GEO - Earnings call 2 2023 | The GEO Group, Inc.

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Operator

Good day and welcome to the GEO Group Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded.I now would like to turn the conference over to Mr. Pablo Paez, Executive Vice President of Corporate Relations. Please go ahead.

Pablo Paez

Thank you, operator. thank GEO joining earnings Group's and discussion for results. everyone the of second morning you us for today's Good quarter XXXX conclude Board; and GEO Wayne quarter well Calabrese, call With Chairman question-and-answer Operating our Officer; the Officer; George second are Black, Chief we morning, Evans, Jose President as session. we James the discuss of Brian Officer; us as Executive Services.This a Gordo, our results Financial Zoley, Chief will and and outlook Chief Secure today with of Executive will This conference being webcast our on investors.geogroup.com. live at call is also Investor website Today, basis will we discuss non-GAAP information. we reconciliation the discuss answers the to give press current information GAAP regarding today, we may in non-GAAP the we respect in and response beliefs and statements information expectations included disclosure various supplemental forward-looking is much with will A release to morning.Additionally, from our issued include including basis your basis questions, to this results the matters. of within provisions are intended These securities safe of the to forward-looking laws. the statements fall harbor

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

George Zoley

previously income EBITDA approximately $XXX this guidance reported $XXX for second were of year. we all of million, management of provide quarter trends Good our reduction objectives, review Thank to of of discuss second I'm on and $XX segments.This the joining an million, earnings for debt XXXX for financial our team GAAP each update the our you, our quarter business morning adjusted on our call. senior quarterly Pablo. midpoint today to guidance revenues everyone you and the of of ahead which issued and million, our us quarter thank approximately and approximately financial of results, joined second by net morning,

Secure renewed Reentry Our second Correctional residential XX to existing and our Rehabilitation for lease GEO quarter, XX X.X Lawton the lease Oklahoma. the for care recently recently Correctional Facility Services the X,XXX-bed GEO Secure years reactivated generate a quarter Services $X.X Plains our stable Oklahoma. lease in in facility segment. and X,XXX-bed existing X,XXX-bed has The unlimited River for Reentry contracts the business of performance options reentry centers term from Services in contracts Facility initial straight-line new new results non-residential reporting an expected reflect annual and of Correctional And X-year renewed unit GEO contracts second Florida our Services revenue centers.During and with Blackwater Great is we State million. agreement under our with of subsequent approximately our

under contract financial air which Our contract revenues a provide our procurement GTI continue recently emergency headwinds operations also operational is Electronic bid currently to approximately term. units an the X-month into a these generate some support strong strong the of first XXXX, which of diversified to contender remains presently to in division assuming for business ICE, the Monitoring hope to full runs million We through and protest.Our Supervision the services, multiyear during Services up active half in over overall contract delivered its segment. period, to be and despite for expected for performance entered Transportation $XX

year. the discussed, Program, participants number previously government's in beginning of Appearance declined federal Supervision this of the As and ISAP, since the we has have or Intensive

seen a of However, decline have participants. in recently slower rate ISAP we

ISAP to then ISAP early ISAP.While participants May. participants August, longer the that previously to since XX% we decline ICE we the and which stabilize moderately. in the being enrolled July that an Additionally, throughout recent With population was in to believe decisions policy increase processing in continued result begin centers, estimated, early than of we in in could believe a have to to increase we continue count experienced increase participant our respect likely is number

levels.As fiscal July, of would require in the level Congress October the a continuing below docket resolution.We we've prior Xst, the includes the a and year adjourned federal beds of ICE keeping their for the Congress non-detained Bill, remain likely alternatives all immigration monitoring approved capabilities to If new under programs. resolution, deal duration June. and federal is without levels provision relates recess increasing rates version begins it Security provided overall individuals detention is consistent the would in Appropriations their its continued years, approved beds of XX,XXX appropriations for funding for of that or not funding as ISAP seen build in the slightly for the XXXX short-term long-term for that with at believe Security current funding ISAP place. proceedings.In which budget the to 'XX. Appropriations in government of a be current the for the historical when appropriations fiscal available under could, reconvenes, XXXX, of to the approved federal August XX,XXX a house Representatives budget use an in Homeland agency's most Senate entire approved year Homeland Congress their for The to Bill occupancy in Our version House increase for funding

DHS to providing continuing the on services Congressional of behalf are high-quality appropriations process and monitor and focused on ICE. We remain

and to market federal agencies. current also our our to continuing are We idle facilities state government efforts

recent Great of and if they modern Bureau federal segment, our activation our Federal of believe annualized incremental comprised approximately the EBITDA of be adjusted facility, GEO management, to agencies. either lease or former X facilities.We generate to beds significant that reactivated in could facilities Services these Prisons we Plains owned well-located now or state were primarily under have With X,XXX Secure idle

focused strategic also which debt, priority net management for a our on team company. Our reducing is our remains key

financial X on debt million approximately Brian portions net the able our years. to more address we XX year be debt Evans to objective to And is XX to refinance reduce remain $XXX potentially to hopeful next to call in now As of next our previously by results per detail. turn have will and we the over months.I discussed, guidance over our in average the

Brian Evans

Thank Good you, George. everyone. morning,

to quarter million. million results reflect and $XX the quarter in Plains of $XXX a Correctional net As in our our operating annualized this lease expected guidance. previously XXXX straight-line approximately of quarterly $X.X new Oklahoma net $XXX results exceeded income million our approximately is revenues Facility reported revenue. reactivation agreement, We generate lease which morning, on XXXX EBITDA Great under second $XXX million.Second million of adjusted issued we reported quarterly of GAAP approximately of We reported income

full quarter second XXXX of and Our compared XXXX. updated due rates million our in debt for the morning for contract. under updated our higher interest the participant reflect in approximately also August transactions net our to to provided reflect of XXXX results we XXXX quarter expectations regarding expense ISAP the This restructuring we XXXX.Moving an guidance second year interest to the increase to guidance completed timing of of $XX levels

participants the July moderately. and number assumed the of believe which then stabilize Our the that to previously early throughout issued third ISAP longer then the for of increase at count month to and previously of guidance increase quarters.Although we and continue we midpoint during the stabilize the would the number of likely than fourth August, participant participants estimated, moderately year, begin was ISAP XXXX continued in and decline that is to to ISAP

results. financial is monitoring million various is We recent alternatives.It of of perhaps $XX major are our approach move result well the as that in updated of to to range financial are for different for annual forecasting $XXX policy. the net the be year net taking approximately basis aware in policy participants year.We add income This ISAP forecast new conservative and a year-end to participation time $X.X participants us this revenues Consequently, of balance full a may difficult likely million of on expect as changes for program billion. to the the to ISAP the calibrate we GAAP assumption financial at

million. $XXX year million full and our $XXX expect to EBITDA be XXXX adjusted between We

We the XXXX exclusive tax be XX% discrete items. rate to full for expect of any our effective year approximately

quarter of $XX third million $XXX between revenues For expect of net be quarterly $XX million. and to we the income million XXXX, $XXX to on million GAAP

a we expect XXXX, third million adjusted between our to XXXX expect million of on $XXX EBITDA million. be net $XX $XX to quarter, $XXX of to quarter in income range of quarterly be million We GAAP $XXX the fourth million.For and to revenues million $XXX

of remain EBITDA be rates in our to levels. any our a guidance range at historical centers, million million.Our currently XXXX in performance which from We assumes to fourth occupancy processing meaningful change steady below without other $XXX $XXX segments ICE adjusted our expect quarter

capital beds.Moving any of of total the guidance secure structure. also does facilities, X,XXX remaining not Our our services approximately which potential reactivation include our idle to

We our focus debt. overall reducing net continue to on

estimates third $XXX of expect debt over was net of $X.XX net net reduced reduction, debt timing reduce reduction of million, XXXX XXXX, billion end flows of year remained per Our debt year.During with the approximately billion. million approximately objective to $X.XX total to throughout billion pace is our the approximately the would on this of Based due of cash for by debt sale a approximately to quarter. reentry years.During this $XX billion, quarter third closing year resulting to X to debt the reduce the further $X.XX XXXX.Our in in net assume for stable by net in approximately million our the debt our at billion the of the we and average we second approximately net debt XXXX, expect the on by of quarter facility next debt approximately $XX $X.XX debt $X.X end and

reduction sales to efforts. our to We complement additional explore expect debt asset

the reflects We marketing may have for value. secure services of adequately are sale.We we actively consider of reentry some residential facilities sale number price the assets if also a larger their that

to contract facility Great net continues in I to secure for next the as our flexibility of more XX However, our our on a of our to remains Black Secure in segment. marketing expense our shareholders we to Services management agreement debt quantum call and that options in the be for leverage or goal debt, lease over capital under decrease potentially reduce a to months.As reactivation, refinance GEO explore the possible to to Oklahoma.Our we at this as reduce XX focus quickly our our gain hope will execute James interest either this of a our of and this traditional our to time, under similar future.At turn months portions credit return review Plains idle overall facilities agreement to our time, strategy,

James Black

pleasure It Brian. an to Services. morning, Secure provide you, GEO everyone. Thank is on Good my update

Act Elimination XXXX, received quarter including second of from Services Services precertification. and X Rate of facilities American accreditation underwent Secure and successfully our audits, accreditations Secure the government of Association our received XX.X%, audits, third-party internal facilities score average our the with of Certifications.Four facilities During reviews, Correctional Prison another XX an

Our from U.K. our agency GTI the X.X detention populations federal driven United division continue GEO in venture at Amy current second joint contract the quarter.Moving trends facilities completed and million to at States to be U.S. Transportation miles our and during the our level, Marshals overseas the government partners approximately stable.

country criminal centers. XX% around services We space our generally the a Our detainees needed Marshals lack of proceedings. capacity near of carries since out facilities May. bed is custodial federal U.S. federal pretrial for suitable We service.Moving processing the the facing and provide as important courthouses, support that populations U.S. believe alternative a across providing facilities it mission early detention all its in our to these services Marshals recently for increase experienced where agency ICE there facilities

centers our at ICE processing rates occupancy remain levels. below However, historical

a year Senate maintain version would for Security August reaching left without compromise House would while has federal the XXXX beds.If and funding XX,XXX the passage a not the current the fiscal at the As X. levels, beds, on of the year of a Homeland Congress that likely government new long-term the would George between Currently, XX,XXX fund when the at a could for resolution House compromise bill noted, the fiscal reached, recess on the outcome appropriation. ICE a version October Senate potential begins is fund or continuing be funding short-term

in role decision a provider control policies. play have congressional the over long-standing appropriations As to of federal no immigration no service the government, we or implementation and

entrusted rights long-standing to quality agency ICE, centers additional on track our the support providing ICE the those and a of stand services consistent behalf support ICE residential Our highest respecting on ready services we delivering to human needed.Our of all professional to with services as processing care. with the any focus of and secure our providing to record commitment have care remains

care generally Our and in health ICE processing quality is ICE our round-the-clock of health more at a processing the Health centers access number than centers double staffing services. typical offer correctional to and care care staff resources, a counsel. accommodate centers libraries state our legal have offer to centers also to with ICE counsel space access processing we legal legal facility.Our dedicated at and meetings

provide also centers sensitive and approved dietitian. processing ICE mills daily are Our that by registered culturally

We provide of volunteers and faith-based needed paths to partner various representation and as and also access with fair opportunities, ensure community religious denominations. we to

access Our ICE processing have and to pavilions, including provide rooms. equipment covered investments enhanced made centers multipurpose also at fields, artificial our recreational to exercise offer quality amenities significant activities.We turf soccer centers,

primarily support also and processing services have historically at of We units. for logistical ICE XX ICE provided our secure transportation

approximately full hope ICE, these multiyear to into bid which contender $XX the its period, under assuming procurement recently in division presently be expected Transportation of also to the for which revenues our X-month partners. support generate a to for term. continue contract contract currently to strong GTI We government remains over active entered state a protests.Moving services, million through to air an provide agency up to contract a is for emergency Our runs operation

and facilities. to our in our contract June for at Facility for valuable, in the are Correctional market renewed are segment in modern, and bureau which we term the believe be the XXXX, through have payments.With term Correctional of expenditures, renewal Blackwater X-year effective second lease the Plains lease we property May options.Over generate million new idle an with X.X new the we revenue straight-line under with the insurance, our Facility XXXX, term Correctional The state continuing well-located Lawton Oklahoma, and a of effective the expect initial During actively of X, Great maintenance, a for we these comprised government Secure annually responsible of tax effective our of X,XXX $X.X Services and assets, beds Plains years primarily River former We we now for reactivation capital X-year of through Facility level.Also renewed subsequent the of X reactivated XXXX. approximately of state we to the has to property Great Oklahoma. X,XXX-bed prison Florida, the we unlimited of lease, federal agreement agencies October And X-year XXXX. X,XXX-bed recently term will for lease a contract X,XXX-bed quarter Facility, approximately very State of

in generate turn commenced the Calabrese this contract Australia million review under Wayne with to care delivered is contract Georgia, of support Care. new behalf to $XX of including Oklahoma, approximately services on Correctional health across state health delivering Xst Our we July for across services states, call XX high-quality begun prisons GEO our This over new expected to State Victoria. with primary rehabilitation will markets, in Virginia.Finally, enhanced and our Facilities Correctional Indiana, I New X programs a of on Departments public respect international annualized Florida, and Mexico, time, revenues.At the in have Arizona,

Wayne Calabrese

an to our on I'm our business with operational James. Care unit, division. you, update Reentry pleased GEO starting Services provide Thank

audits, internal scores of government second X the Correctional successfully quarter, reviews, Reentry Services During perfect residential underwent separate our receiving accreditations, reentry our centers centers accreditation facility pre-certifications.Five including with of received and audits, from third-party those of Association American XXX%. the XX

and Bureau Federal well including of of contracts XX housing for Department reentering XX the communities XX residential provide reentry with day with individuals Rehabilitation.Our as XX programs reporting non-residential center Corrections centers reentry their Prisons renewed contracts, five rehabilitation and residential the also states. California including We as across transitional seven

with these of division. community-based probationers of XX Continuum reduction, centers at the and generated XX reports year.Moving up programs across participants, to states.Outcome cognitive our and X,XXX services, impact treatment, program clients risk second centers provide different the sobriety gains during of and in-prison including behavioral non-residential locations quarter completions for demonstrate in reporting Care of employment terms the and gains increasing paroles to for Our continue several high-quality day for to GEO positive

also individuals the in-custody all to on of academic lead in-prison We've daily school because our services piece XX important classrooms enhanced individuals the addiction. from and deployments. delivered those with approximately average on Continuum equip in-custody suffer sites.Our smart at rehabilitation the Abuse of are high support Care of are at treatment to our to completed X,XXX programs boards but in approximately population aid an individuals academic and these programs During post-release developing also an of delivery not that helping focused job instruction quarter, services we in a care, equivalency in when facilities. of only needs.Our placement our our include We've at of rehab second made on rehabilitation significant many to attain care programs market vocational XX based focused XX,XXX certification programs Substance investment

And character-based and character-based more the housing dorms facilities during XXXX. provide XXX,XXX and our of in-custody faith-based hours we Our these completed programs, the extensive we faith-based well. enhance than units programs.Overall, delivery programs quarter across as of to of facilities or have second rehabilitation designated

behavioral XXX Our and approximately over quarter, programs courses post-release return completions school training second as we high allocated and our to academic individuals we individual GEO treatment behavioral approximately vocational equivalency XXX sessions.During treatment awarded X,XXX facilities support and $XXX,XXX than more XXX communities. also certifications.Our X,XXX X,XXX program approximately the released awarded services completions diplomas approximately Substance to program their they Abuse programs cognitive from to achieved approximately awarded vocational

BI services our provides solutions, required the federal be how participants turning of justice better since the needs we've to supervision criminal be ISAP segment, our and and Department post-release States model including level, services behalf system the and critical under suite integrates agencies of provides to technologies experienced proven in the the Continuum monitoring across At electronic Homeland X lives.Finally, country. million-plus can the individuals. believe federal, products and of this supervision cognitive community released served full contract with of Care our We that award-winning number rehabilitation, our monitored subsidiary program GEO changing the United on in in Security. state year, address in-custody enhanced of monitoring a a Our on a their people local decline behavioral support with of beginning of treatment

variety result case being that we could recent recently agencies participant conduct solutions seen a services compliance and the of However, with important enrolled with in for pilot number ICE ISAP under to working time.As numbers, participants we innovative our provides which policies tracking X over continue in means we've of slower program, decline using of a decisions an BI's ISAP rate technology their management new BI's worn believe to has compliance XX compliance holistic of policy Supervision increase case almost and VeriWatch. in tenure, are and objectives. promote management, period and of in of supervision, solutions, achieved additional programs GPS ISAP.BI and provided technologies monitoring years. wrist that established we has government Appearance is VeriWatch government services Under new Program high levels device, under achieving the with for this federal

this for product Jose the actively over new innovative country.And We at across I'll to the turn Gordo this time, call are remarks. marketing closing agencies government to

Jose Gordo

additional closing, reduce agencies, under assets. contract in believe, have the international debt positioning of XXXX. net capital GEO potentially our on populations processing our debt X,XXX facilities potential we federal units the We transportation number and to either interest of gain delivered Thanks, and we ISAP, non-core lease by upside to enrolled under where our electronic in half and costs activation of and opportunistic shareholders management flexibility secure increased to of diversified new monitoring, the the several to to portions our first divisions available reducing approximately future.We have business or order the refinance of remain quarter secure opportunities, our and focused the centers of wins idle or strong are and/or our including financial company in total return our participants operational state performance managed-only overall a sale ICE reentry, Wayne. beds, during or at increased second In

aggregate to, estimated of at the public record secure many company. undervalued, believe we our more with selectively opportunities, We to and are essential to a is beds in of assets future conservative expect enterprise lines both generally agendas, of administrations account, best the carry we with believe represents are of alone into both being and our we who clients And current worldwide where to as underpin believe and that taking facilities areas to of or prioritizes and/or set significant our adjacent geographic other professionalism, equal to for diversified own new industry. Democratic care.We also real our our segments, continue compelling this our our valuation completes and our our we that various the continue related agency industry. facilities XX can a of of continue stock We mission these are in-service we of XX,XXX and those of sales complementary talent employees, well current plan clients modern beds approximately least comparable pursue to existing and and these have our We current located believe our growth, markets.We existing facilities of that business.In of costs in is excess believe leverage flows case at valuation valuation based new with successful the better significant our in the values a our value or valuable value. track as construction before assets than growth on estate operating for seeking price and political that cash government that replacement who through role and to trust remain critical Instead, Republican proud our do out levels is not no those state and well-being meet we may and employees evolve. our that investors.We clients steadfast demands with to on current be the basis consistently professional projects, play policy with federal government the presence.Based future as on remarks, resource-intensive, years. these our we in entrusted have and great almost decisions at daily clients significantly substantial or we for services We a in equity consummately organization are the presidential That to priorities we we compelling over market commitment provider as our stand complex, to our case questions. components, to believe purpose an take which would delivered glad they ready and a XX,XXX

Operator

question Instructions] The Capital. [Operator Joe Gomes first today NOBLE comes with from

Joseph Gomes

to out start ICE. wanted I on

said occupancy since in ending facilities most operate You XX% you Title What increase guys' at under of a the know ICE see population minimums. the I your XX. levels of are that those contribution facilities populations Are level to more we'd receive the lines? a minimum the additional seeing you you top and that start if so were to bottom a of past now?

Jose Gordo

our that facilities and results. our a below more increase minimum continued that few materially the guarantee financial we ones of select But but in let are do put there's occupants guarantee, enhance it simplistically. Many have minimum a will me

capacity. a located people but increase. think Some continue policies cool the in may are along very as plenty southern others particular, implemented of some the full. put are the in full, of coming are become To changes more northern already across temperatures not, the the not and we states answer, to border populations as facilities have short we or border, we facilities, in border possibility particularly coastal Other the and full.As see are

Joseph Gomes

for said of will I I today anticipating. this in time go participant the the in terms you level of Okay. stabilize gives year? understand were of you what or have than half ISAP, longer up what that period second think But back hopefully confidence you originally either the a on And declined numbers

Brian Evans

and of policy. want we a into discuss that policies monitoring detail provide to participants use Because we're a aware authorized of policies to wider then that are what using. where I really these are really programs for But as of in not don't of and devices effect, detention a they, they the of may combination DHS program as well shifting because different in the alternatives to go be

Joseph Gomes

about looks then numbers which numbers And here again, were is And up correctly XX% I a revenue, Okay. are expenses particular I ran from level drove in operating be quarter. in was since first of would level the that of higher highest operating just like wondering if that quickly, if the out expense XX% little anything my you my over first second it that about the what could the correct, quarter quarter? XXXX. there's point

Brian Evans

No, and I brought do higher have so. that wages being of think you think on I staff don't more board. some normalization

going decline the in ISAP you're that's And then in some accounts that. see to the of So higher-margin the program, a segment.

So that's as affecting well. that

Joseph Gomes

And I'm it my up driving numbers to And that then you sequentially will I what debt me get heard sure that? correctly net quite one went again, Is I'm here net and queue. so, quickly, level. one running I Okay. for not mention, debt if last if quarter, the if in back level this accurate? was like, it looks

Brian Evans

issues. as of just is net was think significant interest I In quarter-over-quarter, million. had we mentioned, and of debt George amount like as So $X a That's capital this payments. mainly working quarter, discussed about the same maybe I timing and the up principal

cash lot all for So We out it quarter, to that. quarter. but of this used this accrued we we out ratably a lay towards had it

in debt, million So net expect as my in quarter, or reduction a mentioned about next $XX significant remarks, I so. we

Operator

question Wedbush with comes next from Violino Securities. Brian The

Brian Violino

my Hi, good for morning. Thanks questions. taking

is any sort funding that Just over participant time, to on program. funding minimum the you're guess, that level? there current continues of I that the count Based current assuming on ISAP disclose I'm level, able the based on

Jose Gordo

that's don't I ever is. there This been think being don't I think discussed. No, count.

Brian Violino

anything notable I or state pipeline? diem per state partners or potential guess, there is increases partners then any partners, And with Yes. county on report the in state to new any on

Jose Gordo

be increased year of X particularly those we to have July have level, department wages contract states most of there's Periodically, starting fiscal applied that point. have labor modifications our to federal with and state facilities renegotiations, partners regarding a our that the the implement At increases.

the for to making that the So relate costs, on they'll facilities medical due health increased year, of again for select for beginning to either increased wages be their budgets following will care staff. be the or conditions wages typically in funding for additional our proposed conditions process market and market related requests or cases we to service establishing pandemic

Brian Violino

one I more, Understood. And if could. just

it a out On investments providing contract a just that's is the air any earlier start revenue. to I comment operations was incremental call, made for believe there immediately million the support the in in bid. $XX and that there's was there Is quarter? of something to needed? of about -- curious, that's sort ICE larger going I And third think I then was

opportunity Just that of curious what be? could kind

George Zoley

Yes. that we emergency prime, today the staffing which contract airplane was the travel internationally. security subcontractor we a a was that domestically in provide our either were on The to contract or role to an referenced

including protested that prime of are That a submitted long-term I X contract procurement, can contract, has think, X a procurement are involved team, are prime competitors to that regarding as it's we run, comprised made decision a by is that was the of we several a So our the a subcontractor months proposes the subcontractor. and that been the with or to an until awarded emergency procurement contract. is

services procurement, protesters we one over that up X presently So next of in or but to are with months we the are course providing our involved partner of X the the the

Operator

next comes Brendan with McCarthy from The Sidoti. question

Brendan Michael McCarthy

just ICE I'm looking here, at one populations. first The

facilities? was I XX% price population they is total your I at in mentioned overall facilities. wondering, up line increases I'm were curious, think that with roughly in you

Jose Gordo

No.

border that I away are full, facilities border -- said think vacant earlier from still some beds. the the have are I southern along others

that At individuals capacity have time, of those are in detained of we of facilities. XX,XXX plenty have We reportedly in almost GEO facilities. people XX,XXX this the

So presently detained, facilities. individuals the we housed being are one-third GEO over in that of have are

the the DHS of one-third contracts have going We market have sector detained the to only approximately the detention with the provides presently, country XX% for counties share.And or XX% of of private individuals. of housing share in cities that with approximately capacity

Brendan Michael McCarthy

for if the anticipated, seen? opening believe, regarding curious the in just And of in having are according just ICE facilities some notes, we've that those to with then of some I'm Texas. increase populations located facilities, about ICE some just my you're any conversations I idle

Jose Gordo

different have of to and I budgets. conversations regarding we matter fair down it comes usually their think several and a going it's to on facilities, say funding

probably have level, the in level, they it's the October that next to at will federal which So federal new approved funding budget, of be at state the year. spring sometime X, wait starts

Brendan Michael McCarthy

more, Okay. if And then one I may.

Just I just could expense looked on items. a line in you but I on administrative large expenses. general driven there we was some wages, operating it by decline comment expenses higher decline? was wondering talked know about that and if like

Brian Evans

Nothing significant.

defend, compared to I in think legal higher specific to the stuff, lower maybe prior had professional nothing fees, costs we've of just the beyond fees. is legal year-over-year undertaken some cases the labor so on especially In department, quarters, though. some company some activity that

Operator

Ludtke question Imperial Kirk next Capital. comes from with The

Kirk Ludtke

of that ICE couple With you to population, a did where pre-COVID? in follow-ups. Just the people respect facilities, you XX,XXX peak your have mentioned ICE

Jose Gordo

XX,XXX, would say XX,XXX, I that. something like

Kirk Ludtke

Okay.

I and was missed you maybe mentioned that what could You it? said, ISAP that quantify if And and some you incremental just curious potential funding. maybe elaborate on I for there's

Jose Gordo

no, a participation cost-efficient program more of use those in around better of people moving policies ISAP concert was DHS on that be in people which I that extending for really didn't for ISAP help require additional more in necessitate funding that for Well, would the for within and may different for ISAP there's the additional the a and may in to There's budget limitations. potential program program, basis. the funding program or things the funding, potential would the Go case. because a there program But into efficiencies increased hopeful But find Congress two additional ISAP say cost on participation which funding. additional on provide

Kirk Ludtke

legislation sentencing. level, some there's would that been state presence? that states in a some for have the stringent more in require some What's you the the states where At like population

Jose Gordo

that repeat you please? Could question,

Kirk Ludtke

can legislation say the sentencing increased have is about Like I'm there's have you been that's some you do -- curious minimum my trends if state -- where in been basically understanding business? -- some made there population, what requirements. you state the just

Jose Gordo

one their either solution population growing much in to or plant problems that to where have interest prefer and it's And with to to have The are even different with have one are a faced facility, really a an having aging them. they our so they're either a facing responding that for facilities. trend cost-effective facility we they is more idle a a population states close physical build not of facilities, stable because

have several looking are of they care significantly and particular, are, because that to will expensive our that going the amenities that correctional don't and fixed in discussed, have They the libraries, be facilities older programs.So newer fields comparison, into at conditioned. they within facilities are if the there attractive air They adding continue very -- very aging population. by be all and own we've future physical in comparison, by our So internally continuum and the fix, are the facilities have modern. for space because more facilities, educational can additional states, marketplace and plant They're that their artificial the correctional state Sunbelt of been turf be have different states now all. are to soccer

Operator

Jordan from Financial. comes with question Next Philadelphia Hymowitz

Jordon Hymowitz

Couple of things.

First, that the a been there's amount within money understanding has current DHS ICE that on program. is towards be and reallocated of do. ISAP hesitant could administration the substantial this, to My

funding become that not it's it? reallocation of more way may the a Is necessarily but funding, that it's understand available. So you that

George Zoley

primarily through of Well, different the ICE I that which funds has program. has including to I'm ICE that various the detention publications -- And for DHS think of that every alternatives reasons, within funding aware stories agencies aware programs, to around the I'm like for ability more to includes that asked shift the department these department the department.

Jordon Hymowitz

indicate would circle process. there those are? case would on the if that rule before monitoring in the Do to preliminary several it rule are the line judge -- in several you people Florida know And of would timing that the what judge if be with cases more would of any the Okay. appellate be cases that being

George Zoley

I lengthy be very can appeal, a No, to and that them of I are really subject all don't presume because process.

Jordon Hymowitz

Okay. And was about before. twofold. side profit somewhere would are talking than would those were like XX, final point like not towards double is, And one guess between the question my would number numbers if has what to is question the XX the profitable? a because the anything number it's more substitute to whether hit that XX. like One we a I a XX, a profitability there we incremental again, XX go from XX, Republicans on minimums, that to And be XX because once the obviously start or we head going true? to from Presidential you be they above as business And go much At not that. more election, is double incremental are be minimum. to B, of prison Is that a margins XX

George Zoley

profitable. Well, because to difficult facility. from facility it certainly calculate more differs to be will It's it

it's each it's calculation We for cumulative have a done haven't aggregate thousands and Because that we significant. beds of number, beds of number. double-digit a -- those additional is between but of available

Jordon Hymowitz

get the peer be that you different minimums? the So yours anything Would double. number close incremental said B, has profitability once be above to that could from

Brian Evans

of would significant not of that accurate. double I'm bottom-line, but as company as contract -- And return. above going understanding benefit is and that guarantees as is, in the our your revenue, don't -- you're think it's I the there not amount cost a mentioned, the our the ice material the if to absorb guarantees No, it the incremental would profitability minimum the double, price business profitability. our to correctly, that's increases George something as well That's it our question occupancy to saying

Jordon Hymowitz

XX,XXX. people dramatically get No, the X,XXX you minimum. those minimums, X,XXX and no. XX,XXX if above XX,XXX Once to versus, the incremental profit incremental you other words, In The go above from say, greater. is

Brian Evans

priced what are, is necessarily. depends meaningful. is those on diems like said, not incremental It And it George Yes. how but per and the contract

Jordon Hymowitz

can you. debt, you Thank when say? back start the buying you And would Okay.

Brian Evans

Well, downs to debt on pay going the third we're in quarter. make additional

Jordon Hymowitz

And could when earliest would be the equity started? the

Brian Evans

terms some equity the credit renegotiate to have do any buyback. of We some can we agreements and of meaningful the before

Jordon Hymowitz

earliest? a XXXX it's number So, at

Brian Evans

is XXXX Probably assumed.

Operator

closing like to This would I GEO concludes the over remarks. back George for the Executive our Zoley, Chairman for session. to Group conference question-and-answer turn

George Zoley

for the conference next today. Thank to Look joining you call. us forward investor

Operator

presentation. The today's conference attending has concluded. for you now Thank

disconnect. You may now

The GEO Group, Inc. (GEO) 9 Aug 232023 Q2 Earnings call transcript