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Corrections Corporation Of America's CEO Hosts Dividend Initiation Conference (Transcript)

As many of you know that have been investors of the company, this program has spent about $500 million or brought in about 28 million shares during that 3-year period of time at a cost basis of about $17.91. So we’ve had great success with that program, but again as we get towards the end of 2011 we knew that was going to run its course. So this led to the announcement which we did yesterday, our new dividend policy.

So as you saw in our press release, we’re intending to pay a cash quarterly dividend of about $0.20 per share or annually about $0.80, and we’re expecting to pay our first dividend in June of this year.

And the dividend supported by strong liquidity; again many of you know this already, that have been following the company, but also a strong balance sheet and also very strong cash generation. In fact, we’re trading right now at debt-to-EBITDA less than three times and not only us saying that we have a good balance sheet and liquidity, this was reinforced last summer by Moody’s which gave us an upgrade in our debt holdings; but also during this period of time as I mentioned earlier, we spent $0.5 billion on share repurchase but we didn’t have to add any additional debt to the balance sheet to achieve that success with that program.

Now as we think about our capital strategy going forward with this new policy, we’re looking at our allocation really going – really two different directions, one of which is about a third of our AFFO going towards the cash dividend and then the other two thirds going towards earnings growth, so really focusing in on our core business of adult secure solutions in the U.S.

Now, investors that have been with the company a while know that we’ve used AFFO as a measure of the company’s cash generation and this, we think is still a good measure to show the amount of cash that we are generating for dividend, but also what we can do for new investment.

Read the rest of this transcript for free on seekingalpha.com

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