Good morning. My name is David, 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 CoreCivic's Q4, 2020 and Year-End Results 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 Instructions] I would now like to turn the call over to Cameron Hopewell, CoreCivic's Managing Director of Investor Relations. Mr. Hopewell, you may begin your conference.

Thanks, David. 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. We are also joined here in the room by our Vice President of Finance, Brian Hammonds. The call today, we will focus on our financial results for the fourth quarter, provide general business updates and an overview of the evolving impacts of the COVID-19 pandemic. During today's call, our remarks, including our answers to your questions, will include forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities and Litigation Reform Act. Our actual results or trends may differ materially as a result of a variety of factors, including those identified in our fourth quarter 2020 earnings release, issued after market yesterday and in our SEC 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. On this call, we will also discuss certain non-GAAP measures. A reconciliation of the most comparable GAAP measurement is provided in our corresponding earnings release and included in the supplemental financial data disclosure on the Investors page of our website, corecivic.com. With that, it's my pleasure to turn the call over to our President and CEO, Damon Hininger. Damon?

Thank you, Cameron. Good morning, everyone, and thank you for joining us today for our fourth quarter 2020 conference call. Today, we will provide you with an overview of our fourth quarter financial performance, update you on our continued response to the COVID-19 pandemic, discuss business develop opportunities, discuss also last month's executive order impacting the Department of Justice use of private facilities, update you on the potential sale of certain non-correctional real estate assets in our property segment, and provide you with an updated strategic overlook for the new year. Following my remarks, I will turn the call over to our CFO, Dave Garfinkle, who will review our financial results in greater detail. Our fourth quarter revenue of $473.5 million represented a 5% decline over the prior year quarter, due to continued impact of the COVID-19 pandemic on occupancy within our safety and community segments. However, occupancy rates in the fourth quarter appeared to have stabilized versus the more significant declines we experienced in the second and third quarters of 2020. In the fourth quarter the occupancy rates across our safety and community segment increased by 70 basis points versus the third quarter of 2020. Normalized funds from operations or FFO for the fourth quarter were $0.63 per share, an increase of 7% compared with the fourth quarter of 2019. Our earnings growth was driven by a combination of new contract awards that were initiated within the last 12-months, and lower G&A expenses, which helped to offset the reduction in occupancy we experienced as a result of the global pandemic, particularly lower utilization at our facilities under contract with Immigration and Customs Enforcement. Dave will provide you with greater details about our fourth quarter financial results following the remainder of my comments. I'd like to provide a brief update…

Thank you, Damon, and good morning to everyone. In the fourth quarter, we recorded a net loss of $0.22 per share or $0.40 of adjusted EPS excluding special items. We generated $0.63 of normalized FFO per share in the fourth quarter of 2020, compared with $0.59 in the prior year fourth quarter, an increase of 7%. We generated AFFO of $0.58 in the fourth quarter of 2020, the same as in the prior year fourth quarter. Adjusted EBITDA was $108.7 million in the fourth quarter 2020, a 5% increase from $103.5 million in the prior year quarter. Adjusted amounts exclude asset impairments of $47.6 million, consisting mostly of a non-cash impairment of goodwill, $7.1 million of expenses associated with debt repayments incurred in connection with the sale of 42 GSA leased properties, and $2.8 million of expenses associated with COVID-19. Our goodwill impairment analysis considered numerous factors with the non-cash impairment predominantly driven by our consideration of the broad base declines in the market capitalization of publicly traded companies in our industry, as well as the reduction in cash flows from the COVID-19 pandemic and the anticipated change in our tax structure. The decline in our equity market cap had to be considered when assessing fair value under the accounting rules for goodwill impairments, and resulted in the impairment of the full balance of goodwill allocated to our community segments amounting to $42.6 million. We believe the cash flows in this segment will improve once effects of the pandemic subside. And we remain committed to the community segment, which focuses on helping those entrusted to our care, obtain employment and successfully reintegrate into their communities. This segment serves individuals nearing the end of their sentence, or as an alternative to incarceration in critical need of case management services, such as…

Thank you. The question-and-answer session will be conducted electronically. [Operator Instructions] We'll take our first question from Joe Gomes with NOBLE Capital.

Good morning, Damon and David.

Good morning, Joe.

So, nice, solid quarter it looks like to me. There are some onetime items, but once we get below the surface, it looks pretty solid. It looks a little bit better than what I was expecting. The last three quarters look pretty similar here during the COVID time. Just wondering kind of two part. One, you talked a little bit about and maybe can provide a little more color detail as to what helped drive a little bit better than expected results here? And, as we're looking forward, do you kind of see what the last recorded run rate? Is that kind of our new normal as we know things today?

Yes, good question. Joe, I'll take a first stab at that. I'd say, certainly when you're comparing Q4 to Q3, the primary drivers were the transition of the Cimarron facility from the contract with Oklahoma to the U.S. Marshals. So during Q3, we were ramping down the facility for the state and then ramping up the facility for U.S. Marshals. So there was a gap in there in the third quarter that stabilized really in the fourth quarter. So that contributed about $0.03 when you're transitioning from Q3 to Q4. The other notable item I mentioned in my comments was the lower G&A expenses. That's not a run rate. So, that was probably $0.04 lower in Q4, compared with Q3 that we'd expect to return to the Q3 and prior quarter numbers beginning in Q1. We did see some expense savings that, I think will continue as long as the pandemic continues, just because we're not able to provide the extensive services that we normally provide in a non-pandemic time period, with all the great things that we do to help our inmates and people entrusted to our care, all those services, the GEDs, classrooms, trade certificates. So, we're operating at a lower level of service currently during the pandemic, just to protect them from the safety and dangers of COVID-19. So, eventually, those expenses will ramp back up as we start to reinstate those levels of services. So, that's probably unique to the period of time in the pandemic. Also, in the fourth quarter, we did have some favorable claims experience in our self-funded medical plans. We had some property tax troops that were favorable, based on the receipt of property tax bills, and some other things like that, that could be recurring. They're just hard to predict.

Okay, great. Thank you on that. If we could switch to Alabama for a second. Congratulations on the win there, very significant in my view, but a couple of quick questions. I know you mentioned you can't really talk about the lease impact the financial impact right now. But I saw some estimates out there, Alabama was looking to build three different facilities. And the estimates were that the capital cost would be somewhere than $900 million to $1 billion range, which, again, just doing some average math would suggest somewhere the $600 million to $700 million for two facilities that you want. A, is that kind of in the ballpark? And then you mentioned about self-financing 10% to 15% of that, and raising the rest through outside financing. Given what we've seen here, when the activist push, I mean, how comfortable are you with your ability to go out and raise the rest of that amount to construct that? And then, finally, you mentioned Kansas as the kind of a model here. And so, Kansas has been up and running, I think, roughly, let's call it a year. Can you kind of give us a little color on how Kansas is performing over this past year? I know, it's special with the pandemic and everything, but is it running towards your expectations? And any hiccups there? Just kind of give us some detail as we project forward Alabama, potentially Hawaii or some of these other states. Kansas being the first one, how is that performing? Thank you.

Yes. Thanks, Joe. A lot of questions here, so let me try to take a couple of them. On the costs, we don't want to get out in front of Alabama on those. You're right, they did disclose the costs of I think it was somewhere around $800 to $1 billion dollars for all three correctional facilities. We've worked with them on the cost during the design phase and have been working extensively trying to offer opportunities for cost savings and so forth. But we don't want to get out in front of Alabama on disclosing those costs. It will somewhat also depend on their lease costs will depend on the financing. We feel very comfortable right now with the financing for that project. Both private placement markets, municipal bond markets are very competitive right now for lenders, a lot of dollars, chasing infrastructure funds. So, this would be a great project we think, to execute the financing. So, we feel really good about the financing sitting here today. Kansas, just I'll touch briefly on Kansas. It was delivered under budget, really on budget to under budget, real close to budget, certainly not over budget. It was delivered in the first quarter of last year and has delivered really as expected work. Just the owner, they operate the facilities very similar to Alabama. Alabama is going to staff it and operate it. So, with respect to our risk, it really is limited to the maintenance services that we perform. So, all that's going as expected and no hiccups there whatsoever. Damon, do you have anything to add there?

Yes, I would say also on Kansas, just kind of connect that little bit to Dave's comments on Alabama. So going back several years, when we were starting that project, we did a private placement on that facility and did 100%. And we needed, about $160 million $170 million for the financing. We got almost $1 billion in interest. And so those type of projects in the financial world are very, very interesting to a lot of investors. And so, again, we got almost 100% money, 100% loan to value on that about $1 billion in interest for 20-year money, and I think 4.3-4.4. So very strong interest been in now on these type of projects that are government leased assets. And again, that was also with all this kind of rhetoric still circling around the country. But also talking about Kansas, as Dave said, we delivered under budget Q1 of last year. And you'd rather be lucky than good that it really was very fortunate timing, because as you know, right at the beginning of the pandemic. And so you've got a population that was coming from a facility that was built in the 1860. So very challenging infrastructure, HVAC units, a lack of kind of negative pressure rooms or infirmary beds. Moving into a brand new modern facility right at the beginning of pandemic was very, very helpful for them operationally. And that facility that we delivered, it's got the largest infirmary unit in the state of Kansas. So it really gives them a lot of flexibility in normal environments, but especially with a pandemic. And then finally, I'll just say I had the good fortune to tour the facility, late last year in fourth quarter and it looks really good. I mean, just it's open, it's modern, it's very clean. It's got new technology, and again, it's got the largest infirmary unit in state of Kansas for the Correction system. So it gives them a lot of flexibility to deal with a lot of challenging issues. So we're excited about that project. And we think it's a good model for not only as we finalize the development and designs of Alabama, but also some of these other state opportunities, we think are down the road for us.

Okay. Thanks for that. One last one for me, and I'll jump back in queue. So more David from really the 10,000 foot level, we've had the executive orders from Biden administration, U.S. Marshal Service question there. There's been some emails, we'll call they've been reported about someone in the Justice Department, I think, with Justice Department but going for ICE and who you can detain who you can't detain anymore. We talked a little bit here about the court system trying to get back to normal there. So trying to - maybe give us a little bit of a State of the Union address so to speak, as you see now. I mean, if we look at U.S. Marshal Service, and the populations there that are detained. Are there other available alternatives out there that could soak up the population there that are being currently serviced by the private sector? Just love to hear some of your thoughts. And again, I understand all the complications here. There's a lot of unknowns going forward. But where you think - what you guys are thinking about today? Thank you.

Yes. Thank you for that question, Joe. Really, really good series of questions there. So the couple answers, let me just first just say globally about populations. And so Marshal Service nationwide, based on our research is about 63,000- 64,000nationwide. And that's pretty consistent where they work in late 2019 early 2020. They did see a significant dip, but it's pretty short lived during the kind of Spring Summer of last year. I think they went as low as 36,000. But they've again gone back up to about 63,000, and again, that's pretty comparable where they were in '19. And even if you go 10 years ago, I'm looking at my chart here, going back to the kind of the 2012-13 year we're kind of in the low 60s. So their populations historically and recently have been pretty stable. And then you take it to the company, if you look at our numbers we're pretty stable last 24 months. So again, we've seen probably some dips last summer, but overall it's been pretty, pretty stable. So globally, but also company specific population pretty stable. As we look at kind of the needs of our customers and it's something we're always researching and talking about anticipating, and but also providing maybe new, more flexible and more innovative solutions going forward. Basically, they're changing demands. The BOP, as you and I talked about Joe, it was pretty clear, seven, eight years ago that their needs were going to change in the private sector being a part of their overall kind of solutions going forward, especially since they were significant overcrowded the time probably what's going to change. And so we've adapted to that not only anticipated kind of the demand, maybe changing on the safety side that also provided more solutions on…

I don't think so. I mean, it's a little early in the Biden administration, so it's one of the reasons we haven't issued guidance. It's hard to unpack all of the application of the executive order and immigration policy. So there's just a lot of dynamics in the environment right now. And that was really the genesis for us not issuing guidance. We want to take a little bit of a wait and see approach and see how things play out.

Thanks for those insightful answers, Dam and Dave. I'll get back in queue and let someone else ask a couple questions. Thank you.

Great. Thank you, Joe.

Thank you, Joe.

Next, we'll go to M. Marin with Zacks.

I have a question about the transition to-date. So the transition, does that [indiscernible] post deleveraging action? Does that in any way open the door to potential new revenue streams for company or opportunity for new revenues coming? Thank you.

Yes. Thank you for question. This is Damon. So the short answer is yes. As you know with a REIT, there are some restrictions on what you can or cannot do as a publicly traded REIT. So, we do think now being a C Corp, again, we were C Corp once upon a time too before 2013. It could open some opportunities to where we provide not only the real estate and maybe the services for certain solutions. So for example, I mentioned earlier, the new project in Kansas that has a very large infirmary unit again, largest actually unit in the state of Kansas serving their correctional institution or correctional system. There could be a case where we can maybe do a medical kind of oriented solution for certain jurisdiction, maybe that's an infirmary, maybe that's a mental health or substance abuse type facility. So, it gives us greater flexibility of providing kind of healthcare related services that we weren't able to do as a REIT. Anything you would add to that David?

There were restrictions under the REIT rules that prohibited certain business activities. Obviously, we were focused on the real estate aspects of the business. But without those limitations, certainly the sky's the limit on non-real estate related businesses, perhaps in adjacencies to the corrections market that could be available to us. So those are things kind of in the R&D stage at this point, but we're starting to identify some opportunities.

Thanks. And could you just remind what the [ph] timeline is for the transition?

I'm sorry, you broke up on me. I didn't hear that question.

Could you just remind us of the timeline for transition?

Oh timeline.

It's hard to put a timeline now, and so we're just on the other side of just now, going into the New Year with the conversion to a C-Corp. But we're actively looking at and talking with partners. And part of this just, being a little bit of a lifting journey with our partners are kind of emerging issues and needs within their system and how we can be a solution. So no real timeline be able to express today, but it's something we're actively looking at.

Okay. Thank you.

Thank you.

Next, we'll go to Jordan Sherman with Ranger Global.

Good morning. I just want to talk about the Alabama thing once more from a different angle. I know you will walk into it, you gave too much detail. But the Kansas facility, what was the cost of development per bed?

It's about $65,000 a bed, $160 million project.

Right. And is there any reason for us to think at least conceptually not specifically, that there will be major differences one way or the other for the development of the Alabama facility?

There could be. I mean Alabama's needs are different. They're certainly larger facilities, different components to it. So, it could be. But again, I really just don't want to get out in front of Alabama.

I guess one thing I would note is that that - I'm sorry.

No, that's fine, I'm sorry.

I was just going to mention that…

Conceptually, so it could be different.

It could be. As I say, one of the units, one of the facilities, it's going to be a kind of a medical focus. So that often that'll drive some unique kind of requirements for that physical plan. So it's a different way, there's three facilities anticipated, two of the three are going to be what I call general population, kind of normal facilities. And those are very consistent with Kansas, but one of the three will have a very specific medical focus. And again, those will probably have some pretty unique requirements from a physical plant perspective.

That would be expensive than the other two facilities.

Understand. Okay. We'll follow to details about that. Hawaii, what is the size of the facility that they're looking to replace?

I think it's about 1,500 or 2,000 beds. And it could be a little bigger or smaller than that, depending on kind of what their needs are. And maybe we've heard also that over the years, they were trying to maybe do some small regional facilities around other parts of the state or other islands, I should say, but that's probably a pretty good ballpark at the moment.

Fair enough. Okay. Just wanted a glimpse of the U.S. Marshal. We have no - I've heard your comments about that not really a lot of capacity outside of your, what's being utilized today. Let's put it that way. Should there be a shift or an attempted shift away from sort of progress for the year. But I'm just wondering, if they go down that pathway, one the way they've chosen with the BOP is to eliminate the contracts as a rollover? So I was just wondering, just conceptually, how would indefinite contracts work in that environment?

I'm not sure we know, Jordan. We list out explorations in our facility portfolio table and our supplemental disclosure report, but we don't have clarity on that.

Okay. So and then just on the immigration side, just like - I just look in the Southwest border crossings numbers, I guess we just got them for January. And clearly, they're kind of exploding numbers, but I'm just wondering how we think about those - I'm sorry.

We did see those numbers. Yes.

Yes. Since highest number, 30% above the highest number we've seen in the last decade. How do those numbers translate into the tensions?

Well, the biggest action right now that's affected detention capacity is the title 42, which is the basically turn around right at the border. So they're not detaining and putting them through the process here in the United States. And obviously, we're early days into the new administration, but there has been not any change on the title 42 policy at the moment. I know that you've read news reports out there looking at it closely, and also overlaying that with the challenges with a pandemic, but you're exactly right. The encounters single encounters, I think, yes, the 200% a year-over-year increase. So, the activity at the border has dramatically impacted, but it's not related to detention at the moment because the title 42.

Okay. So they're coming, they're touching the border in some shape, manner or form, and they're being turned back.

Right.

Okay. Under normal circumstances, how those numbers translate into detentions?

It's just a - I'm sorry. Yes, it's hard to give a ratio if an encounter versus, how many that comparison to a detention capacity. I don't know if that ever been kind of studied. And I'm sure to be honest with you probably it changes based on administration and priorities. But I'd say historically, yes, the encounters are going up on the southwest border that typically, somewhat correlates on to detention capacity and utilization of capacity on the southwest border.

I guess, let me ask a little differently, because that wasn't necessarily a ratio. There are certain people who presented the border, either through a port of entry or not the port of entry, who will be detained, and the certain types of people who won't be. I guess, I was going after is, who and who is detained? And when you talk about priorities, that's what you're referring to is, who is detained out of those people coming across the border may shift as a result of Biden administration and we're not sure exactly yet on those?

Yes. I think the latter is exactly right. It's too early to tell. Historically, I guess what I'd say, and this is regardless of the administration, Republican or Democrat. Historically, the individuals that are detained are typically individuals that you maybe have a violent, either crime history or have - are in the act of doing a violent crime. So, I'd say more, not only just illegal entry into the country, but also maybe smuggling a firearm or smuggling of children or something like that, those are typically the ones if they're going to kind of triage and determine what's the right individual put in detention, it's ones with a violent history. I don't know anything to add to that Dave?

The source or where they're coming from the origination, the country from which they are originating, also can have an impact on their detention, and how long they're detained. So, somebody might have a complex deportation order, they might spend more time with detention facility than somebody who's in Mexico comes from Mexico, for example, there's arrangements with Mexico that would deport them more rapidly.

So then, I guess, how then conceptually, do you think about changes of interior enforcement versus who's detained at the border? I guess I'm trying to figure out what are all the - there are a lot of moving parts, I know that. I'm just trying to figure out one of those moving parts apart. And then how, if we go to a more liberal catch and release, how's that going to work? And then, of course, if we have a more liberal policy, we're certainly going to get in the U.S., we're certainly getting more border crossings, good, bad and indifferent. I'm just trying to put all the elements in place, and I know you'll be able to have an answer on where it goes. But just trying to make sure I have all the pieces of that puzzle?

Yes, it's a good question. And the short answer is, too early to tell. I mean, we're getting obviously some signs with some of these executive orders and some of the pronouncement for the administration. So the short answer is, it's too early to tell. And we also have to monitor. But I guess what I would say is that, we have been able to not only change but also kind of recalibrate not only our services, but also maybe invest in ourselves a little bit. If the priorities changed from administration-to-administration, we can change our solutions based on those priorities. So, it's a different way. There are certain parts of the country where there may be doing more southwest border enforcement and interior enforcement, or there's a maybe a greater need for families versus females versus adult males. And we have changed over the years, some of our facilities are our mission and our services based on kind of those changing needs. So, as I sit here today looking at 40 years of history with the country, I think we've been able to do a good job, especially with ICE facilities, that primarily as you know around the southwest border, we can change again either our services, make some investments, or maybe adding more not only CapEx, but maybe courtrooms and other things that help support that mission. And also, again maybe change the makeup. So changing the facility from adult male or female to families or something like that. So we can pivot and navigate through that I think pretty faculty, as we've shown in the past.

Okay. And then just one more on that and I'll turn it over. The timeline, how do you think about timeline of changes? I guess we'll get a budget request that will give us some sense of the level of beds at least in the interim. How are you thinking? What is sort of the roadmap timeline that you're looking for at least no timeline?

I would say, it's a good question. I'd say probably a couple key things. Yes, the budget you just noted, I read this morning, I don't think I've seen that exact day, but I know the budget is going to be delayed coming out. But there usually is pretty good information, not only on the dollars and cents for each individual agency, but also how that's tied to maybe changes in policy and priority for the administration. So again, I think that'll be a pretty good blueprint to your question. The other thing I would say is that, we just saw here in last few weeks, the confirmation of the agency heads, with this subject which is DHS. But I think probably in the coming weeks, as you start to see announcements on department heads and agency heads, then obviously once those individual get in place, and then they can kind of get aligned with their priorities, not only from the secretary, but also the administration, that'll be a key. But I don't know, if you can add to that David?

Yes. Perhaps as importantly is Title 42. The President is trying to protect the country and eradicate the COVID-19 virus as much as possible. And the timing of reopening the borders, if you will rather than turning them, as we were just discussing, could have an impact on the number of people admitted to the country, and notably those claiming asylum in the United States.

And will we glean anything interesting out of the 100 day moratorium, which is now - there's a federal injunction against that, I guess? Will we glean anything about ability to deport or not deport from that? And sort of final decision on that?

Yes, I think that's going to be a probably wait and see. We'll have to just see with it. I know there's been court challenges that they got to Texas, and I haven't heard of any other states that don't we just have to wait and see the what the impact of those actions are.

Perfect. Okay. Thank you very much.

Thank you.

Next, we'll go to Dane Bowler with 2nd Market Capital.

Hi, good morning.

Good morning.

So I'm wondering on the Alabama new builds. Presumably, the detainees are being moved in from older facilities that maybe weren't as well designed for those exact purposes as the modern purpose-built buildings that you guys are making. So I'm wondering if you can quantify the benefits of the better facility in terms of say health and safety benefits, both the detainees and the employees, as well as potential cost savings in operating them.

Good question. Probably a little hard on the last one, but I'll give a little color to the first part of your question. And that is, it's been reported and I don't think Alabama's had a hard and fast decision on this, but it's been reported that they were talking about 15 to 18 facilities within their states that they are looking to close as a result of these three new modern facilities once are delivered being able to get the efficiency by getting close these older facilities. Technology's a big one. So I mean, if you think about facilities that are 50 to 100 years old, it just is not cost effective, nor that they have the dollars per se to enhance these older facilities with from a technology perspective. I'd say second the design of facilities today is a lot different than it was 50 or 100 years ago. So a lot cleaner line of sight, a lot more efficient design from a staffing perspective. You don't have the exterior where you use limestone or rock as the perimeter wall. These are now used to fences where you can see through and again use technology from both cameras and other detection systems. And then I'd say finally is that these facilities sometimes are acquired from other agencies within state governments, and sometimes these facilities were maybe vacated mental health or hospitals, that maybe they were initially built for a different mission, but they're just not really conducive to an environment where you're providing a corrections, kind of housing and services, but also maybe not have adequate space for programs or medical services. So a lot, a lot of different benefits that can be provided with a new modern facility, part of which is, again, just being able to design it kind of from day one for this mission, versus maybe it being acquired and had a previous mission in another life. Do you have anything to add to that Dave?

Yes, a couple things. One, if they're not incremental beds to Alabama, they're intended to be replacement beds for existing facilities for which Alabama is currently being sued by the Department of Justice for the conditions of confinement. So certainly, this is the governor solution to come up with better capacity. As Damon mentioned, there'll be more high-tech technology, there'll be larger facilities, which I think is also important to note to the latter part of your question. So when you have disparate smaller facilities, it's much more inefficiently run than it can be run, when you have three very large facilities. It just kind of common sense. And now if there Kansas is case, they were able to save enough cost savings to fund the lease payments that we collect, just through the ownership of the facilities, because of the efficiencies that they gained and not having to have as many staff and as much repairs and maintenance on older facilities. So I think there's dated back to 1850s or something like that. So these facilities similarly are very old and outdated. So they have a lot of deferred maintenance and maintenance to expand every day on them that they will not have to spend on three brand new facilities. In fact, that's our responsibility under the terms of the leases. So a lot of efficiencies to be gained by consolidating the facilities, and again, not incremental capacity for more inmates, but just replacement capacity, that puts them in better conditions, and quite frankly, safer conditions for the staff as well.

Okay, great. So as those numbers come out from the Kansas facilities and theoretically, in the future from the Alabama one. Are you finding those that are useful in kind of pitching the same case to other states or other entities that would like a similar build sort of thing?

Absolutely. Yes, great question. But yes, absolutely. We think that the best marketing we could do for new opportunities is previous examples we can point to. So we know that every jurisdiction we've worked with, they do a lot, a lot of homework and research with other jurisdictions that have done kind of similar projects with the private sector. So we think, Kansas helped us get good momentum in Alabama. And we think in turn Alabama will give us good momentum in another state. So that's exactly right.

And this is what we do. So we can provide that value added service to government agencies that haven't constructed facilities in 25, 50 or 100 years, where that's our business. So we know it well, and we know how to design facilities so that they can rebound some efficiencies or rebound inefficiencies out of the older facilities, when you're designing a new one.

Okay. Thank you. Congrats on a good quarter.

Thank you.

Thank you so much.

And that does conclude today's conference. We thank you for your participation. You may now disconnect.