Welcome to the third quarter 2008 The GEO Group’s earnings conference call. My name is Eric and I’ll be your audio coordinator for today. At this time all participants are in a listen-only mode. There will be a question and answer session at the end of the presentation. (Operator Instructions) As a reminder, the conference is being recorded for replay purposes. I would now like to turn your presentation over to your host, Mr. Pablo Paez, Director of Corporate Relations.

Thank you for joining us for today’s discussion of The GEO Group’s third quarter 2008 earnings results. With us today are 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 third quarter performance and current business development activities and will conclude the call with a question and answer session. This conference call 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 will also be available through December 3 at 1-888-286-8010. The pass code for the telephone replay is 10053474. During the call we will discuss non-GAAP basis information. A reconciliation from non-GAAP basis information to GAAP basis results may be found on the conference call section of our Investor Relations web page. 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 10K, 10Q and 8K reports. With that please allow me to turn this call over to George Zoley.

We’ll get started with a brief overview of our financial results for the third quarter, provide you an update on our business development efforts and a number of key industry topics and follow it up with a question and answer session. We are very pleased with our third quarter results which continued to show strong performance from our core operations in US corrections GEO Care and international services. During the quarter we successfully activated 1,725 new beds which validate the continuing strong business demand in our industry and our company’s ability to meet that demand. This morning we reported quarterly pro forma EPS of $0.34 which represents a 26% increase over last year’s third quarter results. Our GAAP EPS grew 29% to $0.31 year-over-year. Our operating revenues grew to $251.9 million from $232.9 million a year ago and our adjusted EBITDA grew 14% to $42.6 million year-over-year. Our adjusted free cash flow for the quarter was $26.4 million. A number of drivers contributed to the growth in revenues and earnings in the third quarter. First, we enjoyed a full quarter’s contribution from the recently activated 744-bed expansion of our LaSalle immigration facility which was in a startup mode during the prior quarter. Second, we received partial contributions from the activation of the 625-bed Northeast New Mexico facility in August. Finally, we opened the 1,100-bed Joe Corley Federal Detention Facility in Montgomery County, Texas in September which also contributed to our quarterly results. In addition to the strong growth in our key financial metrics we also experienced an increase in our average per diem rate for the quarter which was $59.80 compared to $57.16 from a year ago. This represents a 4.5% increase. Finally our company-wide paid level of occupancy remained high at approximately 97%. Looking at our fourth quarter outlook,…

(Operator Instructions) Our first question comes from Todd Van Fleet - First Analysis Securities Corporation.

George, Jerry, the capital availability that you outlined last week if I understand it right that pretty much takes you through any projects that you currently have or plan to get underway prior to or even within 2010. Is that right? So if we look out over the course of the next 2+ years, the capital availability that you outlined last week supports those projects? John G. O’Rourke: Yes.

Thinking about Q4, I know that you feel good about where you’re at and the guidance that you’ve given. But if you were to outline or highlight maybe the top two risks as you see it to the quarter and your ability to perform, things that might pop up maybe to bite you here and there, what would those risks have to be would you say?

As you may recall, the risks that we were articulating in the last conference call related to shifting of beds at various facilities and following that on a daily basis as I do, I can say that we are well within the guidance we originally gave and our presently reaffirming.

I think Maverick County, Montgomery, and Laredo were probably the three facilities I guess of some note George which might have presented some risk related to inmate transfers. Is that correct?

Yes. I really can’t see anything else at this time.

So we have Laredo which is the take-or-pay contract, Montgomery County sounds like it’s wrapping up nicely, you talked about Maverick being a little bit protracted in terms of the ramp up but you feel you’ve adequately covered that in your numbers here that you put out there for Q4.

That’s correct. As I said during my planned remarks, we had a switch between East Mississippi accelerating from December to October and now Maverick stepping back from October to December. In those, costs became kind of a wash on the quarter.

George, you talked about the demand that you guys still see out there with respect to ICE, criminal beds, noncriminal beds and the like. If you had to handicap it, how long do you think it would be until you got wind of some notable change or significant change to your forecast or the worldview as you guys have it and know it today? How long would it take before something were to alter that? Would it be shortly after November 4? Would it be three months? Would it be six months? Would it be 12 months? Is there a way to handicap that in terms of the timeframe by which you feel things are unlikely to change from their current state for three to six months and then possibly maybe at the six-month mark, just speaking hypothetically, that we could see if things are going to change that they would change by that point?

I think you’re implying there could be a possible change at the federal level because of the November elections and with regard to our federal market it’s for the most part being driven by the need for detention beds for criminal aliens. As you may remember from my planned remarks that that initiative is being fully funded presently under a bipartisan Congress and the funding for it increased from $800 million to $1 billion. It’s called the Secured Communities Initiative and this is to accelerate the deportation of criminal aliens. To do that the federal agencies have to provide for more detention bed space to receive these criminal aliens from wherever they’re located either at the state or federal or local level. They have to create in effect processing centers for these people to be processed and removed; and this initiative if you read the Congressional reports is a five to 10-year effort. People may ask the question, “If you start deporting several thousand per month out of a pool of 400,000, aren’t you going to deplete it in a year or two or so forth?” You have to remember that this pool of 300,000 to 400,000 is being fed by a pool of 15 million aliens who are here in the country illegally and give rise to more criminal activity in the future.

Our next question comes from Kevin Campbell - Avondale Partners, LLC.

I wanted to follow up on Todd’s question on the capital availability and your comments in the prepared remarks George. I thought I heard you say that for Oklahoma that you have the capital to support the land acquisition and the planning, which then sounded like you didn’t have the capital for the construction. Just so I’m clear, do you have all the necessary capital to complete the construction of that facility?

On this call on our accordion which has now provided an additional $60 million in liquidity, we have the capital necessary for the planning phases of that project which is land acquisition, design, engineering and planning. But with the availability by the year-end to draw down another $65 million and by next year to access another $150 million we will have the access when we need it to fully finance that project as well as others.

I just wanted to make sure I was clear whether or not this current $85 million gave you that access or not, but it sounds like you will need some additional capital in order to complete that that has been announced. I know you touched briefly in your prepared comments about state budgets, but are there any states that have come back to you saying, “We had agreed to a 3% or 4% rate increase, but because our budget’s significantly worse than we thought; work with us here. Can you reduce this rate or eliminate it?” Has that happened at all?

No, it has not which may be surprising to our listeners because we all read newspaper articles about many if not most states being in the budget deficit. I think part of it relates to the Department of Corrections is part of the public safety responsibility of the state and receives a lot of guarding compared to other agencies. I think other agencies are the first ones to experience and have to take significant budget deficits. The Department of Corrections is usually the last one. No one at this time as yet has come back to us and asked to reduce per diem rates. A more likely outcome would be that they would be talking about trying to achieve some economies or reduce our per diem increases for the following year. Past history has been that they’ve given us an opportunity to give them flexibility on how to accomplish this. We’ve done it through a change of scope of services, cut back on doing certain things that are discretionary and can achieve some cost savings as well as providing additional beds to give them leverage in achieving additional capacity, because many of these states also need more beds at the same time they’re experiencing their budget deficits which is almost a contradiction in objectives but that is the case. So what we try to deliver is cost savings while still providing more capacity.

Are there any states though that perhaps are looking to overcrowd their existing facilities rather than move over towards more beds in the private sector and just leverage off of their own fixed costs? Have you seen that or are they really beyond their ability to do that?

I think it’s the latter. I really am not aware of any state that is suggesting that they’re going to overcrowd their own facilities. Many have been through the wringer with the federal courts on that very issue and the reason or a large part of why we’re in business is because of that issue and the need to provide constitutional standards of incarceration.

On the flip side, are you seeing any new states that were previously not utilizing the private sector taking a look at it again and is there anybody that’s perhaps close to making that switch?

George mentioned Idaho and Georgia in his remarks and we have feelers out in each of our three regions talking with various states obviously about either expanding what they have or venturing into new efforts.

With regards to George, I know we had seen some talk about them privatizing some of their state psychiatric facilities. There was also a large RFI for a mental health prison for GEO Care. Could you comment on that? Any change there?

The RFP came out Friday. That was part of my planned remarks. It’s for a very large facility, 600 beds but it also involves -

Is that Georgia or Florida?

That’s Georgia. It’s to take over an existing facility in the interim and it’s part of a consolidation play to close down older facilities, relocate them temporarily in one facility and then build a brand new facility which will be 600 beds. I believe it requires five years’ experience in this business to be qualified to bid.

Our next question comes from T.C. Robillard - Banc of America Securities, LLC.

George, can I just follow up real quick on one of your responses to one of Kevin’s questions where you said past history indicated that you’d be able to do things in terms of change of the scope of services or cut back on things that are discretionary? Can you give us a sense on what things are discretionary that you guys would have some latitude toward if the states were to come back looking for some price concession?

The first area that comes to mind that falls into the discretionary category, and remember the discretion’s really on the part of the client because they specify the level of services, the area would be programming. There are different types of programming that we have provided to different clients in different locations; programming basic education, vocational training, treatment programming, and various types of treatment. That’s a fairly expensive activity and that is available to be reduced in levels and servicing. It’s a very labor intense activity and it’s something that will probably come into discussion.

I just wanted to talk a little bit on the pro forma operating margins. You guys saw a great sequential and year-on-year improvement, 140, and 120 basis points respectively. You only had 5% growth on the [manday] side; occupancy levels look to be pretty similar. What was the big driver there in terms of getting that margin improvement? Because I know last quarter you guys actually saw margins essentially flattish year-on-year, so can you give us a sense as to what drove the margin improvement?

I think it’s the continuing increase in company-owned facilities and facilities that are federal projects. If you go with starting earlier in the year with the opening of the LaSalle facility, now with the opening of the Laredo facility, you’re seeing more and more company-owned facilities coming on line.

How big is federal in terms of revenue and EBITDA?

I think federal is maybe 40% of our revenues but it is the majority of our EBITDA.

Majority being 75% or just over 50%?

Over 50%.

To go back to another question on the elections and I know a lot of people have obviously always made a big push around the big presidential election but given the chatter that’s out there and the risk that the Democrats could actually take back over Congress, is there a risk over the next couple of years if that were to be the case, and I know that’s a big if? Do you feel that there’s risk to the current criminal alien projects that are in existence today?

No, I don’t. Just to repeat maybe what I’ve already said, there are two basic markets in the federal area. One is to secure the border, and that results in the need for undocumented alien detention beds. Those comprise about 1/3 of our business. But the other initiative is the criminal aliens that’s part of what’s now being called the secured communities initiative and that results in the need for criminal alien beds. That represents 2/3 of the detention beds we are providing to the federal agencies. As you can recall from what I just said earlier, this initiative is being increased in a fairly timely manner by a Democratically controlled Congress. The President only asked for a program funding of $800 million. It was the Democratic chairman I believe of the committee and approved by the Democratically controlled Congress that added another $200 million to this program. So we see very strong bipartisan support if not Democratic leadership in this secured communities initiative that necessitates the need for criminal alien detention beds.

Jerry or Brian, do you have cash from ops and cap ex for the quarter? John G. O’Rourke : Cash from operations for the quarter was about $16 million and cap ex I don’t have in front of me but we’ll get that and come back to you later.

Our next question comes from Manav Patnaik - Barclays Capital.

To get back on the issue of pricing, I know you mentioned that you aren’t seeing any pressure from your customers now but can you give us a sense of what is the timeline around when your customers themselves need to sit down and relook at their budgets and then possibly come back to you with negotiations around the pricing front? And with respect to that, would you or have you seen historically a different strategy in negotiations with respect to your renewals on existing contracts as opposed to brand new RFPs or contracts that they would award you?

Most of our state clients are on a July 1 fiscal year. I really for the most part wouldn’t expect much in discussions until spring of next year to possibly affect the fiscal year budget that starts July 1, 2009. That’s not to say that somebody may not come to us before then, but I would find that highly unusual. Pablo in his great research did some research to find out what were the per diem increases in some very down years like 2001 and 2002 as well as 2003, and the respective increases were 2.9%, just under 3% in 2001, 2002 5% and then the average in the three years is just under 4%. We seem to have done well in past down cycles as far as per diem increases.

For the available capacity on the US corrections side, what is your occupancy rate? I know you said 97% everything combined. Also are most of your available beds accounted for or are a lot of them still open for bidding?

I think our US correction side is probably 97% as well. It’s pretty close. The state facilities are almost always full all the time. It’s the federal facilities that do have fluctuations but on a composite average, US corrections, as well as international is about 97%. The Tacoma expansion is in response to the solicitation so that’s for an existing client. The Aurora expansion is for federal clients. The Robert Dayton expansion is for federal clients. The Broward expansion is for existing federal clients. North Lake, Michigan is an unspecified client so that’s quasi-spec. We have not yet identified a client for that. The Oklahoma project does not have a specific identified client either.

On the incremental margin improvement that anticipated seeing, you mentioned it was because of your greater percentage of owned prisons. Is that implying basically the fact that you’re being able to leverage your own capacity by expanding further and is that incremental expansion that’s helping you grow these margins over time?

Yes, it is. You can just see by the listing I’ve given you. We did several of expansions last year as well again at federal facilities predominantly but these expansions are allowing us to increase the margin profitability for the company.

Without asking for ’09 guidance or anything of the sort, but how much more of sort of an improvement can you see at least just from your US corrections side on the margin front?

I really haven’t done the specific calculation. I really can’t say but it gives us comfort in the guidance we’ve given out.

Our next question comes from Analyst for Emily E. Shanks - Barclays Capital.

My first question relates to updating us on any specific contracts that are expiring over the next year?

The contract in Louisiana is expiring in the fourth quarter and we expect an extension of at least six months and possibly two years. The contract in Junie, Australia is being rebid and we expect a decision there, Wayne? Any time?

I think in December we’ll have or even a little before that the contract, whoever is awarded is expected to be signed mid-December.

We have a contract in a small facility in Houston, Texas that’s expiring.

When does the California contract expire?

The smaller of the four facilities, McFarland expires I believe in 2010 with a five-year renewable option. That’s the next expiration date.

Can you give us total nonrecourse debt at quarter end?

Brian, do you have that?

Yes, $114.7 million.

Our next question comes from [Chuck Russ - Inside Investments]. [Chuck Russ - Inside Investments]: In general terms from everything you’ve said it sounds to me like you are expecting industry growth going forward to be relatively unaffected. Am I oversimplifying and putting words in your mouth or can you talk about that? Do you expect industry demand to at all with the credit crunch, etc.?

Remember we’re in two markets; the state market and the federal market. The federal market is being driven for the most part as we’ve been discussing by the need for criminal alien detention beds. That’s being consistently funded. At the state level you’re obviously hearing about states with different deficits all around the country including the Sunbelt states where our customers are primarily located. But from coast-to-coast we’re seeing the continued need for more capacity. Florida itself has a budget deficit I think of $3 billion or $4 billion and yet in the last month it just issued an award to us for a new 2,000-bed facility. That’s what may seem to be contradictory. How can states proceed with funding additional capacity in the face of budget deficits? Well, the answer is they must because of the constitutional requirements to provide constitutional incarceration. That means having to provide for more capacity. Increasingly so, they’re doing it through the private sector. When Florida had one project to approve last year and it was a private corrections project. If you go across the southern states, you’re going to see that most of their new projects are going to be provided by the private sector in the future because they’ve seen that that is the most cost-effective means to provide for new capacity even notwithstanding any budget deficits they may have and maybe more so because of the budget deficits. [Chuck Russ - Inside Investments]: All that said, should we expect the next three to five years to show the same kind of growth we’ve seen in the past three to five years?

I think so. That’s before considering there could be an increase in the crime statistics as unemployment rates go up. That’s historically been the case. We’re starting to hear about it already from our state clients. They’re’ starting to see an uptick of their new intakes which will drive the need for even more bed space.

Our next question comes from Todd Van Fleet - First Analysis Securities Corporation.

I just want to make sure I understood what was happening in South Africa. You said that they pulled back on one of the five procurements I guess and it’s now four if I understand it right, and that one of your sites that you proposed or maybe it’s the only site you proposed, maybe you can shed some light on that, but one of those sites that you proposed has been chosen as acceptable for one of the four. Is that right George?

I’m going let Wayne address that. He’s just come back from a two-week stint in South Africa.

Originally there were five sites and five prisons. Four of them were paired up two and two so there were three projects to bid on: Project A which had one prison, Project B which had two, and Project C which had two for a total of five. All five sites were selected by government and were available for bidding to all prequalified bidders. As George said in his script remarks, we had in fact been waiting prequalification which we received this past month. So four prequalified bidders are now going to be bidding for four projects. The five prisons, one of them was [Port Shepston], has been deleted because of issues the government had with the [Port Shepston] site. That left four prisons and rather than keeping those four in three bid packages, they divided them into four discreet packages so you now are bidding on four projects, one prison in each of those four bids for 3,000 beds apiece. Before, it was possible for one bidder to win as many as three. You could win A and B or C. Today you can win no more than two projects for a total of 6,000 beds; two of the four.

So as it stands now, is it still viewed that GEO has the opportunity for 6,000 or is it 3,000 beds?

No. GEO and each of the three other prequalified bidders each have the ability to win as many as 6,000 beds or two of the four bids.

These are four facilities at four different sites. Again, I’m just trying to understand. You said that George said in his remarks that one of the sites that GEO had was chosen.

No. No bidder including GEO had anything to do with the selection of the sites. There were five government sites for five prisons. One of those sites was not able to be pushed through on a zoning planning basis so it has fallen away, at least temporarily. The government may be able to resuscitate it down the road but for now the bids have changed. There are four bids for four prisons on four sites selected by the government and that’s what we’ll be bidding on; all four of those prisons. And we can win no more than two.

Let me switch to domestic. In California what’s your latest thinking regarding what might come out of that state following the three judge panel hearing later on this month?

I think a lot of it depends on what that three judge federal panel says. If they impose a cap of reducing the population by 20,000 beds, I would hazard to guess that there will be awards of 20,000 beds. If it’s only 10,000, it’s 10,000. I think the state has armed itself with enough proposals to deal with the scope impact of what the federal judges could levy against the state. We think those decisions could be made by the end of the year.

Is that the current thinking then that the panel would put a cap on the state’s population as one of the possible outcomes from that hearing?

I’m not ascribing that to official State of California thinking. That’s just our outsider view looking inside that. I think they want to be prepared to be able to respond with as many beds as necessary to not have to release people from their system.

One quick one for Jerry. The G&A came back in a little bit which was nice to see. I think that’s the first time that’s happened in a little while. Was that due to any one factor more than another or are we getting a head fake here or what do you think? John G. O’Rourke: A head fake? No. If you recall, you asked that same question last time and we gave you guidance that we thought that the third quarter number was going to come down in the $17 million range. That was because the second quarter had an additional charge associated with our annual leadership conference. That number has come back down so we’re normalized at that $17 million number and we think it’ll stabilize there as I said last quarter to hold between $17 million to $17.5 million. No head fakes. We’re trying to be consistent.

Our next question comes from Kevin Campbell - Avondale Partners, LLC.

Could you guys tell us what the capitalized interest was for the quarter?

The CapEx for Q3 was about $1.1 million. Also just to follow up with T.C.’s question earlier, the CapEx for the quarter was about $28 million so year-to-date we’re about $99 million in cap ex.

What should we expect for capitalized interest? I know you haven’t provided guidance for next year but help us understand it and where it could fall out maybe on an individual project level or overall and help us get a better feeling as to how that’s going to impact numbers next year and into 2010? It seems like it would benefit earnings next year because you have a lot of company-owned projects coming on line but then as they open and that benefit drops off it could be a negative impact to earnings despite revenue and EBITDA growth. Am I thinking about that correctly?

I think that there will be capitalized interest next year but when the projects come on line and you stop capitalizing the interest, the earnings from the projects that we’re building will offset the increased interest expense associated with the construction of those projects.

But taking it by itself, it’s still a negative impact.

On the interest expense line alone.

The tax rate came in a little bit lower for the quarter, 36.8% I think. We were thinking it would be roughly around 39%. What should we assume going forward? John G. O’Rourke: We had a Florida tax credit that dropped the rate. I think we had guided last time to be in the 38% to 39% range. Fortunately we were able to pick up some significant Florida tax credits form the Graceville project that dropped it down to just under $38%. We believe that the fourth quarter will be in the high 38% range but below 39%.

Looking at your adjusted free cash flow, it was down year-over-year as you point out in your press release but I didn’t see any commentary, and I might have missed it earlier on the call, about what drove that downward?

The biggest thing was just a timing issue. If you look in the press release, you can see it kind of jumps right out there is the timing of certain cash tax payments. That’s really the main driver. Everything else is pretty consistent quarter-over-quarter.

We had noticed in some of our checks that the Arizona populations outside of Newcastle that some of the other facilities had been coming down a little bit throughout the quarter. Is there anything unusual going on there?

No. Our Arizona population is at full capacity.

Our next question comes from [Ted Hildemeyer - North Star Partners]. [Ted Hildemeyer - North Star Partners]: You guys had given the rebids for 2008. Do you have the number or what gets rebid in 2009?

Not off the top of our head. I think it’s typically maybe 20% off all the contracts either are renewed by negotiation or actually -

I can’t think of a major rebid next year. [Ted Hildemeyer - North Star Partners]: Last year I think there was a lot of discussion on the fourth quarter call related to seasonality. I want to say in 2006 you had strengthened fourth quarter and that was unusual and then people were disappointed with I guess lack of strength last year. Can you just address that issue and what your expectations are?

We’ve given our guidance for the fourth quarter. [Ted Hildemeyer - North Star Partners]: But when you just think about seasonality, what typically happens at the state level and federal level in fourth quarter?

In the state level, nothing happens in the fourth quarter. There is no seasonality. Our state populations are almost constant. They stay at the same level generally; 97% to 100%. At the federal level there is a fourth quarter seasonality that we have to play with year-by-year to see to what extent it’s going to take place. But it does seem to occur and we’ve taken it into consideration in our guidance which we’ve now reaffirmed. [Ted Hildemeyer - North Star Partners]: And it’s related to letting people go around the holidays?

No. The judges are off on the holidays and there’s less prosecutions taking place and maybe there’s less people coming across the border. It’s a combination of factors that come into play that result in a softer or lower census in the federal facilities. [Ted Hildemeyer - North Star Partners]: Last quarter there was a lot of discussion or concerns about backfilling facilities. Is it as simple as they were backfilled? Can you just take us back through what the concerns were and what actually occurred?

With the opening of several facilities at the beginning of the fourth quarter, which has now occurred, we were concerned that there would be a domino kind of impact to some other surrounding facilities. It has occurred to some extent but it’s well within the guidance we have now reaffirmed today. We feel confident that we’re going to achieve the financial targets we’ve identified.

Our next question comes from [Analyst for Brad Driver - Cirius]. [Analyst for Brad Driver - Cirius]: Your company was just charged with murder and manslaughter in Texas. Your comment?

First, laughter. But then Wayne could you update him on that?

Yes. The indictment was dismissed I want to say Friday. It could have been Thursday. [Analyst for Brad Driver - Cirius]: Are you sure?

Yes, I am. [Analyst for Brad Driver - Cirius]: Kenneth Keith Kallenbach dying in your Delaware County facility in April. The US Department of Justice may be looking into this. Your position on this?

We have no information or comment on that. [Analyst for Brad Driver - Cirius]: Can you tell me what you do at Guantanamo Bay?

We have a contract with the federal agency for the housing of detainees that they bring to the facility. [Analyst for Brad Driver - Cirius]: Overall, your track record in terms of prisoners dying. Do you have any thoughts on that?

We think our track record is exceptional. We provide medical care in accordance with ACA and the National Commission on Correctional Health Care Requirements and we’d put our record up against any other public or private agency, not just in the United States but around the world. We’re very proud of the efforts we make and the results we get. [Analyst for Brad Driver - Cirius]: But in Delaware County, Pennsylvania alone according to published reports perhaps half a dozen or more deaths in the past year.

Many of the deaths have been natural causes and all of them have been examined very closely by ourselves and where necessary by the authorities. We’ve cooperated fully in every investigation that’s been conducted by outside agencies and again we stand by our record of performance. [Analyst for Brad Driver - Cirius]: But you have had to pay good amounts of money in terms of settlements.

That’s the nature of the business. It’s a jail business where people come in right off the streets under different conditions of medical care and it’s a hazardous business, and that’s why we’ve decided to leave that business. We are discontinuing that contract in the next two months.

Our next question comes from [Andrew Morrey - Cowen Asset Management]. [Andrew Morrey - Cowen Asset Management]: You mentioned the opportunity in Florida. I guess Santa Rosa would also have a role there for GEO Care. We haven’t been expecting so much growth from GEO Care. Do you think there are any other small opportunities between now and 2010 when that could help accelerate growth in that area?

We just announced one today which is the new RFP in George for a 600-bed facility which is a very large-scale facility which will be several tens of millions of dollars in value, in annual operating revenues. The proposals are due December 15. GEO Care is marketing in many other locations around the country. [Andrew Morrey - Cowen Asset Management]: The timing of the cash tax payments, do you expect that will normalize in a quarter or two and that basically book taxes going forward should approximate cash taxes or do you think there will still be a difference?

I think if you look at it, booking cash taxes for the third quarter ’08 are approximately normalized and that’s what we would expect. It was third quarter ’07 where they were not normalized. There was some missed timing. Just difference in timing of the payments versus the related expense. I think third quarter ’08 is more normalized and that’s what we would expect going forward.

Our next question comes from Todd Van Fleet - First Analysis Securities Corporation.

Just one question on the facility margin as we go from Q3 to Q4. Absent any changes in activity in terms of new programs coming on line, new facilities coming on line, going off line, what have you, would you ordinarily expect a slight improvement in gross margin or facility margin heading from Q3 to Q4? John G. O’Rourke: Yes. I think we’re going to probably see a trend much similar to Q2 to Q3 that should continue on into Q4 with the stabilization and the maturation of these startup activities and the expansions in particular.

We’ll have a full quarter of Laredo for instance. That’s a company-owned facility on line.

I understand. I’m just trying to handicap if you exclude the likes of the Laredo which we’ll have to try to calculate or quantify what the impact is of that, but just ordinarily if you had no other business coming on line or no new business coming on line Q3 to Q4; same population, same facilities, things are static; would you ordinarily expect a bit of a lift in the facility margin sequentially from Q3 to Q4 related to things like per diem changes; you guys don’t really have the number of days in the quarter impact to you. John G. O’Rourke: Under those circumstances, it would be static.

Because state per diems normally take effect in the summer like July 1.

Our next question comes from [Matt Surovich - Scopia Capital]. [Matt Surovich - Scopia Capital]: Thanks for taking so many questions. You’re quite generous for your time especially the guy who asked about the deaths. We’ve bought a bunch of stock in your company over the last few months so we obviously think it’s quite cheap. One basis on which we think it’s cheap is that even if you just shut off your growth, your stock is worth we think more than $30 a share. Based on the math we’ve done it looks to us like you could become a REIT and pay well over $2 a share in dividends in 2010. Even with the reduced prices of REITs in the stock market now which are greatly reduced and obviously might bounce, your stock would trade over $30 a share. Is converting to a REIT something you would consider if your stock stays down at the kinds of levels it is now?

As you know, we are using our free cash flow to fund our capital projects and as long as there’s a need to do so I think that’s the best purpose for our free cash flow. If at some unforeseeable time in the future that stops, then we would stop and analyze what other ways would be most beneficial to increasing shareholder value. I do feel that the stock price is depressed and is undervalued and I myself have exercised some options in the last few days. [Matt Surovich - Scopia Capital]: Even if you did convert to become a REIT, you’d have some shield of your dividend from the excess of depreciation over maintenance cap ex. You would have significant free cash flow in excess of dividends that you could use towards growth. It would just reduce your growth. It seems to me when you’re cost of capital’s as high as it is now from an equity perspective, it makes sense to do something about it. I guess I would urge you to at least consider that option were your stock to stay at these kinds of levels.

Okay.

I just want to add something since you opened up the opportunity. In terms of the questioner who raised the issue of deaths in custody, it is something we obviously take very seriously as do all of our colleagues in the other companies as well as the public agencies around this country. It’s not something that any of us take lightly but the fact is the indictment itself was a very surprising development. We believe it was wholly inappropriate to the circumstances, and we were very pleased to see it dismissed on Friday or Thursday. I’m really not sure which date it occurred. I want to make clear what we said earlier and that is all deaths in custody are taken seriously by the company. We investigate every death whether natural cause or otherwise internally and we cooperate with outside agencies when they investigate, and we think our track record compares very favorably to the records of investigations and outcomes around the country whether public or private.

We show no more questions in queue at this time. I would like to turn the call over to Mr. George Zoley for closing remarks.

Thank you to everyone who joined us on this call and we look forward to addressing you on the Q4 call. Thank you so much.

Thank you for your participation in today’s conference. This concludes our presentation. You may now disconnect. Have a good day.