GEO - Earnings call transcript Q2 2020

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Operator

Good morning everyone and welcome to The GEO Group's Second Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. this being that note also event recorded. is Please like the Executive conference this President, time, over turn would I Paez, At call to to Relations. Corporate Vice Pablo Please go ahead.

Pablo Paez

Blake joining will afternoon Group's GEO Services. Evans, Schlarb, quarter Zoley, results XXXX us thank Operator. Chairman, of With second everyone President our Care; results. are and Officer you, today's discussion Good you This quarter Thank for today Ann us earnings of Chief for The Secure GEO and we Officer; George and Davis, Chief Founder; and of Financial discuss Brian second afternoon President GEO outlook. Executive

will We issued included discuss in information. GAAP supplemental A live call webcast on is session. question-and-answer our basis and disclosure basis we reconciliation investor results from non-GAAP This basis non-GAAP morning. investors.geogroup.com. a information will conference conclude website to the is we being the call release also at this press with Today

discuss in Safe much today statements beliefs Additionally we with the answers and are include matters. forward-looking of intended current within to securities respect regarding the statements questions response we fall to forward-looking our These expectations provisions of may the including various your to Harbor the laws. information will give

reports. Commission Zoley. differ Exchange in and CEO, that filings various as please a including our factors call Chairman Our Forms materially result With from over actual and turn the this the results XX-Q, George? of our allow in which may those forward-looking George X-K and Securities to statements me are to XX-K, contained

George Zoley

pay for the and our debt also updated and quarter our This everyone. issued fourth quarters. to morning and guidance results, delever. down regarding for Thank reported third you, Pablo, to and afternoon guidance policy updated efforts guidance our full-year, and our second We've dividend provided the good we

second resulted better the expected some that favorable trends in we cost financial quarter, experienced During than performance.

challenges associated our second pandemic. COVID-XX with these face continues trends the during company by to encouraged we're the unprecedented favorable quarter, While

our all deployed increasing all for remains employees, non-essential all protective of COVID-XX. We've mitigate our pandemic, across Services have to facilities employees been and COVID-XX of one on employees have incredible experienced and care. by facilities. have From our always COVID-XX those as cases staff procured that employees the the COVID-XX have our communities outset and residential to this of our staff of focus these challenges, facilities and in and ensuring Despite in facilities, with implemented at been have and commitment facilities on protective have by also the early risks has to helped our to we our our and lived the we and company most our entrusted we have refine manage our ongoing the at GEO of and taken on testing our appropriate and risks care shown these of through continues these in global in believe safety facemasks number focused some frontline impacted our our We to of government inmates the those steps partners, health steps individuals saturation widespread the priority. we personal employees testing conducted allowed our and testing CDC and facilities, our visitation. suspended both our all that number times. steps have our ramping-up equipment Our associated pandemic, resilience that of today been and personal at the and difficult pandemic our as detainees an Working Secure guidance with mitigate issued staff evaluate necessary. and implemented the additional And in equipment

has COVID-XX service provider government spread of of our impact several our as company. across essential While negative an continued the had operations a have segments uninterrupted

overall has Southwest and in in occupancy the at the well crossings all Prisons. sentencing an decline operational border, court We U.S. promote a at Federal facilities centers in along the driven for service Marshals by and our of apprehensions XX% federal to reduced to level. also ICE, a overall Lower Bureau decrease ICE distancing than processing in levels occupancy activity social have as decline in as experienced less capacity practices. has been ICE

minimum of guaranteed consistent service ensure last staffing our contracts intended As to price fixed noted GEO quarter, Secure delivery. adequate most levels payment we Services and contain provisions or

occupancy the to pandemic. COVID-XX populations, to the expire to at the James the the decided rebid to Bureau our current has Our for in decline continue our The set that experienced in D. decline Georgia of at also has the of Bureau Marshals result lower levels Ray will of in populations as those a Prisons a Federal in operate year. expectation is Due part for contract balance this which Facility U.S. overall September ICE and XX. of not is end

updated reflects the for Our expiration on XX. contract guidance September now of the this year

it to and mark the cost expect the governmental of managing challenges continued offers deal to James populations. Facility with to We effective for D. solution prison attractive believe an other Ray agencies government agencies

that a do reentry Despite access for Our occupancy used year. our rhetoric negative and by service services expect associated on of impact with a services. a underpinned supported had providers and and we challenges by the recognize, in significant We assets our essential created government this is which business has are cash global valuation earnings, also however we believe business, to our segment our high our that the continue lower remainder the of centers. to role the for remain as as regarding political capital. has that Day GEO mischaracterization reporting strong. real estate current contracts believe that government quality result of the Care flows concerns of facilities, long-term pandemic, levels experienced our COVID-XX We provision programs future

payments payment, given To determined reduce down towards this dividend million new to this an debt our year have recognize interest our to anticipated Beginning upcoming board that quarterly of be capital $XXX October average $X.XX and based various and being quarterly our of our debt. annualized we any pay $XX in With solely and able in XXXX, and directors annually with discretion our have pay the factors. a the maturities $X.XX until we debt company environment. repayment. $XXX million dividend million to anticipate apply of flow shareholders the of importance share expect or cash don't this excess the our on per dividend debt dividend and we share, our to management board team and excess cash thereafter it current of apply While to flows would best target, end, of we repayment within per preservation

of dividend to dividends to future. focusing allow GEO cost will our REIT should new our structured balance a sustain payment give We increase that Our debt. to traded in as sufficient remain our flexibility and providing the to value our level repaying believe on will a allow also REIT us us debt will also shareholders publicly remaining while

to at undertake we the fourth process corporate facility the levels. our expect and During budgeting and cost opportunities identify annual will savings quarter, and third

our facilities agencies positions. At third-party company-owned the to identify outlook, or that over Brian? I'll turn individuals. time, to to results, this can to to and Brian call expect we liquidity be review Additionally, sold government Evans

Brian Evans

$XXX and $X.XX we reported income GEO to diluted Today, everyone. second per million quarter afternoon, of Good revenues George. net you, share. attributable Thank approximately of

in diagnostic $X.X Our million in million a these startup medical on closeout second expenses, estate before $X.X in associated in pre-tax, of tax million real and reflect pre-tax, $X.X tests, quarter expenses expenses equipment, expenses and with tax results COVID-XX million the protective tax, loss $X.X $XXX,XXX assets personal adjustments. effect before related

diluted of net second quarter Excluding per we these share. $X.XX items, reported adjusted income

second of $X.XX share. quarter reported also AFFO We diluted per

our our resulted impact several to have COVID-XX several continuing continues second pandemic in lower Moving in programs through at March to levels has a of The beginning company. our occupancy quarter. and of The outlook. the and segments facilities on late negative pandemic

through revenue ICE approximately in the decline to occupancy end U.S. of for lower of Marshals our the X% expect levels We and resulting facilities estimated at an year, continue full-year. the

company-owned the federal Georgia the Facility part in Federal decided Prisons COVID-XX Bureau for rebid in to has the James of prison bed populations, driven which to Ray in by the our X,XXX contract pandemic. been Additionally, due decline has not D.

XX, now updated to guidance of generated the At reflects annualized September Our million. of the pandemic. expecting the $XX slowdown the partners our which due shortfalls revenues economic expiration approximately several on government budget James of Ray resulting from the are level, contract D. state

services. additional achieve our engaged successfully to our ways find scope have of contracts to our adjusting time, to we cost And savings these government don't partners with guidance from at efforts. this impact We any state by our within of expect several

programs. and which levels, occupancy our lower experience of to continues year centers, in also segment reporting this residential in Reentry GEO Our began March day

guidance end of GEO to resulting for of levels the for Reentry the and lower XX% decline through assume estimated the year, continues approximately in revenue Our an full-year. occupancy our programs facilities

been Services as also COVID-XX September and Our the of end a segment Youth impacted the expected Garza Hector of by Texas facility in levels the the declining has closure pandemic. of occupancy at result

non-contact We have and as also non-recurring second half increased several dollars of to expect increased infrared equipment, a of in protective sanitation costs testing personal XXXX. thermometers, the result during incur medical and diagnostic COVID-XX million on expenses, our spending

hopeful facilities and Central Our able be remain to ICE contribution updated State center to we cash these of our flows Despite late from as guidance remain our annexes early continues quarter processing revenues these to fourth or quarter in facilities this Even View assume California. we believe early no that as year. Valley though Desert activate beginning third challenges, and strong. as Golden

full-year $X.XX share. of attributable range to to per be GEO We net a expect diluted income in to $X.XX

$X.XX We adjusted range $X.XX diluted be income of to in a expect to share. net full-year per

expect share. a in range $X.XX We diluted of to $X.XX to per full-year AFFO be

a the $X.XX to to in and income of be share expect For adjusted income $X.XX net quarter, in $X.XX a we to of share. diluted $X.XX range GEO range per third be net to diluted attributable per to

per between expect $X.XX third AFFO to We quarter diluted share. and $X.XX be

net of to share be quarter, $X.XX diluted net income and income attributable fourth per to diluted in $X.XX adjusted $X.XX range to $X.XX we a to the to GEO range in per be For of expect a share.

quarter share. expect AFFO be diluted between per and We $X.XX fourth to $X.XX

be million million created approximately to that due recognize million that even second payroll facility With We had expenditures, total revolving At regarding provider, during before the will we approximately of end feature deferring capital respect of in $XX a cash in an XXXX. XXXX in mischaracterization $XX our under debt available in access XXXX our taxes volatility on hand COVID-XX and CapEx under including to million in accordion maintenance on paid million heightened $XXX part addition significant $XXX be role, as to is based borrowing approximately facility. capital $XX.X to a to Approximately services the to $XX created structure. quarter, capacity rhetoric Moving credit our CapEx. our our the markets, credit concerns for political equity and in expect we in of future our our pandemic, million government and capital. had

we balancing steps $X.XX environment, our quarterly announced policy. debt. on dividends anticipated the our repayment with allow board This October, the traded also remain while will REIT of declare us dividend to new Beginning solely this value share morning dividend towards for and capital shareholders to providing to payment, annualized expect applied Given be of of this net our adjust our preserving per to share a we discretion within policy factors. various dividend in per based publicly to $X.XX

in in million $XX in cash annual we would XXXX, our and be this quickly to million our to During debt flows how million recover approximately debt expect repayment, goal between and $XXX post-pandemic. repay average year, on $XXX depending starting

expect undertake opportunities During budgeting savings quarter, and we process the the cost and corporate third levels. fourth facility at to and identify will our annual

sold Care company-owned or Davis identify Additionally, be individuals. government Services I'll agencies for to we to a third-party call to of time, can to over our segment. At expect facilities this turn GEO Blake the review that

Blake Davis

steps unit secure and to everyone. an COVID-XX. our facilities of including procedures on implementation afternoon, services isolation GEO provide best to on guidance isolation the Secure you our the have Services guidance of of the you, facilities including all good the we taken medical correctional for cohorting, at start detention From we specifically risks I'd practices, cases and inspection business our with Thank This quarantine, mitigate Brian, pandemic, associated to guidance facilities like with and presumptive by room. of confirmed CDC. the issued with use and the COVID-XX, the the for covered consistent of issued update airborne

avoid the care our to best individuals measures preventative in We COVID-XX. of have provided spread guidance employees educational on and our to the

and contact We products sanitation we to cleaning high have and healthcare of cleaning equipment that areas increased in personal facilities hygiene teams deployed with of proven sterilize our the and products grade distribution have are supplies disinfectants. sanitation

paid the paid on employees We a exhibit in distribute including to like GEO Services leave, continue they member. pandemic, Early policies time-off symptoms facilities. exercise precautionary and our flu care home remain personal to we to or our family as our to coordinated if protective allow partners for to staff, Secure all with of facemasks government to detainees inmates at and our measure equipment, a

In protocols, with addition widespread increase to that our facilities to we at saturation testing more partners we testing impacted. the new for heavily worked for our intakes have COVID-XX implemented have government have facilities, and been

at all Presently, We process of testing we number an updated testing significantly increased the and the inmates have adjustments and saturation necessary, and we percentage steps guidance large secure have at make services and by sites. best of at detainees conducted have during the facilities testing intake a our of and to we're our increasing as our We taken based evaluate practices. these steps CDC appropriate facilities. widespread on

to has cases hospitalization experienced percentage COVID-XX. believe who remain our number for to a our daily have Only left of our employees work all testing and the sacrifices we we the personal tragically the and compassionate with of mitigate risks allowed those grateful steps While protective equipment some focus fatalities, on of of taken high and hearts. heavy very that us and facilities. quality in very of required have all report to small a provide small make frontline in facilities care us cases to facilities have has which our resulted our We incredibly most COVID-XX, and

to few turn I call Before discuss other a operational I would highlights. the to briefly Ann, like

United Centro Facility quarter, a in new Marshal has approximately we California, the expected nine Detention generate separations in of term is owned our revenues. second million approximately contract $XX the XXX States the government El new service. managed-only This During under normal at achieved bed with and years contract to annualized

were inclusive X,XXX-bed a second we we a to recently beds. Correctional capacity Center, our work projects Thankfully, Also operation ICE, continued the of final completed are to expansion Australia, ICE for total facilities Corrective we the XX-year Australia. Correctional X,XXX. we for awaiting new a Ann transition Services we continue the of us Center. at at capacity announced beds. Texas option we believe I Additionally, time, State review contract Care. we're X,XXX total periods increase effective the have of XXX-bed completing now completed expansion GEO of approval these to New in total quarter. by our share South bringing market the Ravenhall capacity not Correctional of capacity Also, projects, awarded in expansion for Junee our Center have South At Wales, Agency increasing XXX-bed company-owned XX. the Centre In Queensland renewal Australian in In the impacted closed XXX-bed are the turn Processing to expansion Victoria, management Australia, will contract XXX-bed of the previously Gorrie three In this there to to pandemic. And the call Center a by over June a to to on during to the X,XXX COVID-XX addition of expansion been for Fulham Arthur opportunities increasing Correctional

Ann Schlarb

provide Consistent and GEO the facilities, Services COVID-XX to issued with business everyone. like GEO have issued consistent mitigate Thank across an steps spread guidance GEO I'd of our update good Care with guidance Reentry on the the our undertaken we've and unit. you, all Blake, facilities CDC. afternoon, Secure to with you Youth of residential efforts COVID-XX by our GEO and the the Services taken by

on preventative isolate COVID. We spread of implemented policies our guidance have our we COVID-XX provided presumptive in all to the the quarantine avoid and and care educational of have cases best individuals and to cohorting to employees measures confirmed and

products to Response teams Rapid contact have by sterilize have sanitation proven utilized that facilities grade impacted been And ready-to-deploy of we more Teams COVID-XX. our healthcare high have disinfectants. We that using significantly areas facilities to assist are sanitation

paid our employees paid needed. and exercised home have as time-off remain We leave to to allow policies

with Texas several We in the have and implemented all facilities, quality who have screening unfortunately We're our those resulted challenges on evaluate on steps to our rehabilitation remained facemasks Care and entry taken the challenges, residents. and occupancy every including also levels facility our of COVID-XX Youth impact steps has to appropriate focused in Hector practices. delivered to as these centers quarter. into we staff in residential best make have close have of our ways, the we for and Notwithstanding proud The to have negative high in very CDC segment Services in work by reentry frontline employees government on care and continued The to lower updated measures experienced additional the services innovative in GEO We to and Garza through the had participants third provided care guidance our and the technologies. virtual have based a during partners. have these and programs, COVID-XX to our occupancy delivering on adjustments behalf necessary pandemic report referral associated the day and decision has non-residential impacted our programming reporting division levels. of day our which pandemic

sites Additionally, participants. contract our Parkview X,XXX than entered Statewide positive to a with Tennessee, quarter, In highlights. to a were number awarded In XXX-bed reactivate serve we Program into XX during we new Contract Center. of Alaska, Day second a to we more the had Reporting establish capacity a

and contract Case service call Management new federal At remarks. closing under under services a delivery back turn five-year the government's George ICE the for alternatives subsidiary and our program. time, BI we're for Finally, supervision detention to begun between to this I'll excited have his to

George Zoley

of We're to our Thank proud of and this the daily dedication incredibly all pandemic. we unprecedented risks of commitment our Ann. you, mitigate company employees believe has whose allowed global

significant an our service Despite While provider cash several spread uninterrupted remains our with flows had our the essential believe, government as negative segments operations we associated across a recognize of at that essential entailing continued concerns the to and has of company. quality impact government earnings and the our COVID-XX assets pandemic, of strong business rhetoric estate our has a and as role our and supported mischaracterization political by services We provider real access the is long-term the contracts services. government current high future regarding that capital. created challenges

While we in we payment don't on anticipate paying and debt our have maturities XXXX, order capital dividend debt. reducing any to preserve upcoming quarterly until focus down

to our payment to providing sustain while our flexibility focusing with that We shareholders. presentation. in we've consistent remain remaining our to us completes balance will sufficient would value announced Our address will our and to give future. our believe enhance also That us are new allow publicly our commitment today will REIT We the dividend believe for value traded REIT allow long-term debt. shareholders, steps our dividend to should of GEO a a be questions. retaining as debt glad to on any now cost level increase We the structured

Operator

And with we your [Operator go ahead question-and-answer from comes gentlemen, Joe begin Gomes question today Instructions]. question. from and Capital. our Please Ladies NOBLE first will session. the

Joe Gomes

questions. taking for Good afternoon. my Thanks

surrounding tightened a of bit range Just for guidance get kind detail little to a of the just what higher process little the to the so and process uncertainty kind from wanted Just lower-end it contracts populations up wanted some your thought your you behind a there couple given kind on get now the costs, bit that more than of the of your to want in guide loss full-year, the the previous on here focus previously? with was actually of of of the additional declining there? thought guidance some

Brian Evans

is Sure, Joe, this Brian.

will expect would as in George there we quarter. What second may haven't relatively the better quarters consistent think performance than both It in haven't necessarily third the the quarter. third have cost second we quarter, taken mentioned expected performance So and that for we so haven't third continue I in assumed some the it quarter in assumed account. we but into that I say been that

to impact to levels that's to necessarily occupancy So of quarter. assuming the third there and that at more reason see no normalcy I again from some then year. that the normalized population other their is third piece And step down current second so -- And the this no the fourth think from then the continue or return you level is before quarter, main facility from there's any expiring end stated in would of have September. all Ray be this still again the or ICE it but contract the would the come positive James online of that some the that assumed that occur. later And D. California -- call, at as we impact three we the those in not may conference year, we're hopeful year a annexes

Joe Gomes

the a Okay, ICE facilities thanks. where facilities into election fall your going I mean facilities, little I little why everything that some where as follow-up be I'm those would just there'd year. confused the nothing why in you are confused there's on guess I And to today I'm mean, here any seeing you're the with ICE factored given hopeful I to be guess, a activations there of might guys forecast. kind I hopeful the populations into those we're as on year. I mean I this this know be additions that just

Blake Davis

ICE year State beds this in beds latter And was that for and part we're year needs of for is these December answer the will executed hopeful in in think I the and that California. the Well, take place. last of procurement opening that the done

Joe Gomes

Okay, thank you for that.

that additional further? lowest could room reduce still you can that lowered you basically REIT the under and qualify guys you that is still level or did even it -- it to is -- dividend the On have the there

Brian Evans

at Now, we I looked we it there's room, wanted still think from the additional to. perspective of

we a but paying sort continue debt. I that's down And and a also amount or of think status amount to focusing to the point REIT the the balance meaningful the proper maintain mentioned where shareholders George return found of As for that balance us. on valuable

Joe Gomes

little And going you're you if some you additional be saving Pardon and might that owned a and I some be bit cost looking wondering potentially opportunities be a more Okay. could about, for to facilities able sold little me. that was talked to these as of you could you're are and to find about color able might savings what cost where you be some that there provide we think sold? possibly thinking talking facilities that be

Brian Evans

have we're of we Well, decent with size. brokers to smaller, working number are assets or them idle market that are but a sell few them, that of many a there's

but we're to what assets there be do corporate types are see, cost if we're structure on are budgeting So determine reductions, and they like the may evaluate that through and our value the ownership the expect can savings our us. as there. do to look there's in working both those And facility can what to the fourth may that. third we from new And savings then just, more And other that that we'll some with away quarter the we our other of get, facility. go process owner we active in and find transitioning here portfolio we

Joe Gomes

one and then one me. for Okay, last

there nice business the You look right the a else How or new it now? you here. out out pipeline extensions pipeline note contracts, guys there, of didn't does couple wins for bid

Blake Davis

now. right our Well, sector is area the in UK active I the most and in think International Australia

will with for And of budgets will we're year. be to the resis begin as their waiting year. solidify upcoming the what states towards better state we for think the come part latter I to that think terms process

the know anything upcoming So until new about we early really year won't U.S. procurements in next

Operator

Ramgopal question. comes Please next from Mitra with your ahead go Our Sidoti. from question

Mitra Ramgopal

questions. Yes. morning. the Good for Hi. Thanks taking

the I non-renewal First, that? just into get played number really to also, trying to were the to surge of that to BOP in but seeing was of how a we due did states most sensed much guidance. I'm come I the it a that back just of the of contract, sense wanted was tweaking the

Brian Evans

are have a we surge, surge, occupancies? the really see you We didn't in

Mitra Ramgopal

Right.

the terms like surge In cetera Florida, occupancy? that the Texas, of impacting in is how et states

Brian Evans

number the that the cases? surge the of Oh increases in COVID

Mitra Ramgopal

Yes.

Brian Evans

-- So

Blake Davis

to state our we've we've our those a sound facilities able fights because respective in facility control there very somewhat have Yes, manner. was impact, our we we have states. seen we're in seen but that measures before those have a place at in in we an community have But spiked, and when we measures increase even tremendous are that tight or it place in occurred seen those haven't

Brian Evans

I the And and Marshals mentioned has facilities remind that already that that we think we've U.S. as our I'll levels in fall, where in place been impact and ICE occupancy the the in you seen reasons our we just stated. for

George Zoley

the the operate. In facilities federal facilities state rather that than we

Mitra Ramgopal

the just for you if that can what color up. that you you're a And savings no, thanks trends we give earlier wondering more favorable seeing, Okay, to about clearing entails? little cost talked I know identify you're about the think that looking I'm cost Brian, mentioned but I on you also talked

Brian Evans

the Stallman costs. of cost lower medical as Some were areas saw some labor savings we as that well

types least weren't hospitals forth. of a during and appointments shutdown aware, you're period the at As pandemic, those there taking so their they elective and procedures where was most

some been services So of our as impact need And -- that well. on because facilities short-term delayed near had those beneficial our types or those residents have deferred.

that's those may said that fourth case. and necessarily where I continue, carried quarter, would of we some necessarily be into assumed we saw And that's the third savings forward So why savings. or those we materialize that but some haven't haven't of that

Mitra Ramgopal

August seeing contract thought just effective something a is correct? the And you of Department fair. Homeland about was about again think ICE XXXX, that's wondering, that's, I Okay, that Security a awarding or I’m XX-year contract I based,

Brian Evans

is XX-year which rebid and Antonio Texas our That South contract renewed rebid outside Detention Center, and we was period. a a that San a of just for was that in Texas

Mitra Ramgopal

debt to And relates as know competitor different? is to a to something how as clearly, different as I'm Okay, cetera. terms while access approach still in to taking sure competitors or I reduction a the perfect. relates leading very as have now, sustaining again et strategy have aware, capital maybe the to don't want they dividend. allocation little thoughts. your continue thoughts priority of a right of a okay, you're it you And REIT in the to if any navigate decision just doing terms it this environment you capital, any opposed

George Zoley

comfortable fairly board we I Board management think, comfortable just need of discussion we following was an Meeting to debt with more REIT plans have being our and at we're it no lengthy think we’re on end a in to concluded a emphasis I team, for payment and recent of adjustment our ultimate Well, directors but civic and that being had that dividend strategy whatever make repayment, a maybe. put and we game REIT

Operator

next from question. Stifel. with Our your go ahead comes Nick question from Please [indiscernible]

Unidentified Analyst

could could facilities that Yes, how Could a to sold. you Nick [indiscernible]. little the are what going I give then the on are sense or was give for proceeds be be contemplated proceeds those hoping gross be to applied? you where a company and

Brian Evans

which on it So depends facilities.

at use to to debt. would flows. that looking with I range we're cash facilities targeting underutilized But do that the that another event million better or in use some client a $XX that, we're not So that we're and to million be repay mostly of to $XX can able may we produce activate think

Unidentified Analyst

million to $XX a anticipated? for million everything gross $XX There's

George Zoley

Higher that. than

as I well think facility. would underperforming facilities consider idle we as

I of would excess in number So put million. the $XXX

Unidentified Analyst

value. excess evaluation Okay. And impairments? about going valuation think versus to going to Are see the you excess the there in books? how be of Are we received book can then

George Zoley

replacement facilities facility. think be prospective two One their bucket buckets. who could the facilities for such fall be of based value purchasers intended governmental would would on I on facilities in and for value comparable design No, use the the

interested be may in value. land The just would the for land that retail third-party be second be redevelopment the land based parcel. now But on bucket of investors and would

Unidentified Analyst

of the And if Okay. the then in doing going flow back of million, looks it I'm cash debt relative the be can the frequency And $XXX has about and got here? gross readdressed but terms the can dividend, significantly then target math, the just board? GEO. policy $XXX -- substantial at million allocation leverage GEO REIT changes by prior as strategic go then the dividends question out, a to amount about traded still that's They've given REIT like which that the Could corporate a your any to peer. status talk the lower think publicly dividend you and/or the how we to than

George Zoley

time. be we told technically pretty and year or I can we our But it. said, discussion future thorough in and that at about I this addressed question, the will near had revisit REIT a any I'm as The don't think this subject anticipate in I strategy

to we're I time remain repayment a and continue at committed our in debt REIT think this strategy.

Unidentified Analyst

Okay.

with actually the REIT; debt a out. paid substantive the terms to number million on conclusion being in was to to million to is down paying not X.X de-lever million remain the gross of So of $XXX the relative out board came figure annually $XX that particularly of that a of $XXX

to REIT come board option the that is the a does how So the to conclusion as opposed C-CORP? a better

George Zoley

value stock price I November, staying will results be Well, the -- of think I the and don't all I know as But REIT discussions that. public the the that the regarding think the will can further stock REIT. is stock election following condense our if our today marketplace illustrate there and a undervalued in and selling rebound a our action to of I

think substantial would paying to a a dividends that's a I in paying that's invest company prefer not at any all. dividend company than rather investors

Unidentified Analyst

I understand the argument.

the the up not election does is rebound; event way, share debate for price the goes the other So weak and in again? that election the

George Zoley

and invest paying this I'm any I'd of I'm investor, not the an dividend I dividend, Because don't significant company, think in that's a company I've than so. investor another you? myself just wouldn't shoes those paying company I trying what in a put to in am a that's rather in shoes. that said so of

Unidentified Analyst

for I pretty discussion so a find, lengthy can you. your that we Thank offline. this results. on we looking have can appreciate forward that's to seeing additional So thoughts and

George Zoley

you. Thank

Operator

question next Global. go Jordan with from Ranger question. Our Sherman ahead Please from comes your

Jordan Sherman

apologize I reduction set as if strategy? Did I of you missed leverage part this. target Yes, your a debt

Brian Evans

X.X think I X leverage as said to our but times. No, historically is, target, we've

I were and over on in think we that that forth. time reasonably I think So to this get that and level we our occupancies can population assumptions with so and conservative strategy levels

better level for and think a So said. be there's little debt. is what reduction will we some this to it a sustainable But for we meaningful allow than in room

Jordan Sherman

how that dividend specifically at of chosen, the do And arrive Understood. level you number?

Brian Evans

a Again, maintenance our this reduction. of and million $XX it CapEx, needs year, debt that reduction George to perspective looking of targeted a capital was gross $XXX at was CapEx of just from debt a articulated, amount level as a million was that supported level

Jordan Sherman

it taxable -- out? now where relative does close --? relative mean I should how relate this you it to does different asked in your to How come, it how I a appreciate. income, that come would have I Maybe is does way.

Brian Evans

above but the above still I still we're don't much how No, that exactly we're taxable know income number. number. -- still we're above

Jordan Sherman

the doing you Because you'll I'm -- assuming math were

Brian Evans

about have. the amount would minimum talking we You're that

Jordan Sherman

I'm wondering the you Right, are to where right. relative saying minimum. just I'm

Brian Evans

Yes. Yes, we're above. still

Jordan Sherman

I was of as as was XX close. of point, it still Because little higher, and yesterday that today or mean yesterday's lower XX.X

that’s high yield. dividend wondering had So still to just more a I'm if all. you cut, very room

Brian Evans

it. Got it. Got

Jordan Sherman

two James being bigger bigger alternative possible facility, horizon? facility, the the uses on facilities D. that mean Ray I any close; the guess you the I see

George Zoley

We marketing state to state out that clients as clients federal would as well facility of clients. be and

it's excellent area. geographic good it's and So in very an facility

hopeful three another for facility we're that of client. So in purpose

Jordan Sherman

specifically identifiable identifiable? the Okay, nothing of sort at moment, but

George Zoley

today. Not

Jordan Sherman

just number Okay, what There of RFP? yes. the a wondering I'm Fair that enough. of the the things like was status is Alabama in works.

George Zoley

the felt Nebraska. RFP that of two we from the in one There's one there's previously in to the some two requirements participants And as we're various only of I there's discussed not those Alabama we one of reasonable RFPs. types were and We relative those. And think that not in reasons of RFPs. in the Alabama, the market. in withdrew There's for

Jordan Sherman

okay. Understood,

George Zoley

very It's that even RFP don't have stages. is Nebraska been the have submitted. really then not, qualifications And mostly been I it's submitted. bids early think been

Jordan Sherman

consolidations/potential So I'm to just or of looks those for the sort and still because just budgets, issues slowed would types would about the wondering, your world down savings trying they are accelerate facilities I everything cost it comments state need and like? these see states the out, what

George Zoley

in most operating And to cost their the outcome of they -- made slow be because the their operations. budget previously operations down think there's still think have I changes or going then and states to I whether their of support financial previous under would them. approved structural government not things financial are

Jordan Sherman

the last so other potential Garza use All right, that? small most overall just facility for understood. of then, this Center, but Hector on And pretty relatively impact, any smallest

Ann Schlarb

We're the and think pretty market just looking pretty of shortly. have. We that getting it area, it marketable. looks have good we'll at Texas, selling chance good It's a a in San it, on we we're it's in Antonio, that

Jordan Sherman

Selling sorry. it a reusing for facility or I'm something else,

Ann Schlarb

it's this At part, markets to the on be sold.

Operator

with LP. Our from Poptech, your go next Please from comes ahead Poppel question question. Harvey

Harvey Poppel

apologize downside, downside which the ask the Okay, presented, the thank a on at the further very else any I I you I year company the what is other situation call no the answered the go point? had a But business? to this had questions much. bit of lot way there in start you've words, the anticipating certainly In question really wrong the of is If of you get that looking late. because earlier, for at of could potential at

George Zoley

normal would see I we the economy upside, clients. far opening think the and decline, getting particularly Southern our more as recover, the with to border, the of there's pandemic potential back for federal

Harvey Poppel

Well.

there those haven't saying low are you example, yet? that for payment are Are you occupancy schedule? this at down occupancy the minimum all minimums some, payments gotten have So facilities where that or you minimum you where you have

George Zoley

It's somewhere below minimums. the

Harvey Poppel

getting paid for Well, minimum? you're the but

George Zoley

paid getting minimum. the we're But at

Harvey Poppel

Yes. with occupancy where yet the levels you But protected where to haven't some, are on shrunk are the you minimum? haven't yet there

Brian Evans

to an facilities that occupancy has ICE have or at pandemic, most below the maybe think those George mentioned populations the are I think is of during level. stages Marshals No, Marshals earlier, we run. of as our probably guidance minimum down. they've levels, came There haven't and more They we levels. have the population them where And populations facilities issue, sort the facilities those that's and mentioned are we scenario of for early end continue part, a but the as improve where And I earlier, we occupancy not that we levels. occupancy been at the that stabilized that think where as are to been in that. most those sort at or But year, facilities the those which assumed before expect those we would haven't levels do facilities few the for accounted likely of of the

Harvey Poppel

I the at that percent are of from that minimum roughly are of looking on what percent your guess, revenue facilities view, beds facilities basis? percent have it or all a of point And on what

Brian Evans

our Services is probably about piece or Secure which the Corrections biggest XX%. business U.S. From business the of

Harvey Poppel

good. okay, XX%,

suite your what talk work a the potential you Now about election, when in if favor? that that to you're is it were example, would rebound scenario potential from is it that loosening policies the happening or a political the the in of election, referring see what democratic immigration for or you

George Zoley

guess which uncertainty word I and it's hate. politicians Well, markets the

There'll like-in. regarding Now, and would the Federal once the impacts affects service be particular BOP. feeder in the administration Southern the services the is to particularly clarity what of be immigration policies which the agency will immigration Border agencies along as the Marshals Marshals eventually President, there's and and particularly to be certainty because is the enforcement, what who more to the ICE BOP as

a continue question it's administration. clarity administration Trump policies under the of So to as such immigration and such Obama policies as as policy the whether or previous continue the

Harvey Poppel

before, answered And this finally, this and litigation of again almost of been you've every apologize. rash There's if question day. I course

Some announces other firm on the that ambulance what's company's something, view chasing firm litigation?

George Zoley

wage, sued article it's benefits news not paying there's becoming for has litigation. to today and its and health State litigation where a minimum the I've Well, of vacation just read novel been inmates. of Colorado lots

we're I to this in them. entities but resolved and cost private that consider the governments they're them that's space, in favor of kind operate of a be have time time nuisance they that consuming will ourselves cases through. So living that like and eventually

Harvey Poppel

the Do if have is answer up again; reserve you I for a set you have apologize this?

George Zoley

based cases individual merits outcome basis. what on on reserves and set the a the believe likely we the be Well, case-by-case we of to case on

Operator

[Operator Instructions].

from Partners. ahead comes with MidOcean question. your go Our from Please question Levitin next Credit Michael

Michael Levitin

question. the taking for Thanks thanks. Hi,

capital. next maturity? thinking access addressing a of but how about just bit regarding and there is talk little that your path thinking a you're realize how about talked concerns which away, year-and-a-half just of some maturity, January the guys in you Could bit You the XXXX, here it's about you're future little a to while from about to

Brian Evans

talked about, the about quite significant the we bit in a the strategy reduction Well, as liquidity I under think we have and talked call, revolver. we early debt

flows we we maturity. intend cash the room first towards probably with I still and the some even deal the easily liquidity that can revolver, between So the to spear XXXX debt and think under have excess that reduction apply to through maturity

priced otherwise, the improves or up So deal need capital with I reasonably can seems that we market of to. some other opens source think markets, capital access on going without to if and own if we that can the we don't that our

Operator

with end to to that, Zoley question-and-answer And would George turn closing the we'll gentlemen, and over I like back ladies session. conference remarks. today's for call

George Zoley

you addressing for on this forward call. on We everyone call. next participating you Okay, thank look the to

Operator

today's does and Ladies We that you gentlemen, conference thank call. conclude for joining. do

disconnect now your may lines. You

The GEO Group, Inc. (GEO) 6 Aug 202020 Q2 Earnings call transcript