Geo Group Inc (The) REIT

Good day, and welcome to the GeoGroup fourth 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 touchtone phone. 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, sir.

Thank you, Operator. Good morning, everyone, and thank you for joining us for today's discussion of the GeoGroup's fourth quarter and full year 2020 earnings results. With us today are George Zoli, Chairman, Chief Executive Officer and Founder, Brian Evans, Chief Financial Officer, Ann Schlard, President of GeoCare, and Blake Davis, President of GeoSecure Services. This morning, we will discuss our fourth quarter and full year results and our outlook. 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 the 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 securities 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. Today, we reported our fourth quarter and full year 2020 results and issued our final guidance for 2021. During the fourth quarter, our operating divisions continued to face challenges associated with the ongoing COVID-19 pandemic. Over the course of the pandemic, we experienced a decline in overall occupancy levels at several of our federal facilities. Due to the decline in overall federal population, we had previously announced that the Federal Bureau of Prisons had decided not to renew three of our BOP contracts that are scheduled to expire during the first quarter of 2021. More recently, the President issued an executive order directing the Attorney General to not renew DOJ contracts with privately operated criminal detention facilities. While we continue to monitor the scope and implementation timeline for this order, we have assumed that it could result in additional non-renewals of our BOP contracts in 2021 and coming years. and we have incorporated this assumption into our guidance. Unlike the BOP, the U.S. Marshals Service, which is also under the U.S. Department of Justice, does not own and operate its facility. The U.S. Marshals Service contracts for bed capacity, which is generally located in areas near federal courthouses to house pretrial offenders who have been charged with federal crimes under the laws passed by Congress. The U.S. Marshals Service contracts primarily for these facilities through intergovernmental service agreements and to a lesser extent direct contracts. The U.S. Marshals Service may determine to conduct a review of the possible application of the executive order on its facilities. Our GeoCare segment has also been impacted by lower occupancy levels across our reentry senators, day reporting programs, and youth services facilities due to COVID-19. During the fourth quarter, we incurred a non-cash goodwill impairment charge associated with our reentry centers, primarily due to the negative impact the pandemic had on this segment. Despite these challenges, we believe our company remains resilient and is underpinned by long-term real estate assets and supported by contracts entailing essential government services. We've provided these essential services to government agencies at the federal and state levels under both Democratic and Republican administrations and during times when either party has been in control of the legislative branch of the government. Our frontline employees remain focused on providing high-quality services and humane care for all those entrusted to us. During the past year, our employees have shown incredible commitment and resilience as our company has managed through unprecedented times, and we are very proud of their dedication. From the outset of the pandemic, we have implemented company-wide steps to mitigate the risk of COVID-19 to all those in our care and our employees, and we continue to evaluate these steps. Ensuring the health and safety of all those in our facilities and our employees has always been our number one priority. We also recognize that in addition to the challenges associated with COVID-19, heightened political rhetoric has led to a mischaracterization of our role as a government services provider and has created concerns regarding our future access to financing. Our board of directors and our management team are aware of the importance of allocating capital to pay down debt in the current environment. Consistent with our previous guidance, we paid down approximately $100 million in net debt during 2020. To continue our focus on paying down debt, our board recently reduced our quarterly dividend payment to 25 cents per share for the quarter. Our Board will continue to evaluate our dividend and capital allocation strategy, including our planned capital expenditures, with a goal of targeting a minimum of $75 to $100 million in net debt repayment in 2021 and annually thereafter. Additionally, we continue to evaluate cost savings opportunities at the corporate and facility levels, and we have identified several company-owned assets that could potentially be sold. We remain committed to balance our continued creation of value for our shareholders with prudent management of our balance sheet. At this time, I'll turn the call over to Brian Evans to review our financial results, guidance, and liquidity positions.