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Good morning. My name is Travis, and I will be your conference operator. As a reminder, this call is being recorded. At this time I would like to welcome you to CoreCivic's Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions].
I would now like to turn the call over to Cameron Hopewell, CoreCivic's Managing Director of Investor Relations. Mr. Hopewell, you may begin your conference.
Thank you, Travis. Good morning, ladies and gentlemen, and thank you for joining us. Participating on today's call are Damon Hininger, President and Chief Executive Officer; and David Garfinkle, Chief Financial Officer. During today's call, our remarks, including our answers to your questions, will include forward-looking statements pursuant to the safe harbor provision of the Private Securities and Litigation Reform Act. Our actual results or trends may differ materially as a result of a variety of factors, including those identified in our fourth quarter 2019 earnings release issued after market yesterday, and in our Securities and Exchange Commission's filings, including forms 10-K, 10-Q and 8-K reports.
You are also cautioned that any forward-looking statements reflect management's current views only and that the company undertakes no obligation to revise or update such statements in the future. On this call, we will also discuss certain non-GAAP measures. A reconciliation of the most comparable GAAP measurement is provided in our corresponding earnings release and included in the supplemental financial data on the Investors Page of our website, corecivic.com.
With that, it's my pleasure to turn the call over to our President and CEO, Damon Hininger. Damon?
Thank you, Cameron. Good morning, everyone. And thank you for joining our fourth quarter 2019 conference call today. CoreCivic is a diversified real estate investment trust, specializing in delivering government real estate solutions to serve the public good. We are the country's largest private owner of real estate assets being used by U.S. government agencies. Following our latest portfolio acquisition last month and the recent opening of our newly constructed Correctional Facility in Lansing, Kansas, we own 136 facilities, totaling nearly 19 million square feet of real estate.
We have a 35-year history of delivering a broad range of solutions to help solve tough government challenges in flexible, cost effective ways. Our unique diversified portfolio of assets generates a steady reoccurring cash flow stream underwritten by investment-grade government tenants.
Each of our three business segments provide specialized real estate to government tenants. Our safety segment owns and manages corrections and detention facility, including 50 correctional and detention facilities with a design capacity to safely and securely care for over 72,000 people. In the last 5 years, in this segment, we have helped over 30,000 individuals achieve their high school equivalency or an industry-recognized trade certificate, which evidence-based research has shown to materially reduce recidivism rates. Our Community segment is a network of residential reentry centers and nonresidential community-based corrections alternatives that help address America's recidivism crisis and includes 29 residential reentry facilities with a design capacity to support 5,394 individuals. We also provide nonresidential community-based services to approximately 35,000 people on a daily basis.
Finally, our Property segment is a portfolio of mission-critical, government-leased properties that, as of the year-end 2019, included 28 properties, representing approximately 2.4 million feet of real estate. Subsequent to year-end, this portfolio has expanded by nearly 1 million square feet due to the recent opening of our new Lansing Correctional Facility, a new lease with Kentucky for our Southeast Correctional Complex and our acquisition of a 28-property portfolio of GSA-leased assets in January.
Our Properties portfolio produces predictable reoccurring cash flows through leases backed by the high credit quality government tenants. For the full year 2019, we generated $1.98 billion in revenue, an 8% increase from the prior year. This top line growth led to strong double-digit growth in earnings per share, FFO and EBITDA. Normal FFO per share was $2.62, an increase of 13%; and adjusted EBITDA was $444 million, a 12% increase from the prior year.
Our growth was the result of multiple accomplishments across each of our three business segments. Our Safety segment, which accounted for approximately 85% of the company's EBITDA, generated year-over-year revenue growth of 6%. During 2019, we were awarded 4 new contracts. 2 of these contract awards resulted in activation of previously idle correctional facilities. In May of 2019, our 1,422-bed Eden Detention Center was awarded a new contract from the United States Marshal Service, and our 910-bed Torrance County Detention Center awarded a new contract from Immigration and Customs Enforcement or ICE. These facilities were activated over the summer and operations were normalizing throughout the end of the year.
In September of 2019, our 2,232-Bed Adams County Correctional Facility in Mississippi was awarded a new contract from ICE, transitioning the facility from another federal partner. Our Safety segment was also awarded an out-of-state contract from the State of Kansas for up to 600 beds in our Saguaro Correctional Facility in the Arizona.
Our Property segment, which accounted for 10% of the company's EBITDA in 2019, generated year-over-year revenue growth of 34%. The growth generated within this segment was driven by M&A activity completed throughout 2018.
We deliberately tempered our M&A activity in 2019 due to the market valuation of our equity and debt securities throughout the year, which resulted from politically-motivated attacks on the company and our industry. However, we continue to pursue accretive M&A opportunities to grow our properties and community segments. We have narrowed our focus on portfolios with above-average, risk-adjusted returns, with the opportunity for utilizing alternative financing structures as evidenced by our acquisition in January of 28-property portfolio of GSA-leased assets using a DownREIT structure. This portfolio acquisition, coupled with new leases at our Lansing Correctional Facility in Kansas and the Southeast Correctional Complex in Kentucky, positions our Property segment for continued revenue and NOI growth again in 2020.
Our Community segment accounted for 5% of the company's EBITDA in 2019, but has generated 21% year-over-year revenue growth. Revenue growth in this segment was largely driven by acquisitions we made in the area of nonresidential correctional alternative services, including electronic monitoring and case management services.
We continue to pursue limited M&A opportunities for the residential municipalities and nonresidential service providers. And we acquired 2 RRCs in Virginia during the fourth quarter of 2019.
In the fourth quarter, we posted total revenue of $498 million, a 3% increase year-over-year; and normalized FFO per share of $0.59 or $0.01 below the low end of our fourth quarter 2019 guidance. The primary driver of our financial performance in the quarter was lower-than-expected utilization by ICE across our safety portfolio.
Our initial fourth quarter guidance anticipated a combination of decline in ICE utilization and additional expenses for our recently activated facilities continued to ramp to normalized utilization levels throughout the quarter.
During the spring and summer of 2019, activity across the Southwest border was at heightened levels, not reached in nearly 2 decades. In an effort to help address the humanitarian crisis, there was high utilization at many of our facilities under contract with ICE. This above-average utilization by ICE over the summer resulted in increased earnings. We correctly anticipated a reduction in utilization in the fourth quarter, but the declines were slightly larger than what we had forecasted. It is important to note that this ability to flex up or down utilization levels with -- based on real-time demand is actually one of the key reasons why ICE contracts with CoreCivic for a substantial for their detention capacity, and that flexibility is one of the key ways we provide value to taxpayers.
ICE utilization is historically the most difficult to predict of any of our government partners because there are so many complex factors at play. However, Southwest border activity returned to historical norms in the fall of last year and has remained at similar levels based on the latest available government data. This recent trend, along with other immigration policy changes implemented last year, has informed our current expectations for ICE utilization in 2020, and is reflected in our initial 2020 financial guidance.
Our full year 2020 financial guidance forecast normalized FFO per share in the range of $2.30 to $2.40, and AFFO per share in the range of $2.29 to $2.39. Our guidance also includes $0.06 per share in additional interest expense resulting from the refinancing of our unsecured bonds that were set to expire in April of 2020, and the December 2019 issuance of our $250 million Term Loan B.
Having summarized some of the key drivers of our fourth quarter and full year 2019 financial results, and our initial full year 2020 guidance, which Dave will review in more detail, I would now like to shift our focus to recent business development and market opportunities with the potential of influencing future financial performance.
Starting first with our Safety segment. So far this year, we have already announced one new safety contract. In January, we signed an emergency 375-bed contract with Mississippi to utilize our Tallahatchie County Correctional Facility to assist the state following a series of operational challenges at their nearby facility in Parkman, which has also sustained significant infrastructure damage. The 90-day contract provides optional extensions for up to 2 additional 90-day terms and allowing to take time to develop a long-term plan for their correction system.
Situations like this exemplify how critically important it is for State and Federal partners to have access to our modern real estate assets and the services we offer. Our Tallahatchie Facility has provided immediate capacity for the State to move a portion of their closed company population, which should help to improve the safety and security of the entire [indiscernible].
Without the private sector, there would be no immediate alternative solution available to the state. And we stand ready to provide the state with additional assistance should it be requested. The state of Idaho's Board of Correction has granted authority due to the Department of Corrections to award us a contract pursuant to an RFP issued last year for up to 1,200 beds. We have not yet received a final contract, but we have been in frequent communications with Department of Corrections since its announcement. We will hopefully have more to report on that in the very short term.
We are seeing a real need for modern correctional infrastructure across the country, and there is a growing number of states acknowledging this reality as a serious challenge. Recently, the governor of Arizona proposed closing the state's oldest prison in Florence to generate $275 million in savings over 3 years from avoidable repairs and upkeep. The Arizona State Prison Complex in Florence dates back to 1909 and has a capacity of 3,946 beds. Their stated plans are to utilize other public and privately owned facilities within the state that have available capacity. The state has not announced their potential transition plan, so we are awaiting potential procurement opportunities. In our Property segment, we have seen very positive momentum with new lease agreements, new development and future development opportunities. As I mentioned earlier, we've recently activated our new legacy Correctional Facility in Kansas and entered into a new lease agreement for our Southeast Correctional Complex in Kentucky. These 2 lease agreements represent 3,088 newly leased beds or over 525,000 square feet of real estate.
Our $83.2 million acquisition of a portfolio of 28 GSA-leased properties adds an additional 445,000 square feet of real estate to our Property segment's portfolio. As for development opportunities within the Property segment, State of Alabama is in an impactive process to procure 3 large scale state-of-the-art facilities, financed and constructed by the private sector in order to consolidate approximately 15 outdated, overcrowded prisons. The state estimates the aggregate size of this procurement to be approximately 10,000 beds at a cost of nearly $1 billion. The state published an RFP in the fourth quarter of 2019, and we have been publicly named as a qualified respondent to the procurement. This opportunity in Alabama will not contribute to our 2020 financial performance, but it is further evidenced that the build-finance-lease model, pioneered by CoreCivic Properties is resonating with government agencies dealing with critical criminal justice infrastructure needs.
We know there are at least half a dozen other states and many municipalities, considering a similar process to address their aged, inefficient criminal justice infrastructure. For decades, appropriators at the federal state and local level have repeatedly declined to provide sufficient funding to address pressure points within their criminal justice infrastructure, making access to private capital and industry expertise offered through our CoreCivic's Property segment, most efficient cost-effective way to address these previously unmet needs. It is very gratifying to see this offering is resonating and expect to see more of these opportunities come to market.
In our Community segment, we focused much of our attention, in 2019, on integrating the operations of our 2 nonresidential, community-based service companies we acquired in 2019 to create a consistent platform.
We believe the strategic integration position us very well to compete for new market opportunities. The largest market opportunity we are actively pursuing is the rebid of the Intensive Supervision of Appearance Program, also known as ISAP, for immigration and customs enforcement. The ISAP program is the largest electronic monitoring contract in the world, serving well over 100,000 active participants on a daily basis. We have remained engaged throughout the procurement process, which began last May, and believe we offer a very competitive option. The estimated award day for this opportunity is expected to end -- is expected by the end of this month.
We believe we have positioned the company to continue to improve portfolio utilization, as evidenced by the activation of 3 previously idled correctional facilities since the start of 2019. The activation of our Eden Detention Center, Torrance County Detention Center and Southeast Correctional Complex represents 2,988 previously idle beds. Once these contracts are fully activated, we will have 5 remaining idle correctional facilities in the portfolio, a very meaningful improvement in less than 15 months. We also believe this is to be evidence of the -- our real estate and service offerings are resonating across a diverse set of government partners with varied needs.
Each of our three business segments have multiple potential catalysts that could meaningfully contribute to additional cash flow in 2020. In addition, it is important to note that we do not have any material contracts subject to competitive rebids over the next 12 months. So we believe we are well positioned to capitalize on a large number of market opportunities outstanding. I'd like to close my remarks by providing you an update on how we are thinking about our long-term capital allocation strategy.
Our quarterly dividend is very well covered, at an AFFO payout ratio of 75% based on the midpoint of our full year 2020 financial guidance. This payout level is very manageable given our strong cash flows and well below the average REIT AFFO payout ratio.
Since converting to a REIT in 2013, we have maintained a targeted AFFO payout ratio of 80%, and at the current dividend level, our stock carries an attractive yield of over 10%. We continue to assess M&A opportunities on a case-by-case basis as we believe further growth of our Community and Property segments will generate long-term shareholder value. Since the issuance of our Term Loan B in December, the pricing of our unsecured bonds in the secondary market has meaningfully improved. However, the pricing of our bonds and the valuation of our equity securities still do not reflect our strong credit profile or stable cash generation, which requires us to target acquisitions with above-average, risk-adjusted returns and to structure unique deals that do not require significant cash at closing. Given the current market conditions, we believe the best use of our excess cash flows, in the near-term, is to reduce our leverage profile.
I'd now like to pass the call over to Dave to provide a more detailed look at our financial results in the fourth quarter, and our outlook for the first quarter and full year of 2020. Dave?
Thank you, Damon, and good morning, everyone. For the full year ended December 31, adjusted EPS was $1.72, up 18.6% from the prior year; normalized FFO was $2.62, up 13.4% from the prior year; and AFFO was $2.58, up 17.8% from the prior year.
Depending on the metric, these per share amounts were either $0.22 or $0.23 higher than the midpoint of our initial guidance published a year ago at this time. In the fourth quarter, we generated $0.35 of EPS, or $0.36 of adjusted EPS compared to our guidance range of $0.38 to $0.42. Normalized FFO totaled $0.59 per share compared to our guidance range of $0.60 to $0.64. AFFO totaled $0.58 per share compared to our guidance range of $0.59 to $0.63. Adjusted EPS was $103.5 million for the quarter.
Adjusted amounts exclude expenses associated with debt refinancing and M&A transactions, including contingent consideration on an M&A transaction reflected in the prior year quarter. Our financial results for the fourth quarter were slightly below our guidance levels due to lower-than-expected populations from U.S. integration and customs enforcement or ICE. Last quarter, I mentioned that we have lowered our Q4 ICE population projections because we did not believe the elevated levels we experienced in the second and third quarters of 2019 were sustainable as total Southwest border apprehensions had reached the highest levels in over a decade. However, ICE populations nonetheless declined to levels below our forecast.
Compared to the prior year quarter, adjusted EPS and normalized FFO decreased by $0.04 per share, and AFFO decreased by $0.01 per share. New federal contracts in 2019 to activate our previously idle 1,422-bed Eden Detention Center in Texas, and our 910-bed Torrance County Detention Facility in New Mexico were more than offset by declines in California populations at our 3,060 bed La Palma facility in Arizona, which completely vacated the facility by the end of the second quarter of 2019 as expected. Year-over-year results were also negatively impacted by higher G&A expenses and lower ICE populations at our Tallahatchie Facility in Mississippi, and at our Eloy Facility in Arizona. We continue to manage a strong balance sheet with leverage of 3.7x. At December 31, we had $92 million of cash on hand and $413 million of availability on our revolving credit facility in addition to a $350 million accordion feature under our credit facility, which matures in 2023.
During the fourth quarter of 2019, we accessed the capital markets to obtain a $250 million term loan using the proceeds towards repayment in December of $325 million of senior unsecured notes that were scheduled to mature in April 2020, with the balance funded from our revolving credit facility.
We now have no debt maturities until October 2022. In December 2019, we completed construction and activated the 512-bed complex at the Lansing Correctional Facility in Kansas ahead of schedule, and completed the 1,920-bed complex last month on schedule and below budget for a total cost of $155 million, resulting in commencement of the 20-year lease. Our 2020 capital expenditure forecast includes $21 million to $23 million in prison construction, primarily to complete construction of the Lansing Correctional Facility and in connection with the new lease signed in December 2019, with the Commonwealth of Kentucky to reactivate our 656-bed Southeast Correctional Complex pursuant to a 20-year lease agreement, including extension options.
Our 2020 capital expenditure forecast also includes approximately $7 million of tenant improvements and leasing commissions, and maintenance CapEx of approximately $60 million, split evenly between real estate and non-real estate assets. Moving next to a discussion of our earnings guidance. As indicated in the press release, adjusted EPS guidance for the first quarter of 2020 is in range of $0.26 to $0.29. Normalized FFO per share guidance for the first quarter is $0.49 to $0.53. And AFFO per share guidance is $0.50 to $0.54.
For the full year, adjusted EPS guidance is in range of $1.38 to $1.47. Full year normalized FFO per share guidance is in range of $2.30 to $2.40. And full year AFFO per share guidance is $2.29 to $2.39. Adjusted EBITDA guidance for the first quarter is $96 million to $99 million, and for the full year is $427.5 million to $437.5 million.
As a reminder, compared to the fourth quarter of 2019, Q1 is seasonally weaker because of 1 fewer day in the quarter, and because we incur approximately 75% of our unemployment taxes during the first quarter, resulting in a collective $0.04 per share decline from Q4 to Q1. Our Q1 and full year guidance reflects higher interest expense and lower utilization from ICE to several of our facilities compared with 2019 levels. From Q4 to Q1, these items account for a per share reduction of $0.05. From 2019 to 2020, these items account for a per share reduction of $0.31. We have taken into consideration recent immigration trends and policy changes implemented by the Federal Government last year in setting our forecasted levels throughout 2020.
Our full year guidance also includes a new contract in Mississippi, higher utilization at our newly expanded Otay Mesa Detention Facility, the commencement of leasing with Kansas and Kentucky and the full year impact of the activation last year of our Eden and Torrance facilities. In addition to the lease agreements with Kansas for the new Lansing Correctional Facility commencing in the first quarter of 2020 and with Kentucky for our previously added Southeast Correctional Complex commencing mid-year, our guidance for the CoreCivic Property segment includes the portfolio acquisition announced January 2, 2020, of 28 properties, all leads to the Federal Government through the General Services Administration.
We were pleased to be able to finance this $83 million acquisition with only $7 million of cash, with the balance funded by assumed debt with an attractive fixed interest rate of 4.9%, and the issuance of 1.3 million limited partnership units to the seller that are convertible into cash or common stock following a 2-year period.
As the market prices for our securities have been affected primarily by headlines from some of the industry's banking partners as well as Washington politics, we have tempered our M&A pursuits and have no other M&A transactions in our guidance. Our guidance also does not include any new contract awards beyond those previously announced as it is difficult to predict the timing of new awards. As Damon mentioned, the State of Idaho has granted authority to the Department of Corrections to award us the contract pursuant to an RFP for out-of-state capacity of up to 1,200 offenders. This, ultimately, awarded, we may activate another one of our idle facilities.
We are also pursuing several other state opportunities Damon mentioned, any of which will provide upside to our guidance. Our guidance range reflects our best estimate of ICE populations. However, such populations are the most difficult to predict and could provide upside to our guidance like they did last year.
Compared with 2019, our full year 2020 guidance reflects a per share reduction of $0.06 for higher interest expense associated with the $250 million term loan obtained in December at an interest rate of LIBOR plus 4.5%, which was used to refinance our 4% and 8% senior notes. Although we had the capacity to repay the mature notes with our revolving credit facility, which would have faced considerable interest expense, we believe refinancing such notes with longer-term capital was a more prudent strategy than relying on shorter-term bank debt.
The adjusted EBITDA guidance in our press release enables you to calculate our estimated normalized effective income tax rate of 4% to 5% for the first quarter and full year, and provide you with our estimate of total depreciation and interest expense for the first quarter and full year.
We expect G&A expenses to be approximately 6% of total revenue. Whether we are providing flexible capacity for ICE during times of emergent need like those experienced in 2019 or for the U.S. Marshal Service, both of which rely on the private sector for their detention capacity, or are providing a lease to a correctional system facing unique challenges or outdated infrastructure, we play a very important role. We understand transient federal populations, particularly ICE, can be volatile and influence our short-term financial results. So while we signed 3 large contracts with ICE, as well as 2 large contracts with the U.S. Marshal Service over the past 18 months, we have not taken our focus away from state business. In fact, we have been very successful in executing new contracts with state partners.
In 2018, we signed the aforementioned 20-year lease agreement with Kansas, bolstering our growth in the course of the Property segment, and signed management contracts with South Carolina, Vermont and Wyoming, while completing the intake of state population pursuant to new management contracts from Kentucky, Ohio and Nevada, supporting our CoreCivic Safety business. In 2019, we signed a new management contract with Kansas to utilize a portion of our Saguaro facility in Arizona, and another agreement with Kentucky to activate one of our auto facilities in the Commonwealth, this time under a lease agreement where Kentucky will operate the facility. Last month, we signed a new management contract with Mississippi, and we are in pursuit of a management contract from Idaho and a lease of an idle facility with another state.
Regardless of the jurisdiction, government agencies continue to turn to CoreCivic for the solutions we provide. We have been winning new contract awards and completing accretive acquisitions that provide a growing base of stable cash flows.
Several of these new agreements also demonstrate that we can provide facilities operated by our government partner to release in our CoreCivic Properties portfolio for a turnkey solution where we provide both the real estate and correctional services in our CoreCivic Safety portfolio. At the midpoint of our guidance for 2020, we expect to generate roughly $285 million of AFFO, a proxy for cash flow after maintenance CapEx, but before dividends, and expect to invest $15 million in revenue-producing CapEx funded from cash flows. At the current quarterly dividend rate of $0.44 per share, our dividends annualized to $210 million, leaving about $60 million of residual cash flow, which we currently expect to use to pay down debt.
Our dividend is well covered with an AFFO payout ratio of 75% based on our guidance, close to our guided dividend policy of 80% with an attractive yield of over 10%.
Our Board reviews dividend levels and our dividend policy every quarter as part of the quarterly dividend declaration process. The next Board meeting is scheduled for February 20. We expect to issue a press release shortly after that meeting, announcing the amount of the next quarterly dividend that would be paid in April.
I will now turn the call back to the operator, Travis, to open the line for questions.
[Operator Instructions]. We have a question from Joe Gomes, NOBLE Capital.
First question, looking in the fourth quarter, did understand the whole ICE and everything. But if I'm looking at the Safety segment, revenues increased year-over-year, but we all saw a big increase in expenses in the Safety segment, where they went up to 74.3% of revenues from 72.6% of revenues. I just wonder if you could talk a little bit about what was going on there?
At a high level, yes, our expenses -- let me back up. So when you see declines in populations, we're not able to necessarily reduce staff. So you have a fixed cost of staffing that you can only flex if you have significant reductions in populations. So throughout 2019, we had some pretty meaningful increases in federal populations. And so on the margin, those are higher than if you're activating an idle facility, for example. But as far as kind of at a global level, expenses in 2019 reflect higher wage rates. So you've got a very low unemployment rate so provided wage increases, had to provide several market adjustments in several of our facilities. But beyond that, I can't think of anything out of the ordinary that would influence those expense margins.
Okay. And on ICE, I was wondering if you might be able to talk a little bit about what government funding for 2020 is? Or if there's any new government policies that you guys see being bandied about that could positively or negatively impact demand from ICE?
Yes, this is Damon, and I'll answer that question, and I appreciate the question itself. So a couple of things. One is that as we look at trends month-to-month in addition to kind of real-life feedback from our partner, in this case, being ICE. And both on the data and looking at it historically, but also the kind of feedback from ICE, they indicated last summer that was extraordinary levels of population and in turn needs for capacity within our system and other facility they used throughout the country. So we knew going into the last year that they were going to see decreased utilization and really kind of get back to kind of historical levels. And we should look about 10 years back and kind of look at historical levels, and you may know already, historically too, now as you see kind of level, but you usually see a little bit of a decrease during the winter holidays, which has been pretty consistent in the last 60 days.
To your question specifically about policy and funding, so funding has been stable this year based on the demands for ICE. And then the President, I think, just released, a couple of days ago, the budget for 2021. And within that document, there is a request for increased funding of 60,000, so that would be -- 60,000 beds, I should say. So that would be an increase over current funding levels. Now you know as well as I, that's got to go through Congress and the House and the Senate. So a lot more activity on that front to determine exactly what that number is, but at least gives you a preview of what lease administration is looking for next year.
From a policy perspective, you've probably seen all the kind of articles and things we hear back from our partner relative to the cooperation or given with some of the Latin Central America countries and also with Mexico. So there's nothing really to add to that. But I'd say, generally, as we said in my comments, and it's been reported in media, I think there is -- some of those policies and agreements they've worked out has an impact on the Southwest border. Anything you would add to that, David?
No, no. But I do want to go back to your first question, Joe. I was thinking if you're looking at expenses year-over-year, we did have start-up expenses to activate our Torrance and Eden facilities. So year-over-year, Q2, we had about $2.7 million of start-up. In Q3, we had about $6.8 million of start. So those would be reflected in our margins and other -- in per diem tables that we present in the supplemental financial.
Okay, great. And one last one for me. One of the opportunities that you guys have mentioned in the past is the potential transfer of some of the ICE, or U.S. Marshals inmates from local jails to, say, a CoreCivic property. What do you guys see is there any progress in that or the actual potential of that in the near term?
Yes, great question. And I would say it's -- over the last couple of years, you don't see a lot of attention to this, but we kind of hear on the ground and different regions where we operate. There has been some incremental movement populations from city County facilities to CoreCivic and even to GEO. And the kind of common thing that we hear is that ICE through their credit, they continue to kind of raise the bar relative to quality and the type of standard they want to put in place a solely, and we have consistently met or achieved compliance with those standards, where that may be challenging for a studio or county. So you don't see a lot of press on this, but we hear anecdotally, we hear from time to time with our folks in various regions in the country. They're hearing about a city or a county facility or jail that has taken a step, either to go ahead and transition that population back to ICE and that's sort of like CoreCivic or they've just made the decision that they cannot comply with the standards that banks expects for those providers, public or private. So again, I'd say it's, incremental. We've seen some opportunity with that in different parts of the country.
[Operator Instructions]. Your next question comes from Jordan Sherman, Ranger Global.
I wanted to go back to your comments about La Palma. I'm not sure I heard that correctly. Did you say that, that is -- in the supplement, it says, it's 60% -- 59% occupied. Is that right? And is that -- where is that trending? I'm sorry, I missed the comments on that.
Yes. So yes, supplemental that, obviously, indicates end of year. I think we're pretty consistent with it today. Maybe it might be a little higher utilization as we go into first part of this year. But yes, I'd say it's trending a little bit of an increase since -- in the fourth quarter. Anything you would add to that, David?
No, and as La Palma recall, in '19, we had California vacating that facility. We've signed a new contract with ICE to kind of replace the California population but as of yet, they've not fully replaced them. So we had a transition going on throughout 2019 and California, really exiting through June, and then ICE are ramping up. I think year-over-year, I think Q4 versus Q4, I want to say they were, let me double check on that so if you want to...
Well, that's okay. What's your expectation on what will happen with that? And is that capacity you might be able to use with the Arizona situation?
Yes, good question. I'd say the first part is, ICE has indicated that location is very important to them. It's in close proximity to our Eloy Facility, which, historically, has always been utilized for ICE for, gosh, almost 20 to 25 years. So operationally, it is a very good facility for them in proximity, not only Eloy but also their Florence Facility. So ICE has indicated, kind of, I'd say, short and midterm interest on full utilization of facility. But to your second part of your question, absolutely, we'll obviously continue to kind of judge that with ICE and determine if there's other partners that could use that capacity and that might be a good fit for them.
In Q4, I averaged about 1,800 people in that facility -- Q4 '19 compared to about 900 in Q4 '18.
Right. And I'm just wondering, in terms of the outlook for the detainees for ICE and U.S. Marshals, considering the new policies in place, I'm wondering -- again, I'm not sure we all know what's going to happen longer-term on that. But I'm just wondering, does the 60,000 beds in the Trump budget actually make sense? I mean, it doesn't look like we're trending in that direction.
Yes. If you look at, I guess, the last 12 months, just look at my chart, we got as high as, I think, 56,000, 57,000 middle of last year, I guess, during the summer months, and that was, again, increased utilization based on historical standards. Today, if you look at the nationwide number, let's see, this was January. Today, that number was about 42,000, 43,000 nationally that I said in detention capacity, public or private. And what I would say is that if you look at just the amount of individuals they've apprehended on the border, that appears to be pretty consistent over the winter with historical standards looking back at 10-plus years. So that's a long way of saying, and it appears that having kind of funding, I don't know if it's 60,000, but probably some funding up to where they were last year, 55,000 based on now kind of unique things that happen from time to time but also seasonal fluctuations in population, that's probably a pretty good number. Again, 50,000, I don't know if that all can get through Congress and through the House and Senate. But I'd say kind of the funding that it got today, that might be a pretty good number for them to think about claiming now on next year. Anything you would add to that, David?
As Damon mentioned, it is typically seasonal, so you'll see declines in illegal immigration during the peak winter months and during the peak summer months. We factored into our guidance the new policies of the administration implemented last year, and that's about when we saw declines in our populations beginning in September, October-ish. So there can be substantial surges. Last year, we would not have predicted -- we did not predict the level of ICE detainees that we had throughout 2019. As I mentioned, Q2 and Q3 were kind of high watermarks for us. And it's just very difficult to predict whether that's going to happen again this year. We're not expecting it to, it's not in our guidance based on the new policies of the administration. So if it does, there would be upside.
And if I could just add one more thing to the question I was asked earlier. One thing that I think gives us -- maybe buffer just a little bit on maybe its population going up and down on is, I mean, we meet all the appropriate standards. I mean, we've got the newest, most modern facilities providing capacity to ICE. Again, we meet all the appropriate standards, not only if it's physical plans but operational standards. And our ICE facilities are the most monitored probably in our portfolio. I mean, there's a lot of government employees that are walking the halls in our facilities every day, monitoring our operations, interaction with the detainees. And so -- and we welcome that. We welcome that oversight and that constant monitoring. I guess, my point is that if ICE had the opportunity to maybe recalibrate a little bit their capacity and their system, I think we'll always get the first look versus a city or county that, again, can't maybe make the capital investment or the dollars investment to meet these standards that continue to increase and raise the bar on quality.
Understood. Actually, let me ask a question along that line before -- how much of ICE's capacity or U.S. Marshals, I don't know if U.S. Marshals has any -- is not -- is in like county or municipal facilities?
Yes, great question. So, going back to that number, let me just use a round number, say, 45,000 or maybe 50,000 of potential capacity that ICE uses on an annual basis. I would say, between us and GEO and MTC, it's probably about half of the capacity. So if the half of that capacity is private sector, so say in a different way, the other half is with the public sector, cities and counties. There is a little bit of ICE capacity that they've got where they own and operate themselves. But that's a -- it's a very small amount. So I think only a couple of thousand beds. So I say half and half. On Marshals Service, we have about, I think, 8,000, 9,000 prisoners on any given day for the Marshals Service. I think it's pretty consistent with GEO. And I'd say, David, probably with almost 60,000 federal prisoners is probably not half, it's probably maybe about 1/3 of Marshals prisoners that are in private facilities like ours and the other 2/3 are in public or -- public facility, city and county jails.
Right. And I'm just wondering, is there any -- I don't know if you've looked at the details of the budget. I know it's just preliminary or just a more talking points than it is actual budget. Is there an increase in funding requested for ICE officers for enforcement? I mean, maybe that, ultimately, would -- could drive increases in the number of detainees, immigrant -- captures and detainees?
Yes, there's actually pretty well kind of funding across the board for all of ICE and Homeland Security, I should say also and even customs and Border Patrol. So yes, staff and personnel, attorneys, so you had a lot of investments, I'd say, throughout their kind of the entire system.
[Operator Instructions]. We do have our follow-up from Mr. Sherman.
Okay. Thought I'd give someone else a chance. So just to go back to the three facilities, Adams, Tornante and Eden, what -- I was just wondering how the contracts are sort of structure? Is there a base minimum and then an incremental per DM for as or when you get above that? I'm just wondering how those work?
Yes. So it's kind of all of the above. Every contract that we negotiate kind of stands on their own. There's many things that we consider based on kind of the dynamics and needs from the partner, also the regional location and maybe flexibility, either ICE or Marshals want or vice versa, we want based on potential opportunities like in Arizona or -- and Mississippi. So it's kind of all of the above. We've got different provisions in all three.
Okay. And then, I guess, with Adams 51% -- what's the outlook for Adams usage, 51% occupied now? If ICE doesn't take up the rest of that, is there opportunities to farm that out somewhere else? Or use that for some other?
Yes, good question. It's almost kind of the same identical situations La Palma on Arizona. So it's a great location for ICE, close proximity in New Orleans, which is a key kind of airport for them on moving of individuals around the country or maybe out of the country. So it's a great location strategically for them. But it's also kind of the same kind of view we have in that facility. ICE has indicated a need and desire to use the entire facility. But we continue to kind of monitor that and talk to them real-time based on their needs because we know we have now a need in state with like Mississippi, the initial contract we did up in Tallahatchie, which is the northern part of the state, but also out-of-state placement could be an opportunity, too. So we're monitoring closely, but I guess the short answer is, ICE has indicated an interest in entire facility.
So is your expectation that they would ramp that up this -- over the next few quarters or next year? How does that sort of sort out?
Yes. I'd say, probably the way to look at that one, I guess probably it's similar to La Palmas probably during the course of this year. Again, it is a conversation and based on kind of either changes they have, we're also communicating with them that, as you heard me say in my script, too. I mean, we've got, gosh, 1, 2, 3, 4, several states, express an interest in capacity in our system. And so we're also keeping them educated about opportunities maybe where we could use capacity like in Atlanta, La Palma. So I'd say during the course of this year. But again, this will be probably kind of a day-by-day, week-by-week, we'll monitor it closely and determine based on their needs, opportunities, we can also use that capacity for someone else.
And then just the last question. I apologize if I missed it. The timing of the Idaho, either RFP or awarding, or where does that stand again?
It's, we think, any day now. So we've had -- the most notable thing was the public announcement by the Board of Corrections in January, indicating authority and approval for them to negotiate, them being the Department of Corrections, negotiate a contract with us, CoreCivic. And so we've been in constant communication with State Idaho. So we think probably any day now.
And as I mentioned in my remarks, we don't have that contract in our guidance. Would likely require the activation of an idle facility, which is probably 120-day ramp as well. So you're probably talking second half of the year before you start seeing a financial impact, if we, ultimately, get that contract awarded.
So some potential addition to this year, but obviously, a bigger, much bigger impact next year?
Right.
Right. That's exactly right.
Okay. And then just finally, I apologize. Arizona, have they said anything about the timing of their decisions? I know that was sort of a -- that came out of a left field that they would shut down that big facility. But have they put any timing on any part of that process?
I don't think they've put a hard time line on it. It was part of -- you probably know already that it was part of the Governor's state of the state address earlier this year. And so it's our anticipation that this would be a fiscal year -- next year, fiscal year event. So that would be starting July 1 of this year. Again, they haven't said exactly what they plan to do, but we anticipate that they probably will do a procurement or a series of procurements for either in-state and/or out-of-state capacity. Longer term, it could be a play where they want a owned and managed, so a safety solution and/or -- because it is a big quantity, and/or maybe a property solution where we lease it to them and develop it for them. So near-term could be capacity utilization, but long-term could be either a new facility or utilizing a lease model like we do in Kansas or proposed in Alabama.
[Operator Instructions]. We have no further questions in the queue. I'd like to turn the call back over to Mr. Hininger.
Thank you, Travis. Before we conclude the call, I once again want to take a moment to recognize all of our employees across the country who are doing great work on behalf of our government partners. Thanks to their hard work and dedication we were able to make a real difference for those in our care. For example, in 2019, approximately 6,500 high school equivalency or career trade certificates were awarded to individuals that trusted in our care. This type of accomplishment for the individuals in our care can drastically improve their ability to successfully reenter society, and it would not be possible without the commitment of our employees. Whether we are for these individuals on the road to reentry or providing a safe environment for people who have just entered our country, our employees play a meaningful and important role, and for that, I am truly, truly thankful.
I would like to thank everyone for joining us on the call today. We look forward to reporting to you our first quarter 2020 financial results in May. Thanks again.
Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.