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Corrections Corporation Of America's CEO Discusses Q1 2012 Results - Earnings Call Transcript

And we’ve a very unique permanent feature in the business with the delta between our maintenance CapEx and depreciation amortization. And with such, we intend to allocate a third of our AFFO towards the dividend and two thirds or said in another way 100% of our net income towards new growth going forward. And we think that puts us in a very unique category for investment. Also for the quarter, we have some very exciting either start ups or transitions during quarter most notably in January, we transitioned to our new Lake Erie facility up in Ohio.

Later in the quarter, we started our new contract with Puerto Rico by ramping up their inmate population in our Cimarron, Okalahoma facility. And most recently, we opened our new Jenkins county facility in Georgia for the State of Georgia the house inmates there. We also for the quarter closed on our new bank facility in January and also very excited about the terms and conditions of this new facility. But also allowing us to have more flexibilities we think about our debts strategy going forward.

And the United States Marshals service we had challenges also with our population and that was the biggest factor as we thought about our guidance and forecast for the rest of the 2012. And really the headline here is that the BOP added capacity in California and Texas. But also a change in sensing for crack and powder cocaine. New capacity equaled about 4,000 beds and about 1,700 individuals were released early by the BOP in the fourth quarter of last year and the first quarter of this year due to this sensing change. These two events will allow the Marshals Service to achieve a lower average daily population nationwide and achieve a lower level in January than they forecasted in their 2012 projections. And in a few minutes, I will provide a little more detail around this event with the Marshals Service.

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