Good morning. My name is Samira 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 Q2 2022 Earnings 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] 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 begin your conference.

Thanks, Samira. 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. On today’s call, we will discuss our financial results for the second quarter of 2022, developments with our government partners, and provide you with other general business updates. During today’s call, our remarks, including our answers to your questions will include forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities and Litigation Reform Act. Our actual results or trends may differ materially as a result of a variety of factors, including those identified in our second quarter 2022 earnings release issued after market yesterday and in our Securities and Exchange Commission’s filings, including the 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 file on our Investors page at corecivic.com. With that, it’s my pleasure to turn the call over to our President and CEO, Damon Hininger.

Thank you, Cameron. Good morning, and thank you for joining us today for our second quarter 2022 earnings call. On today’s call, I will provide you with details of our second quarter financial performance, discuss with you our latest operational developments, update you on capital allocation strategy and discuss the latest developments with our government partners including the pending $130 million sale of our McRae facility to the state of Georgia. I will then turn the call over to our CFO, Dave Garfinkle, who will review our second quarter financial results and full year 2022 guidance in greater detail and we’ll update you on our ongoing capital structure initiatives. Before proceeding with the agenda, I would like to take a moment to address a tragedy that occurred at our Davis Correctional Facility in Holdenville, Oklahoma. This past weekend, CoreCivic Correctional Officer, Alan Hershberger lost his life in the line of duty succumbing to an injury from an unprovoked attack by an inmate. Officer Hershberger joined CoreCivic in October of 2021 after a career in the military. He served the United States Navy, the Army National Guard in Army Reserves. Originally from Smithville, Missouri, Officer Hershberger started with us at our Leavenworth Detention Center in Kansas. He was very well liked and respected by all those who knew him and worked alongside him throughout our company. Our hearts are with his family and friends, as well as the entire team at Davis, where they’re providing support services – where we are providing support services to assist our people as they cope with his loss. In the past couple of days, numerous correctional leaders from across the country have personally reached out to me to offer their support and condolences. They understand the gravity of the calling and sacrifice that the dedicated…

Thank you, Damon, and good morning, everyone. In the second quarter of 2022, we reported net income of $0.09 per share for $0.13 of adjusted earnings per share, $0.34 of normalized FFO per share, and AFFO per share of $0.33. Adjusted and normalized per share amounts exclude a gain on sale of real estate assets of $1.1 million, expenses associated with debt repayments and refinancing transactions of $6.8 million, and shareholder litigation expense of $1.9 million. The shareholder litigation pertains to derivative lawsuits that raised similar allegations to those associated with the shareholder litigation we settled last year, which had been stayed pending resolution of the original shareholder litigation. During the second quarter of 2022, we reached a settlement with the plaintiffs in the derivative lawsuits, including attorney’s fees and expenses. The decline in adjusted EPS, a normalized FFO per share of $0.12 compared with the prior year quarter, primarily resulted from an EBITDA decline of $10.8 million or $0.06 per share due to the earnings disruption at our 3,060-bed La Palma Correctional Center, the second largest facility in our portfolio, as we continue to transition from ICE populations to populations from the state of Arizona, pursuant to a new management contract that commenced in April for up to 2,706 inmates. Contract termination since the end of the second quarter of last year at our West Tennessee, Leavenworth, and the managed only Marion County Jail contributed to an EBITDA reduction of $4.5 million or $0.03 per share from the prior year quarter. Per share results decreased a $0.01 as a result of the sale of seven properties, five of which were non-core properties in our Properties segment sold during the second quarter of last year and two were underutilized Community segment facilities sold in the first quarter of this year,…

Thank you. [Operator Instructions] And we’ll take our first question from Joe Gomes with NOBLE Capital. Please go ahead.

Good morning, our condolences, and thanks for taking my questions.

Yes, sir. Thank you very much. Thank you.

Well, I just want to talk a little bit, pardon of me about ICE populations, they had been creeping up modestly in the first quarter, and I think in the fourth quarter last year also, if we kind of take out what’s happening at La Palma, are you seeing any type of increase in ICE populations and other facilities? Is it staying flat? Is it decreasing? You could just give us a little more insight onto the ICE populations?

Absolutely. Yes. Joe, this is Damon and thank you again for your comments earlier. So yes, putting aside La Palma, I’d say it’s been relatively stable. I mean, we always have some ups and downs with ICE populations just because of their mission and the kind of huge numbers that we see kind of fluctuate from intakes from day-to-day. But and look, I guess a little bit to your question also kind of look in the rest of the year. I mean, obviously you heard what we said about kind of policy and potential impacts that it would have on population. So, we have assumed that none that’s going to change for the rest of the year. But we also do know that I guess a little more globally too with ICE populations. I mean, they have, as it been public reported, they do have a reprogram request for about $360 million for rest of this fiscal year that you’re trying to get approved through Congress. And then obviously will watch closely what happens next fiscal year, which will begin on October 1. My guess would be is that they probably start the fiscal year with the continued resolution, which has been pretty similar kind of action that you see in previous years. But anything you’d add to that, Dave?

Yes. Just excluding La Palma, and I guess South Texas facility, they were down a couple hundred from last year’s second quarter and basically flat with the first quarter. So they’ve been pretty consistent excluding the transition at La Palma.

Okay, thanks. Thank you for that. On the U.S. Marshals Service, I’m sure you guys have seen the GEO renewal of their direct facility. You’ve got a couple of directs, I think they come up one next year, and one after that. Are you in any discussions with the Marshals Service in terms of maybe being able to use that as precedents for the facility that comes due, I believe next year?

Yes. Great question. And we did note, yes, GEO’s extension there at their Western Region Facility in San Diego. So, we did follow that closely for couple of reasons, one of which is not only the contract, but also we’ve got another facility within the region that supports ICE, as you know. But yes, we’ve talked to ICE – or excuse me, we talked to Marshals Service on a regular basis. In fact, I was up meeting with them at their headquarters here. And I guess the last two to three weeks, and always talking about not only kind of just general operational issues, but also as we’re thinking about these contracts coming up for renewal, as to one in next year in 2023, and then also we’ve got the last one that would be potentially impacted would be 2025. So obviously a few years out. So, I know they’re watching closely not only what their needs are operationally, but I know they’re working kind of in sync was by contract working with the various stakeholders of what the needs are and what the alternatives are within those regions or not. And as I think, Joe, I mean, we have facility in Florence houses on any given day, about 3,000 to 3,500 federal prisoners for the District of Arizona. So, we think it’s very compelling location wise, operationally physical plant it’s in close proximity to the Federal Courts here in Tucson, and Phoenix. So, we’ll continue to monitor and obviously communicate closely with the Marshals Service. But my sense is that this is probably the next one in the line that they’ll probably put their focus in on and think about alternatives that are not there, or could not be there, I should say because the size of that quantity, but also how they think about continue to use the beds within our facility, but anything you’d answer to that Dave?

Just highlight the – maybe obvious it’s more than twice the size of the Western Region Facility, the GEO has. So it’s a great facility and it would be very difficult to replicate the capacity that we have there to continue to serve their needs.

Okay. Thank you for that. On new business opportunities, you talked about the young adult program, previously and other calls, you’ve talked about a couple other states that you were looking at anything new on the new business opportunities?

We’ve got – let me talk about state first. We’ve got conversations going on with a couple of states. I’d say, we’ve probably got one new state in the fold that I wouldn’t be able to publicly disclose. That’s gotten in the mix, because of not only some budget issues, but also some staffing issues within their state that puts some pressure on facilities that they think they need to either ramp down relative to quantity or OXY or potentially close all together. So, yes, we’ve got probably two or three states that are still in the mix for increased utilization. And again I think two of them would be potentially new states that we are not currently doing business with. On the federal side, like I said, I think the story on ICE is also will watch closely what happens in a new fiscal year. Not only with some of these policies that the administrations trying to pull back on, but also what their funding level is next year, as you know, that customer is unique versus all of our other customers, because they’re quantity, they use in detention capacity is driven in big part not only by policy, but also in dollars appropriated for detention capacity. So again, we’ll be watching that in the coming days and weeks as we get closer to the new fiscal year. And like I said, right now with the Marshals Service, they have been relatively stable, putting aside Leavenworth and West Tennessee in our portfolio relative to utilization, we have seen a little bit of increase in a couple of our facilities and, they’ve expressed to us, they probably are going to be stable, maybe modestly grow here in the next, probably 24 months. So, I don’t anything you add to that, Dave?

I just, emphasize that our occupancies at 70%, so growth with existing customers, including with ICE, for example, through the reversal of Title 42 and the continued ramp up of Arizona will obviously create natural growth in 2023 as those things kind of resolve themselves.

One other thing I just say on ICE is that again, we talked to them on a regular basis. Know I just kind of general operational issues, but also, it’s pretty clear to us that, that they continue. And I think I mentioned this back in May, that they continue to look at not only as a former procurement with the case managers for young adults, but also capacity that we’ve got within our system, either in existing facilities on our own operation or maybe vacant facilities. So, we continue to provide them information and additional detail as appropriate as they think about as they kind of game plan what potentially their needs are going to be mission wise as they go to new fiscal year.

Okay. Thank you. And on the McRae, obviously that’s a really nice sale for you guys. You do have some other facilities that are idled. Are you – you talk with any other states about some of those facilities that are idled about possibly helping them meet their needs for upgrading older facilities that they currently use?

Yes. Great question. So, I guess, let me, before I answer that, just let me just give you just a view right now, as we think about the balance sheet and also kind of our capital structure. I mean, we feel like we’ve really gotten a company in a great, great spot. I mean, as you know, Joe, I mean, look at our leverage it’s down to the lowest level, I think we’ve had in about a dozen years, brand new credit facility, it’s got a great group of banks to support that we’ve got obviously maturity that we did last year. So that’s a long way of say it. We feel like we’ve really positioned a company in a very stable place for the foreseeable future. And that’s all always been kind of our style. Because I think about kind of our capital needs. We think about our maintenance CapEx, as we think about growth CapEx, but also having capital for buyback program we’ve done in May. I mean, we’re really, really good. I mean, better than anyone else in the industry relative to where we sit at the moment. So with that, there’s no pressure on us to sell a facility that we don’t think is, mashed or on par with its market value. So, we have expressed, over the years on certain facilities where we don’t think we’ve got any kind of near term business opportunities, expressive jurisdictions, I should say that, potentially these facilities would be attractive to them. So, we’ll keep talking about those opportunities. I didn’t mention this in my comments, but obviously the transaction McRae, indicates obviously the value of our underlying real estate, but it’s also a great market comp if we did have a jurisdiction with interest in the notes still that we’ve got in the portfolio, having a real live market comp obviously is helpful in that discussion too. So anything you’d add to that, Dave?

Yes. I agree that the balance sheet is in great shape, and don’t need to sell any assets. The opportunity with the Georgia Building Authority was a unique one, that was a win-win for them, because they needed additional capacity to place outdated infrastructure. It was great for us, a great sale we’ll generate net proceeds on an asset that was going to be idle at the end of November. So it was unique. And as Damon mentioned in his script, I don’t think there’s going to be a trend of additional prison facilities, nor are we seeking to sell additional prison facilities. We do have – I would add that we do have some smaller assets. We sold three, as I mentioned in my script, two smaller facilities in an undeveloped parcel of land for about $15 million, $16 million in net proceeds will continue to pruning the portfolio and look at assets like that. Perhaps idle residential reentry facilities that can have multiple uses where we’re not seeing prospects of a customer just be better off monetizing those assets, taking proceeds and buying back stock as we continue to believe our stock is undervalued. But I don’t see really, the size sales of the McRae facility or other prison assets. Not to say, never say never, but we don’t need to, it would be nice if we could sell an idle one to do what we were going – what we’re doing with McRae, because buying back stock with those proceeds makes a lot of sense. But I think it’s probably going to be more on the smaller size assets, pruning that community portfolio where we don’t see a long-term opportunities.

Okay. One more for me, if I may. So, you mentioned the buyback a couple of times and great job here so far in what you’re doing. Did the buyback – are you restricted at all in the current environments you just reported earnings? Or is that something that, that is able to continue unabated [ph] even here with and there’s no blackout period, I guess?

That’s correct. Yes. I mean, there are, we do have quarterly blackout periods for earnings and you can enter into 10b5 trading plans – plan sales, basically that enable you to trade through blackout period, if you are not in possession of material non-public information at the time you enter into those 10b5 trading plans, which we did here this last quarter. So, we will likely do that again for the next quarter, but our window – trading window is will be opening once earnings are disseminated properly. And so we’d be able to trade without a 10b5 plan in the short-term. So no other restrictions. And we do have restricted payment baskets in our – the debt that we issued last year, but were nowhere near those restriction – restricted levels. So really no, the only inhibitor would be our leverage profile, which we’ve said two and a quarter to two and three quarter’s times is the target. So that’s really going to be the governor going forward. And with the short-term disruption in earnings, as we see the ability to get clarity around the 2023 budget, once we finish that get that clarity. I’d expect, that we’d be able to pull that leverage back down to the target level, but you could see – you could see it tick up above the two in three quarters here like it did in the second quarter, in the second quarters really, because we had visibility on the net proceeds of McRae coming in. And as I mentioned in my script pro forma for those sale proceeds, we’re back down to 2.7 times. So, we’ll look at it like that as we have visibility to get back in within the leverage target, we’ll take advantage of opportunities in the marketplace.

Okay, great. Thanks for taking my questions, and I’ll pass it on.

Yes sir. Thank you.

And we’ll take our next question from Jay McCanless with Wedbush. Please go ahead.

Hey, good morning. Thanks for taking my questions. In terms of the share repurchases, what type of cadence do you have in mind? Or are you, I know you talked a second ago about the 10b5-1 plans, is it – you are going to have a pretty steady buyback cadence. And also as part of that question, where do you want expect the share account to be by the end of the year?

Yes. Good question. I’d say, our goal is to consistently repurchase shares. We’re a long-term buyer of shares that these prices, and as we’ve discussed for the past couple years intend to return capital to shareholders once we accomplished our leverage targets, which we have done. I wouldn’t want to put a number out there yet for 2023, until we get our budget finalized, which we kind of kicked that process off. And we get some clarity down the road on Title 42 and things like that, but I’d hate to put a number out there, but I think the buybacks that we’ve completed to date are somewhat representative what you’d expect going forward.

Okay. That sounds great. Thanks for taking our questions.

Thank you.

And we’ll take our next question from Kirk Ludtke with Imperial Capital. Please go ahead.

Hello everyone.

Kirk, good morning

My condolences as well. And thank you for the detailed presentation. Very helpful. Sounds – with respect to the buybacks. It sounds like you’re – you plan to continue to buy shares above the target range. Is there a leverage ratio above which you would not buy shares?

Well, yes, let me tag team Dave on this. I mean, we, so you, as we set our range is two and a quarter to two and three quarters. So that would be kind of our range that we’re always looking at, to keep this, pick it off, we’re buying back shares. We will take into account as Dave alluded to earlier. I mean, we will take an account. I mean, we are obviously seeing a disruption of earnings from La Palma with the new Arizona contract. So, we will take that into account. So, if we have a quarter where we’re a little above and, but we know that, Arizona kind of normalize want that always is kind of full ramp we’ll take that into account. So anything you’d add to that, Dave?

Yes, that’s, exactly right. That’s what I was trying to say. You probably said it better than I did.

Okay. Thank you. It sounds like you’ve ramped staffing, really company wide. Where does your staffing stand relative to where it would need to be if Title 42 is lifted?

Good question. And keep me honest Dave, I mean, I’m thinking about facilities, primarily on Southwest border that have ICE contracts. We stay actually pretty well at those facilities. I’m just thinking from kind of San Diego down to Laredo, Texas. I think we’re overall pretty good. I think there’s one or two facilities where we still have, just speaking on full blast to recruit employees into the enterprise. But I think we’re relatively good. I mean, we do have a transition. We talk about La Palma going from ICE to Arizona. We do think that’ll have an impact on facilities in Arizona, like Eloy and also our Florence facilities that have ICE contracts. And so there will be some transition of staff La Palma to those locations. So that helps us a little bit from a staffing perspective, but I’d say relatively speaking, we’re probably in pretty good shape, but anything you add that Dave?

Yes, we have a lot of – right now, we have a lot of people augmenting staff kind of traveling and some expenses come with that. So, we try to minimize that to the extent possible, but that does enable us, it’s a good thing. Large company like ourselves with many correctional facilities enables us to deploy – redeploy staff where we might have too many staff, one facility to help out at a staff that’s short. But I’d say generally speaking, as we go through the rest of the year, any staff that we bring on I think would come with additional populations, and therefore I wouldn’t expect a meaningful deterioration. There could be some, but I wouldn’t expect a meaningful deterioration in margins or EBITDA levels for additional staff, because we would be bringing them on in conjunction with bringing in additional inmate populations. I think, part of the second quarter we were doing that. And I think we’re staff – we would, we’d be staff for adequate, the inmate populations we have today, but any additional staff would, I’d expect come with additional residents.

That’s a good point.

Got it. Thank you. That’s helpful. And then with respect to the ICE population at La Palma, it sounds as though the occupancy limitations have prevented a lot of those detainees from being moved to your ICE facilities nearby.

Yes, that’s correct. Yep. And – I’m sorry.

But if it eventually those occupancy limitations go away and that part of the idea there is still intact is just its delayed as well. Is, I mean, could you elaborate maybe on how many – how that might work and how many detainees you might be able to claw back?

Yes, that’s a great question. So again, keep me honest with you Dave, but I think about and the way ICE is doing this, they’re doing it kind of by location, not necessarily kind of globally as a policy, but they’re looking at kind of the, kind of COVID activity and rates of infection by certain locations. And then that informs their thinking on what type of OXY cap they want within the facility that we’ve got in that location. So, I’d say generally, I mean, we have some facilities that are all higher than others, but I’d say generally those caps have been kind of at 75% of total capacity. So yes, you’re exactly right. We do expect just like the rest of the world that, COVID will continue to kind of subside in some of these protections that were put in place will continue to kind be pulled back a little bit, and then we’ll see OXY approve, throughout the ICE portfolio, but anything to add to that?

No, that’s covers it.

So maybe – thank you. That’s helpful. So there were 900 ICE detainees at La Palma at one point…

One point, there were 1,800 before we started the transition.

Yes, 1,800 and today we’re about 600.

Okay. Maybe that 900 was first quarter. So 1,800, how many of those could be without absent occupancy limitations at the nearby facilities? How many of those 1,800 ICE detainees might end up at another CoreCivic facility?

If the limitations were put in place?

Correct?

Probably five – probably additional 500, which is maybe…

Pretty much the remaining population.

Yes. Maybe a little higher, maybe 700, but I’d say yeah. 500 to 700.

Got it. I appreciate that. Thank you. And then lastly, on the ICE funding, its funded ICE is funded for 34,000 detainees. Currently, you said the population I think was 24,000 and we’re coming up…

That’s correct.

Into a budget process. Has Congress ever not funded ICE?

Oh gosh. I’ve been with company 30 years and I’d say, no, I don’t remember ever not getting funded. Again, the funding levels have gone up and down over the years. But yes, I’ve never seen a situation where they haven’t fund ICE for detention capacity. And I guess, one thing, is not to your question, but I do want to kind of elaborate on point made earlier, even though they’re funded 34,000 [ph] ICE was required to spend a lot of money in kind of non-related detention capacity expenses this fiscal year and that was all COVID-related. So, we do think that, the nationwide number of 24,000, 25,000 the reason that’s lower than the actual funded amount is just because they had to kind of take money from that account that’s used for detention capacity and spend it for other corporate related expenditures, but anything you’d add to the Dave?

Yes, no, I was – going back to the earlier question, I have been tracking the funding levels, detention – funding levels for ICE since 2007 back then it was 27,500 and it’s gone up and it’s, it was around 34,000 throughout the Obama Administration, which is – when higher during the Trump Administrations come back down. So as far as funding for ICE goes, no, I mean, it used to be INS, but it’s been funded since, however long that agency has existed.

Got it. Thank you. Thank you very much.

Yes, sir.

And we’ll take our next question from M. Marin with Zachs. Please go ahead.

Thank you. So, I’d like to follow up on one of the questions you received earlier on staffing and with wage inflation, impacting you and impacting so many others, across the board in lots of sectors, do you think longer term there might be an opportunity to reduce the ratio of staff to occupancy either through, I don’t know, enhanced training of staff or other measures.

Yes. Good question. I guess, the way I’d answer it is that, there are some things that, over time have improved staffing, technology as an example, but I’d say the biggest impact is the way we design facilities. And so look at it from this perspective, operational costs wise about two-thirds of operational cost. If you look at P&L for facility is salary and benefits. And so we take a lot of time on the front end when we design facility. In some cases we even remodel or maybe reconfigure facilities to make it most staff efficient, where, there’s clean lines of sight. It’s a very safe, very open lot of natural lighting, but also helps us on the staffing levels. And so that’s been kind of goal number one, when we design new facilities that we own and operate, but also it’s been a big catalyst for the, solutions we’ve done on this – on the property side, because we can save, in the case of Kansas a couple years ago, I mean, we saved them almost $18 million annually on operating cost for salary and benefits just because we designed a much more efficient facility from a staffing perspective. But anything add to that, Dave?

Yes, I can take of two facilities that we renovated this year that would redesign the facility to add additional populations without a commensurate increase in staffing. So that’s how you really get the efficiencies, but as I think, that most of our contracts have required staffing patterns. And so those aren’t decisions that we make in a vacuum, that’s always a collaborative discussion we have with our government partners.

Okay. Thank you for that answer. One other question, which is from an ESG perspective, where are you right now regarding some of the training and other programs that you are generally offer in the facilities have things returned to more normalized pre-COVID level?

Yes. Great question. And I would say yes pretty, pretty darn close. I mean, we have resumed, in-person training, I guess for several, several months for all the required training that we do pre-service, or in-service at our facilities, but also our national I’d say program like course of a university, those have resumed to be back in-person. And then in fact, we actually had our leadership conference in Tampa last week for all of our facility leaders, where there was a lot of training, within those sessions. So yes, I’d say we’re virtually no [indiscernible]. I mean, we were back kind of back in-person kind of regular sessions and training both at the national level and also at the local level. Anything add to that Dave?

No, I mean, they’re in the early parts of the pandemic, we kind of had to shut those things down. Our training department really got creative and started doing our training CoreCivic University virtually, but as Damon mentioned now, we’re back to in-person sessions.

And I will say, I don’t know if this is part of your question too. You noted it with ESG connection, but I’d say we’re pretty darn close the same also on in facility programming, education, vocation, whatnot. I mean, so, I think we’re pretty much back to normal on that front. Again, we use some technology on the front-end with tablets and other curriculums that we could deliver through those platforms. But I’d say we’re pretty much back to normal now on that front too.

Okay. Thank you.

Thank you.

And we’ll take our next question from Ben Briggs with StoneX Financial. Please go ahead.

Good morning, I guess, good afternoon guys. And thank you for taking the questions. I wanted to touch on the McRae correctional facility sale. So the 66,000 of bed that you got for that facility comes to a rough, if you extrapolate that out, it comes to roughly $4.7 billion evaluation for the real estate. Can you talk a little bit about that? And while there’s obviously going to be some variability in valuation from facility-to-facility, do you think that 66,000 a bed metric is about right, generally speaking, and is that at the high or low end of new build replacement value?

Yes. Great, great question. So a couple answers there, and again, I’ll tag team of Dave on this a little bit, but we think that’s a great deal for Georgia. I mean, if they went out to build a brand new facility today, based on this construction environment and also cost materials, I would venture a guess that that’s probably going to be a 100,000 per bed, maybe even a little higher. So it’s a great transaction for Georgia, but you look at from our side. So I mean, this facility that we’ve had for 20 years, so we’ve built a brand new around 2001, 2002. So it’s a 20-year old asset, but its decades younger than probably the average age of Georgia’s currently current inventory that they publicly operate. So again, great, great solution where they get a new more modern facility at a great rate. So, I think to answer your question, 66,000 per bed, we think that’s a very fair deal for both us and State of Georgia. But I think, looking at kind of replacement value and the cost of real estate, that’s probably, I don’t know if it’s – I’d say maybe kind of mid, what would you say?

Yes, certainly if they are constructing new facility, that themselves, it’s going to be way north of that. Again, it’s a 20 year old asset, so that, that accounts for some of the difference, but I think still it’s probably $150,000 a bed minimum. But I would add, there’s nothing unusual about that facility, as Damon mentioned, 20 years old, it’s about the same age as the average age in our portfolio. So, we think it’s very representative of the correctional assets that we own across the country, providing a good proxy for that, $4.7 billion of real estate. And if you back out our net debt as Damon described in his remarks, you end up with a stock price of around, $29, $30 a share, if you just extrapolate the, that price per bed.

One thing I would add too, it is politically really, really hard for jurisdiction, especially a state jurisdiction to build a new facility right – for obvious reasons. And so we again thinking that we’ve got newer or more modern facilities that we either could sell again, not looking to do this transaction quite frequently, as I mentioned earlier, or lease like we’ve done, through a lot of different states here the last couple of years or potentially do a, properties in Kansas. Again, we think not only these opportunities to sell, but also lease just really shows and how difficult it’s for a jurisdiction to do it themselves, just shows again how valuable our real estate is.

Okay. Yes. I appreciate that. That is that’s great color, especially on that, potential a $100,000 replacement value, our new build value. And then the second question for me, basically on the same subject is, your press release says $130 million sounded to me like that was gross proceeds. Can you just give any color on the net proceeds, net of transaction costs in the like?

Yes, there’d be very, there’s no broker, so it’d be very, the net proceeds would be very close to except for, taxes. So apply a tax rate that we will have to pay taxes on the gain. So the net proceeds will probably be a $105 million, $110 million after we satisfy taxes on a capital gain.

Okay, perfect. Thank you. That’s great caller. I appreciate the time. That’s all the questions for me. I’ll pass it on from here.

Thank you.

And that concludes today’s question-and-answer session, and it also concludes today’s call. Thank you for your participation and you may now disconnect.