You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: We are also joined here in the room by our Vice President of Finance, Brian Hammonds.
The call today will focus on our financial results for the third quarter and provide you with other general business updates.
Going to our agenda for the call, we will provide you with a breakdown of our third quarter financial performance, discuss business development opportunities, and the latest developments with our government partners.
We will also provide you with an update on our capital allocation strategy and our continued response to the COVID-19 pandemic.
Our third quarter revenue of $471.2 million represented a 1% increase over the prior year quarter despite the sale of 47 non-core real estate assets within our property segment in multiple transactions between December 2020 and June 2021 and our decision to exit two managed-only contracts with local governments in the state of Tennessee during the fourth quarter of 2020.
And in the five quarters since we announced the change in our capital allocation strategy, we have substantially improved our credit profile, reducing our net debt balance by approximately $730 million during a time of unprecedented challenges.
We remain committed to reaching and maintaining a total leverage ratio or net debt to adjusted EBITDA of 2.25 times to 2.75 times.
Using the trailing 12-months ended September 30 of 2021, our total leverage ratio was 2.7 times.
Just one year ago, our total leverage ratio was at 4.0 time.
So, we have made significant progress.
And the last time our total leverage ratio was below 3 times was in 2012, nine years ago.
While we have touched the high end of our targeted leverage range, we remain committed to continuing to reduce debt to ensure we remain comfortably within the range.
Our EBITDA has shown to be durable since the beginning of the pandemic, but there are many other factors that could cause our net leverage ratio to fluctuate quarter-to-quarter such as changes in our net cash balance due to semi-annual interest payments on our debt, capital expenditures or changes in working capital.
We continue to believe our capital allocation strategy is the most prudent approach to positioning the Company to generate long-term value through a stable capital structure and continue to cost effectively meet the needs of our government customers with less reliance on outside partners.
I believe this is evidenced by our recent $225 million unsecured bond issuance which price nearly a 100 basis points lower than the bonds we issued back in April of this year.
However, within the next few quarters, we could also be in a position to shift our capital allocation strategy to one that once again returned a portion of our cash flows to our shareholders and less aggressively de-levers.
We believe the valuation of our equity remains well below its fair value and we feel strongly that once we achieve our debt reduction goals, we could create substantial value for our shareholders by repurchasing shares.
In 2009, one of my first acts as CEO was to seek authorization from our Board of Directors for an equity repurchase program.
So I have a full appreciation of the potential value creation that the current stock presents.
Fully appreciating the potential opportunity, we have further progress to make with our current debt reduction strategy.
We continue to see criminal justice related populations meaningfully below their pre-pandemic levels.
The declines have mostly been due to reduction in new intakes rather than early releases.
Governments have acted faster to transfer certain residents assigned to our reentry facilities to non-residential statuses such as furloughs, home confinement or early releases, to create additional space for enhanced social distancing within our facilities.
However, during the third quarter, we did see many of our state customers increase their utilization of our facilities, which contributed to modest increases in our occupancy compared with the prior year quarter.
Our Safety segment's occupancy was 73.2% in the quarter, an increase of 110 basis points compared with the prior year quarter and our Community segment's occupancy was 56.4%, up 180 basis points.
As court room operations gradually reopen and operations normalize, we anticipate this trend in utilization to continue.
And with that we are leaning way forward on increasing our staffing levels in anticipation of higher utilization rates of our partners.
This of course will likely have a material impact on margins as we go into 2022.
Normalized funds from operations or FFO for the third quarter was $0.48 per share, a decline of 8% compared with the third quarter of 2020.
However, this decline was primarily driven by our decision to convert to a taxable C corporation effective January 1st of 2021 from a REIT.
We have added disclosures in our third quarter supplemental financial information document available now on our website, which provides our pro forma results for 2020 reflecting income tax expense, by applying our estimated tax rate to pre-tax income in the prior year.
When compared to pro forma results for the third quarter of 2020, our adjusted earnings per share, normalized FFO per share and AFFO per share increased 33%, 9% and 15% respectively.
Our adjusted EBITDA of $100.9 million increased 7% compared to the third quarter of 2020, and again, this is after the sale of 47 non-core assets since the end of the third quarter of 2020.
Dave will provide greater details about our third quarter financial results, including reconciling between our GAAP and normalized results following the remainder of my comments.
We will start our operational and business development discussion with a brief update on the impact of the COVID-19 pandemic and our ongoing response.
While the rate of positive cases around the nation was significantly increasing due to the Delta variant during the third quarter, we only experienced a small temporary increase in positive cases at some of our facilities.
The most substantial impact of the emergence of the Delta variant was that it temporarily slowed the timeline for normalizing facility operations to remove various protocols that were enacted in response to the pandemic.
As we move toward normalizing operations, the most substantial challenge in today's environment is attracting and retaining qualified employees.
No different from our government partner's own correctional systems, the current employment market has caused staffing challenges for us at many locations across the country.
We have responded to the challenge by aggressively developing new and creative hiring and retention strategies.
And being in the private sector and a multi-state national employer, we have a lot of tools we can deploy in this environment.
These include increasing wages, sign on and retention bonuses and multiple other programs that can increase engagement, a sense of a shared mission, and overall job satisfaction.
Our government partners have been very collaborative in this effort by supporting our request for per diem increases that reflect above average wage inflation in current market.
Across the company this year, we have provided the large -- largest wage increases in my 12 years as CEO and we are committed to utilizing all necessary resources to address this challenge.
We are also following closely the recent vaccination mandates issued by various states and the federal government, including the September 9, 2021 executive order on ensuring adequate COVID safety protocols for federal contractors.
We are working diligently, evaluating the new guides being received from our government partners and ensure we are positioned to fully comply.
For our inmate, detainee and resident populations, we do not have the ability to mandate vaccinations.
Just as we've seen in our communities, there has been some hesitancy for many to accept the vaccine, so it should come as no surprise that the rate of vaccination acceptance is similar to that of the general public.
We continue to provide educational resources to all our residents in order to encourage more to get vaccinated.
I will move next to discuss some recent federal and state level business development updates.
We're continuing to evaluate the impact of the executive order signed by President Biden, issued in January that directed Attorney General to not renew Department of Justice contracts with privately operated criminal detention facilities.
As a reminder, the BOP takes custody of inmates who have been convicted for federal crimes and the USMS is responsible for prisoners who are awaiting trial in Federal Court.
The BOP has experienced a significant decline in inmate population since 2013 and simply does not have as much of a need for prison capacity from the private sector.
The decline in BOP population has intensified by COVID-19.
We currently have one prison contract with the BOP, accounting for approximately 2% of our total revenue.
Marshal Service populations have remained relatively consistent in recent years, so their capacity needs remain unchanged.
In fact, nationwide Marshal population has increased over the past year.
We continue to believe that the Marshals do not have sufficient detention capacity to satisfy their current needs without much of the capacity we provide.
We began the year with four contracts with the Marshals that expire in 2021.
In the first half of the year, we are able to enter into new contractual arrangements for our Northeast Ohio Correctional Center and Crossroads Correctional Center in Montana to remain operational and serve various government partners, where both facilities previously had direct contracts with the Marshals.
At the end of September 2021 our contract with the Marshals at our 600-bed West Tennessee Detention Facility expired and the federal detainee populations were transferred to alternative locations, including approximately 200 to our Tallahatchie County Correctional Facility in Mississippi.
We have elected to retain our staff from the West Tennessee Detention Facility as we pursue an active procurement for the facility with an existing government partner.
The only remaining Marshals contract I have yet to discuss is at our 1,033 bed Leavenworth Detention Center expiring in December of 2021.
Of note, we are currently in discussions with other potential government partners to utilize the Leavenworth Facility in the event that we are unable to reach a solution that enables the Marshals Service to fulfill its mission at this facility.
Our third federal partner is Immigration and Customs Enforcement or ICE, which is not impacted by the previously mentioned executive order.
They continue to be the government partner with the most significant impact from COVID-19 on their capacity utilization.
However, recent activity along the Southwest border has caused significant volatility in their utilization levels.
Nationwide, ICE detainee populations doubled during the first half of 2021 and we experienced a similar utilization increase at our facilities under contract with ICE.
During the third quarter of 2021, ICE detainee populations remained relatively flat.
As a result, our facility utilization levels continue to remain materially below historical averages.
The largest driver of their lower utilization levels has been the enactment of Title 42 since March of 2020, which prevents nearly all asylum claims at the country's borders and ports of entry in order to prevent the spread of COVID-19.
Instead, Title 42 allows individuals apprehended at the Southwest border to immediately be expelled to Mexico or the individual's country of origin.
Administrative changes and court decisions have occurred since the enactment of Title 42, which have enabled unaccompanied minors and some family units to enter and remain in the United States, while their immigration cases are adjudicated.
As I discussed last quarter, these changes essentially no impact on the demand for our services by ICE, because we do not house unaccompanied minors in any of our facilities and our one facility with family admission is provide to ICE on a fixed price basis.
We primarily provide ICE with detention capacity for adult populations and it is unclear when Title 42 will no longer be applied to adults.
Certain factors such as criminal histories or previous deportations may compel the government to keep individuals in custody instead of applying Title 42.
These situations appear to be the primary driver of the increase in ICE utilization we have experienced this year.
Whenever Title 42 is rescinded, we believe there will be a significant surge in the need for detention capacity.
Our facility support ICE for providing safe, appropriate housing and care for individuals as the agency works through the various processes associated with an individual's immigration case, deportation order or initial processing.
While we have no involvement or influence on anyone's immigration-related case, we know these matters are often quite complex and typically they take days or weeks to be adjudicated.
This results in a need for various solutions and a diverse portfolio of real estate across the country to provide housing and care for individuals while they're in ICE custody.
Our facility serve as a critical component of the real estate infrastructure needed by ICE to help them carry out their mission.
Finally, we know there has been a great deal of coverage of a minimum wage ICE detainee lawsuit faced by our largest competitor in Washington State.
We don't have a facility in Washington and so we aren't subject to litigation related to the Washington minimum wage statute.
We do have a pair of similar lawsuits in California, but those are both stayed while one of them is on appeal in the Ninth Circuit.
We don't have trial date scheduled for those and the timing of any future litigation activity is uncertain.
But as our competitor has pointed out, very similar litigation has been dismissed and that dismissal has been upheld on appeal by the Fourth Circuit Court of Appeals.
We also have other litigation around the U.S. related to the ICE voluntary work program or also known as VWP, but those lawsuits don't raise minimum wage claims.
The VWP is an ICE contract requirement and as the VWP's name suggests, it's voluntary.
Detainees aren't forced or coerced to participate in the VWP.
VWP assignments provide an opportunity to avoid idleness, improve morale, learn new skills, and earn money at or above the ICE prescribed minimum daily rate.
Moving now to state and local developments and opportunities, I'll first mention our new lease agreement with the state of New Mexico for our 596 bed Northwest New Mexico Correctional Center that we announced in September.
The new lease has an initial term of three years, but includes automatic extension options that could extend the lease term through 2041.
The new lease commenced on November 1 and we successfully transition operations at the facility to the state.
So you will see that property reclassified from our Safety segment to the Property segment during the fourth quarter.
We continue to pursue an opportunity with the state of Arizona, which adds an active procurement for up to 2,700 beds for medium and close security inmates.
The state intends to close its oldest prison facility in Florence due to its outdated condition, operational and maintenance cost concerns.
Instead of deploying taxpayer funds to build new capacity, the outstanding request for proposal will allow the state to evaluate alternative capacity available from the private sector.
We have responded to the procurement and believe the state's Department of Corrections, Rehabilitation and Re-entry is poised to move quickly on the procurement.
The only other opportunity I will mention is in Hawaii.
The state continues to determine the best approach to replace the Oahu Community Correctional Center, the largest jail facility in the state.
The existing facility has exceeded its useful life and the state is in need of a new, modern facility to meet its current and future needs.
We remain actively engaged with the state regarding various solutions we could deliver and we anticipate a competitive procurement in 2022 to replace the current facility.
First, Newsweek recently released their list of America's most responsible companies for 2021 and we were so very honored to learn of our placement on this list.
At the beginning of their report, they note and I quote "as this difficult year comes to an end, it's good to remember that we're all part of a community, neighbors, family, friends, first responders, we depend on, appreciate and hope to be helpful to each other.
Many corporations also step up, they care about being good citizens and give back to the communities they operate in".
Their ranking goes through a rigorous four-step process, starting with a review of the top 2,000 public companies based on revenue, then afterwards a detailed review of company ESG reports and the relevant KPIs along with a reputational survey to 7,500 U.S. resident.
This list is a who's who of companies I have long observed, admired, and have inspired to emulate and I am deeply grateful and proud of every single CoreCivic team member for their tireless passion for our mission that has allowed us to achieve this well-deserved recognition.
Finally, we shared last month that CoreCivic Co-founder in Industry Visionary T. Don Hutto passed away on October 22, 2021.
Known as a fierce advocate for correctional professionals and for the safety and well-being of Justice involved individuals, Don was instrumental in the creation and implementation of industry-recognized standards that greatly improved conditions for incarcerated people and those who care for them.
He will be missed by everyone who knew him and remembered truly as a hero in the field.
Prior to co-founding CoreCivic, then known as Corrections Corporation of America, with businessman Tom Beasley in 1983, Don had a long and prestigious career in the corrections industry, including as Commissioner of Corrections for the State of Arkansas and later the Director of Corrections for the Commonwealth of Virginia.
Don's rise to industry leader came through a time of uncertainty in America.
Not long before he began serving as the Commissioner of Corrections in Arkansas, the landmark hold for versus solver [Phonetic] decision declared the entire State of Arkansas' prison system unconstitutional.
At that time, there were over 40 states that had some level of control or oversight by the federal government due to inhumane conditions.
This need for higher standards is what sparked the birth of CoreCivic and assured an improved conditions across the country.
Don's experience gave him extensive insight into modernizing the systems to emphasize rehabilitation and education and he used that experience at CoreCivic.
Don was absolutely the right person at the right time to create a better way and lead our profession into the modern era.
And CoreCivic is so very grateful for his leadership, for our wonderful company.
But I am also personally grateful for his mentoring and friendship with me.
In the third quarter of 2021, we reported net income of $0.25 per share or $0.28 of adjusted earnings per share, $0.48 of normalized FFO per share and AFFO per share of $0.47.
Adjusted and normalized per share amounts exclude an impairment charge of $5.2 million for pre-development activities associated with the Alabama project that we are no longer pursuing, as disclosed last quarter.
Financial results in 2021 reflect a higher income tax provision under our new corporate tax structure compared with the prior year when we elected to qualify as a REIT.
For illustration purposes, in the supplemental disclosure report posted on our website, we present the calculations of adjusted net income, normalized funds from operations and AFFO for each quarter and full year of 2020 on a pro forma basis to reflect such metrics, applying an estimated effective tax rate of 27.5%.
Adjusted net income per share in the third quarter of 2021 of $0.28 compares to $0.21 on a pro forma basis, applying this estimated effective tax rate for the third quarter of 2020 while normalized FFO per share of $0.48 compares to $0.44 on a pro forma basis for the prior year quarter and AFFO per share of $0.47 compares to $0.41 on a pro forma basis for the prior year quarter.
Adjusted EBITDA, which is obviously before income taxes was $100.9 million in the third quarter of 2021 compared with $94.6 million in the prior year quarter.
The growth in adjusted EBITDA and the aforementioned per share metrics were achieved despite the sale of 47 properties since the end of the third quarter of 2020 and the execution of numerous refinancing transactions that were collectively dilutive for the quarter as we paid down low cost, short-term variable-rate bank debt with the proceeds from the property sales and issued new unsecured senior notes that have higher interest rates than the debt we repaid.
The property sales and refinancing transactions lowered our overall debt levels, extended our weighted average debt maturities and repositioned the balance sheet for long-term success.
The 47 properties that we sold accounted for $7.3 million of EBITDA in the prior year quarter.
Therefore, excluding these sales, adjusted EBITDA increased $13.6 million or 16% from the prior year quarter, demonstrating strong core operating results.
Occupancy in our safety and community facilities continues to reflect the impact of COVID-19, but increased to 72.1% in the third quarter of 2021 from 70.9% in the prior year quarter, and increased from 71.6% in the second quarter of 2021.
The impact of COVID-19 began in the second quarter of last year as populations, primarily ICE, declined sequentially throughout 2020 as the Southwest border was effectively closed to asylum seekers and adults attempting to cross the Southern border without proper documentation or authority in an effort to prevent the spread of COVID-19.
As the federal and state court systems have begun to return to normal operations and as the number of undocumented people encountered at the Southern border has increased, the utilization of our facilities has increased.
Operating margins have trended similarly and was 27.2% in the third quarter of 2021 compared with 23.8% in the prior year quarter and 26.8% in the second quarter of 2021.
The increase in our operating margins reflects the continuation of lower cost trends combined with higher occupancies.
Many of our facilities continue to operate with pandemic related capacity and operating restrictions that are modifying the services that we are able to provide, impacting margins compared with normal operations.
Further, staffing in this challenging labor market has become increasingly difficult and we have provided annual as well as additional off cycle wage increases and special incentives to help address depressed staffing levels.
Conversely, our government partners are experiencing the same staffing challenges which has contributed to some of the per diem increases we were able to achieve as more budget dollars are allocated to help offset the wage increases.
Turning to the balance sheet.
As of September 30, we had $456 million of cash on hand and $786 million of availability on our revolving credit facility, which matures in 2023.
During the third quarter of 2021, we issued an additional $225 million aggregate principal amount of 8.25% senior unsecured notes due 2026.
The issuance constituted a tack on to the original 8.25% senior notes we issued in April 2020 of $450 million aggregate principal amount.
The additional 8.25% senior notes were priced at 102.25% of their face value, resulting in an effective yield to maturity of 7.65%.
While we believe this effective yield is still high relative to the stability of our cash flows and credit ratings, it compares favorably to the issuance in April when the notes were priced at 99% of face value, resulting in an effective yield to maturity of 8.5%.
As a reminder, the net proceeds from the April issuance were used to fully repay $250 million of 5% senior unsecured notes that were scheduled to mature in 2022 and to repurchase, in privately negotiated transactions, $176 million of the $350 million outstanding principal balance of our 4.625% senior unsecured notes that are scheduled to mature in 2023.
We continue to be steadfast on our debt reduction strategy, paying down $188 million of additional debt during the third quarter alone, net of the change in cash, including the $112 million outstanding balance on our revolving credit facility which remains undrawn today.
Subsequent to quarter-end, we repaid $90 million of the outstanding balance on our Term Loan B, reducing its outstanding balance to $133.4 million.
Including the repayments of the mortgage notes associated with the aforementioned sale of non-core assets, during the nine months ended September 30th, 2021, we have reduced our total net debt balance by over $500 million and our net recourse debt balance by $334 million.
Our leverage, measured by net debt to EBITDA was 2.7 times using the trailing 12 months, down from 4 times using the trailing 12 months at the end of the third quarter of 2020 when we announced our revised capital allocation strategy and decision to revoke our election.
As Damon mentioned, the last time our leverage was below 3 times was 2012, which was the last year we operated as a taxable C Corporation prior to our conversion to a REIT in 2013.
Notably, 2012 followed an aggressive stock repurchase program in 2009 through 2011 when we repurchased over $0.5 billion of stock or equal to half our market capitalization today.
As a REIT from 2013 through 2020, we cannot implement a meaningful share repurchase program.
It is possible we could slip slightly above our targeted leverage ratio of 2.25 to 2.75 times in the fourth quarter, when we are scheduled to make almost $40 million of semi-annual interest payments on our unsecured notes, about $15 million in social security payments that were deferred under the CARES Act, and capital expenditures consistent with our previous guidance.
But we expect to be sustainably within the range on a quarterly basis thereafter.
We have made great strides in enhancing our capital structure by accessing the debt capital markets, addressing near term maturities, selling non-core assets, reducing debt and positioning the balance sheet to enable us to take advantage of growth opportunities and return capital to shareholders.
These steps have enabled us to reduce our reliance on bank capital and we intend to address the 2023 maturity of our bank credit facility next in order to provide us with the clarity needed around our future liquidity and to ensure the implementation of our capital strategy remains on track.
Our intention is to reduce the size of our bank credit facility and extend the maturity yet enabling us to continue operating with optimal flexibility and cost efficiency.
We continue to get increasing clarity around many of the uncertainties that existed when we suspended our financial guidance and currently anticipate providing full year 2022 guidance in February when we report our financial results for the fourth quarter and full year 2021.
I've already highlighted some of the factors experienced in the third quarter that could have an impact on our financial results for the fourth quarter.
These include the anticipation of modestly higher occupancy levels as the country continues to emerge from the pandemic.
Higher demand for our detention facilities could also result from lifting Title 42 to healthcare policy causing the Southern border to remain effectively closed in an effort to prevent the spread of COVID-19.
However, the timing of when the federal government ends Title 42, which is evaluated every 60 days, is difficult to predict and therefore likely won't have a material impact in the fourth quarter.
We also anticipate higher staffing levels as we return our correctional detention and reentry facilities to normalized pre-pandemic operations.
Longer-term, as we look toward 2022, we will endeavor to hire in anticipation of increases in occupancy, which could have a negative impact on our margins at least until we experience further increases in occupancy.
We continue to anticipate a challenging labor market, which could require us to provide further wage increases and other incentives in certain markets necessary to attract and retain qualified staffing levels.
By signing a new contract with Mahoning County at our Northeast Ohio Correctional Center and expanding the contract with Montana at our Crossroads Correctional Center, we have successfully resolved two of the four 2021 contract expirations with the U.S. Marshal Service.
The contract with the U.S. Marshal Service at our 600-bed West Tennessee Detention facility expired September 30 and was not renewed.
As we previously disclosed, we responded to a request for proposal to utilize the West Tennessee facility and we remain optimistic in signing a new contract.
We have temporarily redeployed most of the staff at this facility to other facilities we operate, while we negotiate the contract in order to provide minimal disruption in ramping back up operations.
But depending on the outcome and timing of a decision as well as the pace of utilization, we could experience a reduction in earnings in the fourth quarter of up to $0.02 per share compared with the third quarter.
Our last contract with U.S. Marshals expiring in 2021 is at our 1,033 bed Leavenworth Detention Center in Kansas, which expires in December.
We are in discussions with other potential partners to utilize the Leavenworth facility in the event we are unable to reach a solution that enables the U.S. Marshals to fulfill its mission at this facility.
Since the contract doesn't end until the end of the fourth quarter, however, we don't expect a material impact in the fourth quarter even if the contract is not renewed.
During the third quarter, we responded to a request for proposal from the state of Arizona to care for up to 2,700 inmates the state plans to transfer from a facility owned and operated by the Arizona Department of Corrections, Rehabilitation and Reentry.
We are optimistic in a contract award near the end of the year, which would obviously be more impactful in 2022.
Compared with the third quarter, we expect higher interest expense as a result of the additional issuance at the end of September of $225 million of our 8.25% senior notes, somewhat offset by the $90 million repayment in October of our Term Loan B, which has a total effective rate of 7%.
We currently estimate our income tax expense to reflect a normalized effective tax rate of 27% to 28%, although we estimate our cash taxes to be approximately 20% for the year because of net deductions for special items.

user
compname posts q3 revenue of $471.2 million.
q3 adjusted ffo per share $0.48.
q3 revenue $471.2 million.
expect to provide full year 2022 financial guidance in february 2022.

assistant