Welcome to the fourth quarter 2007 GEO Group earnings conference call. (Operator instructions) I would now like to turn the presentation over to your host for today’s conference, Pablo Paez, Director of Corporate Relations.

Thank you for joining us for today’s discussion of The GEO Group’s fourth quarter and year-end 2007 earnings results. With us today is George Zoley, Chairman and Chief Executive Officer; Wayne Calabrese, Vice Chairman, President and Chief Operating Officer; Jerry O’Rourke, Chief Financial Officer; and Brian Evans, Vice President of Finance, Treasurer and Chief Accounting Officer. This morning, we will discuss our fourth quarter and year-end performance, current business development activities and conclude the call with a question-and-answer session. This conference is also being webcast live on our website at www.thegeogroupinc.com. A replay of the audio webcast will be available on the website for one year. A telephone replay of the audio webcast will also be available through March 13 at 1-888-286-8010. The passcode for the telephone replay is 24342195. During this call we will discuss non-GAAP basis information. Reconciliation from non-GAAP basis information to GAAP basis results may be found on the conference call section of our investor relations webpage. Before I turn the call over to George, please let me remind you that much of the information we will discuss today, including the answers we give in response to your questions, may include forward-looking statements regarding our beliefs and current expectations with respect to various matters. These forward-looking statements are intended to fall within the Safe Harbor provisions of the Securities laws. Our actual results may differ materially from those in the forward-looking statements as a result of various factors contained in our Securities and Exchange Commission filings, including the Forms 10-K, 10-Q and 8-K reports. With that, please allow me to turn this call over to George Zoley.

Good morning to everyone and thank you for joining me today as I provide an overview of our financial results for the fourth quarter and year-end 2007, update our 2008 projects under development and discuss our guidance for 2008. When I conclude my prepared remarks I’ll open out the call to a question and answer session. A year ago we announced that our company had experienced the best year in our history in 2006. I’m very pleased to announce that 2007 now exceeded 2006 and is now the best year of our company has ever experienced. This past year was an extraordinary in many respects for The GEO Group. We completed the acquisition of CentraCore Properties Trust at a cost of $430 million, thereby increasing our facility assets by approximately that amount. We completed a $230 million equity offering allowing us to reduce our debt by $200 million. We split our stock 2-for-1 thus increasing our publicly traded flow to more $51 million. During 2007, we activated 10 new or expanded projects representing 5,400 beds and approximately $100 million in additional annualized revenues. Our total revenues for the year broke through the $1 billion mark for the first time representing an important milestone for our company. We believe our performance strongly validates the continuing success of our company’s uniquely diversified growth platform. Our three business units delivered strong financial results driven primarily by the new projects brought online in 2007 as I mentioned earlier and strong performance at a number of our correctional and residential treatment facilities at both the state and Federal levels. Our fourth quarter pro forma earnings increased 32% to $14.1 million or $0.27 per share based on 51.8 million shares compared to $10.7 million or $0.26 per share, based on 40.3 million shares for the same…

(Operator Instructions) Your first question comes from the line of Analyst on behalf of Jeff Kessler - Lehman Brothers.

On the US Corrections side, could you give us your take on the revised projections by the articles and stuff that came out from Texas? How are you viewing that and what impact do you expect or no impact do you expect to have on your facilities and relationship with the state?

Well, we’re actually encouraged that the state has announced the need for additional treatment beds. We have a long history in the State of Texas going back to the early 90s of providing treatment services for the state, and we have several existing locations where we feel we can provide such treatment beds, and we are aware of other Greenfield sites that could also provide those additional beds.

In GEO Care, besides the Pennsylvania RFP, could you talk about maybe, if you’ve seen any other indications of interest from other states? And also in the guidance, you talked about you expect one new contract or you’ve baked in one new contract in the second half of 2008, could you give us a little more color on that contract, and maybe the size that you are baking into the numbers?

With respect to your first question, GEO Care business development continues at a number of different states, and I’m not really at liberty to disclose which of those states we’re speaking to, because we consider that proprietary information. With respect to Pennsylvania, we’ve recently submitted a best and finals for the two facilities we’re competing for and as I said in my conference call script, they both total approximately $40 million. And we’re hopeful of winning one of them, but we’ll await the results, which we believe will occur by the end of the first quarter.

The one contract that you have baked in for the second half of 2008 in your guidance is one of the two Pennsylvania Centers that you bid for.

Yes.

On the international side, I know you gave the color on the beds and stuff, but from a revenue impact or from a financial impact would you expect at some point for that to hit in towards the end of 2008 or are we still talking 2009 and beyond?

International would be later in the year, ‘09 and beyond.

Your next question comes from the line of Todd Van Fleet - First Analysis.

I wanted to ask you about Arizona and it sounds like Indiana requiring more beds, I would guess that at some point moving through 2008 they might actually want more of those beds where the Arizona inmates are currently residing. Can you expand the Florence Facility further without construction? Where you are going to accommodate the 200 inmates is it possible to go further or is 200 the max and then you have to start actually allocating some capital to build out that facility? So that’s one-half of the question. And then related to that, would Arizona, are they one of the states to which you are marketing the Baldwin Facility?

We have other land in close proximity to that facility. So we are in a position to construct additional beds, the current facility we don’t believe we can expand any further without new construction. We believe these 200 additional incremental beds that we discussed in the conference call is really the one that as far as how many additional new beds you can provide without new construction.

How about their desire perhaps interest in maybe using Michigan, George?

Well, I think that remains to be seen. They have a procurement in place right now for 2000 beds, but obviously it will take some time for those 2000 beds to come online I would say a year and half to two, and in the interim they may feel the need for additional capacity and we have talked to them in the past about Michigan.

Regarding the expansion at Aurora in Colorado, are there a series of legislative hurdles or zoning hurdles that need to be overcome prior to that expansion being completed, so you can actually receive inmates into that facility? Or could you talk a little bit about what’s some of the complicating factors might be before you can actually receive the inmates?

Well it is an urban location and there are more hoops to go through from a planning standpoint, but there aren’t any zoning issues per say. But there are lots of planning issues such as proper buffering from adjacent neighborhoods and lines of site. So it is a much more sophisticated community that it takes more care and time in reviewing construction plans. And it takes longer to construct in Colorado. But there aren’t any zoning issues, so I think we will be on track to deliver the facility as we’ve identified it at the latter part of 2009.

Are there multiple customers potentially for that facility George, ultimately maybe only one customer in the facility, but you are marketing into more than one customer?

It could be another Federal user, that’s a possibility.

Not state?

No.

Your next question comes from the line of Kevin Campbell - Avondale Partners.

I was hoping you guys could talk a little bit about the interest income, and the G&A, they were both a little bit higher than we had expected. So and I understand that the G&A, I think was related to the deferred acquisition costs, but could you give us an idea of maybe what we might expect going forward from both of these line items? John G. O’Rourke: Kevin, you’re exactly correct. We had the one-time, $1.4 million influence associated with those write down of the acquisition fees that had previously been deferred. So, we’re anticipating that we will probably be running in the $16.5 million per quarter run rate on the G&A respectively.

The acquisition fees were those related to CPT or was it with some other acquisitions maybe you’re looking at that didn’t come to fruition and then, therefore you wrote it off?

They were not CPT, and the rest of your question is confirmed.

On the interest income, again that number was a little bit high, it was about what it was in the third quarter, I believe so, but just again higher than we had thought, should we continue to expect it to be around that $2 million level? John G. O’Rourke: I think it’s really between $1.5 and $2 million is where you should expect it to run on.

Could you talk a little bit about the current budgetary environment at the state level, and whether or not these tight budgets are something that favor you in the near-term or short-term or perhaps more so over the long-term? John G. O’Rourke: I think the state budgetary difficulties actually favor us, particularly for those states that require additional beds. The needed capital funds for those additional beds, which based on new construction costs of $60,000 to $70,000 a bed, are very hard to come by at the state level, and they often compete with the need to build more schools. It makes, an easier sell for us to present and pursue a privatization alternative for the states to add to their capacity by using private companies through either their own company financing or through project revenue bond financing that they help facilitate. So, I think the current market as a whole really promotes the development and opportunities for more privatized beds.

On LaSalle, you said the construction was delayed, was it just delayed a month, was that it from April to May?

Its just one month, they got lot of rain this year.

On New Castle, were you going to be transferring all of the Arizona inmates back or was it just going to be the 200?

They will all go back I discussed. And we will be receiving Indiana prisoners in advance of Arizona prisons leaving.

Your next question comes from the line of T.C. Robillard - Banc of America Securities.

On South Africa, George, can you give us a sense of timing as to when they have indicated the RFPs will be awarded? And then from that standpoint assuming you win one or more than one of those. Can you give us a timeline to construction and opening a facility?

They haven’t said when they will award, at this time we don’t expect that will occur for some time. Our own estimates based on what they have done in the past is that award could come by the end of the year, so fourth quarter. And then, these are very large projects it will take two years thereafter to construct the facilities before they are permitted to open.

Jerry, can I get cash from ops and CapEx for the quarter? CapEx for the quarter was $47 million including maintenance CapEx of about $3 million and cash flow from operations was about $39 million.

Brian, do you have the op margins for the main segments, US Corrections, International and GEO Care? I don’t have those in front of me right now, those will be in the 10-K which we should be filing shortly.

Your next question comes from the line of Ben Mackovjak - Rivanna Capital.

Can you breakout what percent of compensated mandates are from the US as opposed to international? John G. O’Rourke: In the 10-K and in the Q we disclosed the amount of compensated mandates by International and US operations.

Is that something you can share now? John G. O’Rourke: I don’t have the 10-K in front of me, but we’ll have it filed shortly.

Historically how do you see international rates compared to US rates by the per diem? John G. O’Rourke: They are a little bit higher. You got to remember that rate is affected also by the exchange rate so, that those international per diem rates, average per diem rates are higher this quarter than they would have been a year ago due to higher exchange rates.

Do you have any plans to hedge that? John G. O’Rourke: No.

For ‘08 do you have a maintenance CapEx estimate? John G. O’Rourke: $12 million, $10 to $12 million is what’s our run rate has been on an annualized basis for maintenance CapEx.

Your next question is a follow-up from the line of Todd Van Fleet - First Analysis.

Could you give us the organic growth or rather the contribution revenue from the foreign exchange in the quarter and then Brian if you could tell us whether there was some deferred interest in the quarter as well. The impact of foreign exchange on revenue during the quarter did it add? Quarter-over-quarter it was probably about $2 million. There was about $1.5, $2 million.

Deferred interest in the quarter that might have reduced the interest expense overall. There was some capitalized interest; I want to say that was about $600,000 to $800,000. That will be disclosed in the 10-K specifically also.

George as you chat with your business development folks and as we consider what’s happening more broadly in the US, I think we’ve heard that, and consistent with what you expected that the immigration flow is returning here in the earlier part of this year, you’ve got the project streamline impacting incarceration levels along the Southwestern border. Has there been any discussion between you and your clients or customers at the state levels regarding what the impact could be potentially for increased cooperation between state and Federal law enforcement regarding illegal immigration flow? Have they had meaningful conversations? Do they understand the impact that it’s going to have on their state and local prison systems? Is that an issue; is it not an issue, if you can help us understand how you are thinking about that?

From my personal view it seems like the greatest impact is on the local court systems, the county courts to which are often in these particular locations where our project streamline is taking place, our small counties, rural counties with small jails and therefore have a bottleneck effect in the program. If they only have a limited capacity of how many people they can detain and therefore a finite limit as to how many people eventually will be sent to us. So there are practical limitations to this new policy. But the capacity of the county is to how many people they can readily detain.

So if they don’t have capacity in their facilities at the local level, they wouldn’t pass those individuals on to another facility at perhaps the state level?

They may spread it around, but it’s more difficult.

Todd further to the question about the federal detention activity, first the Federal magistrates will process what they think can be processed in terms of the available space, but we do talk with them about making available the space we have that maybe 80 or even a 100 miles away and arrange transportation. So we are having ongoing discussions about that and some of that’s already assisted us in bringing that Val Verde population up to its current status. Your question also I thought was about the impact on states, and I think California, Arizona, New Mexico, Texas, those states are going to continue to be impacted by those illegal undocumented aliens who come into the country and commit crimes that aren’t Federal in nature, but are state felonies. And we have already seen in some cases states saying that their populations are what, 15 to 25% represented by those folks. And I don’t see any change in that over the immediate or even mid-term.

So really the two issues then, Wayne, project streamline being one issue, but then perhaps increased cooperation between local state and Federal authorities being a catalyst for higher incarceration or capacity utilization levels. You would see the greater impact from the project streamline activity as opposed to the latter?

I think the project streamline activity is going to continue to impact the numbers that we see in our Federal detention space. And, we’re seeing that seasonally coming back now as George discussed. And, I think streamline and efforts like that to tighten and close that border are continuing to have the impact that was expected by those agencies and our numbers are going up as a result seasonally now. In terms of states though, I haven’t seen a lot of additional cooperation to bring down the numbers of prisoners in the states that undocumented criminal aliens at the state levels. I think those numbers are continuing to increase as they have over the last several years, and are going to continue to impact these states’ requirements for more beds.

Your next question comes from the line of William Gilchrist – Westfield Capital. William Gilchrist – Westfield Capital: On Coke County, George the county has actually auctioned off its facility, and I’m just trying to get some sense of expansion opportunities to whoever gets that and if there is any restrictions on what type of inmates go there, or anything like that?

The county, I think just came out with their solicitation in the last few days. It’s due in the next 10 days, I think. And it’s a monetary type of auction. The proposal with the highest price will likely win. They did indicate an interest in the proposer committing themselves to marketing the facility aggressively for several years. I don’t think they’ve placed any limitations per say on what prisoners can come in there. But if they are out of state prisoners that issue will be regulated by Texas State Law, which has a fairly comprehensive set of statutes that involve the involvement in the Texas Commission on Jail Standards in the review of the facility and the prisoners and it requires, I believe approval by the local sheriff of the prisoners and contract. So, Texas does have probably the oldest and most comprehensive standing laws governing the transfer or the in-take of out of state prisoners. William Gilchrist – Westfield Capital: So they are basically looking to Coke County, the county’s looking to lease this out to someone, not an outright sale?

No it’s an outright sale. I believe they’ll cooperate to facilitate whatever contracts or intergovernmental agreements would be available to reactivate this facility. William Gilchrist – Westfield Capital: Moving on to the UK, can I just clarify something? So the December 5, I was confused, 9500 additional beds is what they were initially talking about for 2012. They upped that to 10,500 beds, is that right or was it an additional 10,500-beds on top of those?

It’s additional, in addition to the 9,500 there is another 10,500 in total. William Gilchrist – Westfield Capital: So the visibility on those additional beds is way too far out.

I don’t know if it’s way too far out, but it’s certainly further out than ‘09 and ‘10.

Your next question is a follow-up from the line of Todd Van Fleet - First Analysis.

Can’t pretend California doesn’t exist anymore just because they have been quiet for a while, but do you expect any resolution or movement in that state in 2008 or what’s the next chip to fall here?

Well, as we’ve said in the past, none of our guidance is dependent upon further business with or new business with California although we would certainly welcome it. We’re waiting and watching ourselves as to what the legislature does with the governor’s very dramatic and apparently extreme proposals. From what we’ve heard, nothing much has happened. So, we don’t know whether this will just result in some stalemate or, but none of our guidance is impacted by it.

Let me turn to the business development pipeline then George for a second. You had mentioned Arizona, Virginia and Florida, I think, as you talked about at the state level, what’s cooking in the new business pipeline. Is that because there have been actual RFPs or pretty detailed discussions going on with those states regarding what the RFP or the procurement might look like. I’m wondering, why you didn’t mention anything with the State of Idaho or maybe few others?

We don’t mention everybody we are talking too. We usually only mention opportunities that are in the public domain. That is a solicitation that has come out either by a state or federal agency that’s in the public domain.

There are no additional questions at this time.

We thank everyone for having joined us today. We look forward to addressing you in the next quarterly conference call. Thank you.