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DATE

Thursday, August 6, 2026 at 1:00 p.m. ET

CALL PARTICIPANTS

  • Executive Vice President of Corporate Relations - Pablo Paez
  • Chairman, Chief Executive Officer and Founder - George C. Zoley
  • Senior Vice President and Chief Financial Officer - Shayn March

TAKEAWAYS

  • Revenue -- $732.1 million, reflecting a 15% increase compared to the second quarter of 2025.
  • Net Income -- $47.5 million, reflecting a 63% increase compared to $29.1 million in the second quarter of 2025.
  • Diluted EPS -- $0.36, representing a 71% increase from $0.21 in the prior-year period.
  • Adjusted EBITDA -- $142 million, representing a 20% increase from $118.6 million in the second quarter of 2025.
  • New Contract Value -- $520 million in annual revenues from contracts awarded throughout 2025, which management identified as the largest annual total in company history.
  • Active ICE Beds -- 27,000 total beds, reflecting a census of approximately 24,000 across active facilities, representing more than one-third of the national ICE population.
  • ICE Population Trend -- 20% increase in populations over the last six weeks following the passage of the Secure America Act.
  • Secure America Act Funding -- $38.5 billion available through Sept. 30, 2029, in addition to $75 billion previously allocated to ICE and Customs and Border Protection.
  • Bighorn Facility Contract -- $85 million in expected annual revenues in the first full year of operations under a five-year support services agreement for the 1,188-bed facility.
  • Rivers Facility Contract -- $80 million in expected annual revenues in the first full year of operations under a five-year support services agreement for the 1,320-bed facility.
  • Idle Capacity Revenue Potential -- $250 million in combined annual revenues possible from 4,500 remaining idle beds at five company-owned facilities.
  • Secure Transportation Revenue -- $20 million in additional annual revenue expected from the Bighorn and Rivers contracts once operations normalize in 2027.
  • ISAP GPS Monitoring -- 54,000 participants currently on GPS ankle monitors, up from 17,000 in early 2025.
  • ISAP Case Management -- 116,000 individuals currently assigned to case management services, contributing to a technology and service mix shift.
  • Share Repurchases -- 1.6 million shares for $36.6 million in the second quarter, with $323 million remaining under the $500 million authorization.
  • Owned and Leased Secure Services Revenue -- $55 million increase, representing 16% growth driven by the activation of three company-owned facilities under new ICE contracts.
  • Managed-only Revenue -- $44 million increase, representing 30% growth driven by a joint venture for the North Florida ICE detention facility and increased transportation revenues.
  • FY 2026 Revenue Guidance -- $2.95 billion to $3.05 billion, as updated in management's revised outlook.
  • FY 2026 Net Income Guidance -- $168 million to $175 million, or $1.27 to $1.32 per diluted share.
  • FY 2026 Adjusted EBITDA Guidance -- $550 million to $560 million.
  • FY 2026 CapEx Guidance -- $135 million to $145 million, with expectations for capital expenditures to decline below $100 million in 2027.
  • Total Net Debt -- $1.5 billion at the end of the second quarter, with total net leverage below 3.0 times Adjusted EBITDA.
  • Florida Facilities Transition -- $100 million in combined annual revenues from the Graceville and Bay facilities now expected to transition on July 1, 2027.
  • Skip Tracing Revenue -- $0 reported in the second quarter due to the lapse in ICE appropriations, with an annualized ramp potential of $60 million expected in the second half of 2026.

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RISKS

  • Zoley noted that the company "did not receive any revenues from our new skip tracing contract, which we believe was due to the lapse in ICE appropriations funding during the government shutdown."
  • Zoley stated regarding the potential sale of turnkey facilities to ICE, "we can give no assurance that any of these transactions will take place at all," noting the timing of government actions is difficult to estimate.
  • Zoley indicated that the transition of management for two Florida facilities was delayed until 2027 due to "budgetary issues that remain unresolved that required the extension."

SUMMARY

Management reported that second quarter results were driven by the activation of contracts awarded in 2025 and a technology shift within immigration monitoring programs. The company is engaged in discussions with the federal government regarding the potential sale of turnkey facilities while maintaining operations through support services agreements. Financial guidance for 2026 was increased to reflect operational strength in the first half of the year, including increased populations at detention sites. Capital expenditures are projected to decrease in the coming year as current facility reactivations conclude.

  • Zoley discussed the potential sale of turnkey facilities, stating, "We are engaged in an active process for the sale of several of our turnkey facilities subject to mutual agreement on price and our continued management of those facilities under long term support services contracts."
  • Zoley highlighted the strategic goal of the federal government, stating it is pursuing the priority of "increasing immigration detention capacity to 100 thousand beds or more and consolidating to fewer larger facilities."
  • Management noted that the technology and case management mix shift under the ISAP contract would likely continue to increase earnings even if overall participation remains stable.
  • CFO March indicated that capital expenditures are expected to decline below $100 million in 2027 following the completion of current facility reactivation projects.
  • Zoley stated that following the recently completed sales of other private facilities, "ICE now uses approximately 36 existing detention sites nationwide that are owned and operated by private contractors."
  • The company noted that the Bighorn and Rivers facility activations are expected to be completed by the end of 2026 and contribute to normalized earnings in early 2027.

INDUSTRY GLOSSARY

  • ISAP-V: The Intensive Supervision Appearance Program, a contract providing electronic monitoring and case management for non-detained individuals in the immigration court system.
  • ICE: U.S. Immigration and Customs Enforcement.
  • turnkey facility: A facility that is fully equipped and ready for immediate operation upon contract activation.
  • skip tracing: The process of locating a person's whereabouts for legal or enforcement purposes.
  • SmartLink: A mobile application using facial recognition and GPS to confirm an individual's location during predetermined check-ins.

Full Conference Call Transcript

Operator: Good day, and welcome to the GEO Group Second Quarter 26 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Pablo Paez, Executive Vice President of Corporate Relations. Please go ahead.

Pablo Paez: Thank you, operator. Afternoon, everyone, and thank you for joining us for today's discussion of The GEO Group's Second Quarter 26 Earnings results. With us today are George C. Zoley, Chairman, Chief Executive Officer and Founder and Shayn March, Senior Vice President and Chief Financial Officer. This afternoon, we will discuss our second quarter results as well as our outlook. And 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-Ks, 10-Q, and 8 k reports. With that, please allow me to turn this call over to our Chairman, CEO, and Founder, George C. Zoley. George?

George C. Zoley: Thank you, Pablo, and good afternoon, everyone, and thank you for joining us. Our diversified business units continue to deliver strong financial and operational performance during the second quarter of 26. Revenues increased 15% from the second quarter of 2 thousand 25, while net income increased 63% from the same period. Our better than expected performance reflects significant revenue growth from the contracts that we entered into throughout 2025. As we have previously discussed in 2025, we were awarded several new or expanded contracts that represent up to approximately $520 million in annual revenues. Which represent the largest amount of new business we have won in a single year in our company's history.

In our secure services segment, we entered into new contracts to house ICE detainees at 4 facilities valued at approximately $280 million in annual revenues and totaling approximately 6 thousand beds. Increasing our total active ICE beds to approximately 27 thousand. Our current census across our active ice facilities is approximately 24 thousand representing more than 1/3 of the current national ICE population of approximately 68 thousand. Which is distributed over 225 separate locations that are primarily short term jail facilities. Over the last 6 weeks, we have experienced a 20% increase in ICE populations.

Following the past passage of the Secure America Act, which restored baseline appropriations funding for ICE and customs and border protection after the longest partial government shutdown in US history. Under the Secure America Act, ICE received $38.5 billion in funding available through 09/30/2029. This amount is in addition to the $75 billion in funding previously allocated to ICE under the 1 big beautiful bill. Including $45 billion for detention, which is available through 09/30/2029. We believe the federal government is continuing to pursue the priority of increasing immigration detention capacity to 100 thousand beds or more and consolidating to fewer larger facilities. As a 40-year partner to ICE, we expect to be part of that solution.

In the past few weeks, we have announced 2 new contracts with ICE for the activation of ICE processing centers at 2 previously idle facilities. We have entered into a 5 year support services contract with ICE for the activation of a federal immigration processing center at the 1.19 thousand-bed Bighorn facility in Hudson, Colorado. While also entering into a lease agreement with the facility owner. The Bighorn support services contract is expected to generate approximately $85 million in the annual revenues in the first full year of operations.

We have also entered into a 5 year support services contract with ICE for the activation of a federal immigration processing center at the GEO owned 1.32 thousand-bed Rivers facility in Winton, North Carolina. The Rivers support services contract is expected to generate approximately $80 million in annual revenues in the first full year of operations. Under both contracts, ICE will reimburse GEO for the capital expenditures needed to reactivate these 2 facilities as well as providing funding for start up expenses during the activation period. We expect the activation of the Bighorn and Rivers facilities to be completed by the end of 2 thousand and 26.

With both facilities achieving normalized operations and earnings contribution in early 2 thousand and 27. Following the activation of these 2 facilities, our total ICE beds under contract will increase to approximately 29.5 thousand beds. We have also approximately 4.5 thousand idle beds that remain available at 5 company owned facilities, which are designed for high security and, therefore, well suited for the current needs of the federal government. We continue to have active discussions with the federal government regarding potential reactivation of additional idle facilities. At full capacity, these 4.5 thousand idle beds could generate approximately $250 million in combined incremental annual revenues.

Our second quarter 2 thousand and 26 results reflect a significant expansion in our secure transportation services on behalf of both ICE and the US Marshals Service. In 2025, we signed a new 5 year contract with the US Marshals covering 26 federal judicial districts and spanning 14 states. And we have entered into new or ex amended contracts to expand, secure ground transportation services at 7 ICE facilities. The support services that we provide under our ICE air transportation subcontract have also continued to steadily increase. Additionally, in our new Bighorn and Rivers contracts with ICE, we are expected to generate approximately $20 million combined in additional annual transportation services revenues once normalized in early 2027.

Importantly, during the second quarter of 26, our ISAP-V contract continued to experience a steady technology shift toward more intensive and higher priced monitoring devices such as ankle monitors. ICEF is the only ICE program currently in place to provide electronic monitoring and case management services for individuals on the nondetained docket. The program relies on several forms of monitoring including GPS, ankle bracelet, or wrist worn devices that provide real time tracking as well as the SmartLink phone app, which relies on facial recognition, voice ID, and GPS to confirm a person's location during predetermined check ins. The current overall ISAP count is approximately 184 thousand participants.

The number of ISAP participants on GPS ankle monitors has increased to approximately 54 thousand currently from 17 thousand early 2025. We also continue to experience a steady increase in the number of ISAP participants assigned to case management services, which involves staff interaction and monitoring for approximately 116 thousand individuals currently. If this trend continues, the technology and case management mix shift would continue to increase the revenues and earnings generated under the ISAP contract even if overall participation counts remain relatively stable. Thus, we continue to be optimistic about the importance and growth potential of the ISAP contract, and we believe it is also well-positioned to scale up to higher overall accounts.

Finally, during the second quarter of 2 thousand 26, we did not receive any revenues from our new skip tracing contract, which we believe was due to the lapse in ICE appropriations funding during the government shutdown. With the restoration of ICE funding, we are optimistic that the contract will begin to ramp up during the second half of 2000 and 26. Moving to our outlook, we have increased our net income and adjusted EBITDA guidance for 2026 to reflect the strength of our results in the first half of the year.

Our updated guidance does not include any earnings contribution from our new Bighorn and Rivers contracts since we expect the activation period for these facilities to be completed by the end of 2 thousand and 26 achieving normalized early contributions in early 2027. Our updated guidance also does not include any earnings contributions from our previously announced managed only contracts for our 1.88 thousand-bed Graceville facility and our 985-bed Bay facility in the state of Florida, which have been rescheduled for implementation. These 2 contracts, are valued at approximately $100 million in combined annual revenues are now explained expected to transition to GEO on 07/01/2027.

Looking at our improved outlook, we believe there are still several sources of potential for further upside. On the revenue side, sources of potential upside include additional growth in our secure services segment from the reactivation of additional idle facilities and or higher overall population across our active facilities. Additional volume increases and our accelerated technology services mix shift in our ISAP contract. Additional growth in our secure transportation services business, additional revenue from higher utilization of our skip tracing contract. On the expense side, our guidance assumes more moderate contributions from labor cost savings in the second half of the year.

Before I turn the call over to our CFO, Shayn March, for a more detailed review of our second quarter results, I would like to highlight our continued commitment towards strengthening our capital structure enhancing shareholder value. During the second quarter of 2 thousand 26, we repurchased approximately 1.6 million shares for approximately $37 million, bringing the total shares repurchased to 10.1 million. For approximately $177 million since the current share repurchase program was authorized in August 2025. Our current total outstanding share count is approximately 130 million, and we have approximately $323 million still available under our $500 million share repurchase authorization.

We believe our stock continues to trade at a relatively low multiple despite the intrinsic value of our assets and our significant growth opportunities. We believe this imbalance creates a unique opportunity to enhance value for our shareholders through share repurchases. At this time, I will turn the call over to Shayn March to review our quarterly results and increased guidance.

Shayn March: Thank you, George. Good afternoon, everyone. Revenues for the second quarter of 26 increased by approximately $732.1 million up from approximately $636.2 million in the prior year's second quarter, reflecting a 15% increase. For the second quarter of 26, we reported net income attributable to GEO operations of approximately $47.5 million or $0.36 per diluted share. This compares to net income attributable to GEO of approximately $29.1 million or $0.21 per diluted share in the second quarter of 25, reflecting a 63% increase for net income and a 71% increase for earnings per share.

Our adjusted EBITDA for the second quarter of 26 increased to approximately $142 million up from approximately $118.6 million the prior year's second quarter, reflecting a 20% increase. Looking at revenue trends, our owned and leased secured services revenues increased by approximately $55 million or 16% compared to prior year's second quarter. This increase was driven by the activation of 3 company owned facilities under new contracts with ICE which was partly offset by revenue loss from the sale of the Lawton, Oklahoma facility and the depopulation of the Lee County, New Mexico facility. Quarterly revenues for our managed only contracts increased by approximately $44 million or 30% from prior year's second quarter.

This increase was primarily driven by the joint venture agreement for the management of the North Florida ICE detention facility as well as certain transportation revenue increases that are reported in this segment. Quarterly revenues for our reentry services increased by approximately $3 million offset by a $3 million decline in nonresidential services revenues compared to the prior year's second quarter. Finally, second quarter 26 revenues for our electronic monitoring and supervision services decreased by less than $3 million or approximately 3.5%. From the prior year's second quarter despite the reduced pricing on our ISAP-V contract. Which demonstrates the strength of the continued favorable technology and case management mix shift in the program. Turning to expenses.

During the second quarter of 26, our operating expenses increased by approximately 12% as a result of the activation of our ICE facility contracts and increased occupancy compared to prior year's second quarter. Operating expenses continue to be favorably impacted by lower labor costs during the second quarter of 26. Our general and administrative expenses for the second quarter 26 remained steady at approximately 9% of revenue compared to prior year's second quarter. Our second quarter 26 results reflect a year over year decrease in net interest expense of approximately $4 million as a result of the reduction in our total net debt. Our effective tax rate for the second quarter of 26 was approximately 28.7%. Moving to our outlook.

Have updated our guidance for the full year 2026 and issued guidance for the third and fourth quarters of 26. We have increased our full year 2026 GAAP net income guidance to a range of $168 million to $175 million or a range of $1.27 to $1.32 per diluted share on annual revenues of $2.95 billion to $3.05 billion and based on an effective tax rate of approximately 30% inclusive of known discrete items.

We have increased our full year 2026 adjusted EBITDA guidance to a range of $550 million to $560 million We expect total unreimbursed capital expenditures for the full year 2026 to be between $135 million and $145 million and expect CapEx to decline below $100 million in 2027.

For the third quarter of 26, we expect GAAP net income to be $45 million to $48 million or a range of $0.35 to $0.37 per diluted share on quarterly revenues of $755 million to $805 million We expect third quarter 26 adjusted EBITDA to be between $140 million and $145 million For the fourth quarter of 26, we expect GAAP net income to be $37 million to $41 million or a range of $0.28 to $0.31 per diluted share on quarterly revenues of $758 million to $808 million We expect fourth quarter 26 adjusted EBITDA be between $137 million and $142 million Moving to our balance sheet.

We closed second quarter of 26 with approximately $55 million in cash and cash equivalents and approximately $1.54 billion of total debt. At the end of the second quarter of 26, our total net debt was approximately $1.5 billion and our total net leverage was below 3x adjusted EBITDA. At the end of the second quarter, we had total available liquidity of approximately $300 million including cash on hand and revolver availability, to support our capital needs. At this time, I will turn the call back to George.

George C. Zoley: Thank you, Shayn March. To recap, we are very pleased with our strong second quarter results and the improved full year outlook. Our financial performance in the first half of 26 has been driven by the new growth opportunities which we captured in 2025 in our normalizing this year. Last year, was the most successful period for new business wins in our company's history. And we expect 2026 to continue to be very active as well. We therefore, believe that we have upside potential across our diversified business segments.

We recently announced new contracts with ICE to reactivate 2 previously idle facilities totaling approximately 2.5 thousand beds with annual revenue value of approximately $165 million once operations normalize in early 2 thousand and 27. With these 2 facility activations, we now have approximately 4.5 thousand idle high security beds that remain available, which could generate in excess of $250 million in annual revenues at full occupancy. We are pleased with the continued shift in technology and case management mix under our ISAP-V contract, which could also provide additional upside throughout 2026.

We also remain well positioned to expand our delivery of secure ground and air transportation services for ice and US Marshals Service beyond the significant growth we have already experienced. Finally, I would like to provide you with an update regarding the plan by ICE and DHS to purchase existing privately owned turnkey ICE processing centers. On our earnings call last quarter, we discussed that ICE was considering the purchase of approximately 10 privately owned key processing centers. As was disclosed recently by CoreCivic, 4 facilities totaling 7.19 thousand beds have been already have been acquired by ICE for more than $2.2 billion at an average purchase price of more than $300 thousand per bed.

Based on our current discussions, we believe that the total number of facilities that are being considered for acquisition by ICE is likely larger than the 10 that were originally contemplated. And it is possible that the number of facilities targeted for acquisition by ICE could continue to grow in the future. Following the recently completed sales, ICE now uses approximately 36 existing detention sites nationwide that are owned and operated by private contractors. CoreCivic now owns and operates approximately 11 ICE detention facilities while GEO owns and operates 23 ICE detention facilities.

We believe that future sales are likely to have similar valuations to the transactions that have already been completed with standard adjustments with respect to geography and facility size. We are engaged in an active process for the sale of several of our turnkey facilities subject to mutual agreement on price and our continued management of those facilities under long term support services contracts. We believe we have 2 types of assets. The buildings and the businesses of providing support services. We are pursuing a potential sale of the buildings but we want to retain the business.

We consider ourselves primarily a support services operator and will place particular importance on our ability to continue our support services at any facility sold to ICE. Several of our facilities already have long term support services contracts in place. And would likely only need to be modified so as to eliminate the ownership cost such as depreciation and property taxes embedded in our present contracts in the event of ICE ownership. 1 of these facilities had some unique and valuable assets that we believe require separate appraisal which has likely resulted in somewhat longer process of evaluation. Several other deal facilities have support services contracts that expire later this year.

ICE has initiated procurement process involving 4 facilities that we hope will result in new long term support services contracts being awarded. At this time, there is no definitive agreement in place with ICE and no precise timeline for the closing of any transactions. And, of course, we can give no assurance that any of these transactions will take place at all. But if any of the GEO facilities are sold to ICE, we intend to use the proceeds to reduce debt continue stock, repurchases, and for other general corporate purposes. The potential sale of multiple facilities to ICE could represent a significant liquidity and shareholder value enhancing event for our company.

While the exact timing of government actions is always difficult to estimate, we remain focused on pursuing new growth opportunities and allocating capital to enhance long term value for our shareholders. Given the intrinsic value of our assets, 50 thousand owned beds, are strong financial performance in providing diversified security support services and our expected future growth we believe our stock continues to be significantly undervalued and offers a very attractive investment opportunity. That completes our remarks, and we would be glad to take questions.

Operator: We will now begin the question-and-answer session. To ask a question, you may press 1 on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. The first today comes from Joe Gomes with NOBLE Capital. Please go ahead.

Joe Gomes: Good afternoon, George and Shayn March. Thanks for taking my questions. Good afternoon. So I want to start out with the Florida facilities You know, it is a 1-year push out here to the right. I was wondering maybe give us a little more color as to why the push out there then secondarily on that, I am assuming since they were supposed to start in early July this year that there was some of those revenues that were expected in the in your prior guidance that you would put out in the first quarter, is that accurate?

And so that would indicate that, you know, even with, you know, this push out to the right for this these particular facilities, you are the guide still being raised would be had been raised even higher if these had not been pushed out.

George C. Zoley: That is correct. Yeah. There were some budgetary issues that remain unresolved that required the extension to July 1st. Okay. Thank you for that. And then on the CapEx, you know, you mentioned George that getting reimbursed for CapEx and some of the new contracts If you could remind us if that is normal, if that is something new from ICE, and is that also play into the reduction and CapEx guidance on the growth side, especially for you guys for this year?

It is relatively new, but it you know, the answer to the second question may be twofold that we have spent a lot of CapEx gearing up and ready for this expansion for the reactivation of ICE facilities. And I think we will be pretty much complete by the end of this year or early next year. So the ongoing maintenance CapEx will come into play on a normal basis, but we will not have any unusual start up CapEx. As we have had over the last year and a half. Okay. Great.

Joe Gomes: And then 1 more for me. I may. I know you talked about the ISAP program. You got the 2-year contract. And even though there is been some mix shift, which is helping maintain revenue under that contract. But we go back a year and a half or so ago, and I think there was some thought out there that you know, the numbers under the ISAP program could, you know, hit well in excess of where we are today.

I mean, it is been pretty flat here now for probably, what, 2 years And just trying to get your feel for us, you know, this you know, is it just not a focus of ICE at this point in time? it is more on the detention side. Or is there something else going on in the ISAP just you know, maybe in the in the near future, we will start to see know, maybe numbers go up to where they were a couple of years ago for you guys up to the, you almost 400 thousand level.

George C. Zoley: You know, I think in general, the focus of ICE has been on increasing detention capacity. But there is a lot of policy shifts as to you know, who will be subject to immigration enforcement So at a later point, maybe next year, we could see ISAP increase dramatically. But right now, the focus is on increasing detention capacity. Okay. Great. Thanks for that. I will get back in queue.

Operator: Thank you. Thanks. The next question comes from Brendan Michael McCarthy with Please go ahead.

Brendan McCarthy: Great. Good afternoon. Appreciate you taking my questions. Just a follow-up on the electronic monitoring side. Is it still the expectation that ICE is looking to reach 100 thousand operational beds before turning to ISAP. Is that is that still a reasonable expectation?

George C. Zoley: I think so for the most part. You know, focus within the agency and throughout the agency is to try to stand up approximately 100 thousand beds. Their they are at a census presently about 68 thousand. And we have of that, 24 thousand in our facilities. So they have another 30 thousand or so more beds to go. But within that process, I think there is a an objective of consolidation into fewer larger facilities down from their present 225 facilities that they use nationwide. So they wanna be in fewer, larger facilities with a normal detention capacity of about a 100 thousand.

Not including maybe a lot of these little jails, which are just feeder locations to the main facilities. That they wanna have.

Brendan McCarthy: Understood. That makes sense. And on the skip tracing contract, I know you mentioned there was not much of impact in Q2 from the lapse in ICE funding. Is $60 million still a reasonable annualized revenue estimate from that contract? Has that changed at all And you know, what are you seeing regarding trends in that program?

George C. Zoley: We do expect to receive another contract this quarter. Possibly this month. And I think that number you quoted is correct.

Brendan McCarthy: Okay. And last question for me just on the potential facility sales. I know you mentioned ICE has initiated the procurement process for involving 4 facilities. I guess, you anticipate a potential sale lining up with the timing of a of a renewal which it looks like a few of those facilities are up for renewal this fall. Just curious if you think the timing might line up there.

George C. Zoley: Well, they are not being renewed. They are being recompeted. These are this is a new procurement to establish a new contract term for those facilities. And we are hoping the contract term is a long contract term, and I think there is a mutual interest to complete this process by the end of this quarter. Hopefully, although it may spill into the next quarter. So that means it is a as we understand it, a 2 step process. There was originally an RF a request for information in which potential interested parties could submit their proposal to indicate that they had such a facility in that particular location there is 4 different locations.

The next step of the process and that first step has been completed. The next step is to validate where the facility is and the ability to activate it within 30 days. We think that process will can take place fairly quickly. And the last step of the process is pricing on that existing facility for the next contract term. And as I said earlier, I think there is there is a mutual interest by us and ICE that this process be hopefully be completed by the end of this quarter. But it could spill into the fourth quarter. Got it. Thanks for that clarification, George. that is all for me.

Operator: The next question comes from Gregory Thomas Gibas with Northland Securities. Please go ahead.

Greg Gibas: Great. Hi, George and Shayn, thanks for taking the questions. Recognize that there are no assurances of asset sales, but post asset sales, could you maybe discuss how you are thinking about capital allocation and what your target net leverage would be? And perhaps just thoughts on buybacks versus any potential considerations for a 31 exchange following any sale.

Shayn March: Hey, Gregory. This is Shayn, and thanks for the question. So post any asset sales, we do have certain restrictions in our current debt agreements. How those proceeds have to be applied. But once we were able to satisfy those restrictions in the indenture and in the credit agreement, we would absolutely look to deploy as much capital as we can to returning it back to shareholders. So I think it is a combination of both debt repayment and ultimately using that money to get either active with share repurchases or other forms of remuneration back to our shareholders.

Greg Gibas: Got it. that is helpful. And secondly, as it relates to ICE's recent push to utilize monitoring services for Haitian immigrants, Would you expect that initiative to notably change the populations under the ISAP program? And, you know, similarly, I was just-- you know, we have seen that continued technology mix shift Wondering if you could maybe quantify it in a way. Like, what would be the impact of moving 1 individual from SmartLINK to ankle monitoring?

George C. Zoley: Well, there is a corresponding decline in the SmartLink app to individuals on the ankle monitors. And the app is far less expensive than the ankle monitors. And because of new policy shifts as to you know, who will be subject to this immigration enforcement, like as you mentioned, the Haitians, we could see as significant increase in the number of people in the ISAP program. And most of them we believe, would be placed under the ankle monitoring supervision. Technique. Okay.

Greg Gibas: Thank you. I will pass it on.

Operator: The next question comes from Kirk Ludtke with Raymond James. Please go ahead.

Kirk Ludtke: Hello, George and Shayn March. Thank you for the call.

George C. Zoley: Thank you. Shayn, a follow-up on the 100 thousand bed target I know you know, we have talked on past calls about ICE's efforts to build their own facilities. How many how many beds do you think might come from that effort? I do not think they are building their own facilities per se. Well, they may be of the warehouse program, I think of the 11 that they purchased, they may be trying to activate maybe 2 or 3. That would be maybe 5 thousand beds. So the vast majority is going to have to come from other places, I guess. it is really a reactivation of what we are formerly BOP facilities.

That were discontinued under the Obama administration. And these are generally high security facilities single cell facilities, that are very desirable by ICE in expanding their detention capacity. Got it. that is that is helpful. Thank you.

Kirk Ludtke: And is there any time limits on the funding Could this effort does this effort have to happen before the end of this administration?

George C. Zoley: No. I believe ICE has maybe $36 billion left for the buildup and of new facilities. And I believe that money is allocated through the president's current term. So they have got some time for this. So Yeah. About 3 years. 3 years. Yeah. Got it.

Kirk Ludtke: And then you mentioned geographic considerations. Can you elaborate on what they might be looking for? What that means?

George C. Zoley: Well, it is it is the difference between a cost of a facility in Oklahoma versus a cost of a facility in Colorado. Or in Washington or different states. Yeah. Just like it-- you know, a house in Florida is the different cost than 1 in Mississippi. And So just And the appraisal technique that is being used is the replacement cost of that facility in that location. Got it. that is helpful. I appreciate it. Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over to George C. Zoley, Chairman and CEO, for any closing remarks.

George C. Zoley: Okay. Thank you for joining us today. We look forward to addressing you in the next quarter. Thank you.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.