On Wednesday, GEO Group (NYSE:GEO) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

GEO Group reported strong financial performance in Q1 2026, with revenues increasing by 17% to $705.2 million and net income almost doubling year-over-year.

The company has secured significant new contracts, contributing to an anticipated $520 million in annual revenues, with notable increases from ICE-related contracts.

Future guidance for 2026 has been raised, with expected net income between $153 million and $166 million and revenues projected up to $3.1 billion.

Operational highlights include the reactivation of idle facilities, expansion in secure transportation services, and a shift towards higher value electronic monitoring devices under the ISAP 5 program.

Management emphasized the potential sale of facilities to ICE as a liquidity and shareholder value-enhancing opportunity, though no definitive agreements are in place yet.

Full Transcript

OPERATOR

Good day and welcome to the the GEO Group first quarter 2026 earnings 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 zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, and then two. Please note this event is being recorded. I would now like to turn the conference over to Pablo Paez, Executive Vice President, Corporate Relations. Please go ahead.

Pablo Paez (Executive Vice President, Corporate Relations)

Thank you Operator Good morning everyone and thank you for joining us for today's discussion of the GEO Group's first quarter 2026 earnings results. This morning we will discuss our first quarter results as well as our outlook. 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 the supplemental disclosure that 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, CEO and Founder, George Zulli.

George Zulli (Chairman, CEO and Founder)

George, thank you Pablo. Good morning to everyone and thank you for joining us on this call. I will conduct the entire conference call due to Shane being out for the next couple of weeks. Our diversified business units delivered strong financial and operational performance during the first quarter of 2026. 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 new or expanded contracts that represent up to approximately $520 million in new incremental annual revenues, which represents the largest amount of new business we have won in a single year in our company's secure services segment, we entered into new contracts to house ICE (Immigration and Customs Enforcement) detainees at four facilities totaling approximately 6,000 beds, including three previously idle company owned facilities in New Jersey, Michigan, Georgia and a management services contract in Florida. We also reactivated our company owned Adelanto ICE (Immigration and Customs Enforcement) Processing center in California which was already under contract but had been severely underutilized due to a long standing Covid related court case. These facility activations represent annual revenues of approximately $300 million and increased our total beds under contract with ice to approximately 26,000 beds. The census across our ICE (Immigration and Customs Enforcement) facilities reached a high of 24,000 early this year, but has since declined to approximately 21,000 but still representing more than one third of the national ICE (Immigration and Customs Enforcement) population of approximately 58,000. We believe that this recent decline is likely due to several factors including the recent transition in leadership at the Department of Homeland security and the 82 day partial government shutdown of DHS resulting in a lapse in annual appropriations for ice. During this lapse in annual appropriations, we believe ICE (Immigration and Customs Enforcement) detention operations have been supported with funding from the One Big Beautiful bill. As a reminder, under the budget reconciliation bill, ice received approximately $45 billion for detention available through September 30, 2029 and this funding is not impacted by the partial government shutdown. Congress has approved legislation that reopened most of dhs, excluding ICE (Immigration and Customs Enforcement) and Customs and Border Protection through an annual appropriations bill while proposing legislation through reconciliation for $70 billion to fund ICE (Immigration and Customs Enforcement) and CPB through and a half years. Consistent with prior shutdowns, the services rendered under our contracts with ICE (Immigration and Customs Enforcement) have continued uninterrupted as they are considered essential public safety services. However, the timing of payments and collections has been somewhat delayed requiring us to carefully manage our liquidity and working capital needs. With the expansion of our revolving credit facility by $100 million earlier this year, we believe we have substantial liquidity. Our first quarter 2026 results also reflect a significant expansion in our secure transportation services on behalf of both ice and the U.S. marshals Service. In 2025, we entered into new or amended contracts to expand secured ground transportation services at four existing ICE (Immigration and Customs Enforcement) facilities and at our three newly activated ICE (Immigration and Customs Enforcement) facilities and the support services that we provide under our ICE (Immigration and Customs Enforcement) air transportation subcontract have continued to steadily increase. In addition, in 2025 we signed a new five year contract with the U.S. marshals Service covering 26 federal judicial districts and spanning 14 states. Overall, these new and expanded transportation contracts are valued at approximately $60 million in incremental annual revenue. Importantly, in 2025 we also secured a contract for the ISAPP (Intensive Supervision Appearance Program) 5 program. ISAPP (Intensive Supervision Appearance Program) is the only ICE (Immigration and Customs Enforcement) program currently in place to provide electronic monitoring and case management services for individuals on the non detained docket. The program relies on several forms of monitoring including gps, ankle bracelets 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. ISAPP counts remained relatively stable during the first quarter of 2026 at approximately 180,000 to 181,000 participants. Consistent with the trend we highlighted last quarter, we have continued to see steady technology shift to more intensive and higher priced monitoring devices such as ankle monitors. The number of ISAPAP participants on GPS ankle monitors has increased to more than 48,000 currently from 17,000 in early 2025. Correspondingly, the number of ISAP participants on the SmartLink mobile app has declined to approximately 131,000 today from approximately 159,000 in early 2025. We also continue to experience a steady increase in the number of ISAPAP participants assigned to case management services which involve staff interaction and monitoring for approximate individuals. Currently, if this trend continues, the technology and case management mix shift would continue to increase the revenues and earnings generated under the ISAPP (Intensive Supervision Appearance Program) contract even if overall volume remains constant. Thus, we continue to be optimistic about the importance and growth potential of the ISAPP (Intensive Supervision Appearance Program) 5 contract. We believe that it is well positioned to scale up to higher overall accounts in the fourth quarter. We were also awarded a new two year contract by ICE (Immigration and Customs Enforcement) for the provision of skip tracing services valued at up to $60 million in revenues per year. We began providing skip tracing services under this new two year contract in the month of March and are optimistic that the contract can ramp up to higher volumes later this year. Finally, at the state level, we were awarded two new management only contracts in 2025 from the Florida Department of Corrections. Valued at approximately $100 million in combined annual revenues, they include the 1884 bed Graceville facility and the 985 bed Bay facility and are scheduled to transition to Geo Management on July 1, 2026. Moving to our updated guidance, we have increased our outlook for 2026 to reflect the strength of our first quarter results and we believe there are still several sources of potential upside that are not currently included in our guidance. 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 populations across our active facilities, additional volume increases and or accelerated technology service mix in our ISAPP (Intensive Supervision Appearance Program) 5 contract, additional revenue from higher utilization of our skip tracing contract and additional growth potential in our secure transportation segment. On the expense side, our guidance assumes more moderate contribution from labor savings in subsequent quarters. Moving to our outlook for new business opportunities in 2026 we will continue to be in active discussions with ice and the U.S. marshals Service regarding the potential reactivation of additional idle facilities. It is our understanding that the present ICE (Immigration and Customs Enforcement) detention Census is approximately 58,000 distributed over 225 separate locations which are primarily short term jail facilities. We believe the Federal government is continuing to pursue the priority of increasing immigration detention capacity to approximately 100,000 beds or more and consolidate to fewer larger facilities. As a 40 year partner to ICE (Immigration and Customs Enforcement), we expect to be part of the solution. We have approximately 6,000 EIDL beds at six company owned facilities which are primarily former US Bureau of Prisons facilities and therefore high security, making them ideally suited for the current needs of the Federal government. At full capacity, these 6,000 beds could generate more than $300 million in combined incremental revenues before moving on to a more detailed review of the first quarter results, I'd like to highlight our continued progress towards strengthening our capital structure and enhancing shareholder value. During the first quarter, we purchased approximately 3.6 million shares for approximately $50 million, bringing the total number of shares repurchase to 8.5 million for approximately $141 million. Our current total outstanding share count is approximately 133.7 million shares and we have approximately $359 million still available under our $500 million share repurchase authorization. We believe our stock continues to trade at historically low multiple despite the intrinsic value of our assets and our significant growth opportunities, and we recognize that the imbalance creates a unique opportunity to enhance value for our shareholders through share repurchases. Moving to a more detailed review of our financial results, revenues for the first quarter of 2026 increased to approximately $705.2 million, up from approximately $604.6 million in the prior year's first quarter, reflecting a 17% increase. For the first quarter of 2026. We reported net income attributable to GEO operations of approximately $38.3 million or or $0.29 per diluted share. This compares to net income attributable GEO operations of approximately $19.6 million or $0.14 per diluted share for the first quarter of 2025, reflecting a 96% increase. This year, our adjusted EBITDA for the first quarter of 2026 increased to approximately $131.4 million from approximately $99.8 million in the prior year's first quarter, reflecting a 32% increase. Looking at revenue trends, our own and Leased Secure Services revenues increased by approximately $70 million or compared to the prior year's first quarter. This increase was driven by the activation of our three company owned facilities under new contracts with ICE (Immigration and Customs Enforcement) which was offset by revenue loss from the sale of the Lawton, Oklahoma facility and the depopulation of Lee County, New Mexico facility. Quarterly revenues for our managed only contracts increased by approximately $33 million or 22 from the prior first year's quarter. This increase was driven by the joint venture agreement for the management of the North Florida ICE (Immigration and Customs Enforcement) Detention facility as well as certain transportation revenue increases that are reported in this segment. Quarterly revenues for our reentry services increased by approximately 5% offset by a 5% decline in non residential services revenues compared to the prior year year's first quarter. Finally, first quarter 2026 revenues for our electronic monitoring and supervision services decreased by approximately 4% from the prior year's first quarter. This decrease was driven by the reduced pricing for our ISAPB 5 contract which was offset by favorable technology and case management mix shift and some modest skip tracing revenues. Turning to the expenses during the first quarter of 2026 our operating expenses increased by approximately 15% as a result of the activation of our new ICE (Immigration and Customs Enforcement) facility contracts and increased occupancy compared to the prior year's first quarter. Operating expenses were favorably impacted by lower than expected labor costs compared to our prior guidance for the first quarter of 2026. Our general and administrative expenses for the first quarter of 2026 declined to 8.6% of revenue as compared to 9.6% of revenue in the prior year's first quarter. Our first quarter 2026 results reflect a year over year decrease in net interest expense of approx. $4 million as a result of the reduction of our total net debt. Our effective tax rate for the first quarter of 2026 was approximately 28.5%. Moving to our outlook, we have increased our guidance for the full year of 2026 and issued guidance for the second quarter of 2026. We expect full year 2026 GAAP net income to be 153 million to $166 million or a range of $1.15 to $1.25 per diluted share on annual revenues of 2.95 billion to $3.1 billion based on effective tax rate of approximately 30% inclusive of known discrete items. We expect full year 2026 adjusted EBITDA to be in the range of 525 million to $545 million. We expect total capital expenditures for the full year of 2026 to be between 137 point million and $162.5 million. For the second quarter of 2026, we expect GAAP net income to be 33 million to $39 million or a range of $0.25 to $0.29 per diluted share on a quarterly revenues of 715 million to $725 million. We expect second quarter 2026 adjusted EBITDA to be between $130 million and $135 million. Moving to our balance sheet, we closed the first quarter of 2026 with approximately $80 million in cash on hand and approximately $1.61 billion in total debt. At the end of the first quarter of 2026, our total net debt was approximately $1.53 billion and our total net leverage was below 3.2 times adjusted EBITDA. With the expansion of our revolving credit facility by $100 million which we announced in January, we believe we have substantial to support our diverse capital needs as we manage through the current partial government shutdown. In closing, we are very pleased with our first quarter results and improved full year outlook. Our strong performance has been driven by the new growth opportunities we captured in 2025 and are normalizing in 2026. Last year was the most successful period for new business wins in our company's history and we expect 2026 to be a very active year as well. We therefore believe we have upside potential across our diversified business segments. We have approximately 6,000 idle high security beds that remain available which could generate in excess of $300 million in annual revenues at full occupancy. The continued shift in technology and case management mix and potential increases in counts under our ISAPB 5 contract could also provide additional upside through 2026. We are also well positioned to continue to expand our delivery of secure ground and air transportation services for ice and the U.S. marshals beyond the significant growth we have already experienced. Finally, as we discussed last quarter, ice has purchased 11 commercial warehouses that were to be retrofitted as detention facility while contracting with private sector companies for operations. These purchases were part of a plan to acquire 24 warehouses and retrofit them as detention detention facilities using funds from the $45 billion provided for detention in the one big beautiful bill. At this time, the warehouse project has been paused and DHS is evaluating how to proceed with this initiative to increase and consolidate detention capacity. It has also been widely reported that ICE (Immigration and Customs Enforcement) is considering the purchase of approximately 10 privately owned turnkey ICE (Immigration and Customs Enforcement) processing centers. ICE (Immigration and Customs Enforcement) uses approximately 40 existing detention sites nationwide that are owned and operated by private contractors. CoreCivic owns and operates approximately 15 detention facilities while GEO owns and operates 23 ICE (Immigration and Customs Enforcement) detention facilities. I can respectfully acknowledge that we have been in discussions with ICE (Immigration and Customs Enforcement) regarding the potential sale of multiple facilities subject to mutual agreement on price and our continued management of those facilities under long term support services contracts. 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. There will also be a need to renegotiate select contracts so as to eliminate the ownership costs such as depreciation and property taxes embedded in our present contracts in the event of ICE (Immigration and Customs Enforcement) ownership. At this time there is no definitive agreement in place with ICE (Immigration and Customs Enforcement) and no precise timeline for the closing of any sign transactions. And of course we can give no assurances that these transactions will take place at all. But if select facilities are sold to ice, GEO would use the proceeds to reduce debt and continue stock repurchases as well as other corporate purposes. The potential sale of multiple facilities to ICE (Immigration and Customs Enforcement) could represent a significant liquidity and shareholder value enhancing the 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 our long term value for our shareholders. Given the intrinsic value of our assets, including 50,000 owned beds at 70 facilities and our current and expected future growth, we believe that our stock is significantly undervalued and offers significant, very attractive investment opportunity. That completes my remarks and I would be glad to take on any questions from our audience. Thank you.

OPERATOR

Thank you. We will now begin the question and answer session. To ask a question, you may press Star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star and then two. At this time, we'll pause momentarily to assemble the roster. And the first question will come from Greg Gibbes with Northland Securities. Please go ahead.

Greg Gibbes (Equity Analyst)

Hey, good morning. Thanks for taking the questions and congrats on the execution there. Wanted to follow up on the potential facility sales and maybe how we should think about potential value valuations in relation to the Lawton facility sale last year at I believe 130,000 per bed.

George Zulli (Chairman, CEO and Founder)

Thank you for the question. I think the Lawton bed valuation is a good baseline to be followed by several other factors that should be the result in a meaningful higher valuation of our ICE facilities. First, the physical plant at an ICE processing center is much more complicated with the addition of courtrooms and office space requirements for ICE personnel, which adds to the cost. Second, the ICE facility locations are in or near urban areas, which add to the land and construction costs. And third, several of the ICE facility locations are in blue states, which makes their development very difficult to establish and very problematic to replicate, thus adding to their value. So again, the Lawton sale at Oklahoma is a good baseline, but there's many things to consider beyond that which would drive the price to a higher level.

Greg Gibbes (Equity Analyst)

Got it. That makes sense. Appreciate that. And you know, I know you mentioned it's difficult to predict the timing of these sales, but do you believe initial sales could still be, you know, I guess realized or announced within Q2 or is Q3 a more likely time frame?

George Zulli (Chairman, CEO and Founder)

I would guess at late Q2 and maybe early Q3, but that's just a guess.

Greg Gibbes (Equity Analyst)

Fair enough, fair enough. And I guess last one for me as it related to some reports that ICE was activating the Central Valley Annex facility in California next to the Golden State Annex. Wonder if you could comment on is that a transfer facility or is that new? Any color you can provide there would be helpful.

George Zulli (Chairman, CEO and Founder)

The Central Valley facility actually was under ICE to begin with in 2020 and was lent to the U.S. Marshals Service for up to only recently. And then ICE has taken it over since then. It's a 700 bed facility. It's located in the McFarland, California area next to another ICE facility actually adjacent to it. So it's part of a complex that is entirely ICE controlled. Got it.

Greg Gibbes (Equity Analyst)

Thanks very much.

OPERATOR

The next question will come from Joe Gomes with Noble Capital. Please go ahead.

Joe Gomes (Equity Analyst)

Good morning. Thanks for the detailed overview, George. Much appreciated. You're welcome. Thank you for joining us. So just wanted to kind of circle back on the Q1 performance, especially given the decline in ICE populations over the period. They were down roughly from 24,000, I think you said, in the end of the fourth quarter to 21,000 at the end of the first quarter or to

George Zulli (Chairman, CEO and Founder)

today, maybe give a little more color on, on how that progressed through the quarter and also maybe some more color on the ramp up of the reactivated facilities. Is that going as expected? Are they going slower than expected given the decline in ICE populations here recently and what that possibly means for getting those facilities up to a normalized occupancy level? Well, two very good questions. Let me take the first question regarding lower populations, which actually promoted an increase in our EBITDA. With respect to lower populations. It required less intake duties, less Less housing assignments, less off-site travel, less labor and overtime for, you know, servicing these facilities, which at one point were extremely active as to the intake and outflow of detainees, which was very costly in bringing people in on an overtime basis, often to handle those areas of intake, housing and off-site requirements. But, you know, it is stabilized at this point and we think it will be fairly stable through the second quarter as well, with a pickup starting probably in the second half of the year. The new facilities had very few rapid intakes at one point, and that has slowed down because of the general scale down of the populations nationally. So we're kind of in a holding pattern, I guess, to a large extent because of the change in administration and the lack of specific funding for ICE and, and a reevaluation of the immigration enforcement policies and programs.

Joe Gomes (Equity Analyst)

Right, okay, thank you for that. And then you talked about lower than anticipated labor cost. Maybe you could talk a little bit more also a little more color on where all that is coming from or what is driving that.

George Zulli (Chairman, CEO and Founder)

Well, as I said, it's the lower number of intakes and lower overall population that drives. It's primarily in the overtime costs to have additional people in the intake area, additional people serving in special needs cases, particularly mental health cases. You have to have additional staff, and that requires many cases overtime. And we're seeing a population that I'm told is more sickly than we've historically had. And these people require more off-site visits, requiring more staff involvement, more overtime expense. So it's been a different situation for us, but with the pause in the overall population levels and the intake activity, it's given us a welcome breather from that very rapid intake and outflow processing that we experienced last year.

Joe Gomes (Equity Analyst)

Okay, and then one more for me, if I may. Last quarter, I believe it was, you talked about looking at some additional opportunities in the mental health area, and I'm just wondering how that is progressing, those efforts.

George Zulli (Chairman, CEO and Founder)

We do have a pending proposal, the State of Florida Department of Children Families, for a forensic facility in the state that we at one time developed, constructed and operated for eight years. So we expect there'll be a decision on that procurement in the next 30 days, I imagine. Okay, great.

Joe Gomes (Equity Analyst)

Thanks, George. Appreciate it. I'll get back in queue.

George Zulli (Chairman, CEO and Founder)

Thank you.

OPERATOR

The next question will come from Brendan McCarthy with Sidoti and co. Please go ahead.

Brendan McCarthy (Equity Analyst)

Great. Good morning. Thanks for taking my questions here. I wanted to start off on the skip tracing business. I know you're only about maybe two months or so into operations there, but can you give us Any detail on the current volume in that program and the revenue model associated with the program?

George Zulli (Chairman, CEO and Founder)

Our guidance really reflects some modest improvement in that program. We, we received an initial contract, we delivered it very quickly. There are other contractors that were awarded similar contracts. They're still working on their assignments and we're waiting for them to catch up so we can get our next assignment.

Brendan McCarthy (Equity Analyst)

Understood. And then just on the updated 2026 guidance, I know the low end of the revenue guide was brought up, but it looks like there was a more meaningful uplift in the adjusted EBITDA and EPS guidance for the year. I'm just curious as to what's the read through there and is it really just in line with your prior comments on kind of a lower cost structure at these new facilities?

George Zulli (Chairman, CEO and Founder)

It really is at this point. I think that's our, our view as to what's taking place in the financials of these facilities. You know, we've had one month of activity to reflect on that and I think we're on track as to our guidance and the underlying assumptions in that guidance. So yeah, I think, you know, we've given you good guidance.

Brendan McCarthy (Equity Analyst)

Got it. Thanks for that detail, George. One more question from me on the updated guidance for CapEx. I think it was up 10 to 11% at the midpoint. Any insight into that increase and maybe what specific segment in the business is going to consume that incremental capital?

George Zulli (Chairman, CEO and Founder)

Well, we have, As I said, 6,000 idle beds and, and some of those facilities need some retrofitting to bring them up to date and revise them according to the new updated needs of ice. As we get these new contracts. ICE is typically asking for more office space, more areas for their use, for more staff and we have to pay for those improvements to the capital structure of the facility.

Brendan McCarthy (Equity Analyst)

Understood. Thanks George. That's all from me.

OPERATOR

The next question will come from Raj Sharma with Texas Capital. Please go ahead.

Raj Sharma (Equity Analyst)

Hi. Congratulations on the solid results and raising the guidance and thank you for taking my questions. I wanted to get some clarity on the $520 million of revenues from wins last year. They don't seem to be fully reflected in the increase in the revenue guidance. Could you please help bridge how much of this, you know, the five winds will be fully ramped versus still to come. And also perhaps comment on the utilization

George Zulli (Chairman, CEO and Founder)

at Atalanto and the other, you know, the three activated ICE facilities by end of year sort of rate. Well, 100 million of the new 520 was related to two facilities in the state of Florida. Those facilities have not yet been Activated, I think they July 1st. So only half of the 100 million will take place this year. Then we had an offset of two facilities with the discontinuation of the Lawton, Oklahoma facility, which was approximately 2,400 beds, and the Lee county facility, which was approximately 1,200 beds. Got it, Got it. And then just I wanted to understand

Raj Sharma (Equity Analyst)

how soon do you see a pickup in the ICE detention stats and has

George Zulli (Chairman, CEO and Founder)

your outlook on achieving the overall ice, achieving the overall hundred thousand detentions? Has that changed at all with the change in the DHS administration and the law? Well, we don't have any special insight as to what the administration is doing as to how they're reassessing the initiative to convert warehouses to detention facilities. But I think there are still an objective of trying to increase overall nationwide capacity as close as possible to the 100,000 and to consolidate to less than the 250 approximately locations they have now to fewer larger scale facilities. But as I think people are aware that as I've said Today, we have 6,000 beds that can be activated within a few months. I think CoreCivic has maybe 10,000 beds and I think both have further expansion capabilities on those beds that I'm citing that we could expand our 6,000 to maybe 10,000. And so the private sector with the two major providers can provide a very material, meaningful increase in nationwide capacity at a very comparable favorable cost. Got it. Thank you for taking my questions.

Raj Sharma (Equity Analyst)

I'll get back in the queue.

George Zulli (Chairman, CEO and Founder)

Thank you.

OPERATOR

The next question will come from Kirk Ludtke with Imperial Capital. Please go ahead. Hello everyone.

George Zulli (Chairman, CEO and Founder)

Thank you for the call. George, you mentioned the 100,000 beds and fewer facilities. Do you have a sense for how many of those 100,000 beds ICE would want to own? Probably as many as possible, but I think they're starting to look at the price tags of each of the facilities and doing comparisons as to whether the existing turnkey facilities may be a better play financially, operationally, so forth, than some of these other locations which have been politically problematic. But so all of the plans I think are being reviewed, assessed, and I'm sure they'll come up with some reasonable conclusions.

Kirk Ludtke (Equity Analyst)

Got it. Why do they want to own the facilities rather than contract with third parties?

George Zulli (Chairman, CEO and Founder)

I think it's been reported that through federal ownership that there is more protection from litigation, unwarranted litigation that infringes upon the activities of the ICE processing centers. There's been litigation regarding overseeing medical services, food services, general cleanliness, etc. And it's really unprecedented in I believe it's fundamentally unconstitutional. And as some blue states are considering more active involvement and oversight of facilities, I think the logical solution to much of that is federal ownership of the facilities. They are federal facilities to begin with. In my opinion, it's the federal government who's paying for the operations of the facilities. But the ownership of the buildings will provide stronger credibility in the courts as to the Supremacy Clause in the Constitution, that these are federal facilities and they are carrying out the congressional priorities of. Of the immigration programs and policies that Congress has passed and that states can only have very limited involvement in those policies and programs.

Kirk Ludtke (Equity Analyst)

Interesting. Thank you. How many beds are in your 23 ICE facilities?

George Zulli (Chairman, CEO and Founder)

We have 25,000 beds in those 23 owned facilities. Great.

Kirk Ludtke (Equity Analyst)

And then lastly, you mentioned the 45 billion. Do they. Would ICE need any type of incremental approval to do this or is that at their discretion? The 45 billion. At their discretion.

George Zulli (Chairman, CEO and Founder)

The 45 billion is at. That's their discretion. Got it.

Kirk Ludtke (Equity Analyst)

I appreciate it. Thank you very much.

OPERATOR

This concludes our question and answer session. I would like to turn the conference back over to George Zoelli, Executive Chairman and CEO of the GEO Group, for any closing remarks.

George Zoelli

Thank you for being on this call and we look forward to addressing you on the next one.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.