Geo Group Inc (The) REIT

And welcome to the GEO Group second quarter 2021 earnings call. All participants will be in 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 second quarter 2021 earnings results. With us today are George Zoli, Executive Chairman of the Board, Jose Gordo, Chief Executive Officer, Brian Evans, Chief Financial Officer, Ann Schlarb, President of GeoCare, and James Black, President of GeoSecure Services. This morning, we will discuss our second quarter 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 for 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 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 Executive Chairman, George Zolle. George?

Thank you, Pablo, and good morning to everyone. It is my pleasure to welcome our new CEO, Jose Gordo, and our new president of GeoSecure Services, James Black, who are joining Brian and myself on today's call. We are pleased with our strong second quarter results and our increased financial guidance for the full year. We believe our financial performance during the second quarter is representative of the resiliency and strength of our diversified business segments. Our better-than-expected performance was driven by continued favorable cost trends, as well as higher occupancies at our U.S. Marshalls and ICE facilities, and increased revenue and earnings from our electronic monitoring segment. Since the end of the first quarter, the census at our U.S. Marshalls facilities has increased by approximately 10%. And the overall census at our ICE facilities has increased by approximately 100% during the same period. With respect to the Bureau of Prisons, we completed the previously announced transition of our Great Plains correctional facility to an idle status in May of 2021. We are actively marketing our Great Plains facility and our other idle facilities for use by other state and federal agencies. As we highlighted previously, the President issued an executive order in January of this year directing the U.S. Attorney General not to renew Department of Justice contracts with privately operated criminal detention facilities. Our base case assumption continues to be that our remaining BOP prison contracts will not be renewed, resulting in two additional BOP correctional facilities closing in November 2021. It is important to note that during the second quarter of 2021, we successfully renewed five BOP reentry contracts, which are not expected to be impacted by the executive order. In fact, we are pleased to have been recently awarded a new BOP contract for a reentry center in the Tampa area, which is the first new BOP residential reentry contract awarded to GEO in several years. With respect to the U.S. Marshals Service, we are continuing to cooperate with the agency in assessing various alternatives on how to comply with the executive order, which appears to be focused on direct contracts with private sector service providers. The U.S. Marshals do not own or operate facilities and instead contract for capacity primarily through intergovernmental agreements and to a lesser extent direct contracts. We operate three facilities that are under direct contracts and nine facilities that are under intergovernmental agreements with the U.S. Marshals. Despite the challenges of the COVID pandemic and the impact of the executive order on our BOP prison contracts, we are pleased with the strong performance of our diversified business segments. We are proud of our frontline employees who have demonstrated significant strength and dedication over the past year and a half. They have continued to provide humane and compassionate care to all those entrusted to our facilities and programs. Understanding the challenges our government agency partners face in carrying out their missions during a pandemic, we invested significant resources to mitigate the impact of COVID-19. including $2 million in 45 Abbott rapid testing devices and $3.7 million in bipolar ionization air purification systems. We recognize that in addition to the challenges that I just discussed, there have been certain concerns regarding our future access to financing. We have adopted a proactive and multifaceted approach to address these challenges. We believe these initiatives are in the best interest of our shareholders and other stakeholders as we work to address our debt maturities and enhance long-term shareholder value. At this time, I'll turn the call over to Brian Evans to address these initiatives in more detail and review our results and guidance.