CXW 10-K & 10-Q changes, risk factors and insider trading

Privatization of correctional, detention, and residential reentry facilities has not achieved complete acceptance by either government agencies or the public at large. The operation of correctional, detention, and residential reentry facilities by private entities has encountered resistance from certain groups, such as labor unions, prison reform organizations, activists and others that believe that correctional, detention, and residential reentry facilities should only be operated by governmental agencies. Any political platform or promise, governmental agency report, investigation or inquiry, public statement by any governmental agency, policy or legislative change, or other similar occurrence or action, that seeks to, or purports to, prohibit, eliminate, or otherwise restrict or limit in any way, the federal government’s (or any state or local government’s) ability to contract with private operators of correctional, detention, and residential reentry facilities, could negatively impact our growth and our ability to renew or maintain existing contracts or to obtain new contracts and could have a materialan adverse effectimpact on our business, financial condition, results of operations orand the market price of our common stock.

On January 20, 2025, President Trump reversed an executive order issued on January 26, 2021,2021 by then-President Biden issuedthat the Private Prison EO. The Private Prison EOhad directed the Attorney General to not renew DOJ contracts with privately operated criminal detention facilities. Two agencies of the DOJ, the BOP and the USMS,USMS utilize our services. The BOP houses inmates who have been convicted, and the USMS is generally responsible for detainees who are awaiting trial. TheThis Privateexecutive Prison EOorder only applied to agencies that are part of the DOJ, which includes the BOP and USMS. We nocurrently longerdo not operate any prison contracts for the BOP. ICE facilities were not covered by thethis Privateexecutive Prison EO,order, as ICE is an agency of the DHS, not the DOJ. ForIt is possible future administrations could issue executive orders restricting the yearuse endedof Decemberprivate 31, 2024, USMScorrectional and ICEdetention accountedfacilities for 21% ($406.4 million) and 29% ($564.8 million), respectively, of our total revenue. Forby the yearfederal ended December 31, 2023, USMS and ICE accounted for 21% ($400.4 million) and 30% ($565.5 million), respectively, of our total revenue. For the year ended December 31, 2022, USMS and ICE accounted for 22% ($403.9 million) and 29% ($527.3 million), respectively, of our total revenue.government.

In addition, negative publicity regarding offenders escaping, rioting or any other disturbances at our facilities or any public perception of poor operational performance at our facilities, contract non-compliance, or other conditions (including disease outbreaks at the facilities we own and manage) at a privately managed facility may result in adverse publicity to us and the private corrections industry in general and could negatively impact our growth and our ability to renew or maintain existing contracts or to obtain new contracts, which could have an adverse impact on our business, reputation, financial condition, results of operations orand the market price of our common stock.

We are subject to fluctuations in occupancy levels, and a decrease in occupancy levels could causenegatively aimpact decreaseour in revenues and profitability.business.

While a substantial portion of our cost structure is fixed, a substantial portion of our revenue is generated under facility ownership and management contracts that specify per diem payments based upon daily or minimum guaranteed occupancy levels. We are dependent upon the governmental agencies with whichwhom we have contracts to provideutilize offendersavailable forbeds at facilities we operate. We cannot control occupancy levels at the facilities we operate. We do not lobby or advocate for any policies that determine the basis for or duration of an individual's incarceration or detention. Under a per diem rate structure, a decrease in our occupancy rates could cause a decrease in revenue and profitability. For the years 2025, 2024, 2023, and 2022,2023, the average compensated occupancy of our facilities, based on rated capacity, was 77%, 75%, 72%, and 70%,72%, respectively, for all of the facilities we operated, exclusive of facilities that are leased to third-party operators where our revenue is generally not based on daily occupancy. Occupancy rates may, however, decrease below these levels in the future. When combined with relatively fixed costs for operating each facility, a decrease in occupancy levels could have an adverse impact on our profitability.business, financial condition, results of operations and the market price of our common stock.

Our cash flow is subject to the receipt of sufficient funding of, and timely payment by, contracting governmental entities. If the appropriate governmental agency does not receive sufficient appropriations to cover its contractual obligations, it may terminate our contract or delay or reduce payment to us. While we have historically been required to continue to perform under our government contracts during government shutdowns, we are generally not paid until the government reopens. Any delays in payment, or the termination of a contract, could have an adverse effect on our business, financial condition, results of operations, cash flowoperations and financialthe condition.market price of our common stock. For example, due to the most recent government shutdown, we continue to experience delays in payments from our federal customers and due to newly added approval requirements of certain invoices by DHS. Our federal customers are required to pay us for services we perform including during government shutdowns, with interest, once the government reopens, and for all invoices not paid within set deadlines. In addition, federal, state and local governments are constantlyregularly under pressure to control additional spending or reduce current levels of spending. For example, during the fourth quarter of 2025, in response to a request from DHS to provide the agency with budgetary savings, we proposed to reduce the term of four management contracts by one year, which the agency accepted. The federal government may nonetheless elect to extend such contracts beyond their new terms. In prior years, these pressures have been compounded by economic downturns. Accordingly, we have been requested and may be requested in the future to reduce our existing per diem contract rates or forego prospective increases to those rates. Further, our government partners could reduce offender population levels in facilities we own or manage to contain their correctional costs. In addition, it may become more difficult to renew our existing contracts on favorable terms or otherwise.

Efforts to reduce the U.S. federal deficit could adversely affect our liquidity,business, financial condition and results of operations and financial condition.operations.

Additionally, considerable uncertainty exists regarding how future budget and program decisions will develop, including the spending priorities of the newcurrent U.S. presidential administration and Congress and what challenges budget reductions will present for us and our industry generally. For example, on NovemberJanuary 12,20, 2024,2025, President Trump announcedestablished aby plannedan executive order an advisory commission, the “Department of Government Efficiency” to reform federal government processes and reduce expenditures. Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential changes in budgetary priorities and spending levels, could adversely affect the funding for and delay or eliminate the ability for additional contracting or increased bed capacity.

We compete with government entities and other private operators on the basis of bed availability, cost, quality and range of services offered, experience in designing, constructing, and managing facilities, and reputation of management and personnel. While there are barriers to entering the market for the ownership and management of correctional, detention, and residential reentry facilities, these barriers may not be sufficient to limit additional competition. In addition, our government customers may assume the management of a facility that they own and we currently manage for them upon the termination of the corresponding management contract or, if such customers have capacity at their facilities, may take offenders and residentsindividuals currently cared for in our facilities and transfer them to government-run facilities. Since we are paid on a per diem basis with no minimum guaranteed occupancy under most of our contracts, the loss of such offenders and residents,individuals, and the resulting decrease in occupancy, would cause a decrease in our revenues and profitability.

Governmental agencies typically may terminate a facility contract at any time without cause or use the possibility of termination to negotiate a lower per diem rate. We believe our cost of corrections and detention solutions is competitive, particularly when compared to alternative corrections and detention capacity. We regularly engage and collaborate with our customers to provide them with competitive rates and value for the services we provide. During the fourth quarter of 2025, for example, in response to a request from DHS to provide the agency with budgetary savings, we proposed to reduce the term of four management contracts by one year, which the agency accepted. The government may nonetheless elect to extend such contracts beyond their new terms. In the event any of our contracts are terminated or are not renewed on favorable terms or otherwise, we may not be able to obtain additional replacement contracts. The non-renewal, termination, renegotiation or competitive re-bid of any of our contracts with governmental agencies could materiallyhave adverselyan affectadverse impact on our business, financial condition,condition and results of operations and liquidity,operations, including our ability to secure new facility contracts from others.

Our growth is generally dependent upon our ability to obtain new contracts to develop and manage correctional, detention, and residential reentry facilities. This possible growth depends on a number of factors we cannot control, including crime rates and sentencing patterns in various jurisdictions, immigration policy, governmental budgetary constraints, and governmental and public acceptance of the privatization of correctional, detention, and reentry facilities. The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, immigration policies that result in reduced migration to the U.S. or a decrease in the number of people apprehended and detained, the expansion of alternatives to incarceration and detention, leniency in conviction or parole standards and sentencing practices through the decriminalization of certain activities that are currently proscribed by criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, detained, convicted, and sentenced, thereby potentially reducing demand for correctional or detention facilities to house them. Immigration reform laws are an ongoing focus for legislators and politicians at the federal, state, and local level and policies that deny entry into the U.S. for any reason could result in a decrease in the demand for our services. Legislation has also been proposed in numerous jurisdictions that could lower minimum sentences for some non-violent crimes and make more inmates eligible for early release based on good behavior. On December 21, 2018, then-President Trump signed legislation, known as The First Step Act, that reduces sentences for first-time offenders in possession of a gun when committing a crime, eliminates mandating life-time sentences for three-time offenders, provides judges more discretion in crafting sentences for some drug-related offenses, and allows offenders to seek a retroactive reduction in sentences affected by the disparity in the sentences for crack and powder cocaine cases narrowed by the Fair Sentencing Act of 2010. Although, under long-standing policy, CoreCivic does not draft, lobby for, promote, or in any way take a position on policies that determine the basis or duration of an individual's incarceration or detention, CoreCivic supported adoption of The First Step Act because the legislation aligns with our publicly stated commitment to advocate for a range of recidivism-reducing policies by providing additional resources to help ensure that incarcerated individuals are given the best possible chance to successfully return to their communities and stay out of prison. Also, the expansion of alternatives to incarceration and detention, such as electronic monitoring or the use of other technologies, may reduce the number of offenders who would otherwise be incarcerated or detained. Similarly, reductions in crime rates, increases in resources dedicated to preventing crime, reduced funding for law enforcement, or strained law enforcement resources could lead to a reduction in arrests, which could lead to a decrease in convictions and sentences requiring incarceration at correctional facilities.

Expectations about continued growth in the utilization of detention beds by the federal government may not be realized, which could negatively impact our stock price.

We currently expect demand from the federal government for our correctional and detention facilities to continue to increase under the newcurrent presidential administration, particularly from ICE, as a result of anticipatedrecent changes in immigration policy and funding levels of our federal government partners charged with correctional and detention responsibilities. This anticipated continued 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. However, we can provide no assurance that the federal government will increase the utilization of our available capacity. Further, the activation of our idle correctional and detention facilities generally requires fourthree to six months to hire, train, and prepare our facilities to accept residential populations, which could result in substantial expenses before we are able to realize additional revenue. If the demand from the federal government for our correctional and detention facilities is not realized or does not increase to levels generally expected in the marketplace, our stock price could decline.

We may face community opposition to facility location, which may adversely affect our ability to obtain or timely activate new contracts.

Our success in obtaining new awards and contracts sometimes depends, in part, upon our ability to locate land that can be leased or acquired, on economically favorable terms, by us or other entities working with us in conjunction with our proposal to construct and/or manage a facility. Some locations may be in or near populous areas or require certain zoning or permitting and, therefore, may generate legal action or other forms of opposition from residents in areas surrounding a proposed site. When selecting project sites, we attempt to conduct business in communities where local leaders and residents generally support the establishment of a privatized correctional, detention, or residential reentry facility. Even if we identify sites where local leaders and residents generally support the establishment of a correctional, detention, or residential reentry facility, whether to be publicly or privately operated, suchconstructing endeavorsor expanding a facility, or proposing to utilize a facility for immigration detention, may still face resistance by broader groups to facilities perceived as supporting over-incarceration.over-incarceration or immigration detention. Therefore, future efforts to find suitable host communities may not be successful. We may incur substantial costs in evaluating the feasibility of the development of a correctional, detention, or residential reentry facility. As a result, we may report significant charges if we decide to abandon efforts to develop a correctional, detention, or residential reentry facility on a particular site. Further, in many cases, the site selection is made by the contracting governmental entity. In such cases, site selection may be made for reasons related to political and/or economic development interests and may lead to the selection of sites that have less favorable environments.sites.

We may incur significant start-up and operating costs on new contracts before receiving related revenues, which may have an adverse impact on our cashbusiness, flowsfinancial condition and results of operations and not be recouped.

When we are awarded a contract to provide or manage a facility, we may incur significant start-up and operating expenses, including the cost of constructing the facility, purchasing equipment and staffing the facility, before we receive any payments under the contract. We may also experience a disruption in cashour flowsbusiness when transitioning from one contract to another. For example, during 2022, as a result of a new contract award from the state of Arizona for up to 2,706 inmates, we transitioned the population atBecause our 3,060-bed La Palma Correctional Center from ICE detainees to inmates from the state of Arizona, which resulted in the disruption of earnings and cash flows during the transition period. Disruptions like these could result in a significant reduction in our cash reserves and may make it more difficult for us to meet other cash obligations. In addition, a contractcontracts may be terminated prior to itstheir scheduled expiration, and as a result, we may not recover these expenditures or realize any return on our investment.

Government agencies may investigate and audit our contracts and operational performance, and if any deficiencies or improprieties are found, we may be required to cure those deficiencies or improprieties, refund revenues we have received, or forego anticipated revenues, and we may be subject to penalties and sanctions, including contract termination and prohibitions on our bidding in response to Requests for Proposals.RFPs.

The industry in which we operate is subject to extensive federal, state, and local regulations, including educational, environmental, health care, data privacy, transportation, telecommunications, and safety regulations, which are administered by many regulatory authorities. Some of the regulations are unique to the corrections industry, some target private, for-profit entities by imposing location requirements, compliance requirements, elevated litigation risk and financial penalties only on private, for-profit correction and detention providers, and some are unique to government contractors. The combination of regulations we face is unique and complex. Facility management contracts typically include reporting requirements, supervision, and on-site monitoring by representatives of the contracting governmental agencies. Corrections and reentry personnel are customarily required to meet certain training standards and, in some instances, facility personnel are required to be licensed and subject to background investigation. Certain jurisdictions also require us to award subcontracts on a competitive basis or to subcontract with certain types of businesses, such as small businesses and businesses owned by members of minority groups. Our facilities are also subject to operational and financial audits by the governmental agencies with whichwhom we have contracts.contract. Federal regulations also require federal government contractors to self-report evidence of certain forms of misconduct. We may not always successfully comply with these regulations and contract requirements, and failure to comply can result in material penalties, including financial penalties, non-renewal or termination of noncompliant contracts and/or our other facility contracts, exclusion from new contract procurement or RFP bidding, and suspension or debarment from contracting with certain government entities.

In addition, private prison managers are subject to government legislation and regulation attempting to restrict the ability of private prison managers to house certain types of inmates, such as inmates from other jurisdictions or inmates at medium or higher security levels. Legislation has been enacted in several states, and has previously been proposed in the United States Congress, containing such restrictions. Such legislation, if enacted, could have an adverse effect on us.our business.

There also has been increasing focus by U.S. and foreign government authorities on environmental matters, such as climate change, the reduction of greenhouse gases and water consumption. In particular, the State of California passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, starting in 2026. InFurthermore, Marchexisting 2024, the SEC adopted new rules regarding climate-related disclosures; however, on April 4, 2024, the SEC issued an order staying the new rules pending the completion of ongoing judicial review. If ultimately implemented, such climate-related disclosure rules could significantly increase compliance burdens, associated regulatory costs,laws and complexity.regulations Newmay be revised or revisednew laws and regulations or new interpretations of existing laws and regulations, suchmay asbe thoseadopted relatedor become applicable to climateus, change,which couldmay affect the operation of our properties or result in significant additional expense and restrictions on our business operations. The costs to defend a claim under such new or revised laws, or to comply with such laws or regulations, could be material and could adversely affect our business, financial condition and results of operations.

Our inmate transportation subsidiary, TransCor, is subject to regulations promulgated by the Departments of Transportation and Justice. TransCorSuch mustregulations also comply with the Interstate Transportation of Dangerous Criminals Act of 2000, which covers operational aspects of transporting prisoners, including,include, but are not limited to, background checks and drug testing of employees; employee training; employee hours; staff-to-inmate ratios; prisoner restraints; communication with local law enforcement; and standards to help ensure the safety of prisoners during transport. Any changes in such regulations could result in an increase in the cost of our transportation operations.

From time to time, we enter into agreements with telecommunications providers to provide telephone services to residents in our facilities. Although we are not a telecommunications provider, these services are subject to regulations which may change from time to time. We are subject to the direct and indirect effects of these regulations. Non‑compliance with these regulations, either by us or by our telecommunications providers, subjects us to risks which could result in increases to our costs or decreases in our revenue. The impact to our revenue is limited because a significant amount of commissions paid by our telecommunications providers is passed along to our customers or is reserved and must be used for the benefit of offendersindividuals in our care.

The failure to comply with data privacy, securityprivacy and exchangesecurity legal requirements could have a materialan adverse impact on our business, reputation, financial position,position and results of operations, cash flows and reputation.operations.

We are subject to complex and evolving U.S. federal and state privacy laws and regulations, which sometimes conflict among the various jurisdictions where we do business. For example, we are subject to HIPAA, which requires us to protect the privacy and security of individually identifiable health information, known as “protected health information” and recognize individual rights related to understanding and controlling how health information is used or disclosed. Various states have passed laws pertaining to the processing of personal data that require companies, including us, to provide new disclosures and options to such persons about data collection, use and sharing practices. Some of these laws are already in effect, while others will go into effect during 2025. HIPAA and state laws require us to report data breaches to affected individuals, government regulators, and in certain cases involving large breaches, the media. Further, the U.S. federal government and a significant number of additional states are considering expanding or passing privacy laws in the near term. We are also subject to increasing legal requirements with respect to the use of artificial intelligence and machine learning applications and tools (including in relation to hiring and employment practices) and biometric information. These legal requirements are rapidly changing and are subject to uncertain application, interpretation and enforcement standards. Our current or future use of artificial intelligence or machine learning tools in our business operations could expose us to new or additional costs and risks, including the potential introduction of new vulnerabilities or cybersecurity risks within our information technology systems and the potential inadvertent or unauthorized release of confidential or protected health information resulting from the use (whether or not authorized) of artificial intelligence or machine learning tools by our employees, contractors, agents, representatives or affiliates. In addition, the artificial intelligence tools we may incorporate into certain aspects of our operations may not generate the intended efficiencies and may impact our business results.

The increasingly complex, restrictive and rapidly evolving regulatory environment at the federal and state level related to data privacy and data protection, including with respect to protected health information and the use of artificial intelligence, may require significant continued effort and cost, changes to our business and data processing practices and impact our ability to obtain and use data. These laws provide for civil penalties for violations, and some confer a private right-of-action to certain individuals for data breaches. Federal and state regulatory bodies, including the Federal Trade Commission andCommission, the California Privacy Protection AgencyAgency, and state attorneys general are engaging in enforcement investigations and actions with respect to privacy and data protection. There is no assurance that our security controls, training of employees on data privacy and data security, and policies, procedures and practices will prevent the improper use or disclosure of personal data. Our inability to adapt or comply with such legal requirements, or the improper use or disclosure of personal data in violation of data privacy laws could harm our reputation, cause loss of consumer confidence, subject us to government enforcement actions, or result in private litigation against us, which could result in loss of revenue, increased costs, liability for monetary damages, fines and/or criminal prosecution, all of which could have a materialan adverse impact on our business, reputation, financial position,position and results of operations and cash flows.operations.

We currently derive, and expect to continue to derive, a significant portion of our revenues from a limited number of governmental agencies. The three primary federal governmental agencies with correctional and detention responsibilities, ICE, the USMS, and the BOP accounted for 51%54% of our total revenues for the year ended December 31, 20242025 ($1,001.9$1,193.5 million). For the year ended December 31, 2024,2025, ICE, USMS, and the BOP accounted for 29%35% ($564.8$770.7 million), 21%18% ($406.4$390.6 million), and 2%1% ($30.7$32.2 million), respectively, of our total revenue. Although the revenue generated from each of these agencies is derived from numerous management contracts and various types of properties,properties (i.e. correctional, detention, and reentry,reentry), the loss or substantial reduction in value of one or more of such contracts could have a materialan adverse impact on our business, financial condition,condition and results of operations, and cash flows.operations. We expect to continue to depend upon federal agencies, including ICE and the USMS, and a relatively small group of other governmental customers for a significant percentage of our revenues.

UnlikeThe thefederal BOP,government thehas USMSpreviously doesadopted policies to not ownrenew detention capacity and relies on the private sector, along with various government agencies, for its detainee population. We currently have two detention facilities that have directDOJ contracts with theprivately USMS.operated Becausecriminal ofdetention facilities. Although the lackcurrent ofadministration 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. On January 20, 2025, President Trumphas reversed thethese Private Prison EO. However,policies, it is possible future administrations could issue similar or new executive orders restricting the use of private correctional and detention facilities by the federal government.

The success of our business depends in large part on the ability and experience of our senior management. The unexpected loss of any of these persons could materiallyhave adverselyan affectadverse impact on our business and operations.business.

In addition, the services we provide are labor-intensive. The success of our business, and our ability to satisfy the staffing and operational performance requirements of our contracts, require that we attract, hire, develop and retain sufficient qualified personnel. When we are awarded a facility management contract or open a new facility, we must hire operating management, correctional and detention officers, and other personnel. Our inability to hire sufficient qualified personnel on a timely basis, or experiencing excessive turnover or the loss of significant personnel at existing facilities, could adversely affect our business and operations.business. These risks mayhave bebeen intensified by the activation of multiple previously idle facilities under new management contracts with ICE, where the activation process is not yet complete, and could in the future be compounded if we have the federal government seeksopportunity to activate multipleadditional idle facilities to carry out the immigration policies implemented under President Trump's second presidential administration.facilities. Many of our contracts include specific staffing requirements, and our failure to satisfy such requirements may result in the imposition of financial penalties or loss of contract.

Workers' compensation, auto liability, employee health, and general liability insurance represent significant costs to us. Because we are significantly self-insured for workers' compensation, auto liability, employee health, and general liability risks, the amount of our insurance expense is dependent on claims experience, our ability to control our claims experience, and in the case of workers' compensation and employee health, rising health care costs in general. Unanticipated additional insurance costs could adversely impact our results of operations and cash flows, and the failure to obtain or maintain any necessary insurance coverage could have an adverse impact on us.our business, financial condition and results of operations.

Many of our facility contracts provide for fixed fees or fees that increase by only small amounts during their terms. If, due to inflation or other causes, our operating expenses, such as wages and salaries of our employees, insurance, medical, and food costs, increase at rates faster than increases, if any, in our revenues, then our profitability would be adversely affected. WeIn the past, we have experienced increases in personnel costs and expect the labor marketcosts. toThe remaincontinuation challenging,or whichintensification of such increases could have a materialan adverse effectimpact on our operations.business, Seefinancial "Partcondition II,or Item 7. Management's Discussion and Analysisresults of Financial Condition and Results of Operations – Results of Operations and Management's Discussion and Analysis of Financial Condition and Results of Operations – Inflation."operations.

We maintain business relationships with key partners, suppliers, channel partners and other parties that have complementary products, services or skills. We depend, in part, on the performance and capabilities of these third parties and on the financial condition of, and our relationship with, distributors and other indirect channelbusiness partners, which can affect our capacity to effectively and efficiently serve current and potential government partners. We depend on these third parties and suppliers to also adequately protect themselves from theagainst risks ofthat they may face, including cybersecurity risk, to ensure timely delivery of products and services we procure. Additionally, cost inflation and supply chain disruptions may lead to higher laborcosts andcharged otherby costs,such asthird wellparties asor anthe inabilityunavailability of the products or services they provide. Should we be unable to procuresource such products needed to deliver theor services wefrom provide,alternative whichor couldlower adverselycost affectproviders, our business, financial condition and results of operations.operations could be adversely affected.

The primary risk we face for asset impairment charges is associated with real estate that we own. As of December 31, 2024,2025, we had $2.1 billion in property and equipment, including $319.0$149.7 million in long-lived assets at sevenfour idled CoreCivic Safety facilities, one idled non-core CoreCivic Safety facility, one idled CoreCivic Community facility,facilities and twoone idled CoreCivic Properties correctional facilities.facility. We can provide no assurance that we will be able to secure agreements to utilize our idle properties, or that we will not incur impairment charges in the future.

Certain of our facilities are subject to options to purchase and reversions. Nine of our facilities are subject to an option to purchase by certain governmental agencies. Such options are exercisable by the corresponding contracting governmental entity generally at any time during the term of the respective facility contract. Certain of these purchase options are based on the depreciated book value of the facility, which essentially could result in the transfer of ownership of the facility to the governmental agency at the end of the life used for accounting purposes, while other options to purchase are exercisable at prices below fair market value. See "Business – Facility Portfolio." If any of these options are exercised, there exists the risk that we will be unable to invest the proceeds from the sale of the facility in one or more properties that yield as much cash flow as the property acquired by the government entity. In addition, in the event any of these options isare exercised, there exists the risk that the contracting governmental agency will terminate the management contract associated with such facility. For the year ended December 31, 2024,2025, the nine facilities currently subject to these options generated $344.6$374.5 million in revenue (17.6%16.9% of total revenue) and incurred $302.4$314.7 million in operating expenses.

Cybersecurity threats: Our systems and data are subject to the potential for cyberattackscybersecurity incidents including unauthorized access, data breaches, and malicious software. Any such incidents could result in the loss of sensitive information, significant operational disruptions, legal liability, and reputational harm.

Force majeure: Unforeseeable circumstances or circumstances beyond our controls such as geopolitical conflicts, natural disasters, etc. may cause significant operational disruptions,disruptions to our information technology systems or those on which we rely, which could result in material recovery costs or loss of customer confidence.

The current cybersecurity threat environment presents increased risk for all companies, including companies in our industry. We, our employees, government partners, and third parties are regularly the target of cyberattacks and other attempts to breach, or gain unauthorized access to, our information systems and databases. Moreover, given the current cybersecurity threat environment, we expect the volume and intensity of cyberattacks and attempted intrusions to continue to increase in the future. Cybersecurity threats and techniques used in cyberattacks may be pervasive, sophisticated and difficult to prevent, including, computer viruses, malicious or destructive code (such as ransomware), social engineering (including phishing, vishing and smishing), denial of service or information or security breach tactics that could result in disruptions to our business and operations, unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction or theft of confidential, proprietary or other information, including intellectual property of ours, our employees or of third parties. Cyberattacks are carried out on a worldwide scale and by a growing number of cyber actors, including organized crime groups, hackers, terrorist organizations, extremist parties, hostile foreign governments, state-sponsored actors, activists, disgruntled employees and other third parties. For example, several well-known companies have recently disclosed high-profile security breaches involving sophisticated and highly targeted attacks on their company's infrastructure or their customers' data, which were not recognized or detected until after such companies had been affected notwithstanding the preventive measures they had in place. In addition, since Russia's invasion of Ukraine and the conflict in Israel and the surrounding areas, many companies have experienced heightened cybersecurity risks. Cybersecurity threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence, machine learning and quantum computing by making fraud detection more difficult, particularly with detection devices that use voice recognition or authentication. Further, the information systems of third parties upon which we rely in connection with our business, such as vendors, suppliers, government partners, and other third-party service providers, could be comprised in a manner that adversely affects us and our information systems. Additionally, the failure of our employees to exercise sound judgment and vigilance when targeted by social engineering or other cyberattacks may increase our vulnerability.

We are subject to risks related to corporate social responsibility.

As of December 31, 2024,2025, through our CoreCivic Safety segment, we operated 4244 correctional and detention facilities, 3840 of which we owned or controlled via a long-term lease, with a total design capacity of approximately 62,00068,000 beds. Through our CoreCivic Community segment, we operated 2120 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 6five properties, with a total design capacity of approximately 10,0008,000 beds. We are the nation's largest owner of partnership correctional, detention, and residential reentry facilities and one of the largest prisonoperators operatorsof such facilities in the United States. Our size and experience provide us with significant credibility with our current and prospective customers, and enable us to generate economies of scale in purchasing power for food services, health care and other supplies and services we offer to our government partners.

OnIn addition, on January 20, 2025, President Trump reversed an executive order issued on January 26, 2021,2021 by then-President Biden issuedthat the Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, or the Private Prison EO. The Private Prison EOhad 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. TheThis Privateexecutive Prison EOorder only applied to agencies that are part of the DOJ, which includes the BOP and USMS. We no longer operate any prison contracts for the BOP. U.S. Immigration and Customs Enforcement, or ICE,ICE facilities were not covered by thethis Privateexecutive Prison EO,order, as ICE is an agency of the Department of Homeland Security, or DHS, not the DOJ. ForIt is possible future administrations could issue executive orders restricting the yearsuse endedof Decemberprivate 31, 2024correctional and 2023,detention facilities by the USMSfederal accounted for 21% ($406.4 million) and 21% (400.4 million), respectively, of our total revenue.government.

We also offer our customers an attractive portfolio of correctional, detention, and reentry facilities that can be leased for various needs as an alternative to providing "turn-key" correctional, detention, and residential reentry bed space and services to our government partners. InOver Junethe 2023,last six years, we announced that we hadhave entered into a lease agreementagreements with the Oklahoma Departmentstates of Corrections,Oklahoma, orNew ODC,Mexico, and Kentucky for our 1,670-bed Allen Gamble Correctional Center. The lease agreement includes a base term that commenced on October 1, 2023, with a scheduled expiration date of June 30, 2029, and unlimited two-year renewal options. We previously operated the Allen Gamble facility in our Safety segment under a management contract with the ODC. The management contract was scheduled to expire on June 30, 2023. However, effective July 1, 2023, we entered into a 90-day contract extension for the management contract, after which time, operations of the Allen Gamble facility transferred from us to the ODC in accordance with the lease agreement. In September 2021, we announced that we had entered into a three-year lease agreement with the state of New Mexico atCenter, our 596-bed Northwest New Mexico Correctional Center, which was recently extended under an option period for another three-year term. We previously operated the Northwest New Mexico facility in our Safety segment under a contract with the state of New Mexico. The lease agreement commenced on November 1, 2021 and includes extension options that could extend the term of the lease through October 31, 2041. The lease of these two facilities, along with the lease of our 656-bed Southeast Correctional ComplexComplex, respectively. We retain responsibility for facility maintenance throughout the terms of the leases, which have expiration dates ranging from October 2027 to theJune Kentucky2030. DepartmentThe leases of Corrections,these orthree KYDOC,correctional originating in 2019facilities demonstrate our ability to react quickly to our partners' needs with innovative, flexible and cost-effective solutions. We previously operated these three correctional facilities for various government partners. We intend to pursuerespond to additional opportunities to lease prison facilities to government and other third-party operatorsagencies in need of correctional capacity.

Through the combination of our operational initiatives to (i) provide valuable and critically needed services that could increase our revenues and increase the utilization of our available beds, (ii) deliver new bed capacity through new facility construction and expansion opportunities, (iii) expand our real estate-only solutions, (iv) grow the utilization of our community corrections facilities, (v) develop or acquire new business offerings that expand the range of solutions we provide to government partners and diversify our cash flows, and (vi) contain our operating expenses, we believe we will be able to maintain our competitive advantage and continue to diversify the range of services we provide to our customers at an attractive price, thereby producing value for our stockholders. As further explained under the heading "Liquidity and Capital Resources," through our revised capital allocation strategy, upon achieving targeted debt reduction levels we beganhave been allocating a substantial portion of our free cash flow to returning capital to our shareholders through share repurchases, further enhancing stockholder value.

Asset impairments. The primary risk we face for asset impairment charges is associated with facilities we own. As of December 31, 2024,2025, we had $2.1 billion in property and equipment, net, including $315.2$149.7 million in long-lived assets at ninefive idled correctional facilities.facilities that are operated with a core staffing complement to remain currently available and that are being actively marketed as solutions to meet the correctional or detention needs of potential customers. The net carrying values of the ninefive idled facilities as of December 31, 20242025 were as follows (in thousands):

We also evaluate on a quarterly basis, market developments for the potential utilization of each of ourits idle propertiesfacilities in order to identify events that may cause us to reconsider ourits assumptions with respect to the recoverability of book values as compared to undiscounted cash flows. We consider the cancellation of a contract in our Safety or Community segment or an expiration and non-renewal of a lease agreement in our Properties segment as indicators of impairment and test each of the idled propertiesfacilities for impairment when weit areis notified by the respective customers or tenants that they would no longer be utilizing such property.facility.

During the year ended December 31, 2024,2025, net income was $68.9$116.5 million, or $0.62$1.08 per diluted share, compared with net income of $67.6$68.9 million, or $0.59$0.62 per diluted share, for the previous year. Financial results for 20242025 reflect $3.0 million of expenses associated with mergers and acquisitions, asset impairments of $1.5 million, and a net gain on the sale of real estate assets of $3.3$1.0 million and $3.1 million of asset impairments. Financial results for 2024 also reflect $31.3 million of expenses associated with debt repayments and refinancing transactions.million. For the year ended December 31, 2024,2025, income tax expense reflects a net benefit of $9.8$1.0 million associated with these special items.

Financial results for 20232024 reflect an $0.8 milliona gain on the sale of real estate assets,assets $2.7of $3.3 million and $3.1 million of asset impairments,impairments. andFinancial $0.7results for 2024 also reflect $31.3 million of expenses associated with debt repayments and refinancing transactions. For the year ended December 31, 2023,2024, income tax expense reflects a net expensebenefit of $0.2$9.8 million associated with these special items and a change in our corporate structure.items.

CoreCivic Properties segment, consisting of the 6five correctional real estate properties owned by CoreCivic.CoreCivic held for lease to government agencies.

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 offenderindividual in our care 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.individual in our care. We believe the measurement is useful because we are compensated for operating and managing facilities at an offendera 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 offendersindividuals in our care 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 years ended December 31, 20242025 and 20232024:

The $89.0$256.8 million, or 4.8%,13.3%, increase in total management revenue was primarily a result of an increase in revenue of $64.4$145.8 million driven primarily by an increase of 3.5%7.3% in average revenue per compensated man-day. The increase in average revenue per compensated man-day primarily resulted from the effect of per diem increases at many of our facilities.facilities, along with a change in business mix. The increase in total management revenue was also a result of an increase in revenue of $26.5$109.6 million driven primarily by an increase in average daily compensated population from 20232024 to 2024,2025, includingnet of the revenueeffect generated byof one additionalless day of operations due to a leap year in 2024. The increase in revenue resulting from the increases in average revenue per compensated man-day and average daily compensated population was net of the effect of the reduction in compensated populations at our Allen Gamble Correctional Center and the termination of an IGSA with respect to the STFRC. Notwithstanding the termination of this IGSA, which generated operating margins higher than the portfolio average, we believe the positive impact of the increase in average revenue per compensated man-day at our other facilities has resulted in an increase to our operating margins as residential populations recovered from the impact of COVID-19 and helped offset the wage and employee benefit increases we have been incurring, as further discussed hereinafter. Revenue generated from our electronic monitoring and case management services during 20242025 decreasedincreased $1.9$1.4 million (from $36.7 during 2023 to $34.8 million during 2024 to $36.2 million during 2025).

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 51%54% and 52%51% of our total revenue in 20242025 and 2023,2024, respectively, increasing $7.0$191.6 million, or 0.7%,19.1%, in 20242025 from 2023.2024. 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 increasesincreases. atThe certainincrease facilitiesin andfederal asrevenue afrom result2024 to 2025 was partially offset by the effect of one additionalless day of operations due to a leap year in 2024, partially offset by the termination of an IGSA with respect to the STFRC.2024.

State revenues from contracts at correctional, detention, and residential reentry facilities that we operate increased $36.8$36.5 million, or 5.0%,4.7%, from 20232024 to 2024.2025. State revenues 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. StateMost notably, state revenues alsoincreased increased$13.2 million due to higher utilization from the statesstate of Montana andresulting Wyomingfrom due totwo new management contracts executed during 20232024 and 2024,2025, as previously described herein, as well as higher utilization from other states under existing management contracts. State revenues generatedalso increased $14.3 million during 2025 when compared to 2024 also benefited from the state of Georgia due to increases in average daily populations as well as the impact of per diem increases in 2025. The increase in state revenues in 2025 was partially offset by the effect of one additionalless day of operations due to 2024 being a leap year. The increaseyear in state revenues was partially offset by a decrease in state revenues at our Allen Gamble Correctional Center that resulted from a new lease agreement effective October 1, 2023, as further described hereinafter, and is now reported in our Properties segment.2024.

Total expenses per compensated man-day increased to $83.18 during 2025 from $77.16 during 20242024. fromExpenses $76.59per duringcompensated 2023.man-day Weincreased as a result of start-up expenses at our California City Facility, our Midwest Regional Reception Center, our West Tennessee Detention Facility, and our Diamondback Correctional Facility. 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 been progressively improving,improved since the COVID-19 pandemic, recruiting has beenremains particularly challenging sinceat thecertain startfacilities ofin theparticular pandemicgeographic duelocations, toresulting the front-line nature of the services we provide, and the shortage of nursing staff across the country intensified as a result of the COVID-19 pandemic and the challenging labor market. Further, we have incurredin incremental expenses to help ensure sufficient staffing levels under unique and challenging working conditions.levels. While we werehave been able to reduce the use of these temporary incentives byat $12.8most million during 2024 when compared to 2023facilities due to the improving hiring environment, we expect to continue to incur a certain level of incremental expenses in the future, particularly ifas demand from the federal government for capacity at our correctional and detention facilities rapidlyis increases under the new presidential administration,increasing, particularly from ICE, that could result from changes in immigration policy.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 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.

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 63%62% and 60%63% of our total operating expenses during 20242025 and 2023,2024, respectively. 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 inmate 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 vacancy deductionsvacancies as a result of the labor shortages, which are reflected as reductions to other management revenue. Estimating vacancyrevenue 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 vacancyrevenue 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.

Operating expenses incurred by CoreCivic Properties in connection with facilities we lease to third-party operators weredecreased consistent$4.2 million, or 30.4%, during 20242025 when compared towith 2023.2024. The increasedecrease inwas operatingprimarily expensesa in our Properties segment resulting from the transitionresult of the Allenexpiration Gambleand Correctional Center from our Safety segment to our Properties segment effective October 1, 2023 was offset by the expirationnon-renewal of the lease agreement with the California Department of Corrections and Rehabilitation, or CDCR, at our California City Correctional CenterFacility effective March 31, 2024,2024. andThe byCalifornia City Facility transitioned from our Properties segment to our Safety segment during the expirationsecond quarter of the2025, leaseas we entered into an agreement with ICE to reactivate and operate the ODC at our North Fork Correctional Facility effective June 30, 2023, as further described hereinafter.facility.

fluctuations in our operating results because of, among other things, changes in occupancy levels; competition; contract renegotiations or terminations including as a result of a change in facility ownership; inflation and other increases in costs of operations, including a rise in labor costs; fluctuations in interest rates and risks of operations;

our ability to successfully identify and consummate future development and acquisition opportunities, integrate their operations, and realize projected returns resulting therefrom; and the availability of debt and equity financing on terms that are favorable to us, or at all.

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 MarchJune 31,30, 2026, through our CoreCivic SafetyResidential segment, we operated 4464 correctionalcorrectional, detention, and detentionreentry facilities, 4060 of which we owned or controlled via a long-term lease, with a total design capacity of approximately 68,00072,000 beds. Through our CoreCivic CommunityServices segment, we operatedprovided 20mail residentialorder reentrypharmacy centers,services whichto weover 600 correctional facilities, including correctional facilities owned or controlledoperated viaby aCoreCivic, long-termacross lease,32 withstates, aas totalwell designas capacitytransportation ofand approximatelyelectronic 4,000monitoring beds.and case management services. In addition, through our CoreCivic Properties segment, we owned five properties,properties held for lease to government agencies, with a total design capacity of approximately 8,000 beds.

In addition to providing fundamental residential services, our correctional, detention, and residential reentry facilities offer a variety of rehabilitation and educational programs, including basic education, faith-based services, life skills and employment training, and substance abuse treatment. These services are intended to help reduce recidivism and to prepare individuals in our care for their successful reentry into society upon their release. We also provide or make available to individuals in our care certain health care services (including medical, dental, and mental health services), food services, and work and recreational programs. OnWe Aprilhave 1,been 2026,a weflexible acquiredand Clinicaldependable Solutionspartner Pharmacy,for orgovernment CSP, in an all-cash transaction. CSP is one of the largest providers of mail order pharmacy services to correctional facilities in the United States, servicingfor over 60040 correctional facilities, including CoreCivic, across 28 states. We expect the acquisition of CSP to diversify our cash flows in a complementary business and a growing market.years.

We are a Maryland corporation formed in 1983. Our principal executive offices are located at 5501 Virginia Way, Brentwood, Tennessee, 37027, and our telephone number at that location is (615) 263-3000. Our website address is www.corecivic.com. We make available on or through our website certain reports and amendments to those reports that we file with or furnish to the SEC in accordance with the Securities Exchange Act of 1934, as amended, or the Exchange Act. Such reports include our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and10-Q, our Current Reports on Form 8-K and our definitive proxy statement. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. In addition, we routinely post on the “Investors” page of our website news releases, announcements and other statements about our business and results of operations, some of which may contain information that may be deemed material to investors. Therefore, we encourage investors to monitor the “Investors” page of our website and review the information we post on that page. Information contained on our website is not incorporated by reference herein and is not part of this Quarterly Report. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at the following address: www.sec.gov.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, or OBBBA. OBBBA appropriates a total of $75 billion in mandatory funding to ICE for immigration enforcement activities and to increase detention capacity. Specifically, OBBBA appropriates $45 billion for single adult alien detention capacity and family residential center capacity. This funding is a significant increase in funding historically provided to ICE for border security and immigration detention. The funding will remain available through September 30, 2029, and is in addition to base annual appropriations during that time period. The additional funding is also being used by the Department of Homeland Security, or DHS, to hire nearly 10,000 new ICE officers to implement the immigration enforcement initiatives. On June 10, 2026, President Trump signed into law an approximate $70 billion budget reconciliation bill, the "Secure America Act", which secures total funding to the DHS for ICE and Customs and Border Protection, or CBP, through September 30, 2029.

Given the legislative and executive actions mentioned above, among others, we believe the short-term growth opportunities of our business are particularly attractive as federal government agencies consider their emergent needs. During 2025, ICE began to utilize additional bed capacity in our portfolio at facilities with existing contracts, we 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 4,5006,000 individuals, or 44.7%,59.6%, from the beginning of 2025 through MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, 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. On August 3, 2026, we were awarded a new contract with ICE to utilize one of these facilities, our 1,600-bed Prairie Correctional Facility located in Appleton, Minnesota, or the Prairie Facility, a facility that has been idle since 2010.

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.Kansas, or the Midwest Facility. 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 longer-term contract. On September 29, 2025, we announced that we entered into a new contract with ICE effective September 7, 2025. The City of Leavenworth filed a lawsuit alleging that a Special Use Permit, or SUP, was required to activate the facility, which resulted in a delay in the intake process. In December 2025, we filed an application for the SUP, and subsequently obtained approval for the SUP on March 11, 2026. We began accepting detainees at the Midwest facilityFacility on March 12, 2026. The new agreement, which expires September 6, 2027, provides for a fixed monthly payment plus an incremental per diem payment based on detainee populations. As of MarchJune 31,30, 2026, we cared for 94379 individuals at the facility. On August 4, 2026, we sold the Midwest Facility to DHS, and we continue to manage the facility in accordance with the existing management agreement for the Midwest Facility with ICE.

On April 1, 2025, we entered into a letter agreement with ICE to begin activation efforts at our 2,560-bed California City Detention Facility, or 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 long-term contract. 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 effective September 1, 2025. As of MarchJune 31,30, 2026, we cared for 1,8171,674 individuals at the facility. On November 12, 2025, a putative class action case was filed by seven ICE detainees against ICE, seeking injunctive relief related to operation of the facility. The case was filed by attorneys affiliated with three non-governmental organizations. We are not currently a party to the lawsuit, but moved to intervene to seek appeal of the class certification order. The injunctive relief sought by Plaintiffs could impact operation of the California City Facility. On February 6, 2026, the Northern District of California Court provisionally granted class certification for at least 120 days,certification, and ordered ICE to ensure access to medical care, disability accommodations, and recreation opportunities to detainees housed at the California City Facility. On March 30, 2026, the case was transferred to the Eastern District of California. If Plaintiffs continue to pursue injunctive relief and the Court orders such relief as requested, such relief could negatively impact the financial performance of the facility. See Note 8 of the Notes to the Consolidated Financial Statements contained in this Quarterly Report for further discussion of the pending litigation. On July 2, 2026, we sold the California City Facility to DHS, and we continue to manage the facility in accordance with the existing management agreement for the California City Facility with ICE.

On August 14, 2025, we announced that we had been awarded a new contract through an IGSA with ICE to resume operations at our previously idled 600-bed West Tennessee Detention Facility in Mason, Tennessee. The West Tennessee facility had been idle since September 2021. The IGSA expires in August 2030 and may be further extended through bilateral modification. We began receiving ICE detainees at the West Tennessee facility during September 2025, and as of MarchJune 31,30, 2026, we cared for 385523 individuals at the facility.

On October 1, 2025, we announced that we had been awarded a new contract through an IGSA between the Oklahoma Department of Corrections and ICE to resume operations at our previously idled 2,160-bed Diamondback Correctional Facility in Watonga, Oklahoma. The Diamondback facility had been idle since 2010. The new contract commenced on September 30, 2025, expires in September 2029, and may be further extended through bilateral modification. We began receiving detainees in December 2025, and as of MarchJune 31,30, 2026, we cared for 7351,522 individuals at the facility.

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 2025 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,impairments and 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 2025 Form 10-K. There were no newly identified critical accounting policies during the first threesix months of 2026, nor were there any material changes to the critical accounting policies and estimates discussed in our 2025 Form 10-K.

Our results of operations are impacted by the number of correctionalcorrectional, detention, and detentionreentry facilities we operated, including 4060 we owned or controlled via a long-term lease and four owned by our government partners (CoreCivic SafetyResidential), the number of residential reentry centers we owned or controlled via a long-term lease (CoreCivic Community),and 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:

Three and Six Months Ended MarchJune 31,30, 2026 Compared to the Three and Six Months Ended MarchJune 31,30, 2025

Net income was $37.9$37.1 million, or $0.38$0.37 per diluted share, for the three months ended MarchJune 31,30, 2026, compared with net income of $25.1$38.5 million, or $0.23$0.35 per diluted share, for the three months ended MarchJune 31,30, 2025. Net income was $75.1 million, or $0.76 per diluted share, for the six months ended June 30, 2026, compared with net income of $63.7 million, or $0.58 per diluted share, for the six months ended June 30, 2025. Financial results for the three and six months ended MarchJune 31,30, 2026 reflect $2.4$0.7 million and $3.1 million, respectively, of expenses associated with mergers and acquisitions, as further described hereinafter. For the three and six months ended June 30, 2026, income tax expense reflects a net benefit of $0.2 million and $0.9 million, respectively, associated with this special item. 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 MarchJune 31,30, 2026, the2025, income tax expense reflects a net benefit of $0.7$0.4 million associated with this special item.

CoreCivic CommunityResidential segment, consisting of the 2064 residentialcorrectional, detention, and reentry centersfacilities thatwe aremanage, 60 of which we owned or controlled via a long-term lease and managedfour of which are owned by CoreCivic.third CoreCivicparties, Communitywith alsoa includesdesign the operating resultscapacity of our72,000 electronicbeds. monitoringSubsequent andto casequarter-end, managementwe services.sold four detention facilities we owned, although we continue to manage these facilities.

Total revenue consists of management revenue we generate through CoreCivic Safety and CoreCivic CommunityResidential in the operation of correctional, detention, and residential reentry facilities, as well as the revenue we generate through CoreCivic Services from the operations of CSP, TransCor and our electronic monitoring and case management services.RMS. 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 by segment for the three and six months ended MarchJune 31,30, 2026 and 2025 (in millions). (The revenue amounts for the Services segment are net of intercompany eliminations):

TheRevenue. $126.1Total revenue in our Residential segment increased $91.6 million, or 26.1%,17.5%, increaseand in$216.5 totalmillion, managementor revenue21.7%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared with the same periodperiods in 20252025. The increase in both the three- and six-month periods was primarily a result of an increase in revenue of $71.2$68.9 million and $139.5 million, respectively, driven primarily by an increase of 13.5%12.6% and 13.0%, 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. The increase in total managementrevenue revenuein both the three- and six-month periods was also a result of an increase in revenue of $53.7$22.7 million and $77.0 million, respectively, driven by an increase in average daily compensated population from 2025 to 2026.

Average daily compensated population increased 5,814,2,337, or 11.3%,4.3%, to 57,24356,363 during the three months ended MarchJune 31,30, 20262026, compared to 51,42954,026 during the three months ended MarchJune 31,30, 2025. Average daily compensated population increased 4,066, or 7.7%, to 56,801 during the six months ended June 30, 2026, compared to 52,735 during the six months ended June 30, 2025. The increase in average daily compensated population was primarily a result of an increase in occupancy largely due to higher ICE populations,populations includingresulting from new contracts to reactivate the Dilley Facility, ourthe California City Facility, our West Tennessee Detention facility, and our Diamondback Correctional Facility, and the Midwest Facility. These fourfive facilities accounted for an increase in average daily compensated population of 4,7984,621 and 4,715 during the three and six months ended MarchJune 31,30, 20262026, respectively, as compared with the same periodperiods in 2025, and accounted for an increase in revenue of $88.0 million and $189.2 million during the three and six months ended June 30, 2026, respectively, as compared with the same periods in 2025. We currently expect average daily compensated populations and revenue to continue to increase in the second half of 2026 as a result of these new contracts. In addition, our acquisition of the Farmville Detention Center effective July 1, 2025 also contributed to the increase in average daily compensated population. At MarchJune 31,30, 2026, we cared for 580698 individuals at the Farmville facility. Partially offsetting these increases in average daily compensated population, ICE populations in our care at facilities other than those recently activated declined during both periods as a result of a recent decline in detention populations nationwide, as further discussed hereinafter. Average daily compensated occupancy in our SafetyResidential segment was 78.4% and Community segments was 79.6% and 77.0%76.8% during the three months ended MarchJune 31,30, 2026 and 2025, respectively, and was 79.0% and 76.9% during the six months ended June 30, 2026 and 2025, respectively. This increase in average daily compensated occupancy during the six-month period occurred despite an increase in average available beds due to the activation and transfer of ourthe 2,560-bed California City Facility from the Properties segment to the SafetyResidential segment effective April 1, 2025. We began receiving ICE detainees at ourthe California City Facility during August 2025 and, as of MarchJune 31,30, 2026, we cared for 1,8171,674 individuals at the facility.

The solutions we provide to our federal customers, including primarily ICE and the U.S Marshals Service, or USMS, continue to be a significant component of our business. The federal customers in our SafetyResidential and Community segmentssegment generated approximately 58%53% of our total revenue for both the three months ended June 30, 2026 and 49%2025, increasing $78.2 million, or 27.2%, during the three months ended June 30, 2026 as compared with the same period in 2025. The federal customers in our Residential segment generated approximately 56% and 52% of our total revenue for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, increasing $116.8$195.0 million, or 48.4%,36.9%, during the threesix months ended MarchJune 31,30, 2026 as compared with the same period in 2025. 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.

In addition, as previously mentioned, demand from ICE has resulted in the activation of five previously idled facilities. The following table presents the estimated total annual revenue from each of these activated facilities:

State revenues from contracts at correctional, detention, and residential reentry facilities that we operate increased $7.1$10.0 million, or 3.6%,5.0%, duringfrom the threesecond quarter of 2025 to the second quarter of 2026. State revenues increased $17.1 million, or 4.3%, from the six months ended MarchJune 31,30, 20262025 as compared withto the samecomparable period in 2025.2026. State revenues in both periods increased primarily 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 increases in average daily populations at certain of our facilities.

Operating Expenses. Operating expenses incurred by CoreCivic Safety and CoreCivic Community in connectionthe Residential segment increased $90.5 million, or 23.4%, during the second quarter of 2026 as compared with the operationsame period in 2025, 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 $93.8$184.0 million, or 25.2%,24.5%, during the threesix months ended MarchJune 31,30, 2026 whenas compared with the same period in 2025. Operating expenses increased primarily as a result of wage increases across our portfolio. Throughout 2025, we achieved higher staffing levels and we continue to see improvement in our attraction and retention of facility staff in the current labor market. In addition, wages and other operating expenses 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 changes in immigration policies under the current presidential administration. The increase in operating expenses in both the three- and six-month periods includes start-up related expenses at our Midwest Regional Reception CenterFacility during the first quarter of 2026, when we officially activated the facility and began accepting residential populations from ICE following receipt of an SUP during the quarter. These activation-related expenses are expected to continuecontinued into the second quarter of 2026. The increase in operating expenses from the prior year period was also 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 during the three and six months ended MarchJune 31,30, 2026 whenas compared to the same periodperiods in the prior year2025 as a result of the acquisition of the Farmville Detention Center on July 1, 2025.

The increase in operating expenses during the three and six months ended MarchJune 31,30, 20262026, whenas compared with the same periodperiods in the prior year2025, was partiallyalso offseta by $5.6 millionresult of employee retention credits, or ERCs, recognizedreceived in the amount of $8.3 million and $11.0 million during the three and six months ended June 30, 2025, respectively, compared with $5.6 million received during the first quarter of 2026.2026, Wewhich recognized $2.8 million of ERCs duringrepresented the firstfinal quarterpayment ofexpected 2025.to be received related to ERCs. 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.

Total expenses per compensated man-day increased to $88.55$93.05 during the three months ended MarchJune 31,30, 2026 from $78.47$78.66 during the three months ended MarchJune 31,30, 2025.2025, and increased to $90.92 during the six months ended June 30, 2026 from $78.66 during the same period in the prior year. Expenses per compensated man-day increased in both periods as a result of start-up expenses at ourthe California City Facility, our Midwest Regional Reception Center,Facility, our West Tennessee Detention Facility, and our Diamondback Correctional Facility, as we had not yet reached stabilized occupancy at these facilities. The increase in total expenses per compensated man-day 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 partiallyalso offseta byresult of the ERCs,timing of ERCs received, as previously mentioned.

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 63% of our total operating expenses during the three months ended March 31, 2026 and 2025. 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.

Variable expenses per compensated man-day increased to $23.72$24.78 during the three months ended MarchJune 31,30, 2026, from $20.84$21.27 during the same period in the prior year, anor increase16.5%, ofand 13.8%.increased to $24.38 during the six months ended June 30, 2026 from $21.15 during the same period in the prior year, or 15.3%. The increase in variable expenses per compensated man-day in both periods was primarily due to the start-up expenses at four previously idle facilities and the resumption of operations at our Dilley Facility on March 5, 2025, combined with the effect of an elevated inflation rate applicable to our variable expenses. In addition, variable expenses per compensated man-day increased 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.

Facility Management Contracts. We enter into facility management contracts to provide bed capacity and management services to governmental entities in our CoreCivicResidential Safety and CoreCivic Community segmentssegment for terms typically ranging from one to five years, with additional renewal periods at the option of the contracting governmental agency. Accordingly, a substantial portion of our facility management contracts are scheduled to expire each year, notwithstanding contractual renewal options that a government agency may exercise. Although we generally expect these customers to exercise renewal options or negotiate new contracts with us, one or more of these contracts may not be renewed by the corresponding governmental agency. Further, our government partners can generally terminate our management contracts for non-appropriation of funds or for convenience.

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 May 31, 2026. WeDuring continuethe second quarter of 2026, we agreed to discussextend 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 willat continuethis tofacility signthrough extensions.May Further,31, 2031. However, we lease the Elizabeth facility from a third party under a lease agreement scheduled to expire on June 30, 2027. We can provide no assurance that we will be able to extend the lease, which could result in the termination of our contract with ICE if we are unable to extend the lease agreement or identify an alternative place of performance acceptable to ICE. We generated total revenue of $5.6 million and $22.6$11.2 million at this facility during the three months ended March 31, 2026 and the twelvesix months ended DecemberJune 31,30, 2025,2026, respectively. At MarchJune 31,30, 2026, we cared for 268256 detainees at this facility under terms of the most recently extended contract.

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