Good morning, and welcome to the GEO Group Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Pablo Paez. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for today's discussion of the GEO Group's third quarter 2017 earnings results. With us today are George Zoley, Chairman and Chief Executive Officer; Brian Evans, Chief Financial Officer; Ann Schlarb, President of GEO Care; and Dave Donahue, President of GEO Corrections & Detention. This morning, we will discuss our third 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 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. 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 Chairman and CEO, George Zoley. George?

Thank you, Pablo, and good morning to everyone joining us on today's conference call. We are very pleased with our strong quarterly results and outlook for the balance of the year. Our financial performance reflects continued growth across our diversified real estate and services portfolio. During the third quarter, we experienced improved occupancy rates across a number of our eye specialties. We also saw an increase in census at our New Jersey reentry programs, which led the reactivation of our Delaney Hall facility. With our recent acquisition of CEC now fully integrated we have approximately 96,000 beds worldwide, which makes GEO, the largest private corrections and detention provider in the private sector. And to our knowledge the fifth largest among all unified corrections organizations in the world. As of the end of the third quarter, we had approximately 5000 available beds at five idle facilities along with approximately 2000 underutilized beds across a number of our active facilities. We continue to actively market this available bed capacity and believe there are a number of opportunities to deploy these assets. As we've disclosed in the past on a combined basis, these 7000 available beds could generate between $50 million and $60 million in incremental annual adjusted EBITDA at full utilization. We are also involved in several publicly known new business development opportunities. At the federal level The Bureau of Prisons CAR 18 procurement provides an opportunity for us to compete for the management of the 2355 beds Taft California facility currently under rebid. Proposals were due in June with an award expected in mid-2018. The BOP CAR 19 procurement provides for awards up to 9500 beds under 10-year contracts for existing facilities with not less than 1200 beds but not more than 1800 beds located anywhere in the continental United States.…

Thank you, George. Good morning to everyone. This morning, we reported third quarter GAAP earnings per share of $0.31, and AFFO per share of $0.63 and quarterly revenues of $567 million, including $21 million in construction revenue. Excluding the M&A related expenses, we reported adjusted net income of $0.34 per share compared to third quarter 2016, our third quarter 2017 results reflect several items, including the activation of the new ICE contract at our company-owned 780-bed Folkston, Georgia facility in January, the issuance of 10.4 million shares of common stocks on a post-split basis in March, the refinancing of our credit in March and the acquisition of CEC which closed in April. Sequentially from the second quarter this year our third quarter results reflect higher occupancy rates across a number of our ICE facility. Looking at the most recent data from U.S. customs and border protection, monthly apprehensions along the Southwest Florida more than double from April to August of this year. During the third quarter, we also experienced a higher overall census in our New Jersey reentry programs as a result of the restoration of funding funds state government shutdown in earlier July. The increase in overall census in our New Jersey operations also led to the reactivation of our Delaney Hall facility in New York. Although, we continue to have available capacity at the facility. Moving to our guidance for the balance of the year, we have confirmed our fourth quarter earnings per share guidance in a range of $0.34 to $0.36, and AFFO per share in a range of $0.63 to $0.65, on quarterly revenues of $557 million to $562 million. Our fourth quarter guidance reflects the following operational and financial items. The continuation of the improved occupancy rates at our ICE facilities and higher overall census…

Thanks, Brian, and good morning, everyone. Looking at our GEO Corrections & Detention segments from the United States, our state segment has remained stable throughout the entire year. We have long-standing partnerships in nine states, including Florida, Georgia, Louisiana, Oklahoma, Arizona, New Mexico, California, Virginia and Indiana. In four of these states, California, Georgia, Oklahoma and New Mexico, we owned and manage our facilities. And the remaining four states, Florida, Arizona, Virginia, and Indiana, we operate one or more state-owned facilities through managed-only contracts. As we look at the state budget picture, all but one of our state customers has stable budgets. And our correctional facilities have been able to provide high-quality services without being impacted by budgetary constraints. Across our eight GEO state customers we've been expanding the delivery of our continued programs, which we've now launched at more than a dozen GEO state facilities. And we are excited about the opportunity to expand our relationships within those states. In Florida, this year the state legislature allocated $2.9 million in funding to expand the GEO Continuum of Care programs to four additional facilities beyond our company-funded program at Graceville Correctional Facility. We also remain optimistic about the opportunity to partner with new states across the country. Several states continue to face capacity constraints. And many of our state customers are facing challenges related to older prisons, which need to be replaced with new and more cost-efficient facilities. In the states where we have a presence, the average state prison ranges from approximately 30 to 60 years. The state of Kansas has undertaken a procurement probe gun process for the development and ownership of a new 2,400-bed facility to replace the state's oldest prison facility. Proposals under this procurement was submitted in September with the contract decision expected during the…

Thank you, Dave, and good morning, everyone. GEO Care has had a very active year so far and we're very pleased with the operational and financial performance of our four divisions. During the third quarter, our reentry division experienced an overall higher census in our New Jersey programs. As you may recall, we had experienced a temporary decline in utilization rates in the state of New Jersey, which was the results of the State budget impacts and government shut-down in early July. Ultimately the enacted beds restored the funding for our programs and we experienced a ramp up in the utilization of our facilities over the last two months. In fact, we were able to reactivate our Delaney Hall facility in New York during the third quarter to provide state funded reentry programs to our FX and Union County. We remain very optimistic about our expanded reentry platform following the acquisition of CEC. We've identified a number of new business opportunities and have submitted several proposals for residential and non-residential programs. These new potential projects represent more than $85 million in incremental annual revenue opportunity. In terms of our used services business, we continue to experience stable utilization rates across our facilities. Our used segment has been stable for the past couple of years after our team undertook a number of consolidation and marketing initiatives. We're constantly evaluating our youth facility portfolio to ensure we are maximizing the utilization of our assets and programs. Moving to our BI electronic monitoring division, the utilization of our ISAP contract with ICE has steadily increased over the last quarter. At the state and local level, BI continues to pursue a number of new business opportunities. Finally, we have expressed you in the past, we are very excited about our GEO Continuum of Care program. Our GEO Continuum of Care division overseas the integration of our industry leading evidence faced rehabilitation program imprison with post-release support services. We have been implementing these programs at a number of our facilities around the country and we're already starting to see meaningful results an improved outcomes and reduced recidivism. We believe that our focus on improved rehabilitation and community re-entry programs is in line with efforts been undertaken by government agencies to invest a meaningful rehabilitation and recidivism reduction programs. At this time, I will turn the call back to George for his closing remarks.

Thank you, Ann. We are very pleased with our strong financial performance and outlook for the balance of the year. Our management team remains focused on capturing new growth opportunities. We continue to carefully evaluate our capital allocation to create sustainable long-term value for our shareholders. We are excited about the continued success of our company and I'd like to thank all of our employees worldwide, many of them who are listening on this call. Their dedication and professionalism are unmatched and have allowed GEO to become the fifth largest corrections organization in the world and to be recognized by our customers as best-in-class. We remained optimistic about the demands and the trends in our diversified business segments. And we look forward to further any our commitment to better the lives of those and trusted to us who are GEO Continuum of Care rehabilitation programs. We believe strongly that we are at our best when helping those in our care reenter society as productive and employable citizens. We are now happy to open the call to your questions.

Thank you. [Operator Instructions] And our first question will come from Tobey Sommer of SunTrust.

Hi, this is Conte [ph] on for Tobey, thank you for taking my questions. First up, where do we sit on the ramp up of ICE population from interior enforcement, is the ramp up still in the beginning stages and how should we think about how border crossings versus interior enforcements will drive ICE population growth in 2018? Thank you.

I think we are still in the early stage of interior enforcement. And we expect a progressive as combination of interior enforcement with border crossings to steadily increase the overall senses as we see it now as occurred during the third quarter and we forecast for the fourth quarter and for next year. So, I think there is an awareness that ICE is issuing request for information for different additional locations around the country as they expect to establish additional facilities that are primarily driven by the need for additional capacity due to the interior enforcement. So, and looking to the future we believe that the census will continue to increase by virtue of a combination of stronger interior enforcement combined with border crossings.

Got it. And regarding the recent RFP for new ICE bed capacity in the four different cities, is there appetite for new construction or facilities to meet the ICE requirements. How should we think about GEO's maximum CapEx acceptable to build new facilities for ICE?

I think that the new RFs will provide a number of locations for a new builds and GEO has a such an appetite for these kinds of facilities, particularly with the contemplated, length of the contracts, which we estimate to be approximately 10 years. So, yes, we're very interested in those opportunities.

Okay. And lastly for me on real estate only solutions for GEO, what is the likelihood of spending a new real estate only deal by the end of this year? Is it more likely now, that it will get push up in 2018? Thank you.

Well, there is an only a few months left at before the end of this year, we expect some decisions to be made towards the end of the year or at the beginning of next year, early part of next year.

Thank you very much.

And our next question comes from Kevin McVeigh of Deutsche Bank.

Hey Brian, can you help us understand, what drove the increase in the guidance on the revenue side, was that specifically ice or any other factors?

I think the main driver was just the timing of some of the Ravenhall construction related revenue was off I think in the previous quarter, both quarter and then it was better in this third quarter, as they catch up, remember the project is basically winding down from a constructive perspective and facilities is expected to begin operations here in November.

Got it. And then, can you just remind us on Ravenhall, where it is that said, on the income statement, is that going to be up in the managed-only, or in the owned at least?

Well, it's a managed-only facility, but we do have an equity investment, so, there will be some return in the, either in the revenue line or the interest income line related to that equity investments. And then obviously the operation piece will be in operational revenue and margin.

Got it, got it. And then my final question was any thoughts on Governor Brown kind of vetoing the EU state populations, any thoughts on that in terms of potential impact for you folks?

Could you clarify that question vetoing?

Yes, George, I think the legislature was trying to an act of law that would prohibited California from an acting the use of out of state facilities, and he vetoed that bill, as I understood it. So, I think that's actually good for the industry. Is there anything kind of potentially out there in California, or is that just kind of keeping his options open.

Well, I think there is a hope that eventually they won't need this out of state beds. And that remains to be seen whether they ever get to that point or not, because my understanding is their population continues to increase.

Super. Thank you.

[Operator Instructions] And our next question will come from Mark Strouse of JPMorgan.

Good morning. Thanks for taking my questions. So, I just wanted to kind of follow-up on an earlier question, regarding the ICE. Are you able to say what percentage, what kind of mix of those beds could potentially be met using your existing facilities or your idle beds?

We certainly have a couple of facilities that qualify for the use, in response to our RFI, we can't really say, maybe 25% to 50%.

Okay, okay, that's helpful. And then just, I understand it still another an RFP, but where are your expectations as far as timing of - when those beds could potentially come on line?

Well, if the RFI is following it up on meaning that they like what they receive as far as additional capacity and locations, I would think, they'd move forward within RFP early next year, decision by late next year, the construction of facility, if it's a new one, we'll take another. If it's an existing facility, I would think that contract would come on line, let's say January 2019.

Understood. Okay, thank you very much.

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

Okay. Thank you all for listening into this third quarter conference call. We look forward to address soon on the next call. Thank you.