Good day and thank you for standing by. Welcome to the CoreCivic's First Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Grant, Managing Director of Investor Relations.

Thank you, Operator. Good morning, everyone, and welcome to CoreCivic's first quarter 2025 earnings call. Participating on today's call are Damon Hininger, CoreCivic's Chief Executive Officer; Patrick Swindle, CoreCivic's President and Chief Operating Officer; and David Garfinkle, our Chief Financial Officer. We are also joined here in the room by our Vice President of Finance, Brian Hammonds. On this call, we will discuss financial results for the first quarter of 2025 as well as updated financial guidance for the 2025 year. We'll also discuss developments with our government partners and provide you with other general business updates. During today's call, our remarks, including our answers to your questions will include forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities and Litigation Reform Act. Our actual results or trends may differ materially as a result of a variety of factors, including those identified in our first quarter 2025 earnings release issued after market yesterday as well as in our Securities and Exchange Commission filings, including Forms 10-K, 10-Q, and also 8-K reports. You are cautioned that any forward-looking statements reflect management's current views only and that the company undertakes no obligation to revise or update such statements in the future. Management will also discuss certain non-GAAP metrics. A reconciliation of the most comparable GAAP measurement is provided in the corresponding earnings release and included in the company's quarterly supplemental financial data report posted on the Investors page of the company's website at corecivic.com. With that, it is my pleasure to turn the call over to our CEO, Damon Hininger.

Thanks Mike. Good morning, and thanks, everyone, for joining us for CoreCivic first quarter 2025 earnings call. On this morning's call, we will discuss our latest operational results and update you on the latest developments and opportunities with our government partners. Following my opening remarks, including high level comments on our quarter and updates on contracting activity, I will hand the call over to Patrick Swindle, our President and Chief Operating Officer. Patrick will discuss operational results as well as our ongoing facility activations. Finally, we will turn the call over to our CFO, Dave Garfinkle, who will provide greater detail on our first quarter financial results as well as our updated 2025 financial guidance. Dave will also provide an update on our capital allocation strategy. Before I go to the highlights of our first quarter results and numerous contracting actions, I would like to share how excited I am for and deeply proud of our team here at CoreCivic. Our team has always been mission and outcomes focused, but this is such a significant moment of time in our company's history. Never in our 42-year company history have we had so much activity and demand for our services as we are seeing right now. As you know, and as shared daily in the media, many of our partners are facing tough challenges and our team is focused and energized to be able to answer the call with solutions our partners need at this critical moment in time. Let me now move on to a few highlights from our first quarter results. Financially CoreCivic exceeded its expectations for revenue and profit during the first quarter. Patrick and Dave will discuss the quarter in greater detail, but the strong financial performance resulted from realized cost management improvements, coupled with meaningful increases…

Thanks, Damon. I'll start with a high level overview of our first quarter operational performance. As Damon mentioned, overall occupancy for the quarter was 77%, up 1.5 percentage points from the fourth quarter of last year and 1.8 points since the year ago quarter. Occupancy has been on an upward trajectory since early 2023 when it sitted approximately 70%. This quarter also showed a month-to-month trend in improving occupancy with increases in ICE detention population levels beginning in late January. Federal partners, primarily Immigration and Customs Enforcement, and the U.S. Marshal Service, comprised 48% of CoreCivic's total revenue in the first quarter. Revenue from our federal partners declined 8% during the first quarter of 2025 compared to the prior year quarter. However, excluding the Dilley Immigration Processing Center from both years, our revenue from ICE increased 11% versus the first quarter of 2024. Our first quarter revenue from the U.S. Marshals Service, our second largest customer was essentially flat year-over-year, though we believe the U.S. Marshals Service population may start to increase later this year. Now, I'd like to discuss ICE's usage of detention capacity nationally across all facilities. ICE started the quarter with this national detention population at approximately 39,000 and ended the quarter at nearly 48,000 individuals in detention. The most recently published ICE detention total was 47,928 on April 6, 2025. CoreCivic’s share of the total detention population has remained roughly steady during this period of expansion and we've increased from roughly 10,000 ICE detainees in our facilities at the end of 2024 to about 12,000 now. As we anticipated last quarter, the accelerated rate of interior enforcement arrest has more than offset the decline in order apprehensions resulting in ICE exceeding the 41,500 funded bed level. On March 5, we announced the resumption of operations at…

Thank you, Patrick, and good morning, everyone. In the first quarter of 2025, we generated net income of $0.23 per share and FFO per share of $0.45, both exceeding average analyst estimates by $0.10 per share. Adjusted EBITDA was $81 million, exceeding average analyst estimates by $10 million. Excluding the contribution of our South Texas Family Residential Center and our California City Correctional Center contracts in the prior year period, revenue increased 6.7% and adjusted EBITDA increased 21.2% in the remainder of our portfolio helping offset some of the impact of these contract losses. On an as reported basis, compared to the prior year quarter, adjusted EBITDA decreased $8.5 million, adjusted EPS declined $0.02, and normalized FFO per share decreased $0.01. These year-over-year declines resulted from the termination of our contract with ICE at the South Texas Family Residential Center effective August 9, 2024, and a lease expiration with the State of California effective March 31, 2024, at our California City Correctional Center. These terminations combined for a decrease in facility net operating income of $22.6 million or $0.16 per share from the prior year quarter. During the first quarter, we began reactivating the South Texas facility now known as the Dilley Immigration Processing Center under a new five-year agreement that became effective March 5 and accepted our first residence at this facility April 9. Further, on April 1, 2025, we entered into a letter contract with ICE at the California City facility now known as the California City Immigration Processing Center, which authorizes funding for a six-month period to reactivate the facility while we work with ICE to negotiate and execute a long-term contract. The reductions in adjusted EBITDA and per share results during the first quarter of 2025 compared with the prior quarter were partially offset by higher…

Thank you. At this time, we'll conduct the question-and-answer session. [Operator Instructions]. Our first question comes from Joe Gomes with Noble Capital. Your line is open.

So I want to start with these letter agreements. Great news on both Midwest and Cal City. Are you hiding any more of them on us? Has ICE come to you and signed a couple more recently?

Definitely not hiding any more on you, Joe, but I guess, a couple observations. One is that it's clear to us that there's a lot of intensity, for obvious reasons, for ICE to get a lot of beds under contract. And so they kind of pulled this tool out of the toolbox here earlier this year to basically get these facilities under at least the protection for ICE, so they can get these secured more under long-term contracts. So it was a great feature on their part to at least get these facilities secured. They know they're going to need them, they know they're going to get additional funding through reconciliation to support the contracts. And obviously, it's a great feature for us because as Dave noted, it allows us to go ahead and start the activation process, start hiring staff, put leadership in place, get the academies going. So it would not surprise us, Joe, that we see a lot more of these in the coming days and weeks, especially as we get closer to reconciliation. But anything you'd add to that, Dave?

Just I mean the two letter contracts that we have, we have heard from ICE for the longest time that the Midwest Regional Reception Center was a priority for them to consolidate populations in that area. And then the Cal City facility becoming available at the end of March of last year. And that's in a strategic location. So a great facility for ICE could potentially even be used for the U.S. Marshals Service. But those are two key facilities we are really pleased to get under letter agreements. And then of course, the Dilley facility, which is not a letter agreement, it's extended to the longer-term contract stage, between Cal City and Dilley, those were really two key facilities we were prioritizing at the beginning of the year. So good to get those across, at least Dilley across the finish line in the letter agreement with Cal City.

One thing I'll also add, Joe, is that again I've been with the company almost 33 years, almost 16 years as CEO. I've never seen the intensity and activity on ICE's part to secure capacity. Again these letter agreements are a new tool that are utilizing again to I think secure these beds again with Cal City and Midwest. But we have also seen, I mean they've toured a lot of our facilities that are not under contract. Capacity we've got in Colorado, capacity we've got in Oklahoma, capacity we've got in Tennessee, I mean really all over the country they've expressed interest in some way or another, not just in the details of each facility and the capabilities, but actually making efforts to tour the facilities, see our capabilities, see maybe some CapEx that could be deployed to be able to put not only additional transportation assets in place, but also maybe courts and other services to help support the mission. So a lot of activity is the bottom line.

Okay. And then the additional $25 million CapEx that you announced, how many more facilities could that stand up?

Yes, good question, Joe. I mean we're kind of leaning forward on almost all of our idle facilities at this point. At the beginning of the year, we kind of targeted the priority locations that we thought would make the most sense. So we've obviously expanded the number of facilities that, that we're investing in to have ready. They obviously depending on how long they've been idle, have different levels of CapEx. I wouldn't necessarily say that's the total CapEx that we would end up spending on them because we're leaning forward at different levels as well. So I don't know if that number is an additional $25 million or maybe even as high as $50 million if we were to activate all facilities and incur all the capital expenditures necessary to reactivate them all. But we are certainly leaning forward on more facilities than we were last quarter just due to the confidence that we have in our ability to reactivate these facilities and that's not just for federal. I think that, that could include potential state contracts as well. So we want to position these facilities to be available for the next customer that would use them.

Okay. And then one of the things that items has been in the news was the use of some soft sided facilities, there was the Fort Bliss, on off type of contract. What would your guys appetite be for either putting together or managing one of these types of soft sided facilities?

Yes, great question Joe. And the bottom line is we're very interested. We're very interested. We've been monitoring this very closely. As you've probably seen the press, I think they're talking about potentially 10 military reservations around the country that potentially could be good sites for that type of solution. We think this type of solution they're looking for is something that we're very capable to provide. As you know with Dilley, we just again reactivated it in 31 days. But going back 10 years when we first opened that facility, we basically had to do that. We had to work quickly with target to provide the CapEx, get the campus configured and operate very quickly. And I think we did it within I think probably 80 to 90 days. So we've got the capability to provide something very quickly that they're anticipating on some of these military reservations. I also say that in addition to our experiences at Dilley, we've got obviously great capacity and ability to do transportation that may be needed on this site. So it's very consistent with what we do on the detention side with our other facilities, but also again, we've got the capability to do it very, very quickly. I talked about Dilley, but also we've been asked by ICE from time to time to help with natural disasters depopulate a facility very quickly when a hurricane is coming. So that's a long way of saying, we've got the capabilities that they're anticipating they'll need for these solutions on these military properties. The only other thing I would just say is that every procurement, every RFI, every survey or sources site that we've seen from ICE here in the last 90 days, we've expressed interest in one way or another. So again you asked specifically about Bliss, but obviously a lot of activity going on around the country for unique detention solutions either in existing facilities, which obviously again we've had a lot of success already with all the facilities we just announced. But maybe some other unique solutions they want in other parts of the country. But anything you can add to that, Dave?

Just that obviously our priority would be on our idle facilities and maximizing the utilization of our facilities. But we'll respond to whatever needs our customer has. We think our own facilities provide the most cost effective, readily available capacity. But there are some other solutions that, that as Damon just mentioned, we'd be interested in, could provide and could put up fairly quickly as well.

One other quick thing, I alluded to this in my comments, Joe, but we've got a lot of real estate around existing facilities that maybe would be suitable for expansion too. So if there's a certain location in the country where ICE is saying, your facility in this location is 2,000 beds, can you add another 250 very quickly? That's part of the analysis that we're doing. And again, that could be a kind of a short-term expansion consistent with these type of facilities that are anticipating for these military reservations. So again, all the different solutions we're bringing to bear based on what their needs are and where they need those beds at.

Great, thanks. I'll let someone else ask a couple questions.

Thank you, Joe.

Thanks Joe.

Thank you. Our next question is from Jay McCanless with Wedbush. Your line is open.

Hey, good morning, guys. Thanks for taking my questions. The first one I had, it was interesting you guys were talking about increasing the size of your rolling fleet. I guess, could you give us maybe some preliminary idea of what revenues you might be able to generate doing more transportation work for ICE?

Yes, probably a little hard to put a number to it. We could maybe talk to you offline and give you a ballpark. But the way we thought about it is places like Cal City and Leavenworth; we know kind of historically what the needs are based on the number of beds for capacity need for transportation. So we just basically have done that analysis. So anyway, it's a long way of saying, we probably won't get clarity on that until we kind of finalize some of these contracts like Cal City and Leavenworth. But again, we can work with you a little bit offline and give you at least a ballpark.

Okay. That sounds great. And then also wanted to you guys talked about looking at some different facilities, and your partner -- you guys have partnered with Target Hospitality, I guess, is PECOS one of the ones that you guys might consider purchasing and/or what other facilities might you be looking at this point?

Yes, probably be a little inappropriate for me to give a lot of clarity on that. We -- again, we often know the market really, really well, and so we basically have surveyed facilities that are available that maybe are newer in construction that would be consistent with type of mission. So I wouldn't want to necessarily say we're looking at these various facilities around the country for obvious competitive reasons. But again, we're -- we've got a great real estate team that's not only looking at potentially what's available, maybe owned by local or city or county governments, but also again, obviously talking to Target about their capabilities, what they have at their various locations. Anything you'd add to that, Dave?

No. Going back to the transportation question, I was thinking about that further. A lot of our negotiations are including the transportation services in the existing detention contract. So they're not necessarily separate and often built into the per diem, but we are seeing certainly an increased need for transportation services in connection with those contracts.

That's great. And then, the last question I had, you guys said in the prepared comments that BOP starting to get more active on the community side, I guess. What -- anything you can tell us there? Have you seen any more push out of Pam Bondi or justice in terms of the First Step Act?

Yes, great, great question. It's been, I think, two weeks that the BOP has announced a new director, a gentleman from West Virginia. And I think he's been in the early days just getting his leadership team in place. So I think he's still got some positions filled at the senior leadership level at the BOP. So it's our belief that probably in the coming days and weeks, once he gets again his leadership team in place, they've got a plan on what they want to do. Not only on the community side, but also maybe on the secure side that they'll start making those kind of priorities and goals known out to the private sector. We understand that there's been some work on that already, but again, it's just been announced with the new director and like I said, he's getting his team in place. And like I said, we'll probably know a lot more over the summer leading up to our call in August on kind of where the direction is. But we do feel like, back to your kind of initial part of your question. We do feel like there's going to be a big push by this administration and DOJ leadership to really supercharge the capacity that's available in the private sector for community beds to again really fulfill the goals and the intent of the First Step Act. I don't know if anything you'd add to that, Dave.

Yes, I think potentially in the secure side, too, it's well documented they've had challenges with their infrastructure. It's old and outdated and they've had some staffing challenges. So we think we provide a great solution to be able to provide additional services to the BOP in our correctional facilities like we did years ago. It's cost effective as well. So we're optimistic that that can be an opportunity, at least in the medium-term. Maybe not tomorrow, but in the medium to long-term, certainly.

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

Yes, sir.

Thank you. Our next question comes from M. Marin with Zacks. Your line is open.

Thank you. So in your prepared remarks and now in the Q&A, you've mentioned some of the competitive advantages that you see with your facilities versus other options for government partners, newer infrastructure, more modern amenities, I guess, and cost effectiveness. So in terms of your ability to negotiate higher per diem, how much room do you think you have before that cost advantage might go away?

Well, it's a great question. We watched, I mean, we've been doing this for years where we watch really closely on what the rates city and counties negotiate with the MAR service in ICE. So obviously, we look at that as a kind of a not as a benchmark, but just obviously want to appreciate what certain jurisdictions are charging ICE and MAR service in certain geographical locations in the country. So that's one data point. And then the second thing is really what the scope is. And so ICE, they may want the tension capacity, but they also may want transportation or they want a specialized medical component that's got infirmary beds. And so again, we kind of put all those pieces in place and look at the total cost. And if you look at even those where we have a more comprehensive level of services, I mean, we're still very competitive to the alternatives both the city and counties can offer, but also what the federal government could do themselves, especially if they're buying beds from the BOP or other agencies within the federal government. And then there's been some discussion, as you know, about maybe capacity outside the U.S. and if you look at those numbers, I mean, we are really, really, really cost competitive and again, higher quality, great audit scores, more effective logistically for transportation, and obviously a lot less likely to get challenged from a legal perspective relative to our capabilities and the service we provide. I don't know if you can add to that, Dave.

Yes, where we already have the capacity, the challenge with some of the other solutions being proposed is they intend on them being temporary. And so you have to recover that cost of activation and cost of infrastructure over a short period of time, which adds to the challenges in providing a competitive per diem compared with our traditional detention capacity where the beds are in the ground, already built paid for can ramp staffing fairly quickly. So I think that will continue to be a competitive price advantage.

Okay. Thank you. That makes sense. One more question, which is the three facilities that you're currently in the process of reactivating or you've already started onboarding people are in three different states, right? Texas, California, Kansas, and you talked about how these all three facilities are strategically located, I think specifically for ICE's needs. If you look at your overall portfolio, the facilities that are currently idle, and you're thinking in terms of strategic location, you've been talking about the Kansas, Midwest Regional Reception Center for quite a while. So you knew for a while that was a strategically located facility. If you look at your portfolio and specifically look at idled facilities, are there any others that jump out at you in terms of the location as being particularly attractive for ICE and then potentially other government partners?

Yes, that's a great question. I'll tag team here a little bit with Dave on that. But I'd say the three locations that I think for me are top of mind, that I think would be most attractive to ICE is one, our facility Northeast of Memphis here in Tennessee. So right there on the border of Memphis and Arkansas, it's about a 600 bed facility. And I think ICE would find that very attractive just because of proximity to Memphis and obviously the transportation hub there with I-40 going through Memphis. So that would be one. Second, this is an obvious one, but Oklahoma, I mean centrally located, period. So our capacity at both our Diamondback facility and our Norfolk facility, which again right there on I-40 West of Oklahoma City, Oklahoma City usually is a very big hub for air transportation for ICE and Marshall Service. So checks a lot of boxes with those two facilities. And again, I think both of those will be very attractive to ICE. And then, finally, I'll just say the capacity we've got in Colorado, I think having beds out West that are not all the way over to the Coast in California where they could service the needs of Salt Lake and Denver and even some of the needs out of Wyoming, Montana, makes our Kit Carson and our Warefield facilities very attractive to ICE. So I'd say those were probably the next one is kind of top of the list. We obviously have got capacity up in Minnesota with our Prairie facility. That could be a good solution if their activity more kind of mid to long-term for ICE on the Northern border. So that would be a great location. And then we do have some incremental beds in Kentucky that are maybe a little lower on the list. But I'd say Tennessee, Oklahoma, Colorado, I think they're probably the top three locations where we've got capacity I think will be very attractive. But anything you add to that, Dave?

Just the beds in Oklahoma, they're sizable, they're scaled so Diamondback's 2,160, North Fork's 2,400. So those are very large facilities. And when you get large facilities like that, if they need that type of demand, if the demand's there, can certainly offer a more competitive per diem compared with a smaller facility where per diem could be -- wouldn't be able to compete as well as large facility like those two.

Okay. Thank you very much.

Appreciate your question.

Thanks, M.

Thank you. Our next question is from Greg Gibas with Northland Securities. Your line is open.

Hey, good morning, Damon, Dave, Patrick, thanks for taking the questions. Congrats on the quarter. I wanted to ask on the puts and takes, I guess of the $48 million EBITDA range increase at the midpoint, Dilley obviously being the primary one. But could you maybe discuss the drivers or pieces of the increase in your guidance assumptions?

Sure, I'll take that one, Greg. Certainly, the Q1 beat was like I think we were $13 million higher than our internal forecast $10 million higher than average analyst estimates. So that's obviously being carried through. You mentioned the Dilley facility that will be ramping up, so we don't get a full run rate until September or really a full quarter until Q4. But also I'd add the population increases we've seen, if you looked at January, February and March, particularly ICE populations, they increase sequentially each month. So we're kind of carrying through those populations that we saw in March, expecting them to sustain throughout the remainder of the year. So those are really impactful as well. On the expense side, I'd say probably status quo. On the expense side, we didn't build any additional cost savings in for the rest of the year. That's where we've normalized expenses for the most part; particularly we continue to refer to the pandemic years. So I think those are really at a good level these days and so didn't necessarily see a lot of opportunity for cost savings going forward where there could be potential opportunities in the guidance, as we mentioned, the Midwest Regional Reception Center and the Cal City facility, the longer-term contracts are not baked in. I think we took a fairly reasonable approach on per diem increases, particularly from state customers. They don't kick in until July. That's not coincidentally the same month where we provide wage increases to our staff. So we'll -- we're in discussions with most state legislatures right now or legislatures are in session and we'll see where we come out on that. There potentially could be upside with per diem increases there, but that, that we won't know that for another couple months.

Got it. That's helpful, Dave. And guessing there's nothing specific that you can share here, but do you have a general sense of the timing of when the letter contracts are expected to be finalized via a formalized contract? Like how long would you expect maybe that negotiation process to take? And do you think it would have to be post budget reconciliation?

Yes. Great. Another great question, and I'll tag team with Patrick on this a little bit, but both of them are progressing pretty darn well. We got I guess, the template of the actual contracts on both locations, I think within the last 10 days. And so we're thumbing through it and making notes. And so there'll probably be some back and forth on the contract itself and I'm sure a fair amount of revisions as we go back and forth. And then that usually leads into probably a face-to-face or a couple over the phone or both negotiations as we finalized terms. So hard to say today exactly the timing, but I think it's going to be days and weeks, not -- definitely not months. And then the second part of your question, I think there's a chance we get these done before reconciliation. And again, I think part of the rationale in getting these letter contracts is that they didn't want to miss this moment in time to get these two facilities. And again, it would surprise us that we get maybe another letter contract or two prior to reconciliation to where again they can kind of put their -- get their hands on the capacity and on the facilities as we work on a parallel path on the contracts. But Patrick, let me -- let you kind of add or amplify to this.

Sure. Thank you, Damon. Thank you for the question. I'd offer two additional thoughts. One of them is normal activation for a mothball facility would be 120 to 180 days. And so the value of a letter contract is it really allows us to go fully into activation mode for those facilities. And over the six months, we're under the letter contractor agreement; put ourselves in a place where when the final agreement is in place, we're able to begin ramping up the facility operations very quickly. In other words, we can be ready for receipt of the first group of detainees even in advance of the end of the six-month letter contract. So it really accelerates the timeline under which we can prepare. We are pacing ourselves during the letter contract period, but we are working toward being fully activated, so that when the final agreement is in place, we're ready to immediately begin supporting our customers need. So that's certainly a key focus of us and it's a benefit of letter contract structure. Second thing I'd mention is, letter contracts are only one mechanism that ICE is using presently to solicit beds. And so we've talked a lot about letter contracts and the potential for activations under letter contracts. But there also are other mechanisms that we can use as well to activate facilities. And so I think certainly that is one pathway toward a contract and an activation. There are also others that are available to us as well. And so each individual location may have specific intricacies that may require one pathway or another, but we're very well prepared, whether it be under a letter contract with a six-month ramp or another mechanism that might allow us to also activate very quickly.

Great. Really appreciate the color there. And I guess, lastly, because I don't think it was touched on yet, could you provide an update on how you're thinking about the potential rebidding of the ISAP contract and positioning CoreCivic for that and maybe anything you've heard on it.

Yes. Thank you for that question. I obviously heard what GEO said yesterday on their call and they mentioned maybe a one or two year extension. We haven't heard two, but we heard maybe there was going to be a one year extension and obviously waiting the timing on the RFP. But I think we've made it very clear, we've been preparing ourselves for the last years of couple of years for the rebid of this contract. We've got the capability; it's something that we do already in our community division. So we continue to get ourselves prepared for not just the needs relative to the contract itself, but also getting ourselves aligned with the appropriate technology and third-party providers to help support our proposal. So again, we're watching very closely. I think in this environment, especially when you've got DOGE and others looking at most cost effective solutions for government, we think introducing some additional competition for innovation and cost effectiveness would be value added to the federal government. Anything to add to that, Dave?

No. I think you covered it, Damon.

Got it. Thanks very much.

Yes, sir.

Thank you for your questions. [Operator Instructions]. Our next question is from Benjamin Briggs with StoneX Financial. Your line is open.

Hey guys, thank you for holding the call and taking the questions. A lot of mine got answered, but I've got a couple left here. So I think the last guy asking questions brought up the ISAP and the monitoring contracts. So how many individuals are you monitoring under ISAP as it stands today?

Well, we currently don't have a contract with ICE for ISAP. That's again completely under the contract that GEO and BI's got at the moment. So we've got contracts but with other jurisdictions.

Okay. So I guess under -- that's what I'm referring to, under those jurisdictions, how many individuals are you monitoring?

Oh, keep me on with your, Dave, I want to say it's a probably 20,000 to 30,000.

Yes. I was thinking more towards the 20,000, but it may have grown. So yes, that's probably about right.

Okay, got it. What is your ability to ramp there? Would there be kind of a long process? Would you have to get additional infrastructure or is it a relatively fast ramping period?

It's relatively fast. And again, we've been watching this agreement and this requirement for, gosh, probably going on six, seven years. And so we've got again the capabilities. We know that there would be a requirement to very quickly provide office space in certain locations where they've got great or high utilization. So again, we know those locations. We know where we have to kind of ramp up leases for probably storefront office space. And again, from a staffing perspective, we feel like we can do that both in our community division, but also probably pull some folks from our safety division on the eyesight to help support that activation. So yes, we got -- we definitely got the capabilities and we've got the plan that if we get some of that contract going forward, again, we've got the plan where we can scale up and ramp up very quickly. But anything to add to that, Dave?

Yes, something we do differently. So in our monitoring subsidiary, we use a teaming agreement with a third-party to provide the devices and we've checked in with them to make sure to ask them how quickly they could scale up. And we don't have any concerns about scaling up to the size that would be certainly under the current ISAP contract or potentially larger. So we're very comfortable with our ability to scale there.

Okay, got it. That's very helpful. So it sounds like it's mostly kind of offices and some administrative stuff. The technology is already in place.

Yes, correct. That's a good way to frame it.

Got it. Understood. Thank you. So moving on again to some of your, I guess, growth opportunities. I think you said that you've got nine facilities with a total of 13,000 beds that are idle. If those were all activated, can you ballpark for me what the total incremental revenue might be?

Well, I'd say I know I get back into that, but I think last call we said it was probably anywhere from $250 million to $275 million. We've activated Dilley, probably without putting any further pen to paper, it's probably, oh gosh, the $200 million to $225 million in EBITDA as well, if we activated all of them at this point, that would be the upside.

Okay, got it. $200 million to $225 million of EBITDA. That's helpful. And then as far as, and I know, guy, I know that you got some questions earlier, but I'm going to try to ask a different way. As far as timing is concerned, I know it can be unpredictable. There have to be budget appropriations and you're waiting for some government sign offs. But as far as what the pace is for a ramp, when do you think is a fair time to model to you guys sitting, call it a run rate peak EBITDA. Do you think by second half of 2026 it should be realized? Do you think it might take a little longer, potentially faster? How is it that you guys think about that?

Yes, let me -- I'm going to tag team with Patrick on this a little bit. But I would say let me, I guess, talk about kind of the coming days and weeks and kind of key milestones. And so we've talked about off the contract with Dilley, we've talked about the letter contracts leading into permanent contracts in Cal City. So those feel like on those two probably will get finalized again as we go into summer, maybe early fall. Additional contracting actions again I talked about our capacity in Tennessee and Oklahoma and Colorado probably being the next round of most attractive capacity to ICE. It feels like we'll get additional engagement on that again in the coming days and weeks. I don't think reconciliation has to get done for them to engage on us. Again, I wouldn't be surprised. They call us tomorrow and say hey we're ready to do a letter contract on name of facility Diamondback. But we do feel like that reconciliation then will be a catalyst especially to get if it's a letter contract going into a permanent contract because I think again they'll want to start showing activity in the third or fourth quarter of having this capacity available as they kind of ramp up the rest of the part of the infrastructure again especially around law enforcement and other assets they've got on their side that are probably come from the funding. So a long way of saying that yes, it feels like that if reconciliation gets done. And I'll just say again I don't have anything unique to offer on this call but if you just listen to the media on any given day, it feels like all leadership in Congress, House, Senate and obviously the White House are focused on getting this done ideally by the July 4, definitely the August, August Recess. So it feels like again the momentum is there on the funding side. And again I think that will be on a parallel path on all these contracting activities. But Patrick, let me let you kind of add amplify to that.

Thank you, Damon. Only thing that I would add is I think a lot of your question depends on where peak demand ultimately stops. In other words, what is the ultimate aggregated bed number when you look across all the alternative solutions that we can provide. So whether that's the utilization of our existing capacity. I know that was the question that was asked previously whether that would be the work that we're doing with our partner target to look at solutions that might be in non-traditional or soft sided type structures could be additional capacity related to opportunities currently contemplated for military bases. So I think in some respects, there's a lot of dependency on where peak demand ultimately settles out as to what the timing might be because it certainly could extend beyond second half of 2026. But I would say just thinking about the timeline around activations when we expect full funding will be in place. I think second half of 2026 is a reasonable assumption for when we could hit peak EBITDA run rate based on the demand level that ultimately presents.

All right. That's very helpful. I appreciate that. Thank you for taking the questions and congratulations on the quarter.

Yes, sir. Thank you.

Thank you for your question. Our next question comes from Kirk Ludtke with Imperial Capital. Your line is open.

Well, thank you, everyone. Appreciate the call and for you staying late.

Thanks, Kirk. No problem.

I just had a assuming -- let's assume that there are zero border crossings, no funding limitations, what is the relationship between the deportation rate and the number of beds? So in other words, you mentioned 1 million a year. You mentioned 100,000 beds. Is that roughly the relationship there?

Yes, that's what -- and I think I heard Tom Homan say that again this morning on one of the morning shows. But that's the near-term goal is 100,000 bed capacity and 1 million deportations on an annual basis. And so I think we mentioned on the last call 100,000 feels like kind of the new base going forward. Again, we'll see what happens with the funding through reconciliation, but at the moment feels like a pretty good number. Patrick, I don't know if there's anything you'd add to that.

Nothing to add, Damon.

Great. Thank you. And do you have a sense for when they'll get to 1 million, a run rate of a million a year?

Oh, I don't think I've heard and I don't think they've expressed that in the press. Again, I'm sure part of it is also through reconciliation, the additional funding they'll need for staffing for law enforcement and processing, case managers, whatnot. So I'm sure they've done that scenarios on their side of the fence relative to that, but I have not heard a ramp plan.

Okay, got it. Thank you. Libya was added to the list of foreign locations, and I suspect these foreign locations are serving a different mission. You don't really view them as competition, but what -- how should we think about those?

Yes, exactly right. We don't see them as competition. And I think there's probably strategic and political reasons why some of those locations makes sense. But again, for all the reasons, we've talked about, 42 years in business, highest quality, best audit scores, logistically more favorable. We're obviously, not only just location wise, but we can provide transportation and less likely to get challenging courts, which we're seeing that obviously play out more and more here in the last few weeks. So yes, don't see it as competition.

Got it. I appreciate it. Thank you and congratulations on the quarter.

Yes, sir.

Thank you. Our next question comes from Jordan Hymowitz with Philadelphia Financial Management of San Francisco. Your line is open.

Thanks, guys. Couple questions. If the numbers you're talking about come to fruition, it seems like in the second half of 2026, you guys could be in a place to initiate a close to a double-digit dividend yield if you don't do M&A. Is that a reasonable thought process? You're not going to take the debt down any more than 2x to 2.25x, are you?

No. No, that's right, Jordan. Dividend -- we have not had a lot of conversations lately with our board or quite frankly even with investors about a dividend because we think the share repurchases more compelling at this point. But if we were to execute on a number of contracts and the stock price responds, obviously, we don't want to overpay for shares. So at that point, a dividend might make sense.

Okay. Second question, you've spoken incredibly favorably on TH during this call and potentially in a number of joint ventures with them, would there be a possibility of an interest in them as an M&A candidate? They were approached by a different private equity. But might that potentially fit with your M&A potential list of things?

Wow, what a direct question, Jordan. This never crossed our mind. They're a great, great partner and obviously it's not something that we've talked about or have entertained. So I appreciate your question, but it wouldn't be appropriate for me to provide any additional feedback on that.

Okay. And last question is, how big do you think the ISAP business has to be for a government to entertain two people splitting the contract versus one?

Oh, that's a great question. And I don't think they have to. I don't think they have to grow. I mean, I think there could be a path forward where they say, okay, we want to introduce a little bit of diversification with providers in anticipation of growth. But I think it could be what it is today allow for two providers. And if they do think there's going to grow, then I think having two providers that could help with the scale of that growth would be, I think, a good idea on the government side.

Okay, thank you.

Yes, sir.

Thanks, Jordan.

And this is the end of our Q&A session. I would now like to turn back to Damon Hininger for closing remarks.

Thank you so much, operator. And before I let you all go, let me just note one quick thing. This week, nationally is National Correctional Officers and Employees Week, this was put in place by President Ronald Reagan back in 1984 and the intent is to recognize people in our profession both public and private, correctional officers, correctional workers around the country for the important work they do day in and day out. It is a tough business as you all know as many of you on the call are long time investors, it's tough, tough work but it's also very rewarding work. So I didn't want this moment to pass without recognizing our employees. They're the best of the business that do this work again can be very challenging but also very rewarding and they are obviously executing really, really effective like right now with all of these opportunities but also great outcomes for people in our facilities. So again my hats off to our entire team here within the CoreCivic. With that, we're adjourned. Thank you so much for participating in today's call and thank you again for your continued support of the company.

This does conclude the program. You may now disconnect.