CoreCivic Inc (CXW) 2024 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the 2024 second-quarter CoreCivic, Inc earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 CoreCivic, Inc 2024 年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your first speaker today, Mike Grant, Managing Director of Investor Relations. Please go ahead.

現在我想將會議交給今天的第一位發言者，投資者關係董事總經理麥克·格蘭特。請繼續。

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us today. Participating on today's call are Damon Hininger, CoreCivic's President and Chief Executive Officer; and David Garfinkle, our Chief Financial Officer. We're also joined here in the room by our Vice President of Finance, Brian Hammonds.

謝謝你，接線生。早安，女士們先生們，感謝你們今天加入我們。參加今天電話會議的有 CoreCivic 總裁兼執行長 Damon Hininger；以及我們的財務長 David Garfinkle。我們的財務副總裁 Brian Hammonds 也加入了我們的行列。

On this call, we will discuss financial results for the second quarter of 2024 as well as financial guidance for the 2024 year. We will also discuss developments with our government partners and provide you with other general business updates during today's call. Our remarks, including our answers to your questions, will include forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities and Litigation Reform Act.

在本次電話會議上，我們將討論 2024 年第二季的財務表現以及 2024 年的財務指引。我們還將與政府合作夥伴討論進展情況，並在今天的電話會議中向您提供其他一般業務更新。我們的言論，包括我們對您問題的回答，將包括根據《私人證券和訴訟改革法案》安全港條款做出的前瞻性陳述。

Our actual results or trends may differ materially as a result of a variety of factors, including those identified in our second-quarter 2024 earnings release issued after market yesterday as well as in our Securities and Exchange Commission filings, including Forms 10-K, 10-Q and 8-K reports. You are also cautioned that any forward-looking statements reflect management's current views only and that the company undertakes no obligation to revise or update such statements in the future.

我們的實際結果或趨勢可能會因多種因素而產生重大差異，包括昨天盤後發布的2024 年第二季度收益報告以及我們向證券交易委員會提交的文件（包括表格10-K、10）中確定的因素-Q 和 8-K 報告。也請您注意，任何前瞻性陳述僅反映管理層當前的觀點，本公司不承擔將來修改或更新此類陳述的義務。

Management will also discuss certain non-GAAP metrics. A reconciliation of the most comparable GAAP measurements is provided in the corresponding earnings release and included in the company's quarterly supplemental financial data report posted on the Investors page of the company's website at corecivic.com.

管理階層也將討論某些非公認會計準則指標。相應的收益報告中提供了最具可比性的 GAAP 衡量標準的調節表，並包含在該公司網站 corecivic.com 投資者頁面上發布的季度補充財務數據報告中。

With that, it is my pleasure to turn the call over to our President and CEO, Damon Hininger.

至此，我很高興將電話轉給我們的總裁兼執行長 Dammon Hininger。

Thanks, Mike. Good morning, and thanks, everyone, for joining us for CoreCivic's second-quarter 2024 earnings call. On today's call, we'll provide details of our second-quarter financial performance. I will also discuss our latest operational results and update you on our latest developments with our government partners and our capital allocation strategy.

謝謝，麥克。早安，感謝大家參加我們的 CoreCivic 2024 年第二季財報電話會議。在今天的電話會議上，我們將提供第二季財務業績的詳細資訊。我還將討論我們最新的營運業績，並向您介紹我們與政府合作夥伴的最新進展以及我們的資本配置策略。

Following my remarks, I will turn the call over to our CFO, Dave Garfinkle, who will provide greater detail on our financial results and on our 2024 financial guidance. Dave will also provide an update on our ongoing capital structure initiatives, including details on our stock repurchase plan, debt repayments, and progress on our leverage target.

在我發表演講後，我將把電話轉給我們的財務長戴夫·加芬克爾 (Dave Garfinkle)，他將提供有關我們的財務業績和 2024 年財務指導的更多詳細資訊。戴夫還將提供有關我們正在進行的資本結構計劃的最新信息，包括我們的股票回購計劃、債務償還以及槓桿目標進展的詳細信息。

I'll start with a high-level overview of our second-quarter financial results. In the second quarter, we generated revenue of $490.1 million, a 6% increase compared with the prior-year quarter. During this quarter, we experienced revenue growth from all three of our partner groups, federal, state and local governments. I will provide more color on each later in this call.

我將首先概述我們第二季的財務表現。第二季度，我們營收 4.901 億美元，比去年同期成長 6%。在本季度，我們的所有三個合作夥伴群體（聯邦、州和地方政府）的收入都實現了成長。我將在本次通話中稍後為每個內容提供更多顏色。

For the second quarter of 2024, we generated normalized funds from operations or FFO of $46.6 million or $0.42 per share compared with $37.8 million or $0.33 per share in the second quarter of 2023, representing a 27% per share increase. The increase in FFO was driven by higher federal, state, and local populations in our safety and community segments, combined with expense normalization and lower interest expense resulting from our debt reduction strategy.

2024 年第二季度，我們從營運或FFO 產生的正常化資金為4,660 萬美元，即每股0.42 美元，而2023 年第二季度為3,780 萬美元，即每股0.33 美元，每股成長27% 。FFO 的增加是由於我們的安全和社區部門的聯邦、州和當地人口增加，加上我們的債務削減策略帶來的費用正常化和利息支出降低，推動了 FFO 的成長。

These increases were partially offset by slightly higher G&A expenses and decreased lease revenue in our property segment, resulting from the previously disclosed expiration of a lease with the State of California at our California City Correctional Center, effective March 31, 2024. Federal partners, primarily Immigrations and Customs Enforcement or ICE and the United States Marshals Service comprise slightly over half of CoreCivic's total revenue.

這些增長被我們房地產部門的一般管理費用略有增加和租賃收入減少所部分抵消，這是由於先前披露的與加州政府在我們的加州城市懲教中心的租約將於2024 年3 月31 日到期而導致的。聯邦合作夥伴，主要是移民和海關執法局（ICE）和美國法警局，佔 CoreCivic 總收入的一半以上。

During the second quarter of 2024, revenue from our federal partners increased 7% versus the second quarter of last year. Revenue from ICE, our largest partner, was up significantly as Title 42 was still in place for approximately half of the comparable quarter of last year. As a reminder, Title 42, which was invoked in March of 2020 at the start of COVID-19 response empowers federal health authorities to deny migrants entry to the United States in order to prevent the spread of contagious diseases.

2024 年第二季度，我們聯邦合作夥伴的營收比去年第二季成長了 7%。我們最大的合作夥伴 ICE 的收入大幅成長，因為去年同期約一半的時間裡《Title 42》仍然有效。提醒一下，第 42 條於 2020 年 3 月應對新冠肺炎 (COVID-19) 疫情之初被援引，授權聯邦衛生當局拒絕移民進入美國，以防止傳染病的傳播。

Title 42 officially ended May 11, 2023, and our populations with ICE has been consistently higher since then. During the second quarter of 2024, revenue from ICE was $151 million compared to $136.7 million during the comparable quarter of 2023.

Title 42 於 2023 年 5 月 11 日正式結束，自那時起，我們的 ICE 人口一直在增加。2024 年第二季度，ICE 的營收為 1.51 億美元，而 2023 年同期為 1.367 億美元。

Now I'd like to review ICE's usage of detention capacity broadly. Following passage of the bipartisan funding bill in March of this year, which provided funding for 41,500 detention beds, ICE's actual usage of detention beds dipped from 39,000 at the start of March to roughly 34,000 to 35,000 in April before increasing to roughly 37,000 to 38,000 to the end of the quarter. The most recent ICE detention count was just over 37,000 on July 13, 2024.

現在我想回顧一下 ICE 對拘留能力的廣泛使用。今年3 月通過了為41,500 個拘留床位提供資金的兩黨資助法案後，ICE 實際使用的拘留床位從3 月初的39,000 個下降到4 月份的約34,000 至35,000 個，然後又增加到約37,000 個至38,000 個。2024 年 7 月 13 日，ICE 最近的拘留人數剛超過 37,000 人。

Note that funded beds also include payment for a number of beds reserved under fixed payment contracts, but not fully used at certain facilities. So beds paid for do not equal beds used. And therefore, the actual number in detention won't necessarily reach that full 41,500 funded level. ICE reserves these beds under fixed payment contracts to ensure that they have capacity when needed.

請注意，資助床位還包括根據固定付款合約保留但在某些設施中未完全使用的一些床位的付款。因此，支付的床位並不等於已使用的床位。因此，實際拘留人數不一定會達到 41,500 人的資助水準。ICE 根據固定付款合約保留這些床位，以確保它們在需要時有足夠的容量。

Seasonality, economics and geopolitical dynamics, both abroad and here in United States, all influence immigration, and as such, ICE detention populations can fluctuate considerably. CoreCivic's role is to work closely and responsibly with ICE to assist them in their important mission, providing them with bed capacity in locations where needed in a safe, secure, and humane environment.

國內外的季節性、經濟和地緣政治動態都會影響移民，因此 ICE 拘留人數可能會大幅波動。CoreCivic 的職責是與 ICE 密切、負責任地合作，協助他們完成重要使命，在安全、可靠和人性化的環境中為他們提供所需地點的床位容量。

CoreCivic's revenue from state partners in our safety and community segments in the second quarter grew 5% versus the prior year. This increase is a result of higher per diem rate and steady occupancy from our state government partners, as well as contributions from new state contracts with Montana and Wyoming signed in the fourth quarter of 2023, which contributed a bit over 1% of that growth.

第二季度，CoreCivic 從安全和社區領域的國家合作夥伴那裡獲得的收入比去年同期增長了 5%。這一增長是由於我們州政府合作夥伴的每日津貼率提高和入住率穩定，以及2023 年第四季度與蒙大拿州和懷俄明州簽署的新州合約的貢獻，該合約貢獻了略高於1% 的成長。

Additionally, as you may recall, the Allen Gamble Correctional Center in Holdenville, Oklahoma, transitioned from a management contract with the State of Oklahoma to a lease in October, 2023. Excluding state revenue from the Allen Gamble facility from our second quarter 2023 which shifted to our property segment, state revenue in our safety and community segments increased nearly 10% year over year.

此外，您可能還記得，俄克拉荷馬州霍爾登維爾的艾倫甘布爾懲教中心於 2023 年 10 月從與俄克拉荷馬州的管理合約轉變為租賃合約。不包括從 2023 年第二季度開始轉移到我們的房地產部門的 Allen Gamble 設施的國家收入，我們的安全和社區部門的國家收入同比增長了近 10%。

The largest facility occupied by a state government partner in our safety segment is the La Palma Correctional Center in Eloy, Arizona, where we pivoted from a federal contract to a contract with the State of Arizona roughly two years ago. I am pleased to report that financial performance at our La Palma facility continues to progress with stable occupancy and improving operating and financial metrics.

我們安全部門中州政府合作夥伴佔用的最大設施是位於亞利桑那州埃洛伊的拉帕爾馬懲教中心，大約兩年前，我們從聯邦合約轉向與亞利桑那州簽訂的合約。我很高興地向大家報告，我們拉帕瑪工廠的財務表現持續進步，入住率穩定，營運和財務指標不斷改善。

La Palma's year-over-year EBITDA improvement in the second quarter was nearly $3 million as we began to realize the returns on our investments and hard work directed at local hiring made there to end the facility's reliance on temporary labor resources and incentives. There is still room for improvement, but it is heartening to see the progress there.

拉帕瑪第二季的 EBITDA 年成長近 300 萬美元，因為我們開始意識到我們的投資回報，並且在當地招聘方面所做的努力結束了該設施對臨時勞動力資源和激勵措施的依賴。仍有改進的空間，但看到進展令人振奮。

To round out our discussion of the second quarter 2024 revenue, local revenue in our safety and community segments, which is revenue generated from contracts with county governments increased 49%, albeit off a smaller base. This growth reflects new major contracts signed in the second half of 2023 with Hinds County, Mississippi and Harris County, Texas. Both populations are housed at our Tallahatchie County Correctional Facility located in Tutwiler, Mississippi, and the populations have adapted well.

為了完善我們對 2024 年第二季收入的討論，安全和社區領域的地方收入（即與縣政府簽訂的合約產生的收入）增長了 49%，儘管基數較小。這一增長反映了 2023 年下半年與密西西比州海因茲縣和德克薩斯州哈里斯縣簽署的新主要合約。這兩個人都被關押在位於密西西比州圖特懷勒的塔拉哈奇縣懲教所，這些人已經適應得很好。

CoreCivic's overall occupancy in our safety and community segments for the second quarter of 2024 increased to 74.3% from 70.3% in the prior-year period. This growth in occupancy stems from both higher use of existing contracts, particularly with ICE, and also from the four new contracts signed in the second half of 2024 that I have mentioned.

2024 年第二季度，CoreCivic 在安全和社區領域的整體入住率從去年同期的 70.3% 增至 74.3%。入住率的成長源於對現有合約（尤其是與 ICE 的合約）的更多使用，以及我提到的 2024 年下半年簽署的四份新合約。

From the second quarter of 2023 to the second quarter of this year, occupancy in our safety segment increased from 70.8% to 75.1%, while our occupancy in our community segment declined very slightly from 62.8% to 62.3%. As we have mentioned in the past, our operating model has significant embedded operating leverage from changes in occupancy, and this was a factor in our margin improvement during the second quarter.

從 2023 年第二季度到今年第二季度，我們的安全部分的入住率從 70.8% 增加至 75.1%，而我們的社區部分的入住率則略有下降，從 62.8% 降至 62.3%。正如我們過去所提到的，我們的營運模式因入住率變化而具有顯著的嵌入營運槓桿，這是我們第二季利潤率改善的因素。

In recent calls, we have discussed labor attraction and retention, important components of our business that has become particularly challenging, starting with the onset of the COVID-19 pandemic. Labor market pressures during 2022 and 2023 necessitated temporary incentives and related incremental operating expenses, including travel and expense outlays. Using the flexibility that as an integral part of the private market solution set, the CoreCivic team responded by designing and implementing differentiated human capital strategies and investing in our frontline employee compensation.

在最近的電話會議中，我們討論了勞動力的吸引和保留，這是我們業務的重要組成部分，自 COVID-19 大流行爆發以來，這些組成部分變得尤其具有挑戰性。2022 年和 2023 年勞動市場壓力需要臨時激勵措施和相關增量營運支出，包括差旅和費用支出。CoreCivic 團隊利用作為私募市場解決方案不可或缺的一部分的靈活性，透過設計和實施差異化的人力資本策略並投資於我們的第一線員工薪酬來回應。

As a result of these initiatives, we have increased our staffing levels through improved recruiting and labor retention. The labor markets we see today in most of our geographies are displaying significant normalization and greater workforce stability. The labor cost increases we see now have returned to relatively normal levels, both on a year-over-year basis and in relation to per diem rates. Our improved staffing has allowed us to dial back elevated spending on temporary incentives and associated travel expenses and has positioned us well operationally to manage our customers' higher population needs.

由於這些舉措，我們透過改善招募和勞動力留任來提高人員配備水準。我們今天在大多數地區看到的勞動力市場都表現出顯著的正常化和更大的勞動力穩定性。我們現在看到的勞動成本成長已經恢復到相對正常的水平，無論是同比還是每日工資率。我們改進的人員配置使我們能夠減少臨時獎勵和相關差旅費用的增加支出，並使我們能夠在營運上更好地管理客戶更高的人口需求。

Our safety segment has provided 92% of total revenue year to date, and the net operating income for our safety segment increased 25% during the second quarter of 2024 over the second quarter of 2023, reflecting the strong occupancy trends and cost management efforts I just detailed.

迄今為止，我們的安全部門佔總收入的 92%，2024 年第二季度我們安全部門的淨營業收入比 2023 年第二季度增長了 25%，反映了強勁的入住趨勢和成本管理工作。 。

Turning to our community segment, which is currently comprised of 21 residential re-entry facilities serving the bureau prisons as well as state and county governments. The community segment is engaged primarily in the important activities that prepare individuals for successful re-entry to their communities after a period of incarceration or as an alternative to incarceration.

轉向我們的社區部分，目前由 21 個住宅再入境設施組成，為局監獄以及州和縣政府提供服務。社區部門主要從事重要活動，幫助個人在監禁一段時間後成功重返社區或作為監禁的替代方案。

In addition to our 21 residential re-entry facilities, our non-residential services, electronic monitoring and case management services are also included in our community segment. As mentioned, occupancy in our community segment was essentially flat in the second quarter of 2024 compared with the second quarter of 2023. However, net operating income in this segment increased 13% due to per diem increases attained in connection with contract renewals in addition to cost discipline.

除了我們的 21 個住宅重返設施外，我們的非住宅服務、電子監控和案件管理服務也包含在我們的社區部分。如前所述，與 2023 年第二季相比，2024 年第二季我們社區部分的入住率基本上持平。然而，由於與合約續約以及成本控制相關的每日津貼增加，該部門的淨營業收入增加了 13%。

Similar to our safety segment, our community segment facilities have been able to reduce temporary staffing incentives. We remain positive about the occupancy outlook for the community segment now that the pandemic-related public health policies have ended and as more of our government partners return their focus to the importance of re-entry to curb their recidivism challenge.

與我們的安全部門類似，我們的社區部門設施已經能夠減少臨時人員配置激勵措施。由於與疫情相關的公共衛生政策已經結束，而且我們越來越多的政府合作夥伴將注意力重新集中到重新進入以遏制累犯挑戰的重要性上，我們對社區部分的入住前景仍然持樂觀態度。

Our strong financial performance has underpinned our ability to execute on our long-term capital allocation strategy. During the second quarter of 2024, we repurchased 1.3 million shares of our common stock at a cost of $20 million. We ended the quarter with leverage measured as net debt to adjusted EBITDA at 2.5 times for the trailing 12 months, placing us at the midpoint of our 2.25 times to 2.75 times leverage target range that we established in August of 2020.

我們強勁的財務表現支撐了我們執行長期資本配置策略的能力。2024 年第二季度，我們以 2,000 萬美元的成本回購了 130 萬股普通股。本季結束時，過去 12 個月中，以淨負債與調整後 EBITDA 的比率衡量的槓桿率為 2.5 倍，處於我們於 2020 年 8 月制定的 2.25 倍至 2.75 倍槓桿目標範圍的中點。

We have accomplished what we set out to achieve, and we are proud of the strategy, focus, and diligence that contributed to our success. In his comments, Dave will provide you with further detail regarding our capital markets activities.

我們已經實現了我們設定的目標，我們為促成我們成功的策略、專注和勤奮感到自豪。戴夫將在評論中向您提供有關我們資本市場活動的更多詳細資訊。

Before discussing growth opportunities and concluding our remarks, I wanted to discuss our South Texas Family Residential Center in Dilley, Texas, where operations will officially cease tomorrow. And I would like to start with a bit of history.

在討論成長機會和結束我們的演講之前，我想討論一下位於德克薩斯州迪利的南德克薩斯家庭住宅中心，該中心的運營將於明天正式停止。我想從一些歷史開始。

In 2014, during the Obama-Biden administration, ICE came to CoreCivic as a trusted partner to help them solve an emergent and high-profile challenge of providing temporary residential space and screening for family groups crossing the southern border. Prior solutions attempted by the government had proven inadequate, and ICE recognized CoreCivic' ability to respond to challenges, nimbly, and swiftly both inherent advantages of the private sector.

2014 年，在歐巴馬-拜登執政期間，ICE 作為值得信賴的合作夥伴來到 CoreCivic，幫助他們解決一項引人注目的緊急挑戰，即為穿越南部邊境的家庭團體提供臨時居住空間和篩檢。政府先前嘗試的解決方案被證明是不夠的，ICE 認識到 CoreCivic 靈活、迅速地應對挑戰的能力，這都是私營部門的固有優勢。

We ultimately agreed to a contract for a unique facility, a facility that would be operated under family residential standards. In 2021, at the request device, the facility shifted its mission to the detention of single adults initially females and then later to males. ICE chose to retain operations under the family residential standards, which embedded higher costs, presumably because it preserves flexibility around future use of the facility.

我們最終同意了一份獨特設施的合同，該設施將按照家庭住宅標準運營。2021 年，根據設備的請求，該設施將其任務轉向拘留單身成年人，最初是女性，後來是男性。ICE 選擇保留家庭住宅標準下的運營，這意味著更高的成本，大概是因為它保留了未來設施使用的靈活性。

As we disclosed on June 10, ICE communicated to us that based on the costs of the facility, their budgetary pressures and desire for additional more secure detention capacity, which provides them flexibility, they intended to terminate the contract for services at the South Texas facility on August 9, and reprogrammed the savings into new capacity in existing and new contracts in key strategic locations in the United States.

正如我們在6 月10 日所揭露的那樣，ICE 告知我們，基於該設施的成本、他們的預算壓力以及對額外更安全的拘留能力的渴望（這為他們提供了靈活性），他們打算終止南德克薩斯設施的服務合約8 月 9 日，並將節省的資金重新規劃為美國關鍵戰略地點現有和新合約的新產能。

We're extremely proud of the South Texas Family Residential Center and thankful for the nearly 10 years it was able to serve the evolving needs of ICE. Our team at South Texas is excellent, bringing compassion and a wealth of skills and discipline, and many of them have accepted employment opportunities we have offered them at other CoreCivic facilities.

我們對南德克薩斯家庭住宅中心感到非常自豪，並感謝它在近 10 年來滿足 ICE 不斷變化的需求。我們在德州南部的團隊非常優秀，他們富有同情心、豐富的技能和紀律，其中許多人接受了我們在其他 CoreCivic 設施中提供的就業機會。

While we are winding down this contract, the longer-term macroenvironment for our federal, state and local business remains extremely strong. The complex challenges our government partner is facing include existing capacity limitations, aging infrastructure, staffing challenges, and populations that are increasing in numbers and involving in their needs.

雖然我們正在逐步終止這份合同，但我們聯邦、州和地方業務的長期宏觀環境仍然極其強勁。我們的政府合作夥伴面臨的複雜挑戰包括現有的能力限制、基礎設施老化、人員配備挑戰以及人口數量不斷增加並滿足其需求。

In particular, we remain in discussions with federal, state and local government agencies, including several agencies we do not currently serve, to help address their various challenges in the near to long term. Some of these opportunities may require activations of several of our idle facilities.

特別是，我們仍在與聯邦、州和地方政府機構（包括我們目前不服務的幾個機構）進行討論，以幫助他們解決近期和長期的各種挑戰。其中一些機會可能需要啟動我們的一些閒置設施。

Demonstrating this need at the federal level, on May 30, ICE issued an RFI seeking information on facilities within three areas of responsibility: Chicago, Harlingen, and Salt Lake City. Generally, facilities should be within a two-hour commute from the listed ICE field or sub field office, comply with ICE performance-based national detention standards, have approximately 850 to 950 detention beds and an infirmary.

為了在聯邦層級證明這一需求，ICE 於 5 月 30 日發布了一份 RFI，尋求有關芝加哥、哈林根和鹽湖城三個責任區域內設施的資訊。一般來說，設施應距離所列 ICE 辦事處或分辦事處不到兩小時通勤路程，符合 ICE 基於績效的國家拘留標準，擁有約 850 至 950 個拘留床位和一個醫務室。

They prefer a dedicated facility but will consider a shared facility. Interested parties may propose one or more facilities in each area of responsibility or AOR and may also support multiple AOR.s. The RFI is for informational purposes only and does not constitute an RFP or commitment to issue an RFP.

他們更喜歡專用設施，但會考慮共享設施。有興趣的各方可以在每個責任區域或責任區提出一個或多個設施，也可以支援多個責任區。 RFI 僅供參考，並不構成 RFP 或發布 RFP 的承諾。

Responses to the RFI were due June 23, 2024. We have responded with multiple facility options, including our idled 1,033-bed Midwest regional reception center in Kansas. This is the largest advertisement for potential new detention capacity by ICE in over 10 years, and we believe we're the only provider with available capacity in all three locations.

對 RFI 的回覆截止日期為 2024 年 6 月 23 日。我們提供了多種設施選擇來應對，其中包括位於堪薩斯州閒置的 1,033 個床位的中西部地區接待中心。這是 ICE 十多年來最大的潛在新拘留能力廣告，我們相信我們是唯一一家在所有三個地點都擁有可用能力的提供者。

Further demonstrating growing needs at the federal level, on June 26, ICE issued an RFP for up to 600 detention beds in the state of New Jersey, which would expand their capacity in that state. Initial responses were due on July 17.

6 月 26 日，ICE 發布了一份在新澤西州設立多達 600 個拘留床位的 RFP，這進一步證明了聯邦層面不斷增長的需求，這將擴大該州的拘留床位。初步答覆截止日期為 7 月 17 日。

Demonstrating the growing need at the state level, as mentioned in our earnings press release yesterday on July 25, 2024, we received a notice of intent to award a new management contract from the state of Montana. We are pleased to extend our relationship with the state of Montana. During the current quarter, we anticipate receiving 120 residents at our 1,896-bed Saguaro Correctional Facility in Eloy, Arizona, where we already manage 120 residents for the state of Montana. Upon receiving these additional residents, Saguaro facility will be near full capacity.

正如我們在 2024 年 7 月 25 日的收益新聞稿中提到的，我們收到了蒙大拿州授予新管理合約的意向通知，這表明州一級的需求不斷增長。我們很高興擴大與蒙大拿州的關係。在本季度，我們預計在亞利桑那州埃洛伊設有 1,896 個床位的 Saguaro 懲教所接收 120 名居民，我們已經在那裡管理蒙大拿州的 120 名居民。在接收這些額外的居民後，仙人掌設施將接近滿載。

Under the new contract, Montana may also utilize additional facilities we operate subject to availability, should they have the need. We also manage the company-owned and fully occupied Crossroads Correctional Center in Shelby, Montana, pursuant to a separate management contract with the State of Montana.

根據新合同，如果蒙大拿州有需要，他們還可以利用我們運營的額外設施（視情況而定）。根據與蒙大拿州簽訂的單獨管理合同，我們還管理公司擁有且完全佔用的蒙大拿州謝爾比十字路口懲教中心。

In addition to Montana, as I previously mentioned, we are in discussions with several other existing state partners as well as new state partners that could result in the activation of one or more idle facilities. We believe these opportunities could manifest in both the short term as well as in the long term.

正如我之前提到的，除了蒙大拿州之外，我們正在與其他幾個現有的州合作夥伴以及新的州合作夥伴進行討論，這可能會導致啟動一個或多個閒置設施。我們相信這些機會可能會在短期和長期內顯現出來。

So in conclusion, our operating costs continue to improve and the agencies we serve continue to demonstrate a growing need for our solutions. Our financial results for the second quarter and first half of 2024 reflect the value of our solutions and also the ongoing hard work and prudent decisions made by our focused team here at CoreCivic. Our readily available bed capacity in key locations position us well to serve the growing needs of our government partners.

總之，我們的營運成本持續改善，我們服務的機構繼續表現出對我們解決方案日益增長的需求。我們 2024 年第二季和上半年的財務表現反映了我們解決方案的價值，也反映了我們 CoreCivic 專注團隊的持續努力和審慎決策。我們在關鍵地點隨時可用的床位容量使我們能夠很好地滿足政府合作夥伴不斷增長的需求。

As Dave will explain in further detail, we are updating our financial guidance for 2024 based on our strong financial performance in the second quarter but also reflecting the termination of the South Texas Family Residential facility management contract effective on August 9.

正如 Dave 將進一步詳細解釋的那樣，我們根據第二季度強勁的財務業績更新了 2024 年的財務指引，同時也反映了 8 月 9 日生效的南德克薩斯州家庭住宅設施管理合約的終止。

And now I will turn the call over to Dave, who will provide a detailed look at our second-quarter financial results, our capital market activities, and assumptions included in our newly updated financial guidance. Over to you, Dave.

現在我將把電話轉給戴夫，他將詳細介紹我們第二季的財務表現、我們的資本市場活動以及我們新更新的財務指引中包含的假設。交給你了，戴夫。

Thank you, Damon, and good morning, everyone. In the second quarter of 2024, we reported GAAP net income of $0.17 per share compared with $0.13 per share in the prior-year quarter. Excluding special items, adjusted EPS during the second quarter was $0.20 compared with $0.12 per share in the prior-year quarter, exceeding average analyst estimates as well as our internal forecast by $0.05 per share.

謝謝你，達蒙，大家早安。2024 年第二季度，我們公佈的 GAAP 淨利潤為每股 0.17 美元，而去年同期為每股 0.13 美元。不包括特殊項目，第二季調整後每股收益為 0.20 美元，而去年同期為每股 0.12 美元，超出分析師平均預期以及我們內部預測每股 0.05 美元。

Special items in the current year quarter include $4.1 million of expenses associated with debt repayments and refinancing transactions. Normalized FFO per share was $0.42 during the second quarter of 2024 compared with $0.33 in the prior-year quarter, an increase of 27%.

本季的特殊項目包括與債務償還和再融資交易相關的 410 萬美元費用。2024 年第二季度，每股標準化 FFO 為 0.42 美元，與去年同期的 0.33 美元相比，成長 27%。

Adjusted EBITDA was $83.9 million compared with $72.1 million in the prior-year quarter, an increase of $11.8 million or 16%. The increase in adjusted EBITDA resulted from higher occupancy from federal, state, and local populations and the continued normalization of our operating expense structure. These factors also contributed to the increase in adjusted EPS and normalized FFO per share.

調整後 EBITDA 為 8,390 萬美元，較上年同期的 7,210 萬美元增加 1,180 萬美元，即 16%。調整後 EBITDA 的增加是由於聯邦、州和當地居民入住率的提高以及我們營運費用結構的持續正常化。這些因素也導致了調整後每股收益和標準化每股 FFO 的增加。

These increases were net of a reduction in facility net operating income of $7.3 million, or $0.05 per share, resulting from the previously disclosed lease termination with the State of California, effective March 31, 2024, at our California City Correctional Center reported in our property segment. Federal revenue in our safety and community segments increased $16.1 million or 6.6% from the second quarter of 2023 to the second quarter of 2024. State revenue in these segments increased $9.5 million or 5.3% from the second quarter of 2023 to the second quarter of 2024, which included revenue from two new contracts with the state of Montana and Wyoming awarded in the fourth quarter of 2023.

這些增長扣除了設施淨營業收入減少730 萬美元或每股0.05 美元的淨額，該減少是由於之前披露的與加利福尼亞州的租賃終止（自2024 年3 月31 日起生效）導致的，我們的加州城市懲教中心在我們的財產中報告。從 2023 年第二季到 2024 年第二季度，我們安全和社區領域的聯邦收入增加了 1,610 萬美元，即 6.6%。從2023 年第二季度到2024 年第二季度，這些領域的州收入增加了950 萬美元，即5.3%，其中包括2023 年第四季度與蒙大拿州和懷俄明州簽訂的兩份新合約的收入。

The increase in state revenue is net of a reduction of $7.5 million resulting from the transition of our Allen Gamble Correctional Center in Oklahoma from a facility we previously operated in our safety segment to a facility we now leased to the State of Oklahoma in our property segment, effective October 1, 2023. This facility generated $1.9 million of revenue in our property segment during the second quarter of 2024, but was nonetheless more profitable in our property segment than it was in our safety segment.

州收入的增長扣除了俄克拉荷馬州艾倫甘布爾懲教中心從我們之前在安全部門運營的設施轉變為我們現在在財產部門租賃給俄克拉荷馬州的設施而減少的 750 萬美元，自2023 年10 月1 日起生效。該設施在 2024 年第二季為我們的房地產部門創造了 190 萬美元的收入，但我們的房地產部門的利潤仍然高於我們的安全部門。

Local revenue in our safety and community segments increased $4.1 million or 49% from the second quarter of 2023 to the second quarter of 2024, primarily resulting from new contracts with Hinds County, Mississippi awarded in the third quarter of '23 and Harris County Texas awarded in the fourth quarter of 2023. Finally, revenue in our property segment declined primarily due to the aforementioned expiration of the lease at our California City facility, which resulted in a reduction of $7.8 million from the second quarter of 2023 to the second quarter of 2024.

從2023 年第二季度到2024 年第二季度，我們的安全和社區部門的當地收入增加了410 萬美元，即49%，這主要是由於23 年第三季度與密西西比州海因茲縣簽訂的新合約以及與德州哈里斯縣簽訂的新合約2023年第四季。最後，我們房地產部門的收入下降主要是由於上述加州城工廠的租約到期，導致 2023 年第二季至 2024 年第二季收入減少 780 萬美元。

Operating margin on our safety and community facilities combined improved to 23.7% in the second quarter of 2024 compared to 20.6% in the prior-year quarter. The increase in our operating margin was due to the increase in occupancy from 70.3% to 74.3% for our safety and community segments combined, an increase in our average per diem rate by 4.8% over the prior-year quarter and the normalization of operating expense trends we have experienced over the past several quarters, continuing into the second quarter of 2024.

2024 年第二季度，我們的安全和社區設施的營業利潤率合計提高至 23.7%，而去年同期為 20.6%。我們營業利潤率的成長是由於我們的安全和社區部門的入住率從 70.3% 增加到 74.3%，我們的平均每日津貼比去年同期增加了 4.8%，以及營業費用的正常化我們在過去幾個季度經歷過的趨勢，一直持續到2024 年第二季。

During the second quarter, we were able to continue reducing certain operating expenses such as registry nursing, temporary wage incentives, and travel, all related to labor market pressures that have been steadily easing over the past several quarters. These three expense categories declined by $7.4 million from the second quarter of 2023.

在第二季度，我們能夠繼續減少某些營運費用，例如登記護理、臨時工資激勵和旅行，所有這些都與過去幾個季度穩步緩解的勞動力市場壓力有關。這三類費用較 2023 年第二季減少了 740 萬美元。

Turning next to the balance sheet. During the second quarter, we redeemed the remaining $98.8 million outstanding balance on our old 8.25% senior unsecured notes that were scheduled to mature April 15, 2026, at a redemption price of 104.125% of the principal amount resulting in the aforementioned $4.1 million charge. This redemption completed the refinancing transactions begun during the first quarter with the issuance of $500 million of new senior unsecured notes at an interest rate of 8.25% percent. The proceeds of these notes, which have a maturity date of April 15, 2029, were used to tender for the then outstanding $593.1 million principal balance of our old 8.25% percent notes.

轉到資產負債表旁邊。在第二季度，我們贖回了原定於2026 年4 月15 日到期的8.25% 高級無抵押票據的剩餘9,880 萬美元未償餘額，贖回價格為本金的104.125%，導致上述410 萬美元費用。這次贖回完成了第一季開始的再融資交易，發行了 5 億美元的新優先無抵押票據，利率為 8.25%。這些票據的到期日為 2029 年 4 月 15 日，所得收益用於投標我們舊利率 8.25% 票據當時未償還的 5.931 億美元本金餘額。

In addition to the net proceeds received from the issuance of the new 8.25% notes, we used borrowings under our revolving credit facility and cash on hand to fund the tender and redemption of the old 8.25% notes. Following the completion of the tender offer of $494.3 million of the old 8.25% notes during the first quarter and the redemption of the remaining $98.8 million principal balance in the second quarter, we have no debt maturities until 2027, when $243.1 million of senior unsecured notes at a rate of 4.75% mature.

除了發行新的 8.25% 票據所收到的淨收益外，我們還利用循環信貸安排下的借款和手頭現金為舊 8.25% 票據的投標和贖回提供資金。在第一季完成4.943 億美元舊利率8.25% 票據的要約收購併在第二季度贖回剩餘9,880 萬美元本金餘額後，我們直到2027 年才到期債務，屆時將有2.431 億美元的高級無擔保票據成熟率為4.75%。

During the second quarter, we also repurchased 1.3 million shares of our common stock at an aggregate purchase price of $20.1 million, increasing the total share repurchases during 2024 to 4 million shares at an aggregate purchase price of $59.5 million.

第二季度，我們也以 2,010 萬美元的總購買價回購了 130 萬股普通股，使 2024 年回購的股票總數增加到 400 萬股，總購買價為 5,950 萬美元。

On May 16, 2024, our Board of Directors authorized an increase to the share repurchase program up to an additional $125 million, increasing the total authorization to $350 million. Since our share repurchase program was announced in May 2022 through June 30, we have repurchased 14.1 million shares of our stock at a total cost of $172.1 million or an average price of $12.20 per share, leaving $177.9 million available under the Board authorization.

2024 年 5 月 16 日，我們的董事會授權將股票回購計畫增加至 1.25 億美元，使授權總額增加至 3.5 億美元。自我們於2022 年5 月宣布股票回購計畫以來，截至6 月30 日，我們已回購1,410 萬股股票，總成本為1.721 億美元，平均價格為每股12.20 美元，董事會授權下還剩下1.779 億美元。

As of June 30, we had $60 million of cash on hand and an additional $232 million of borrowing capacity on our revolving credit facility, providing us with total liquidity of $292 million. Our leverage measured by net debt to adjusted EBITDA was 2.5 times using the trailing 12 months ended June 30, 2024, down from 3.1 times at June 30, 2023, and within our targeted leverage of between 2.25 times and 2.75 times.

截至 6 月 30 日，我們手頭上有 6,000 萬美元現金，循環信貸額度還有 2.32 億美元的額外借貸能力，為我們提供了 2.92 億美元的流動性總額。截至2024 年6 月30 日的過去12 個月，我們的槓桿率（以淨債務與調整後EBITDA 衡量）為2.5 倍，低於2023 年6 月30 日的3.1 倍，且在我們2.25 倍至2.75倍的目標槓桿範圍內。

Moving lastly to a discussion of our 2024 financial guidance. We expect to generate adjusted EPS of $0.58 to $0.66 and normalized FFO per share of $1.48 to $1.56. We expect federal populations to remain within a stable range for the remainder of 2024. If national detention populations increase and are sustained at higher levels, there could be upside to our guidance.

最後討論我們的 2024 年財務指引。我們預計調整後每股收益為 0.58 美元至 0.66 美元，標準化 FFO 為每股 1.48 美元至 1.56 美元。我們預計 2024 年剩餘時間內聯邦人口將維持在穩定範圍內。如果國家拘留人數增加並維持在較高水平，我們的指導可能會有好處。

Our guidance includes the impact from the previously disclosed termination of the contract at the South Texas Family Residential Center effective August 9, 2024. This facility is expected to contribute $0.08 of normalized earnings per share in the third quarter, its final quarter of operations, compared with $0.11 in the second quarter. These normalized amounts do not include an impairment charge of approximately $0.02 per share anticipated in the third quarter for the write-off of certain remaining assets at the facility.

我們的指導包括先前披露的南德克薩斯家庭住宅中心合約終止的影響，該合約將於 2024 年 8 月 9 日生效。該設施預計將在第三季（即營運的最後一個季度）貢獻 0.08 美元的正常化每股收益，而第二季為 0.11 美元。這些標準化金額不包括預計在第三季沖銷該設施某些剩餘資產的每股約 0.02 美元的減損費用。

Because the operating margin at this facility exceeded the average operating margin of our safety and community segments due to its size and scalability of expenses, and due to the unique design and specialized services provided at the facility, all else equal, we expect our operating margin to decline by approximately 150 basis points to 200 basis points for a full quarter. Our forecast does not include an increase in populations that could result from the reallocation of federal budget dollars from our South Texas contract to other detention beds, which could provide upside to our guidance.

由於該設施的規模和費用可擴展性，以及由於該設施提供的獨特設計和專業服務，在其他條件相同的情況下，該設施的營業利潤率超過了我們安全和社區部門的平均營業利潤率，因此我們預計我們的營業利潤率整個季度下降約 150 個基點至 200 個基點。我們的預測不包括因聯邦預算資金從德克薩斯州南部合約重新分配到其他拘留床而可能導致的人口增加，這可能為我們的指導提供上行空間。

Our guidance also includes additional residents from the State of Montana based on the notice of intent to award a new management contract we just received July 25. We currently expect to receive approximately 120 residents during the current quarter at our 1,896-bed Saguaro Correctional Facility in Arizona, doubling the current population from the State of Montana at this facility, which was 91% occupied during the second quarter. We also care for approximately 1,000 residents from Hawaii and 600 residents from the State of Idaho at this facility. Under the new award, Montana may also approve the utilization of any other facility we own or operate should the state need additional capacity.

根據我們 7 月 25 日剛收到的授予新管理合約的意向通知，我們的指導還包括來自蒙大拿州的其他居民。目前，我們預計本季將在亞利桑那州設有1,896 個床位的Saguaro 懲教所收容約120 名居民，使該設施目前蒙大拿州的人口增加一倍，該設施在第二季度的入住率為91%。我們也在該機構照顧大約 1,000 名來自夏威夷的居民和來自愛達荷州的 600 名居民。根據新的裁決，如果蒙大拿州需要額外的產能，蒙大拿州還可以批准使用我們擁有或經營的任何其他設施。

Our guidance does not include any additional share repurchases. Although, our leverage at June 30 is squarely within our targeted range, leverage, which is calculated using EBITDA for the trailing 12 months will mathematically increase as a result of the termination of the contract at the South Texas facility beginning August 10.

我們的指導不包括任何額外的股票回購。儘管我們 6 月 30 日的槓桿率完全在我們的目標範圍內，但由於南德克薩斯工廠的合約從 8 月 10 日開始終止，使用過去 12 個月 EBITDA 計算的槓桿率將會增加。

Accordingly, in order to minimize the impact on leverage, we intend to prioritize the use of our free cash flow to further reduce our debt ahead of stock repurchases although we may exercise discretion in repurchasing additional shares of our common stock, taking into consideration our leverage, earnings trajectory, stock price, liquidity, and alternative opportunities to deploy capital.

因此，為了盡量減少對槓桿率的影響，我們打算在股票回購之前優先利用我們的自由現金流進一步減少我們的債務，儘管考慮到我們的槓桿率，我們可以酌情決定回購更多普通股。 、獲利軌跡、股價、流動性以及部署資本的替代機會。

Our balance sheet and cash flows remain strong with no near-term debt maturities and readily available bed capacity, positioning us well to take advantage of opportunities in the marketplace. We expect adjusted funds from operations or AFFO, which we consider a proxy for our cash flow available for capital allocation decisions to range from $162.4 million to $172.4 million or $1.45 to $1.54 per share for 2024.

我們的資產負債表和現金流仍然強勁，沒有短期債務到期，而且床位容量隨時可用，這使我們能夠很好地利用市場機會。我們預計，2024 年來自營運或AFFO 的調整後資金將在1.624 億美元至1.724 億美元之間，即每股1.45 美元至1.54 美元之間，我們將其視為可用於資本分配決策的現金流的代表。

We expect our normalized effective tax rate to be approximately 30% for the remainder of the year, which after considering the lower effective tax rate for the first quarter equates to an annual effective tax rate of approximately 27.5%. The full-year EBITDA guidance in our press release provides you with our estimate of total depreciation and interest expense.

我們預計今年剩餘時間的標準化有效稅率約為 30%，考慮到第一季較低的有效稅率，相當於年度有效稅率約為 27.5%。我們新聞稿中的全年 EBITDA 指引為您提供了我們對總折舊和利息費用的估計。

We are forecasting G&A expenses in 2024 to be slightly higher than 2023. We plan to spend $62 to $66 million on maintenance capital expenditures during 2024, unchanged from our previous guidance and $8 million to $10 million for other capital investments, also unchanged from our previous guidance.

我們預計 2024 年的一般管理費用將略高於 2023 年。我們計劃在2024 年期間花費6200 至6600 萬美元用於維護資本支出，與我們之前的指導保持不變，併計劃花費800 萬至1000 萬美元用於其他資本投資，也與我們之前的指導保持不變。

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

我現在將把電話轉回給接線員，以開通提問線路。

Thank you. At this time, we will conduct the question-and-answer session. (Operator Instructions)

謝謝。這時，我們將進行問答環節。（操作員說明）

Joe Gomes, Noble Capital.

喬·戈麥斯，貴族資本。

Good morning. Thanks for taking the questions. So I wanted to start on the South Texas. Obviously, it ends --contract ends tomorrow. You’ve provided the owner of the facility with your lease termination notice. But given the environment and where we are, so close to a new election here, the potential for a change in administration, is there a way that you guys can kind of keep that facility -- your options for that facility open at least through the to see what happens here at the -- in the election?

早安.感謝您提出問題。所以我想從德克薩斯州南部開始。顯然，合約明天就結束了。您已向設施所有者提供租賃終止通知。但是考慮到環境和我們所處的位置，這裡距離新的選舉如此之近，政府有可能發生變化，有沒有一種方法可以讓你們保留該設施——你們對該設施的選擇至少通過看看選舉中會發生什麼事？

Yes, sir. This is Damon. And short answer is yes. So we’ve got a great relationship with the owner of the assets down there, target, who has been again a great partner here in the last 10 years. And I think just generally, I think you know this history a little bit, Joe, but we got our first family detention contract with ICE back in 2006. They wound down that contract in 2009. That was at another property. It was actually at our Taylor, Texas facility, and then they came back to us in 2014.

是的，先生。這是達蒙。簡短的回答是肯定的。因此，我們與那裡的資產所有者 Target 建立了良好的關係，在過去 10 年裡，他再次成為這裡的優秀合作夥伴。我想一般來說，我想你對這段歷史有所了解，喬，但我們早在 2006 年就與 ICE 簽訂了第一份家庭拘留合約。他們於 2009 年終止了該合約。那是在另一處房產。它實際上是在我們位於德克薩斯州泰勒的工廠，然後他們在 2014 年回到了我們這裡。

So history indicates that there is a chance, maybe a good chance, that depending on the needs on the Southwest border, they come back to us for a solution. So that’s a long way of saying, absolutely, we’re keeping all our options open for sure. I don’t know if you have anything to add to that, Dave.

所以歷史表明，他們有機會，也許是一個很好的機會，根據西南邊境的需要，回到我們這裡尋求解決方案。因此，從長遠來看，我們絕對會保留所有選擇。我不知道你是否還有什麼要補充的，戴夫。

We do have a 90-day marketing period with them that begins on Friday where we work together to try to come up with a replacement customer. So that would take us through the middle of November. So I’m sure they’ll be looking for other customers as well. But as Damon mentioned, they’re a really good partner, and we continue to have dialogue about exactly what you just described.

我們確實與他們有一個為期 90 天的行銷期，從週五開始，我們將共同努力尋找替代客戶。這樣我們就可以度過十一月中旬了。所以我確信他們也會尋找其他客戶。但正如達蒙所提到的，他們是一個非常好的合作夥伴，我們將繼續就您剛才所描述的內容進行對話。

Okay. Thanks for that. And then I know typically, in July is when the state budgets all come in and you start to see some per diem -- potential per diem increases for the year forward. Just trying to get a idea how that kind of played out this year for some of your state contracts.

好的。謝謝你。然後我知道，通常情況下，七月是國家預算全部進來的時候，你開始看到一些每日津貼——未來一年每日津貼的潛在增長。只是想了解今年你們的一些州合約的情況如何。

Yeah. Dave maybe can give you a number or two, but overall, we had a good spring. So again, we work closely with our partners and in turn, with their engagement with legislators around the country and the dozen or so states that we have direct contracts with. So I’d say generally we had a overall good year.

是的。戴夫也許可以給你一兩個數字，但總的來說，我們度過了一個愉快的春天。因此，我們再次與我們的合作夥伴密切合作，反過來，他們也與全國各地的立法者以及與我們有直接合約的十幾個州接觸。所以我想說，總的來說，我們度過了整體良好的一年。

As you know, last couple of years, we got some pretty outsized per diem increases where a big chunk of that would go to salary increases to deal with all the challenges in the labor market because of the pandemic. So I’d say this spring felt a little more kind of a normal spring, kind of pre-COVID, where you’d see increases in kind of the range of 2% to 4% depending on the jurisdiction. But I think you’d add to that, Dave.

如您所知，過去幾年，我們的每日津貼大幅增加，其中很大一部分將用於加薪，以應對疫情造成的勞動力市場的所有挑戰。所以我想說，今年春天感覺更像是一個正常的春天，有點像新冠疫情之前的春天，你會看到增幅在 2% 到 4% 的範圍內，具體取決於司法管轄區。但我認為你應該補充這一點，戴夫。

Yeah. I was looking at the number. That’s exactly right. It was low-single digits, a little bit higher than CPI. So a pretty normal year as it was with our wage increases this year as well.

是的。我正在看號碼。完全正確。這是較低的個位數，略高於 CPI。所以這是非常正常的一年，因為今年我們的薪水也漲了。

Okay. Thanks for that. And one more, if I may. So obviously, listened to the GEO call yesterday. And if you’re looking at the ICE numbers -- Damon, you did talk about them -- that mid-June they hit about 38,500 to come back down, as you said, to 37,000 level, authorizations for 41,500. One of the things that GEO mentioned is they felt that ICE is budget-constrained for moving much past that 37,000 number.

好的。謝謝你。如果可以的話，再來一張。顯然，昨天聽了 GEO 電話會議。如果你看看 ICE 的數字——達蒙，你確實談到過——6 月中旬，他們的數量達到了 38,500 人左右，正如你所說，回到了 37,000 人的水平，授權數量為 41,500 人。GEO 提到的一件事是，他們認為 ICE 的預算限制使其無法超過 37,000 個數字。

Wanted to try to get your guys' thoughts on that topic. Do you think they are constrained and the fact that South Texas is now gone, that does give them the flexibility to -- in other areas -- other facilities to increase populations there?

想嘗試了解你們對這個主題的想法。您認為他們是否受到限制，而南德克薩斯現在已經消失，這確實使他們能夠靈活地在其他地區建立其他設施來增加那裡的人口？

Yeah. I think that’s a good question, and I think that’s right. Again, they said when they took the action on South Texas, it was budget-related, but also, they wanted to get capacity in some other locations around the country, especially capacity that maybe was able to take higher custody detainees.

是的。我認為這是一個好問題，而且我認為這是正確的。他們再次表示，當他們在德州南部採取行動時，這是與預算相關的，但他們也希望在全國其他一些地方獲得能力，特別是可能能夠接收更多拘留者的能力。

And so we’ve seen a little bit higher utilization already in our system. Again, the budget won’t be impacted until after tomorrow, because obviously, that’s when the contract expires. So from now until end of September, I think there is a chance we’ll see a little higher utilization, not necessarily brand-new contracts, but I think it’s just probably existing contracts where they increase utilization a little bit.

因此，我們已經看到我們的系統利用率有所提高。同樣，預算要到明天之後才會受到影響，因為顯然，那是合約到期的時候。因此，從現在到 9 月底，我認為我們有可能會看到利用率有所提高，不一定是全新的合同，但我認為可能只是現有合約的利用率有所提高。

As I said in my script too, they do try to keep some beds kind of on reserve throughout the system. So I don’t know if they get to exactly that 41,500 number before the end of the fiscal year. But I don’t know if you have anything to add to that, Dave.

正如我在腳本中所說，他們確實嘗試在整個系統中保留一些床位。所以我不知道他們是否會在本財年結束前準確地達到 41,500 個數字。但戴夫，我不知道你是否還有什麼要補充的。

I think you covered everything I was going to say.

我想你已經涵蓋我要說的一切了。

Jason Weaver, JonesTrading.

賈森‧韋弗，瓊斯交易公司。

Hey. Good morning. Thanks for taking my question. Along those same lines, just quickly on the guidance for the second half, is any amount of that variation due to the uncertainty around the ICE appropriations process where the budget will start on October 1?

嘿。早安.感謝您提出我的問題。同樣，對於下半年的指導，由於 ICE 撥款流程（預算將於 10 月 1 日開始）的不確定性，是否會產生任何變化？

Yeah. Let me maybe tag team with Dave on this to give you a little just how we're thinking about next year for the fiscal year starting October 1. And so we think there's probably a pretty good chance that the federal government will be funded through a continued resolution.

是的。也許讓我和 Dave 一起討論這個問題，向您介紹我們對明年 10 月 1 日開始的財政年度的看法。因此，我們認為聯邦政府很有可能透過一項持續的決議來獲得資金。

Again, kind of have to look in a crystal ball on timing, on how long that goes. But I think it's probably a pretty good guess it goes past the election and probably even past the beginning of the first of the year. And so basically, that resets the budget amount, specifically for ICE, at that 41,500 number.

再說一次，我們必須透過水晶球來判斷時機，看看這會持續多久。但我認為這可能是一個很好的猜測，它會持續到大選之後，甚至可能持續到年初。基本上，這將預算金額（特別是 ICE 的預算金額）重置為 41,500 個數字。

But I guess the other thing I'd point to is that we do know that the House has released their funding proposal for ICE, which would take it up to 50,000. I don't believe, as of today, Senate has released their funding number. But just a reminder, they did do a funding number in that bipartisan immigration bill back in, I think, February or March of this year. Ultimately, that didn't get passed, but of note, that was also at 50,000. So we don't think that's a coincidence that they're thinking kind of that number for next year. And again, that bill on the Senate side was bipartisan.

但我想我要指出的另一件事是，我們確實知道眾議院已經發布了對 ICE 的資助提案，該提案將使其達到 50,000 美元。我不相信，截至今天，參議院已經公佈了他們的資金數量。但提醒一下，他們確實在今年二月或三月的兩黨移民法案中列出了資金數量。最終，該提案並未獲得通過，但值得注意的是，該提案也達到了 5 萬人。因此，我們認為他們為明年考慮這個數字並不是巧合。再說一遍，參議院方面的這項法案是兩黨共同支持的。

So we'll have to wait and see. Again, got to get through the election, get through the end of the year. And as it relates to total funding levels, that will get enacted, we think, probably first of next year.

所以我們必須拭目以待。再說一遍，必須完成選舉，完成年底。由於它與總資金水準有關，我們認為這可能會在明年年初頒布。

So going back to your question around guidance, we're seeing rest of the year kind of stable populations within our system. So even though there could be a pretty significant increase next fiscal year, at the moment, we're not baking that into guidance. But anything you could add to that, Dave?

因此，回到您關於指導的問題，我們看到今年剩餘時間我們系統內的人口數量保持穩定。因此，儘管下一財年可能會有相當大的成長，但目前我們還沒有將其納入指引。但戴夫，你還有什麼可以補充的嗎？

Yeah. As Damon said, our forecast contemplates pretty stable federal populations for the rest of the year. And populations can fluctuate. Here we are in the peak summer months, which is typically the time when you see lower migration to the US because of the heat. And then there's other factors that Damon mentioned in his prepared remarks that can influence populations.

是的。正如達蒙所說，我們的預測考慮到今年剩餘時間聯邦人口相當穩定。而且人口可能會波動。現在正值夏季高峰期，通常在這個時候，由於炎熱，前往美國的移民數量會減少。達蒙在他準備好的演講中提到了其他可能影響人口的因素。

I think when October 1 hits, the federal budget will refresh. So there's always a chance that they feel more comfortable spending more dollars earlier in the year.

我認為當 10 月 1 日到來時，聯邦預算將會刷新。因此，他們總是有可能在今年早些時候花更多的錢感到更自在。

And then finally, my last point would be they did indicate -- ICE did indicate that they have the flexibility to reallocate the South Texas contract dollars to 1,600 additional detention beds. So in theory, I think that would increase the funded level from 41,500. But again, not in our forecast; we're contemplating stable throughout the rest of the year. But we'll just have to wait and see.

最後，我的最後一點是他們確實表明——ICE 確實表明他們可以靈活地將南德克薩斯合約資金重新分配給 1,600 個額外的拘留床位。所以從理論上講，我認為這將使資助水準從 41,500 增加。但同樣，這不在我們的預測之內；我們正在考慮在今年剩餘時間內保持穩定。但我們只能拭目以待。

Got it. That's helpful. Thank you. And then dovetailing into that, I believe the House appropriations bill also seemingly expands the ISAP program to cover the entire non-detained docket, whether that gets done is anybody's guess. But if it becomes significantly larger, can you see that contract being opened up to more than just a single vendor? And how would your offering fit into that program?

知道了。這很有幫助。謝謝。與此相吻合的是，我相信眾議院撥款法案似乎也擴大了 ISAP 計劃，以涵蓋整個非拘留案件，至於是否能完成，誰也說不準。但如果它變得明顯更大，你能看到該合約不僅僅開放給單一供應商嗎？您的產品將如何融入該計劃？

Yeah. So you're exactly right on the funding level. So we've been watching that closely, and I think it's absolutely the case. I think if they have to go up to several million participants in that program, then I think they'll have to open it up for multiple vendors to provide that type of scale and flexibility for that size of program.

是的。所以你在資金水平上是完全正確的。所以我們一直在密切關注，我認為情況絕對是如此。我認為，如果他們必須在該計劃中增加數百萬參與者，那麼我認為他們必須向多個供應商開放，以便為該規模的計劃提供這種類型的規模和靈活性。

So we've been doing a lot of work obviously. We've got within our community segment a lot of expertise on monitoring and what the right devices are, if it's ankle bracelet or if it's a wrist worn device or whatnot. So we've been doing a lot of work and testing and getting ourselves prepared.

所以顯然我們已經做了很多工作。我們的社區部分擁有大量監控方面的專業知識，以及什麼是合適的設備，是否是腳環或腕帶設備等。因此，我們做了很多工作和測試，並做好了準備。

But yes, I think if there's a significant increase in that program, they'll have to look at multiple providers to provide solutions, not just on the technology side, but I think also on the counseling and case management. Anything you could add to that, Dave?

但是，是的，我認為如果該計劃有顯著增加，他們將不得不尋找多個提供者來提供解決方案，不僅在技術方面，而且我認為也在諮詢和案例管理方面。戴夫，你還有什麼可以補充的嗎？

Yeah, our approach is a little different when it comes to that contract with respect to the technology. We're kind of technology agnostic and would look to other technology providers to team with us. So that obviously avoids the capital expenditures that are necessary to constantly invest into the technology, different solutions that ICE may request. Obviously, that comes at the downside of a little bit of margin that goes to those providers, but it relieves us of that capital obligation, probably the main difference.

是的，當涉及技術方面的合約時，我們的方法有點不同。我們對科技持不可知論態度，希望其他技術提供者與我們合作。因此，這顯然避免了持續投資於 ICE 可能要求的技術和不同解決方案所需的資本支出。顯然，這會導致這些提供者獲得一點利潤，但它減輕了我們的資本義務，這可能是主要的區別。

But again, we do have -- when it comes to the case management services, we provide a lot of those services, particularly in our residential re-entry centers today. But if they are going to expand it to the 7 million non-detained docket that they've discussed, I think you're going to see multiple providers involved in that type of a solution.

但同樣，我們確實有 - 當談到案件管理服務時，我們提供了很多這樣的服務，特別是在今天的住宅重新進入中心。但如果他們打算將其擴展到他們討論過的 700 萬未拘留案件，我認為您將看到多個提供者參與此類解決方案。

Got it. Thank you for that color, and congrats on the quarter.

知道了。感謝您的這種顏色，並祝賀本季。

Brian Violino, Wedbush.

布萊恩·維奧利諾，韋德布希。

Great. Thanks for taking my questions. Just wanted to touch on the NOI margins. I heard in the comments that South Texas is probably going to have 150, 200 basis point negative impact, which would put the safety segment margin just under 22% pro forma. But it sounds like the expense environment is improving. I guess, can you just talk about the potential for margin expansion above that pro forma level looking out into the back half of the year?

偉大的。感謝您回答我的問題。只是想談談 NOI 的利潤。我在評論中聽說南德克薩斯州可能會產生 150、200 個基點的負面影響，這將使安全部門利潤率預計略低於 22%。但聽起來消費環境正在改善。我想，您能談談今年下半年利潤率擴大到預計水準以上的潛力嗎？

Yeah, I will take that one. Thanks, Brian. Yes, and similar to what we have seen in increases in occupancy from, say, the second quarter of last year to the second quarter of this year, it's a very leveraged model such that those margins do increase the higher occupancy goes. So we're still 6 percentage points, 7 percentage points away from pre-pandemic occupancy. So if occupancy continues to increase, we would expect those margins to offset -- at least partially offset that reduction that we will see from the South Texas contract.

是的，我會接受那個。謝謝，布萊恩。是的，與我們所看到的從去年第二季到今年第二季的入住率成長類似，這是一個槓桿率很高的模型，因此，隨著入住率的提高，這些利潤率確實會增加。因此，我們距離疫情前的入住率還有 6 個百分點、7 個百分點。因此，如果入住率繼續增加，我們預計這些利潤將被抵消——至少部分抵消我們將從南德克薩斯合約中看到的減少。

Per diem increases, as we mentioned, we got a little bit better than CPI, I think, during the July 1 timeframe, which is when state government budgets reset. So that will help margin improvement as well. That would again be offset a little bit by the wage increases that we also provide at our state facilities effective July 1. So certainly increased opportunity with occupancy, that's going to be the biggest driver.

正如我們所提到的，每日津貼的增加，我認為，在 7 月 1 日的時間範圍內，也就是州政府預算重置的時間裡，我們的表現比 CPI 好一點。因此，這也將有助於提高利潤率。這將再次被我們在 7 月 1 日生效的國家機構提供的工資上漲所抵消。因此，入住率肯定會增加，這將是最大的推動因素。

Got it. Makes sense. And just one more on the reallocation of funds from South Texas, I guess, could you talk about if you think -- and it sounds like the answer is maybe yes -- but if you think that this really increases the likelihood of new facilities opening just with all the RFIs and RFPs coming out. And then just your thoughts on the timeline of when we could start to hear awards being given out related to those RFPs and later on RFIs, probably.

知道了。有道理。我想，還有一個關於從德克薩斯州南部重新分配資金的問題，您能否談談您是否認為——聽起來答案可能是肯定的——但如果您認為這確實增加了開設新設施的可能性就在所有 RFI 和 RFP 出來之後。然後，請談談您對我們何時開始聽到與這些 RFP 以及稍後的 RFI 相關的獎項授予的時間表的想法。

Yeah. Great, great question. And I think you're -- it's spot on with your comment there. I think it's no coincidence on the timing of that contract and the action they took on terminating it with the RFIs they released. So again, looking for three different locations in different parts of the country for up to 1,000 beds -- again, that kind of advertisement came out right around the time we got the notice from South Texas.

是的。很好，很好的問題。我認為你的評論是正確的。我認為該合約的時間表以及他們透過發布的 RFI 終止合約所採取的行動並非巧合。再次，我們在全國不同地區的三個不同地點尋找最多 1,000 個床位——再次，此類廣告就在我們收到南德克薩斯州的通知時發布。

So I think they're thinking about that way, again, not only increase utilization in existing contracts, but also this gives them the comfort to go ahead and at least move forward on RFI. Obviously, they haven't done RFP yet, so obviously got to see that next. But I think it's a good indication by them taking that initial step with the advertisements for these three facilities that now with these budget savings, they can kind of redeploy that in new capacity around the country.

因此，我認為他們正在考慮這種方式，不僅可以提高現有合約的利用率，而且還可以讓他們放心地繼續前進，至少在 RFI 方面取得進展。顯然，他們還沒有完成 RFP，所以接下來顯然需要看看。但我認為，他們透過這三個設施的廣告邁出了第一步，這是一個很好的跡象，現在有了這些預算節省，他們可以在全國範圍內重新部署新的產能。

But anything you could add to that, Dave?

但戴夫，你還有什麼可以補充的嗎？

Yeah. I think in the short-term it would be allocated more toward existing facilities with existing contracts. I mean, here we are, August 8, I guess it is. It'd be tough to get them done before the end of the fiscal year given the state that they're only in an RFI stage, as Damon mentioned. But the South Texas contract does free up permanent dollars even beyond the end of this fiscal year. So I still think that they'll act on that RFI.

是的。我認為短期內它將更多地分配給現有合約的現有設施。我的意思是，我們到了，8 月 8 日，我想是這樣。正如達蒙所提到的，考慮到這些項目還處於徵求意見稿階段，在本財政年度結束之前完成這些項目將很困難。但南德克薩斯州的合約確實在本財年結束後釋放了永久資金。所以我仍然認為他們會根據 RFI 採取行動。

Timing is always difficult to predict with any government agency, but the average timeframe from beginning RFI to award is six months-ish. So that could give some idea. Now, it's an election year, so don't know if that's going to factor into the timing of an award or not.

對於任何政府機構來說，時間總是很難預測，但從開始 RFI 到授予合約的平均時間為六個月左右。這樣可以提供一些想法。現在是選舉年，所以不知道這是否會影響頒獎時間。

But we do know that they have historically said that they have a need. And as we proposed our facility in Kansas, we've had a lot of conversations with ICE about that facility passed though. So I still think they could act on that one.

但我們確實知道他們歷史上曾說過他們有需要。當我們提議在堪薩斯州設立設施時，我們與 ICE 就該設施進行了多次對話，但最終還是通過了。所以我仍然認為他們可以採取行動。

Ben Briggs, StoneX Financials.

Ben Briggs，StoneX Financials。

Hey, guys. Good morning and thank you for taking the questions and also congratulations on the quarter. So the vast majority of mine got asked and answered here, so thank you. But last one I had was -- I believe the answer is no -- but can you just clarify for me does this share buyback authorization expire, or would it have to be basically terminated for it to expire?

嘿，夥計們。早安，感謝您提出問題，並對本季表示祝賀。所以我的絕大多數問題都在這裡被問到並得到了回答，所以謝謝。但我的最後一個是——我相信答案是否定的——但你能為我澄清一下這個股票回購授權是否到期，或者是否基本上必須終止才能到期？

Correct. No, it does not expire. It's open ended. I think we gave the 177 million remaining under that authorization, and we have not suspended it. What I said in my prepared remarks is we'll kind of slow down the share repurchase until we get better visibility because of the increase in leverage that will come from South Texas.

正確的。不，它不會過期。它是開放式的。我認為我們已經提供了該授權中剩餘的 1.77 億美元，並且我們沒有暫停它。我在準備好的演講中所說的是，我們將放慢股票回購的速度，直到我們獲得更好的能見度，因為南德克薩斯州的槓桿率將會增加。

But it is certainly open. We have no restrictions on our ability to buy back stock. Our covenants are well within cushion on our covenants. So if there's opportunities we could act on those opportunities. But short answer to your question is no expiration on that authorization.

但它肯定是開放的。我們回購股票的能力沒有任何限制。我們的契約完全在我們的契約的緩衝範圍內。因此，如果有機會，我們可以抓住這些機會採取行動。但對你的問題的簡短回答是該授權不會過期。

Okay, I got it. And I do see in your release here that you state you -- and I think you stated during the scripted portion -- that you intend to prioritize the use of free cash flow to reduce debt. Is there any authorization that's necessary for you guys to buy back debt? Or is that -- you can kind of do that at your option?

好的，我明白了。我確實在你的新聞稿中看到，你說你打算優先使用自由現金流來減少債務，我認為你在腳本部分也說過。你們回購債務是否需要任何授權？或者說——你可以根據自己的選擇這樣做？

Yeah, we've had that conversation with our board previously, so we have that option. We speak to them about capital allocation strategies every quarterly board meeting, and we'll be having that discussion in the coming weeks with them again, but I wouldn't expect any restrictions there.

是的，我們之前已經與董事會進行過對話，所以我們有這個選擇。我們在每季的董事會會議上都會與他們討論資本配置策略，我們將在未來幾週內再次與他們討論，但我不認為會有任何限制。

Edwin Groshans, Compass Point.

艾德溫‧格羅尚斯，《指南針點》。

Good morning, and thank you for taking my questions. You mentioned, I think you said RFI with New Jersey, and I guess there is some state laws there about not having or sponsoring private prisons. So can you just talk about that a little bit? It seems unusual that ICE knowing this, would go out and put out a request for that state.

早上好，感謝您回答我的問題。你提到，我想你提到了新澤西州的 RFI，我想那裡有一些州法律關於不設立或資助私人監獄。那你能簡單談談這個嗎？ICE 知道這一點，卻出面向州政府提出請求，這似乎很不尋常。

Yeah, good question. So yeah, let me distinguish here a little bit. So they did -- ICE did an RFI earlier this spring for three locations in kind of the mid to -- middle part of the country and the western part of the country: Salt Lake, Chicago, and then South Texas. And so we've participated in that RFI and submitted proposals under that RFI.

是的，好問題。是的，讓我在這裡稍微分辨一下。於是他們就這樣做了——今年春天早些時候，ICE 為美國中中部和西部的三個地點進行了資訊徵求（RFI）：鹽湖城、芝加哥，然後是德克薩斯州南部。因此，我們參與了該 RFI 並根據該 RFI 提交了提案。

On a parallel path, ICE is also taking steps to basically do the recompete of a contract that we've already actually have in place with ICE in Elizabeth, New Jersey. This is a operation that we've had for almost 30 years. So we've gone through a couple cycles on the recompete of this contract. And I have to say we're really, really proud of this operation. We've got great performance record there and great working relationship with the local folks there in the ICE office.

與此同時，ICE 也在採取措施，基本上重新競爭我們已經與新澤西州伊麗莎白市的 ICE 簽訂的合約。這項手術我們已經進行了近 30 年。因此，我們已經經歷了幾個週期來重新競爭這份合約。我必須說，我們對這次行動感到非常非常自豪。我們在那裡擁有出色的業績記錄，並與 ICE 辦公室的當地人建立了良好的工作關係。

And so this recompete of that contract. There has been obviously some legal action by the State of New Jersey here in the last couple of years, challenging the authority of ICE doing direct contracts with private providers like us. We have prevailed in those cases most recently. It is still pending litigation. But we do feel like with other legal challenges we've seen during the history of our company around the country, that will prevail ultimately.

因此，重新履行該合約。過去幾年，新澤西州顯然採取了一些法律行動，挑戰 ICE 與像我們這樣的私人提供者直接簽訂合約的權威。我們最近在這些案件中取得了勝利。目前該案仍在等待訴訟。但我們確實認為，我們公司歷史上在全國範圍內看到的其他法律挑戰最終將佔上風。

So ICE, knowing all that in the background, they still felt comfortable to go ahead and do the RFP. And again, we'll compete in it. And again, we feel really good with our chance of being a 30-year operator there. But I don't know -- anything you'd add to that, Dave?

因此，ICE 在了解了所有背景後，仍然放心地繼續進行 RFP。再說一次，我們將參與其中。再說一次，我們對有機會成為那裡 30 年的營運商感到非常高興。但我不知道——戴夫，你還有什麼要補充的嗎？

Nope. I think you covered it there, too, Damon.

沒有。我想你也提到了這一點，達蒙。

All right. Thank you, Damon, and thank you for the clarification on that. I did have a question on the RFI. I think you answered part of it saying that they put out the RFI right after the announcement they told you that you were closing the South Texas facility, but it also seems a little bit unusual. I was wondering, is there anything to read in relative to the increase in beds to 41,500? Or do you anticipate or hear that ICE maybe looking to alter some of its detention policies, maybe in response to Biden's June 4 proclamation or anything along those lines?

好的。謝謝你，達蒙，也謝謝你對此的澄清。我確實對 RFI 有疑問。我想你回答了其中的一部分，說他們在宣布要關閉南德克薩斯工廠後立即發布了 RFI，但這似乎也有點不尋常。我想知道，相對於床位增加到 41,500 個，有什麼值得閱讀的嗎？或者您是否預計或聽說 ICE 可能會尋求改變其一些拘留政策，也許是為了回應拜登 6 月 4 日的公告或類似的內容？

Yeah. Good question. I wouldn't say -- generally, we're not hearing anything kind of relative to change in policy on detention capacity and kind of what the requirements should be or standards. Those have been pretty consistent here last couple of years. So we're not hearing or seeing anything relative to kind of change of view or policy.

是的。好問題。我不會說——一般來說，我們沒有聽到任何與拘留能力政策變化以及要求或標準相關的變化。過去幾年，這些情況一直非常一致。因此，我們沒有聽到或看到任何與觀點或政策變化相關的事情。

And again, not necessarily to your question, but relative to the size, again, they'll be able to increase somewhat incrementally, again with the savings with South Texas, but if they go much bigger or larger than that, they'll have to wait until the next fiscal year and what ultimately is appropriate from Congress and signed by the President. But I don't know if there's anything else you can add to that, Dave?

再說一遍，不一定是你的問題，但相對於規模，他們將能夠稍微增量地增加，同樣是通過南德克薩斯州的儲蓄，但如果他們變得更大或更大，他們將有等到下一個財政年度，國會最終提出適當的建議並由總統簽署。但我不知道戴夫，你還有什麼可以補充的嗎？

No. Unless you were asking about the 41,500 as we've mentioned, that includes some funding under fixed price contracts. So the actual people detained will be lower than the 41,500 if they're going to be spending at 41,500. And again, the South Texas should create more capacity to fund additional detention.

不。除非您詢問的是我們提到的 41,500 美元，否則這包括固定價格合約下的一些資金。因此，如果他們的支出為 41,500，那麼實際被拘留的人數將低於 41,500。同樣，南德克薩斯州應該創造更多的能力來資助額外的拘留。

[Court Mangum].

[曼古姆法院]。

Hey, guys, thanks for taking my question. Really most of my questions have been answered, but I just wanted to dig a bit more into just sort of what happened with South Texas. You guys have always had a really good grasp on the way that the winds are blowing regarding potential changes to facility renewals and non-renewals and keeping us pretty well prepared for those changes.

嘿，夥計們，謝謝你提出我的問題。事實上，我的大部分問題都得到了解答，但我只是想進一步深入了解南德克薩斯州發生的事情。你們一直非常清楚地了解設施更新和不更新的潛在變化的風向，並使我們為這些變化做好充分準備。

I get obviously what happened with South Texas, but just sort of what happened there to sort of catch us all off guard so much? And do you think -- is there really anything else out there that might be like this in the future that could potentially catch us off guard?

我顯然明白南德克薩斯州發生了什麼，但那裡發生的事情讓我們所有人措手不及？你認為──未來是否真的有其他類似的事情可能會讓我們措手不及？

Yeah. I appreciate that question. The South Texas facility, again, going back to kind of history, as I understand it, up until 2006, they had never done family detention. And we were, again, the first company they called when they thought about it for the first time, and we did a solution in Taylor, Texas, and we did it for about three years. And then again, it was five years later then we've got a call from the Obama-Biden administration about some of the challenges of southwest border, and they want to revisit that policy on family detention.

是的。我很欣賞這個問題。德州南部的設施，再次回顧歷史，據我了解，直到 2006 年，他們從未進行過家庭拘留。我們再次成為他們第一次考慮這個問題時打電話給的第一家公司，我們在德克薩斯州泰勒提出了一個解決方案，我們做了大約三年。五年後，我們接到了歐巴馬-拜登政府關於西南邊境的一些挑戰的電話，他們希望重新審視有關家庭拘留的政策。

So I think it's been well-known that the policy, obviously, for that type of solution is going to be driven by the administration and whoever's in the White House. And that policy may change depending on not only the needs or desires of the administration but also what the challenges are with on the southwest border. And that could be not only just family units but also potentially on migration patterns, nationalities, gender and whatnot. And with that, ICE has got to be very flexible based on the needs on the southwest border at that moment.

因此，我認為眾所周知，這種解決方案的政策顯然將由政府和白宮的任何人推動。該政策可能會發生變化，不僅取決於政府的需求或願望，還取決於西南邊境面臨的挑戰。這不僅可能涉及家庭單位，還可能涉及移民模式、國籍、性別等。因此，ICE 必須根據當時西南邊境的需求非常靈活。

So a long way of saying that that's been the case -- working with ICE for almost 40 years, they have to be pretty nimble and flexible based on the needs on the southwest border but also the desires and the priorities of the administration. And with that, we've got to be there lockstep with them to meet those needs based on changing conditions.

從長遠來看，情況確實如此——與 ICE 合作近 40 年，他們必須根據西南邊境的需求以及政府的願望和優先事項保持相當靈活和靈活。因此，我們必須與他們保持同步，根據不斷變化的條件來滿足這些需求。

But anything you could add to that, Dave?

但戴夫，你還有什麼可以補充的嗎？

Yeah. And as far as kind of taken by surprise, the facility was highly utilized right up until the date where we received that notification. So we did not see that coming. And furthermore, it is very unusual for ICE to exit contracts in the middle of their term. They always have that right.

是的。令人驚訝的是，直到我們收到通知之日，該設施的利用率一直很高。所以我們沒有預見到這種情況的發生。此外，ICE 在合約期間中期退出合約的情況非常罕見。他們總是有這個權利。

All of our government partners have cancellation for non-appropriation of funds, in most cases for convenience as well. But with a 95% plus renewal rate, it doesn't happen that often, let alone in the middle of a contract; this contract even had some term left on it.

我們所有的政府合作夥伴都因未撥款而取消，在大多數情況下也是為了方便。但續約率高達 95% 以上，這種情況不會經常發生，更不用說在合約期間了；這份合約甚至還剩下一些期限。

So it was very surprising. We understand the reasons -- the budget driven and trying to reallocate those dollars, which we've always known. It's a very expensive contract because of the unique design and the unique set of services that we provide at that facility. So it drove the cost up. So I understand the reasons, but it was unusual.

所以這是非常令人驚訝的。我們理解其中的原因——預算驅動並試圖重新分配這些美元，這是我們一直都知道的。這是一份非常昂貴的合同，因為我們在該設施提供獨特的設計和獨特的服務。所以就推高了成本。所以我明白原因，但這很不尋常。

And don't expect any others. Like I said, they have the right to, but it's such an unusual facility that we wouldn't expect any other actions similar to this one.

並且不要指望任何其他人。就像我說的，他們有權這樣做，但這是一個不尋常的設施，我們不會期望有任何其他類似的行動。

M. Marin, Zack.

M.馬林，札克。

Thank you. I'll be brief, because we've spent a lot of time, obviously, talking about several topics, specifically ICE contracts. So I'm wondering if in the past -- in prior calls, you've talked about how you've had increased conversations with a number of different perspectives and existing customers across the board, including states and counties. And obviously, you just saw you signing a new state contract with the state of Montana. Are you still seeing interest at the same level from those more regional customers or prospective customers?

謝謝。我會很簡短，因為我們顯然花了很多時間討論幾個主題，特別是 ICE 合約。所以我想知道在過去 - 在之前的電話中，您是否談到過如何與許多不同的觀點和現有客戶（包括州和縣）進行更多的對話。顯然，您剛剛看到您與蒙大拿州簽署了一份新的州合約。您是否仍看到那些更多區域客戶或潛在客戶具有相同程度的興趣？

Yeah. Great question, and the short answer is absolutely. So this last year, I mean, we've seen a lot of activity at the state and local level. So Montana, we've talked about on this call. We've seen increased utilization from Idaho. We've seen increased utilization in Georgia. We've seen increased utilization in Colorado. New contract here recently with Wyoming, and then at the local level, Hinds County in Mississippi and Harris County in Texas.

是的。很好的問題，簡短的回答是絕對的。我的意思是，去年我們在州和地方層級看到了很多活動。蒙大拿州，我們在這次電話會議中討論過。我們看到愛達荷州的利用率增加。我們看到喬治亞州的利用率有所提高。我們看到科羅拉多州的利用率有所提高。最近與懷俄明州簽訂了新合同，然後在地方一級、密西西比州的海因茲縣和德克薩斯州的哈里斯縣簽訂了新合同。

So a lot of activity in the last 6, 8, 10 months, and that activity has continued to be very brisk. We've got a lot of conversations going on again with existing partners but also a few new ones. And a couple of conversations are actually around activating idle capacity or vacant facilities. And so we continue to see really strong interest from both existing and new partners.

因此，過去 6、8、10 個月有很多活動，而且這些活動仍然非常活躍。我們與現有合作夥伴再次進行了許多對話，但也與一些新合作夥伴進行了對話。一些對話實際上是圍繞著激活閒置產能或空置設施進行的。因此，我們繼續看到現有和新合作夥伴都表現出濃厚的興趣。

But I don't think anything you could add to that, Dave?

但我認為你沒有什麼可以補充的，戴夫？

Nothing, Damon.

沒什麼，達蒙。

Well, that's always an important thing for you to consider, is absorbing idle capacity. So those are good conversations, I'm thinking.

嗯，吸收閒置產能始終是您需要考慮的重要事項。我想，這些都是很好的對話。

Yes, ma'am.

是的，女士。

Yeah. Well, I guess I would add the capital expenditure forecast that we have does include some capital expenditures for a facility, because we're running out of big blocks of space. We still have some at a facility in Mississippi that we've been using for our most recent wins, but have to start thinking about which would be our next facility that we activate. So we've allocated some dollars there to make sure we're ready in the event the opportunity presents itself.

是的。好吧，我想我會添加我們的資本支出預測，其中確實包括設施的一些資本支出，因為我們已經沒有大塊空間了。我們在密西西比州的一個設施中仍然有一些設施，我們最近的勝利一直在使用這些設施，但我們必須開始考慮哪個設施將是我們啟動的下一個設施。因此，我們在那裡分配了一些資金，以確保我們在機會出現時做好準備。

Okay, thank you. And then last question, which is in terms of being ready for if and when the opportunity presents itself. You talked earlier in the -- I believe, in your prepared remarks about staffing levels. And I'm not sure -- I think what you said was you're not quite at the same level as pre-COVID.

好的，謝謝。最後一個問題是，如果機會出現，就要做好準備。我相信，您早些時候在準備好的有關人員配置水平的評論中談到過。我不確定——我認為你所說的是你與新冠疫情之前的水平不完全一樣。

The guidance calls for some increased staffing, I believe you said, but we did see during certain parts of COVID and then even after COVID, that you were seeing that you had to pay certain incentives, sign-on bonuses. We're past that at this point, aren't we?

我相信您說過，指導意見要求增加人員配備，但我們確實在新冠疫情期間甚至在新冠疫情之後看到，您必須支付某些激勵措施、簽約獎金。我們現在已經過去了，不是嗎？

Yeah. We're past that. We were past that -- I'm sorry, I didn't hear that last part, but, yeah, we are past that. And we're doing a lot better. I mean, again, I'd say generally, the challenges we had staffing, as I talked to my peers and other companies here in the Nashville business community, I think we were pretty close on having similar challenges. But sitting here today, we still got some work to do but overall, we're in a great spot.

是的。我們已經過去了。我們已經過去了——抱歉，我沒有聽到最後一部分，但是，是的，我們已經過去了。我們做得更好了。我的意思是，我想說，一般來說，我們在人員配置方面面臨的挑戰，當我與納許維爾商業界的同行和其他公司交談時，我認為我們非常接近面臨類似的挑戰。但今天坐在這裡，我們還有一些工作要做，但總的來說，我們處於一個很好的位置。

Our labor markets in almost everywhere we operate has improved pretty dramatically. And so, as we said in our prepared remarks, a lot of the special and unique incentives and programs we had to put in place with, especially like temporary staff, we've been able to wind down that almost virtually down to zero. So we've had a lot of good success on that point. And again, the markets generally where we operate, the labor markets, I should say, have improved dramatically.

我們經營的幾乎所有地方的勞動市場都得到了顯著改善。因此，正如我們在準備好的發言中所說，我們必須實施許多特殊和獨特的激勵措施和計劃，尤其是臨時員工，我們已經能夠將其幾乎減少到零。所以我們在這一點上取得了很大的成功。再說一次，我應該說，我們經營所在的市場，也就是勞動市場，已經有了顯著改善。

But I don't know if you have anything to add to that, Dave.

但我不知道你是否還有什麼要補充的，戴夫。

Just final point, yeah, our guidance does include some increases in staffing at some facilities to make sure we're prepared for any increases in occupancy that come. But certainly, the market has kind of normalized on the labor front. But, yeah, guidance does contemplate some increases in staff from here.

最後一點，是的，我們的指導確實包括增加一些設施的人員配備，以確保我們為即將到來的入住率增加做好準備。但可以肯定的是，市場在勞動力方面已經趨於正常化。但是，是的，指導意見確實考慮了從這裡增加一些員工。

[Greg], Northland Securities.

[格雷格]，北國證券。

Hey, Damon and Dave, thanks for taking the questions. Congrats on the results. Much has been answered already, but wanted to ask how much do you take out of guidance for the South Texas Family Residential Center this year? And just to get a sense of maybe how the outlook changed ex that impact and to get maybe a sense of kind of cadence in the back half?

嘿，達蒙和戴夫，謝謝你們提出問題。祝賀結果。已經回答了很多問題，但想問一下您今年從南德克薩斯家庭住宅中心的指導中獲得了多少資金？只是為了了解前景如何改變，並了解後半場的節奏？

Yeah. We issued a press release giving the notice. We said, I think, it was $0.38 to $0.41 on an annual basis. And so I think I quantified in my prepared remarks how much we had in Q2 and in Q3, so that'll be rolling off. A sequential decline from Q2 to Q3 and then no earnings per share out of that contract in Q4, but about half of it for the third quarter.

是的。我們發布了一份新聞稿，發布了這項通知。我們說，我想，每年的價格是 0.38 美元到 0.41 美元。因此，我認為我在準備好的發言中量化了我們在第二季和第三季的收入，因此這將會逐漸減少。從第二季到第三季連續下降，然後第四季合約沒有每股收益，但第三季約為一半。

Got it. Great. And just to clarify a previous question. As it relates to the expense structure improvements, did it sound like you kind of characterize expense levels as no longer elevated and then pretty much fully normalized at this point?

知道了。偉大的。只是為了澄清之前的問題。由於它與費用結構的改善有關，聽起來您是否認為費用水平不再升高，然後在這一點上幾乎完全正常化？

Yeah. Pretty darn close. I said, we've got a few facilities in a couple markets where it's still a little bit challenged from a labor perspective, but overall, I mean, much lower costs, again with incentives and temporary staff and some other things. Registry nursing was another thing that we had to use during the kind of high during the pandemic. And all those have come down pretty dramatically here in the last 12, 18 months. Anything you'd add, Dave?

是的。非常接近。我說，我們在幾個市場擁有一些設施，從勞動力角度來看，這些設施仍然面臨一些挑戰，但總的來說，我的意思是，成本要低得多，同樣有激勵措施、臨時員工和其他一些東西。登記護理是我們在大流行期間的那種高潮期間必須使用的另一件事。在過去 12、18 個月裡，所有這些都大幅下降。戴夫，你還有什麼要補充的嗎？

Yeah, I agree with that. I don't know that we're all the way there down yet, but it is pretty much. And the good news is a lot of the incentives that we provided to get us through were temporary. There were shift premiums or, like Damon said, registry nursing that can go away. So they weren't permanent ads to the cost structure.

是的，我同意這一點。我不知道我們已經走到了這一步，但也差不多了。好消息是，我們為幫助我們度過難關而提供的許多激勵措施都是暫時的。輪班保費或像達蒙所說的登記護理費用可以消失。因此，它們並不是成本結構的永久性廣告。

Thank you. This concludes our question-and-answer session. I would now like to turn it back to Damon for closing remarks.

謝謝。我們的問答環節到此結束。現在我想請達蒙致閉幕詞。

Well, thank you very much and thank you all for participating in our call today. And let me just say a special thank you to our investors, really grateful for all your support. So we're going to conclude our call. Enjoy the rest of your day. Thank you.

好的，非常感謝大家，也感謝大家參加我們今天的電話會議。讓我特別感謝我們的投資者，非常感謝你們的支持。所以我們要結束我們的通話。享受你一天剩下的時間。謝謝。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。