CoreCivic — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the three months ended September 30, 2026, was $744.1 million, a 28.2% increase from the prior year quarter.
• Net income was $1,344.1 million ($14.49 diluted EPS), compared to $26.3 million ($0.24 diluted EPS) in the prior year quarter.
• Adjusted Net Income was $45.7 million ($0.49 Adjusted Diluted EPS), a 104.2% increase from $26.2 million ($0.24 Adjusted Diluted EPS) in the prior year quarter.
• Adjusted EBITDA was $117.8 million, a 32.6% increase from $88.8 million in the prior year quarter.
• Normalized FFO per diluted share was $0.75, a 56.3% increase from $0.48 in the prior year quarter.
• Net debt to Adjusted EBITDA leverage ratio improved to (0.1)x from 2.5x as of September 30, 2025.
• Total debt outstanding as of September 30, 2026, was $629.6 million.
• Cash and cash equivalents increased to $547.2 million from $97.9 million as of December 31, 2025.
• Weighted average diluted shares outstanding decreased by 13.8% compared to the prior year quarter.

Guidance and Future Outlook:

• Updated full-year 2026 Net Income guidance is $1.461 billion to $1.467 billion, revised down from $1.492 billion to $1.511 billion.
• Updated full-year 2026 Adjusted Diluted EPS guidance is $1.74 to $1.80, revised up from $1.64 to $1.73.
• Updated full-year 2026 Normalized FFO per diluted share guidance is $2.78 to $2.85, revised up from $2.68 to $2.77.
• Updated full-year 2026 Adjusted EBITDA guidance is $442.5 million to $445.5 million, revised up from $434.5 million to $439.5 million.
• The company expects to invest $30.0 million to $35.0 million in maintenance capital expenditures on real estate assets and $35.0 million to $40.0 million for maintenance capital expenditures on other assets and IT.
• The company expects to invest $35.0 million to $40.0 million for capital expenditures associated with activating previously idled facilities.
• Guidance incorporates the estimated financial impact of the change in ownership for four sold facilities but does not include potential additional facility sales.

Business Segments and Product Lines:

• CoreCivic Residential segment operating margin was 22.3%, relatively flat compared to 22.5% in the prior year quarter.
• Four newly activated facilities (West Tennessee, California City, Diamondback, Midwest) generated $19.9 million in net operating income during the quarter and are expected to generate approximately $320.0 million in annual revenue once fully activated.
• CoreCivic Services segment net operating income increased to $9.6 million from $1.1 million in the prior year quarter, driven by the acquisition of Clinical Solutions Pharmacy (CSP).
• CSP provides mail order pharmacy services to over 600 correctional facilities across 32 states.
• Occupancy in the Residential segment increased to 84.0% from 76.7% in the prior year quarter.
• Federal customers (ICE and USMS) generated 53% of total revenue in the quarter, up from 55% in the prior year quarter, with federal revenue increasing $71.3 million (22.2%).
• The company entered a new five-year management contract to activate the 1,600-bed Appleton Detention Facility, expected to generate approximately $75.0 million in annual revenue once fully activated.

Market and Competitive Landscape:

• Demand for services from U.S. Immigration and Customs Enforcement (ICE) increased, contributing to higher utilization of recently activated facilities.
• The company is the nation's largest owner of partnership correctional, detention, and residential reentry facilities and one of the largest operators in the United States.
• Discussions are ongoing with ICE regarding the potential acquisition of additional detention facilities, though these are in preliminary stages with no assurance of occurrence.

Risks and Challenges:

• Management contracts with ICE can be terminated for non-appropriation of funds or for convenience, creating uncertainty regarding the continuation of management services for sold facilities.
• Future results are subject to risks including changes in government policy, legislation, and regulations affecting the privatization of corrections and detention services.
• Risks include the ability to obtain and maintain management contracts, contract compliance, negative publicity, and inmate disturbances.
• Operational risks include fluctuations in occupancy levels, competition, contract renegotiations, inflation, and rising labor costs.
• The company faces risks related to government budget uncertainty, debt ceilings, and potential government shutdowns.

Management Commentary and Tone:

• Lucibeth Mayberry, President and CEO, stated the quarter was driven by increased demand from ICE, the activation of facilities, and the acquisition of Clinical Solutions Pharmacy.
• Mayberry noted that capital allocation strategies, including lower interest expense and share repurchases, improved per-share earnings and valuation metrics.
• Management expressed confidence in the balance sheet's improved flexibility and commitment to long-term shareholder value following the expansion of share repurchase authorization.
• The company acknowledged the leadership transition from Patrick Swindle to Mayberry due to health reasons, with Swindle remaining as a trusted advisor.

Other Key Points:

• The company sold four detention facilities (California City, Otay Mesa, Appleton, Midwest) to the U.S. Department of Homeland Security for gross proceeds of $2.2 billion, resulting in a $1.8 billion aggregate gain on sale of real estate assets.
• Net proceeds of approximately $1.6 billion were used to repay over $700 million of debt and fund a $500 million Accelerated Share Repurchase (ASR) agreement.
• The Board of Directors authorized an additional $500 million share repurchase, increasing the total authorization to $1.7 billion, with $755.8 million currently available.
• The ASR agreement executed on August 10, 2026, involved a $500 million payment to a dealer, with final settlement scheduled prior to the end of the second quarter of 2027.
• The company redeemed $238.5 million of 4.75% senior unsecured notes (2027 Notes) in full on August 12, 2026, incurring $4.0 million in charges.
• Lucibeth Mayberry was appointed President and CEO on September 24, 2026, succeeding Patrick Swindle, and was appointed to the Board of Directors.
• The company expects to begin receiving detainees at the Appleton Facility in the fourth quarter of 2026, with full activation estimated in the second quarter of 2027.