Geo Group Inc (The) REIT

Good morning and welcome to the GEO Group first quarter 2020 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Pablo Paez, Executive Vice President of Corporate Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us for today's discussion of the GEO Group's first quarter 2020 earnings results. With us today are George Zoli, Chairman and Chief Executive Officer, Brian Evans, Senior Vice President and Chief Financial Officer, Ange Lard, Senior Vice President and President of GeoCare, and David Donahue, Senior Vice President of GeoSecure Services. This morning, we will discuss our first quarter results and outlook for the balance of the year. We will conclude the call with a question and answer session. This conference call is also being webcast live on our investor website at investors.geogroup.com. Today, we will discuss non-GAAP basis information. A reconciliation from non-GAAP basis information to GAAP basis results is included in the press release and supplemental disclosure we issued this morning. Additionally, much of the information we will discuss today, including the answers we give in response to your questions, may include forward-looking statements regarding our beliefs and current expectations with respect to various matters. These forward-looking statements are intended to fall within the safe harbor provisions of the security laws. Our actual results may differ materially from those in the forward-looking statements as a result of various factors contained in our Securities and Exchange Commission filings, including the Form 10-K, 10-Q, and 8-K reports. With that, please allow me to turn this call over to our Chairman and CEO, George Zolle. George? Thank you, Pablo, and good morning to everyone.

This morning, we reported our first quarter results, updated our guidance for the full year, and issued guidance for the second quarter. As our country and the world face an unprecedented health and economic crisis, geo employees and facilities throughout the United States and internationally have also been impacted by the spread of COVID-19 virus. Some of our employees live in communities that have endured significant hardship. and a few of our facilities have experienced cases of COVID-19 in both our staff and individuals entrusted to our care. From the outset of this global pandemic, our corporate, regional, and field staff have implemented comprehensive steps to address and mitigate the risks of COVID-19 to all of those in our care and our employees. Ensuring the health and safety of all those in our facilities and our employees has always been our number one priority. As a longstanding provider of essential government services, we have the experience with the implementation of best practices for the prevention, assessment, and the management of infectious diseases. All of our facilities operate safely and without overcrowded conditions. All of our facilities have access to regular hand washing with clean water and soap, as well as ample hygiene and sanitation products. All of our geo-secure facilities provide 24-7 access to health care. In the case of our ice processing centers, the number of health care staff is typically double the number of health care staff at state correctional facilities. Most of our facilities are equipped with airborne infection isolation rooms, specifically designed to manage infectious diseases. During this call, David Donahue and Anne Schlarb will discuss the steps we've taken at our GeoSecure services and GeoCare facilities to implement best practices consistent with the guidance issued by the Center for Disease Control and Prevention. Even though we have continued our operations as an essential government service provider, the spread of COVID-19 has also negatively impacted our projected revenues and cash flows for the year. Our ICE and U.S. Marshals facilities have experienced lower overall occupancy as a result of declines in crossings and apprehensions along the southwest border, as well as a decrease in court, and sentencing activity at the federal level. Additionally, the federal government recently issued COVID-19 operational guidance recommending a reduction to 75% capacity at ICE processing centers where possible to promote social distancing practices. It's important to note that most of our GeoSecure facilities contracts contain fixed price or minimum guaranteed payment provisions intended to ensure adequate staffing levels and consistent service delivery. Currently, our ICE processing centers and U.S. Marshals facilities are operating at around the capacity level tied to the fixed price or minimum guarantee payment provisions. Although it is possible that we may experience an improvement in occupancy levels at ICE and U.S. Marshals facilities later this year, Our updated financial guidance assumes a continuation of the currently lower levels for the entire year. With respect to off-site medical expenses at our ICE processing centers and U.S. Marshalls facilities, the federal government typically bears the cost for off-site medical care. Our geo-care segment has also experienced a decline in revenue, primarily related to lower occupancy across our geo-reentry centers, and day reporting programs. While we hope the trends will improve later this year, our updated guidance assumes lower occupancy levels for the entire year. During the first quarter, we began the intake process at the government-owned 512-bed El Centro detention facility in California under a new nine-year fixed monthly price contract with the U.S. Marshals Service. We also completed the intake process and achieved normalized operations at our company-owned 1,800-bed North Lake Correctional Facility in Michigan. And in Texas, we completed the intake process and achieved normalized operations at the county-owned 1,800-bed Reeves County Detention Center 1 and 2 and 1 and the 1,376-bed Reeves County Detention Center 3. These facilities were activated under new 10-year contracts with the Federal Bureau of Prisons, providing for fixed monthly payments. Before I turn the call over to Brian Evans to review the results outlook and liquidity position, I would like to say a few words about our frontline employees. Every day, more than 20,000 GEO employees report to work at over 200 GEO facilities and program locations. These frontline employees make daily sacrifices to care for all of those in our facilities and programs. They are security officers, social workers, case managers, teachers, maintenance staff, doctors, nurses, but more importantly, they are members of the diverse communities whose families have also been impacted like everyone else. I'd like to express our deepest gratitude and appreciation to all of our frontline GEO employees for their daily dedication and sacrifice, which is truly an inspiration for us all. Despite this quarter's many challenges, our revenues and cash flows remain resilient and continue to support our dividend payments. I'll now turn the call over to Brian Evans.