CoreCivic, Inc.

Previous wording

government budget uncertainty, the impact of the debt ceiling and the potential for government shutdowns and changing budget priorities;

Current wording

government budget uncertainty, the impact of the debt ceiling and government shutdowns (including, the timing of collection of federal governmental receivables while the current federal government shutdown continues) and changing budget priorities;

Previous wording

We are the nation's largest owner of partnership correctional, detention, and residential reentry facilities and one of the largest operators of such facilities in the United States. As of June 30, 2025, through our CoreCivic Safety segment, we operated 44 correctional and detention facilities, 40 of which we owned or controlled via a long-term lease, with a total design capacity of approximately 67,000 beds. Through our CoreCivic Community segment, we owned and operated 21 residential reentry centers, which we owned or controlled via a long-term lease, with a total design capacity of approximately 4,000 beds. In addition, through our CoreCivic Properties segment, we owned 5 properties, with a total design capacity of approximately 8,000 beds.

Current wording

We are the nation's largest owner of partnership correctional, detention, and residential reentry facilities and one of the largest operators of such facilities in the United States. As of September 30, 2025, through our CoreCivic Safety segment, we operated 45 correctional and detention facilities, 41 of which we owned or controlled via a long-term lease, with a total design capacity of approximately 68,000 beds. Through our CoreCivic Community segment, we owned and operated 20 residential reentry centers, which we owned or controlled via a long-term lease, with a total design capacity of approximately 4,000 beds. In addition, through our CoreCivic Properties segment, we owned 5 properties, with a total design capacity of approximately 8,000 beds.

Previous wording

In addition, on January 20, 2025, President Trump reversed an executive order issued on January 26, 2021 by then-President Biden that had directed the Attorney General to not renew United States Department of Justice, or DOJ, contracts with privately operated criminal detention facilities. Two agencies of the DOJ, the United States Federal Bureau of Prisons, or BOP, and the United States Marshals Service, or USMS, utilize our services. The BOP houses inmates who have been convicted, and the USMS is generally responsible for detainees who are awaiting trial. This executive order only applied to agencies that are part of the DOJ, which includes the BOP and USMS. We currently have two detention facilities that have direct contracts with the USMS, our second largest customer. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration in September 2023 and now expires in September 2028. The second direct contract expires in October 2025. We currently do not operate any prison contracts for the BOP. ICE facilities were not covered by this executive order, as ICE is an agency of the DHS, not the DOJ. It is possible future administrations could issue executive orders restricting the use of private correctional and detention facilities by the federal government.

Current wording

In addition, on January 20, 2025, President Trump reversed an executive order issued on January 26, 2021 by then-President Biden that had directed the Attorney General to not renew United States Department of Justice, or DOJ, contracts with privately operated criminal detention facilities. Two agencies of the DOJ, the United States Federal Bureau of Prisons, or BOP, and the United States Marshals Service, or USMS, utilize our services. The BOP houses inmates who have been convicted, and the USMS is generally responsible for detainees who are awaiting trial. This executive order only applied to agencies that are part of the DOJ, which includes the BOP and USMS. We currently have two detention facilities that have direct contracts with the USMS, our second largest customer. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration in September 2023 and now expires in September 2028. The second direct contract was renewed upon its expiration in October 2025 and now expires in September 2030. We currently do not operate any prison contracts for the BOP. ICE facilities were not covered by this executive order, as ICE is an agency of the DHS, not the DOJ. It is possible future administrations could issue executive orders restricting the use of private correctional and detention facilities by the federal government.

Previous wording

Further, on January 29, 2025, President Trump signed into law the Laken Riley Act, which had been passed by Congress with bipartisan support on January 22, 2025. The Laken Riley Act requires ICE to detain certain non-United States nationals who have been charged, arrested, or convicted of crimes including burglary, theft, assault of a law enforcement officer, as well as killing or injuring another person. ICE has estimated that the mandatory detention requirement of the Laken Riley Act could require more than 60,000 additional detention beds.

Current wording

Further, on January 29, 2025, President Trump signed into law the Laken Riley Act, which had been passed by Congress with bipartisan support on January 22, 2025. The Laken Riley Act requires ICE to detain certain non-United States nationals who have been charged, arrested, or convicted of crimes including burglary, theft, assault of a law enforcement officer, as well as killing or injuring another person. We believe the Laken Riley Act has contributed to the increased demand for detention beds by ICE, as further described hereinafter.

Previous wording

Given the recent legislative and executive actions mentioned above, we believe the short-term growth opportunities of our business are particularly attractive as federal government agencies consider their emergent needs. ICE has begun to utilize additional bed capacity in our portfolio at facilities with existing contracts, and we have been in discussion with ICE to activate certain of our idle facilities. As of June 30, 2025, we had seven idle correctional facilities that are operated with a core staffing complement to remain currently available and that are being actively marketed as solutions to the correctional or detention needs of potential customers. The number of people we care for under contracts with ICE has increased by approximately 2,900 individuals, or 28.4%, from the beginning of the year through June 30, 2025. During the first quarter of 2025, we entered into contract modifications at our 2,016-bed Northeast Ohio Correctional Center in Youngstown, Ohio, our 1,072-bed Nevada Southern Detention Center in Pahrump, Nevada, and our 1,600-bed Cimarron Correctional Facility in Cushing, Oklahoma to collectively add capacity for up to 784 ICE detainees. In addition, on March 5, 2025, we announced that we had agreed under an amendment to an intergovernmental service agreement, or IGSA, to resume operations and care for up to 2,400 individuals at the 2,400-bed Dilley Immigration Processing Center in Dilley, Texas, or the Dilley Facility. The amended IGSA expires in March 2030 and may be further extended through bilateral modification. We began receiving residents at this facility during April 2025. Previously, after nearly ten years of operation, we received notification from ICE on June 10, 2024 of its intent to terminate funding of the IGSA for services at the Dilley Facility effective August 9, 2024. We did not operate the Dilley Facility from August 9, 2024 until the resumption of operations at the facility on March 5, 2025. Also, effective March 7, 2025, we entered into a letter agreement with ICE to begin activation efforts at our 1,033-bed Midwest Regional Reception Center in Leavenworth, Kansas. The letter agreement authorizes initial funding up to $5.0 million with maximum funding up to $22.6 million for a six-month period while we work to negotiate and execute a long-term contract. The City of Leavenworth has filed a lawsuit alleging that a Special Use Permit, or SUP, is required to activate the facility. See Note 7 in the Notes to the Consolidated Financial Statements for further discussion of the pending litigation. On April 1, 2025, we entered into a letter agreement with ICE to begin activation efforts at our 2,560-bed California City Immigration Processing Center, or the California City Facility, formerly known as the California City Correctional Center. The letter agreement authorizes initial funding up to $10.0 million with maximum funding up to $31.2 million for a six-month period while we work to negotiate and execute a lo…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Given the recent legislative and executive actions mentioned above, we believe the short-term growth opportunities of our business are particularly attractive as federal government agencies consider their emergent needs. ICE has begun to utilize additional bed capacity in our portfolio at facilities with existing contracts, we have signed new contracts to activate five previously idled facilities, and we have been in discussion with ICE to activate additional idle facilities. The number of people we care for under contracts with ICE has increased by approximately 3,700 individuals, or 36.9%, from the beginning of the year through September 30, 2025. As of September 30, 2025, we had five idle correctional facilities containing approximately 7,000 beds that are operated with a core staffing complement to remain currently available and that are being actively marketed as solutions to the correctional or detention needs of potential customers.

Previous wording

As previously described herein, several executive and legislative actions have gone into effect since the inauguration of President Trump on January 20, 2025 that have resulted in an increase in the number of people detained by ICE, including in our detention facilities. During the first quarter of 2025, we entered into contract modifications at our Northeast Ohio Correctional Center, our Nevada Southern Detention Center, and our Cimarron Correctional Facility to collectively add capacity for up to 784 ICE detainees. In addition, on March 5, 2025, we announced that we had agreed under an amendment to an IGSA, to resume operations and care for up to 2,400 individuals at the 2,400-bed Dilley Facility in Dilley, Texas. The amended IGSA expires in March 2030 and may be further extended through bilateral modification. Previously, after nearly ten years of operation, we received notification from ICE on June 10, 2024 of its intent to terminate funding of the IGSA for services at the Dilley Facility effective August 9, 2024. We did not operate the Dilley Facility from August 9, 2024 until the resumption of operations at the facility on March 5, 2025.

Current wording

On March 5, 2025, we announced that we had agreed under an amendment to an intergovernmental service agreement, or IGSA, to resume operations and care for up to 2,400 individuals at the 2,400-bed Dilley Immigration Processing Center in Dilley, Texas, or the Dilley Facility. The amended IGSA expires in March 2030 and may be further extended through bilateral modification. We began receiving residents at this facility during April 2025. Activation of the Dilley Facility was completed in September 2025. Previously, after nearly ten years of operation, we received notification from ICE on June 10, 2024 of its intent to terminate funding of the IGSA for services at the Dilley Facility effective August 9, 2024. We did not operate the Dilley Facility from August 9, 2024 until the resumption of operations at the facility on March 5, 2025.

Previous wording

The consolidated financial statements in this Quarterly Report are prepared in conformity with U.S. generally accepted accounting principles, or GAAP. As such, we are required to make certain estimates, judgments, and assumptions that we believe are reasonable based upon the information available which, by their nature, are subject to an inherent degree of uncertainty. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from our estimates. A summary of our significant accounting policies is described in our 2024 Form 10-K. The significant accounting policies and estimates which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include those related to idle facilities and asset impairments, self-funded insurance reserves, and legal reserves. For a discussion of our critical accounting policies and estimates, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Notes to Consolidated Financial Statements" presented in our 2024 Form 10-K. There were no newly identified critical accounting policies during the first six months of 2025, nor were there any material changes to the critical accounting policies and estimates discussed in our 2024 Form 10-K.

Current wording

The consolidated financial statements in this Quarterly Report are prepared in conformity with U.S. generally accepted accounting principles, or GAAP. As such, we are required to make certain estimates, judgments, and assumptions that we believe are reasonable based upon the information available which, by their nature, are subject to an inherent degree of uncertainty. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from our estimates. A summary of our significant accounting policies is described in our 2024 Form 10-K. The significant accounting policies and estimates which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include those related to idle facilities and asset impairments, self-funded insurance reserves, and legal reserves. For a discussion of our critical accounting policies and estimates, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Notes to Consolidated Financial Statements" presented in our 2024 Form 10-K. There were no newly identified critical accounting policies during the first nine months of 2025, nor were there any material changes to the critical accounting policies and estimates discussed in our 2024 Form 10-K.

Previous wording

Our results of operations are impacted by the number of correctional and detention facilities we operated, including 40 we owned and four owned by our government partners (CoreCivic Safety), the number of residential reentry centers we owned and operated (CoreCivic Community), the number of facilities we leased to government agencies (CoreCivic Properties), and the facilities we owned that were not in operation. The following table sets forth the changes in the number of facilities in operation for the periods presented:

Current wording

Our results of operations are impacted by the number of correctional and detention facilities we operated, including 41 we owned and four owned by our government partners (CoreCivic Safety), the number of residential reentry centers we owned and operated (CoreCivic Community), the number of facilities we leased to government agencies (CoreCivic Properties), and the facilities we owned that were not in operation. The following table sets forth the changes in the number of facilities in operation for the periods presented:

Previous wording

Net income was $38.5 million, or $0.35 per diluted share, for the three months ended June 30, 2025, compared with net income of $19.0 million, or $0.17 per diluted share, for the three months ended June 30, 2024. Net income was $63.7 million, or $0.58 per diluted share, for the six months ended June 30, 2025, compared with net income of $28.5 million, or $0.25 per diluted share, for the six months ended June 30, 2024. Financial results for the three and six months ended June 30, 2025 reflect $1.5 million of expenses associated with mergers and acquisitions, as further described hereinafter. For the three and six months ended June 30, 2025, income tax expense reflects a net benefit of $0.4 million associated with this special item. Financial results for the three and six months ended June 30, 2024 reflect $4.1 million and $31.3 million, respectively, of expenses associated with debt repayments and refinancing transactions. Financial results for the six months ended June 30, 2024 also reflect a $0.6 million gain on the sale of real estate assets. For the three and six months ended June 30, 2024, income tax expense reflects a net benefit of $1.3 million and $9.6 million, respectively, associated with these special items.

Current wording

Net income was $26.3 million, or $0.24 per diluted share, for the three months ended September 30, 2025, compared with net income of $21.1 million, or $0.19 per diluted share, for the three months ended September 30, 2024. Net income was $90.0 million, or $0.83 per diluted share, for the nine months ended September 30, 2025, compared with net income of $49.6 million, or $0.44 per diluted share, for the nine months ended September 30, 2024. Financial results for the three and nine months ended September 30, 2025 reflect $0.8 million and $2.3 million, respectively, of expenses associated with mergers and acquisitions, as further described hereinafter, an asset impairment of $1.5 million, and a gain on the sale of real estate assets of $2.5 million. For the three and nine months ended September 30, 2025, income tax expense includes an expense of $0.1 million and reflects a net benefit of $0.4 million, respectively, associated with these special items. Financial results for the three and nine months ended September 30, 2024 reflect a gain on the sale of real estate assets of $1.2 million and $1.7 million, respectively, and $3.1 million of asset impairments. Financial results for the nine months ended September 30, 2024 also reflect $31.3 million of expenses associated with debt repayments and refinancing transactions. For the three and nine months ended September 30, 2024, income tax expense reflects a net benefit of $0.6 million and $10.2 million, respectively, associated with these special items.

Previous wording

CoreCivic Safety segment, consisting of the 44 correctional and detention facilities that are owned or controlled via a long-term lease and managed by CoreCivic, as well as those correctional and detention facilities owned by third parties but managed by CoreCivic. CoreCivic Safety also includes the operating results of our subsidiary that provides transportation services to governmental agencies, TransCor America, LLC, or TransCor.

Current wording

CoreCivic Safety segment, consisting of the 45 correctional and detention facilities that are owned or controlled via a long-term lease and managed by CoreCivic, as well as those correctional and detention facilities owned by third parties but managed by CoreCivic. CoreCivic Safety also includes the operating results of our subsidiary that provides transportation services to governmental agencies, TransCor America, LLC, or TransCor.

Previous wording

CoreCivic Community segment, consisting of the 21 residential reentry centers that are owned or controlled via a long-term lease and managed by CoreCivic. CoreCivic Community also includes the operating results of our electronic monitoring and case management services.

Current wording

CoreCivic Community segment, consisting of the 20 residential reentry centers that are owned or controlled via a long-term lease and managed by CoreCivic. CoreCivic Community also includes the operating results of our electronic monitoring and case management services.

Previous wording

For the three and six months ended June 30, 2025 and 2024, our total segment net operating income, which we define as facility revenue (including interest income associated with finance leases) less operating expenses, was divided among our three business segments as follows:

Current wording

For the three and nine months ended September 30, 2025 and 2024, our total segment net operating income, which we define as facility revenue (including interest income associated with finance leases) less operating expenses, was divided among our three business segments as follows:

Previous wording

A key performance indicator we use to measure the revenue and expenses associated with the operation of the correctional, detention, and residential reentry facilities we own or manage is expressed in terms of a compensated man-day, which represents the revenue we generate and expenses we incur for one offender for one calendar day. Revenue and expenses per compensated man-day are computed by dividing facility revenue and expenses by the total number of compensated man-days during the period. A compensated man-day represents a calendar day for which we are paid for the occupancy of an offender. We believe the measurement is useful because we are compensated for operating and managing facilities at an offender per diem rate based upon actual or minimum guaranteed occupancy levels. We also measure our costs on a per compensated man-day basis, which are largely dependent upon the number of offenders we accommodate. Further, per compensated man-day measurements are also used to estimate our potential profitability based on certain occupancy levels relative to design capacity. Revenue and expenses per compensated man-day for all of the correctional, detention, and residential reentry facilities placed into service that we owned or managed, exclusive of those held for lease, and for TransCor were as follows for the three and six months ended June 30, 2025 and 2024:

Current wording

A key performance indicator we use to measure the revenue and expenses associated with the operation of the correctional, detention, and residential reentry facilities we own or manage is expressed in terms of a compensated man-day, which represents the revenue we generate and expenses we incur for one offender for one calendar day. Revenue and expenses per compensated man-day are computed by dividing facility revenue and expenses by the total number of compensated man-days during the period. A compensated man-day represents a calendar day for which we are paid for the occupancy of an offender. We believe the measurement is useful because we are compensated for operating and managing facilities at an offender per diem rate based upon actual or minimum guaranteed occupancy levels. We also measure our costs on a per compensated man-day basis, which are largely dependent upon the number of offenders we accommodate. Further, per compensated man-day measurements are also used to estimate our potential profitability based on certain occupancy levels relative to design capacity. Revenue and expenses per compensated man-day for all of the correctional, detention, and residential reentry facilities placed into service that we owned or managed, exclusive of those held for lease, and for TransCor were as follows for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Total revenue consists of management revenue we generate through CoreCivic Safety and CoreCivic Community in the operation of correctional, detention, and residential reentry facilities, as well as the revenue we generate from TransCor and our electronic monitoring and case management services. Total revenue also consists of lease revenue we generate through CoreCivic Properties from facilities we lease to third-party operators. The following table reflects the components of revenue for the three and six months ended June 30, 2025 and 2024 (in millions):

Current wording

Total revenue consists of management revenue we generate through CoreCivic Safety and CoreCivic Community in the operation of correctional, detention, and residential reentry facilities, as well as the revenue we generate from TransCor and our electronic monitoring and case management services. Total revenue also consists of lease revenue we generate through CoreCivic Properties from facilities we lease to third-party operators. The following table reflects the components of revenue for the three and nine months ended September 30, 2025 and 2024 (in millions):

Previous wording

Total management revenue increased $47.8 million, or 9.8%, and $44.1 million, or 4.5%, for the three and six months ended June 30, 2025, respectively, as compared with the same periods in 2024. The increase in total management revenue in both the three- and six-month periods was primarily a result of an increase in revenue of $24.6 million and $33.5 million, respectively, driven primarily by an increase of 4.9% and 3.5%, respectively, in average revenue per compensated man-day. The increase in average revenue per compensated man-day in both periods primarily resulted from the effect of per diem increases at many of our facilities. In addition, the revenue resulting from the letter agreements with ICE at our California City Facility and our Midwest Regional Reception Center, as previously described herein, also contributed to the increase in revenue per compensated man-day. The increase in total management revenue in both the three- and six-month periods was also a result of an increase in revenue of $23.0 million and $10.8 million, respectively, driven by an increase in average daily compensated population from 2024 to 2025, net, in the six-month period, of the effect of one less day of operations due to a leap year in 2024. The increase in average daily compensated population from 2024 to 2025 was partially offset in both periods by the effect of the termination of funding of the IGSA associated with the Dilley Facility effective August 9, 2024. However, the IGSA was subsequently amended and operations resumed at the facility on March 5, 2025. Revenue generated from our electronic monitoring and case management services during the three months ended June 30, 2025 increased $0.2 million (from $8.8 million during the three months ended June 30, 2024 to $9.0 million during the three months ended June 30, 2025). Revenue generated from our electronic monitoring and case management services during the six months ended June 30, 2025 decreased $0.2 million (from $17.7 million during the six months ended June 30, 2024 to $17.5 million during the six months ended June 30, 2025).

Current wording

Total management revenue increased $88.2 million, or 18.1%, and $132.3 million, or 9.1%, for the three and nine months ended September 30, 2025, respectively, as compared with the same periods in 2024. The increase in total management revenue in both the three- and nine-month periods was primarily a result of an increase in revenue of $45.3 million and $79.1 million, respectively, driven primarily by an increase of 8.7% and 5.3%, respectively, in average revenue per compensated man-day. The increase in average revenue per compensated man-day in both periods primarily resulted from the effect of per diem increases at many of our facilities, along with a change in business mix. In addition, the revenue resulting from the letter agreements with ICE at our California City Facility and our Midwest Regional Reception Center also contributed to the increase in revenue per compensated man-day. The increase in total management revenue in both the three- and nine-month periods was also a result of an increase in revenue of $42.2 million and $52.8 million, respectively, driven by an increase in average daily compensated population from 2024 to 2025, net, in the nine-month period, of the effect of one less day of operations due to a leap year in 2024. Revenue during the three-month period also increased due to the resumption of operations at the Dilley Facility, which had terminated August 9, 2024. However, the IGSA for services at the Dilley Facility was subsequently amended and operations resumed at the facility on March 5, 2025. Revenue declined at this facility during the nine-month period in 2025 compared with the nine-month period in 2024 because in 2025 we were only generating revenue on portions of the facility as it was reactivated, and only from its reactivation date. Revenue generated from our electronic monitoring and case management services during the three months ended September 30, 2025 increased $0.7 million (from $8.5 million during the three months ended September 30, 2024 to $9.2 million during the three months ended September 30, 2025). Revenue generated from our electronic monitoring and case management services during the nine months ended September 30, 2025 increased $0.4 million (from $26.2 million during the nine months ended September 30, 2024 to $26.6 million during the nine months ended September 30, 2025).

Previous wording

Montana. In August 2024, we entered into a contract with the state of Montana which contributed to an increase in populations held at our Saguaro Correctional Facility. In addition, on January 16, 2025, we announced that we were awarded a new management contract with the state of Montana to care for additional inmates outside the state of Montana. During the first six months of 2025, we cared for an average daily population of 189 inmates at our Tallahatchie County Correctional Facility in Mississippi under this new contract. The increase in average daily compensated population in both periods was partially offset by the effect of the termination of funding of an IGSA associated with the Dilley Facility effective August 9, 2024. The IGSA was subsequently amended and operations resumed at the Dilley Facility on March 5, 2025. Average compensated populations decreased by 1,129 and 1,618 during the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024 attributable to the termination of funding of the IGSA at the Dilley Facility. Average compensated occupancy in our Safety and Community segments increased to 76.8% from 74.3% during the three months ended June 30, 2025 and 2024, respectively, and to 76.9% from 74.7% during the six months ended June 30, 2025 and 2024, respectively. These increases in occupancy occurred despite an increase in average available beds due to the activation and transfer of our 2,560-bed California City Facility from the Properties segment to the Safety segment effective April 1, 2025. We did not receive any ICE detainees at our California City Facility during the three- or six-month periods ended June 30, 2025.

Current wording

Average daily compensated population increased 4,479, or 8.8%, to 55,236 during the three months ended September 30, 2025 compared to 50,757 during the three months ended September 30, 2024. Average daily compensated population increased 2,088, or 4.1%, to 53,577 during the nine months ended September 30, 2025 compared to 51,489 during the nine months ended September 30, 2024. The increase in average daily compensated population in both periods was primarily a result of an increase in occupancy largely due to higher ICE populations, and as a result of two new management contracts with the state of Montana. In August 2024, we entered into a contract with the state of Montana which contributed to an increase in populations held at our Saguaro Correctional Facility. In addition, on January 16, 2025, we announced that we were awarded a new management contract with the state of Montana to care for additional inmates outside the state of Montana. During the first nine months of 2025, we cared for an average daily population of 206 Montana inmates at our Tallahatchie County Correctional Facility in Mississippi under this new contract. In addition, the increase in average daily compensation in both current periods was impacted by the acquisition of the Farmville Detention Center effective July 1, 2025. At September 30, 2025, we cared for 731 individuals at the Farmville facility. The increase in average daily compensated population in the nine-month period was partially offset by the effect of the termination of funding of an IGSA associated with the Dilley Facility effective August 9, 2024. The IGSA was subsequently amended and operations resumed at the Dilley Facility on March 5, 2025. Average compensated populations decreased by 728 during the nine months ended September 30, 2025 compared to the same period in 2024 attributable to the termination of funding of the IGSA at the Dilley Facility. Average compensated occupancy in our Safety and Community segments increased to 76.7% from 75.2% during the three months ended September 30, 2025 and 2024, respectively, and to 76.8% from 74.9% during the nine months ended September 30, 2025 and 2024, respectively. These increases in occupancy occurred despite an increase in average available beds due to the activation and transfer of our 2,560-bed California City Facility from the Properties segment to the Safety segment effective April 1, 2025. We began receiving ICE detainees at our California City Facility during August 2025 and, as of September 30, 2025, we cared for 500 individuals at the facility.

Previous wording

The solutions we provide to our federal customers, including primarily ICE and the USMS, continue to be a significant component of our business. The federal customers in our Safety and Community segments generated approximately 53% of our total revenue for the three months ended June 30, 2025 and 2024, increasing $28.8 million, or 11.1%, during the three months ended June 30, 2025 as compared with the same period in 2024. The federal customers in our Safety and Community segments generated approximately 52% and 53% of our total revenue for the six months ended June 30, 2025 and 2024, respectively, increasing $7.7 million, or 1.5%, during the six months ended June 30, 2025 as compared with the same period in 2024. The increase in federal revenue was primarily a result of increased occupancy and per diem increases at certain facilities, particularly those where we have contracts with ICE. The increase in federal revenue in both periods was partially offset by the effect of the termination of funding of the IGSA associated with the Dilley Facility in August 2024, and, in the six-month period ended June 30, 2025, the effect of one less day of operations due to a leap year in 2024.

Current wording

The solutions we provide to our federal customers, including primarily ICE and the USMS, continue to be a significant component of our business. The federal customers in our Safety and Community segments generated approximately 55% and 51% of our total revenue for the three months ended September 30, 2025 and 2024, respectively, increasing $70.9 million, or 28.3%, during the three months ended September 30, 2025 as compared with the same period in 2024. The federal customers in our Safety and Community segments generated approximately 53% and 52% of our total revenue for the nine months ended September 30, 2025 and 2024, respectively, increasing $78.6 million, or 10.2%, during the nine months ended September 30, 2025 as compared with the same period in 2024. The increase in federal revenue was primarily a result of increased occupancy at certain facilities, particularly those where we have contracts with ICE, and per diem increases. The increase in federal revenue in the nine-month period was partially offset by the effect of the termination of funding of the IGSA associated with the Dilley Facility in August 2024, and the effect of one less day of operations due to a leap year in 2024.

Previous wording

State revenues from contracts at correctional, detention, and residential reentry facilities that we operate increased $9.9 million, or 5.2%, from the second quarter of 2024 to the second quarter of 2025. State revenues increased $19.7 million, or 5.2%, from the six months ended June 30, 2024 to the comparable period in 2025. State revenues in both periods increased as a result of per diem increases under a number of our state contracts, as certain states have recognized the need to provide additional funding to address increases in the wages of our employees. State revenues also increased due to higher utilization from the state of Montana resulting from two new management contracts executed during 2024 and 2025, as previously described herein, as well as higher utilization from other states under existing management contracts. The increase in state revenues in the six-month period ended June 30, 2025, was partially offset by the effect of one less day of operations due to a leap year in 2024.

Current wording

State revenues from contracts at correctional, detention, and residential reentry facilities that we operate increased $7.1 million, or 3.6%, from the third quarter of 2024 to the third quarter of 2025. State revenues increased $26.8 million, or 4.7%, from the nine months ended September 30, 2024 to the comparable period in 2025. State revenues in both periods increased as a result of per diem increases under a number of our state contracts, as certain states have recognized the need to provide additional funding to address increases in the wages of our employees. Most notably, state revenues increased $10.0 million during the nine-month period in 2025 compared to 2024 due to higher utilization from the state of Montana resulting from two new management contracts executed during 2024 and 2025, as previously described herein, as well as higher utilization from other states under existing management contracts. State revenues also increased $9.2 million during the nine-month period in 2025 compared to 2024 from the state of Georgia due to increases in average daily populations as well as the impact of per diem increases in the current year. The increase in state revenues in the nine-month period ended September 30, 2025, was partially offset by the effect of one less day of operations due to a leap year in 2024.

Previous wording

The $8.1 million, or 46.6%, decrease in lease revenue from the six months ended June 30, 2024 to the comparable period in 2025 primarily resulted from the termination of the lease agreement at our California City Facility effective March 31, 2024.

Current wording

The $7.5 million, or 34.9%, decrease in lease revenue from the nine months ended September 30, 2024 to the comparable period in 2025 primarily resulted from the expiration and non-renewal of the lease agreement with the state of California at our California City Facility effective March 31, 2024.

Previous wording

Operating expenses totaled $398.3 million and $375.7 million for the three months ended June 30, 2025 and 2024, respectively, while operating expenses for the six months ended June 30, 2025 and 2024 totaled $773.1 million and $753.8 million, respectively. Operating expenses consist of those expenses incurred in the operation and management of correctional, detention, and residential reentry facilities, as well as those expenses incurred in the operations of TransCor and our electronic monitoring and case management services. Operating expenses also consist of those expenses incurred in the operation of facilities we lease to third-party operators.

Current wording

Operating expenses totaled $449.6 million and $370.8 million for the three months ended September 30, 2025 and 2024, respectively, and operating expenses for the nine months ended September 30, 2025 and 2024 totaled $1,222.6 million and $1,124.7 million, respectively. Operating expenses consist of those expenses incurred in the operation and management of correctional, detention, and residential reentry facilities, as well as those expenses incurred in the operations of TransCor and our electronic monitoring and case management services. Operating expenses also consist of those expenses incurred in the operation of facilities we lease to third-party operators.

Previous wording

2025, when compared to the same period in 2024. Operating expenses in both the three- and six-month periods increased primarily as a result of wage increases across our portfolio. We achieved higher staffing levels during the three and six months ended June 30, 2025 when compared to the same periods in 2024 as we continued to see improvement in our attraction and retention of facility staff in the current labor market. In addition, wages have increased as a result of an increase in our overall staffing levels in response to the increasing demand from the federal government for capacity at our correctional and detention facilities, particularly from ICE, due to recent changes in immigration policies under the current presidential administration. Further, operating expenses increased from the prior year periods as a result of the letter agreements with ICE enabling us to begin activation efforts at our California City Facility and our Midwest Regional Reception Center, as previously described herein, and due to an increase in transportation services expense, which corresponds with the increased populations at certain of our facilities, as well as an overall increase in transportation needs from ICE.

Current wording

Operating expenses incurred by CoreCivic Safety and CoreCivic Community in connection with the operation and management of our correctional, detention, and residential reentry facilities, as well as those incurred in the operations of TransCor and our electronic monitoring and case management services, increased $79.2 million, or 21.5%, during the third quarter of 2025 when compared with the same period in 2024. Expenses incurred by these segments increased $100.5 million, or 9.0%, during the nine months ended September 30, 2025, when compared to the same period in 2024. Operating expenses in both the three- and nine-month periods increased primarily as a result of wage increases across our portfolio. We achieved higher staffing levels during the three and nine months ended September 30, 2025 as compared to the same periods in 2024, and we continued to see improvement in our attraction and retention of facility staff in the current labor market. In addition, wages have increased as a result of an increase in our overall staffing levels in response to the increasing demand from the federal government for capacity at our correctional and detention facilities, particularly from ICE, due to recent changes in immigration policies under the current presidential administration. Further, operating expenses increased from the prior year periods as a result of the letter agreements with ICE enabling us to begin activation efforts at our California City Facility and our Midwest Regional Reception Center, as previously described herein, and due to an increase in transportation services expense, which corresponds with the increased populations at certain of our facilities, as well as an overall increase in transportation needs from ICE. In addition, operating expenses increased from the prior year periods as a result of the acquisition of the Farmville Detention Center on July 1, 2025, as further described herein.

Previous wording

The increase in operating expenses during the three and six months ended June 30, 2025 when compared with the same periods in 2024 was partially offset by the effect of the termination of funding of an IGSA associated with the Dilley Facility effective August 9, 2024. We leased the Dilley Facility and the site upon which it was constructed from a third-party lessor. The original lease agreement provided us with the ability to terminate the lease with a notification period of at least 60 days if ICE terminated the IGSA associated with the Dilley Facility. Upon being notified on June 10, 2024 by ICE of its intent to terminate the funding of the IGSA associated with the Dilley Facility, we provided notice to the third-party lessor of our intent to terminate the lease agreement effective August 9, 2024, at which time we had no further lease or material other operating expense commitments associated with the Dilley Facility. However, the IGSA was subsequently amended and operations resumed at the facility on March 5, 2025. Simultaneous with the March 5, 2025 amendment of the IGSA and resumption of operations at the Dilley Facility, we entered into a new lease agreement with the same third-party lessor over a period co-terminus with the term of the amended IGSA. The new lease agreement contains a graduated lease rate over the first six months consistent with the amended IGSA to correlate with the activation of the five neighborhoods within the facility, as further described hereinafter.

Current wording

The increase in operating expenses during the three months ended September 30, 2025 as compared with the same period in 2024 also includes the effect of the termination of funding of an IGSA associated with the Dilley Facility effective August 9, 2024 and the subsequent resumption of operations at the facility effective March 5, 2025. We leased the Dilley Facility and the site upon which it was constructed from a third-party lessor. The original lease agreement provided us with the ability to terminate the lease with a notification period of at least 60 days if ICE terminated the IGSA associated with the Dilley Facility. Upon being notified on June 10, 2024 by ICE of its intent to terminate the funding of the IGSA associated with the Dilley Facility, we provided notice to the third-party lessor of our intent to terminate the lease agreement effective August 9, 2024, at which time we had no further lease or material other operating expense commitments associated with the Dilley Facility. However, the IGSA was subsequently amended and operations resumed at the facility on March 5, 2025. Simultaneous with the March 5, 2025 amendment of the IGSA and resumption of operations at the Dilley Facility, we entered into a new lease agreement with the same third-party lessor over a period co-terminus with the term of the amended IGSA. The new lease agreement contains a graduated lease rate over the first six months consistent with the amended IGSA to correlate with the activation of the five neighborhoods within the facility, as further described hereinafter, resulting in a graduated increase in staffing levels from March 5, 2025 through September 30, 2025 as each of the five neighborhoods were activated. Total operating expenses at this facility increased $21.4 million during the three months ended September 30, 2025 compared with the same period in the prior year, and increased $0.4 million for the nine months ended September 30, 2025 compared with the same period in the prior year.

Previous wording

The increase in operating expenses during the three and six months ended June 30, 2025 when compared with the same periods in 2024 was also partially offset by $8.3 million and $11.0 million of employee retention credits, or ERCs, recognized during the three and six months ended June 30, 2025, respectively. The ERCs were made available to eligible businesses that had employees and were affected during the COVID-19 pandemic under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, which was signed into law in March 2020 and was extended through June 30, 2021. The CARES Act, among other things, incentivized companies to retain employees through an ERC, which compensates employers for wages of employees that were retained and could not perform their job duties at 100% capacity as a result of coronavirus pandemic restrictions. The increase in operating expenses in the six-month period was also partially offset by the effect of one less day of operations due to a leap year in 2024.

Current wording

The increase in operating expenses during the nine months ended September 30, 2025 when compared with the same period in 2024 was partially offset by $11.0 million of employee retention credits, or ERCs, recognized during the first half of 2025. The ERCs were made available to eligible businesses that had employees and were affected during the COVID-19 pandemic under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, which was signed into law in March 2020 and was extended through June 30, 2021. The CARES Act, among other things, incentivized companies to retain employees through an ERC, which compensates employers for wages of employees that were retained and could not perform their job duties at 100% capacity as a result of coronavirus pandemic restrictions. The increase in operating expenses in the nine-month period was also partially offset by the effect of one less day of operations due to a leap year in 2024.

Previous wording

Total expenses per compensated man-day increased to $78.78 during the three months ended June 30, 2025 from $77.53 during the three months ended June 30, 2024, and increased to $78.63 during the six months ended June 30, 2025 from $77.23 during the same period in the prior year. We continue to experience labor shortages and wage pressures in several markets across the country and have provided customary inflationary wage increases to remain competitive. Although the hiring environment has progressively improved since the COVID-19 pandemic, recruiting remains particularly challenging at certain facilities in particular geographic locations, resulting in incremental expenses to help ensure sufficient staffing levels. While we have been able to reduce the use of these temporary incentives at most facilities due to the improving hiring environment, we expect to continue to incur a certain level of incremental expenses in the future, particularly as demand from the federal government for capacity at our correctional and detention facilities is increasing, particularly from ICE. Incremental expenses include, but may not be limited to, incentive payments to our front-line and field staff, temporary employee housing expenses and other travel related reimbursements, additional paid time off, off-cycle wage increases in certain markets to remain competitive, and registry nursing expenses. These incremental investments have enabled us to increase overall staffing levels, which has contributed to the increase in total expenses per compensated man-day. Further, expenses per compensated man-day increased from the prior year periods as a result of the letter agreements with ICE at our California City Facility and our Midwest Regional Reception Center. The increase in total expenses per compensated man-day in both periods includes the effect of the termination of the funding of the IGSA associated with the Dilley Facility effective August 9, 2024. The IGSA was subsequently amended and operations resumed at the Dilley Facility in March 2025. These incremental operating expenses were partially offset by the ERCs, as previously mentioned.

Current wording

Further, we continue to experience labor shortages and wage pressures in several markets across the country and have provided customary inflationary wage increases to remain competitive. Although the hiring environment has progressively improved since the COVID-19 pandemic, recruiting remains particularly challenging at certain facilities in particular geographic locations, resulting in incremental expenses to help ensure sufficient staffing levels. While we have been able to reduce the use of these temporary incentives at most facilities due to the improving hiring environment, we expect to continue to incur a certain level of incremental expenses in the future, particularly as demand from the federal government for capacity at our correctional and detention facilities is increasing, particularly from ICE. Incremental expenses include, but may not be limited to, incentive payments to our front-line and field staff, temporary employee housing expenses and other travel related reimbursements, additional paid time off, off-cycle wage increases in certain markets to remain competitive, and registry nursing expenses. These incremental investments have enabled us to increase overall staffing levels, which has contributed to the increase in total expenses per compensated man-day. The increase in total expenses per compensated man-day in both the three- and nine-month periods includes the effect of the termination of the funding of the IGSA associated with the Dilley Facility effective August 9, 2024. The IGSA was subsequently amended and operations resumed at the Dilley Facility in March 2025. These incremental operating expenses for the nine-month period were partially offset by the ERCs, as previously mentioned.

Previous wording

We continually monitor compensation levels very closely along with overall economic conditions and will adjust wage levels necessary to help ensure the long-term success of our business. Further, we continually evaluate the structure of our employee benefits package and training programs to ensure we are better able to attract and retain our employees. Salaries and benefits represent the most significant component of our operating expenses, representing approximately 61% of our total operating expenses during the six months ended June 30, 2025 and 2024. As previously mentioned, recruiting and retaining staff has been particularly challenging for us and for the corrections and detention industry as a whole. An inability to attract and retain sufficient personnel could prevent us from caring for additional residential populations for government agencies in need of additional capacity due to an increase in populations or an inability to adequately staff their facilities. An inability to attract and retain sufficient personnel in our existing facilities could also cause our government partners to assess liquidated damages, reduce our residential populations, or in certain circumstances, cancel our contracts.

Current wording

We continually monitor compensation levels very closely along with overall economic conditions and will adjust wage levels necessary to help ensure the long-term success of our business. Further, we continually evaluate the structure of our employee benefits package and training programs to ensure we are better able to attract and retain our employees. Salaries and benefits represent the most significant component of our operating expenses, representing approximately 62% of our total operating expenses during the nine months ended September 30, 2025 and 2024. An inability to attract and retain sufficient personnel could prevent us from caring for additional residential populations for government agencies in need of additional capacity due to an increase in populations or an inability to adequately staff their facilities. An inability to attract and retain sufficient personnel in our existing facilities could also cause our government partners to assess liquidated damages, reduce our residential populations, or in certain circumstances, cancel our contracts. We have also been subjected to revenue deductions for staff vacancies as a result of the labor shortages, which are reflected as reductions to other management revenue. Estimating revenue deduction amounts due to staff vacancies can be complex and subject to management judgment and estimations. Some of our government partners have granted waivers for revenue deductions for staff vacancies in recognition of the unique and challenging labor market, while others have discretionarily adjusted such deductions based on our extraordinary costs, efforts and incentive programs implemented to attract and retain staff.

Previous wording

Variable expenses per compensated man-day increased to $21.38 during the three months ended June 30, 2025, from $20.64 during the same period in the prior year, or 3.6%, and increased to $21.12 during the six months ended June 30, 2025 from $20.42 during the same period in the prior year, or 3.4%. The increase in variable expenses per compensated man-day in both periods was primarily due to the effect of an elevated inflation rate applicable to all of our variable expenses, partially offset by the effect of the termination of the funding of the IGSA associated with the Dilley Facility effective August 9, 2024. The IGSA was subsequently amended and operations resumed at the Dilley Facility on March 5, 2025. In addition, variable expenses per compensated man-day increased from the prior year quarter due to an increase in transportation services expense, which corresponds with the increased populations at certain of our facilities, as well as an overall increase in transportation needs from ICE.

Current wording

Variable expenses per compensated man-day increased to $22.79 during the three months ended September 30, 2025, from $19.42 during the same period in the prior year, or 17.4%, and increased to $21.70 during the nine months ended September 30, 2025 from $20.09 during the same period in the prior year, or 8.0%. The increase in variable expenses per compensated man-day in both periods was primarily due to the aforementioned start-up expenses at three previously idle facilities, combined with the effect of an elevated inflation rate applicable to all of our variable expenses, partially offset in the nine-month period by the effect of the termination of the funding of the IGSA associated with the Dilley Facility effective August 9, 2024. The IGSA was subsequently amended and operations resumed at the Dilley Facility on March 5, 2025. In addition, variable expenses per compensated man-day increased from the prior year quarter due to an increase in transportation services expense, which corresponds with the increased populations at certain of our facilities, as well as an overall increase in transportation needs from ICE.

Previous wording

Operating expenses incurred by CoreCivic Properties in connection with facilities we lease to third-party operators decreased $2.0 million, or 27.8%, during the six months ended June 30, 2025 when compared with the same period in 2024. The decrease was primarily a result of the termination of the lease agreement at our California City Facility effective March 31, 2024. The California City Facility transitioned from our Properties segment to our Safety segment during the second quarter of 2025, as we have entered into a letter agreement with ICE for a six-month period to begin activation efforts while we work to negotiate and execute a long-term contract to operate the facility.

Current wording

Operating expenses incurred by CoreCivic Properties in connection with facilities we lease to third-party operators decreased $2.5 million, or 24.5%, during the nine months ended September 30, 2025 when compared with the same period in 2024. The decrease was primarily a result of the expiration and non-renewal of the lease agreement at our California City Facility effective March 31, 2024. The California City Facility transitioned from our Properties segment to our Safety segment during the second quarter of 2025, as we entered into an agreement with ICE to reactivate and operate the facility.

Previous wording

Our management contract at the 300-bed Elizabeth Detention Center in New Jersey has been extended numerous times including most recently through June 30, 2025. We continue to operate the facility under the terms of this extended contract. ICE has issued a request for proposal, or RFP, for up to 600 beds in New Jersey. We have offered the Elizabeth Detention Center under this RFP. We continue to discuss the terms of a long-term contract with ICE, but can provide no assurance that we will be awarded a new contract, or that ICE will continue to sign extensions. We generated total revenue of $5.7 million and $11.3 million at this facility during the three and six months ended June 30, 2025. At June 30, 2025, we cared for approximately 345 detainees at this facility under terms of the most recently extended contract.

Current wording

During 2024, ICE issued a request for proposal, or RFP, for up to 600 beds in New Jersey. We have offered the 300-bed Elizabeth Detention Center under this RFP. Our management contract at the Elizabeth Detention Center has continued under numerous short-term extensions, including most recently through December 31, 2025, with additional extension options through March 31, 2026. We continue to discuss the terms of a long-term contract with ICE, but can provide no assurance that we will be awarded a new contract, or that ICE will continue to sign extensions. We generated total revenue of $5.7 million and $17.0 million at this facility during the three and nine months ended September 30, 2025. At September 30, 2025, we cared for approximately 300 detainees at this facility under terms of the most recently extended contract.

Previous wording

CoreCivic Safety includes the operating results of the correctional and detention facilities that we operated during each period. Total revenue generated by CoreCivic Safety increased $48.0 million, or 10.5%, from $455.4 million during the three months ended June 30, 2024 to $503.3 million during the three months ended June 30, 2025, and increased $44.4 million, or 4.9%, from $913.1 million during the six months ended June 30, 2024 to $957.5 million during the six months ended June 30, 2025. CoreCivic Safety's facility net operating income increased $23.4 million, or 21.8%, from $107.3 million during the three months ended June 30, 2024 to $130.7 million during the three months ended June 30, 2025, and increased $22.0 million or 10.2% from $214.9 million during the six months ended June 30, 2024 to $236.9 million during the six months ended June 30, 2025. During the three and six months ended June 30, 2025, CoreCivic Safety generated 92.1% and 91.9%, respectively, of our total segment net operating income, compared with 92.1% and 89.1%, respectively, during the three and six months ended June 30, 2024.

Current wording

CoreCivic Safety includes the operating results of the correctional and detention facilities that we operated during each period. Total revenue generated by CoreCivic Safety increased $85.8 million, or 18.7%, from $459.3 million during the three months ended September 30, 2024 to $545.1 million during the three months ended September 30, 2025, and increased $130.2 million, or 9.5%, from $1,372.4 million during the nine months ended September 30, 2024 to $1,502.6 million during the nine months ended September 30, 2025. CoreCivic Safety's facility net operating income increased $6.6 million, or 5.7%, from $115.8 million during the three months ended September 30, 2024 to $122.4 million during the three months ended September 30, 2025, and increased $28.6 million or 8.6% from $330.7 million during the nine months ended September 30, 2024 to $359.3 million during the nine months ended September 30, 2025. During the three and nine months ended September 30, 2025, CoreCivic Safety generated 92.1% and 92.0%, respectively, of our total segment net operating income, compared with 94.3% and 90.9%, respectively, during the three and nine months ended September 30, 2024.

Previous wording

We currently expect demand from the federal government for correctional and detention facilities in our Safety segment to further increase under the current presidential administration, particularly from ICE, as a result of changes in immigration policy and funding levels of our federal government partners charged with correctional and detention responsibilities, as previously described herein. This anticipated increase in demand could result in higher utilization of our available capacity under existing contracts, as well as through new contracts utilizing our idle correctional and detention facilities or our other existing capacity. For example, in addition to the resumption of the IGSA associated with the Dilley Facility on March 5, 2025, during the first quarter of 2025, we entered into contract modifications at our 2,016-bed Northeast Ohio Correctional Center in Youngstown, Ohio, our 1,072-bed Nevada Southern Detention Center in Pahrump, Nevada, and our 1,600-bed Cimarron Correctional Facility in Cushing, Oklahoma to collectively add capacity for up to 784 ICE detainees. However, we can provide no assurance that the federal government will continue to increase the utilization of our available capacity. Further, the activation of our idle correctional and detention facilities generally requires four to six months to hire, train, and prepare our facilities to accept residential populations, which, depending on the contract structure, could result in substantial expenses before we are able to realize additional revenue.

Current wording

We currently expect demand from the federal government for correctional and detention facilities in our Safety segment to further increase under the current presidential administration, particularly from ICE, as a result of changes in immigration policy and funding levels of our federal government partners charged with correctional and detention responsibilities, as previously described herein. This anticipated increase in demand could result in even higher utilization of our available capacity under existing contracts, as well as through new contracts utilizing our idle correctional and detention facilities or our other existing capacity. For example, during the first quarter of 2025, we entered into contract modifications at our 2,016-bed Northeast Ohio Correctional Center in Youngstown, Ohio, our 1,072-bed Nevada Southern Detention Center in Pahrump, Nevada, and our 1,600-bed Cimarron Correctional Facility in Cushing, Oklahoma to collectively add capacity for up to 784 ICE detainees. However, we can provide no assurance that the federal government will continue to increase the utilization of our available capacity. Further the activation of our idle correctional and detention facilities generally requires four to six months to hire, train, and prepare our facilities to accept residential populations, which, depending on the contract structure, could result in substantial expense before we are able to realize additional revenue.

Previous wording

On December 6, 2022, we received notice from the California Department of Corrections and Rehabilitation, or CDCR, of its intent to terminate the lease agreement for our 2,560-bed California City Facility by March 31, 2024, due to the state's declining inmate population. The California City Facility, which was reported at that time in our Properties segment, was idled effective April 1, 2024. Effective April 1, 2025, we entered into a letter agreement with ICE to begin activation efforts at the California City Facility. The letter agreement authorizes initial funding up to $10.0 million with maximum funding up to $31.2 million for a six-month period while we work to negotiate and execute a long-term contract. Because we are now operating the facility rather than leasing it, the California City Facility transitioned from our Properties segment to our Safety segment during the second quarter of 2025. Revenue generated by the letter agreement with ICE at the California City Facility amounted to $8.1 million during the three and six months ended June 30, 2025. We expect to begin receiving ICE detainees at the California City Facility under terms of the letter agreement in the short term.

Current wording

On December 6, 2022, we received notice from the California Department of Corrections and Rehabilitation, or CDCR, of its intent to terminate the lease agreement for our California City Facility by March 31, 2024, due to the state's declining inmate population. The California City Facility, which was reported at that time in our Properties segment, was idled effective April 1, 2024. Effective April 1, 2025, we entered into a letter agreement with ICE to begin activation efforts at the California City Facility. The letter agreement authorized initial funding up to $10.0 million with maximum funding up to $31.2 million for a six-month period while we worked to negotiate and execute a longer-term contract. Because we are now operating the facility rather than leasing it, the California City Facility transitioned from our Properties segment to our Safety segment during the second quarter of 2025. We began receiving ICE detainees at our California City Facility during August 2025 under terms of the letter agreement. On September 29, 2025, we announced that we entered into a new two-year contract with ICE to utilize the California City Facility, effective September 1, 2025. Revenue generated at the California City Facility amounted to $11.0 million and $19.1 million during the three and nine months ended September 30, 2025. As of September 30, 2025, we cared for 500 individuals at the facility. We currently expect activation of the facility to be complete in the first quarter of 2026. Total annual revenue once the activation is complete is expected to be approximately $130.0 million.

Previous wording

Effective March 7, 2025, we entered into a letter agreement with ICE to begin activation efforts at our 1,033-bed Midwest Regional Reception Center in Leavenworth, Kansas. The letter agreement authorizes initial funding up to $5.0 million with maximum funding up to $22.6 million for a six-month period while we work to negotiate and execute a long-term contract. Revenue generated by the letter agreement with ICE at the Midwest Regional Reception Center amounted to $3.9 million and $4.9 million during the three and six months ended June 30, 2025, respectively.

Current wording

Effective March 7, 2025, we entered into a letter agreement with ICE to begin activation efforts at our Midwest Regional Reception Center in Leavenworth, Kansas. The letter agreement authorized initial funding up to $5.0 million with maximum funding up to $22.6 million for a six-month period while we worked to negotiate and execute a long-term contract. Revenue generated by the letter agreement with ICE at the Midwest Regional Reception Center amounted to $3.2 million and $8.1 million during the three and nine months ended September 30, 2025, respectively. On September 29, 2025, we announced that we entered into a new two-year contract with ICE to utilize the Midwest Regional Reception Center, effective September 7, 2025. Although we have been successful in hiring staff and have prepared the facility to accept detainees, the intake process has been delayed by legal challenges. The new agreement provides for a fixed monthly payment plus an incremental per diem payment based on detainee populations, both of which commence once the temporary injunction currently prohibiting the intake of detainees is no longer enforceable. Total annual revenue once the facility is fully activated is expected to be approximately $60.0 million. However, we can provide no assurance that we will obtain a favorable ruling in these matters or predict when these matters will be resolved. Because we expect to continue hiring staff to prepare to accept detainee populations, margins will be negatively impacted until we are able to generate revenue through the receipt of detainees under the new contract. We will offer newly hired employees opportunities to be redeployed at our other activations until the legal challenges are resolved.

Previous wording

On June 10, 2025, we announced that we entered into a definitive agreement to acquire the Farmville Detention Center, a 736-bed facility located in Farmville, Virginia. The transaction, amounting to a gross purchase price of $67.0 million excluding transaction costs, was consummated on July 1, 2025, through the acquisition of 100% of the membership interests in entities that owned and operated the facility. The Farmville Detention Center provides transportation, care, and civil detention services to adult male non-citizens through an IGSA with ICE, which expires in March 2029, and is expected to result in total annual incremental revenue of approximately $40.0 million.

Current wording

On July 1, 2025, we acquired the Farmville Detention Center, a 736-bed facility located in Farmville, Virginia. The acquisition of the Farmville Detention Center was consummated through the acquisition of 100% of the membership interests in entities that owned and operated the facility. The aggregate purchase price was $71.4 million, including the acquisition of working capital accounts, but excluding $2.0 million of transaction-related expenses. The Farmville Detention Center provides transportation, care, and civil detention services to adult male non-citizens through an IGSA with ICE, which expires in March 2029, and is expected to result in total annual incremental revenue of approximately $40.0 million. During the three months ended September 30, 2025, we generated total revenue at this facility of $10.8 million.

Previous wording

On August 1, 2024, we entered into a management contract with the state of Montana to care for an unspecified number of inmates at facilities we operate. The contract is scheduled to expire on July 31, 2026, and may be extended by mutual agreement for a total term of up to seven years. As of June 30, 2025, we cared for 365 inmates from the state of Montana at our Saguaro facility under this management contract, along with another similar contract with the state of Montana that was entered into during the fourth quarter of 2023. We also care for residents from the state of Hawaii and the state of Idaho at our Saguaro facility. On January 16, 2025, we announced that we were awarded a new management contract with the state of Montana to care for additional inmates outside the state of Montana. As of June 30, 2025, we cared for 237 inmates from the state of Montana at our Tallahatchie facility in Mississippi under this new contract. We also care for residents from Wyoming, Vermont, the U.S. Virgin Islands, USMS, and Tallahatchie, Hinds, and Harris counties at the Tallahatchie facility. This latest contract with Montana expands the geographic range of our facilities that can serve the state of Montana, where we also manage the fully occupied company-owned Crossroads Correctional Center in Shelby, Montana for the state of Montana pursuant to a separate management contract.

Current wording

On August 1, 2024, we entered into a management contract with the state of Montana to care for an unspecified number of inmates at facilities we operate. The contract is scheduled to expire on July 31, 2026, and may be extended by mutual agreement for a total term of up to seven years. As of September 30, 2025, we cared for 362 inmates from the state of Montana at our Saguaro facility under this management contract, along with another similar contract with the state of Montana that was entered into during the fourth quarter of 2023. On January 16, 2025, we announced that we were awarded a new management contract with the state of Montana to care for additional inmates outside the state of Montana. As of September 30, 2025, we cared for 239 inmates from the state of Montana at our Tallahatchie facility in Mississippi under this new contract. This latest contract with Montana expands the geographic range of our facilities that can serve the state of Montana, where we also manage the fully occupied company-owned Crossroads Correctional Center in Shelby, Montana for the state of Montana pursuant to a separate management contract. During the three and nine months ended September 30, 2025, management revenue from the state of Montana at the Saguaro and Tallahatchie facilities increased $3.2 million and $9.9 million, respectively.

Previous wording

CoreCivic Community includes the operating results of the residential reentry centers that we operated during each period, along with the operating results of our electronic monitoring and case management services. Total revenue generated by CoreCivic Community decreased $0.2 million, or 0.6%, from $30.3 million during the three months ended June 30, 2024 to $30.1 million during the three months ended June 30, 2025, and decreased $0.4 million, or 0.6%, from $60.2 million during the six months ended June 30, 2024 to $59.8 million during the six months ended June 30, 2025. CoreCivic Community's facility net operating income increased $0.4 million, or 7.1%, from $6.2 million during the three months ended June 30, 2024 to $6.6 million during the three months ended June 30, 2025, and increased $0.8 million, or 6.5%, from $11.9 million during the six months ended June 30, 2024 to $12.7 million during the six months ended June 30, 2025. During the three and six months ended June 30, 2025, CoreCivic Community generated 4.7% and 4.9%, respectively, of our total segment net operating income, compared with 5.3% and 5.0%, respectively, during the three and six months ended June 30, 2024.

Current wording

CoreCivic Community includes the operating results of the residential reentry centers that we operated during each period, along with the operating results of our electronic monitoring and case management services. Total revenue generated by CoreCivic Community increased $2.4 million, or 8.7%, from $28.2 million during the three months ended September 30, 2024 to $30.7 million during the three months ended September 30, 2025, and increased $2.1 million, or 2.4%, from $88.4 million during the nine months ended September 30, 2024 to $90.5 million during the nine months ended September 30, 2025. CoreCivic Community's facility net operating income increased $2.5 million, or 69.1%, from $3.6 million during the three months ended September 30, 2024 to $6.1 million during the three months ended September 30, 2025, and increased $3.3 million, or 21.0%, from $15.5 million during the nine months ended September 30, 2024 to $18.8 million during the nine months ended September 30, 2025. During the three and nine months ended September 30, 2025, CoreCivic Community generated 4.6% and 4.8%, respectively, of our total segment net operating income, compared with 2.9% and 4.2%, respectively, during the three and nine months ended September 30, 2024.

Previous wording

Operating margins in our CoreCivic Community segment were positively impacted during the three and six months ended June 30, 2025 by an increase in average revenue per compensated man-day, which increased from the comparable prior year periods primarily as a result of per diem increases at several of our facilities, as well as for ERCs in the Community segment amounting to $0.4 million during the three and six months ended June 30, 2025. The effect of the increased average revenue per compensated man-day and the ERCs was partially offset by increased operating expenses per man-day, which were driven primarily by higher wage rates and inflationary increases in variable expenses. Because facilities in our Community segment are typically smaller in size than those in our Safety segment, occupancy fluctuations have a larger impact on operating margin per compensated man-day. Accordingly, modest changes in occupancy can have a notable impact in our Community segment.

Current wording

Operating margins in our CoreCivic Community segment were positively impacted during the three and nine months ended September 30, 2025 by an increase in average revenue per compensated man-day, which increased from the comparable prior year periods primarily as a result of per diem increases at several of our facilities, as well as for ERCs received in the Community segment amounting to $0.4 million during the first half of 2025. In addition, variable expenses per compensated man-day decreased from the comparable prior year periods as a result of a settlement of a legal matter at a facility in the Community segment recognized during the third quarter of 2024. The effect on operating margins of the increased average revenue per compensated man-day, the ERCs, and the decrease in variable expenses per compensated man-day was partially offset by increased fixed expenses per man-day, which were driven primarily by higher wage rates and inflationary increases in other fixed expenses. Because facilities in our Community segment are typically smaller in size than those in our Safety segment, occupancy fluctuations have a larger impact on operating margin per compensated man-day. Accordingly, modest changes in occupancy can have a notable impact in our Community segment.

Previous wording

In January 2024, we completed the sale of the 120-bed Dahlia Facility, a residential reentry center in Denver, Colorado. We received gross sales proceeds of $8.0 million on the sale of the Dahlia facility compared to the carrying value of $7.5 million, resulting in a $0.5 million net gain on the sale after transaction related expenses, which was recognized in the first quarter of 2024. We continued to operate the Dahlia facility through the expiration of the management contract in June 2024. During our period of operation in 2024, this facility generated facility net operating income of $0.2 million.

Current wording

In January 2024, we completed the sale of the 120-bed Dahlia Facility, a residential reentry center in Denver, Colorado. We continued to operate the Dahlia facility through the expiration of the management contract in June 2024. In July 2024, we completed the sale of the idled 390-bed Tulsa Transitional Center, a residential reentry center in Tulsa, Oklahoma. In September 2025, we completed the sale of the idled 60-bed Columbine Facility in Denver, Colorado, which broke even during the three and nine months ended September 30, 2025. During the three and nine months ended September 30, 2024, these three facilities incurred facility net operating losses totaling $0.3 million and $0.2 million, respectively.

Previous wording

CoreCivic Properties includes the operating results of the properties we leased to government agencies during each period. Total revenue generated by CoreCivic Properties increased $0.3 million, from $4.4 million during the three months ended June 30, 2024 to $4.7 million during the three months ended June 30, 2025, and decreased $8.1 million, from $17.5 million during the six months ended June 30, 2024 to $9.3 million during the six months ended June 30, 2025. CoreCivic Properties' facility net operating income increased $1.6 million, from $1.0 million during the three months ended June 30, 2024 to $2.5 million during the three months ended June 30, 2025, and decreased $6.1 million, from $10.2 million during the six months ended June 30, 2024 to $4.1 million during the six months ended June 30, 2025. During the three and six months ended June 30, 2025, CoreCivic Properties generated 3.2% of our total segment net operating income compared with 2.6% and 5.9%, respectively, during the three and six months ended June 30, 2024.

Current wording

CoreCivic Properties includes the operating results of the properties we leased to government agencies during each period. Total revenue generated by CoreCivic Properties increased $0.6 million, from $4.1 million during the three months ended September 30, 2024 to $4.7 million during the three months ended September 30, 2025, and decreased $7.5 million, from $21.5 million during the nine months ended September 30, 2024 to $14.0 million during the nine months ended September 30, 2025. CoreCivic Properties' facility net operating income increased $1.1 million, from $1.3 million during the three months ended September 30, 2024 to $2.4 million during the three months ended September 30, 2025, and decreased $5.0 million, from $11.5 million during the nine months ended September 30, 2024 to $6.4 million during the nine months ended September 30, 2025. During the three and nine months ended September 30, 2025, CoreCivic Properties generated 3.3% and 3.2%, respectively, of our total segment net operating income compared with 2.8% and 4.9%, respectively, during the three and nine months ended September 30, 2024.

Previous wording

As previously described herein, on December 6, 2022, we received notice from the CDCR of its intent to terminate the lease agreement for our 2,560-bed California City Facility by March 31, 2024, due to the state's declining inmate population. The California City Facility was idled effective April 1, 2024. Effective April 1, 2025, we entered into a letter agreement with ICE to begin activation efforts at the California City Facility. Because we are now operating the facility rather than leasing it, the California City Facility transitioned from our Properties segment to our Safety segment during the second quarter of 2025. Rental revenue generated from the CDCR at the California City Facility was $8.6 million during the period the lease was active in 2024. Facility net operating loss was $1.1 million and facility net operating income was $6.2 million during the three and six months ended June 30, 2024, respectively, including carrying expenses we continued to incur following the lease termination. Facility net operating loss was $0.9 million during the first quarter of 2025 at the California City Facility while the facility was still being reported in our Properties segment.

Current wording

On December 6, 2022, we received notice from the CDCR of its intent to terminate the lease agreement for our 2,560-bed California City Facility by March 31, 2024, due to the state's declining inmate population. The California City Facility was idled effective April 1, 2024. Effective April 1, 2025, we entered into a letter agreement with ICE to begin activation efforts at the California City Facility, and on September 29, 2025, we announced that we were awarded a new two-year contract at this facility. We began receiving detainees at the California City facility in August 2025, and currently expect the activation to be complete in the first quarter of 2026. Because we are now operating the facility rather than leasing it, the California City Facility transitioned from our Properties segment to our Safety segment during the second quarter of 2025. Rental revenue generated from the CDCR at the California City Facility was $8.5 million during the period the lease was active in 2024. Facility net operating loss was $0.9 million and facility net operating income was $5.2 million during the three and nine months ended September 30, 2024, respectively, including carrying expenses we continued to incur following the lease termination. Facility net operating loss was $0.9 million during the first quarter of 2025 at the California City Facility while the facility was still being reported in our Properties segment.

Previous wording

For the three months ended June 30, 2025 and 2024, general and administrative expenses totaled $43.9 million and $33.9 million, respectively, while general and administrative expenses totaled $79.9 million and $70.4 million during the six months ended June 30, 2025 and 2024, respectively. General and administrative expenses consist primarily of corporate management salaries and benefits, professional fees, and other administrative expenses. General and administrative expenses increased during the three and six months ended June 30, 2025 when compared to the same periods in 2024 primarily as a result of an increase in corporate salaries and benefits, which was largely related to higher incentive-based compensation. In addition, general and administrative expenses increased in both periods as a result of $1.5 million of expenses incurred in the second quarter of 2025 related to the acquisition of the Farmville Detention Center.

Current wording

For the three months ended September 30, 2025 and 2024, general and administrative expenses totaled $45.3 million and $41.2 million, respectively, while general and administrative expenses totaled $125.2 million and $111.5 million during the nine months ended September 30, 2025 and 2024, respectively. General and administrative expenses consist primarily of corporate management salaries and benefits, professional fees, and other administrative expenses. General and administrative expenses increased during the three and nine months ended September 30, 2025 when compared to the same periods in 2024 primarily as a result of an increase in corporate salaries and benefits, which was largely related to higher incentive-based compensation. In addition, general and administrative expenses increased in both periods as a result of $0.8 million and $2.3 million of expenses incurred in the three and nine months ended September 30, 2025, respectively, associated with mergers and acquisitions, including primarily the acquisition of the Farmville Detention Center on July 1, 2025.