CoreCivic, Inc.

Good day, and thank you for standing by. Welcome to the Q4 2025 CoreCivic Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Jeb Backman. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to CoreCivic's fourth quarter 2025 earnings call. Participating on today's call are Patrick Swindle, CoreCivic's president and chief executive 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 2025, as well as financial guidance for the 2026 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 2025 earnings release issued after market yesterday, as well as in our Securities and Exchange Commission filings, including forms 10-K, 10-Q, and also 8-K reports. You are 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 discuss certain non-GAAP metrics. 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, Patrick Swindle.

Thank you, Jeb. Good morning, and thanks, everyone, for joining us for CoreCivic's fourth quarter 2025 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 my opening remarks, I will hand the call over to our CFO, Dave Garfinkel, who will provide greater detail on our fourth quarter and full year 2025 financial results, as well as introduce our 2026 financial guidance. Dave will also provide an update on our capital structure, including activity on our share repurchase program and other balance sheet initiatives. First, I'd like to provide an update on our activation activities where we continue to move towards stabilized occupancy in mid-2026. As a reminder, we announced new awards in the second half of 2025 at the 600-bed West Tennessee Detention Facility, the 2,560-bed California City Immigration Processing Center, the 1,033-bed Midwest Regional Reception Center, and the 2,160-bed Diamondback Correctional Facility. While three of the four previously idle facilities continue to receive additional populations, the fourth, Midwest Regional, continues to experience a delay in the intake process as we rate the result of a special use permit application that we filed in December 2025. We've been engaged with the City on the application and the conversations have been productive. In aggregate, and excluding Midwest Regional, these three new contract awards are expected to generate annual revenue of approximately $260 million once our operations normalize. Once we reach stabilized occupancy on these previously idle facilities, which we expect to occur during the first half of 2026, we expect our annual revenue run rate to be approximately $2.5 billion and our annual EBITDA run rate to increase by almost $100 million year-over-year to approximately $450 million. This is not counting Midwest Regional or any additional contract awards. Let me emphasize that point. Our 2026 guidance is consistent with the commentary on our last earnings call, despite excluding Midwest Regional due to uncertainty around initial detainee intake. Once operational, that facility will provide upside to our initial 2026 guidance. Moving to a discussion of the business climate, in early January 2026, Nationwide ICE detention populations were at historical highs of around 69,900 individuals, an increase of almost 10,000 individuals from the end of the third quarter. ICE was our first customer 43 years ago and has been our largest customer for over a decade. From the end of 2024 through the end of 2025, ICE populations in our care increased 5,903 individuals to just over 16,000, or 58%. Nationwide populations from the U.S. Marshals Service, our second largest customer, have declined from the prior year, partially offsetting the increase from ICE as facilities that share contracts between the two agencies have extended the capacity to ICE due to the higher demand. Marshals populations are also down nationwide due to fewer apprehensions at the southern border. Our average daily marshals population has declined by 1,235 individuals from the fourth quarter of 2024. As we continue to look for additional ways to meet our government partners' needs, we believe we can make available substantial capacity to meet future demand. Even after the aforementioned activations, we own five idle corrections and detention facilities containing approximately 7,000 beds. Along with surge capacity we've made available at certain facilities and partial capacity we have in facilities that are currently in operation, we've informed ICE that we could provide it with nearly 13,000 additional beds. And this does not include additional capacity we may be able to provide through other means. We are confident that the detention beds that we provide are the most humane, most efficient logistically, most compliant, most secure, are readily available, and provide the best value to the government. Our Dilley Immigration Processing Facility is a great example. This is a purpose-built facility for family residential housing that we first operated in 2014 under the Obama administration. Last year, we entered into a new agreement that extends into 2030. As part of that contract, we must meet performance requirements based on a combination of rigorous accreditation and government-established performance standards. There are full-time federal monitors onsite to ensure accountability and compliance with the contract. This includes specific quality measures and standards for cleanliness, high-quality food and basic necessities, legal access, medical care, and translation services. For those of you interested in learning more about this facility, I would encourage you to visit our website at www.coursecivic.com where you can take a virtual guided tour. Beyond these federal opportunities, we are seeing an increase in opportunities at the state level as well. In addition to increases in populations under existing contracts, we're in discussions with several states in need of additional bed capacity. One or more of these opportunities could include the use of our idle correctional facilities. These opportunities could transpire in the coming quarters. I'll now move on to a high-level overview of our top-line revenue and fourth quarter operational performance. Federal partners, primarily Immigration and Customs Enforcement and the U.S. Marshals Service, comprise 57% of CoreCivic's total revenue in the fourth quarter. Revenue from our federal partners increased 49% during the fourth quarter of 2025 compared with the prior year quarter. Further breaking down our federal revenue, revenue from ICE increased 124.4 million, or 103.4%, while revenue from the U.S. Marshals Service decreased by 11.3 million versus the prior year quarter. As mentioned, some of this decline is simply a shift in mix where ICE and marshals share a contract. Revenue from our state partners increased 5% from the prior year quarter. This increase includes additional revenue from the state of Montana, resulting from two new contracts we signed with the state since the second quarter of 2024 and population increases in Georgia and Colorado. Total occupancy for our safety and community segments for the quarter was 78.1%, up 2.6 points since the year-ago quarter. The average daily population across all of the facilities we manage was 56,308 individuals during the fourth quarter of 2025, compared with 50,202 in the year-ago quarter. This increase was driven by more demand for our services, new contracting activity, and the Farm Bill acquisition that was completed July 1, 2025. Our teams continue to be successful in working with our government partners in managing the additional people in our care for which we are focused on delivering the highest quality services and environment every day. Our fourth quarter results exceeded our internal projections for adjusted EPS and normalized FFO per share by $0.08 each. and adjusted EBITDA by $8.6 million. Despite full-year 2026 EBITDA guidance near record levels, our stock is currently trading at a discount to our historical trading multiples, which we believe does not reflect the cash flows of our business, particularly considering the ongoing ramp of previously idle facilities giving us good visibility of our growth potential in 2026 and beyond. Therefore, we plan to continue to prioritize our cash flow and share repurchases, taking into consideration stock price and alternative opportunities to deploy capital, among other factors. That being said, we have the balance sheet flexibility to take advantage of other growth opportunities that we may identify. The substantial progress made during the year in reactivating previously idle facilities couldn't have been accomplished without the hard work of our employees and strong relationships with our government partners. I'm confident we have the right plan and the right teams in place to be successful both in these and future activations. In the meantime, we continue to remain focused on effectively managing our core portfolio and ensuring we meet our high operational standards as well as those of our government partners. Without this focus and strong performance, these additional opportunities would not exist. And so as I turn it over to Dave to discuss our fourth quarter financial results in more detail, our capital allocation activities and assumptions included in our 2026 financial guidance, I'd like to again express my appreciation to our 13,000 employees. I want to recognize their focus and commitment to ensuring that everyone in our care is provided a safe, secure, and humane environment, delivering industry-leading quality to every individual for which we are responsible. Dave?