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Geo Plans to Open Three Texas Facilities in 2008

From Geo Group Conference Call on February 13th: A webcast of the call can be found here, and a written transcript of the Texas-specific portions can be found here.

"We are working on three separate projects in Texas. In Montgomery County, we are awaiting the county’s completion of a 1100-bed non-recourse bond financed detention facility which we expect will be used by other state or federal agencies. We expect to open this managed [unclear] facility in September and estimate it will generate $14 million in annual operating revenues.

In Laredo, we are building the 1500-bed Rio Grande Detention Center for the US Marshals Service under contract for the office of the federal detention trustee. This facility will cost approximately $86 million when completed and is being company-financed. We expect the contract to generate approximately $36 million in annual revenues when the facility is available to open by October of this year. Our contract with OFDT provides for a fixed monthly payment with an occupancy guarantee of 50% enabling us, again, to recover all of our fixed costs in desired economics at the guaranteed occupancy level. We receive a nominal per-diem for population levels in excess of the 50% guarantee.

In Maverick County, we are constructing a 654-bed detention facility which is being financed through the issuance of non-recourse project revenue bonds. We anticipate the project will be completed and ready for occupancy by the federal or county detention agencies in September. At full occupancy this managed-only facility will generate approximately $10 million in annualized operating revenue exclusive of debt service."

Also of Note

Geo Group may bid on the sale of the Coke County facility that was shut down last October because of unsanitary and unsafe conditions.

"Our guidance also does not take into account our possible reactivation of the Coke County Texas Facility, which is currently the subject of a public auction by its owners—the County."

"...I don’t think they’ve placed any kind of limitations, per se, on which prisoners can come in there"

Geo Group will likely bid on new immigrant detention contracts funded in the 2008 federal budget

"Congress has approved a budget for 2008 fiscal year, and has provided funding that supports a 4,500-bed increase in the immigration detention beds to 32,000 beds from the prior year’s 27,500."

Geo Group is finalizing the renewal terms of a 5-year Bexar County Facility Agreement

“On December 20th, we were selected by Bexar County to negotiate a 5-year contract to continue to operate the 688-bed central Texas detention facility in downtown San Antonio. We are currently working with the county to finalize terms to renew our 5-year agreement.”

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