Corrections Corp of America 1Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Looking forward, our 11 state customers, where we provide both owned and managed solutions, and this is excluding California, we are expecting a bed shortfall from them of about 17,000 over the next 5 years. We’re pursuing 6 new state prospects, which show their projected overcrowding in the next 5 years to be about 8,000 inmates.”

“State economies continue to improve, and many states are exceeding their revenue forecast for the last half of the fiscal year. With this, we are cautiously optimistic that this will manifest itself into pricing improvement going forward, but in the near term, we’re also encouraged that this improved budget environment has led to recent actions taken by Idaho, Oklahoma and Arizona, and moving forward and using the private sector to manage their very real challenges of growth and overcrowding.”

“update on California, and just a couple of items of note. First of which is on April 11, the three-judge panel upheld its previous mandate, which was affirmed by the U.S. Supreme Court 2 years earlier, requiring that the state operate its 33 public facilities of 137.5% of design capacity. Currently, the state is operating at approximately 150%. The three-judge panel denied the state’s claim to vacate its capacity order, and has ordered compliance by December of 2013 and ordered California to submit a plan showing how they would do so.”

“”[california] has to reduce their population within those facilities by about 10,000 inmates”

“we are very excited about all the steps that we’ve been able to complete during the spring as it relates to our REIT conversion”

“not all the budget proposals are completed, but the proposals…as it relates to our contracts, I would say, is modestly better than it was last year, and it’s — last year was better than 2 years ago…So Idaho and Oklahoma, I think, are great examples of that to where we’re seeing them feel a little more comfortable, that the budget environment maybe is stabilizing in respect to the states.”

“states are feeling like they’ve reached the bottom on the deficits they had to close in their budgets. And now that they’ve stabilized and now are seeing some increases in revenues, which — I think if you talk to any CFOs at the state level, they’d say that they’ve still got — they still want to see more growth. They’re getting completely comfortable. But they have seen some growth, and they feel comfortable to go ahead and move forward on some of these decisions. So yes, I’d say the tone has modestly improved.”