CoreCivic Q2 2025 Earnings Report

CoreCivic EPS Results

• Actual EPS: $0.59
• Consensus EPS: $0.43
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: $0.42

CoreCivic Revenue Results

• Actual Revenue: $538.17 million
• Expected Revenue: $499.02 million
• Beat/Miss: Beat by +$39.15 million
• YoY Revenue Growth: +9.80%

CoreCivic Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 11:00AM ET

CoreCivic (NYSE:CXW) owns and operates partnership correctional, detention, and residential reentry facilities in the United States. It operates through three segments: CoreCivic Safety, CoreCivic Community, and CoreCivic Properties. The company provides a range of solutions to government partners that serve the public good through corrections and detention management, a network of residential reentry centers to help address America's recidivism crisis, and government real estate solutions. Its correctional, detention, and residential reentry facilities offer rehabilitation and educational programs, including basic education, faith-based services, life skills and employment training, and substance abuse treatment. The company owns and operates correctional and detention facilities, residential reentry centers, and properties for lease. CoreCivic, Inc. was founded in 1983 and is based in Brentwood, Tennessee.

CoreCivic Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company raised full-year 2025 guidance, forecasting adjusted EPS of $1.07–$1.14 and adjusted EBITDA of $365M–$371M on stronger occupancy and new contract ramps.
• Positive Sentiment: Congress passed the One Big Beautiful Bill Act, appropriating $45B for ICE detention capacity (and $75B total for border security) through 2029, driving demand for CoreCivic’s beds.
• Positive Sentiment: CoreCivic reactivated Dilley (2,400 beds) and California City (2,560 beds), is in advanced talks to restart Midwest Regional (1,033 beds), and closed the $67M Farmville acquisition (736 beds).
• Positive Sentiment: In Q2, revenue rose 9.8% Y/Y and adjusted EBITDA jumped 23.2% to $103.3M, while adjusted EPS climbed 80% to $0.36 per share, exceeding internal forecasts.
• Negative Sentiment: Intake at the Midwest Regional Reception Center is delayed by a City of Leavenworth lawsuit over permit requirements, and the timing of resolution is uncertain.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the CoreCivic two quarter two thousand twenty five earnings call. At this time, all participants are in a listen only mode. After the speakers' presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press 11 on your telephone.

[Operator]

You will then hear an automated message advising your hand is raised. To answer your question, please press star when one again. Please be advised that today's conference is being recorded. I would now like to turn the call over to David Gutierrez. You may now begin.

[David Gutierrez, Head of PR, IR & Corporate Development at Dresner Corporate Services]

Thank you, operator. Good morning, everyone, and welcome to CoreCivic's Second Quarter twenty twenty five Earnings Call. Participating on today's call are Damon Hinegar, CoreCivic's Chief Executive Officer Patrick Swindle, CoreCivic's President and Chief Operating Officer and David Garfinkel, our Chief Financial Officer. We also are joined here in the room by our Vice President of Finance, Brian Hammonds. On this call, we will discuss financial results for the 2025 as well as updated financial guidance for the 2025 year.

[David Gutierrez, Head of PR, IR & Corporate Development at Dresner Corporate Services]

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 second quarter twenty twenty five earnings release issued after market yesterday as well as in our Securities and Exchange Commission filings, including Forms 10 ks, 10 Q and also eight ks reports. You are cautioned that any forward looking statements reflect management's current views only, and the company undertakes no obligation to revise or update such statements in the future. Management will discuss certain non GAAP metrics.

[David Gutierrez, Head of PR, IR & Corporate Development at Dresner Corporate Services]

A reconciliation of the most comparable GAAP measurement is provided in corresponding earnings release and included in the company's quarterly supplemental financial data report posted on the Investors page of the company website at corescivic.com. With that, it is my pleasure to turn the call over to our CEO, Damon Heinecker.

[Damon Hininger, President & CEO at CoreCivic]

Thank you, David. Good morning, and thanks, everyone, for joining us for CoreCivic's second quarter twenty twenty five earnings call. On this morning's call, I will provide an overview of the current environment, briefly review our second quarter financial highlights and discuss our outlook, contracting and acquisition activity and opportunities resulting from government funding initiatives at both the federal and state level. Following my opening remarks, I will hand the call over to Patrick Swindle, our President and Chief Operating Officer. Patrick will review the performance of our core portfolio, discuss in further detail our operational activities relating to facility activations during the quarter and how we are preparing for additional demand from our government partners.

[Damon Hininger, President & CEO at CoreCivic]

Finally, we will turn the call over to our CFO, Dave Garfinkel, who will provide greater detail on our second quarter financial results as well as our updated 2025 financial guidance. Dave will also provide an update on our capital allocation strategy.

[David Garfinkle, CFO at CoreCivic]

Moving first to a discussion of the business climate. Our business is to help solve tough government challenges in flexible, cost effective ways and to provide safe environments where people in our care can reside temporarily as they go through their legal due process. Our business is perfectly aligned with the demands of this moment.

[David Garfinkle, CFO at CoreCivic]

We are in an unprecedented environment with rapid increases in federal detention populations nationwide and a continuing need for solutions we provide. At the June 2025, nationwide ICE detention populations were 57,861, the highest detention populations ever recorded by ICE, which has been our largest customer for over ten years. From the 2024 through the end of the second quarter, ICE populations in our care increased to just over 13,000 or 28%. And we know the demand from ICE will increase. Just last month, Congress reached final resolution on federal funding for border security through the One Big Beautiful Act that is historically unmatched and will be available through September 2029.

[David Garfinkle, CFO at CoreCivic]

I will elaborate more on the impact of this funding later in the call. Nationwide populations from The United States Marsh Service, our second largest customer, have also begun to increase, although we expect the Marshals population to increase further towards the 2025 and into 2026. Our year over year Marshals population increased slightly to just over 7,700 at the June. Many of our state partners continue to face complex correctional challenges, either because of staffing shortages, overcrowding or outdated infrastructure. Our year over year state populations were up about 3.5%, driven most notably from new contracts with the State of Montana.

[David Garfinkle, CFO at CoreCivic]

The business environment contributed to the strength of our second quarter financial results. Total revenue increased by 9.8% from the 2024 to the 2025, and we generated double or even triple digit percent increases in GAAP net income, adjusted net income or their corresponding per share amounts as disclosed in our earnings press release. Adjusted EBITDA for the quarter increased to $103,300,000 up $19,500,000 or 23.2% from the prior year quarter. While the second quarter included certain payroll tax credits that Dave will explain further, even excluding these credits, we exceeded our internal projections for adjusted EPS and normalized FFO per share by $07 and adjusted EBITDA by $9,200,000 We have carried these favorable financial results to our updated full year 2025 financial guidance and further increased guidance for updated occupancy projections and new developments, which Dave will review in detail. During the second quarter, we repurchased 2,000,000 shares of our common stock at an aggregate cost of $43,200,000 increasing our year repurchases to 3,900,000.0 shares at an aggregate cost of $81,000,000 During the 2025, we also announced that we had entered into an definitive agreement to acquire the Farmville Detention Center located in Virginia for a total purchase price of $67,000,000 which was completed on July 1 at an attractive EBITDA multiple and accretive to earnings.

[David Garfinkle, CFO at CoreCivic]

We believe the deployment of capital on these opportunities adds substantial value to our shareholders. Turning next to an update on our reactivation activities. As we disclosed in the first quarter, we entered into an agreement with ICE to resume operations at the Dilly Immigration Processing Center in Dilly, Texas, a 2,400 bed facility originally constructed in 2014 to provide a safe and secure environment appropriate for family populations. Before resuming operations in the first quarter, this facility, which we leased from Target Hospitality, has been idled since August 2024. We began receiving residence at this facility during the same quarter, and we are on schedule to complete the full reactivation by the end of the 2025.

[David Garfinkle, CFO at CoreCivic]

In the first quarter, we also announced we entered into a letter contract with ICE to reactivate our 2,560 bed California City Immigration Processing Center effective 04/01/2025. The letter contract provides funding to begin start up activities while we work to negotiate and execute a longer term contract. As a result of the process made on this reactivation, we expect to receive detainees in the third quarter. Based on the status of negotiations with ICE, we also believe we will be successful in entering into a longer term contract before the end of the third quarter. Effective 03/01/2025, we entered into another letter contract with ICE to begin activation efforts at the ten thirty three bed Midwest Regional Reception Center.

[David Garfinkle, CFO at CoreCivic]

The intake process has been delayed by a lawsuit filed by the City of Leavenworth alleging that a special use permit is required to operate the facility, which we do not believe is required. ICE remains very intent on using the facility, and we are pursuing several avenues through the courts to be able to accept detainees. The timing for resolution is currently uncertain. Patrick will provide further details on the progress of these activations. Looking forward, we are in advanced negotiations to activate a fourth idle facility and have just recently begun discussions to activate a fifth idle facility.

[David Garfinkle, CFO at CoreCivic]

Although it is difficult to predict if and when government actions might be taken on these potential contracts, we are optimistic that we will be successful obtaining contract awards to activate additional idle facilities, especially now that historic funding levels for border security and immigration detention have been obtained. Let me also provide one other legal case update that I know many of you have been following. We are pleased that the Third Circuit Court of Appeals upheld a lower court's judgment that determined that New Jersey could not block private immigration detention facilities like Elizabeth Detention Center from operating in the state. The court again found New Jersey's law unconstitutional under the supremacy clause of the U. S.

[David Garfinkle, CFO at CoreCivic]

Constitution. We strongly believe that this was the right decision. We're very proud of our long partnership with ICE and Elizabeth, and as the filings in the case may clear, Elizabeth is absolutely critical to the successful execution of ICE's national mission. Before I turn the call over to Patrick, I wanted to provide some details of this government funding approved by Congress under the reconciliation process, remind you of our detention bed capacity and close my remarks on additional business opportunities. On July 4, President Trump signed the One Big Beautiful Bill Act, a pivotal moment for funding related to our industry.

[David Garfinkle, CFO at CoreCivic]

This act appropriates $75,000,000,000 in mandatory funding to ICE for immigration enforcement activities and to increase detention capacity. Specifically, the act appropriates $45,000,000,000 of the $75,000,000,000 for single adult alien detention capacity and family residential center capacity, which represents more than three times previous budgeted levels. The remaining $30,000,000,000 of this $75,000,000,000 to ICE was appropriated for, among other expenditures, hiring and training of new ICE agents, transportation costs for alien removals and promoting family unity by detaining aliens that have been charged with a misdemeanor with the alien's children. This funding is a historic increase in funding provided to ICE for border security and immigration detention, which we know will further drive demand for the solutions we provide. It has been widely reported in the press that the act is intended to fund approximately 100,000 beds, an increase from 41,500 that had been funded since late twenty twenty four, which was an increase from about 34,000 generally funded with a few exceptions over the past fifteen years.

[David Garfinkle, CFO at CoreCivic]

The funding under the act will remain available through 09/30/2029, and will be in addition to base annual appropriations during that time period. We also understand that these funds will be released from the Treasury and available to ICE in the coming weeks. In addition to funding directly for ICE, the act also appropriates 23,000,000,000 in mandatory funding to the Department of Homeland Security or DHS for border support activities, including $10,000,000,000 to the DHS Secretary for reimbursement of cost incurred in undertaking activities in support of DHS mission to safeguard U. S. Borders.

[David Garfinkle, CFO at CoreCivic]

This funding is available for use at the discretion of the DHS Secretary. The act appropriates an additional $65,000,000,000 in mandatory funding to Customs and Border Protection or CBP for border control and security activities, including border infrastructure, personnel, fleet vehicles, facilities, border surveillance and technology. Finally, the act appropriates roughly $12,000,000,000 to the Department of Justice, or DOJ, for immigration enforcement and border security related activities and programs. These funds are to be used to combat drug trafficking, prosecution of immigration matters and hiring of immigration judges and staff to address backlogs of petitions, cases and removals. Law enforcement activities by DHS, ICE, CBP and DOJ often contribute to the demand and utilization of our bed capacity.

[David Garfinkle, CFO at CoreCivic]

On prior earnings calls, we have discussed capacity we can make available to our federal partners to accommodate their needs. But as a reminder, we own nine idle corrections and detention facilities containing 13,400 beds, including the two facilities under letter contracts that I mentioned earlier that contain 3,600 beds. By adding surge capacity we have made available at certain facilities, partial capacity we have in facilities that are currently in operation, and capacity we can make available through third party leases, like our great partnership with Target Hospitality I have previously mentioned, we have close to 30,000 beds that we have informed ICE we could make available. We also continue to evaluate additional opportunities for expansion that could be cost effective and allow for greater efficiencies. We know that detention beds like these represent the best value and are the most humane, most efficient logistically, have the highest audit compliance scores in their system, are more secure, weatherproof and are readily available.

[David Garfinkle, CFO at CoreCivic]

Additionally, with forty two years of operating experience with ICE, private sector beds are the least likely to be legally challenged, particularly relative to international and some other options. Before I move on, let me reinforce these two points. First, the passage of the One Big Beautiful bill has changed dramatically the activity of ICE in securing bed capacity. We did see very brisk contracting activity for detention bed capacity since the first of the year through the end of the second quarter. However, ICE didn't have enough funding for all this new capacity, so they knew that they would have to get several reprogrammings of funds to meet the increased utilization.

[David Garfinkle, CFO at CoreCivic]

And even with that, it was not enough funding because we knew that they were running at a significant budget deficit over the last sixty days. But now with the passage of the One Big Beautiful Bill Act, contracting activity is running at a much faster pace. And not just for capacity. On July 29, ICE launched a very aggressive nationwide hiring program for 10,000 employees. This is very important for two reasons: One, it is another sign of the intensity of ICE behavior with the passage of the One Big Beautiful Bill Act.

[David Garfinkle, CFO at CoreCivic]

And two, this increase in law enforcement personnel will obviously raise the level of individuals arrested and the requirement for detention capacity. My second point is to reinforce that all of the proposed or implemented detention solutions discussed publicly, soft sided solutions at military bases or at locations like Alligator Alcatraz, capacity at Guantanamo Bay or traditional secure capacity that historically we have provided, Eyes' view of all of these offerings is an all of the above approach and not one solution is preferred over the others that are available in the near term. They have a need and funding for all of these solutions. But in addition to the superior benefits that I noted earlier in our solutions, it is important to note that ICE does not see soft sided facilities as long term solutions. And as you can see in these agreements that have been put in place, minimum standards and requirements have been incorporated, whereas our agreements have comprehensive requirements and mandate national detention standards that we have complied with over many, many years. Wrapping this section up, and as I previously mentioned, in addition to increasing utilization of beds under existing contracts we have experienced over the past couple of quarters and the expansion of contracts at our Ohio, Mississippi, Nevada and Oklahoma facilities we have previously disclosed, we are in various stages of negotiation on multiple idle facilities to provide additional bed capacity to ICE. In addition to these federal opportunities, we continue to have active dialogue with several existing state partners as well as new state partners that could result in additional populations, including the possible use of idle facilities. We have also responded to a proposal from the Florida Department of Corrections to manage one or more facilities they own and hope to hear results of that procurement in the near future. One final note on state budgeting activity.

[David Garfinkle, CFO at CoreCivic]

State budgets are typically approved and start annually on July 1. We are pleased with the level of funding approved by state legislatures for our state contracts, including premium increases that were important for us to obtain. The increases approved across our state portfolio averaged in the mid single digits and were about double the increases that we were able to obtain last year. We are extremely grateful for the support of our state government partners. Now, I'll pass the call over to Patrick Swindle for a further review of our operations activity during the second quarter. Patrick?

[Patrick Swindle, President & COO at CoreCivic]

Thanks, Damon. I'll start with a high level overview of top line revenue and second quarter operational performance. Federal partners, primarily Immigration and Customs Enforcement and the U. S.

[Patrick Swindle, President & COO at CoreCivic]

Marshals Service comprised 50% of CoreCivic's total revenue in the second quarter. Revenue from our federal partners increased 11% during the 2025 compared with the prior year quarter, including a reduction in revenue at the Dilly Immigration Processing Center, which closed in August 2024, but resumed operations in the 2025 and continues to ramp toward full operations. Excluding the Dilley Immigration Processing Center from both years, our revenue from federal partners increased 19% versus the 2024. Further breaking down our federal revenue, revenue from ICE increased $25,900,000 or 17%, while revenue from the U. S.

[Patrick Swindle, President & COO at CoreCivic]

Marshals Service was up $2,700,000 or 3%. As Damon mentioned, we expect increases in U. S. Marshals populations later in 2025 and into 2026. Revenue from our state partners increased 9,900,000 or 5% from the prior year quarter.

[Patrick Swindle, President & COO at CoreCivic]

These increases include additional revenue from the State of Montana resulting from two new contracts we signed with the State since the 2024. We care for these additional populations at our Saguaro Correctional Facility in Arizona and our Tallahatchie County Correctional Facility in Mississippi. Total occupancy for our Safety and Community segments for the quarter was 76.8%, up 2.5 points since the year ago quarter. Note that occupancy for the second quarter reflects the transfer of our 2,560 bed California City Immigration Processing Center from our property segment, which isn't included in these occupancy statistics to our safety segment. This facility has been in our Property segment because it was previously leased to the State of California as the lease expired in March 2024.

[Patrick Swindle, President & COO at CoreCivic]

We resumed operations at this facility in the 2025 due to a letter contract signed with ICE effective 04/01/2025, although we have not yet received any detainees during the second quarter. Therefore, if we exclude this additional capacity from the calculation, making more apples to apples comparison with prior periods, our reported occupancy would have been 79.7%. Occupancy has been on an upward trajectory since early twenty twenty three when it stood at approximately 70%. Another way to look at occupancy is the average population we manage on a daily basis. The average daily population across all of the facilities we manage was 54,026 during the 2025 compared with 51,541 in the year ago quarter.

[Patrick Swindle, President & COO at CoreCivic]

This increase was driven by more demand for our services and new contracting activity. Our teams have been very successful in working with our government partners and managing the additional people in our care, which we are focused on every day and do not take for granted. As Damon alluded, the second quarter was a very busy quarter with reactivation activities at several previously idle facilities. We resumed operations at the Dilly Immigration Processing Center in the quarter under an amendment to an Intergovernmental Services Agreement or IGSA, and we are on schedule to complete full activation by the end of the third quarter when we expect to generate the full fixed monthly revenue for the facility. We've activated four neighborhoods at the facility and have hired approximately five fifty staff at this facility, progressing towards six forty staff when we expect all five neighborhoods to be fully activated.

[Patrick Swindle, President & COO at CoreCivic]

Effective 04/01/2025, we entered into a letter contract with ICE to begin activation efforts at our 2,560 bed California City Immigration Processing Center. The letter contract provides funding for a six month period to begin startup activities while we work to negotiate and execute a longer term agreement. We have hired over 200 staff, held 10 pre service training academies, and have invested $3,500,000 in capital expenditures in preparation for receiving detainees from ICE. As a result of the progress made on this reactivation and based on communications from ICE, we currently expect to begin receiving detainees from ICE in the third quarter under the terms of the letter contract. Along with the progress we believe we have made on the negotiations with ICE, this milestone gives us confidence that we'll be successful in entering into a longer term contract before the end of the third quarter.

[Patrick Swindle, President & COO at CoreCivic]

Effective 03/07/2025, we entered into a letter contract with ICE to begin activation efforts at our ten thirty three bed Midwest Regional Reception Center. We've hired approximately 130 of the approximately 300 staff that will be needed to operate a full facility. We've also held 12 pre service training academies and invested $3,500,000 in capital expenditures in preparation for receiving detainees from ICE. Based on the progress we have made, we are ready to begin accepting detainees at this facility under the terms of letter of contract. However, the intake process has been delayed by the lawsuit with the City of Leavenworth that Damon mentioned.

[Patrick Swindle, President & COO at CoreCivic]

ICE is eager to begin utilizing this facility and we are optimistic about successfully resolving the dispute. But ICE and we will both have to wait until the disagreement is resolved. In the meantime, we will continue to negotiate with ICE for a longer term contract. As previously reported, on July 1, we completed the acquisition of the seven thirty six bed Farmville Detention Center in Virginia and immediately began implementing the integration plan we designed during the due diligence period. The facility provides transportation, care and civil detention services to adult male non citizens through an IGSA between Prince Edward County, Virginia and ICE, which expires in March 2029.

[Patrick Swindle, President & COO at CoreCivic]

While we haven't exercised this integration muscle in several years, I'm pleased with the status of the integration of systems, processes and of course the team, which is already substantially complete. We are excited to welcome the 200 plus employees at the Farmville facility to the CoreCivic team and are pleased to expand our book of business with ICE at such a critical location, which ICE has used since the facility was constructed in 2010. I would like to extend my gratitude to our activation team that has worked so diligently on all of these activations and integrations along with the countless professionals executing our activation plans who reserve credit for these activities. These accomplishments have only been possible due to months of pre planning and hard work. We know there is more work to be done.

[Patrick Swindle, President & COO at CoreCivic]

While the activations of the Dilly, California City And Midwest Regional Reception Center facilities are not done, we continue to prepare for additional idle facility activations. We are in advanced negotiations to activate a fourth idle facility and have just begun discussions to activate a fifth idle facility. And we continue to lean forward on capital expenditures for additional facility activations demonstrating our confidence in future contracting activity. Including the capital expenditures previously mentioned through June 30, we've incurred over $30,000,000 associated with activations in new transportation vehicles and plan to spend 40,000,000 to $45,000,000 more. With all of this activity, we remain focused on effectively managing our core portfolio.

[Patrick Swindle, President & COO at CoreCivic]

It is the stability of operations and financial results of these facilities that gives us the opportunity to grow our business. We're managing our costs prudently, making investments where we see needs. We're meeting with customers to help ensure we're meeting their needs and expectations, and we're tending to our residential populations, providing the programs and services they need to transition successfully upon the release from our care. And so as I turn it over to Dave to discuss our second quarter financial results in more detail, our capital allocation activities and assumptions included in our updated 2025 financial guidance, I'd like to express my appreciation to our 13,000 employees for their focus and commitment to our mission. Dave?

[David Garfinkle, CFO at CoreCivic]

Thank you, Patrick, and good morning, everyone. In the 2025, we generated GAAP EPS of $0.35 per share and FFO per share of $0.58 Excluding special items, adjusted EPS in the second quarter was $0.36 compared with $0.20 in the 2024, an increase of $0.16 per share or 80%. And normalized FFO per share was $0.59 per share compared with $0.42 per share in the prior year quarter, an increase of $0.17 per share or 40.5%. Special items for the 2025 included $1,500,000 of charges associated with our acquisition of the Farmville Detention Center reported in G and A expenses. Special items in the prior year quarter included $4,100,000 of expenses associated with debt payments and refinancing transactions.

[David Garfinkle, CFO at CoreCivic]

Adjusted EBITDA was $103,300,000 exceeding average analyst estimates by $21,000,000 and compared with $83,900,000 in the 2024. The increase in adjusted EBITDA from the prior year quarter of $19,500,000 resulted from higher federal and state populations as well as higher average per diem rates across much of our portfolio, which contributed approximately $20,000,000 in incremental facility net operating income over the prior year quarter. The increase also resulted from the recognition of employee retention credits available under the CARES Act amounting to $8,300,000 or $08 per share, including $3,200,000 of interest on the credits. These increases were net of the financial impact of the termination of the contract with ICE at the Dilly Immigration Processing Center effective 08/09/2024. However, we began reactivating the Dilly facility during March 2025 under a new five year agreement and accepted our first residence at this facility April 8.

[David Garfinkle, CFO at CoreCivic]

This facility accounted for a net decrease in facility net operating income of $11,400,000 or $07 per share from the 2024. As Damon and Patrick both mentioned, we expect this facility to be fully operational by the end of the 2025 when we expect to generate revenue for the full fixed monthly payment from ICE. Other factors affecting EBITDA and per share results included higher G and A expenses and the favorable impact of our capital allocation strategy contributing to increases in per share earnings of $02 per share through reductions in gross interest expense and common shares outstanding. We exceeded our internal forecasted adjusted EBITDA by $20,700,000 and both adjusted EPS and normalized FFO per share by $0.15 per share. Even after excluding the employee retention credits, we exceeded adjusted EBITDA by $9,200,000 and our per share results by $0.07 reflecting the strength of the quarter driven primarily by higher federal populations under existing contracts combined with new contracting activity.

[David Garfinkle, CFO at CoreCivic]

The number of ICE populations in our care followed national trends, which reached a record high at the June. Operating margin in our safety and community facilities combined was 26.2% in the 2025 compared with 23.7% in the prior year quarter. Again, the increase in our operating margin was due to higher occupancy as well as the employee retention credits, which are reflected as a reduction to operating expenses. Excluding the employee retention credits, our operating margin was 24.6%, a 90 basis point increase from the prior year quarter. Turning next to the balance sheet.

[David Garfinkle, CFO at CoreCivic]

During the second quarter, our Board of Directors authorized an increase to our share repurchase program by $150,000,000 increasing the total aggregate authorization up to $500,000,000 During the second quarter, we repurchased 2,000,000 shares of our common stock at an aggregate cost of $43,200,000 increasing our year to date repurchases to 3,900,000.0 shares at an aggregate cost of $81,000,000 Since our share repurchase program was announced in May 2022 through June 30, we have repurchased 18,500,000.0 shares of our stock at a total cost of $262,100,000 or an average price of $14.19 per share. As of June 30, we had $237,900,000 available under the updated Board authorization. After taking into consideration these share repurchases, our leverage measured by net debt to adjusted EBITDA was 2.3 times using the trailing twelve months ended 06/30/2025. As of June 30, we had $130,500,000 of cash on hand and an additional $216,400,000 of borrowing capacity on our revolving credit facility, which had a balance of $40,000,000 outstanding, providing us with total liquidity of $346,900,000 On 07/01/2025, we used our existing liquidity to acquire the Farmville Detention Center, a seven thirty six bed facility located in Virginia, for a total purchase price of $67,000,000 ICE has been using this facility since it was constructed in 2010.

[David Garfinkle, CFO at CoreCivic]

Our strong balance sheet and cash flows provide us with significant flexibility to implement our capital allocation strategy of returning capital to shareholders and to take advantage of unique tuck in acquisition opportunities like this with favorable investment returns. Moving lastly to a discussion of our updated 2025 financial guidance. We expect to generate adjusted diluted EPS of $1.07 to $1.14 up from $0.83 to zero nine two dollars in our previous guidance and normalized FFO per share of $1.99 to $2.07 up from $1.72 to $1.82 We expect adjusted EBITDA of $365,000,000 to $371,000,000 up from $331,000,000 to $339,000,000 Our updated guidance reflects the favorable results for the second quarter, updated occupancy projections consistent with current trends, the acquisition of the Farmville Detention Center on July 1, as well as the reactivation of the California City Immigration Processing Center based on the expectation of receiving detainee populations during the 2025. Our guidance reflects a range of assumptions pertaining to the activation of our California City facility, which is still operating under terms of the letter contract. There could be upside to our guidance if the timing or terms of a longer term contract at our California City facility, including the pace of receiving detainees, is more favorable than our forecast.

[David Garfinkle, CFO at CoreCivic]

Our guidance does not include the impact of a potential longer term contract at our ten thirty three bed Midwest Regional Reception Center as the intake process has been delayed by the lawsuit Damon and Patrick mentioned as we have not yet completed negotiations on a long term contract. The timing of any resolution on this legal matter is difficult to predict. We have updated our guidance to reflect a reduction in facility net operating income at this facility in the 2025 compared with our previous guidance as we continue to ramp up our staffing levels and other operating expenses, which are expected to exceed the revenue available under the letter contract. There could be upside to our guidance if the litigation is resolved expeditiously. As a reminder, the new agreement reached in March to activate the Dilly facility provides for a fixed monthly revenue payment in accordance with a graduated schedule to correlate with the activation of each neighborhood within the facility.

[David Garfinkle, CFO at CoreCivic]

Our guidance reflects revenue for the full facility beginning September 2025, which is unchanged from our previous guidance. Consistent with our past practice, our guidance does not include the impact of new contract awards not previously announced because the timing of government actions on new contracts is always difficult to predict. We are in advanced negotiations to activate a fourth idle facility and have just begun discussions on activating a fifth idle facility. Although it is difficult to predict if and when government actions might be taken on these potential contracts, we are optimistic that we will be successful in obtaining contract awards to activate additional idle facilities, especially now that historic funding levels for border security and immigration detention have been obtained under the One Big Beautiful Bill Act. We expect to revise our financial guidance throughout the year if and when new contracts are signed.

[David Garfinkle, CFO at CoreCivic]

In addition to our 2,560 bed California City Immigration Processing Center and our ten thirty three bed Midwest Regional Reception Center, we own seven idle correctional and detention facilities that have 9,826 available beds or a total of 13,419 available beds as of June 30. The activation of an idle facility involves hiring, training and preparing the facility to accept residential populations, which depending on contract structure could result in substantial start up expenses before we realize additional revenue. To the extent any new contract requires the activation of an idle facility before we begin to recognize revenue, our guidance could be negatively impacted by these start up expenses until the revenue we generate offsets these expenses. For modeling purposes, when bridging results from Q2 to Q3, it is important to take into consideration the 11,500,000 of EBITDA or $08 per share associated with the employee retention credits recognized in the second quarter. Further, during Q3, we expect to continue to increase staffing levels to prepare for the receipt of detainees under both letter contracts without a proportionate increase in revenue negatively impacted Q3 by approximately $06 per share compared with Q2.

[David Garfinkle, CFO at CoreCivic]

The negative impact of the letter contracts in Q3 is more than offset in the fourth quarter by the assumption of a longer term contract at our California City facility and a continuing increase in detainee populations at that facility as well as a fully operational Dilly facility. We plan to spend $60,000,000 to $65,000,000 on maintenance capital expenditures during 2025 and 9,000,000 to $10,000,000 for other capital expenditures, both unchanged from our prior guidance. Our 2025 forecast also includes 70,000,000 to $75,000,000 of capital expenditures associated with potential idle facility activations and for additional transportation vehicles, up $5,000,000 from our prior guidance. During the first half of the year, we spent $30,700,000 on potential idle facility activations and additional transportation vehicles. Our guidance includes a similar level of share repurchases as we purchased during the first two quarters.

[David Garfinkle, CFO at CoreCivic]

Our share repurchases will take into consideration our stock price, earnings trajectory, liquidity and alternative opportunities to deploy capital. Our guidance does not include any additional capital expenditures beyond those mentioned that could be needed in connection with the reactivation of our idle facilities, which may depend on customer needs and preferences. We expect adjusted funds from operations or AFFO, which we consider a proxy for our cash flow available for capital allocation decisions, such as share repurchases and growth CapEx, such as facility activations, to range from $216,000,000 to $227,000,000 for 2025. We expect our normalized effective tax rate to be 25% to 30%, unchanged from our prior guidance. The full year EBITDA guidance in our press release provides you with our estimate of total depreciation and interest expense.

[David Garfinkle, CFO at CoreCivic]

And we are forecasting G and A expenses in 2025 to be approximately $160,000,000 excluding expenses associated with M and A transactions. I will now turn the call back to the operator to open up the lines for questions.

[Operator]

Thank you.

[Operator]

And our first question will come from the line of Joe Gomez of NOBLE Capital. Your line is open. Joe, your line is open.

[Joe Gomes, Senior Research Analyst at Noble Capital Markets]

Can you hear me?

[Damon Hininger, President & CEO at CoreCivic]

Yes, we can hear you. Yes, sir. Good morning.

[Joe Gomes, Senior Research Analyst at Noble Capital Markets]

Hi. Okay. Good morning. Thank you. Congrats on the quarter and the raised guidance.

[Joe Gomes, Senior Research Analyst at Noble Capital Markets]

Did want to start with you talked, Damon, about alternative solutions like the soft side and international, things of that nature. And I guess the kind of two multipart question here is, one, as ICE starts to look at these solutions, is slowing down the process with discussions with you guys and your type of solutions? And secondly, what would be your interest in either participating in some of these soft sided spaces or maybe just managing them, if not actually constructing them?

[Damon Hininger, President & CEO at CoreCivic]

Yes. Great question, Joe, and thank you for that and thank you for the comments. Let me start with the first part. And as I indicated on the call or in my script, I should say, the intensity has really picked up here in the last couple of weeks with the passage of the One Big Beautiful Bill Act. So we obviously saw a lot of activity, as I mentioned, from kind of January through June.

[Damon Hininger, President & CEO at CoreCivic]

Obviously, we've got the letter contracts. We've got the new contract at Dilly. So a lot of activity for sure. But with the funding now in place, we clearly are seeing a lot of intensity both at the national level with DHS and ICE leadership, but also seeing to play out in field offices where they're engaging us on tours, contract negotiations. As we all alluded to, we've got multiple facilities that are in some level of discussion relative to activation and final and long term contracts.

[Damon Hininger, President & CEO at CoreCivic]

But maybe if I could, let me just step back for a minute and just give you kind of big picture how we see things and then kind of answer a second part of your question about these other alternatives. Let me just first just give you a kind of reminder for you and the rest of the folks on the call just the demand as we see it today. So, you know, it's been reported in the press over the last twelve months, there is about 14,000,000 people in the country illegally, about half of that amount is what we call non detained docket or people in the immigration proceedings. So these are folks as we understand it from ICE, it's 7,500,000 that they're focusing on especially ones that have a criminal record. And so $7,500,000 and if they've got a goal with this administration to do deportations at a clip of $1,000,000 a year, that's obviously a lot of people that they're going to have to work through here in the next three, four, five years.

[Damon Hininger, President & CEO at CoreCivic]

So those are big, big numbers and obviously that's going be a multi year effort. So that would be number one as I think about the demand. The second thing I would say about the demand is that resources obviously had to be recalibrated here in the last few months. So first of this year, most of the resources, no surprise, were focused on the Southwest Border. And if you look at the detention populations at that time, about 90% of all people detained in facilities at the first of the year were people that were arrested at the Southwest Border.

[Damon Hininger, President & CEO at CoreCivic]

That is now completely flipped. If you look at the detention population today, which is again about 56,000 people, about 70% of those individuals were arrested in the interior. So it's completely flipped here in the last seven to eight months. It's gotten some press on that, but I think it's important to note that ICE has been working hard along with DHS leadership to recalibrate their resources for enforcement within the interior and again focus on that 7,500,000 people that are in immigration proceedings or maybe have removal orders. The last thing I'll just say on the demand side is that, as reported in the press, last two or three months, basically the Southwest Border has been completely closed down.

[Damon Hininger, President & CEO at CoreCivic]

The apprehensions are at record lows, but we know that ICE and even Custom Border Patrol, they can recalibrate as appropriate if that changes. So that's the demand side. So now let's flip over to the supply side. Again, while we reported and we noticed some of these things in my script, there was this big beautiful Bill Act, 175,000,000,000 under that act for border security. That's going to take many different personnel levels within the federal government to higher levels.

[Damon Hininger, President & CEO at CoreCivic]

It's obviously going to put a lot of resources in place, but I guess a couple of things I'd point to of note. One of which is there's 6,000 frontline officers, law enforcement officers on ICE today. They want to take up to 16,000. So 6,000 to 16,000. So there will be a lot more people that will be able to do these enforcement actions within The United States.

[Damon Hininger, President & CEO at CoreCivic]

Secondly, there's a lot of resources for Custom Border Patrol, I touched on that in my script, a lot of resources for immigration judges and courts, a lot of resources for technology, especially on Southwest Border, vehicles, etcetera, etcetera. So they're clearly doing a ton of investment, what I'd say, kind of on the front of the funnel to get the ability to have more enforcement efforts around The United States. But coming back to us and then going back to your second part of your question, if you look at just the dollars that were appropriated for detention capacity, so again, as in my script, it's been widely reported, that's about $45,000,000,000 That's just for detention. If you take that over the next four to five years and layer that on top of the $3,500,000,000 that's been appropriate last couple of years for ICE detention and round numbers that's about 13,500,000,000 basis over the next four to five years. And if you take their per day average, ICE's average per day for detention beds in The United States, which is about $165 that's about 200,000 beds that they could purchase either from the private sector, from state and local governments or other offers that they have, if we make solutions available to them.

[Damon Hininger, President & CEO at CoreCivic]

The 200,000 beds is the capability if you look at just purely from a dollars perspective. And so to answer your question, we've got the 30,000 beds that we've offered to ICE. Those are in the facilities that we've talked about and Dave noted 13,400 in vacant facilities. But we've also got surge capacity that we've made available in our facilities that are currently operational, but where we've reconfigured the operational capacity where we've added some beds. The third is what we've added some partial capacity in places where we've got maybe lower occupancy where we can provide solutions for ice and this has already taken place in places like Nevada and Oklahoma.

[Damon Hininger, President & CEO at CoreCivic]

And then finally, the third party leases through Target, we've got either opportunities with a vendor like them where they could do a completely new activation or do an expansion. And an example expansion would be at our Dilly facility, which we've talked previously that's got a lot of capabilities for expansions. So we've got 30,000 beds available today. Some of this is already under contract or letter contracts with like Cal City and Midwest, but also a lot of other capabilities to provide capacity in a very short term. To your last part of your question, if that comes through a solution with a state government or is that a solution that we do on a military base, we're all the above are very interested.

[Damon Hininger, President & CEO at CoreCivic]

We've got the capabilities. Often we've been working with state governments for almost forty two years. We've been in constant conversations with them as they see kind of the for the federal government. And as you're seeing, there is some interest from states to partner. So we think there's a great kind of win win where we could partner with someone like that to provide these solutions.

[Damon Hininger, President & CEO at CoreCivic]

So let me tag team a little bit and see if Patrick anything you would add to that.

[Patrick Swindle, President & COO at CoreCivic]

Thank you, Damon. The only thing that I would add is I think it's really important to look at prioritization of the different solutions or alternatives that ICE is considering. As you can imagine, as they shifted from the border to interior enforcement, there are gaps that present across the country. And so, you may see, for example, a private sector solution like our California City facility contracted for.

[Patrick Swindle, President & COO at CoreCivic]

You might see a state solution like is presented in Florida or military based solution like is presented with Fort Bliss. And I think it's important to contextualize all those because in the beginning ICE is ensuring that it has the capacity that it needs in specific locations across the country. And so it isn't necessarily an either or, but a prioritization in terms of filling out the resource gaps or needs across the country. And so if you see a solution, for example, that might be a military based solution or a state level solution, that doesn't mean necessarily that it would displace a private sector solution or vice versa. It may be a function of timing and location and resource needs.

[Patrick Swindle, President & COO at CoreCivic]

So we believe that ICE is considering all of those alternatives and we continue to believe that the investments that we've made at our capacity position it well to meet ICE needs at the appropriate time.

[Damon Hininger, President & CEO at CoreCivic]

And thanks for that, Patrick. I mean, that's a really important point. Again, you go back to the dollars, they've got the funding capability to go to 200,000 beds today and their current population is 56,000. So they really, to Patrick's point, have opportunities to say, okay, where is the near term need and demand at and then look at the alternative that's gotten those various locations.

[Damon Hininger, President & CEO at CoreCivic]

So I think that's an important point. Lastly, And I'll just say, you think about our financial performance today, you think about our guidance for the rest of the year, that just assumes obviously South Texas, which we've announced as part of our guidance, but also Cal City and also a couple of smaller contracts where they've had increased utilization. Our financial performance, which has been pretty significant this year, only incorporates really kind of a very small part of the opportunity that's going to be, I think, near term for us as we go into this year into 2026.

[Joe Gomes, Senior Research Analyst at Noble Capital Markets]

Great. Thanks for that. And then you brought up non detained docket. So how many people are there? So I'll switch gears for a second.

[Joe Gomes, Senior Research Analyst at Noble Capital Markets]

It's common knowledge, the ISAP contract is coming up for renewal here. Competitor has got an extension on it for right now. They were hoping to get at least a six month to a year on it. But I think after that, it would come up for rebid. One, is that something you'd be interested in?

[Joe Gomes, Senior Research Analyst at Noble Capital Markets]

Two, kind of capabilities do you have for that? Do you think given the potential size we're talking about here, again, the $7,000,000 non butane docket, is this something maybe in your view ICE would look into split into multiple contracts out there like they do on the detention side, given that the past high here was roughly 375,000 people?

[Damon Hininger, President & CEO at CoreCivic]

Yes, great question. And let me first just say, and I think we've been pretty consistent on this, that really in the days since the election, the message has been pretty darn clear from administration, DHS leadership and ICE leadership that detention is going to be the priority. So we've been working around the clock at that really almost for a year on getting ourselves ready with capital improvements to facilities that are currently either partially utilized or completely vacant, leaning forward on buying buses and vans for transportation needs, making sure that we've got strong pipelines for the labor that we'll need for these activations or additional staff will need for facilities that go up to a higher occupancy. So detention has been the priority. It's been made clear to us from again from leadership, administration, DHS and ICE.

[Damon Hininger, President & CEO at CoreCivic]

And so again, that's what we've been focusing on. Having said that, obviously, we've been watching to see what's going on with ICE subcontract. Obviously, we heard some of the comments from GEO's leadership yesterday on their call and we are interested. And so we're going to watch obviously closely what plays out relative to their extension and then the RFP once it comes out, which I guess could be later this year or maybe early next year. But to answer the second part of your question, we absolutely got the capability, especially and I think this came out a little bit yesterday on the GEO call.

[Damon Hininger, President & CEO at CoreCivic]

If they go to more of an active monitoring solution, mean that is right in our wheelhouse. Our community division has been doing those type of solutions for nearly thirty years with jurisdictions all over the country. So we clearly got that capability and competency and also we've got the leadership and also we've got the financial worth on the technology to scale up. So we're monitoring very closely, we'd be interested. But I'll say again, we know right now in this moment, detention is the priority and that's been our focus since the first of this year, late last year.

[Joe Gomes, Senior Research Analyst at Noble Capital Markets]

Great. And one more for me, and I'll pass it on. The Midwest facility, and unfortunately, we're kind of the loggerheads here right now, hopefully gets resolved quickly. But given its location and ICE's interest in it, are there other potential facilities in that location that ICE, if this continues to drag along, could decide to move their interest to?

[Damon Hininger, President & CEO at CoreCivic]

Would say I mean, ICE has always been very I'd say always, recently, in the last couple of years, they've been very interested in the facility. I mean for all the points you just made, the location is ideal. It's near a major metropolitan airport. It's close to I-seventy. So from transportation perspective, it's very good location wise.

[Damon Hininger, President & CEO at CoreCivic]

I'm confident, obviously, I don't want to speak to any kind of pending legal matters. You heard what we said in our script, so I really can't add more than that. But I'm confident we're going to get through resolution on this near term and that facility will be made available to ICE.

[Operator]

And our next question will be coming from the line of Jason Weaver of Jones Trading. Your line is open.

[Jason Weaver, MD - Head Specialty Finance & Real Estate Research at Jones Trading]

Hi, guys. It was great to see the updated guidance. As you're well on your way to activating these new facilities, are you seeing any efficiency gains in the expected timeline to staff and get everything prepared for intake? I know, Julie, it's a unique case here, but just overall.

[Patrick Swindle, President & COO at CoreCivic]

This is Patrick. I guess the way I would answer that is we started preparing for activations in the fourth quarter of last year. And the timeline is, as we talked about, being somewhat funding driven has given us a window in the 2025 to really invest resources and making sure that our facilities are positioned to activate quickly. So we've had strong visibility on where the initial demand would manifest and we've made preemptive investments to make sure that we can meet that demand as quickly as possible.

[Patrick Swindle, President & COO at CoreCivic]

And so I think because of the preparation work that we did, it really has made the activations that we've initiated so far in Midwest, at Cal City and at South Texas very smooth. Now I think one of the things we're obviously sensitive to is the ramp up in activity nationwide after the passage of the funding of the One Big Beautiful Bill Act. So we do believe that there may be an acceleration, but we also believe that the work that we've already done in our existing sites and it is helpful with their existing facilities that those facilities are already in place. They don't have to be constructed on a very rapid timeline. They're ready.

[Patrick Swindle, President & COO at CoreCivic]

We can have them prepared. The physical plant is primed for activation, puts us in a great position to activate those quickly. So again, the timelines, the resource investments we made early, we think position us really well depending on where demand does shift and manifest to be able to meet that within our existing portfolio.

[Jason Weaver, MD - Head Specialty Finance & Real Estate Research at Jones Trading]

Great. Thanks, Patrick. And then I believe we touched on it in the past, but do you have any new visibility into or have you had any incremental discussion regarding the PayCo, Texas facility that was formerly managed by HHS?

[Patrick Swindle, President & COO at CoreCivic]

Yes, nothing new to report. Obviously, we're again monitoring kind of more globally what the needs are there in the Southwest Border and kind of recalibration of where the needs are based enforcement actions there and again the focus more on the interior versus Southwest border. So again, we're well aware of that facility and its capabilities and then continue to kind of monitor based on what the needs are from ICE and that moment in time in that part of the country.

[Jason Weaver, MD - Head Specialty Finance & Real Estate Research at Jones Trading]

Got it. And just one more, I think you might have mentioned in your prepared remarks, but just to clarify FarmVille, can you talk about the timing of that when you expect that incremental $40,000,000 revenue run rate?

[Patrick Swindle, President & COO at CoreCivic]

Yes, I can take that one immediately. So we closed on July 1. It was a $40,000,000 annual revenue and so it was a contract in place. So I would expect approximately $20,000,000 for the second half of the year.

[Jason Weaver, MD - Head Specialty Finance & Real Estate Research at Jones Trading]

Got it. Fair enough. Thanks a lot guys.

[Patrick Swindle, President & COO at CoreCivic]

Thank you.

[Operator]

You. One moment for the next question please. And the next question will come from the line of Ann Moran of Zacks. Your line is open.

[M. Marin, Senior Analyst at Zacks Investment Research]

Thank you. So I have a couple of questions. You know, we've touched upon both of the topics that I'd sort of like to get a little bit more color on. You know, given what you've said, ICE is extremely, you know, well funded at the moment and has significant need. You have a strong relationship, you know, with ICE and a long term relationship, and you have, significant ongoing discussions.

[M. Marin, Senior Analyst at Zacks Investment Research]

All that said, we still hear in the news, as you mentioned, Alligator, Alcatraz and other solutions. Can you give us little bit more color on what you see as the possible advantages of CoreCivic facilities compared to some of these other solutions we're hearing about?

[Damon Hininger, President & CEO at CoreCivic]

Absolutely. So tag team on this one also, but I appreciate your question. So, again, as I said in my script, you think about our facilities, they're very secure, made with hardened construction. They have been tested by ICE or INS for the last forty years. They have got the most superior audit accords versus any alternative they've ever had in The United States, even more recent solutions that you just noted.

[Damon Hininger, President & CEO at CoreCivic]

They've got great capabilities. So many of our facilities have courtrooms and other solutions on-site, so it makes the mission a lot more efficient. And they're extremely cost effective. Mean, you look at our per day rate versus some of these alternatives that were recently procured, I mean, they're dozens, if not hundreds of dollars cheaper for us versus these other alternatives, a lot more cost effective. The other thing that we're watching closely on some of these other solutions, as you mentioned, like Alligator Alcatraz, what we're seeing once these contracts are in place, they've got really minimum standards, both for the operation facility, but also for the staff.

[Damon Hininger, President & CEO at CoreCivic]

And what we're hearing kind of back channel is that they kind of see these solutions at very short term that there is it's kind of Patrick said, there's maybe a very unique in a short period of time in a third part of the country and these facilities can be rapid deployed, but they don't want to do a huge investment both on not only the physical asset, but also the standards and requirements, some of the infrastructure and also the personnel. And so flip it back to us, our solutions and the contracts that we've had like Dilly and some of the others that we've been working on last couple of months like House City and Midwest, they're going to have a comprehensive set of terms and conditions and requirements. They're going to have all the newest detention standards and requirements again that we've been doing for decades and we can comply with very easily and quickly. And then also they're going to have the highest standards from a personnel perspective. And so I think the better way to say it or kind of think about this is that not only are facilities more cost effective and have all these other benefits, But I think they see our facilities as now more secure, but also a longer term solution, more permanent solution versus these others where we're hearing privately, they could be only for six to twelve months.

[Damon Hininger, President & CEO at CoreCivic]

I anything you'd add to that Patrick. Yes, the only thing that I would add is I think again, goes back to my comments earlier, which is I think ICE is in the process at this moment of identifying where it has the greatest geographic needs. So that might be a focus on an area of the country where you have significant needs for internal enforcement support, but there isn't existing capacity. Obviously, you can't pick up one of our facilities and drop it in Florida, for example. And so there are very specific geographic needs or support needs for the ICE mission in various parts of the country that are going to require alternatives to our capacity to be used.

[Damon Hininger, President & CEO at CoreCivic]

But again, as Damon said, our facilities are both our facilities and our operation very well understand the standards that ICE has for its operations. Our ability to scale those is very rapid in a way that's consistent with the way that we performed with ICE for our forty years of operations. And so we feel like our assets are very well positioned. They meet all applicable standards. We can activate those very quickly.

[Damon Hininger, President & CEO at CoreCivic]

And again, I look at the prioritization right now being a function of where the geographic need is and the mission support need is for ICE, but ultimately funding is such that we would expect our facilities are very well positioned to meet the intermediate long term needs for ICE as they ramp up their activities nationwide.

[M. Marin, Senior Analyst at Zacks Investment Research]

Thank you. Okay. So that's some segues into my next question, which is about occupancy. And you talked in your prepared remarks about how occupancy is on an upward trajectory. I think you gained about 200 basis points year over year in the second quarter.

[M. Marin, Senior Analyst at Zacks Investment Research]

Can you just I went back and I looked at some of your metrics prior to the pandemic. And it looked like at one point, and this might not be the high, but it looked like occupancy was close to 87%. I'm wondering what you see as your potential runway here.

[David Garfinkle, CFO at CoreCivic]

And this is Dave. Yes, absolutely, we've got a lot of runway on occupancy. We do include our idle bed capacity in our occupancy statistics. So even as we activate those idle facilities, that's going to improve our occupancy statistics dramatically. That obviously has a big impact on our margins, although I'd say the margin improvement is more impacted by higher utilization at existing facilities.

[David Garfinkle, CFO at CoreCivic]

But getting back to occupancy as we fill idle capacity and provide other bed capacity available to ICE and the U. S. Marshals Service as we get into later 2025 and into 2026, certainly we could see high 80s in a relatively short term. It is not the high. I think the high I've been with the company since 2001 and I think we were in the mid-90s back then.

[David Garfinkle, CFO at CoreCivic]

So we certainly have the capability to go higher. And only thing I'd add to that is that again, going back to pre COVID, yes, eighty seven percent sounds right. Again, we had several vacant facilities, I think in that period of time, but it's crystal clear to us that ICE is interested in every single bed that we've got in the enterprise. So to Dave's point, and going back to pre COVID eighty seven percent, but sitting here today, knowing what we know and knowing what the demand is and also knowing what the financial capability of ICE, I think every single bed that we've gotten in our enterprise is very attractive to ICE for multiple reasons.

[M. Marin, Senior Analyst at Zacks Investment Research]

Thank you very much.

[David Garfinkle, CFO at CoreCivic]

Thanks, Ann.

[Operator]

Thank you. One moment for the next question. And our next question is coming from the line of Ben Briv of Stonex Financial. Your line is open.

[Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group]

Hey, guys. Congratulations on the quarter and the guidance and thank you for taking the call. Yes.

[Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group]

So a couple of things. First of all, and maybe I missed this, but I know you said you've got 30,000 idle beds. If those were to get activated theoretically immediately, what can you put some number on the revenue potential for that? I'm not sure if you already gave it or if I missed it.

[Damon Hininger, President & CEO at CoreCivic]

Yes, I'll let Dave tackle that one.

[David Garfinkle, CFO at CoreCivic]

Yes, we did not. But if you took the $165 per diem that Damon mentioned, that's kind of the average across the country for ICE beds and apply that to the 30,000 beds, you're at $1,800,000,000 of incremental revenue. And again, not all of that is capacity in our portfolio today. As Damon mentioned, some of that's relationships with other parties to lease facilities.

[David Garfinkle, CFO at CoreCivic]

But I think we've said if you activated all of our idle 13,419 beds, we get around $500,000,000 in annual revenue, and that would translate around 200,000,000 to $225,000,000 in incremental EBITDA.

[Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group]

Okay. Got it. So 500,000,000 200,000,000 to $225,000,000 of additional EBITDA. Got it. You. I appreciate And then next thing for me. So you were talking a little about how a lot of the apprehensions are no longer happening on borders, but they're now happening in the interior. And obviously, there are detention facilities located around the country, people have to get transported from where they're obtained to those detention facilities. Can you talk a little bit about what your transportation capabilities are and how they might be expanding and any opportunities that you guys see there?

[Damon Hininger, President & CEO at CoreCivic]

Yes, great question and tag team with Dave and Patrick on that. But let me just say at high level, as I mentioned earlier, I guess it was probably October, November, we started leaning way far forward on buying vans and buses because the clear message was, as I said earlier, was detention. But the second message was, we need real help on transportation too. So we started leaning pretty far forward on getting ourselves in the queue for the purchase of vans and buses that were being constructed to different manufacturers around the country. So, we have seen a dramatic increase in the use of our transportation assets around the country.

[Damon Hininger, President & CEO at CoreCivic]

And the last thing I'll say before I give it over to Patrick is that we've gotten ourselves capability wise where if someone is being arrested in a sort of geographical location where we don't necessarily have an attention facility, we are positioning assets around the country where we can quickly go ahead and pick them up from a local jail or a local facility and then move them to one of our facilities. And so that's worked out pretty well. And that's a capability competency we've had for, gosh, over thirty years. But Patrick, would you add to that?

[Patrick Swindle, President & COO at CoreCivic]

Yes.

[Patrick Swindle, President & COO at CoreCivic]

I just had a couple of things. So obviously, our TransCore operation supports our ICE and Marshall operations all across the country. And so the TransCore network allows us to support most of the geographies in the country to the extent that that's needed. Obviously, key focus around our existing facility operations. This year, the investment that we're making in vehicles is over five times what we would normally spend for CapEx for our TransCore operations.

[Patrick Swindle, President & COO at CoreCivic]

As Damon mentioned, we wanted to be ahead of the curve knowing that there is a long lead time on purchases for buses and vans to be able to get the inventory in place so we could ramp our operations in a timely way when that was needed. So it gave us an ability to ensure that we would be able to meet those needs and we continue to receive delivery on those vehicles. The last thing I'd say is from an experience perspective, we're just celebrating our thirty fifth year anniversary of operations at our TransCore facility this year. So again, we've been able to flex up or down our transportation support needs needed by our customers. And I think what you're seeing this year is an indication of both our capability to do that and the knowledge and expertise that allow us to be able to meet that mission in addition to the housing mission.

[Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group]

Got it. Got it. Thank you. What percentage I'm not sure if you disclosed this. What percentage of, call it, I guess, LTM or twenty twenty four revenue is transport?

[Damon Hininger, President & CEO at CoreCivic]

Well, most of our transportation revenue is kind of intercompany. So we do a lot of the transportation among our own facilities. I don't have the breakout of but we do do mass moves for certain states like Hawaii, Vermont, etcetera. So that is third party revenue that shows up in our financial statements as incremental revenue. But a lot of our transportation, it comes in various forms.

[Damon Hininger, President & CEO at CoreCivic]

So we have some fixed some of our contracts have fixed monthly amounts that they pay us for to provide a minimum number of miles of transportation and then other contracts will get paid on a per mile basis. So our third party transportation revenue is not a material number, but most of the transportation revenue that we really generate is through the management contracts where it's eliminated in intercompany, but is kind of like part of the embedded in the per diem.

[Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group]

Understood. Got it. So it's kind of baked into the rest of the contract.

[Damon Hininger, President & CEO at CoreCivic]

Right. That's right.

[Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group]

Got it. Got it. All right. Well, this has been very helpful. Again, thank you guys and congratulations and I look forward to talking to you soon.

[Patrick Swindle, President & COO at CoreCivic]

Thank you.

[Damon Hininger, President & CEO at CoreCivic]

You so much.

[Operator]

Thank you. One moment for the next question. The next question I have is coming from the line of Mason Bourne of AWH Capital. Your line is open.

[Mason Bourne, Long/Short Equity Analyst at AWH Capital]

Hi, guys. Thanks for the question. More a point of clarification, but I just wanted to ask about the reported beds from ICE. And so I think the current level, like you mentioned, is about 57,000. At the beginning of the year, it was pretty easy to see where those beds were occupied by facility.

[Mason Bourne, Long/Short Equity Analyst at AWH Capital]

And more recently, that gap has really widened. And so I think most recently, I'm kind of calling them phantom beds. It's about 15,000 of the 56,000 are not broken out by facility. It seems like you're capturing them given your financial results, but just hope you could talk about that if that's a reporting issue, if it's just due to the activity or what you might think might be going on there?

[Damon Hininger, President & CEO at CoreCivic]

Yes, appreciate your question. I'm not sure I've got an answer for you. But yes, again to go to the high level number, I'm looking at the most recent report, yes, 56,945 that ICE reported, again that was on July 27. And as of yesterday, I think we were at about 13,500 within our facilities. I don't know if you had anything to add to that, Patrick.

[Patrick Swindle, President & COO at CoreCivic]

I don't. No, but we do track where growth is occurring really by facility nationally. So we can we're certainly willing to share with you our approach for gathering that data if you want to touch base with us offline.

[Mason Bourne, Long/Short Equity Analyst at AWH Capital]

Great. One other quick one. I appreciate your conservatism in the guidance. I just want to make sure that I understand it right. So I think it's not very well understood between you and your main public competitor, but you're basically at or above all of your contractual minimums, right?

[Mason Bourne, Long/Short Equity Analyst at AWH Capital]

So as you capture an incremental bet, you're getting the incremental economics of that, which I think maybe isn't necessarily the case with your competitors. Is that fair?

[Damon Hininger, President & CEO at CoreCivic]

Yes, it absolutely is fair. I would say, oh gosh, I'd say during the pandemic, we were below some of the fixed monthly guarantees. But nowadays, we have a couple of contracts that can bounce around that level. But for the most part, every incremental detainee is contributing to additional revenue. Good question.

[Mason Bourne, Long/Short Equity Analyst at AWH Capital]

Thank you.

[Damon Hininger, President & CEO at CoreCivic]

You're welcome.

[Operator]

Thank you. One moment for the next question. And the next question is coming from the line of Jay McCanless of Wedbush. Your line is open.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Hey, good morning everyone.

[Jason Weaver, MD - Head Specialty Finance & Real Estate Research at Jones Trading]

So the first question and apologies pretty basic modeling question, but if you look at the 66,100 beds that were in safety at the end of the quarter, Does that include both Dilly and Cal City?

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Or are those going to get included later in the year?

[Damon Hininger, President & CEO at CoreCivic]

It now includes both Dilly and Cal City. That's

[Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group]

correct.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Okay.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

And then so when Farmville comes on, that's an immediate add of $7.36 for that number, because I believe that facility was full when you all bought it, correct?

[Damon Hininger, President & CEO at CoreCivic]

Yes. Definitely, we'll come into that number in the third quarter, and it was about full. That takes on capacity. Wasn't completely full, high occupancy. Pretty darn close.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Okay, great. All right, thank you for that. And then, David, I want to go back to what you said about occupancy potentially getting into the mid-80s. Is that something that happens this year? Is that more of a 26% type of probability? Just maybe give us some guideposts for that.

[David Garfinkle, CFO at CoreCivic]

Yes. I think even if we're activating facilities like we talked about Cal City in our guidance because we think we could accept detainees within in the coming days and weeks, it will take some time to ramp those up. So I think that's really a 2026 before we get to the mid-80s. But certainly, I mean, we're already in the high 70s. We could be low 80s by the end of the year depending on our ability to sign new contracts.

[David Garfinkle, CFO at CoreCivic]

I think if you exclude any new contracts, we're probably going to be still be in the upper 70s, maybe low 80s. But as we expect these new contracts to come online, we'll ramp up to the mid 80s.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Okay, great. And then just the last question. You all referenced some, I think, dollars 10,000,000,000 in border funds that was allocated to DHS. Are there any revenue opportunities for Civic inside that pool of money?

[Damon Hininger, President & CEO at CoreCivic]

Yes, so the $10,000,000,000 this is Damon. The $10,000,000,000 I was referring to, yes, that's the dollars of the total $175,000,000,000 for border security under the Big Beautiful Bill Act that's for detention. So absolutely that's the money. So again, 10,000,000,000 and again that's on top of the $3,500,000,000 that's in the base appropriation that Congress does on an annual basis. So you add those two numbers together that's $13,500,000,000 on an annual basis.

[Damon Hininger, President & CEO at CoreCivic]

And again, this money is multi year money that goes through twenty twenty nine. So that is going to be the money that ICE is going to look to fund existing capacity, but also new capacity they get under contract in the coming days and weeks. That's theoretically off of the $40,000,000,000 That's 45,000,000,000 So that's exactly right. Carving out by year. That's exactly right.

[Damon Hininger, President & CEO at CoreCivic]

So that's a good clarification. So yes, that's prorated. So again, 40,000,000,000, we're saying $40,000,000,000 it's actually $45,000,000,000 There's going to be some money as we understand it to fix a couple of deficits here and there within DHS. But yes, 40,000,000,000 probably a good number for the next four plus years on top of the 3.5 that they get from Congress on an annual basis.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Right. And so I mean, since the letter contracts, something you all have been receiving this year, there's potential if they wanted to do something with that, they could put that $10,000,000,000 per year issue some new letter contracts, potential revenue opportunities for CorSoDick down the road. Is that the right way to think about it?

[Damon Hininger, President & CEO at CoreCivic]

It's pretty darn close. I guess one thing I would say is that the letter contracts that we got in Cal City and Midwest that was during early this year and the way we thought about those agreements is they were basically a bridge to help with activation activities, but also get on the other side of the big beautiful bill act. We think now that that is been passed and as we said earlier, we think in probably by the August, the actual dollars will be transferred to accounts within DHS. We think now they're going to go straight into direct contracts or IGAs with us. They're not going to use letter contracts because now they've got the funding.

[Damon Hininger, President & CEO at CoreCivic]

They don't need a bridge. They don't need a way for kind of funding as they were earlier this year. So we think that's going to not only accelerate contracting activity, but also they're going to go straight into agreements and not do these letter agreements.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Okay. That's great. Thanks guys. Appreciate it.

[Damon Hininger, President & CEO at CoreCivic]

Yes, sir.

[Operator]

Thank you. One moment for the next question. Our next question is coming from the line of Greg Gibas of Northland Securities. Your line is open.

[Greg Gibas, VP & Senior Research Analyst at Northland Securities, Inc]

Hey, thanks for taking the questions, guys. Congrats on the quarter. You mentioned expectations for U. S. Marshals Service population growth towards the 2025 into 2026.

[Greg Gibas, VP & Senior Research Analyst at Northland Securities, Inc]

What I guess are you hearing that supports those expectations? And what facilities in the portfolio are maybe best positioned to meet their needs kind of based on what they're looking for from a regional capacity perspective?

[Damon Hininger, President & CEO at CoreCivic]

Yes, great question. The first part is that just history indicates that will happen. So if you look over the last ten, fifteen years when you have a new administration, it usually takes a year, maybe eighteen months, maybe a little longer for every individual U. S. Attorney that is needed in different court districts around the country to get nominated and get through the process through the Senate.

[Damon Hininger, President & CEO at CoreCivic]

And again, there's probably about 94 U. S. Attorneys around the country. So again, that's going to take a while. Once those U.

[Damon Hininger, President & CEO at CoreCivic]

S. Attorneys get in place in different court districts around the country, then obviously they can start implementing the direction from administration from relative to focus prosecutions and certain crimes and offenses. And so history indicates that once that happens and these people get in place, they build their staff, they're getting direction from kind of behavior and prioritization relative to prosecutions in certain parts of the country, you'll start to see increase in the federal prison population for the Marshal Service. And so we're already seeing that a little bit, but once I think they get fully staffed and get through all these nominations, you'll see it increase pretty dramatically. I don't know anything you'd add to that, Patrick.

[Patrick Swindle, President & COO at CoreCivic]

The only thing I would add is that obviously in addition to the staffing changes, there are enforcement changes that take time to work their way through the system. And so combination of the appointment in The U. S. Attorneys combined with a shift in enforcement priorities toward the administration's priorities result in a bit of a lag. But as Damon said, we typically see during the second year of administration an increase in need.

[Patrick Swindle, President & COO at CoreCivic]

Now in terms of magnitude of demand, initially I would expect that would be additional utilization of existing contracts in existing facilities more than it would be need for substantial expansion of new capacity that's not already in place.

[Damon Hininger, President & CEO at CoreCivic]

And to the second part of your question, I think we've got really good opportunities in Arizona, Oklahoma, potentially Mississippi and New Mexico, all those states. We have facilities in those states with existing U. S. Marshals contracts at that capacity.

[Greg Gibas, VP & Senior Research Analyst at Northland Securities, Inc]

Sure. Very helpful. And I guess simply because I don't think it was asked yet. Are you able to provide any color or is there anything you can share on the fourth and fifth idle facility discussions and maybe more particularly the fourth that you're in advanced discussions for?

[Damon Hininger, President & CEO at CoreCivic]

Nothing more than we've shared already. Yes, we're having discussions, but not at a point yet to reveal. Obviously, we're going get a little further down the road with ICE on those discussions.

[Greg Gibas, VP & Senior Research Analyst at Northland Securities, Inc]

Fair enough. And I guess lastly, just as we think about kind of quarterly cadence, as Cal City begins intake this quarter, Dilly ramps to full occupancy by the end of this quarter, do you kind of see Q4 as a fair run rate of maybe the currently contracted facilities going forward, obviously with the exclusion of Midwest Regional?

[Damon Hininger, President & CEO at CoreCivic]

Yes, we do. Yes, I'd say if you look at Q4 on a run rate basis, you're probably no less than $400,000,000 in EBITDA on an annual basis and that does not include any of the additional contracts like the fourth and fifth idle facilities we just mentioned that we're in discussions with. One is in the advanced stages of discussions, one is kind of in the earlier stages and that's just two of them and we've got additional opportunities after that. So as we look obviously, we're not putting out guidance for 2026, but as we look out to 2026 based on the book of business that we have in 2025 and as these contracts ramp up and some of them will be fully ramped like Dilly in Q4, we don't see well, we see a minimum EBITDA of $400,000,000 going into 26,000,000 without new contracts.

[Greg Gibas, VP & Senior Research Analyst at Northland Securities, Inc]

Right. Thanks very much.

[Operator]

Thank you. One moment for the next question. And the next question comes from the line of Raj Sharma of Texas Capital. Your line is open.

[Raj Sharma, MD - Equity Research at Texas Capital]

Yes.

[Raj Sharma, MD - Equity Research at Texas Capital]

Thank you for taking my questions. Congratulations on a solid quarter and raised guidance. My first question is, can we go back to the electronic monitoring business? If you could comment on what you think the cadence of it is? Does the supervision sort of monitoring business, does it stay at current levels here as your competitor has indicated?

[Raj Sharma, MD - Equity Research at Texas Capital]

And then when should it pick back up once detention sort of goals are reached? And my question really is that if ICE levels of ICEP go back to $375,000 in Europe for a contract in six months or a year, how much of that business are you ready to take, get? What is the capacity of how much you can handle in the electronic monitoring and supervision?

[Damon Hininger, President & CEO at CoreCivic]

Yes, thank you so much. I appreciate that question. And again, I'll just reinforce, I mean, the laser focus from DHS, ICE leadership administration is detention. And again, as I said earlier, I mean, we're working 20 fourseven on to accommodate that. And again, if you look at our occupancy today, we've got a lot of runway to help support that prioritization of using detention capacity.

[Damon Hininger, President & CEO at CoreCivic]

So, I won't rehash that, but obviously that's our focus. And so to answer your question, yes, I think we would agree with GEO. Kind of our view is that the current program and its size is probably where it's going to be for the foreseeable future. Again, we're going to watch closely on kind of the timing of RFP. As GEO said yesterday, they've got the one month extension through August.

[Damon Hininger, President & CEO at CoreCivic]

They're waiting to see if they do a six or twelve month extension after that to allow time for RFP. And again, as I said earlier, we've got the competency and the capability and also if they kind of shift more to active monitoring, which is the ankle bracelet GPS type solution, we've been doing that for thirty plus years. So we've definitely got we check all the boxes relative to our ability and being very competitive in that procurement. But anything you'd add to that, Patrick? Yes.

[Damon Hininger, President & CEO at CoreCivic]

Only thing that I would add is that I think it's really important to contextualize the program overall, which is it isn't a singular service. It's a program that's actually evolved over time based on the needs of ICE and the type of monitoring that might be required during a particular period and those priorities may shift. And so clearly the prioritization is around detention services through the end of the year. That is very clear. I think the question beyond that, and it really goes back to Damon's answer earlier to one of the questions, which is the funding that's available under the One Big Beautiful Bill Act is actually in excess of 100,000 beds that gets talked about a lot right now as a targeted bed number.

[Damon Hininger, President & CEO at CoreCivic]

I think really to think about what the world looks like in six months or twelve months of being different than today is somewhat difficult at this point because funding is available to utilize more beds than 100,000 beds if that's ultimately needed. So you'd have to see a shift in priority from ICE to focus on something other than detention and we haven't seen that yet. Then in terms of capacity, obviously this is a program that we've looked at for some time. We've built the capacity and the partnerships that we believe would allow us to compete very effectively for that program at current funded levels. And so we are in a place where we would hope to be in a position to be considered as an alternative.

[Damon Hininger, President & CEO at CoreCivic]

Think we've positioned ourselves well. And certainly at the current level and capability set, we think we're very well positioned to compete at the appropriate time. But again, the short run, we believe the focus of ICE today is on detention, ramping up detention and meeting the needs of their current priorities.

[Raj Sharma, MD - Equity Research at Texas Capital]

Thank you. That's really helpful. And then my next question is on the contribution of EBITDA from the reactivated facilities. How much what's the current contribution from reactivated facilities right now in your EBITDA number? And when would you when you think you'd reach mature margin profile on these facilities that we can I know that David has talked about the potential add on in EBITDA once they turn on fully? Could you talk about that, please?

[Damon Hininger, President & CEO at CoreCivic]

So first of all, we typically don't parse the economics of our individual contracts from a contribution perspective. And so I know that's something that would be helpful from an external modeling perspective, but it's something that we typically don't do and have not done. And we've talked about what the contribution could be from a revenue perspective around our new contracts. From a timeline standpoint, we do expect our South Texas facility will hit normalized run rate for the fourth quarter. So you would expect that facility would be fully contributing and fully ramped in the fourth quarter.

[Damon Hininger, President & CEO at CoreCivic]

You would expect our Cal City facility would be ramping up and achieving normalized run rate at some point during the fourth quarter. And as Dave said during his most recent question, we would expect our run rate would be north of 400,000,000 as we exit this year. And obviously, can look at the puts and takes that have contributed to our outperformance this year. But again, we typically don't and wouldn't expect to parse the individual contract economics.

[Raj Sharma, MD - Equity Research at Texas Capital]

Got it. Thank you. Thank you for taking my questions. I'll take it offline. Thanks a lot. Congratulations, Greg.

[Operator]

Thank you. One moment for the next question. And the next question is coming from the line of Jordan Hemowitz of Philadelphia Financial Management of San Francisco. Please go ahead.

[Jordan Hymowitz, Portfolio Manager at Philadelphia Financial]

Thanks, guys. A couple of questions. The last time your occupancy was above 80%, could you remind us of the EBITDA margins? And would it actually be higher than that now given the ICE mix is a little higher profit margin or the federal more specifically than the state?

[Damon Hininger, President & CEO at CoreCivic]

I would say we were around 25, if I recall correctly. Have to go back to check to confirm for sure. But I think we are on 25%, 26% total operating margin. That's across the whole portfolio. So again, as we've mentioned, not in a portfolio of our size, have some better margins and some worse margins, but that's the average across the portfolio.

[Damon Hininger, President & CEO at CoreCivic]

I don't I wouldn't say our margin profile would change materially just with an increase in ICE business. I think they're consistent with the overall margin profile of the Safety segment. So I'd expect us, as we increase occupancy, to approach and perhaps exceed that 25% margin, again, just because of higher occupancy, not necessarily because of the specific customer.

[Jordan Hymowitz, Portfolio Manager at Philadelphia Financial]

Okay. Second question, could you remind people, you bid on the ISOB contract last time, and I believe you were the lower bidder instead it didn't win the contract. Do you see this administration possibly ignoring the lower bid if that was the case again?

[Damon Hininger, President & CEO at CoreCivic]

Yes. It's hard to say to get into the heads of people that evaluate the proposal So it'd be really kind of hard to answer that question. So again, we're waiting to see when the procurement comes out. Again, GEO said it could be a six month or twelve month extension that they get after this current extension through the end of in August.

[Damon Hininger, President & CEO at CoreCivic]

And then we'll have to evaluate when it comes out and see if they've got a new requirement. And also with that, to your question about kind of weighting of price, if that changes how they consider the overall arching kind of cost of the contract with a proposal from us and the overall arching kind of scoring of the proposal.

[Jordan Hymowitz, Portfolio Manager at Philadelphia Financial]

Okay. And final question is, do you see yourself initiating a dividend in 2026, given the increased cash flow and buyback already ongoing?

[Damon Hininger, President & CEO at CoreCivic]

Not at the current prices, no. Not at the current stock price.

[Jordan Hymowitz, Portfolio Manager at Philadelphia Financial]

Okay. Thank you.

[Damon Hininger, President & CEO at CoreCivic]

You're welcome. Thanks, Jordan. Thank you for your question.

[Operator]

Thank you. That does conclude today's Q and A session. I would like to go ahead and turn the call back over to Damian Hininger for closing remarks. Please go ahead.

[Damon Hininger, President & CEO at CoreCivic]

All right. Thank you so very much and thank you so much for your interest in the company. I know we went a little over, but also we had a lot to talk about. On behalf of the team here in the room and throughout the organization, we're deeply grateful for your interest in the company, but more importantly your support and investment in our company. We've had a tremendous, tremendous first half of twenty twenty five as you see from the financial performance, but also the forecast for the year we're going to have a very strong year as we end 2025 and going into 2026.

[Damon Hininger, President & CEO at CoreCivic]

So we look forward to talking to you at our next call in early fall. Thank you so much.

[Operator]

This does conclude today's conference call. You may all disconnect.

Participants

Executives

• Damon Hininger, President & CEO
• David Garfinkle, CFO
• Patrick Swindle, President & COO

Analysts

• David Gutierrez, Head of PR, IR & Corporate Development at Dresner Corporate Services
• Joe Gomes, Senior Research Analyst at Noble Capital Markets
• Jason Weaver, MD - Head Specialty Finance & Real Estate Research at Jones Trading
• M. Marin, Senior Analyst at Zacks Investment Research
• Ben Briggs, Director - Leveraged Finance Strategist at StoneX Group
• Mason Bourne, Long/Short Equity Analyst at AWH Capital
• Jay McCanless, MD - Equity Research at Wedbush Securities
• Greg Gibas, VP & Senior Research Analyst at Northland Securities, Inc
• Raj Sharma, MD - Equity Research at Texas Capital
• Jordan Hymowitz, Portfolio Manager at Philadelphia Financial