Geo Group Inc Q2 FY2020 Earnings Call

Good morning everyone and welcome to The GEO Group's Second Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note that this event is being recorded. At this time, I would like to turn the conference call over to Pablo Paez, Executive Vice President, Corporate Relations. Please go ahead.

Thank you, Operator. Good afternoon everyone and thank you for joining us for today's discussion of The GEO Group's second quarter 2020 earnings results. With us today are George Zoley, Chairman, Chief Executive Officer and Founder; Brian Evans, Chief Financial Officer; Ann Schlarb, President of GEO Care; and Blake Davis, President of GEO Secure Services. This afternoon we will discuss our second quarter results and 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 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 which are contained in our Securities and Exchange Commission filings including the Forms 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 afternoon to everyone. This morning we reported our second quarter results, updated our guidance for the full-year, and issued guidance for the third and fourth quarters. We've also provided updated guidance regarding our dividend policy and our efforts to pay down debt and delever. During the second quarter, we experienced some favorable cost trends that resulted in better than expected financial performance. While we're encouraged by these favorable trends during the second quarter, our company continues to face challenges associated with the unprecedented COVID-19 pandemic. Our employees live in communities that have been impacted by the pandemic and most of our facilities have experienced some cases of COVID-19 in both our staff and individuals entrusted to our care. Despite these ongoing challenges, our frontline employees have shown incredible commitment and resilience that have helped our company manage through these difficult times. From the outset of this global pandemic, our staff has implemented steps to mitigate the risks of COVID-19 to all those in our care, and our employees continue to evaluate and refine these steps as appropriate and necessary. Working with our government partners, we have implemented the guidance issued by the CDC at all of our facilities. Early on in the pandemic, we deployed face masks for all employees, inmates, and detainees at our residential facilities, procured additional personal protective equipment, and suspended non-essential visitation. We've also been focused on ramping up testing, and today we have conducted widespread saturation COVID-19 testing at an increasing number of our Secure Services facilities, ensuring the health and safety of all of those in our facilities. Our employees have always been and remain our number one priority. We believe that the steps we have taken across our facilities and our focus on personal protective equipment and testing have allowed GEO to mitigate the risks associated with COVID-19. While our operations as an essential government service provider have continued uninterrupted, the spread of COVID-19 has had a negative impact across several segments of our company. We have experienced a decline in overall occupancy levels at our Federal facilities for ICE, U.S. Marshals service, and the Bureau of Prisons. Lower occupancy has been driven by a decline in crossings and apprehensions along the Southwest border, as well as an overall decrease in court and sentencing activity at the federal level. ICE has also reduced operational capacity to less than 75% in all ICE processing centers to promote social distancing practices. As we noted last quarter, most of our GEO Secure Services contracts contain fixed price or minimum guaranteed payment provisions intended to ensure adequate staffing levels and consistent service delivery. Our current expectation is that our ICE and U.S. Marshals facilities will continue to operate at lower occupancy levels for the balance of the year. The Federal Bureau of Prisons has also experienced a decline in overall populations in part as a result of the COVID-19 pandemic. Due to this decline in populations, the Bureau has decided to not rebid the contract for our D. Ray James Facility in Georgia which is set to expire at the end of September. Our updated guidance for the year now reflects the expiration of this contract on September 30. We expect to market the D. Ray James Facility to other governmental agencies and believe it offers an attractive cost-effective solution for government agencies to deal with the continued challenges of managing prison populations. Our GEO Care segment has also experienced lower occupancy levels as a result of COVID-19 in our reentry centers and day reporting programs, which we expect to continue for the remainder of the year. Despite the significant challenges associated with this global pandemic, we believe that our business, earnings, and cash flows remain strong. Our business is underpinned by long-term real estate assets that are supported by high-quality contracts for the provision of essential government services. We do recognize, however, that the current political rhetoric and mischaracterization of our role as a government services provider has had a negative impact on our valuation and has created concerns regarding our future access to capital. While we don't have any upcoming debt maturities until 2022, we recognize the importance of capital preservation and debt repayment given the current environment. To this end, our board of directors and our management team have determined that it would be in the best interest of our company and shareholders to reduce our quarterly dividend payments and apply our excess cash flows to pay down debt. Beginning with our anticipated October dividend payment, we expect to pay a quarterly dividend of $0.34 per share, or $1.36 per share annualized solely within the discretion of our board and based on various factors. With this new dividend target, we anticipate being able to apply $100 million this year and thereafter an average of $50 million to $100 million in excess cash flow annually towards debt repayment. Our new dividend payment level will also allow GEO to remain structured as a REIT and will give us sufficient flexibility to sustain our dividends should our cost of debt increase in the future. We believe that remaining a publicly traded REIT will allow us to balance providing value to our shareholders while also focusing on repaying our debt. During the third and fourth quarter, we will undertake our annual budgeting process and expect to identify cost savings opportunities at the corporate and facility levels. Additionally, we expect to identify company-owned facilities that can be sold to government agencies or to third-party individuals. At this time, I'll turn the call over to Brian Evans to review our results, outlook, and liquidity positions. Brian?

Thank you, George. Good afternoon, everyone. Today, we reported second quarter revenues of approximately $588 million and net income attributable to GEO of $0.31 per diluted share. Our second quarter results reflect a $1.3 million loss on real estate assets pre-tax, $600,000 in startup expenses before tax, $2.3 million in closeout expenses pre-tax, $3.9 million in COVID-19 related expenses before tax associated with personal protective equipment, diagnostic tests, and medical expenses, and $1.6 million in the tax effect of these adjustments. Excluding these items, we reported second quarter adjusted net income of $0.36 per diluted share. We also reported second quarter AFFO of $0.66 per diluted share. Moving to our outlook. The COVID-19 pandemic continues to have a negative impact on several segments of our company. The pandemic has resulted in lower occupancy levels at several of our facilities and programs beginning in late March and continuing through the second quarter. We expect lower occupancy levels at our ICE and U.S. Marshals facilities to continue through the end of the year, resulting in an estimated revenue decline of approximately 9% for the full-year. Additionally, the Federal Bureau of Prisons has decided to not rebid the contract for our company-owned 1,900 bed D. Ray James Facility in Georgia due to the decline in federal prison populations, which has been driven in part by the COVID-19 pandemic. Our updated guidance now reflects the expiration of the D. Ray James contract on September 30, which generated annualized revenues of approximately $60 million. At the state level, several of our government partners are expecting budget shortfalls resulting from the economic slowdown due to the pandemic. We have successfully engaged with several of our state government partners to find ways to achieve cost savings within our contracts by adjusting our scope of services. At this time, we don't expect any additional impact to our guidance from these efforts. Our GEO Reentry segment also continues to experience lower occupancy levels, which began in March of this year in our residential centers and day reporting programs. Our guidance continues to assume lower occupancy levels for our GEO Reentry facilities and programs through the end of the year, resulting in an estimated revenue decline of approximately 10% for the full-year. Our Youth Services segment has also been impacted by declining occupancy levels and the expected closure of the Hector Garza facility in Texas at the end of September as a result of the COVID-19 pandemic. We have also increased our spending on personal protective equipment, diagnostic testing, medical expenses, non-contact infrared thermometers, and increased sanitation as a result of COVID-19, and expect to incur several million dollars in non-recurring costs during the second half of 2020. Our updated guidance continues to assume no contribution from our Central Valley, Desert View, and Golden State facilities in California, even though we remain hopeful to be able to activate these facilities as ICE processing center annexes beginning as early as late third quarter or early fourth quarter of this year. Despite these challenges, we believe that our revenues and cash flows remain strong. We expect full-year net income attributable to GEO to be in a range of $0.95 to $0.99 per diluted share. We expect full-year adjusted net income to be in a range of $1.07 to $1.11 per diluted share. We expect full-year AFFO to be in a range of $2.29 to $2.33 per diluted share. For the third quarter, we expect net income attributable to GEO to be in a range of $0.25 to $0.27 per diluted share and adjusted net income to be in a range of $0.28 to $0.30 per diluted share. We expect third quarter AFFO to be between $0.58 and $0.60 per diluted share. For the fourth quarter, we expect net income attributable to GEO to be in a range of $0.18 to $0.20 per diluted share and adjusted net income to be in a range of $0.19 to $0.21 per diluted share. We expect fourth quarter AFFO to be between $0.50 and $0.52 per diluted share. Moving to our capital structure. At the end of the second quarter, we had approximately $76 million in cash on hand in part due to deferring approximately $45 million in payroll taxes that will be paid during 2021 and 2022. Approximately $350 million in borrowing capacity is available under our revolving credit facility in addition to an accordion feature of $450 million under our credit facility. With respect to our capital expenditures, we expect total CapEx in 2020 to be approximately $93 million, including $20.5 million for maintenance CapEx. We recognize that even before the COVID-19 pandemic, heightened political rhetoric based on a mischaracterization of our role as a government services provider, had created significant volatility in our debt and equity markets, and created concerns regarding our future access to capital. Given this environment, we announced this morning steps to adjust our dividend policy. Beginning with our anticipated dividend payment in October, we expect to declare quarterly dividends of $0.34 per share for $1.36 per share annualized solely within the discretion of our board and based on various factors. This new dividend policy will allow us to remain a publicly traded REIT, balancing providing value to our shareholders while also preserving capital to be applied towards the repayment of debt. During this year, we expect to repay approximately $100 million in debt, and starting in 2021, our goal would be to average between $50 million and $100 million in annual debt repayment, depending on how quickly our cash flows recover post-pandemic. During the third and fourth quarter, we will undertake our annual budgeting process and expect to identify cost savings opportunities at the corporate and facility levels. Additionally, we expect to identify company-owned facilities that can be sold to government agencies or to third-party individuals. At this time, I'll turn the call over to Blake Davis for a review of our GEO Care Services segment.

Thank you, Brian, and good afternoon, everyone. I'd like to provide you with an update on our GEO Secure Services business unit and specifically on the steps we have taken at our secure services facilities to mitigate the risks associated with COVID-19. From the start of the pandemic, we issued guidance to all of our facilities consistent with the guidance issued for correctional and detention facilities by the CDC. This guidance covered best practices including the implementation of quarantine, cohorting, and medical isolation procedures for confirmed and presumptive cases of COVID-19, including the use of airborne inspection isolation rooms. We have provided educational guidance to our employees and individuals in our care on the best preventative measures to avoid the spread of COVID-19. We have increased in the distribution of personal hygiene products and cleaning supplies and have deployed sanitation teams to sterilize high contact areas of our facilities with cleaning equipment and sanitation products that are proven healthcare grade disinfectants. We continue to exercise paid leave and paid time-off policies to allow our employees to remain home if they exhibit flu-like symptoms or to care for a family member. Early on in the pandemic, we coordinated with our government partners to distribute personal protective equipment including face masks to all of our staff, inmates, and detainees as a precautionary measure at our GEO Secure Services facilities. In addition to the COVID-19 protocols we have implemented at our facilities, we have worked with our government partners to increase testing for new intakes and widespread saturation testing for facilities that have been more heavily impacted. We have significantly increased testing at all of our facilities and have conducted widespread saturation testing at an increasing number of our secure services sites. Presently, we're testing a large percentage of inmates and detainees during the intake process at our facilities. We evaluate the steps we have taken and we make adjustments to these steps as appropriate and necessary based on updated guidance by the CDC and best practices. While most of our facilities have experienced some cases of COVID-19, we believe the steps we have taken and our focus on personal protective equipment and testing have allowed us to mitigate the risks of COVID-19. Only a small percentage of the cases that our facilities have experienced have required hospitalization, and a very small number tragically resulted in fatalities, which has left us all with very heavy hearts. We remain incredibly grateful for our frontline employees who make daily sacrifices to report to work and provide high quality and compassionate care to all of those in our facilities. Before I turn the call to Ann, I would like to briefly discuss a few other operational highlights. During the second quarter, we achieved normal separations at the government-owned 512 bed El Centro Detention Facility in California, under our new managed-only contract with the United States Marshals service. This new contract has a term of approximately nine years and is expected to generate approximately $29 million in annualized revenues. Additionally, we were recently awarded a new 10-year contract by ICE, inclusive of renewal option periods for the continued operation of our company-owned 1,840-bed South Texas ICE Processing Center. In Australia, we completed the previously announced transition of management of the 890-bed Arthur Gorrie Correctional Centre to the Queensland Corrective Services Agency effective June 30. Also in Australia, we continue to work on three expansion projects during the second quarter. In the State of Victoria, we are close to completing a 137-bed expansion of the Fulham Correctional Center bringing total capacity to 1,045 beds. We're awaiting final approval for a 300-bed contract capacity expansion at the Ravenhall Correctional Center increasing total capacity to 1,600 beds. In New South Wales, we have now completed a 480-bed expansion at the Junee Correctional Center, increasing total capacity to 1,280 beds. Thankfully, our Australian facilities have not been impacted by the COVID-19 pandemic. In addition to these expansion projects, we believe there are opportunities for us to increase our market share in Australia. At this time, I will turn the call over to Ann for a review of GEO Care.

Thank you, Blake, and good afternoon, everyone. I'd like to provide you with an update on the steps we've taken to mitigate the spread of COVID-19 across our GEO Care business unit. Consistent with the efforts undertaken by our GEO Secure Services facilities, all of our residential facilities and GEO Reentry and GEO Youth Services have issued COVID-19 guidance consistent with the guidance issued by the CDC. We have implemented quarantine and cohorting policies to isolate confirmed and presumptive cases of COVID-19 and we have provided educational guidance to our employees and all individuals in our care on the best preventative measures to avoid the spread of COVID. We have utilized sanitation teams to sterilize high contact areas of our facilities using sanitation products that are proven healthcare grade disinfectants. We have Rapid Response Teams ready-to-deploy to assist facilities that have been more significantly impacted by COVID-19. We have exercised paid leave and paid time-off policies to allow our employees to remain home as needed. We have implemented additional screening measures for entry into our facilities, and we have provided face masks to all staff and residents. We evaluate the steps we have taken and make adjustments to these steps as appropriate and necessary based on updated guidance by the CDC and best practices. The COVID-19 pandemic has had a negative impact on several of our residential reentry centers and non-residential day reporting programs, which have experienced lower occupancy and referral levels. The pandemic has also impacted occupancy levels in our Youth Services segment and unfortunately the challenges associated with COVID-19 resulted in the decision to close the Hector Garza facility in Texas during the third quarter. Notwithstanding these challenges, our GEO Care division remains focused on delivering high quality services to the participants in our care on behalf of our government partners. We're very proud of our frontline employees who have continued to report to work every day and have delivered rehabilitation programming to those in our care in innovative ways, including through virtual technologies. Additionally, during the second quarter, we had a number of positive highlights. In Alaska, we entered into a 112-bed contract to reactivate our Parkview Center. In Tennessee, we were awarded a new Statewide Contract to establish 19 Day Reporting Program sites with a capacity to serve more than 2,800 participants. Finally, we're excited to have begun service delivery under a new five-year contract between our BI subsidiary and ICE for Case Management and supervision services under the federal government's alternatives to detention program. At this time, I'll turn the call back to George for his closing remarks.

Thank you, Ann. We're incredibly proud of all of our employees whose daily commitment and dedication we believe has allowed our company to mitigate the risks of this unprecedented global pandemic. While our operations as an essential government service provider have continued uninterrupted, the spread of COVID-19 has had a negative impact across several segments of our company. Despite the significant challenges associated with the pandemic, we believe that our earnings and cash flows remain strong and our business is supported by long-term real estate assets and high-quality contracts entailing essential government services. We recognize that the current political rhetoric and the mischaracterization of our role as a government services provider has created concerns regarding our future access to capital. While we don't have any upcoming debt maturities until 2022, we anticipate reducing our quarterly dividend payment in order to preserve capital and focus on paying down debt. Our new dividend payment level will allow GEO to remain structured as a REIT and will give us sufficient flexibility to sustain our dividend should our cost of debt increase in the future. We believe that remaining a publicly traded REIT will allow us to balance providing value to our shareholders while also focusing on retaining our debt. We believe the steps we've announced today are consistent with our commitment to enhance long-term value for our shareholders. That completes our presentation. We would now be glad to address any questions.

Ladies and gentlemen, we will start the question-and-answer session. Our first question today comes from Joe Gomes from NOBLE Capital. Please proceed with your question.

Good afternoon. Thanks for taking my questions. Just wanted to focus a little bit here on the guidance for the full-year, you tightened up the range a little bit from your previous guidance with the lower-end actually now higher than what it was previously? Just kind of wanted to get your thought process behind that given some of the additional costs, some of the uncertainty surrounding the declining populations and the loss of a couple of contracts there so just kind of want to get in more detail on your guide thought process?

Sure, Joe, this is Brian. For the third quarter, we expect performance to be relatively consistent with the second quarter. However, we have not assumed that the better-than-expected cost performance from the second quarter will necessarily continue into the third quarter. While it may, we haven't factored that into our expectations. This is likely why you see a step down from the second to third quarter. From the third to the fourth quarter, the main factor is assuming that the population remains at current levels, with no return to more normalized occupancy levels this year. Additionally, the D. Ray James contract is set to expire at the end of September. As we mentioned in the conference call, we have not assumed any positive impact from the three California ICE facility annexes that we are hopeful may come online this year, but that would likely be later in the year.

Okay, thanks. And just the follow-up on the ICE facilities, I mean given where ICE populations are today seeing where we're going here into the fall with the election everything I mean, I guess, I'm a little confused as to why you guys would be hopeful that there'd be any additions in those facilities this year. I know there's nothing factored into your forecast, I just I guess I'm a little confused as to why you're hopeful that there might be some activations on those facilities this year.

Well, I think the answer is that ICE needs beds in the State of California. The procurement for these beds was done last year and executed in December for opening in the latter part of this year, and we're hopeful that that will take place.

Thank you for that. Regarding the dividend, have you reduced it to the lowest level necessary to still qualify under the REIT, or is there still some additional room for further reduction?

Now, there's still additional room. I think we looked at it from the perspective of we wanted to. As George mentioned maintain the REIT status and continue to return a valuable amount to the shareholders while also focusing on paying down a meaningful amount of debt. I think that's the sort of balance or the point where we found that proper balance for us.

Okay, pardon me. And you talked a little bit about, you're going to be looking for some additional cost saving opportunities and potentially some owned facilities that could be sold, and I was wondering if you might be able to provide a little more color there as where you think you might be able to find some of these cost savings and what facilities are we talking about that you're thinking that could possibly be sold?

Well, we have a number of idle assets that we're working with brokers to market or sell them, many of them are smaller, but there's a few that are decent size. So we're working on that. There may be other assets that are in the portfolio that are active that we may look to see if there's more value transitioning those to other ownership away from us. And then the cost reductions, we're just as we go through our budgeting process here in the third and fourth quarter will evaluate both our facility and our corporate structure and determine what types of savings we can get, but we do expect to find some savings there.

Okay, and then one last one for me. You didn't note a couple of nice contracts, extensions or wins here. How else does it look in terms of the bid pipeline out there, the new business pipeline out there for you guys right now?

Well, I think our most active area is in the International sector in Australia and the UK right now. I think we're waiting for state budgets to better solidify as states come to terms with what their revenues will be for the upcoming year. We think that process will begin towards the latter part of the year. So we really won't know anything about new upcoming procurements until early next year in the U.S.

Our next question comes from Mitra Ramgopal from Sidoti. Please go ahead with your question.

Yes. Hi. Good morning. Thanks for taking the questions. First, I just wanted to come back to the guidance. I sensed that most of it was really of the tweaking was due to the non-renewal of the BOP contract, but I'm just trying to get a sense also, how much did the surge that we were seeing in a number of states played into that?

We see the surge, we didn't really have a surge, are you in occupancies?

Right. In terms of the surge in states like Florida, Texas, et cetera how is that impacting the occupancy?

Oh, the surge that the increases in the number of COVID cases?

Yes, we've seen there was when we have a community or state that has spiked, we've seen an increase in our facility somewhat but our measures that we have in place at our facilities are tight and we're able to control it in a very sound manner. But we haven't seen tremendous impact because we have those measures in place even before those spikes occurred in those respective states.

And I think as we mentioned in the fall, and I'll just remind you that that place where we've seen the impact in our occupancy levels has been in our ICE and U.S. Marshals facilities for the reasons that we already stated.

In the federal facilities rather than the state facilities that we operate.

Okay, no, thanks for clearing that up. And Brian, I know you mentioned we talked about the cost savings that you're looking to identify but I think you also talked earlier about the favorable cost trends you're seeing, I'm just wondering if you can give a little more color on what that entails?

Some of the areas that we saw cost savings were on labor as well as some lower medical costs. As you're aware, during the pandemic, there was at least a period where most hospitals shutdown their elective procedures and they weren't taking those types of appointments and so forth. So that had some near short-term beneficial impact on our facilities because our residents need those types of services as well. And those have been delayed or deferred. So that's where we saw some of those savings. And that's why I said we haven't necessarily carried those savings forward into third and fourth quarters, some of that may materialize or continue, but we haven't assumed necessarily that that would be the case.

Okay, that's fair. And I’m just wondering, I thought about seeing something about the Department of Homeland Security or again ICE awarding you a contract based, I think was a 10-year contract effective August 2020, is that correct?

That was a rebid of our South Texas Detention Center, which is in Texas outside San Antonio and that was a rebid and we just renewed that contract for a 10-year period.

Okay, okay, perfect. And again as it relates to the capital allocation strategy clearly, debt reduction is a priority right now while still sustaining the dividend. I don't know if you have any thoughts. I'm sure you're aware of your competitor or leading competitors taking a very different approach in terms of how they want to navigate this environment as it relates to access to capital, et cetera. Just any thoughts you have in terms of the decision to continue as a REIT as opposed to maybe doing something a little different?

Well, I think we had a fairly lengthy discussion at our recent Board Meeting with board of directors and management team, I think it was concluded that we're comfortable being a REIT and we just need to make an adjustment in our dividend payment to put more emphasis on debt repayment, but we’re comfortable being a REIT and we have no plans underling for any different strategy whatsoever.

Our next question comes from Nick from Stifel. Please go ahead with your question.

I was hoping you could provide some insight on the company facilities that are planned for sale. Can you give an idea of what the gross proceeds might be and how those proceeds will be used?

So it depends on which facilities. So we're looking at some facilities that may be underutilized that we can activate or use with another client that would produce better cash flows. But in the event that we're not able to do that, I think we're targeting a range of $30 million to $50 million and mostly to use to repay debt.

There's a $30 million to $50 million gross for everything anticipated?

Higher than that. I think we would consider underperforming facilities as well as idle facilities. So I would put the number in excess of $100 million.

Okay. And then how can we think about the valuation received versus the book value? Are there going to be impairments? Are you going to see excess evaluation in excess of books?

No, I think the facilities fall in two buckets. One bucket would be for prospective governmental purchasers who could use the facilities for their intended design and the value on such facilities would be based on the replacement value of comparable facility. The second bucket would be for third-party retail investors that may just be interested in the land and redevelopment of the land parcel. But now would be based on land value.

Okay. Regarding the dividend, if I calculate correctly, it appears that $160 million to $163 million will be distributed as REIT dividends. This goes back to the previous question but still represents a significant amount of cash flow considering the gross debt that GEO has compared to your publicly traded peers, who maintain a much lower leverage target than GEO. Can you discuss how often the board can revisit the REIT status and any potential changes to the dividend policy or the strategic allocation of corporate resources?

The REIT question, I think technically can be addressed I'm told at any time. But as I said, we had a pretty thorough discussion about this subject and our strategy, and I don't anticipate in this year or in the near future that we will revisit it. I think we're committed at this time to remain in a REIT and continue our debt repayment strategy.

Okay. So in terms of the conclusion that the board came out with to remain a REIT; the paying down of $50 million to $100 million of debt annually on a gross figure of 2.4 is not particularly substantive number to actually de-lever relative to the $163 million that was being paid out. So how does the board come to the conclusion that the REIT is a better option as opposed to a C-Corp?

I am not sure I can summarize all of that, but I believe our stock is currently undervalued. After the election results in November, I anticipate a rebound in our stock price, highlighting the benefits of remaining a REIT and the decision to operate in the public marketplace. I think investors would prefer to put their money into a company that offers substantial dividends rather than one that does not provide any dividends.

I understand the argument. So in the event that the election goes the other way, and the share price does not rebound; is the REIT status up for debate again?

I don't think so. Because of what I've just said, I'm trying to put myself in the shoes of another investor, and I'm an investor in this company, so I am in those shoes. I'd rather invest in a company that's paying a significant dividend than a company that's not paying any dividend, wouldn't you?

So that's a pretty lengthy discussion for that we can find, so we can have offline. I appreciate your thoughts on this and looking forward to seeing additional results. Thank you.

Thank you.

Ladies and gentlemen, that does conclude today's conference call. We do thank you for joining. You may now disconnect your lines.