Despite a combined revenue of more than $3.2 billion in 2012, private prison companies like GEO Group and Corrections Corporation of America (CCA) are typically careful not to highlight the fact that they exist to make a profit. But, regardless of what their PR teams may lead you to believe, these companies have business models that rest on perverse incentives — the more people they incarcerate the stronger their bottom line.
Perhaps at no other time is this more publically explicit than during the industry's quarterly earnings calls. Essentially, these calls are aimed at current and potential investors, and serve as a platform for private prison companies to tout their successes and opportunities to “create value for [their] shareholders.”
This week’s Humpday Hall of Shame belongs to George Zoley and Damon Hininger, top executives for GEO Group and CCA respectively, because you should know exactly how, in their own words, they entice people to invest in companies that profit handsomely from the pain and suffering of human beings behind bars.
The following are selected quotes taken from both CCA and GEO Group 2013 4th Quarter results earnings calls, which occurred last month. Full transcripts for the CCA and GEO Group calls are available online.
Damon Hininger, President and CEO of Corrections Corporation of America, said:
“Now because we know we have a tremendous opportunity to create value for our shareholders by offering our partners solutions that optimize the occupancy within our existing owned facilities, this continues to be our #1 priority.”
TRANSLATION: Our priority is putting more bodies in our prisons so we can make more money for our shareholders.
“Even with this progress, our CCA team continues to actively identify ways to meet the significant needs of existing or new partners to utilize the existing capacity as we look to the balance of 2014.”
TRANSLATION: Progress = filling more prison beds, and we’re working hard to find ways that we can continue to do this, including filling the empty cells we already have.
“During the fourth quarter of last year and the first quarter of this year, we achieved a number of important milestones with the activation of approximately 5,700 beds, which are expected to generate close to $100 million in annual revenues.”
TRANSLATION: Great news! We have 5,700 new prison beds to fill, which we expect to make about $100 million from.
“We have historically enjoyed solid occupancy rates in the mid to high 90s and strong customer retention rates in excess of 90%.”
TRANSLATION: We’ve enjoyed the fact that we’ve kept our prisons full and the contracts keep on coming.
“We remain focused on marketing our 6,000 idled beds in inventory, which we estimate would add $0.65 to $0.70 per share to our AFFO. We are actively pursuing several publicly known opportunities totaling 10,000 beds approximately and are exploring a number of other growth opportunities for the development of new projects and the potential purchase of assets. We expect that all of these efforts will continue to drive growth for our company and create value for our shareholders.”
TRANSLATION: We’re working hard to find ways to fill our 6,000 empty prison beds, which will make more money for our shareholders. We’re also exploring the many ways we can continue to capitalize on our system of punishment and imprisonment, which we expect will make us and our shareholders richer.