Good Morning. My name is Rachel, and I will be your conference operator. As a reminder, this call is being recorded. At this time, I’d like to welcome you to the CoreCivic’s First Quarter 2017 Earnings Conference Call. All lines have been placed on mute to avoid any background noise. After the speakers’ remarks, there will be a question-and-answer session [Operator instruction] Thank you. I would now like to turn the call over to Cameron Hopewell, CoreCivic’s Managing Director of Investor Relations. Mr. Hopewell, you may now begin your conference.

Thanks, Rachel. Good morning, ladies and gentlemen, and thank you for joining us. Participating on today’s call are Damon Hininger, President and Chief Executive Officer; and David Garfinkle, Chief Financial Officer. During today’s call, our remarks 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 first quarter 2017 earnings release and 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. This call will include a discussion of non-GAAP measures. A reconciliation of the most comparable GAAP measurements is provided in our corresponding earnings release, and included in the supplemental financial data on the Investors page of our website that you can find at www.Corecivic.com/investors. With that, it’s my pleasure to turn the call over to our President and CEO, Damon Hininger.

Thank you, Cameron, and good morning and thank you to everyone for joining our call today. Also joining us here in the room is Vice President of Finance, Brian Hammonds. 2017 has been off to an extremely fast start due to a multiple opportunities that we have seen to revise solutions for our government partners across each of our free line of business. Like most of you we have closely followed the developments with the transition of the new administration at the federal level which will continue over the next few months as numerous leadership appointments remain unconfirmed. At the same time we have also been busy marketing our unique and cost effective real estate solutions in perusing opportunities with all levels of government. Year-to-date we have been actively engaged with opportunities representing well over billion dollars and new real estate development projects. Not all of these are likely to come to fruition but we believe that magnitude speaks to the positive market response to the Corecivic plan and the diverse range of solution we bring to the table. Our financial performance in the first quarter was strong compared with our initial forecast provided in early February. We generated adjusted diluted earnings per share $0.43 and normalized funds from operation per diluted share of $0.63 exceeding the high end of our guidance by $0.04 and $0.05 per share respectively. Dave will walk you through all the details leading to our performance in the quarter but more generally we are official managed operations and expenses across our entire facility portfolio and overall utilization was modestly better than our previous forecast. Our forecast for the balance of the year has various puts and takes from our previous financial guidance some of which I will highlight. Importantly our guidance also does not include…

Thank you, Damon, and good morning, everyone. In the first quarter, we generated $0.42 of EPS and $0.43 of adjusted EPS compared to our guidance range of $0.37 to $0.39 and $0.05 ahead of consensus estimates. Normalized FFO totaled $0.63 per share compared to our guidance range of $0.57 to $0.58 and $0.06 ahead of consensus estimates. AFFO totaled $0.62 per share ahead of our prior guidance range of $0.55 to $0.56 and $0.07 ahead of consensus estimates. Our per share result exceeded our forecast as revenues and operating expenses were both better than anticipated by above equal amounts in our internal model. As you may recall from our comments last quarter we did not expect the elevated population levels from immigration and customs enforcement experienced during the fourth quarter of 2016 to be sustainable and therefore our population projections in the first quarter were lower than the fourth quarter. Our federal population levels did in fact declined during the first quarter. They did not decline at the pace we had projected. Operating expenses were also lower than forecasted as expense controls the chief during the fourth quarter were again realized in the first quarter. AFFO per share further exceeded expectations by more than EPS and FFO per share because maintenance capital expenditures on real estate were $2.1 million lower than expected. Maintenance capital expenditures can fluctuate from quarter to quarter although they are typically lowest in the first quarter. We have maintained our annual guidance for maintenance CapEx on real estate so we expect the outsized AFFO performance in the first quarter relative to EPS and FFO to contract in future quarters. Adjusted EPS of $0.43 was 7.5% higher than the prior year quarter of $0.40 while normalized FFO per share increased by 5% from the prior year quarter.…

Thank you [Operator Instructions]. And we will take our first question from Michael Kodesch with Canaccord Genuity.

Hey, good morning guys and thanks for taking my questions, very comprehensive prepared remarks there. Just starting with Eden, I guess, I want to kind of ask a little bit about how you guys are approaching that and maybe what you are hearing from the BOP in terms of bidding that in the CAR 19, it seems little awkward for them to let the contract expire and then month or two later consider turning this facility back on so, I mean do you think that are you talking that up to government’s inefficiency or is that more of you guys focusing more on perusing an ICE contract there? Thanks.

Michael, great question. This is Damon and let me tackle that one I think it’s more the change in administration and the priorities of the new administration, so you are right, it does quite make sense when you think about you got a facility like Eden and other facilities in the CAR 16, let them expire and then potentially re-contract with them in the CAR 19. But one thing we heard from the bureau is that under CAR 16 they were really they are at the one yard line on awarding those contracts as we understand it. And so, if they step back and kind of re-advertise that took it up 10,800 beds by their own estimate they would probably take a year to kind of re-go through that process, re-advertise it, get right proposals and then award but their view is just go ahead and put a bow on CAR 16 we have already got it basically finalize with 3600 beds but with that I think it's no coincident that when they are getting close to the bed earlier we think could be any day now and award a CAR 16 we think it's no coincidence that they have advertised for 9500 beds to CAR 19, so I think that was a sign for both only the operators like us but also local communities. [Technical Difficulty] on additional capacity so today’s point they can go into 18 and secure these beds and probably refine from a capacity perspective. The other thing is another leading indicator which I alluded to my comments is U.S. attorneys so there are lot of U.S. attorney vacancies around the country and so if you don't have the prosecutors of course that's going to affect the prosecutions. So I know the bureau is looking at kind of those two numbers both on vacancies and U.S. attorneys’ numbers but also marshal numbers but also again indicating they need additional beds but they probably wait a little while and award CAR 19 a little further down the road.

Great. That's really helpful color. I guess just one more question on CAR 19, we saw that come out and it expanded in overall I guess, procurement 13000 beds I notice that your Adams facility is up for renewal I think in July it's got one year renewal I think extension on it. Is that have you guys sort of that's being rebid into the CAR 19 contract so you essentially get us back to the original allotment?

We have not heard that formally. We are watching that closely but yes we do have an extension period on that we do understand that likely will come to pass, we will do the extension but as it relates to the CAR 19 or other procurement we don't know anything formally.

Alright. Fair enough. I guess moving on to your community acquisitions and your pipeline there. Are you guys seeing any other big portfolios out in the market I mean anything like center point I think CEC was kind of the last big well that got taken out but are you guys seeing any other portfolios there?

Yes Michael there really are not a lot of large portfolios out there, CEC was obviously the largest our acquisition [Adlon] in the 15 was probably the second largest corrections provider in the country and as you know it's a very fragmented market full of very small operators up and non-profits the real estate mayor may not be owned and operated by the same entity. So, it is a really a rollup strategy and it's identifying sourcing those opportunities trying to find out which ones are interested in selling. So unfortunately there is not a lot of large portfolios to acquire but the ones we are finding, we are finding very attractive and very accretive even though they are small dollar amounts and our efforts to try to consolidate and acquire as many as we can at the attractive prices.

Thanks. Yes. Okay. And then just one last one for I have to ask question about ICE, of your idle capacity out there I think you have got a couple of kind of a long Southern border there and with the Eden obviously back there that could make a lot of sense too. But which facilities do you think make the most sense from ICE’s perspective?

Yes we have got facilities from Kentucky to Colorado that are either partially [indiscernible] or complete vacant today. So let me first talk about the facilities that we don't think would probably make a lot of sense for ICE just because we have got line of sight near term of some opportunities and that is there are three facilities in Kentucky so we think we are really good shape potentially utilization if one, if not all three facilities there with the state of Kentucky based underneath and also their growth and then also we continue to hear rate interest from the state Oklahoma about our Diamondback facilities so those two states collectively vacant capacity is about 4500 beds so we feel like we are good line of sight with those two partners in those two respective states. But with that we don't think those are really in line for ICE opportunities. But we think in addition to Eden and also some incremental capacity we have got in Arizona we think the capacity we have got in Tallahatchie could be of interest to ICE especially with the close location to [Memphis] which is big hub and then also our facility up in Minnesota which is the priory so we are hearing that as I mentioned earlier with the increase prioritization of interior enforcement that in your path there has been more kind of interest in demand for bed in the Southwest border they actually could be some interest on capacity and key locations either we have got lot resources with -- like Memphis or also some activity they have got on the Northern border so we think those two facilities would be notable in addition to what we have got on Southwest border for ICE.

Great, just one last quick one because you mentioned and I will hop back in the queue but on Minnesota you mentioned you guys are probably looking at ICE there have you guys kind of abandon the thought of going with the state there. I know the state was kind of pursuing it but back and forth in the assembly?

Absolutely not, Minnesota we think could make a lot of sense for that facility, it’s a new modern facility into state that has had some growth and overcrowding and it’s got some backup the population and local jail, so working into that conversation, so we have got a kind of multipath approach for a solution there at the priory, so we think it’s visible to eyes, so we also think it make a lot of sense for the state of Minnesota.

Great. It’s very helpful. I will jump back in the queue. Thanks.

Thank you Michael.

And next we will move to Tobey Sommer with SunTrust.

Thanks. I was hoping that you could comment a little bit further about two kind of divergent trends, one is the current population trends at ICE coming down from winter activity and the expectation that demand and contracting to support future needs is going to drive growth. How do we kind of see that on fully, how long does it take to get to the actual new contract announcements do you think?

Yes, great question. So, sitting here today Tobey and this is Damon I think that it’s notable, very notable that ICE got approval for funding for over 39,000 beds and we were doing a lot of homework on this yesterday, but it’s been about eight maybe nine years that ICE has got in this amount of increase year-over-year in funding. So, we think increase of 15% or about 5,000 beds is really notable, so I think that shows one kind of expectation and there what the need is and also support they have got from congress. The second to your question about contracts so, we have got some contract already with ICE today that are underutilized, so part of that capacity growth we think is not necessarily new contract, but just more optimization over increased civilization at the existing contract with ICE and our sense is with others either at a local level or some of our peers within the industry that’s part of the case too where they’ve got contracts already in place but just have opportunity of drive more capacity under those existing contract vehicles. So new contracts we think could be triggered by the new funding for fiscal year 2018 and we’ve kind of heard numbers kind of all over the board on potential [indiscernible] utilization for the next fiscal which is going to start on October 01, but as we get closer to probably, probably September because August is going to be the recess for the congress as we get into September and kind of circle around and number for ICE then I think that’s where you can see potential activity on new contracts for increased utilization for ICE for the detention needs going to the new fiscal year.

Okay, thank you. From a broad perspective you had a range of kind of customer behavior about near term either opportunities or maybe withdrawing a little bit of the demand new terms only come back to market later, I am curious about your appetite for capital deployment for new construction in what kind of conditions or terms you might need in that deployment to make you feel comfortable to kind of think this in action?

Tobey, let me make sure I find your question. Are you talking about specific customer or you are just talking about more generally about capital deployment?

I thought I let you answer it generally if you, ICE seems to have the most kind of volatility ups and downs so I had them in mind but a general answer would suffice?

Yes let me say generally then I will provide specific thoughts on ICE. But generally, if we have got a state like Georgia which we have had a great run way there was solutions what we provide in the state and we provided great solutions on the problematic side. I said last quarter but I would love to say it again we had number one and number two in that state facility that had most GED completions in 2016 so we are very proud of our team in Georgia what they have done for that state. But if Georgia came to market and said they needed a new facility and typically have done contracts for 20 – 25 years then yes we would be very aggressive on pursuing that opportunity and deploying capital for additional capacity either expanding facilities or building new facility. So generally if you have got a partner either where we do business today or we feel good about kind of their long term needs and support of the private sector then yes we will be very aggressive on that front. As it relates to ICE, the view we have had here in the last couple of months is that we have got vacant capacity in places like Minnesota or Tallahatchie that we are going to be very aggressive on providing great solutions that are very comprehensive and providing the solution to the mission for ICE. So no capital deployment so that's a pretty straight forward answer. But if it is a case where ICE came to us and said we want to facilitate or need expansion existed facility that would be a little longer conversation and we would want to understand kind of the long term need and then also with that get some of our risk mitigated through contract term either through compensation or length of term or potential fixed payment. So that would be a little longer conversation with ICE that conversation gets a little bit easier as you heard me say recently, is that if it's an expansion out of facilities that we have got in [indiscernible] Arizona or I San Diego where the capital is probably pretty modest so we are just leveraging these operations then that's probably a little easier conversation but it will be a little longer conversation because again we would want to have a pretty good view of kind of long term demand for ICE if we had to deploy capital. Anything to add to that David.

Obviously coming close to 10000 idle beds and idle facilities across the country we think we have got plenty of capacity to accommodate any demands from our federal partners. So there wouldn't be they are just conveniently located so we would need to deploy capital except for the circumstances in which Damon mentioned.

Okay and then [indiscernible] an increase and funding for beds I was curious if you could recall some sort of relationship between ICE’s populations and the populations in demand at the other two federal agencies and kind of the extent to which there is interplay in other words an increase in ICE activity impact the other two customers?

That's a good question. Let me think about that for a minute. So we are doing little homework on ICE’s funding yesterday and as I recall it was really kind of 2008, 2009 fiscal years where you saw pretty meaningful increase year-over-year on ICE funding but thinking back about that time with Marshals and BOP. BOP was growing they were growing up until 2013 so I could tell you how close and parallel they were in growth but there was growth there from 2009 to 2013 with the BOP and Marshal Service. I want to say, I think we’re doing time two, I want to say 2006 and 2007 I think they saw a little bit of decline national wide but I want to say at same period of time. So there is some linkage there and so it could be the case where you see the same thing here with this increased funding for ICE and as you know Tobey it's not universally the same time ICE might see utilization go pretty quickly whereas Marshal and BOP it's a little more gradual overtime.

Thank you. Just two questions from me. If you could elaborate on the real-estate only solutions and comment on your kind of prospect to get something done here in 2017 as well as give us an update on how ICE populations in the South Texas family facility? Thank you.

Absolutely. So let me tackle both of those. So the first one we feel really good about the real-estate only solution I will tell you why we have had really two notable milestones here in the last couple of years so first of which is we made the trail on a lease with California and city facility and then last year did the lease with Oklahoma at our North Fork facility and both facilities have been great solutions in those two states. One thing I didn’t appreciate when we got those solutions in place is that if there is a [boiler] that goes out or if there is a leak in the roof or you got the air conditioner goes out, we are there tomorrow fixing it. And what I heard from leadership here recently in Oklahoma was one of their facilities and they had a boiler go out or had a leak in the roof, it may be weeks, months if not the next fiscal year until they can get that fixed. So that’s one thing I didn’t really appreciate in this solution is that we are there tomorrow fixing whatever may happen either because of natural disaster or a system failure and as again a part of the overall kind of value proposition on these real estate only solutions. But the second milestone is we’re out today. We’ve been talking about for sometime about how this could potentially be a great solution for states where we don’t have a footprint today but we are ready to go in and develop a new project to replace an [old equated] facility. So I think it’s really notable. You got five states today talking publicly how the private sector could be a great solution in a respected state and what’s also…

No, there’s nothing to add, thanks.

Thank you very much.

[Toby] thank you.

And next we move onto Kevin Mcveigh with Deutsche Bank.

Great, thanks for this very helpful context. What type as you kind of think about development opportunities, twofold question, what type of returns are you thinking about in terms of relative to historical goals across the group and then even at some point can those developments lead to owned and managed in terms of a longer term opportunity, that’s my first question?

Yes, so I mean I guess your last part to the first part of the question I guess you are saying. So we think that the real estate owned solution really opens the playing field for more opportunities with other jurisdictions and so where you got a state like Wisconsin or [Indiscernible] that are talking publicly about private sector company and being in a real estate solution for replacement of old and [equated] facility we see that long term being just that. We provide the real estate, they do the operation. And so we’ve been very clear on that, that our goal as we want to be very very respectful of what the wishes and desires are that jurisdiction long term. So if they are very clear in the front and saying, hey this is all about we mean a road state solution, there will never be an opportunity to operate facility but we are very comfortable with that, and again with Cal City in California and Oklahoma that’s been the case in both solutions, make a license for those jurisdictions that we’ve been very very happy with the returns on those two projects. So to your first part of your question is that on the returns, what we are thinking about is as we think about these development deals is that it will be a little lower than our historical returns which is being communicated to the market at 13% to 15% ROI or EBITDA return on capital deployment, we think it’s appropriate for us to go below that just because one, we don’t have the operational risk and some of the other risk that you have with the operation. So we think that could be in high single digits on a return, but every situation, every deposit is going to be a little different, so it’s going to determine based on the project to sell the length of term, how comfortable we feel by the respected utilization of long term, that will be instructive on how we think about the appropriate return, but I think high single digits would be appropriate for real estate owned solution if not lower double digit.

Got it. And then it sounds like you brought some additional capacity online, I mean is that just given how robust the federal opportunity is to give yourself more room as opposed to going back six months there was a lot opportunity both the state level maybe not as much as the Federal, is that just kind of the service in both aspects of the business given robustness at the federal level? Is that the best way to think about it, relative to because I know we are not building anything in terms of speculative from a longer term perspective, I know that there was build out an -- of demand this feels like it’s a little more near term in terms of those beds coming online?

Yes, so make sure I’m following your question. Yes, we are definitely taking our foot off the pedal in any speculative capacity, so you will not be hearing us talking about that anything in the near term. But I think if we see a meaningful absorption in places like Kentucky and Oklahoma and all the other opportunities that we have talked about will dilate that, so to be kind of a case by case either because we see sort of the May end at the federal level which sitting here today other than ICE it’s going to be a little bit of a wait and see, but at the state level if we see opportunities there then we’ll – with us appropriate. Most of the state that we’ve done business with it’s when you – infact when you get a new facility and a new contract it could be the case where I should say simple conversation with us and they are going to say, we are at full utilization with your facility, here’s the five year forecast what the population needs and so maybe either we optimize or do a maybe a small expansion of the facility to help accommodate maybe some additional growth. So I think about kind of the near term we’ve got a bunch of available beds, at appropriate locations we’ve got a lot of interest from ICE and other state partners. So I think the only real capital deployment we would have in the near term outside of M&A on the re-entry side would be these real estate owned solutions that we talked about or maybe some potentially small expansion around the country that we have where we’ve got increased utilization within existing partner.

Very helpful. Thank you.

Absolutely, thank you.

And next we move to [YY] Kai with Philadelphia Financial. Please go ahead, Mr. Kai your line is open

This is Jordan for [YY] actually. I am just wondering do you have any update to the slide that you put out with pending facilities available for lease where you listed last quarter or when will that slide be out and already?

Looking at the camera so we are preparing our investor presentation now it will be on the road in a couple of weeks. We’ve got this May 15 circled as the date we’ll post that and yes, we could probably put that same schedule that you are referring to, I think I know is talking about with calculating what the impact on FFO per share would be if we utilized all of our idle and underutilized capacity. And this is the same number as of quarter end it was close to – a little bit over 8000 beds and then with [Indiscernible] coming online it’s getting close to 10,000 idle beds and I think last quarter we said that was about $1 in the calculation but given some of the opportunities that we see particularly with certain states and with real estate only solutions at least in one case they would not generate margins consistent with the average and the portfolio should be more closer to that $0.65 to $0.75 per share.

And it does look like his line is disconnected. We’ll move onto Michael Kodesch with Canaccord Genuity.

Hey thanks guys. Just want a quick follow up here. Just talking about how the ICE capacity utilization from your existing facilities kind of brought this question up but what percentage of your ICE contracts are fixed price I mean we are talking about the upside from the incentive part of the contract I guess you can say where you go above and beyond kind of a set occupancy?

Well, I don't know if I have got an answer for that one. I don't know if I can give you a number, yes I would say most of them at least in the fourth quarter of Q4 comparable with Q1 in the fourth quarter there was maximum utilization and our contracts with ICE were well over the minimum guarantees. In our forecast probably towards the lower end of that there are a couple that are below the guarantee but they don't know below the guarantee so I would say our forecast is relatively conservative towards the low end of those guarantee so not much downside but some upside to the extent that utilization picked up.

Great and then just lastly on [indiscernible] obviously the OIG report came out which looked to be largely more oversight from the United States Marshal perspective but I mean should we expect anything else to come of that or I mean are they pretty happy with your facility operation there it's just going to be little bit more oversight from their perspective or should we be expecting anything else?

Yes Michael that's -- so yes lot of the recommendations were for the Marshal service I think they concurred on all of them which we very much support and think that makes a lot of sense. There is clearly a few things that we could have done better but we have already rectified and take the appropriate action but overall very, very satisfied with the facility and with the operation for the Marshal service perspective.

Super. That's it from me. Good quarter guys. Thanks.

Thanks Michael.

And at this time I would like to turn the call back over to Mr. Hininger for any additional or closing remarks.

Well, thank you Ms. Rachel, and thanks again for everyone on the call for joining us on today extremely to our investors, extremely grateful of your investment in CXW and we look forward to reporting to you again with our second quarter results in early August. Thanks so much.

And that will conclude today's call. We thank you for your participation.