Q1 2024 The GEO Group Inc Earnings Call

Operator: Good day and welcome to the Geo Group first quarter 'twenty 'twenty four earnings conference call.

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Operator: To withdraw your question, please press star then 2. 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.

Operator: Please note this event is being recorded.

Operator: I would now like to turn the conference over to Pablo Paez Executive Vice President of corporate Relations. Please go ahead.

Pablo E. Paez: Thank you, operator. Good morning, everyone, and thank you for joining us for today's discussion of the Geo Group's first quarter 2024 earnings results. With us today are George Zoley, Executive Chairman of the board; Brian Evans, Chief Executive Officer; Wayne Calabrese, President and Chief Operating Officer; Shayn March, Acting Chief Financial Officer; and James Black, President of GeoSecure Services.

Pablo E. Paez: Thank you operator, good morning, everyone and thank you for joining us for today's discussion of the Geo group's first quarter 2024 earnings results with.

Pablo E. Paez: With us today are George the only executive chairman of the board.

Pablo E. Paez: Brian Evans, Chief Executive Officer Wayne.

Pablo E. Paez: Wayne Calibrates, President and Chief operating Officer, Jane March our acting Chief Financial Officer, and James Black President of Geo secure services.

Pablo E. Paez: This morning, we will discuss our first quarter results as well as 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 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.

Pablo E. Paez: This morning, we will discuss our first quarter results as well as our outlook.

Pablo E. Paez: We will conclude the call with a question and answer session.

Pablo E. Paez: This conference call is also being webcast live on our Investor website at investors <unk> Geo group Dotcom.

Pablo E. Paez: Today, we will discuss non-GAAP basis information.

Pablo E. Paez: Reconciliation from non-GAAP basis information to GAAP basis results is included in the press release and supplemental disclosure we issued this morning.

Pablo E. Paez: Additionally, much of the information we will discuss today.

Pablo E. Paez: Including the answers we gave in response to your questions May include forward looking statements regarding our beliefs and current expectations with respect to various matters.

Pablo E. Paez: 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 Zoley. Thank you, Pablo.

Pablo E. Paez: These forward looking statements are intended to fall within the safe Harbor provisions of the securities laws.

George C. Zoley: 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.

George C. Zoley: With that please allow me to turn this call over to our executive Chairman George George Thank.

George C. Zoley: And good morning to everyone. Thank you for joining us for our first quarter 2024 earnings. I'm pleased to be joined today by our senior management team. During today's call, we will review the first quarter's financial results and the operational milestones for each of our business sectors, provide an update on our recent refinancing transactions and our continued efforts to enhance long-term value for our shareholders, and discuss our financial guidance and outlook for the balance of the year.

George C. Zoley: Thank you Pablo and good morning to everyone and thank you for joining us on our first quarter 2024 earnings call.

Speaker Change: I'm pleased to be joined today by our senior management team.

George C. Zoley: During today's call, we will review the first quarter financial results and the operational milestones for each of our business segments.

George C. Zoley: <unk> provided an update on our recent refinancing transactions and our continued efforts to enhance long term value for our shareholders.

George C. Zoley: And discuss our financial guidance and outlook for the balance of the year.

George C. Zoley: During the first quarter, our diversified business units continued to deliver strong operational and financial performance. This morning, we reported first quarter revenues of approximately $606 million and a gap net income of approximately $23 million. We also reported first quarter adjusted EBITDA of approximately $118 million.

George C. Zoley: During the first quarter, our diversified business units continued to deliver strong operational and financial performance.

George C. Zoley: This morning, we reported first quarter revenues of approximately $606 million and GAAP net income of approximately $23 million.

George C. Zoley: We also reported first quarter adjusted EBITDA of approximately $118 million.

George C. Zoley: Looking at our key quarterly trends revenues for our owned and leased secure facilities.

George C. Zoley: Looking at our key quarterly trends, revenues for our owned and least secure facilities increased by approximately 7% from a year ago. This increase was driven primarily by year over year population increases across our ICE facilities. Utilization in our ICE facilities averaged approximately 13,000 beds during the first quarter of 2020. We estimate that during the same time frame, the utilization across all ICE facilities nationwide averaged approximately 38,500.

George C. Zoley: Increased by approximately 7% from a year ago. This increase was driven primarily by year over year population increases across our ice facilities.

George C. Zoley: Utilization in our ice facilities averaged approximately 13000 beds during the first quarter of 2024.

George C. Zoley: We estimate that during the same time frame the utilization across all ice facilities nationwide averaged approximately 38500 beds.

George C. Zoley: We estimate that the utilization across ice facilities nationwide is currently at approximately 37000 beds and the current utilization at Geos ice facilities remains at approximately 13000 deaths.

George C. Zoley: With respect to federal funding the appropriations Bill for fiscal year, 'twenty, four which recently.

George C. Zoley: We estimate that the utilization across ISOC facilities nationwide is currently at approximately 37,000, and the current utilization at Geo's ice facilities remains at approximately 13,000. With respect to federal funding, the appropriations bill for fiscal year 24, which recently was enacted by Congress, increased funding for ICE detention to 41,500 beds from the previously funded level of 34,000. Moving to our managed-only segment, compared to one year ago, our quarterly revenues increased by approximately 14%. The year-over-year increase in managed-only revenues was driven by new contract activations in our secure transportation and international business.

George C. Zoley: Enacted by Congress increased funding for ice detention to 41500 beds from the previously funded level of 34000 deaths.

George C. Zoley: Moving to our managed only segment compared to one year ago, our quarterly revenues increased by approximately 14%.

George C. Zoley: The year over year increase in managed only revenues was driven by new contract Activations in our secured transportation and international businesses.

George C. Zoley: In the third quarter of 2023, our GTI Transportation Division activated a new contract to provide air operation support for ICE. This contract was first activated on an emergency basis, and more recently, we announced a new long-term five-year contract for GTI to continue to deliver these services as a subcontractor to CSI Aviation, which holds the prime contract with ICE. Internationally, our Geo Australia subsidiary activated a new contract in July 23 to deliver primary health care services across 13 public prisons in the state of Victoria.

George C. Zoley: In the third quarter of 2023, our GTI Transportation Division activated a new contract to provide air operation support for Rice.

George C. Zoley: This contract was first activated on an emergency basis and more recently, we announced a new long term five year contract for GTI to continue to deliver these services as a subcontractor to CSI aviation, which holds the prime contract.

George C. Zoley: With ice.

George C. Zoley: Internationally, our Geo Australia subsidiary activated a new contract in July 23, two deliver primary health care services across 13 public prisons and the state of Victoria.

George C. Zoley: Moving to our Geo Reentry Services Division, we renewed three residential reentry center contracts with the Federal Bureau of Prisons during the first quarter of 2024, and the quarterly revenues for our non-residential reentry services segment increased by approximately 19% from a year ago with respect to the Federal Government's Intensive Supervision Appearance Program, or ISAS. Participant counts averaged approximately 188,000 individuals during the first quarter of 2024, compared to an average ISAF participant count of approximately 192,000 during the fourth quarter of 2023. Since the end of the first quarter, the ISAP participant count has fluctuated between approximately 184,000 and 185,000 individuals.

George C. Zoley: Moving to our Geo reentry services Division, we renewed three residential reentry center contracts with the Federal Bureau of prisons during the first quarter of 2024.

George C. Zoley: And the quarterly revenues for our non residential reentry services segment increased by approximately 19% from a year ago.

George C. Zoley: With respect to the federal government's intensive supervision appearance program or ISR.

George C. Zoley: Participant counts have averaged approximately 188000 individuals during the first quarter of 2024.

George C. Zoley: Compared to an average ICF participant count of approximately 192000 during the fourth quarter of 2023.

George C. Zoley: Since the end of the first quarter. The ICF participant count has fluctuated between approximately 184180 5000 individuals.

George C. Zoley: With respect to federal funding.

George C. Zoley: With respect to federal funding, the appropriation bills for fiscal year 24, which was recently enacted by Congress, increased funding for alternatives to detention programs to approximately $470 million, an increase of approximately 7% over the previously funded level of approximately $440 million. While we would expect utilization rates for detention beds and alternatives to detention programs to potentially increase in the second half of the year, consistent with seasonal increases in border crossing activity, the timing and impact of such increases are difficult to estimate. Additionally, policy and budgetary decisions that can often impact the utilization of ICE detention beds and the alternatives to detention programs like ICEF are outside of GEO's control as a service provider to the federal government.

George C. Zoley: Appropriation bills for fiscal year, 'twenty, four which was recently enacted by Congress increased funding for alternatives to detention programs to approximately $470 million an increase of approximately 7% over the previously funded level of approximately 400.

George C. Zoley: $40 million.

George C. Zoley: Well, we would expect utilization rates for detention beds and the alternatives.

George C. Zoley: Retention programs to potentially increase in the second half of the year consistent with seasonal increases in border crossing activity, the timing and impact of such increases are difficult to estimate.

George C. Zoley: Additionally, policy and budgetary decisions that can often impact the utilization of ice detention beds and the alternatives to detention programs like <unk> or outside of <unk> control as a service provider to the federal government for.

George C. Zoley: For these reasons, we have decided to maintain our full-year 2024 Adjusted EBIDTA Guidelines. We remain focused on providing high-quality services on behalf of DHS and ICE, and we stand ready to provide any needed services and resources to help the federal government and all of our government agency partners meet their needs. Finally, we are pleased to have recently completed the refinancing of substantially all of our debt. These important refinancing transactions have pushed our debt maturities, reduced our overall cost of debt, and have given us greater flexibility for potential capital returns under our debt covenant. I will now turn the call over to our CEO, Brian Evans. Thank you, George. Good morning, everyone.

George C. Zoley: For these reasons, we have decided to maintain our full year 2024, adjusted EBITDA guidance, we remain focused on providing high quality services on behalf of DHS and ice and we stand ready to provide any needed services and resources to help the federal government.

Brian R. Evans: And all of our government agency partners meet their needs.

Brian R. Evans: Finally, we are pleased to have recently completed the refinancing of substantially all of our debt. These important refinancing transactions have pushed our debt maturities reduce our overall cost of debt and has given us greater flexibility.

George C. Zoley: Retention capital returns under our debt covenants I will now turn the call over to our CEO Brian Evans.

Brian R. Evans: Thank you George good morning, everyone.

Brian R. Evans: Our continued and steady financial performance continues to be underpinned by the strength of our diversified services platform. As we have demonstrated over the last several years, the diversification of our company has allowed us to deliver steady operational and financial results. As we have expressed to you in the past, government policy and budgetary decisions that can impact the utilization of our diversified services are outside of our company's control as a service provider to agencies at all levels of government.

Brian R. Evans: Our continued and steady financial performance continues to be underpinned by the strength of our diversified services platform.

Brian R. Evans: As we have demonstrated over the last several years the diversification of our company has allowed us to deliver steady operational and financial results.

Brian R. Evans: As we have expressed to you in the past the government policy and dumped budgetary decisions that can impact the utilization of our diversified services are outside of our company's control as a service provider to agencies at all levels of government.

Brian R. Evans: Therefore, our focus has always been on delivering high-quality services and innovative solutions to meet the needs of our government agency partners, with an unwavering commitment to operational excellence across all our services. At the board and management level, we have focused our growth and investment strategy on developing a service platform that we believe is unmatched in terms of diversification and scope in our industry. We have done so by carefully allocating capital for more than 20 years, investing in company-owned facilities, and pursuing strategic acquisitions of businesses and assets.

Brian R. Evans: Therefore, our focus has always been on delivering high quality services and innovative solutions to meet the needs of our government agency partners with an unwavering commitment to operational excellence across all our service lines.

Brian R. Evans: At the board and management level, we have focused our growth and investment strategy on developing a service platform that we believe is unmatched in terms of diversification and scope in our industry.

Brian R. Evans: We have done so by carefully allocating capital for more than 20 years investing in company owned facilities and pursuing strategic acquisitions of businesses and assets.

Brian R. Evans: We believe this strategy has allowed us to develop leading market positions across the spectrum of services in our industry, giving us the ability to effectively respond to the needs of our government agency partners as policy priorities evolve over time. Specifically, as it relates to U.S. Immigration and Customs Enforcement, we have a longstanding public-private partnership with the federal government dating back to the mid-1980s.

Brian R. Evans: We believe this strategy has allowed us to develop leading market positions.

Brian R. Evans: Across the spectrum of services in our industry, giving us the ability to effectively respond to the needs of our government agency partners as policy priorities evolve over time.

Brian R. Evans: Specifically as it relates to U S immigration and customs enforcement, we have a long standing public private partnership with the federal government dating back to the mid 19 eighties.

Brian R. Evans: We currently have 17 company-owned facilities under contract with ICE, providing needed bed space and support services across the United States. Additionally, our BI subsidiary has provided electronic monitoring and case management services on behalf of ICE under the ISAP contract for over 20 years. Over this time frame, BI has built what we believe is an unparalleled platform of technology solutions and case management services, successfully achieving high levels of compliance under the program with bipartisan support.

Brian R. Evans: We currently have 17 company owned facilities under contract with ice providing needed bed space and support services across the United States.

Brian R. Evans: Our <unk> subsidiary has provided electronic monitoring and case management services on behalf of ice under the ICF contract for over 20 years.

Brian R. Evans: Over this timeframe <unk> has built what we believe is an unparalleled platform of technology solutions and case management services successfully achieving high levels of compliance under the program with bipartisan support.

Brian R. Evans: Given our unparalleled diversified services platform and our long-standing public-private partnership with ICE, we believe GEO is uniquely positioned to continue to support the agency with a spectrum of support services and solutions, including additional bag capacity, secure transportation, electronic monitoring technologies, and case management services. While we expect the utilization of ICE detention beds and alternatives to detention programs to potentially increase in the second half of this year, consistent with seasonal increases in border crossing activity, it remains difficult to estimate the exact time and impact of these potential trends.

Brian R. Evans: Given our unparalleled diversified services platform and our long standing public private partnership with ice. We believe <unk> is uniquely positioned to continue to support the agency.

Brian R. Evans: With the spectrum of support services and solutions, including additional bank capacity secure transportation electronic monitoring technology and case management services.

Brian R. Evans: While we expect to idle utilization of ice detention beds and alternatives to detention program to potentially increase in the second half of this year consistent with seasonal increases in border crossing activity. It remains difficult to estimate the exact timing impact of these potential trends, we remain focused on the daily <unk>.

Brian R. Evans: We remain focused on the daily delivery of high-quality services on behalf of ICE and all our government agency partners, and we stand ready to support their potential future needs. We are focused on marketing our currently idle secure services facilities, which total approximately 10,000 beds, to local, state, and federal agencies for reactivation, either under a traditional secure services contract or a lease arrangement. These important assets could provide meaningful upside to our annualized revenues and cash flows if fully reactivated.

Brian R. Evans: Avery of high quality services on behalf of ice and all our government agency partners and we stand ready to support their potential future needs.

Brian R. Evans: We are focused on marketing our currently idled secure services facilities, which total approximately 10000 beds to local state and federal agencies for reactivation.

Brian R. Evans: Either under our traditional secure services contract or a lease arrangement.

Brian R. Evans: These important assets could provide meaningful upside to our annualized revenues and cash flows if fully reactivate it and.

Brian R. Evans: Another strategic priority for our management team is to continue our disciplined allocation of capital to enhance long-term value for our shareholders. For the past three years, we have prioritized deleveraging our balance sheet and reducing our debt, and we have made significant progress toward this objective.

Brian R. Evans: Another strategic priority for our management team is to continue our disciplined allocation of capital to enhance long term value for our shareholders.

Brian R. Evans: For the past three years, we have prioritized deleveraging, our balance sheet and reducing our debt and we have made significant significant progress towards this objective.

Brian R. Evans: We are pleased that the successful execution of this strategic priority enabled our company to refinance substantially all of our debt this previous month. In addition to pushing out our maturities and lowering our average cost of debt, the recent refinancing transactions have given us greater flexibility to explore options to return capital to shareholders. Under our new credit facility covenants, we will be able to retain 25% of excess cash flow until September 2025 and 50% of excess cash flow after that date, as long as our leverage remains between 2.5 and less than 3.5 times adjusted EBITDA.

Brian R. Evans: We are pleased that the successful execution of this strategic priority enabled our company to refinance substantially all of our debt this previous month and.

Brian R. Evans: In addition to pushing out our maturities and lowering our average cost of debt. The recent refinancing transactions have given us greater flexibility to explore options to return capital to shareholders.

Brian R. Evans: Under our new credit facility covenants, we will be able to retain 25% of excess cash flow until September 2025, and 50% of excess cash flow after that date.

Brian R. Evans: As long as our leverage remains between two and a half and less than three five times adjusted EBITDA.

Brian R. Evans: This will give us the ability to use our cumulative retained excess cash flow for restricted payments, such as dividends or share repurchases, as long as our total leverage remains below three and a half times adjusted EBIT.

Brian R. Evans: This will give us the ability to use our cumulative retained excess cash flow for restricted payments such as dividends or share repurchases as long as our total leverage remains below three five times adjusted EBITDA.

Shayn P. March: Under our new Senior Notes Indenture, we will have an Initial Restricted Payments basket of $125 million, which will increase over time by 50% of net income. We believe that these new covenants will provide our board greater flexibility to evaluate options to return capital to shareholders in conjunction with our company's overall capital needs. We will also continue to evaluate future potential asset sales to complement our capital needs, primarily focusing on our idle or underutilized residential reentry since these assets are typically located in urban areas, can usually be repurposed for alternative uses, and generally attract a larger pool of potential interested buyers.

Brian R. Evans: Under our new senior notes indenture, we will have an initial restricted payments basket.

Shayn P. March: $125 million, which will increase over time by 50% of net income.

Shayn P. March: We believe that these new covenants will provide our board greater flexibility to evaluate options to return capital to shareholders in conjunction with our company's overall capital needs.

Shayn P. March: We will also continue to evaluate future potential asset sales to complement our capital needs, primarily focusing on our idle or underutilized residential reentry centers. Since these assets are typically located in urban areas can usually be repurposed for alternative uses and generally.

Shayn P. March: <unk>, a larger pool of potential interested buyers.

Shayn P. March: As we continue to execute our strategic priorities and allocate capital towards enhancing long-term value for shareholders, we believe our company will continue to be an attractive value proposition for investors, given the strong and predictable nature of our cash market. At this time, I'll turn the call over to Acting CFO Shayn March. Thank you, Brian. Good morning, everyone.

Shayn P. March: As we continue to execute our strategic priorities and allocate capital towards enhancing long term value for shareholders. We believe our company will continue to be an attractive value proposition for investors given the strong and predictable nature of our cash flows at this time I will turn the call over to acting CFO Shane Maher.

Shayn P. March: Today, we reported first quarter 2024 gap net income of approximately $23 million on quarterly revenues of approximately $606 million. We also reported first quarter 2024 adjusted EBITDA of approximately $118 million. Coralie revenues and our Owned and Leased Secure Services segment increased by approximately 7% year-over-year, primarily driven by higher occupancy rates and levels at our U.S. Marshal Services and ICE facilities. Revenues in our Managed Only segment increased by approximately 14% during the first quarter of 2024, compared to one year ago. This year-over-year increase in our managed-only segment was driven by higher revenues in our secure transportation and international segment. Finally, revenues in our non-residential services segment increased by approximately 19% year-over-year.

Shayn P. March: Thank you Brian Good morning, everyone. Today, we reported first quarter 2024, GAAP net income of approximately $23 million.

Shayn P. March: Revenues of approximately $606 million.

Shayn P. March: We also reported first quarter of 2024, adjusted EBITDA of approximately $118 million.

Shayn P. March: Quarterly revenues at our owned and leased secure services segment increased by approximately 7% year over year, primarily driven by higher occupancy rates levels at our U S Marshal services facilities.

Shayn P. March: Revenues at our managed only segment increased by approximately 14% during the first quarter of 2024 compared to one year ago.

Shayn P. March: This year over year increase in our managed only segment was driven by higher revenues at our secure transportation and international segments.

Shayn P. March: Finally quarterly revenues in our non residential services segment increased by approximately 19% year over year.

Shayn P. March: These revenue increases were offset by lower quarterly revenues from our electronic monitoring and supervision services segment, which is the result of lower participant counts under the ISR contract compared to one year ago.

Shayn P. March: These revenue increases were offset by lower quarterly revenues from our Electronic Honoring and Supervision Services segment, which is the result of lower participant counts under the ISOP contract compared to one year ago. During the first quarter of 2024, operating expenses increased by approximately 2% as a result of inflationary cost increases, higher occupancy levels, and the shift in quarterly revenue mix compared to the first quarter of 2020. Our first quarter 2024 results also reflect a year-over-year and Nat H due to the repayment of debt over the past 12 months, as well as due to higher interest income compared to the first quarter of 2020. Our effective tax rate for the first quarter of 2024 was approximately 26%.

Shayn P. March: During the first quarter of 2024 operating expenses increased by approximately 2% as a result of inflationary cost increases higher occupancy levels and the shift in quarterly revenue mix compared to the first quarter of 2023.

Shayn P. March: Our first quarter of 2024 results also reflect a year over year decrease in net interest expense due to the repayment of debt over the past 12 months as well as due to higher interest income compared to the first quarter of 2023 or.

Shayn P. March: Our effective tax rate for the first quarter of 2024 was approximately 26%.

Shayn P. March: Moving to our guidance for the full year and the second quarter of 2020, for the full year 2024, we expect Gap Net Income to be in a range of $55 million to $75 million on annual revenues of approximately $2.4 billion and an effective tax rate of approximately 20%, inclusive of known discrete items. Our full year 2024 guidance reflects a $86 million pre-tax loss on a distinction of debt as a result of our recent refinancing transactions.

Shayn P. March: Moving to our guidance for the full year in the second quarter of 2024 for.

Shayn P. March: For the full year of 2024.

Shayn P. March: We expect GAAP net income to be in a range of 55 million to $75 million.

Shayn P. March: <unk> revenues of approximately $2 $4 billion and an effective tax rate of approximately 20% inclusive of known discrete items.

Shayn P. March: Our full year 2024, 24 guidance reflects a $86 million.

Shayn P. March: Tax loss on extinguishment of debt.

Shayn P. March: As a result of our recent refinancing transactions.

Shayn P. March: We expect our full year 2024 adjusted EBITDA to be in the range of $485,000. $6,515,000,000. The low end of our adjusted evidence guidance range assumes a continuation of the current utilization rate for our ICE detention beds and the current ICE staff participant count, which is presently below the average participant count we experienced during the first quarter. The high end of our adjusted EBITDA guidance range assumes that utilization rates for IC tension beds in the ISOP contract increased during the second half of the year, consistent with seasonal increases in border crossing activity.

Shayn P. March: We expect our full year 2024, adjusted EBITDA to be in the range of 485 million.

Shayn P. March: And $515 million.

Shayn P. March: The low end of our adjusted EBIT guidance range assumes a continuation of the current utilization rates.

Shayn P. March: Our our ice detention beds and they occur I stopped participant count, which is presently below the average participant count we experienced during the first quarter.

Shayn P. March: The high end of our adjusted EBITDA guidance guidance range assumes that utilization rates for ice detention beds and the ISR contracts increased during the second half of the year consistent with seasonal increases and border crossing activity.

Shayn P. March: For the second quarter of 2024, we expect a gap net loss in a range of $27 million to $30 million as a result of the $86 million pre-tax loss on the extinguishing of debt during the second quarter.

Shayn P. March: For the second quarter of 2024, we expect a GAAP net loss in a range of 27 million to $30 million as a result of the $86 million pre tax loss on extinguishment of debt during the second quarter and we expect second quarter 2020 for revenues to be in the range.

Shayn P. March: And we expect second quarter 2024 revenues to be in the range of $600 million to $610 million. Additionally, we expect second quarter 2024 adjusted EBITDA to be in the range of $119 to $125 million. Moving to our capital structure, as previously noted, we recently completed the refinancing of substantially all of our debt. On April 18th, we closed on a new $760 million senior credit facility. Projects include a $450 million dollar term loan bearing interest at SOFR plus 5.25% and a $310 million revolving line of credit which had no borrowings outstanding at closing.

Shayn P. March: Of 600 million to $610 million.

Shayn P. March: We expect second quarter of 2024 adjusted.

Shayn P. March: EBITDA to be in a range of $119 million to $125 million.

Shayn P. March: Moving to our capital structure as previously noted we recently completed the refinancing of substantially all of our debt.

Shayn P. March: In a simultaneous transaction, we also closed our two senior note offices. A $650 million senior secured note at 8.58% and a $625 million senior unsecured note at 10.25% The offering of these two notes and the term loan resulted in net proceeds of approximately $1.67 billion. We used the net proceeds to refinance approximately $1.5 billion of existing debt, including our previous two-term loans.

Shayn P. March: The 9.5% and 10.5% Senior Second Mean Secured Notes and the 6% Senior Unsecured Notes. Subsequently, on May 6th, we also retired approximately $177 million in principal amount of our 6.5% convertible notes in exchange for approximately $177 million in cash and approximately 9.8 million shares of GeoCommonStock. There are now approximately 136 million shares outstanding of GeoCommons.

Shayn P. March: On April 18, we closed on a new $760 million senior credit facility comprised of a $450 million term loan bearing interest at sofa, plus five and one quarter percent Nick.

Shayn P. March: 310 billion dollar revolving line of credit, which had no borrowings outstanding at closing.

Shayn P. March: And a simultaneous transaction. We also closed our two senior note offerings, a $650 million senior secured note an eight and five 8%.

Shayn P. March: $625 million senior unsecured note at 10, and one quarter percent.

Shayn P. March: The offering of these two notes and the term loan resulted in net proceeds of approximately $1 $67 billion.

Shayn P. March: We used the net proceeds to refinance approximately $1 $5 billion of existing debt, including our previous two term loans. The nine in one half and tenant in one half percent senior second lien secured notes and the 6% senior unsecured notes.

Shayn P. March: Subsequently on May six we also retired approximately $177 million.

Shayn P. March: In principal amount of our six at one 5% convertible notes in exchange for approximately $177 million in cash and approximately $9 8 million shares of Geo common stock.

Shayn P. March: There are now approximately 136 million shares outstanding of Geo common stock.

Shayn P. March: We now have approximately $53 million in outstanding principal amount of our convertible notes due 2026, and we are considering all of our options for addressing these subnotes. As a result of these transactions, we have reduced our average cost of debt by approximately 1% on the portions of our debt that were restructured in 2022. This meaningfully improved step structure, under this Meaningfully Improved Debt Structure, our fixed rate debt represents approximately 75% of our total indebtedness, and we pushed out substantially all of our debt maturities to 2029 and 2031.

Shayn P. March: We now have approximately $53 million in outstanding principal amount of our convertible notes due 2026, and we are considering all of our options for addressing the sub notes.

Shayn P. March: As a result of these transactions, we have reduced our average cost of debt by approximately 1% on a portion of our debt that were restructured in 2022.

Shayn P. March: This meaningfully improved debt structure.

Shayn P. March: Our fixed rate.

Shayn P. March: I'm sorry under this meaningfully improved debt structure, our fixed rate debt represents approximately 75% of our total indebtedness and we pushed out substantially all of our debt maturities to 2029 and 2031.

Shayn P. March: Going forward, we expect to continue to focus on further reducing our net debt, and, as Brian discussed, we also have greater flexibility to evaluate options to return capital to shareholders under our new debt restriction. At this time, I will turn the call over to James Black for a review of our geo-secured services segment. Thank you, Shayn. Good morning, everyone.

Shayn P. March: Going forward, we expect to continue to focus on further reducing our net debt and as Brian discussed. We are also have greater flexibility to evaluate options to return capital to shareholders under our new debt restrictions.

James H. Black: At this time I will turn the call over to James <unk> for a review of our secured services segment.

James H. Black: It is my pleasure to review the quarterly milestones for GEO Secure Service. During the first quarter of 2024, our secure services facilities successfully underwent a total of 60 audits, including internal audits, government reviews, third-party accreditations, and the Prison Rape Elimination Act, or PREA CERN. Five of our secure services facilities received accreditation from the American Correctional Association with an average score of 99.8 percent, and one facility received PREA certification. Our GTI Transportation Division and our Geo AMI UK joint venture completed approximately 5 million miles driven in the United States and the UK during the first quarter.

James H. Black: Thank you Sharon good morning, everyone. It is my pleasure to review the quarterly milestones for Geo secure services.

James H. Black: During the first quarter of 2020 for our secure services facilities successfully underwent a total of 60 audits, including internal audits government reviews third party accreditation in the prison rape elimination Nation Act or <unk> applications.

James H. Black: Five of our secure services facilities received accreditation from the American Correctional Association with an average score of 99, 8% and one facility received <unk> certification.

James H. Black: Our GTR transportation Division and our Geo Amey U K joint venture completed approximately 5 million miles driven in the United States in the U K during the first quarter.

James H. Black: Moving to current trends for our government agency, at the federal level, the populations at our U.S. Marshals Detention Facilities increased by approximately 5% since the beginning of the year. Our U.S.

James H. Black: Moving to current trends for our government agency partners at the federal level populations at our U S. Marshalls detention facilities increased by approximately 5% since the beginning of the year.

James H. Black: Marshals facilities around the country support the agency as it carries out its mission of providing custodial services for pretrial detainees facing federal criminal proceedings. We believe that our U.S. Marshals facilities provide needed bed space near federal courthouses where there is generally a lack of suitable alternative detention capacity. Moving to our eyes process

James H. Black: Our U S marshals facilities around the country support the agency as it carries out its mission of providing custodial services for pretrial detainees facing federal criminal proceedings.

James H. Black: We believe that our U S marshals facilities provide needed bid space near federal courthouses, where there is generally a lack of suitable alternatives to detention capacity.

James H. Black: Moving to our ice processing centers, we experienced stable utilization of approximately 13000 beds throughout the first quarter of 2024.

James H. Black: We experienced stable utilization of approximately 13,000 beds throughout the first quarter of 2024. During the first quarter, we estimate that the utilization across all ICE facilities nationwide averaged approximately 38,500. We estimate that the current utilization across ICE facilities nationwide is currently at approximately 37,000. The current utilization at our ICE facilities remains at approximately 13,000.

James H. Black: During the first quarter, we estimate that the utilization across all ice facilities nationwide averaged approximately 38500 beds.

James H. Black: We estimate that the utilization across ice facilities nationwide is currently at approximately 37000 beds.

James H. Black: The current utilization at our ice facilities remains at approximately 13000 beds.

James H. Black: With respect to federal funding, Congress recently enacted an Appropriations Bill for Fiscal Year 2024, which provides funding for 41,500 ICE detention beds, an increase of 7,500 beds from the previously funded level of 34,000. Geo has a longstanding track record of delivering professional support services on behalf of ICE at Geo-contracted ICE processes. And we stand ready to support ICE with any additional needs. We have a total of 10,000 beds at several idle facilities that we believe are well-suited to support ICE's mission. And we have the expertise and resources to provide the needed ancillary services to meet the agency's needs.

James H. Black: With respect to federal funding Congress recently enacted appropriate and appropriations Bill for fiscal year, 2024, which provides funding for 41500 ice detention beds.

James H. Black: An increase of 7500 beds from the previously funded level of 34000 visits.

James H. Black: <unk> has a long standing track record of delivering professional support services on behalf of ice at Geo contracted ice processing centers, and we stand ready to support ice with any additional needs.

James H. Black: We have a total of 10000 beds at several idled facilities that we believe are well suited to support ices mission and.

James H. Black: And we have the expertise and resources to provide the needed ancillary services to meet the agency's needs.

James H. Black: Geo contract and ice processing centers offer a round the clock access to quality health care services.

James H. Black: Geocontracted ice processing centers offer around-the-clock access to quality health care services. Our health care staff at ICE processing centers, where we provide resident health care, is generally more than double the number of health care staff in a typical state correctional facility. Geocontracted ICE Processing Centers offer full access to legal counsel and legal law libraries, and resources, and we have dedicated space at each ICE Center to accommodate meetings with legal counsel.

James H. Black: Our health care staff at ice processing centers, where we provide resident healthcare is generally more than doubled the number of health care staff in a typical state correctional facilities.

James H. Black: <unk> contract.

James H. Black: Contract and ice processing centers offer full access to legal counsel and legal library and resources and we have dedicated space at each center to accommodate meetings with legal counsel.

James H. Black: <unk> contracted ice processing centers to provide residents with three daily meals that are culturally sensitive special diet appropriate and approved by registered Dieticians.

James H. Black: Geocontracted ice processing centers provide residents with three daily meals that are culturally sensitive, special diet appropriate, and approved by registered dietitians. We also provide access to faith-based and religious opportunities at each geo-contracted ICE processing center, and we partner with community volunteers as needed to ensure a fair representation of various faiths and denominations.

James H. Black: We also provide access to faith based and religious opportunities at each Geo contracted ice processing center, and we partner with community volunteers as needed to ensure a fair representation of various space in denomination.

James H. Black: <unk> contracted ice processing centers also offer access to quality recreational activities. We have made significant investments in enhanced amenities at these centers, including artificial turf soccer fields covered pavilions exercise equipment and multipurpose room.

James H. Black: Geocontracted ice processing centers also offer access to quality recreational activities. We have made significant investments in enhanced amenities at these centers, including artificial turf soccer fields, covered pavilions, exercise equipment, and multi-purpose facilities. We provide secure transportation services for ICE, primarily at 12 of the geocontracted ICE processing centers. Starting in the second half of 2023, our GTI Transportation Division also began providing secure air operation support for ICE, initially under emergency.

James H. Black: We provide secure transportation services for ice primarily at 12 zero contracted ice processing centers.

James H. Black: Starting in the second half of 2023, our GTI Transportation Division also began providing secure air operation support for ice initially under emergency contract.

James H. Black: During the first quarter of 2024, we announced that GTI had been awarded a long-term, five-year contract to continue to provide air operations support services on behalf of ICE as a subcontract to CSI Aviation, which holds the prime company. This important contract is expected to generate approximately $25 million in annualized revenue. At this time, I will turn the call over to Wayne Calabrese for a review of our geocache. Thank you, James.

James H. Black: During the first quarter of 2024, we announced that GPI had been awarded a long term five year contract to continue to provide air operation support services on behalf of ice as a subcontract to the CSI aviation, which holds the prime contract.

Wayne H. Calabrese: This important contract is expected to generate approximately $25 million in annualized revenues.

Wayne H. Calabrese: At this time I will turn the call over to Wayne calibration for a review of our Geo care Division.

Wayne H. Calabrese: Thank you James I'm pleased to provide an overview of the quarterly operational milestones for our Geo care Division.

Wayne H. Calabrese: I'm pleased to provide an overview of the quarterly operational milestones for our GeoCare division. For example, during the first quarter of 2024, we renewed three residential reentry center contracts with the Federal Bureau of Prisons. Additionally, we retained three contracts for our non-residential day reporting centers, and we were awarded one new day reporting center contract. Our residential reentry centers, non-residential day reporting centers, and our ISAP offices successfully underwent a combined total of 77 audits, including internal audits, government reviews, third-party accreditations, and Prison Rape Elimination Act, or PREA, certification. Three of our residential reentry centers received accreditation from the American Correctional Association with an average accreditation score of 100%, and one of our residential reentry centers received PREA certification.

Wayne H. Calabrese: During the first quarter of 2024, we renewed three residential reentry center contracts with the Federal Bureau of prisons.

Wayne H. Calabrese: Additionally, we retained three contracts for our nonresidential day reporting centers and we were awarded one New day reporting center contract.

Wayne H. Calabrese: Our residential reentry centers nonresidential day reporting centers and our ice SAP offices successfully underwent a combined total of 77 audits, including internal audits government reviews third party accreditations and prison rape elimination.

Wayne H. Calabrese: Asian Act or Preah certifications.

Wayne H. Calabrese: Three of our residential reentry centers received accreditation from the American Correctional Association with an average accreditation score of 100% and one of our residential reentry centers received free of certification.

Wayne H. Calabrese: Our 34 residential re-entry centers provide transitional housing and rehabilitation programs for individuals re-entering their communities across 14 states, and census levels at these centers remain stable at approximately 5,000 individuals during the first quarter of the year. Our non-residential and day reporting centers provide high-quality community-based services, including cognitive behavioral treatment for up to approximately 8,500 parolees and probationers at approximately 90 locations across 10 different states. Moving to our GEO in-prison programs and our Continuum of Care Division, during the first quarter of 2024, we delivered enhanced in-custody rehabilitation to an average daily population of approximately 2,600 individuals at 31 in-prison program sites in seven states and to approximately 21,000 individuals at 13 continuum of care sites in eight states. Our in-custody rehabilitation services include academic programs focused on helping those in our care attain high school equivalency diplomas.

Wayne H. Calabrese: Our 34 residential reentry centers provide transitional housing and rehabilitation programs for individuals re entering their communities across 14 states and census levels. At these centers remained stable at approximately 5000 individuals during the.

Wayne H. Calabrese: First quarter of the year.

Wayne H. Calabrese: Our nonresidential and day reporting centers provide high quality community based services, including cognitive behavioral treatment for up to approximately 8500, parolees and probationers out approximately 90 locations across 10 different states.

Wayne H. Calabrese: Moving to our Geo in prison programs and our continuum of care Division.

Wayne H. Calabrese: In the first quarter of 2024, we delivered enhanced in custody rehabilitation to an average daily population of approximately 2600 individuals at 31 in prison program sites in seven states and to approximately 21000.

Wayne H. Calabrese: Individuals at 13 continuum of care sites in eight states.

Wayne H. Calabrese: Our in custody rehabilitation services include academic programs focused on helping those in our care attain high school equivalency diplomas.

Wayne H. Calabrese: We have made a significant investment to equip all of our classrooms with smart boards to aid in the delivery of academic instruction at all our facilities. We have also focused on developing vocational programs that not only lead to certification when completed but are also based on market job placement needs. Our substance abuse treatment programs are an important piece of our rehabilitation services because many of the individuals in our care suffer from addiction and substance use disorders.

Wayne H. Calabrese: We have made a significant investment to equip all of our classrooms with smart boards to aid in the delivery of academic instruction at all our facilities.

Wayne H. Calabrese: We have also focused on developing vocational programs that not only lead to certification when completed but are also based on market job placement needs.

Wayne H. Calabrese: Our substance abuse treatment programs are an important piece of our rehabilitation services because many of the individuals in our care suffered from addiction and substance use disorder.

Wayne H. Calabrese: Our facilities also provide extensive faith-based and character-based programs. We've designated faith-based and character-based housing units or dorms across our facilities to enhance the delivery of these programs. During the first quarter of the year, we completed approximately 700,000 hours of enhanced in-custody rehabilitation programs. Our academic programs awarded more than 600 high school equivalency diplomas, and our vocational courses awarded close to 850 vocational training certifications. Our substance abuse treatment programs have awarded more than 1,200 program completions.

Wayne H. Calabrese: Our facilities also provide extensive faith based and character based programs, we've designated faith based and character based housing units or dorms across our facilities to enhance the delivery of these programs.

Wayne H. Calabrese: During the first quarter of the year, we completed approximately 700000 hours of enhanced in custody rehabilitation programming.

Wayne H. Calabrese: Our academic programs awarded more than 600 High school equivalency diplomas and our vocational courses awarded close to 850 vocational training certifications.

Wayne H. Calabrese: Our substance abuse treatment programs awarded more than 1200 program completions.

Wayne H. Calabrese: We achieved over 700 behavioral treatment program completions and more than 4000 individual cognitive behavioral treatment sessions.

Wayne H. Calabrese: We achieved over 700 behavioral treatment program completions and more than 4,000 individual cognitive behavioral treatment sessions. During the first quarter, we also allocated approximately $400,000 toward post-release services. This funding supported more than 600 individuals released from GEO facilities as they made their way back to their communities. The GEO Continuum of Care integrates enhanced in-custody rehabilitation, including cognitive behavioral treatment, with post-release support services that address critical community needs of released individuals. We believe our award-winning program provides a proven model of how the two-plus-million people in the United States criminal justice system can be better served in changing their lives.

Wayne H. Calabrese: During the first quarter, we also allocated approximately $400000.

Wayne H. Calabrese: Towards post release services. This funding supported more than 600 individuals released from Geo facilities as they made their way back to their communities.

Wayne H. Calabrese: Our geo continuum of care integrates enhanced in custody rehabilitation, including cognitive behavioral treatment with post release support services that address critical community needs of released individuals.

Wayne H. Calabrese: We believe our award winning program provides a proven model on how the two plus million people in the United States Criminal Justice system can be better served and changing their lives.

Wayne H. Calabrese: Finally, turning to our Electronic Monitoring and Supervision Services segment, our BI subsidiary provides a full suite of monitoring and supervision solutions, products, and technologies on behalf of federal, state, and local agencies across the country. During the first quarter, participant counts under the ISAP contract averaged approximately 188,000 individuals.

Wayne H. Calabrese: Finally, turning to our electronic monitoring supervision services segment. Our BVI subsidiary provides a full suite of monitoring and supervision solutions products technology and technologies on behalf of federal state and local agencies across the country.

Wayne H. Calabrese: During the first quarter participant counts under the <unk> contract averaged approximately 188000 individuals.

Wayne H. Calabrese: Since the end of the first quarter, the ISAT participant count has fluctuated between approximately 184,000 and 185,000 individuals. With respect to federal funding, Congress recently approved an appropriations bill for the current fiscal year, which funds the federal government through September 30, 2024. That appropriations bill enacted by Congress increased funding for alternatives to detention programs, which includes the ISAP contract, to approximately $470 million, representing an approximate 7% increase over the previously funded level of approximately $440 million.

Wayne H. Calabrese: Since the end of the first quarter the ice that participant count has fluctuated between approximately 184000 and 185000 individuals.

Wayne H. Calabrese: With respect to federal funding Congress recently approved an appropriations bill for the current fiscal year, which funds the federal government through September 32024.

Wayne H. Calabrese: That appropriations Bill enacted by Congress increased funding for alternatives to detention programs, which includes the <unk> contract to approximately $470 million, representing an approximate 7% increase over the previously funded level of approximately 440.

Wayne H. Calabrese: <unk>.

Wayne H. Calabrese: BI has provided technology solutions, holistic case management, supervision, monitoring, and compliance services under the ISAP contract for almost 20 years. Under BI's tenure, ISAP has received bipartisan support and has achieved high levels of compliance using a variety of new technologies and case management services.

Wayne H. Calabrese: <unk> has provided technology solutions holistic case management supervision monitoring and compliance services under the ICF contract for almost 20 years.

Wayne H. Calabrese: Under <unk> tenure by SAP has received bipartisan support and has achieved high levels of compliance using a variety of new technologies and case management services over that time.

Wayne H. Calabrese: The current ISAP contract has a term of five years, terminating on July 31, 2025. BI will continue to explore new and innovative technology solutions to support the needs of ICE as we prepare to compete for this important contract. At this time, I will turn the call back to George for closing remarks. Thank you, Wayne.

Wayne H. Calabrese: The current <unk> contract has a term of five years terminating on July 31 2025.

Wayne H. Calabrese: <unk> will continue to explore new and innovative technology solutions to support the needs device as we prepare to compete for this important contract at this time I will turn the call back to George for closing remarks, Thank you Wayne and in closing our diversified business.

George C. Zoley: And in closing, our diversified business units have continued to deliver strong financial and operational performance. We are pleased that our steady results in our multi-year strategy to lever our balance sheet successfully positioned Geo to refinance substantially all of our debt, which is presently approximately $1.8 billion and is expected to decrease to $1.6 billion by the end of the year. Our recent successful refinancing has lowered our average cost of debt and has given us greater flexibility to evaluate options to potentially return capital to shareholders.

George C. Zoley: Units have continued to deliver strong financial and operational performance.

George C. Zoley: We are pleased that our steady results in our multiyear strategy to Delever, our balance sheet successfully positioned geo to refinance substantially all of our debt, which is presently approximately one 8 billion and is expected to decrease to one 6 billion.

George C. Zoley: By the end of the year.

George C. Zoley: Our recent successful refinancing has lowered our average cost of debt and has given us greater flexibility to evaluate options to potentially return capital to shareholders.

George C. Zoley: We believe we have several opportunities for potential upside in our financial performance. We are focused on marketing our current idle facilities and our diversified services to government agencies around the country. Operationally, we remain committed to achieving operational excellence in the delivery of our services on behalf of our government agency partners.

George C. Zoley: We believe we have several opportunities for potential upside in our financial performance. We are focused on marketing our current idle facilities and our diversified services to government agencies around the country operationally, we remain committed to achieving operational excellence and the delivery of our services on <unk>.

George C. Zoley: Half of our government agency partners, we believe that our company is strong and predictable cash flows and our improved debt structure continued to present, an attractive opportunity for investors that completes our remarks, and we would be glad to take questions operator.

Operator: We believe that our company's strong and predictable cash flows and our improved debt structure continue to present an attractive opportunity for investors. That completes our remarks, and we would be glad to take questions. Operator. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone.

Operator: We will now begin the question and answer session.

Operator: To ask a question you May Press Star then one on your Touchtone phone.

Operator: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from Joe Gomes with Noble Capital. Please go ahead.

Operator: If you are using a speakerphone please pick up your handset before pressing the keys.

Joseph Anthony Gomes: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Operator: At this time, we will pause momentarily to assemble our roster.

Operator: The first question today comes from Joe Gomes with Noble capital. Please go ahead.

Joseph Anthony Gomes: Good morning, and congratulations on the quarter. Thank you. But I just want to get a little clarification here. Maybe you guys are saying that, you know, you think that ice currently is about 37,000. And just looking at, you know, some of the numbers that ice puts out, it looks like the beds are more than they're saying are 34 or 5. And I just wondered, am I missing something?

Joseph Anthony Gomes: Good morning, congrats on the quarter.

Speaker Change: Thank you.

George C. Zoley: Or do you guys have some information that gives a more recent update versus some of the dated ICE data? To our understanding, there's been a significant ramp-up in the census of those in detention facilities. You know, I think the first half of the fiscal year, which just ended last month, there was an intent for budgetary reasons to keep the bed count at a lower level in line with the original budget.

Joseph Anthony Gomes: But just wanted to get a little clarification here maybe.

George C. Zoley: And you guys are saying that you're thinking that ice currently is about 37000, just looking at some of the numbers that <unk> put side it looks like the beds or more and they are saying or 34. Five I was just wondering by missing something or do you guys have some information.

George C. Zoley: That gives them more recent update versus some of the dated ice data.

George C. Zoley: To our understanding there has been.

George C. Zoley: Significant ramp up in.

George C. Zoley: The census of those.

George C. Zoley: In detention facilities I think the first half of the fiscal year, which just ended last month. There was an intent for budgetary reasons to keep the bed count at a lower level in line with the original budget and know that.

George C. Zoley: The recent.

George C. Zoley: The recent funding of the agency at a higher level of 41,500 beds is allowing them to now step up their count in their ICE facilities around the world. Okay, thanks for that. And then on the marshals, you got a nice increase in the number of people and Marshalls. I was wondering, you know, what is driving that.

George C. Zoley: <unk> of the agency at a higher level of 41500 beds is allowing them to now step up their account in their ice facilities around the country.

Speaker Change: Okay. Thanks for that.

George C. Zoley: And then on the Marshalls.

George C. Zoley: You guys have a nice increase.

George C. Zoley: And the number of people and Marshalls I was wondering what is driving that is that a reflection of the courts getting back to a more normal operating environment or.

George C. Zoley: Is that a reflection of the courts getting back to a more normal operating environment? Or, you know, some of these we've seen in the past, locals, are refusing to hold on to some of the detainees these days? Just trying to figure out what's driving the increase in the Marshalls population.

George C. Zoley: Some of these we've seen in the past locals.

George C. Zoley: Localities are refusing to to hold onto some of the detainees. These days just trying to figure out what's driving the increase in the marshals populations.

George C. Zoley: It's probably a combination of both of those things, the reluctance of local governments to be dealing with providing extra beds to federal agencies versus having a need for those beds themselves or for political purposes of not wanting to participate in such a federal program, but also the need to expand the number of beds as they did have a decrease in bed capacity under this administration at the outset of this administration year. Okay, pardon me, and you guys kind of mentioned it from the bigger, you know, the 10,000 foot level, but I don't know if there was any more detail you could provide about kind of some of the new business opportunities, especially on the state and local level that you're kind of pursuing at this point.

George C. Zoley: It's probably a combination of both of those things.

George C. Zoley: The reluctance of local governments to be dealing with.

George C. Zoley: Providing extra beds to federal agencies versus having a need for those beds themselves or for political purposes of not wanting to.

George C. Zoley: <unk> in such a federal program, but also the need to expand the number of beds as they did.

George C. Zoley: Have a decrease in bed capacity.

George C. Zoley: Under this administration at the outset of the.

George C. Zoley: The administration year.

George C. Zoley: Okay.

George C. Zoley: Pardon me.

George C. Zoley: You guys kind of mentioned that from the from the bigger.

George C. Zoley: The 10000 foot level, but I don't know if there was any.

George C. Zoley: More detail you can provide about kind of some of the new business opportunities, especially on the state and local.

George C. Zoley: Level that you are kind of pursuing at this point.

George C. Zoley: Yes.

George C. Zoley: We really don't discuss any marketing opportunities unless there are public procurements that, you know, we obviously would have a responsibility to react to. But at this time, there are no public procurements that we can comment on.

Speaker Change: We really don't discuss.

Speaker Change: Any marketing opportunities on unless there are public procurements.

Speaker Change: But we obviously would.

George C. Zoley: Have a responsibility to react to but at this time there are no public procurements that we.

Speaker Change: We can comment on.

George C. Zoley: Yeah.

George C. Zoley: Okay, just generally, I guess, then our... Are you seeing more opportunities on a state and local level than you have historically, or is that more flat there, or maybe if you could just characterize it that way? It's somewhat flat with some of our clients, but we're seeing other clients asking for beds at a smaller scale than we would prefer. And we haven't jumped at those opportunities because our facilities are generally large.

Speaker Change: Okay, just generally I guess then.

George C. Zoley: Are you seeing more opportunities on the state and local level than you had historically or is that more flat there or maybe if you could just characterize it that way.

George C. Zoley: Yes.

George C. Zoley: It's somewhat flat with some of our clients, but we are seeing.

George C. Zoley: Other clients asking for bids.

George C. Zoley: All at a smaller scale than we would prefer and we haven't jumped at those opportunities because.

George C. Zoley: Our facilities are generally large I would say a thousand beds and above and we are keeping those facilities and reserve for larger governmental end users.

George C. Zoley: I would say a thousand beds and above, and we're keeping those facilities in reserve for larger governmental use. And then one more for me, I'll jump back in line, this is kind of more hypothetical, George, but as we all know, when the current administration came in and they ended basically the contracts with the BOP, if there was a change in administration and they were more favorable to contracts with the BOP, looking at the BOP populations, they've risen by about 10,000 people since three years ago, do you think, again, this is hypothetical, that the BOP would still look upon favorably if they needed space of coming to you, or given what's happened in the past couple of years, do you think they would be more reluctant to reestablish contracts, Well, using past experience as a guide under the previous administration, there was a reversal of the prohibition in using the private sectors for BOP contracting.

George C. Zoley: Okay.

Speaker Change: And then one more for me and I'll jump back in line and this is kind of more hypothetical George but as we all know when the current administration came in in May.

George C. Zoley: And basically the contract with the <unk>.

George C. Zoley: <unk>.

George C. Zoley: If there was a change in administration and they were more favorable to contracts with with the <unk>.

George C. Zoley: Looking at the MLP populations, they've risen about by by about 10000 people since three years ago do you think.

George C. Zoley: It's a hypothetical.

George C. Zoley: <unk> would still look upon favorably if they needed space of coming to you or given what's happened in the past couple of years do you think they would be more reluctant to reestablish contracts with with firms like the private spend the sector.

George C. Zoley: We will use the past experience as a guide in under the previous administration there was a reversal.

George C. Zoley: Of of the prohibition and using the private sectors for contracting. So we would think that's a distinct possibility.

George C. Zoley: So, we would think that it's a distinct possibility that the BOP facilities would once again be contracted to private sector entities like ourselves. And there was a similar impact under this administration regarding some Marshalls facilities that were direct contracts that were discontinued. I would think there would be a similar attitude if there was a new administration that would very possibly have a desire to reestablish those contracts with the Marshals Service as well as the BOP. Thanks for that. I appreciate the answers to my questions. I'll get back in queue.

George C. Zoley: The <unk> facilities would would once again be contracted to private sector entities like ourselves and there was a similar impact under this administration regarding some marshalls facilities that were direct contracts that were discontinued.

George C. Zoley: I would think there would be a similar attitude if if there is a new administration.

George C. Zoley: That would be.

George C. Zoley: Possibly have a desire to reestablish those contracts with the Marshal service as well as the MLP.

Speaker Change: Thanks, Pat I appreciate the answers to my questions I'll get back in queue.

Speaker Change: Thank you.

Operator: The next question comes from Brian Violino with Wedbush Securities. Please go ahead. Good morning.

George C. Zoley: The next question comes from Brian <unk> with Wedbush Securities. Please go ahead.

Brian J. Violino: Great. Good morning, Thanks for taking my questions.

Brian J. Violino: Thanks for taking my questions. Just to start on the guide, it sounds like the high end is assuming we'll see some uptick in second half occupancy levels in the detention segment. I guess, could you clarify if that assumes that we're going to be going up to the 41.5 bed count that was approved in the budget, or just sort of a general increase from here? As we said, it's hard to predict exactly where they're going.

Brian J. Violino: Just to start on the guide it sounds like the high end is assuming we will see some uptick in second half occupancy levels.

Brian J. Violino: And then the pension segment I guess could you clarify is that assumes that we're going to be going up to the 41 five bed count that was approved in the budget or just sort of a general increase from here.

Brian J. Violino: Oh.

Brian J. Violino: As we said, it's hard to predict exactly where they're going to the budget allocation project.

Brian J. Violino: The budget allocation project. The ability to go to 41,000, but I would think that would occur on a progressive, incremental basis, on a step-by-step basis. We've seen a change in the last few weeks going from 34,000 to approximately 37,000. So we.

Brian J. Violino: The ability to go to a 41000.

Brian J. Violino: But I would think that would that would occur on a progressive incremental basis step on a step by step basis. So we've seen a change in the last few weeks going from 34000 to approximately 37000.

Brian J. Violino: So.

George C. Zoley: We expect a continuation, but where it ends, we don't know. Okay, thanks. And then I will appreciate all the details on the indentures and the credit agreements for the bonds.

Brian J. Violino: We expect a continuation, but where it ends we don't know.

Speaker Change: Okay. Thanks.

George C. Zoley: And then appreciate all the details on the indentures and credit agreements for the for the bonds. Just curious if you could.

Brian R. Evans: Just curious if you could give us a bit more thoughts in terms of timing as it relates to capital returns. Would you potentially want to wait until the cash flow sweep steps down later next year? Or if your leverage gets lower into your target range, could you think about repurchases earlier than that?

Speaker Change: Give us a bit more thoughts on in terms of timing as it relates to capital returns.

Brian R. Evans: Would you potentially want to wait until the cash flow suite steps down later next year or if your leverage gets lower into your targeted range could you think about repurchases earlier than that.

Brian R. Evans: I think.

Brian R. Evans: I think at a minimum we have to wait until the leverage steps down towards the middle of next year. So we're locked in on the 75% ECF through that point, and then it could step down based on leverage, and we can access those covenants at that point. Okay, thanks. And then just one more for me.

Brian R. Evans: At a minimum we have to wait until the leverage steps down towards the middle of next year.

Brian R. Evans: So we're locked in on the 75% ECF through to that point and then it could step down based on leverage and we can.

Brian R. Evans: Access the those covenant at that point in time.

Brian J. Violino: It looked like the NOI margins in the monitoring segment were a bit lower sequentially and year over year. Anything to note there, you know, one time or seasonal? And, you know, if not, should we expect those margins to improve over the course of the year otherwise? The margins in that segment are obviously being impacted, as we've discussed on the call, by the change in the utilization of the ISAP contract predominantly. As discussed earlier, if the guidance, if the numbers move up later in the year in ISAP, similar to what may occur with the ICE detention beds, then we should see some nominal improvement in those numbers. Thanks for answering my question; the question comes from Brendan McCarthy with Sidoti. Please go ahead. Hey, good morning.

Speaker Change: Okay. Thanks, and then just one more from me it looked like the NOI margins in the monitoring segment.

Brendan Michael McCarthy: A bit lower sequentially and year over year anything to note there.

Brendan Michael McCarthy: One time or seasonal and if not should we expect those margins to improve over the course of the year otherwise.

Brian J. Violino: The margins.

Brian J. Violino: In that segment are obviously being impacted as we discussed on the call by the change in the utilization of the ICF contract predominantly.

Brendan Michael McCarthy: So if the disc.

Brendan Michael McCarthy: Discussed earlier, if the guidance is.

Brendan Michael McCarthy: The numbers move up later in the year.

Speaker Change: <unk> similar to the may occur with.

Brendan Michael McCarthy: With the ice detention beds, and we should see some.

Brendan Michael McCarthy: Nominal improvement in those in those margins.

Brendan Michael McCarthy: Got it thanks for answering my questions.

Brendan Michael McCarthy: Next question comes from Brendan Mccarthy with Sidoti. Please go ahead.

Brendan Michael McCarthy: Hey, good morning, Thanks for taking my questions.

Brendan Michael McCarthy: Thanks for taking my questions. I just wanted to start off looking at the EIDL facilities. It looks like there was an increase in the secure EIDL facility bed count by roughly 900 beds. I think it was driven by reclassification of the – or related to the Delaney Hall asset. Can you just discuss what drove that increase? It was a thousand bed facility that was previously a re-entry facility.

Brendan Michael McCarthy: Wanted to start off looking at the idled facilities. It looks like there was an increase in the secure.

Speaker Change: All right.

Brendan Michael McCarthy: Facility bed count by roughly 900 beds I think it was driven by a reclassification of the related to the Delaney Hall asset can.

Brendan Michael McCarthy: Can you just discuss what drove that increase.

Brendan Michael McCarthy: It was say.

Brendan Michael McCarthy: <unk> thousand bed facility that was previously reentry facility.

Brendan Michael McCarthy: And we are looking at that facility for.

Wayne H. Calabrese: We are looking at that facility for marketing in the near future. Got it, okay. And then...

Wayne H. Calabrese: Marketing in the near future.

Wayne H. Calabrese: Got it Okay and then.

Brendan Michael McCarthy: I just kind of wanted to touch on the guidance; it looked like the Assumption for shares outstanding increased by $137,000 from about 126,000 from the initial guidance. I'll obviously let assume, you know... Sorry, go ahead. Millions. Millions.

Wayne H. Calabrese: Just kind of wanted to touch on the guidance it looks like.

Brendan Michael McCarthy: The assumption for shares outstanding increased I think it was like a 137000 from.

Brendan Michael McCarthy: About 126000.

Brendan Michael McCarthy: From the initial guidance.

Brendan Michael McCarthy: Obviously that assumes.

Speaker Change: Sorry go ahead.

Brendan Michael McCarthy: Millions and millions yes.

Brendan Michael McCarthy: Sure.

Brendan Michael McCarthy: Yeah. Oh, right, right, yep. 1.36 million to 1.37 million, approximately.

Speaker Change: Oh right right yes.

Brendan Michael McCarthy: $37 million approximately.

Brendan Michael McCarthy: Right, yep, sorry about that. Obviously, I assume that does not include any share repurchase activity, but driving that increase is likely related to the Exchangeable Notes, is that correct? Yeah. Got it. OK. One last question for me. Do you have any comment on potential executive action from the Biden administration that's just been making headlines in recent days as it relates to the border?

Speaker Change: Right Yep, sorry about that.

Brendan Michael McCarthy: Obviously I assume that does not include any share repurchase activity.

Brendan Michael McCarthy: What's driving that increase is likely related to the.

Brendan Michael McCarthy: The exchangeable notes is that correct.

Speaker Change: Yes, yes.

Speaker Change: Got it okay.

Brendan Michael McCarthy: One last question for me do you have any comment on potential executive action from the by the administration.

Brendan Michael McCarthy: <unk> been making headlines in recent days.

Brendan Michael McCarthy: As it relates to the border.

Brendan Michael McCarthy: Okay.

Brendan Michael McCarthy: I'm unclear as to what your question is. I, you know, I've heard that he's thinking about changing some policy, but I'm unclear as to what policy they're talking about. Got it, understood. That's all from me, thanks. The next question comes from Greg Gibbous with Northland Securities. Please go ahead.

Brendan Michael McCarthy: Unclear as to what is what your question is executive vacuum policy that shows in the quarter.

Gregory Thomas Gibas: I've heard that is.

Gregory Thomas Gibas: Thinking about changing some policy.

Gregory Thomas Gibas: I'm unclear as to what policy Theyre talking about.

Gregory Thomas Gibas: Got it understood that's all for me thanks.

Brendan Michael McCarthy: Okay.

Gregory Thomas Gibas: The next question comes from Greg Davis with Northland Securities. Please go ahead.

Gregory Thomas Gibas: Hey, good morning, guys. Thanks for taking the questions. Um, you know, this is with respect to Q2 guidance, you know, what do you expect that uplift and need it to be driven by given, you know, the expectation for roughly flat revenue? Yeah, that's going to be primarily caused by the cost of payroll tax that we have in the first quarter, which is..., typical for our business. And then in the second quarter, you don't necessarily see a repeat of that expense. That's roughly $5-$6 million in added payroll expense in the first quarter relative to the second.

Gregory Thomas Gibas: Hey, good morning, guys. Thanks for taking the questions.

Speaker Change: This is <unk>.

Gregory Thomas Gibas: But with respect to Q2 guidance, what do you expect that uplift in EBITDA to be driven by a given.

Gregory Thomas Gibas: The expectation for roughly flat revenue.

Gregory Thomas Gibas: Yes, that's going to be primarily caused by the cost of payroll tax that we have in the first quarter, which is typical.

Gregory Thomas Gibas: Typical for our business and then in the second quarter, you don't necessarily see a repeat of that expense thats roughly $5 million to $6 million of added payroll expense in the first quarter relative to the second.

Gregory Thomas Gibas: Okay, makes sense. And as it relates to maybe just more general cost structure dynamics, could you address just any favorable or unfavorable trends that you're seeing on, you know, any, Whether it relates to, you know, payroll, obviously, there's some seasonality, like you just said, but any trends you're seeing on those line items? No, I don't think so, you know, over the last several years, we had to give some fairly significant, [inaudible] Slowed down, you know, there's still pressure in the labor markets, but it's more steady than it was.

Speaker Change: Okay makes sense and as it relates to maybe just more general cost structure dynamics could you address just any favorable or unfavorable trends that youre seeing.

Gregory Thomas Gibas: Any.

Gregory Thomas Gibas: Whether it relates to.

Gregory Thomas Gibas: Payroll, obviously theres some seasonality like you just said, but any trends youre seeing on both line items.

Speaker Change: No no I don't think so.

Gregory Thomas Gibas: Over the last several years, we had to get some fairly significant.

Gregory Thomas Gibas: Adjustments at certain contracts, which we were able to negotiate with our clients.

Gregory Thomas Gibas: Revenue increases to offset that so I think that's slowed down there is still pressure in the labor markets, but it's more more steady than it was.

Gregory Thomas Gibas: We did see impacts on food and utilities previously, but I think those have also stabilized some more recently. So I'm not seeing any real significant pressures in those major cost categories other than, you know, what's normal in the market. Sure, okay. And, you know, more high level, you know, why do you think the ICESat populations, you know, what do you attribute that to in terms of why they've kind of continued to decline sequentially? Well, part of it was certainly the budget deficits that were being experienced within ICE. It's my understanding that they had an overall budget deficit of approximately $700 million.

Gregory Thomas Gibas: We did see previously also impacts shift food and utilities, but I think those have also stabilized some more recently, so not seeing any real significant.

Gregory Thomas Gibas: Pressures in those major cost categories.

Gregory Thomas Gibas: Other than what's normal in the market.

Speaker Change: Sure Okay.

Gregory Thomas Gibas: So they had to cut back in certain areas, which included detention capacity, as well as ISAC. Okay, I got it. And I guess the last one for me, just as it relates to full year guidance. Are there any contract renewals this year, or do you know other factors that could kind of swing it one way or another, or is it mostly just kind of fluctuations in those ice populations? With regard to our Atalanto facility in California, I believe that the current performance period has now been extended to June 19th, and we've been in discussions and have made a request to extend that period for the balance of the year, if possible, if not, you know, through at least September 30th, and we're awaiting a response. And we were just looking for the balance of the year to continue, so if for some reason it didn't, then that could have a downward impact.

Gregory Thomas Gibas: More high level.

Gregory Thomas Gibas: Why do you I know, it's been just kind of slight declines here, but why is the ice populations.

Gregory Thomas Gibas: Do you attribute that to in terms of why they've kind of continued to decline sequentially.

Gregory Thomas Gibas: Well.

Gregory Thomas Gibas: Part of it was certainly.

Gregory Thomas Gibas: The budget deficit that were being experience within ice.

Gregory Thomas Gibas: It's my understanding that they had an overall budget deficit of approximately 700 million. So they had to cut back in certain areas, which included detention capacity as well as ICL.

Gregory Thomas Gibas: Okay got it and I guess last one for me just as it relates to full year guidance.

Gregory Thomas Gibas: Are there any contract renewals this year or other factors that could kind of swing it one way or another or is it mostly just kind of fluctuations in those.

Gregory Thomas Gibas: Ice populations.

Gregory Thomas Gibas: Yeah.

Gregory Thomas Gibas:

Gregory Thomas Gibas: Yeah.

Gregory Thomas Gibas: Yes.

Gregory Thomas Gibas: With regard to our adelanto facility in California.

Gregory Thomas Gibas: I believe that the current performance periods.

Gregory Thomas Gibas: Has is.

Gregory Thomas Gibas: Now extended to June 19th June 19, and we've been in discussions.

Gregory Thomas Gibas: <unk> made a request to extend that period.

Gregory Thomas Gibas: <unk>.

Gregory Thomas Gibas: Four.

Gregory Thomas Gibas: The balance of year if possible.

Gregory Thomas Gibas: If not it.

Gregory Thomas Gibas: Through at least September 30th.

Gregory Thomas Gibas: And we are awaiting a response to that.

Gregory Thomas Gibas: Okay.

Gregory Thomas Gibas: For the balance of the year that will continue so if for some reason it didn't and that could have a downward impact.

Gregory Thomas Gibas: Yeah.

Wayne H. Calabrese: Okay, and we would expect maybe more of an update closer to that June time frame on that. If something changes, otherwise, we'll update in the next earnings report. Well, we would expect an answer within the next few weeks, actually. Okay, got it.

Gregory Thomas Gibas: Okay, and we would expect maybe more of an update closer to that June timeframe on that.

Wayne H. Calabrese: If something changes otherwise, we'll update on the next earnings call.

Wayne H. Calabrese: We would expect an answer within the next few weeks actually.

Speaker Change: Okay got it thanks guys.

Wayne H. Calabrese: The next question comes from Kirk Ludtke with Imperial capital. Please go ahead.

Operator: Thanks guys. The next question comes from Ludtke with the Imperial Council. Please go ahead. Hello, everyone.

Kirk Ludtke: Thank you for the call. Congratulations on the refi. You mentioned the ISAP contract expires in May of next year. What is the typical process for renewing that?

Ludtke: Hello, everyone. Thank you for the call congratulations on the refi.

Ludtke: You mentioned the ice contract expires in May of next year.

George C. Zoley: And then also, have there been any developments with respect to that request for information that implied a pretty significant increase in Alternatives to Detention? A procurement process has not yet been announced for the rebid of that contract, and the lead time for a procurement process for that. This kind of contract, which is large-scale, large-volume, takes several months. Probably six, nine, twelve months lead time is necessary to re-procure such a contract.

Ludtke: What is what's the typical process for renewing that and then I'll also.

George C. Zoley: Have there been any developments with respect to that.

George C. Zoley: Request for information.

George C. Zoley: Does that imply a pretty significant increase in.

George C. Zoley: Alternatives to detention.

George C. Zoley: Oh.

George C. Zoley: Procurement process has not been yet announced for the rebid of that contract.

George C. Zoley: The lead time for a procurement process in that.

George C. Zoley: Yes.

George C. Zoley: Kind of contracts with just large scale large volume.

George C. Zoley: Several months.

George C. Zoley: Probably six 912 months lead time is necessary to re procure such a contract. So we're not aware that any announcement to that effect yet occurred leading to the possible possibility that the current term could be extended for.

George C. Zoley: So we're not aware that any announcement to that effect has yet occurred leading to the possible possibility that the current term could be extended for some period of time. And Kirk, just to correct you there, the expiration date on the existing contract without any renewals, as George was talking about, or... Short-term extensions would be July 31st of next year, not May 31st. July 31st.

George C. Zoley: Some period of time.

Speaker Change: And Curt just a correctly there.

George C. Zoley: The expiration date on the existing contract without any renewals as George was talking about.

George C. Zoley: Short term extensions would be July 31 of next year not may 30.

Speaker Change: July 31st Okay. Thank you.

George C. Zoley: Okay. Thank you. So the lead time is, is a, so we're not quite to that 12 months, kind of lead time, but you might start, you know, seeing some, some developments there in July of this year. Yeah, okay. And the request for information from a while ago that implied a pretty significant increase in... alternatives to detention more broadly. Has there been any?

George C. Zoley: So the lead time is.

George C. Zoley: So we're not quite to that 12 months.

George C. Zoley: Kind of lead time, but you might start.

George C. Zoley: Seeing something seeing some.

George C. Zoley: Some developments there July of this year.

George C. Zoley: Possibly.

Speaker Change: Yes, okay.

George C. Zoley: And the request for information from.

George C. Zoley: A while ago that was.

George C. Zoley: Kind of implied a pretty significant increase in.

George C. Zoley: And alternatives to detention more broadly is there been any.

Wayne H. Calabrese: developments on that front. Well, there was additional funding, but, you know, part of that funding was used to offset the deficit that was in that program as well as other programs. You may recall I said moments ago that the agency as a whole had an apparently deficit of approximately $700 million. The different programs, from detention facilities to ISAP programs to other programs, were running hotter at the beginning of the fiscal year, and that had to be made up with this new funding that was made available just to offset the deficits before they could achieve higher levels. And I think in both areas of detention and ISEP, we will possibly see higher levels. But it's only recently that they have reduced the lower levels to offset the deficit.

George C. Zoley: Developments on that front.

Wayne H. Calabrese: Well there was additional funding, but part of that funding was used to offset the.

Wayne H. Calabrese: The deficit that was in that program.

Wayne H. Calabrese: As well as other programs.

Wayne H. Calabrese: You may recall, I said moments ago that the agency as a whole had.

Wayne H. Calabrese: Apparently a deficit of approximately $700 million.

Wayne H. Calabrese: So.

Wayne H. Calabrese: The the different programs from detention facilities to ICF programs to other programs were running hotter at.

Wayne H. Calabrese: At the beginning of the fiscal year and that had to be made up.

Wayne H. Calabrese: With this new funding that was made available just to offset the deficits before they could achieve higher levels.

Wayne H. Calabrese: And I think in both areas detention and <unk>.

Wayne H. Calabrese: Very possibly see higher levels, but.

Wayne H. Calabrese: Yeah.

Wayne H. Calabrese: Only been recently that they will reduce the lower levels to offset the deficits.

Wayne H. Calabrese: This is Wayne. As far as that alternate RFI approach goes, it seems to have gone fairly dormant. We really haven't heard much more about that.

Wayne H. Calabrese: Go ahead, Hey, this is wayne as far as that alternate RF I approach. It seems to have gone fairly dormant we really haven't heard much more about that.

Kirk Ludtke: Okay, great. Thank you. You mentioned that you've got 10,000 idle beds. Are those all... would those all be appropriate for ICE detainees? Yes, with some revisions to provide office space for ICE staff, which is not normally a requirement to any great extent for BOP contracts or Marshall's contracts. The difference in the ICE facilities is that you have more on-site ICE personnel and you also probably need some courtrooms and other, you know, ancillary facilities.

Speaker Change: Okay, great. Thank you and.

Kirk Ludtke: You mentioned that you've got the 10000 idle beds are those all.

Kirk Ludtke: Will those all be appropriate for ice detainees.

Kirk Ludtke: Yes.

Kirk Ludtke: With some revisions.

Kirk Ludtke: To provide office space for ice staff, which is not normally a requirement.

Kirk Ludtke: To any great extent for BNP.

Kirk Ludtke: Contracts or marshals contracts.

Kirk Ludtke: The difference in the ice facilities as you have more onsite ice personnel and you also.

Kirk Ludtke: Probably need some court rooms.

Kirk Ludtke: And other ancillary things.

Speaker Change: Got it I appreciate it thank you very much.

George C. Zoley: Got it. I appreciate it. Thank you very much. I would like to turn the conference back over to George Zoley for any closing remarks. Thank you very much. We look forward to addressing you at the next conference. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

George C. Zoley: This concludes our question and answer session I would like to turn the conference back over to George solely for any closing remarks.

George C. Zoley: Thank you very much we look forward to addressing you as the next conference call.

George C. Zoley: The conference has now concluded.

George C. Zoley: You for attending today's presentation you may now disconnect.

George C. Zoley: Okay.

George C. Zoley: Yes.

George C. Zoley: Okay.

George C. Zoley: Yes.

George C. Zoley: Yes.

George C. Zoley: Yes.

George C. Zoley: Okay.

George C. Zoley: Yes.

George C. Zoley: Yes.

George C. Zoley: Okay.

George C. Zoley: Yes.

George C. Zoley: Okay.

George C. Zoley: Yes.

George C. Zoley: Yes.

George C. Zoley: Great.

George C. Zoley: Okay.

George C. Zoley: Okay.

George C. Zoley: Yes.

George C. Zoley: Okay.

George C. Zoley: Yes.

George C. Zoley: Okay.

George C. Zoley: Sure.

Speaker Change: [music] accordingly.

George C. Zoley: Yes.

George C. Zoley: Thanks.

George C. Zoley: Great.

George C. Zoley: Yes.