Thank you for standing by. My name is Kath, and I will be your conference operator today. At this time, I would like to welcome everyone to the CoreCivic, Inc. Third Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent 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 Mike Grant, CoreCivic's Managing Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to CoreCivic's third quarter 2024 earnings call. Participating on today's call are Damon Hininger, CoreCivic's President and Chief Executive 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 third quarter of 2024 as well as financial guidance for the 2024 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 provision 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 third quarter 2024 earnings release issued after market yesterday as well as in our Securities and Exchange Commission filings, including Forms 10-K, 10-Q and 8-K reports. You are also cautioned that any forward-looking statements reflect management's current views only and that the Company undertakes no obligation to revise or update such statements in the future. 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 President and CEO, Damon Hininger.

Thanks, Mike. Good morning, and thanks, everyone, for joining us for CoreCivic's third quarter 2024 earnings call. On this morning's call, I will provide details of our third quarter financial performance. I will also discuss our latest operational results and update you on the latest developments and opportunities with our government partners. Following my remarks, I will turn the call over to our CFO, Dave Garfinkle, who will provide greater detail on our financial results and on our updated 2024 financial guidance. Dave will also provide an update on our capital structure initiatives, including progress on our leverage target. Finally, just before our Q&A, I will offer some brief comments on the potential impact of the election on our business. First, I'll start with a high-level overview of our third quarter financial results. In the third quarter, we generated revenue of $491.6 million, a 2% increase compared with the prior year quarter. Underlying revenue growth, excluding the South Texas family residential center, which closed during the quarter, would have increased over 5% against the prior year. I will provide more color on our performance with our federal, state and local partner groups later in the call. During the third quarter of 2024, we generated normalized funds from operations or FFO of $47.6 million, or $0.43 per share compared to $40.5 million or $0.35 per share in the third quarter of 2023, representing a 23% per share increase. The increase in FFO is driven by higher revenues combined with expense normalization and lower interest expense resulting from our debt reduction. These increases were partially offset by higher G&A expenses and decreased lease revenue in our Property segment resulting from our previously disclosed expiration of a lease with the State of California at our California City Correctional Center effective March 31, 2024.…

Thank you, Damon, and good morning, everyone. In the third quarter of 2024, we generated GAAP net income of $0.19 per share compared with $0.12 per share in the prior year quarter. Excluding special items, adjusted EPS during the third quarter was $0.20 compared with $0.14 per share in the prior year quarter, exceeding average analyst estimates by $0.11 per share and our internal forecast by $0.08 per share. Special items in the current year quarter include $3.1 million of asset impairments and a $1.2 million gain on the sale of an idle residential reentry center. Normalized FFO per share was $0.43 during the third quarter of 2024 compared with $0.35 in the prior year quarter, an increase of 23%. Adjusted EBITDA was $83.3 million, compared with $75.2 million in the prior year quarter, an increase of $8.1 million, or 11%. The increase in adjusted EBITDA resulted from higher occupancy, contributing to an increase in revenue of $7.9 million and a $6.5 million reduction in operating expenses, resulting from the continued normalization of our expense structure, particularly in the labor market. These factors, along with a decrease in interest expense and shares outstanding, also contributed to the increase in adjusted EPS and normalized FFO per share. These per share increases were net of a reduction in facility net operating income of $7.2 million, or $0.05 per share, resulting from the previously disclosed lease termination with the State of California effective March 31, 2024, and our California City Correctional Center reported in our Property segment. Even though the previously disclosed termination of the contract with ICE at the South Texas Family Residential Center occurred in the middle of the third quarter of 2024, net operating income at this facility was comparable to the prior year quarter due to the accelerated recognition…

Thank you so much, Dave. And I wanted to just give a little bit of observations and comments on the elections that just happened a couple of days ago. First, I want to just give a few observations on the state side and then talk a little bit about the federal side. But let me just first say, I've had the good fortune to be with the company well over 32 years. We have seen, during that period of time, significant events during that history where elections have kind of changed the course on policy and sentiment on certain issues. And it feels like with this election this year, we are heading into an era that we really haven't seen maybe only once or twice in a company's history where the value proposition of the private sector for both our state partners and our federal partners are going to be not only strong today, but even stronger as we go into the next couple of years. So I want to start with that. Let me just first talk about the state side. So there was 11 races for governor around the country. Two of them were a consequence to us, Montana and Vermont. Both those customers are working with us today for out-of-state solutions and also with Montana, we also have got an in-state facility. No surprises and no changes, we think, in policy. Both the incumbents won those races, so we think it's going to be steady as it goes with those two states. And as we talked about earlier, Montana continues to be a growing partner with us with its most recent procurement. So that's number one on the state side. Number two is, I wanted to highlight something that was going on in California this election cycle.…

Thank you. [Operator Instructions] And your first question comes from the line of Jason Weaver with JonesTrading. Your line is open.

Hey, good morning, guys. Thanks for taking my question.

Good morning.

Damon, you've touched on in several of the last conference calls about the sort of the gearing that you have with regard to occupancy. I was wondering, can you comment on how you would expect the margin profile to change if we were to ramp Safety segment occupancy up into the low-80s, mid-80s and beyond there?

Yes, thanks Jason. I'll try to take a stab at that question. I think in my prepared remarks, I indicated what the margins were. Again, it's important to exclude the South Texas facility, which had an outsized impact on our overall margin profile, but we're around 22%, I think it was 22.3%, excluding that contract in the third quarter. You're right. As the occupancy increases, our financial model has a bit of operating leverage to it. So we had always indicated that if we got back to a pre-pandemic occupancy in the low-80s that we'd be around a 25% margin. So that was before the termination of the South Texas contract. So I'd probably bring that down 150 basis points or so, maybe up to 200 basis points at occupancy in the low-80s. If occupancy were to go in the mid to upper 80s, I haven't run the math on that, but I would guess you'd add a couple of hundred basis points to that margin.

Got it, got it. That's actually helpful. And then, I appreciate your comments on the Marshals Service, and just knowing a little bit of the details around that. Would you say that if the USMS no longer has to use those third-party contracting entities, does that remove any type of bottleneck for them that makes them more likely to use private providers such as yourself?

Yes, it’s a great question, and I think the short answer is yes. I think if you've got multiple tools to contract versus less, and I think that makes it a little easier, especially certain parts of the country. So yes, I think that's right.

Got it. I appreciate that color.

And one other comment, Jason, on the occupancy. I think on the margin, it's obviously impacted by where that occurs. So if it occurs, if occupancy is increasing at facilities that are already operational, you get the operating leverage there. Now, we're looking at potentially activating new facilities, and of course, you have startup expenses associated with an activation. So during that activation period, your margins are obviously going to be negatively impacted. And I would expect as you stabilize occupancy, margins at those facilities would be around that 22% to 25% margin. So just want to give that caveat on the increase in occupancy. It depends on where it comes from.

No, with a shift in demand like this, I would expect that, but that's helpful. Thank you for the color.

You're welcome.

Yes, sir.

Your next question comes from the line of M. Marin with Zacks. Your line is open.

Thank you. So I have a couple of questions following up on some of the remarks you made in your prepared comments. So there's an RFI out and you're thinking that there will be an RFP in early 2025. Is there a standard timeline that we should think about because it seems like there's a lot of activity now in other RFIs and RFPs. So is there a standard?

Yes, thank you for this question. This is Damon. Let me make sure I understand the RFI you're asking about. Is it for detention capacity or alternative detention or for both?

Well, if you wanted to give us a broader stroke answer, then I would say for both, but I was specifically thinking about for detention capacity.

Detention capacity. Thank you for that. So, yes, so, again, my prepared remarks kind of gave you an overview of everything that's out there right now. It wouldn't surprise us that there's maybe more to come where they're either looking at the current RFIs and maybe expanding, saying the scope and the size maybe is bigger or just need to be a bigger footprint or maybe it's for new locations in the country. But yes, I think there was some obviously work on ICEs part knowing that potentially going into the fall, there's going to be more detention capacity. So I think they were just trying to be proactive with these RFIs and trying to get as much information they can at their fingertips as they go into coming days, weeks and months for detention needs and where the capability are with the private sector. But again, I think I wouldn't be surprised if we wake up tomorrow or the coming days and weeks where we're seeing more engagement there for additional information. But anything you'd add or amplify, Dave?

Maybe, typically, going from RFI to RFP, it's, I don't know, on average maybe a six-month process getting from RFP to contract award and commencement. Again, don't know how that would be impacted by a new administration coming in. The RFIs are interesting and they may be more prepared to move quickly to the RFP stage in early 2025 given the desire to impact immigration policies.

Yes, that's a good point because again, going back to South Texas, that facility was about 120 days. And so they moved really, really quickly. So if the energy and demand is there and they're getting direction from leadership, they can move very, very quickly. And again, I think the RFIs, they've got out already. Obviously, they've gotten a lot of great market information from us and others, where, again, to Dave's point, that allows them maybe to be a little more efficient into this year, going into next year.

Okay. That's helpful. And then, just to follow-on something else you said, you talked a little bit about how you've been preparing for increased occupancies with your staffing levels, you're comfortable with where staffing levels are, but then obviously to take on new awards, there would be some startup costs. Would those startup costs also include new hirings? Or have you identified certain hirings already within the pipeline?

Yes, that's a great question. So yes, we've been working, and as you know, we went from about 5,000 in population in May of 2023 to where we are today, which is about 10,000. So we had to just naturally get ourselves staffed up for that doubling of our population here in the last 18 months. But with that, we really kind of challenged our operations and our HR team to say, if we need to scale that even further with some investments we need to make on kind of the processing, again, making sure it's very efficient for background screenings, training and whatnot. So we basically have gotten the playbook ready to scale up. We've got the pipelines kind of populated, so we know where we can pull from the various labor markets around the country to get people. But you're right, once we hit go, then obviously they'll start incurring expense. Obviously tie that to various contracts and we'll communicate as appropriate to the market when we get to that point. But obviously that would be part of our start-up. Anything you want to add to that, David?

Yes. So to be clear, we have not hired in advance for activations of idle facilities, for example, and that probably wouldn't expect us to do that until we get more clarity around timing. But we do have capacity in existing facilities where we already have contracts where we can take on, I don't know, 1,500 to 2,000 additional people that are at facilities already staffed. It's just a longer process when you're activating a new facility or entering in a new contract.

Okay, got it. Thank you.

You're welcome. Thank you, M.

Your next question comes from the line of Brian Violino with Wedbush. Your line is open.

Great. Good morning. Thanks for taking my questions. Just wanted to get a bit more detail about, I know you mentioned, if ICE were to have needs above and beyond the current idle beds of both you and your competitors today and more of a hypothetical, but would there be a need for additional permanent construction? I know you mentioned temporary housing. Just curious your thoughts about that if new construction would be an option and the cost of temporary centers versus permanent facilities? Thanks.

Yes, great question. And I think all that will be kind of figured out as we continue to kind of engage with ICE and we kind of understand the mission. As you know, every facility has kind of generally the same mission, but we've had some facilities have a very unique mission, notably like with our facility down in Dilley, Texas where it started as a family facility, but we did a couple of mission changes over time where it's only providing help with residents – adult residents I should say. So I think if we get in discussion with ICE, I think they're going to pretty clearly be able to say, this solution in this part of the country, we think it's a long-term solution. And so you need to think about investments relative to not only just the mission and the staffing and the programs or whatnot, but also the physical plan. But there are also maybe some discussions where they say, we think this mission is maybe more short-term in length, and so the good news for us is that we can do both and have done both. I mean, we've got vacant capacity, again, we've talked about the 18,000 earlier today. But if there are certain parts of the kind of the mission for ICE or near-term where they clearly kind of say, it's probably a temporary solution. Then obviously, again, we've got the competition and capability and really the third-party relationships to do that pretty quickly. Anything you'd add to that, Dave?

Yes. Yes, I mean, we've got nine facilities, I think it's nine facilities with approximately 13,000 beds. So we're a ways away before we're thinking about construction of new facilities. I wouldn't put that on the table yet. But we do have the capability to execute into lease agreements. That's what Damon's talking about when we mentioned third parties. So that's not permanent capital necessarily that we would have to deploy. But those are things we'll be thinking about in the coming weeks and months.

Great, thank you. And just one more. On the new ATD RFI that you mentioned came out yesterday, I believe there was another RFI that had been out for a while. I guess anything notably different compared between those two RFIs that you believe would increase the likelihood that that would be broken up in the future. I know you mentioned there's an industry day coming up. Just curious if there's any other notable differences between those RFIs?

I'd say I didn't do a kind of reconcile between the two, since it's kind of late breaking news. But I'd say with the RFI that came out yesterday, again, I think it's a clear sign by doing an RFI and also doing an Industry Day. That's usually the case where they, again, want to think about the scale, so maybe getting more people in the program and doing that with multiple vendors. So we took that as a very encouraging sign. And to be honest with you, pretty consistent with what we've heard from ICE here recently, where they're thinking about engaging multiple partners, again, with likely changes to the program, the size of it, and looking maybe for a different mission and outcomes.

Great. And just one more if I could. Is there any major change in the way you're approaching this ATD renewal versus prior years in terms of the strategy to win some of that?

I'd say the biggest thing is we've made a lot of investment. So we've made a lot of investment both in people and competency and then also work and research and R&D with our third parties. And so we've spent a lot of time here in the last probably 36, 24 months, making those investments and getting ourselves prepared. So I'd say we're a lot better prepared to put a bow on it, a lot better prepared today than we were a couple of years ago.

Got it. Thank you very much.

Thank you, Brian.

Your next question comes from the line of Joe Gomes with Noble Capital Markets. Your line is open.

Good morning.

Good morning, Joe.

Good morning, Joe.

So, wanted to start out looking at the Community segment. And I know, Damon, you mentioned there was a, I think, you said 2.9 million legal settlement in there. But if I'm looking at the supplement, the revenue per compensated mandate has fallen sequentially here. And then also, while looking at the expenses, operating expenses, increased pretty significantly. And just if you could give us a little more color as to what is driving both of those, it'd be appreciated.

Yes, I'll take a stab at that, Joe. So the operating expense increase was certainly related to the legal matter. The per diem, slight reduction in per diem was really mixed. As Damon mentioned in his prepared marks, we do business with both the Federal Bureau of Prisons and local county governments in that section – in that sector’s segment. So, they're not large numbers, so small differences in one or the other can have an outsized impact on the per day impact.

Okay, thanks for that. And talk about South Texas. You had a, I believe, a marketing agreement, 90-day or so marketing agreement there. Given yesterday's results, is that something that you can extend if you think there's the possibility that South Texas is back in play, so to speak, as a potential ICE facility? Or any additional detail there would be great.

Yes, thanks for that question. So yes, we've been, really since the conclusion of the contract in early August, we've tried to keep that facility in what I call kind of warm status to get ourselves prepared that if there is a need that we could reactivate it. So we've continued those conversations with Target, our third-party provider who has been an excellent partner of ours over the years and also just making sure that we can kind of ramp up staffing. So we're watching closely. We had maybe not quite a third of the staff at South Texas stay with us, just relocate to other locations. And so, obviously, we know who they are and where they're currently working. And my guess is that the vast majority would be interested to go back to Dilley if we reactivate it. And then some of the staff, for whatever reason, for personal reasons, couldn't stay with us or relocate, I should say, to other locations. But it would surprise us that them still residing in a local area that we can quickly kind of get them back in the fold. And obviously, the good news about them is many of them will be able to keep their credentials from a background screen process and also go through probably an abbreviated training. So again, we're thinking through all the kind of details there to get ourselves prepared that if and when ICE wants to use that facility, which a 10-year run there. ICE was very, very happy with that facility and the way it was configured and obviously gave them great flexibility with different missions. So we're just getting ourselves prepared for that. But anything you'd add to that, Dave?

We do have, I mean, the facility is intact, they have not dismantled it or anything. We have assets there that we have not removed. We did take an impairment charge, as I mentioned, in this quarter, but we have assets there that we're not relocating yet, and have continuous discussions with Target about all those items.

Okay. Perfect. Thank you for that.

Thank you, Joe.

And let me – I got one more for you if that's okay.

Go ahead.

Back to the yesterday's RFI release, obviously, very early days in there and we'll see what happens in the virtual day that they're talking about. But outside of you and your main competitor, who else is out there that could perform either the monitoring or the case management side? Is that a very narrow group of, you think, potential competitors for this, or is it a big group of people that could be involved in this?

Yes, that's a great question. And I think the short answer is that I think the size of this program today, but also potentially the size going forward, I think, would lead you to think, yes, it's probably only a couple of us, us and GEO. There may be one out there that I'm not thinking of, but I think the ICE will probably want to make sure that the capability of various organizations that would be in this program have the financial wherewithal, the capability, the expertise, the competency. And again, I think that's a very small group of people. But I think the other thing the RFI is trying to do is that there may be someone out there that maybe, again, doesn't have the size and scale like us that maybe would be a good partner for us for whatever reason. Maybe that's just a small component of the case management services or maybe the technology. So I think that's part of the reason also they're doing RFI is that maybe they've had a few people knocking on the door, a few people knocking on ICE's door saying, “I've got this capability and it could be a piece of the overall program. I just need a dance partner to do it.” So I think that's part of the intent too. So we're looking forward again to participate, like I said earlier, we've made and you know this too, Joe, I mean we've made a lot of investments and done a lot of work to get ourselves prepared for this. But anything you'd add to that, Dave?

Yes, I think it still depends on the scope of services. The RFI yesterday was a bit informative, but again, you don't know what a new administration may want to do to the scope of services and how they look at case management services versus electronic monitoring versus different types of technologies. I think we'll just have to wait and see what they are, and depending on that scope of services, that could invite other parties to the table as well.

Great. Thanks for that and I'll get back in queue. Thank you.

Thank you very much, Joe.

Your next question comes from the line of Greg Gibas with Northland Securities. Your line is open.

Hey, good morning, Damon and Dave. A lot of good color in those prepared remarks. I know you addressed a few on this, but I wanted to follow-up on that, that ISAP or ATD program. If you anticipate ICE ramping populations significantly there as it relates to the total opportunity across the U.S., kind of needing another provider, I guess, do you think it's mostly scale-driven? Is it cost-driven kind of via more competition? Is it kind of technology-driven or maybe all three? And it just as it relates to the potential move to dual sourcing, your thoughts on the likelihood of it, just given the new RFI and commentary there?

Yes, it's a great question. I think the first part of your question, I'd say, yes, it's probably all of the above. So everything you kind of laid out there, I think, on your list, I think is probably all, again, all the above is probably what ICE is thinking about. And then I think, yes, I think that the last part is just, yes, just scale, but also a little bit to Dave's earlier point, what the program looks like. So I think they're just trying to get themselves well prepared, as Dave said, with the new administration where the views from a policy perspective may change on how this program looks. So I think a little bit kind of similar to what we talked with the RFIs this summer in advance of detention capacity needs. I see this kind of the same thing. Again, the other thing I'll just say, and I mentioned this earlier, I think doing an RFI, there's no requirement that ICE or any of our government partners have to do an RFI. They could just go ahead and say, “Okay, we're happy with kind of the status quo. We could do an RFP and just award it to the incumbent.” So, doing an RFI, again, I think if history is an indication, that's a clear sign where they're like one to open up kind of the realm of the possible and kind of see what alternatives they could have, but also get themselves prepared again as I said earlier with the, to scale up the program. But anything you'd add to that, David?

Yes, it just makes sense to me with anything, if you're a government agency selling services that you want competition for price, you want competition for technology, you want competition for quality of services. So I think to your point, your earlier point, I think it's going to be all of the above, but again, there's something we'll have to wait and see.

Right, makes sense, Great. As it relates to the approximate 18,000 available beds for ICE, could you, and maybe broke this out? How many are kind of idle facilities versus topping off existing or already operational facilities? And, obviously the margins differ probably quite a bit between those two buckets, but perhaps could you speak to maybe a blended margin if hypothetically those were fully utilized?

Oh, boy. Dave, I'll try to take a stab at that. So I think we've probably got around 1,500 beds today. I think it's 1,500 or 1,300 to 2,000 changes on a daily basis depending on ebbs and flows of populations under existing contracts. Then we've probably got another 800 or so that could be accommodated in facilities not currently housing ICE detainees, and then as I mentioned around 13,000 in idle facilities. So those would have to be complete activations. And so the margins on those, as I mentioned earlier, on the idle facilities, when you're activating those, you're obviously the negative margin during the startup period. I would imagine margins would be slightly higher than our portfolio average in the Safety segment, which for the third quarter was 25.2%. So maybe a little bit higher than that once you reach a stabilized occupancy at an idle facility that you've activated for ICE. On the already utilized facilities, as I mentioned, those are higher because you've already got your fixed costs largely in place and you're just incurring your variable expenses or supplemental disclosure report, which we posted on the website breaks out our fixed and variable costs as well as the per diem. I would imagine that per diem in the supplemental is an average for the whole portfolio. I would expect that that would be slightly higher for an ICE population because it's a transient population, so you have more risk associated with occupancy levels so it can be a higher per diem. But I would imagine that margin could be quite a bit higher for an already active facility where we have the fixed cost and staff in place.

Got it. That's helpful. Thank you.

Thank you.

Your next question comes from the line of Kirk Ludtke with Imperial Capital. Your line is open.

Hello, Damon, David, Mike, appreciate the call.

Good morning.

Good morning, Kirk.

On the Marshals, you mentioned, I think I got this right. You said the current population is 47,000, but it was 66,000 under the first – in the first Trump administration. Are those the right numbers?

Actually, what I was doing is given more historical. So, and I'll tell you what the population is today, but historically trying to give a sense of how to change from a Democratic to a Republican administration. So at the end of President Obama's term, second term, it was at 47,000 – almost 48,000. That was the national population for federal prisoners for the United States Marshals Service. It got as high as to almost 67,000 under President Trump. So again, going from kind of late 2015, 2016 to early 2020, 2021. Today – so those are two data points. Today, the population is at 55,000, just actually almost 66,000. So two historical numbers and then obviously the current number is the last one.

Okay, got it. Thank you. And with respect to the executive order, you didn't mention the Bureau of Prisons. I know that was not a big part of your business. Before the executive order, I'm wondering, is that just something you're going to stay away from?

We're definitely going to watch closely that really all of our kind of engagement with our partners is driven by needs and demand. And as you know, the Bureau of Prisons has seen a significant decline in their population over the last decade. So I think any reengagement with us will be dictated by demand. The only caveat I have there is it's been well reported and we're sympathetic to this is that, this Bureau has been challenged with some physical plans that are very, very old. So I think that'll continue to get kind of screwed knee and seeing how the Bureau can get supported on that issue. And then also there's been some places I know that's had challenge with staffing. So that's a long way of saying, we enjoy today a really good relationship with the Bureau of Prisons. We work with them on the community side. And if there is a need on the safety side, I'll say very happy to have that conversation at the right moment.

Got it, I appreciate it. Thank you. And then lastly, there is a lot – it's likely that deportations will ramp. And so does that change the nature of your business if the mix of detainees is more weighted toward people that have been seized on the interior and in the process of being deported rather than people who have been seized crossing the border? Does that change anything?

Yes, that's a great question. And the short answer is, it could, by facility, but the good news is we've been doing it for 40 years. So we've seen that change even at facilities where maybe it's a more longer-term population of facility, but maybe changes in policy and behavior make it more short-term. So the good news about our facilities, I mean, we designed them and purpose built them to be very flexible based on the changes of mission for ICE. Again, some of the facilities maybe that are baking today that have not worked with ICE, we may have to do a little bit of investment, especially if there's great need for intake. So, I mean, we may have a facility that was designed for 50 to 100 coming into facility on a regular basis and that needs to go up to 200 or 300. So we may have to make some tweaks there with the physical plant, but again, we've not been done doing that for many years, a lot of other locations, so it's pretty easy to do. But anything to add that, David?

Yes, we have both today. So we have facilities where it's a very transient population, very short length of stay. In fact, we had one earlier this year convert from one that was more of a longer-term stay to a processing center. So we can manage either. But as Damon said, not sure whether that will change under a new administration or not.

Got it. Well, it seems like the length of stay would be longer for someone that is being deported.

Possibly. Yes, possibly. Not to get into the weeds, but determines – it depends on their legal case, where they're in the immigration process, and then also the country of origin, because logistically sometimes they go longer with certain countries to deport back versus others. So – but yes, those are all variables that can happen. And again, we're well suited to kind of work through those issues.

Got it. And then lastly, does an administration that's more focused on deportation, does it make the monitoring component of the ATD contract more important or less important or is it hard to say?

I think that's a great question. I think at the moment it's probably hard to say. There is a large number, I think, we've heard north of a million people that have basically orders for removal already. And so it could be the case where they say, “Okay, let's look at all the tools at our disposal and prioritize the triage as appropriately. And both those tools, detention and alternative detention, could be very effective.” So I think those will be questions that will be answered here to coming days and weeks. But at the moment, we think they're probably looking at more tools, not less, to kind of help them work through this.

Okay, I appreciate it. Thank you.

Yes, sir.

And your next question comes from the line of Ben Briggs with StoneX Financial. Your line is open.

Good morning, guys. Thanks for taking the call and thank you for taking the question.

Good morning, Ben.

A lot of mine – yes, good morning, guys. So a lot of mine got answered here, but I got a couple of quick ones for you. So first of all, there's a little, I know we've been talking about RFIs and RFPs a lot. I just want to make sure I have this straight. So correct me if I'm wrong here. ICE, Immigration and Customs Enforcement, has a total of five RFIs out right now. Is that correct?

Well, there are two, so there are two RFIs. I think they have five AORs associated with them and then there's one RFP in New Jersey.

Okay, got it. Got it. That makes sense. Okay, thank you. And then Montana has one RFP out, right?

Yes, that was just issued last week, I think it was.

Yep, and then there's the electronic monitoring RFI out from ICE in addition to all that?

That's right. Yep, it just came out yesterday.

Yep, okay good. Wanted to make sure I understood that. I know you said you anticipate those ICE RFIs leading to RFPs eventually?

Yes.

Great, okay. Great. Second thing for me is just kind of a housekeeping thing. I don't think there are, but are there any facilities with remaining COVID population restrictions? Those have all rolled off, correct?

Those are all rolled off, yes sir, at least in our portfolio.

Yep, yep. And then finally, just kind of referring to the guidance here. I know you increased guidance a little bit, but it does imply a little bit of a slip in guidance in the fourth quarter. That's not all attributable to South Texas, is it? Or can you give a little bit of a fourth quarter 2023 to fourth quarter 2024 EBITDA bridge?

EBITDA bridge, yes. So I mean, our guidance last quarter contemplated the termination of the South Texas facility. So that would be a reduction from Q3 to Q4, about $17.5 million. Other than that, I think there are just some pretty offsetting puts and takes going both ways. I don't know that it was necessarily a big change from last guidance in Q4.

No, I mean, fourth quarter of 2023. So you did $90 million of EBITDA…

No.

In fourth quarter of 2023. And then that's going to be down to, it looks like, $62-ish in fourth quarter of 2024. And I just wanted to kind of get any commentary you had on that?

Yes, so South Texas would be one, and then our California city facility terminated March 31st of 2024. So it would have been included in last year's fourth quarter. I have that number at my fingertips, but I think it was $25 million of EBITDA on an annual basis, so about a fourth of that in Q4 of 2023.

So, virtually, those two together would be the data.

Yes, yep.

Okay, yes, I wasn't including the CalCity. Okay, well, this has been very helpful. Thank you, again, for taking the call.

Sure, thank you.

Thank you, I will now turn the call back over to Damon Hininger for closing remarks.

Thank you so much. Thank you so much for participating in our call today. Grateful for all the questions and the commentary. And I just want to say to our shareholders, thank you so much for your continued support and advice and counsel to us. We're grateful for that and never want to take it for granted. Enjoy the rest of your day, everyone. Thank you so much.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.