Good morning and welcome to the GEO Group Incorporated First Quarter 2016 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Pablo Paez, Vice President of Corporate Relations. Please go ahead.

Thank you, operator. Good morning, everyone and thank you for joining us for today's discussion of the GEO Group's first quarter 2016 earnings results. With us today is George Zoley, Chairman and Chief Executive Officer; Brian Evans, Chief Financial Officer; David Donahue, President of GEO Corrections & Detention; and Ann Schlarb, President of GEO Care. This morning we will discuss our first quarter results and current business development activities. We will conclude the call with a question-and-answer session. This conference call is also being webcast live on our website at www.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. These forward-looking statements are intended to fall within the Safe Harbor provisions under securities laws. Our actual results may differ materially from those in the forward-looking statements as a result of various factors contained in our Securities and Exchange Commission filings, including the Form 10-K, 10-Q and 8-K reports. With that, please allow me to turn this call over to our Chairman and CEO George Zoley. George?

Thank you, Pablo and good morning to everyone. Thank you for joining us on this call. We are very pleased with our first quarter results and the outlook for the balance of the year, which continue to reflect organic growth in each of our diversified business segments of GEO Corrections & Detention and GEO Care. During the first quarter of the year, we achieved a number of milestones. GEO Corrections & Detention successfully completed the activation of the Arizona State Prison in Kingman. We had assumed management of this 3,400 bed facility on December 1 of last year under seven-year contract with the Arizona Department of Corrections. At the time of the transition of management functions, the Kingman facility housed approximately 1,700 inmates. We are pleased to have achieved a smooth transition from the previous operator and have completed the ramp up at the facility, which is now operating at its design capacity of 3,400 beds. The Kingman facility plays an important role in helping meet the need for cost efficient correctional bed space in Arizona, and this important contract is a testament to our decade-long partnership with the State of Arizona. With respect to GEO Care, we have continued to implement our new five-year contract with the Department of Homeland Security for the provision of case management services for families going through the immigration review process. This important contract is representative of GEO Care's leadership in the provision of community-based and case management programs through our comprehensive GEO Continuum of Care. GEO Care has been able to build on its existing relationships with local community providers to provide comprehensive case management services under distinct program. These important projects underscore the diversified nature of our services and our ability to grow across the entire spectrum of corrections management, community re-entry…

Thank you, George and good morning to everyone. As disclosed in our press release today, we reported adjusted funds from operations in the first quarter 2016 of $0.84 per share, which represents a 17% year-over-year increase. We reported adjusted EPS for the first quarter of 2016 of $0.45 per share, which represents a 10% year-over-year increases. Our revenues for the first quarter 2016 increased to approximately $510 million from $427 million a year ago. Our construction revenue for the first quarter 2016 was $41 million, which came in $22 million lower than our guidance of $63 million. As a reminder, our construction revenue is related to our Ravenhall project in Australia and has little or no margin. For the first quarter of 2016, we reported net operating income of approximately $136 million or a 17% increase year-over-year. Compared to our first quarter 2015, our first quarter 2016 results reflect the reactivation of the 1,940-bed Great Plains and the 1,748-bed North Lake Correctional Facilities in June of 2015, the activation of the 640-bed expansion of the Adelanto detention facility in July of 2015, the activation of the 626-bed expansion of the Karnes residential center in December 2015, the new GEO Care contract with the Department of Homeland Security for case management services in November of 2015 and $41 million in construction revenue compared to $22 million in construction revenue for the first quarter of 2015. These revenues for both periods are associated with the Ravenhall prison project in Australia. Moving to our guidance. We have increased the low-end of our full year AFFO guidance resulting in a range of $3.54 to $3.62 per share. We've also increased the low-end of our full-year adjusted EPS guidance resulting in a range of $1.96 to $2.04. We've confirmed our full year revenue guidance and…

Thanks, Brian, and good morning to everyone. I’d like to address recent project activations, major contract rebids and select publicly known business development opportunities. GEO was the largest detention operator for the US federal government agencies including the Federal Bureau of Prisons, US Immigration and Customs Enforcement, more commonly referred to as ICE and the US Marshals Service. Our business relationship with these three federal agencies now spans three decades. Additionally, we provide correctional facilities for 10 states including Florida, Georgia, Louisiana, Oklahoma, Arizona, New Mexico, California, Vermont, Virginia and Indiana. Our business relationships with our state customers began in the mid-1980s and now involve more than 20 facilities that are almost all medium security or higher. With respect to international business, GEO is the only US publicly traded company providing corrections and detention services overseas. We presently operate in the United Kingdom, Australia and South Africa. As it relates to our recent project activations, during the first quarter of 2016, we completed the activation of the 3,400 bed Arizona State Prison in Kingman, Arizona under a seven-year managed-only contract with the Arizona Department of Corrections. We assumed management of the Kingman facility in December of last year and at that time it housed approximately 1,700 inmates. We are pleased that had completed the ramp up process of the facilitate and have now achieved normalized operations at 3,400 beds. At full occupancy, the facility is expected to generate approximately $73 million in gross annualized revenues, including $24 million for debt service payments, resulting in net annualized revenues to GEO of approximately $49 million. Moving to our company-owned Karnes ICE Residential Center for which we completed a $32 million expansion in the fourth quarter of last year, as you may remember, the center began operating with the new fixed monthly payment…

Thank you, Dave and good morning everyone. As you may remember, our GEO Care segment is comprised of four divisions. Our GEO Reentry division manages 21 halfway houses totaling over 3000 beds and 63 day reporting centers nationwide with the ability to service more than 4,000 participants. Our youth services division oversees 12 residential facilities with approximately 1300 beds and seven non-residential programs with approximately 1200 participants. Our BI division monitors approximately 139,000 offenders under community supervision including 102,000 individuals through an array of technology products including radiofrequency, GPS and alcohol monitoring devices. Finally, our GEO Continuum of Care division oversees the integration of our industry-leading evidence-based rehabilitation programs, both in prison and through our community-based and post-release services. As we've discussed in the past, we're enthusiastic about the opportunity to expand our delivery of offender rehabilitation services through the GEO Continuum of Care, which we believe is in line with current criminal justice reform discussions. We view these efforts as positive and we believe that the emphasis on offender rehabilitation and community reentry programs as part of criminal justice reform will create growth opportunities for our company. Each of our divisions continues to pursue several new growth opportunities. GEO Reentry continues to work with existing and prospective local and state correctional customers to leverage new opportunities in the provision of community-based reentry services in both residential facilities and nonresidential day reporting centers. We are pursuing new residential reentry center opportunities for state and federal agencies and new day reporting centers in several states. These new opportunities total more than $28 million in potential annualized revenues. We were also successful -- also recently successful in securing new contracts for the continued housing of BOP offenders at our Salt Lake City residential facility in Utah and for additional beds for our…

Thank you, Ann. We are very pleased with our strong financial performance for the quarter and our outlook for the balance of the year. We've achieved a number of important milestones with the ramp up of the Kingman Arizona facility by GEO Corrections & Detention and the implementation of the new family case management program by GEO Care. These important projects are representative of our diversified growth platform in our ability to provide tailored real estate management and programmatic solutions to our customer base across all segments of the correctional spectrum. This diversified growth and investment strategy has positioned GEO as the world's largest private provider of corrections, detention and offender rehabilitation services. We remain focused on pursuing new growth opportunities and are enthusiastic about the opportunity to expand our delivery of offender rehabilitation services through our GEO Continuum of Care platform, which we believe gives our company a competitive advantage when pursuing new contracts. As a REIT, GEO is focused on providing essential real state solutions to government agencies in the fields of detention, corrections and post-release facilities. But additionally, as a service provider, our commitment is to be the world's leader in the delivery of offender rehabilitation and community reentry programs. This commitment is consistent with criminal justice reform efforts that emphasize rehabilitation and community reentry programs for offenders, which we view as positive for our company as evidenced by our continued growth in our diversified business segments. We believe that our unique platform of correctional and rehabilitation services better positions GEO to capture future growth, which will enhance value for our shareholders and allow us to continue to grow our earnings, cash flows and dividend payments. This concludes our presentation and we would now like to open the call to your questions.

Thank you. [Operator Instructions] Our first question comes from Tobey Sommer with SunTrust. Please go ahead.

Hi, this is actually [indiscernible] for Tobey. Thank you taking the question. Could you give us some commentary current election cycle, what your expectations are on expansions on potential outcomes you maybe anticipating in 2017? Thank you.

Well we believe we provided essential government services at the federal level and in the state level and it historically those services have received bipartisan support and we expect that's going to continue in the future.

And on the margin side as the utilization stays at the current high level, how should we think about the impact to the margins for rest of the year?

The utilization of which? Are you speaking about a specific business unit or segment?

Well just overall, United States and international.

I mean, I think margins will improve a little bit through the balance of the year, the first quarter is typically our lowest performing quarter, we see some seasonality in some of the populations at some of our facilities and we typically expect that to improve during the second quarter and going into the third quarter. So we should see a little bit better margins and that's obviously reflected in our guidance and improved performance.

The next question comes from Michael Kodish with Canaccord. Please go ahead.

Hey good morning guys and nice quarter and just a few questions from me here. Starting off with the tender offer and then the debt offer as well. Do you guys have some nice proceeds there; I'm just kind of wondering what the plan is for the excess cash.

Well currently we paid down the revolver and create some additional liquidity there. As I think is evident from the call as George mentioned and Dave mentioned, there is a number of opportunities that we're continuing to pursue and the bulk of those opportunities would require some sort of capital to make them come through so the Houston project is a significant opportunity. ICE is continuing to look for beds in Gary, Indiana in the Indiana area, Illinois area and then in the New York as Dave mentioned. So those are significant potential capital opportunities that we may see. The need for there is a project in Australia that could require our capital; there is a new bid down there that we've discussed so all of those opportunities would require capital.

And then moving on to interest income, you guys have seen a nice lift over the past few quarters. I know you have some contracts and notes receivable in there related to some of your foreign contractors. I was wondering if you could break down 1Q and then maybe how that would look going forward as well.

Well, the interest income is stepping up as you mentioned in connection with that contract receivable that we have on the balance sheet. So as that continues to grow, the interest income will continue to step up some, I don't have the exact breakdown in front of me but again it's probably another $1 million for the year or something like that, not material but it's factored in.

So that's an additional million for the contractor receivable or on a different phase?

In interest income throughout the balance of the year, we'll continue to see that growth as the contractor receivable grows. The contract receivable will grow probably and editors another 150 million or so.

And then moving on to the Baldwin facility, I was wondering if you guys could give and I'm sorry if I missed this in your prepared remarks, I was wondering if you could give a little color as to how that's ramping just both from Vermont and Washington?

Well thanks for the question Michael. You know the facility is stabilized with normal operating rhythm for the State of Vermont. The State of Washington we have not seeing utilization from that department as you may recall they have gone through an effort of reorganizing their own agency and leadership as being in place there but we will continue dialog with the State of Washington about future needs and the facility is performing very well.

As you kind of mentioned in your prepared remarks then, I think Michigan is looking at potentially leasing a facility and I think they were looking at the Baldwin facility, I was wondering, and just kind of the way things are right now, what's your appetite for an arrangement like that.

Well I could say that you know we obviously are in dialog with the Michigan department of corrections and respective stakeholders in that jurisdiction because we do have a significant presence there. Their department has continued needs and others an evaluation about their physical plants and their current capacity expectations. So we've made ourselves available for that continued conversation, we want to be very supportive of Michigan and their needs and in concert with that we're willing to have the open dialog to best suit the organizational activity for that community.

[Operator Instructions] Our next comes from Kevin McVeigh with Macquarie. Please go ahead.

Can you just give us a sense at a high level George or Brain just how state budgets have been trending and just how we should think about that across populations more from existing organic growth if you could?

I think most of our client populations are fairly stable and with a few exceptions.

Kevin this is Dave, I would entertain the logical right now as most state governments are evaluating their revenue expectations and their budget outlays for upcoming appropriators to consider. They're seeing compression and they're looking for opportunities to become more efficient. So we continue to be encouraged by the ability for us to provide services, quality services to create options for them to consider but the expectations for the economic adjustments is really up to what's in front of those jurisdictions and we're just happy to be available to those dialogs when they have needs.

Got it and then it sound like you made a couple of references to the dividend. Any sense in terms of, what we should expect in terms of the pace of increase of payout, is that just any thoughts on that would be helpful?

Our track record we established in the short period of time that we've be a REIT, we've evaluated it at least annually and consistently in the fourth quarter and I would expect that we will continue to follow that pattern and we've been pretty straight forward with that, we're targeting that 80% payout ratio and I think we've been consistently right at that maybe 74 or something like that but we've been right around that payout ratio. So we'll continue to monitor that, we'll continue to evaluate in a timely fashion, we'll continue to evaluate it against whatever our projected capital needs are. But I see we've shown good discipline in regards to that matter.

Ladies and gentlemen this concludes our question-and-answer session; I would like to turn the conference back over to George Zoley for any closing remarks.