Hello everyone, and thank you all for joining us during the Lytham Partners Fall 2025 Investor Conference. My name is Joe Diaz. I'm a Managing Partner at Lytham Partners . Today, David Garfinkle, CFO, and Jeb Bachmann, Managing Director of Investor Relations at CoreCivic, will be taking us through their slide presentation. CoreCivic trades under the ticker symbol CXW. Let's get started. David and Jeb, welcome. I will turn the floor over to you for your presentation.
Thank you, Joe. This is David Garfinkle. As Joe mentioned, I'm the Chief Financial Officer for CoreCivic, and I've got Jeb Bachmann with me. I've been with the company since 2001. Jeb's a little bit newer. He's been here a little over a month. We're going to go through our investor presentation. It is posted on our website as well. I'm not going to touch on every slide. I'm going to tag team with Jeb on the presentation, but we're going to land on a few slides and hopefully educate you about CoreCivic. CoreCivic was founded in 1983. You can flip the slide to Jeb. CoreCivic, founded in 1983. We have total assets of about $2.9 billion, real estate assets with a book value of about $2.3 billion. Really a very real estate-intensive company, solid infrastructure play. 2024 revenues are about $2 billion and adjusted EBITDA of $330.8 million.
About 51% of our revenue is with the federal government. That's the U.S. Immigration and Customs Enforcement and the U.S. Marshals Service. About 30% is ICE and 20% is the U.S. Marshals Service. About 41% of our business comes from state governments, and the remainder, about 8%, is from local governments and others. We're 100% government. All of our revenues come from federal, state, and local government agencies. Market capitalization is about $2.2 billion. We have 70 correctional, detention, and reentry facilities throughout the United States, comprising 79,202 beds. 100% of our operations are domestic. We're only in the United States, so I have no international operations. There's a map on slide three, Jeb, if you want to advance that, that shows a dot plot of where all of our facilities are located throughout the United States. We operate in three different business segments.
The safety segment, founded in 1983 with the company, is the ownership and operation of corrections and detention facilities. We've been doing that since the founding of the company in 1983. Today, we have about 44 corrections and detention facilities with 67,289 beds. It is our largest segment, comprised of about 92% of our net operating income or NOI. The safety segment has the largest near-term opportunity, which we'll talk about during the presentation. The community segment is comprised of 21 residential reentry facilities, more known as halfway houses. These are facilities that, if people are in the last part of their sentence, they transfer custody from a state, typically a state correctional institution, into a residential reentry facility. Our primary focus in this segment is to help them find a job.
During the day, they're either out looking for a job or working at a job and then staying at our facility during the evenings. We have about, as I mentioned, 21 facilities, 4,159 beds in that portfolio, and it comprises about 5% of our NOI. The last segment is what we call the property segment. These are corrections and detention facilities that are only leased to state government agencies, typically state departments of corrections. We do not perform the management services inside our safety or inside our properties segment. We are leasing them. It's very real estate-like. We're just collecting a monthly rent check from our state government customers. Today, we have about five facilities in that segment, 7,754 beds and about 3% of our NOI. If you want to flip over to slide five, Jeb. Just kind of describing industry market share. Private prisons today, it's a misnomer.
Private prisons today only house about less than 8% of the nation's prison populations. CoreCivic is the largest owner of correctional and detention facilities on the private side. We have about 57% of all owned corrections and detention beds. We manage about 41% of all privately managed beds. That could include facilities where we provide the management services in facilities that we do not own. There's, I think there's four facilities that are owned by state government agencies where we provide the management services. Most of our business, substantially all of our NOI, is generated in facilities that we actually own and operate. On the federal detention market, really two government customers, as I mentioned, ICE, Immigration and Customs Enforcement. They outsource about 91% of their detention populations. The private sector manages about 83% of all ICE detention populations, and CoreCivic manages about 27% of total ICE populations.
U.S. Marshals Service, the other federal agency we do business with, outsources about 85% of their detention populations, and the private sector manages about 34% of U.S. Marshals populations, and CoreCivic manages about 13% of all U.S. Marshals populations. The other companies we compete with, and I say that tongue in cheek, you know, is the GEO Group, as you can see on this slide, MTC, Management and Training Corporation, and LaSalle. Those are the other large private prison detention companies, but we don't often compete with them on a head-to-head basis. Usually, the government identifies a location, a facility that they'd like to use, and we go through a cost justification process with the government and negotiate a sole source contract with the government. There are a couple of states where we might compete head-to-head against GEO or the MTC Corporation, but it's really rare.
More often, it's the sole source negotiations, as I just described. Jeb, you want to flip over to slide seven? That's our historical occupancy. You can see pre-COVID, we reached the low 80% percentile. We were impacted by COVID-19. As you can imagine, in a correctional or detention setting, it's very difficult to social distance. A lot of prison populations, and particularly ICE, ICE populations declined significantly during the COVID-19 pandemic. As we have emerged from COVID-19, and that occurred primarily with ICE in the middle of 2023 or May 2023, Title 42, which was a policy that prohibited entry into the United States to claim asylum and other undocumented people were not allowed into the United States. That was declared ended in May 2023. Since then, you have seen a recovery of our detainee correctional populations, ending Q2 at 76.8%. Still not quite back to our pre-pandemic levels.
Do you want to flip over to slide eight, Jeb? I'll turn it over to you to kind of describe the ICE opportunity, which is in the safety segment. That's really the catalyst and where all of the attention of our investors is being spent today.
Thanks, Dave. As you mentioned, this is a very important slide in our presentation because it kind of outlines where the growth potential is versus our current revenue and EBITDA numbers. When you look at the top of this slide, it's trying to give you an idea of what kind of funding was approved in July 2025 through the One Big Beautiful Bill Act, appropriated about $45 billion to ICE detention capacity, which called for an increase of the detention beds from about 50,000 - 100,000 range. When you look at where we are currently on that front, I think at the end of July, August timeframe, we're sitting around 58,000 - 60,000 beds. That would mean you need another 40,000 additional detention beds to be added to meet the capacity for the detention needs that ICE has laid out here with this bill passage.
On this slide below that, you'll see the list of our facilities. There's about nine facilities there, about 13,419 beds, to be exact, availability that if we activated those could be used for detention beds to meet some of the growing demands for ICE. I think when you look at that list, we've already talked about about four out of that list that we've either contracted this year or in the process of working through contracts. The first of that was, actually, I'm sorry, Dilly, which is not on this list, was a facility that we reactivated earlier this year with our partner in Texas. We also announced the Midwest Regional that in Leavenworth that we're working on with a letter contract.
West Tennessee, which came right after 2Q earnings, and then Cal City, which is another one that's also working on a letter contract, but we're also working on putting in a long-term contract there as well. That's four facilities. There is a fifth that we've talked about with investors that we hope to have something in place before the end of the year. Really just working off this list on reactivations to help meet ICE's needs. I think the thing to keep in mind here with this slide, and you can look at the disclaimers off to the right, but it's important to point out that the $28 compensated mandate number that we're using is a pretty conservative number. That's an average for all of our facilities across our portfolio.
In regards to the valuation of the contracts, ICE or the federal government contracts are generally higher on a compensated per mandate amount. When you're bringing in these new contracts with these idle facilities, that should drive up the $28.02 that you see, which is kind of the 2Q 2025 average. I want to point out the section below where we put the unused beds, basically beds that exist in our current facilities that do have contracts that are idle, excuse me, beds that are open with the existing contracts. Those are beds that we can send out to the U.S. Marshals Service or to ICE. Those would have even a higher day rate because you aren't activating facilities and hiring staff. You're basically just using beds that you already have at current staffed active facilities.
Again, important slide gives you a feel for where the upside is on a conservative basis because we'd argue it would be higher than that when it's all said and done when contracts are brought in with the federal government.
Thanks, Jeb. I'd add a couple of points. This slide does not include surge capacity, does not include capacity available through third parties. Jeb already mentioned the Dilly Immigration Processing Center in Texas that we reactivated in March of this year. It's not on here because we don't own it. We lease it from a company called Target Hospitality Group, and we have a good relationship with them. We have other relationships that we could tap to expand the capacity that we could make available to ICE. Right here, as Jeb's pointing out, we've got 13,419 beds in idle facilities, another 3,239 in facilities that are operational that already have federal contracts. We could expand existing facilities, tap other locations through those third-party relationships to accommodate ICE's need to go up to 100,000 beds, which is a big number.
The federal government may, ICE may have to go to alternative locations other than those in the private sector in order to reach 100,000 detention beds. That's a really big number. I would say really for the reasons Jeb said, the $28.02, that's our operating income per compensated mandate in Q2 2025. If you were to use probably a more realistic number, particularly when you look down at the bottom part, the 3,239, that margin per day would be a lot higher if we're topping off facilities because we've already got the staffing in place, all the fixed costs in place, and you're only incurring a variable expense. That $28.02 could be two, maybe even three times higher than that when you're topping off a facility. In reality, we're showing here at 50% to 90% utilization, we could generate an additional $93.9 million to $169 million in EBITDA.
I think if you were to use probably more realistic numbers here, we could generate $200 million- $225 million in EBITDA by activating these idle facilities and topping off the facilities that are already under contract with the federal government. Moving on, if you want to flip to slide nine, Jeb, kind of showing the durable earnings and cash flows the company generated. We've got a chart here, a bar chart from 2009 to 2025. We're operating obviously through multiple administrations. That's, you know, at a 40-plus year history. Even including on here, we're operating through Democrat and Republican administrations. You do see the dip in EBITDA during the COVID years.
As I mentioned, that was because the borders were closed until the termination of Title 42, which, as I mentioned, was a policy that denied entry into the United States to asylum seekers and anyone crossing the border without proper documentation or authority in an effort to contain the spread of COVID-19. That ended in May 2023. As populations grew, we also saw an increase in our EBITDA levels. We have a 97% contract renewal rate. You can see that on the left side of this slide. Really, even though our government customers can cancel contracts due to non-appropriation of funds or for convenience, we have a 97% renewal rate on our contracts over the past five years. Moving on to slide 12, talking a little bit about the balance sheet. In August 2020, we used to operate as a real estate investment trust until 2021.
In August 2020, we reset our leverage target to two and a quarter to two and three quarters. That is net debt to adjusted EBITDA. Since that time, August 2020, which was the date we really decided to convert from a real estate investment trust to a traditional C corporation, we have repaid about $1.3 billion of debt. That just shows the tremendous amount of cash flow that our facilities generate, enabling us to pay off that level of debt since August 2020 through June 30th, 2025. Credit ratings are rated BB by S&P and Ba2 by Moody's. Moody's just upgraded their rating on us on July 18th based on industry tailwinds. We have a significant amount of balance sheet flexibility.
We ended the second quarter using the trailing 12 months EBITDA at leverage of 2.3 times, at the lower end of our target of two and a quarter to two and three quarters. As of June 30, we had about $347 million of liquidity. That is cash on hand plus available under our revolving credit facility. That balance sheet flexibility gives us a lot of opportunities. If you want to flip over to slide 14, Jeb, that is an example of one M&A opportunity. We closed on the acquisition of the Farmville Detention Center July 1st. It was a $67 million acquisition of a 736-bed facility. It came at a low multiple on EBITDA, so a really good and attractive acquisition for us. We also have the ability to utilize our cash flow for share repurchases.
If you flip over to slide 15, Jeb, we have a $500 million authorization for share repurchases. We have $81 million purchased during the first half of 2025 and $237.9 million remaining under that share repurchase authorization as of June 30th, 2025. Jeb, I'll flip it back to you to go back to ICE, you know, the detention market dynamics to cover that on slide 18.
Sure, thanks. The next couple of slides, we're just going to be looking at kind of the situation with ICE and the federal government and the border encounters. As you can see on slide 18, prior to Trump being reelected in November of 2024, really the detainee population was driven by a combination of the border arrests as well as ICE. You can see on the slide, or excuse me, on the graph to the bottom left, that as we moved through 2025, the border encounters dropped off significantly from around 25,000 in the beginning of the year to around 14,000, close to 15,000 by July of this year. Whereas the ICE detainee population grew significantly to about 43,000 from about 15,000 earlier in the year. That's where the current detention population is trending.
As ICE moves away from the border and more towards interior enforcement, that's really where you're going to see a lot of the activity occur on the detention population. Again, looking at the right-hand side of this slide on the bottom, this just gives you another kind of clear picture on the border encounters and the type of people that they're encountering. More importantly, the numbers have dropped off significantly as the borders have generally been closed since Trump took office. The federal enforcement agencies are focusing on the interior of the country now with all the people that have entered the country illegally since, I guess, the Biden administration was in place over the past four years.
Moving to the next slide, just trying to give a quick overview because I know a lot of people, a lot of investors, I should say, are concerned about, you know, when they heard about these different alternatives for housing illegal immigrants like Alligator, Alcatraz, or Guantanamo Bay, or El Salvador, they wonder what kind of impact it would have on our business. Just want to give an idea that, you know, while these facilities have been talked about and in some cases used, we think it's more of kind of a shock and awe type strategy where it's just giving people the thought that, hey, if you come to the U.S. illegally, these are some of the areas you could go to.
Longer term, though, we just don't think that these are viable options because they're much more expensive than facilities like we have that are sometimes sitting idle because they're hard-sided versus these facilities generally are soft-sided facilities. They're not weatherproof. They have a lot of issues with running water, bathroom facilities, and the like that just don't, you know, not amenable to a detention population. The cost is a lot for mobilization and demobilization versus a facility like we have that has already been built and just requires staffing in some cases. I feel like the alternative bed strategy that has been put out there by the federal government is more, again, of a deterrent than an actual solution to help detain the populations that they would be locating within the U.S.
Yeah, thanks. Just another, and we've been operating for 40 plus years, so we are definitely the lowest cost provider. We're a high-quality operator. I would argue, you know, the highest quality in the country and a proven solution. A lot of these other solutions will be legally challenged, but we're focused in on providing our government customers with high-quality operations at the lowest cost. We feel like our traditional detention facilities will continue to meet that need. Again, as the government goes from 57,000 up to 100,000 beds, they may need more than is available in the private sector. Understand the utilization of these facilities that are trying to help out the federal government meet their needs. We feel like our idle facilities, as presented in previous slides, are great alternatives, are great solutions for the government rather than the alternative solutions for the reasons stated on this slide.
Obviously, that's the impetus and the catalyst for our growth here in the short term. As Jeb mentioned, we're activating four to five previously idle facilities currently and feel like we've got an opportunity to continue providing our services and our space to the federal government. We are also seeing growth in state populations. We obviously keep an eye on what's going on at the state level in terms of their populations. That is about, you know, the other almost other half of our business. We see that those populations growing over the coming years as well. Really a good story, not impacted by tariffs or international operations, things like that. I think it's an interesting investment for participants on this call. Really happy to answer any questions you have if you want to contact us, set up a call with us. We're happy to talk further about our business.
With that, before I turn it back to Joe, just wish you a good conference and hope to speak with you soon. Back to you, Joe. Thank you.
All right. David and Jeb, thank you so much for a comprehensive review of the company. We thank everyone for watching today. If you have any questions or would like to schedule a meeting with CoreCivic, send an email to 1x1@lithiumpartners.com and we'll try and accommodate you. If you would like to learn more about Lithium Partners, you can visit our website at lithiumpartners.com or follow us on LinkedIn to stay connected about future events. We hope you all enjoy the rest of the conference and have a great day. David and Jeb, thank you again.
Thank you. Enjoy the conference.