Geo Group Inc (GEO) 2003 Q4 法說會逐字稿

Good morning ladies and gentlemen and welcome to the Correctional Properties Trust fourth-quarter 2003 earnings results conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time. (OPERATOR INSTRUCTIONS) As a reminder, this conference call is being recorded. I would now like to introduce Ms. Christy Barnhart.

早安，女士們、先生們，歡迎參加懲教財產信託基金 2003 年第四季財報電話會議。此時所有參與者都處於只聽模式。稍後我們將進行問答環節，屆時會有說明。 （操作員說明）謹此提醒，本次電話會議正在錄音。現在我想介紹克里斯蒂·巴恩哈特女士。

Thank you. Good afternoon, and welcome to today's conference call by Correctional Properties Trust. This call will contain forward-looking statements regarding future events and future performance of the Company that involves risks and uncertainties that could materially affect actual results. Please refer to our SEC filings for a description of risks, uncertainties and other factors that could cause actual results to vary from current expectations and forward-looking statements contained in this teleconference.

謝謝。下午好，歡迎參加懲教財產信託公司今天的電話會議。本次電話會議將包含有關公司未來事件和未來業績的前瞻性陳述，其中涉及可能對實際結果產生重大影響的風險和不確定性。請參閱我們向 SEC 提交的文件，以了解可能導致實際結果與本次電話會議中當前預期和前瞻性陳述不同的風險、不確定性和其他因素的描述。

At this time, I would like to introduce Charles Jones, President and Chief Executive Officer; and David Obernesser, Chief Financial Officer.

這次我想介紹一下總裁兼執行長查爾斯瓊斯（Charles Jones）；和財務長大衛·奧伯內瑟。

Thanks Christy and good afternoon. Appreciate your participating in our quarterly conference call. I am Chuck Jones. We will begin the call with David Obernesser, our Chief Financial Officer who will provide details of our financial results and related matters.

謝謝克里斯蒂，下午好。感謝您參加我們的季度電話會議。我是查克瓊斯。我們將首先與我們的財務長 David Obernesser 通話，他將提供我們財務表現和相關事項的詳細資訊。

Thank you, Chuck. Today Correctional Properties Trust reported net income for fourth-quarter 2003 of 44 cents per share with funds from operations or FFO of 61 cents per share. These earnings figures are based on diluted weighted average shares outstanding during the period of 11,063,000 shares. In addition, the Board of Trustees declared a quarterly dividend of 45 cents per share, payable March 2nd, 2004 to shareholders of record as at close of business on February 17, 2004.

謝謝你，查克。今天，懲教財產信託公司公佈 2003 年第四季的淨利潤為每股 44 美分，其中來自營運或 FFO 的資金為每股 61 美分。這些獲利數據是根據稀釋期間已發行股票的加權平均數 11,063,000 股。此外，董事會宣布派發每股 45 美分的季度股息，將於 2004 年 3 月 2 日支付給截至 2004 年 2 月 17 日營業結束時登記在冊的股東。

Total revenue for the fourth-quarter 2003 was 8.6 million as compared to 7.6 million from the fourth-quarter of 2002. This increase of 13 percent in revenue is primarily due to the acquisition of Delaney Hall in May of 2003 which increased revenue by 662,000 in the quarter. The remaining increase in due to CPI rent escalations on certain facilities as well as a one-time cumulative nonrecurring CPI building adjustment for approximately 255,000 to that Geo Group formally known as Wackenhut Corrections Corporation.

2003 年第四季的總營收為860 萬美元，而2002 年第四季的總營收為760 萬美元。季度的收入增加了662,000 美元。由於某些設施的 CPI 租金上漲以及一次性累積非經常性 CPI 建築調整而導致的剩餘增量約為 255,000 美元，由 Geo Group（正式名稱為 Wackenhut Corrections Corporation）支付。

General and administrative expenses were 655,000 for the fourth-quarter 2003 of versus 327,000 for the fourth-quarter of 2002. This increase is primarily due to increases in directors and officers insurance, salaries and benefits, professional fees and trustee fees. Increase in general and administrative expenses in the fourth-quarter of 2003 versus the third-quarter 2003 of 167,000 is primarily due to an increase in year-end discretionary officer compensations and increase in trustee fees.

2003 年第四季的一般和行政費用為655,000 美元，而2002 年第四季為327,000 美元。 。 2003 年第四季的一般和行政費用比 2003 年第三季的 167,000 有所增加，主要是由於年終酌情官員薪酬和受託人費用的增加。

Interest expense was 1.2 million for the fourth-quarter 2003 as compared to 2.8 million for the fourth-quarter 2002. A decrease in interest is primarily due to the reduction in the outstanding balance of the credit facility as a result of the paydown on the credit facility using the net proceeds from the follow-on offering completed in July, 2003. The Company's debt at December 31 consisted with 3.8 million of bank credit facility debt and 55.9 million of outstanding nonrecourse long-term AAA rated bond debt at a fixed rate of 7.15 percent.

2003 年第四季的利息支出為 120 萬美元，而 2002 年第四季的利息支出為 280 萬美元。月完成的後續發行的淨收益進行融資。 7.15%。

Therefore the company's capitalization at December 31, 2003 consists of 59.7 million of debt and 212.7 million of book equity which equates to a capitalization of structure of 22 percent debt and 78 percent equity. In November 2003, the Company completed the amended and restated bank credit facility consisting initially of a $95 million revolver. The bank credit facility includes a provision to increase it up to 200 million by increasing the revolver and/or originating a new term loan of up to 100 million subject to the successful syndication and closing.

因此，截至 2003 年 12 月 31 日，該公司的資本由 5,970 萬債務和 2.127 億帳面權益組成，相當於 22% 債務和 78% 權益的資本化結構。 2003 年 11 月，公司完成了修訂和重述的銀行信貸安排，最初包括 9500 萬美元的左輪手槍。銀行信貸安排包括一項規定，透過增加循環貸款和/或在成功銀團和結帳的情況下發放最多 1 億的新定期貸款，將其增加至 2 億。

Currently there are no outstanding amounts on the bank credit facility. As previously disclosed, the operating contracts between the Geo Group and the California Department of Corrections on the McFarland facility was scheduled to expire on December 31, 2003. The operating contract expired as expected and the facility is currently vacant. The Geo Group is continuing in its efforts to enter into a new operating contract with a California Department of Corrections, as well as offering the McFarland facility to incarcerated inmates from other interested government agencies. However, there are no assurances that a new contract will be entered into on the facility.

目前，銀行信貸額度沒有未償還金額。如同先前所揭露的，Geo Group 與加州懲教局之間關於麥克法蘭設施的營運合約原定於 2003 年 12 月 31 日到期。 Geo Group 正在繼續努力與加州懲教署簽訂新的營運合同，並向其他有興趣的政府機構的被監禁囚犯提供麥克法蘭設施。然而，無法保證該設施將簽訂新合約。

The current average remaining life on our releases at approximately 5.1 years with the earliest lease maturity occurring in 2008. Although the McFarland facility and the Jena Facility are currently vacant, they are both subject to non-cancellable, triple net leases which expire in 2008 and 2010, respectively.

目前我們發布的平均剩餘壽命約為5.1 年，最早的租賃到期時間為2008 年。 2008 年到期，分別為2010年。

Our lease at the Geo Group is obligated to pay the rents on these vacant facilities regardless of whether or not they have an operating contract for the lease facility and has never been late in doing so. Correctional Properties Trust non-cash items during the fourth-quarter of 2003 included approximately 138,000 on revenues and straight lining in accordance with GAAP and approximately 103,000 for the amortization and deferred financing fees. Chuck will now (inaudible) .

我們在Geo Group 的租賃方有義務支付這些空置設施的租金，無論他們是否擁有租賃設施的營運合同，並且從來沒有遲到過。 2003 年第四季懲教財產信託非現金項目包括約 138,000 項依照公認會計準則計算的收入和直線法，以及約 103,000 項攤銷和遞延融資費用。查克現在會（聽不清楚）。

Thank you, David. 2003 was an excellent year for Correctional Properties Trust and one in which several major objectives were achieved, including we established a business relationship with Community Education Centers and acquired Delaney Hall from the Company for $21 million. Community Education Centers, a.k.a. CEC is a private facility operator located in CEC is a rapidly growing privately held company which owns additional correctional facilities and also received three new awards in the second half of 2003.

謝謝你，大衛。 2003 年對於懲教財產信託基金來說是極好的一年，實現了幾個主要目標，包括我們與社區教育中心建立了業務關係，並以 2,100 萬美元從該公司收購了 Delaney Hall。社區教育中心，又稱 CEC，是一家私人設施營運商，位於 CEC 是一家快速發展的私人公司，擁有更多懲教設施，並在 2003 年下半年獲得了三個新獎項。

During 2003 Correctional Properties Trust also completed a following offering of our common shares. The net proceeds of the offering were used to reduce our bank debt to minimal levels. The Company's original bank credit facility had a five-year term and expired in October of 2003.

2003 年期間，懲教財產信託基金也完成了以下普通股發行。此次發行的淨收益用於將我們的銀行債務減少到最低水準。公司原有的銀行信貸額度期限為五年，於 2003 年 10 月到期。

In the fourth-quarter we closed a new $95 million bank credit facility which today has an outstanding balance of zero. This revolving credit facility provides the company with needed liquidity as we pursue and negotiate facility acquisitions.

在第四季度，我們關閉了一項新的 9,500 萬美元銀行信貸額度，目前未償餘額為零。當我們尋求和談判融資收購時，這種循環信貸便利為公司提供了所需的流動性。

In early 2003 the compensation committee of the Board of Trustees began a review of the Company's compensation structure, including trustee fees. The Company has an excellent Board of Trustees with a broad range of expertise. The board has been very stable with the only change being the 2002 resignation of George Zoley, the Chairman and CEO of our major tenant. As a result of this compensation review and in recognition of the increased trustee demands and responsibilities the fees paid to our non-employee trustees was amended and increased in 2003. This was the first time any increases have been made to the trustees fees since our IPO in 1998.

2003 年初，董事會薪酬委員會開始審查公司的薪酬結構，包括受託人費用。公司擁有優秀的董事會，擁有廣泛的專業知識。董事會一直非常穩定，唯一的變化是我們主要租戶的董事長兼執行長 George Zoley 於 2002 年辭職。由於此次薪酬審查，並認識到受託人要求和責任的增加，我們於 2003 年修改並增加了支付給我們的非僱員受託人的費用。年。

Under the new structure, a significant portion of trustee fees will be paid in Company common shares subject to shareholder approval at our upcoming annual meeting. Since inception, the Company has used nonqualified stock options as a component of trustee fees and executive compensation. Following the committee's compensation review, the Board of Trustees elected to discontinue the issuance of stock options and instead will be issuing restricted shares of the Company's stock.

根據新的結構，受託人費用的很大一部分將以公司普通股的形式支付，但須在即將舉行的年度會議上獲得股東批准。自成立以來，公司一直使用非合格股票選擇權作為受託人費用和高階主管薪酬的一部分。經過委員會的薪酬審查後，董事會決定停止發行股票選擇權，轉而發行公司股票的限制性股票。

The use of restricted stock versus stock option has several important advantages, including a straightforward and well-established accounting treatment and the use of restricted stock result in the issuance of considerably fewer shares to achieve the compensation objective. This change from the issuance of stock options to the use of restricted shares will require an amendment to our existing stock option plan, which will be presented to our shareholders at our annual meeting.

與股票選擇權相比，使用限制性股票具有幾個重要的優點，包括直接且完善的會計處理方法，以及使用限制性股票可以大幅減少發行股票以實現薪酬目標。從發行股票選擇權到使用限制性股票的這項變更將需要對我們現有的股票選擇權計畫進行修改，該計畫將在我們的年會上提交給我們的股東。

Corporate governance received extensive attention in 2003. The Company's original bylaws adopted in 1998 require that a majority of the Company's trustees be independent and further required that only independent trustees serve as members of our committee. As a result, no change in the membership of our Board was mandated to comply with newly enacted corporate governance legislation regulations or exchange rules.

公司治理在2003年受到廣泛關注。因此，為了遵守新頒布的公司治理立法規定或交易所規則，我們的董事會成員並沒有被強制變更。

During 2003 new governance charters were adopted by the compensation committee and the corporate governance and nominating committee. Additionally, the audit committee charter was amended. Each of these documents was again amended in January 2004 as a result of the release of new requirements by the various regulators.

2003 年，薪酬委員會以及公司治理與提名委員會通過了新的治理章程。此外，也修訂了審計委員會章程。由於各個監管機構發布了新的要求，這些文件於 2004 年 1 月再次進行了修訂。

In addition, the Board of Trustees adopted comprehensive corporate governance guidelines in January 2004. Each of the newly amended and adopted documents is available on our website www.CorrectionalPropertiesTrust.com under the corporate governance tab. As mentioned earlier, we do have one open trustee seat which we are seeking to the fill with an independent professional who is qualified to serve on the audit committee. We have made considerable progress in identifying candidates and hope to include an nominee in the upcoming proxy.

此外，董事會於 2004 年 1 月通過了全面的公司治理準則。如前所述，我們確實有一個空缺的受託人席位，我們正在尋求一位有資格在審計委員會任職的獨立專業人士來填補該席位。我們在確定候選人方面取得了相當大的進展，並希望在即將發布的委託書中包含一名被提名人。

I want to now shift the focus to our primary markets and how we are approaching each. I will then finish with our acquisition targets and earnings guidance for 2004.

我現在想將重點轉移到我們的主要市場以及我們如何應對每個市場。最後我將介紹 2004 年我們的收購目標和獲利指導。

Broadly speaking, we have two market segments. These are facilities leased to private correctional facilities operators and facilities leased directly to government. Within the private operator segment there are three specific market dimensions. First, the sale by a private operator of existing facility, which has been leased back to the selling operator. This is a major component of our acquisition strategy and target facilities. In many cases private operators need to access capital by selling existing properties to compete for new management awards or meet other liquidity requirements.

從廣義上講，我們有兩個細分市場。這些設施包括出租給私人懲教設施業者的設施和直接出租給政府的設施。在私人運營商細分市場中，存在三個特定的市場規模。首先，私人業者出售現有設施，並將其租回給出售業者。這是我們收購策略和目標設施的重要組成部分。在許多情況下，私人業者需要透過出售現有財產來獲得資本，以爭取新的管理獎或滿足其他流動性要求。

The second component of the private operator market is the development new facilities. There are opportunities where operators have received management and develop awards; Correctional Properties Trust can play an important role by providing liquidity to complete new facilities which the company would then own and leased to the operator.

私人運營商市場的第二個組成部分是開發新設施。有機會獲得經營者管理和發展獎項；懲教財產信託可以發揮重要作用，為完成新設施提供流動性，然後該公司將擁有這些設施並將其出租給營運商。

The third component in the private operator market is the expansion of our existing portfolio of properties. The expansion of existing facilities is an economical way for government to access new bed capacity. Opportunities in these three dimensions with private operators represent the core of our acquisition candidate. Facilities leased directly to government are the second market segment. This includes the sale and the leaseback of existing government operated facilities, as well as financing and then owning newly developed properties.

私人營運商市場的第三個組成部分是擴大我們現有的物業組合。擴大現有設施是政府獲得新床位容量的經濟方法。私人營運商在這三個方面的機會是我們收購候選人的核心。直接租賃給政府的設施是第二個細分市場。這包括現有政府營運設施的出售和回租，以及融資並擁有新開發的房產。

With the stress on state and county budgets combined with the need for new prisons and jails, I continue to believe the direct lease market represents opportunity for the Company. Because ownership by the private sector of government-operated correctional facilities represent a changing customary practices, there is a significant marketing effort required. This includes an extensive and focused effort at the county commission and state legislature level. We invested considerable marketing efforts last year at various legislatures with encouraging results.

由於州和縣預算面臨壓力，加上對新監獄和看守所的需求，我仍然相信直接租賃市場為公司帶來了機會。由於私部門對政府經營的懲教設施的所有權代表著習慣做法的變化，因此需要進行大量的行銷工作。這包括縣委員會和州立法機構層面的廣泛而集中的努力。去年，我們在各個立法機構投入了大量的行銷努力，並取得了令人鼓舞的成果。

As you are probably aware, we have operated our company with three employees since inception in 1998. While this has been an efficient business model, and an appropriate given the circumstances the business platform has dramatically changed. Our new capital base liquidity and debt capacity affords us growth opportunities not present prior to our follow on offering and completion of our new credit facility.

您可能知道，自 1998 年成立以來，我們的公司一直由三名員工營運。我們新的資本基礎流動性和債務能力為我們提供了在我們後續提供和完成新信貸安排之前不存在的成長機會。

As a result, in January we added a new member to our staff as Director of Project Development to focus on acquisitions principally in the direct government market. While this new member of our team does not have government experience, he has a very successful marketing and sales background and is someone we have known for several years. We have also had discussions with other prospective employees and it is reasonable to expect the possible addition of two more positions, most likely one senior employee and in operations and new business and one entry-level person in finance and administration.

因此，一月份我們增加了一名新成員作為專案開發總監，主要專注於直接政府市場的收購。雖然我們團隊的新成員沒有政府經驗，但他擁有非常成功的行銷和銷售背景，並且是我們認識多年的人。我們也與其他潛在員工進行了討論，有理由預計可能會增加兩個職位，最有可能的是一名負責營運和新業務的高級員工以及一名負責財務和管理的入門級人員。

I want to now address earning guidance for 2004. In considering guidance, it is important to understand certain provisions in our two North Carolina property leases. Each of these two properties is subject to a purchase option which can be exercised by the state of North Carolina toward the end of 2004. The North Carolina legislature convenes in May of 2004 and elected officials may choose to evaluate and possibly exercise one or both of these purchase options. While the purchase by the State of North Carolina of either or both of these facilities would result in a one-time gain for the Company, future earnings would be negatively impacted. Each of the two facilities contributes approximately 12 cents annually in FFO.

我現在想談談 2004 年的收入指引。這兩處房產均受購買選擇權的約束，北卡羅來納州可在2004 年底前行使該購買選擇權。或兩項權利：這些購買選項。雖然北卡羅來納州購買其中一個或兩個設施將為公司帶來一次性收益，但未來的收益將受到負面影響。兩個設施每年為 FFO 貢獻約 12 美分。

Let's now look at earnings guidance based on our existing portfolio of properties. Assuming CPI increases of 1.5 percent, and annual general and administrative expense of 2.5 to 2.6 million, 2004 earning guidance is as follows. First, I will address GAAP, EPS, and then FFO quarter by quarter. For earnings per share, the first quarter 41 cents. Second quarter, 41 cents. Third quarter, 41 cents. Fourth-quarter, 42 cents and the total for 2004 GAAP EPS, $1.65.

現在讓我們來看看基於我們現有物業組合的獲利指引。假設CPI上漲1.5%，年度管理費用為2.5至260萬元，2004年獲利指引如下。首先，我將逐季度討論 GAAP、EPS，然後是 FFO。第一季每股收益為41美分。第二季度，41 美分。第三季度，41 美分。第四季 42 美分，2004 年 GAAP 每股盈餘總計 1.65 美元。

Now FFO. FFO for the first quarter 58 cents; second-quarter, 58 cents; third quarter, 59 cents; fourth-quarter, 59 cents. For 2004, FFO total of $2.34. Although we are expecting additional revenue and corresponding earnings from acquisitions, we have not included these potential acquisitions or earnings in this 2004 guidance. We are currently pursuing several acquisitions ranging from 5 million to $80 million, as well as pursuing expansions of existing portfolio facilities.

現在FFO。第一季FFO 58美分；第二季度，58美分；第三季度，59美分；第四季度，59 美分。 2004 年，FFO 總額為 2.34 美元。儘管我們期望透過收購獲得額外的收入和相應的收益，但我們並未將這些潛在的收購或收益納入 2004 年的指導中。我們目前正在進行多項收購，金額從 500 萬美元到 8,000 萬美元不等，並尋求擴大現有的投資組合設施。

While we cannot provide the timing or assurance any acquisitions or expansions will be successfully completed, I can assure you acquisitions and achieving the corresponding growth in our company is the focus of our intention. The objective for 2004 is to complete a minimum of 75 million in new acquisitions at cap rates consistent with our existing portfolio, which is to say lease rates in excess of 10 percent with either fixed annual lease escalators or annual rent increases based on CPI.

雖然我們無法提供任何收購或擴張將成功完成的時間或保證，但我可以向您保證，收購並實現我們公司的相應成長是我們意圖的重點。 2004 年的目標是按照與我們現有投資組合一致的資本化率完成至少 7500 萬美元的新收購，也就是說，租賃率超過 10%，並且每年固定租賃升級或根據 CPI 增加年租金。

If however we are successful in acquiring properties which are leased directly to government, it is reasonable to expect the cap rates on those properties may be less than 10 percent.

然而，如果我們成功收購直接租賃給政府的房產，則可以合理預期這些房產的資本化率可能會低於 10%。

We enjoyed success during 2003 in positioning the Company. We are expanding our staff to increase our staff at the government level and have adopted a broadened acquisition strategy.

2003 年，我們在公司定位方面取得了成功。我們正在擴大人員規模，以增加政府層級的人員數量，並採取了擴大收購策略。

Before I address questions, one additional item. We have today received a request that the company release earnings prior to the opening of the market on the day of our conference call. We will adopt this practice for future earnings releases.

在回答問題之前，我想補充一個問題。今天，我們收到了要求該公司在電話會議當天開市前公佈收益的請求。我們將在未來的收益發布中採用這種做法。

And now we will be pleased to address any questions you may have.

現在我們很樂意解答您可能提出的任何問題。

(OPERATOR INSTRUCTIONS) Ross Nussbaum of Smith Barney.

（操作員說明）Smith Barney 的 Ross Nussbaum。

I am here with Jon Litt. Couple questions, first the McFarland property out in California, had you expected -- I know the contract was inspiring but did you expect it to go vacant?

我和喬恩·利特在一起。有幾個問題，首先是麥克法蘭位於加州的房產，你是否期望——我知道這份合約很鼓舞人心，但你是否期望它會空置？

In December -- actually I think November they started pulling inmates out it was to expire and with this political change out there it was very difficult to really get much of a read on it. But the contract was to expire and did, and Geo has spent a large amount of time out there looking at new contracts. But yes, we expected we knew that was going to expire, and it is always tough to know what they are going to do. So they did start to remove inmates.

12 月——事實上，我認為 11 月，他們開始把即將到期的囚犯拉出來，隨著政治變革的發生，很難真正深入了解它。但合約本來就到期了，而且確實到期了，吉奧花了很多時間尋找新合約。但是，是的，我們預計我們知道它即將到期，而且總是很難知道他們會做什麼。所以他們確實開始轉移囚犯。

The lease on that is through 2010?

租期到2010年嗎？

2008, April 2008.

2008年，2008年4月。

The Gino lease is 2010? What is the prospect of getting somebody into McFarland this year?

吉諾的租約是2010年？今年讓某人進入麥克法蘭的前景如何？

I would give a very good prospect. It is 224 beds. It is in a very good location. It is an older facility so the cost basis is fairly low, and it is mostly in a good location.

我會給一個非常好的前景。共有床位224床。它的位置非常好。這是一個較舊的設施，因此成本相當低，而且大部分位置都很好。

You did 61 cents in the fourth quarter, yet you are forecasting 58 one and 2Q of '04. What is the delta there? What is driving that?

您在第四季度實現了 61 美分，但您預測 04 年第二季為 58 美分。那裡的三角洲是什麼？是什麼推動了這一點？

The decrease is in two items -- primarily its the revenue there might be a slight decrease in the first quarter revenue compared to the fourth quarter, and that was a one-time adjustment we had in the fourth quarter a CPI retroactive adjustment.

下降有兩個方面，主要是收入，第一季營收比第四季可能會略有下降，這是我們在第四季CPI追溯調整中進行的一次性調整。

Can you walk me through that one more time?

你能再跟我講一遍嗎？

Yes, Jon, our master lease with the Geo Group like our corrections over the years we have looked at some ambiguous language trying to work a resolution with Wackenhut on the CPI increases and when they actually became effective. It was either the first day of the rollover month, the last day of the month or the date during the month and the lease was didn't get the kind of guidance we needed for it. So we worked through that, and that resulted in a catch-up adjustment.

是的，喬恩，我們與 Geo Group 的主租約就像我們多年來的更正一樣，我們一直在研究一些模棱兩可的語言，試圖與 Wackenhut 就 CPI 上漲問題達成解決方案，並在何時真正生效。這要么是展期月份的第一天，要么是當月的最後一天，要么是當月的某個日期，而租賃沒有得到我們所需的指導。所以我們解決了這個問題，並進行了追趕調整。

What was the total dollar amount of the catch-up adjustment?

追趕調整的總金額是多少？

250,000.

250,000。

250,000, which principally took us from what was expected on the street of 60 cents up to 61 cents. And then as we look at the first quarter of this year we've got a full amortization of our bank credit facility costs. We've got increased insurance costs. We've have trustee fees, and we have compensation, which is increased. We also have budgeted in there -- we have one additional employee, and we've budgeted in there a room for one more.

250,000，這主要使我們從街頭預期的 60 美分上升到 61 美分。然後，當我們看到今年第一季時，我們已經得到了銀行信貸便利成本的全額攤銷。我們的保險費用增加了。我們有受託人費用，也有補償，而且這些補償都增加了。我們還在那裡進行了預算——我們增加了一名員工，我們還在那裡安排了一間可容納另一名員工的房間。

And what was the total dollar amount that you expect? That that's going to be higher? The amortization and the just the G&A related expenses compensation, trustees fees etc?

您預計的總金額是多少？那這樣會更高嗎？攤銷以及一般行政費用相關費用補償、受託人費用等？

I think G&A will run about $630,000 per quarter, approximately.

我認為每季的 G&A 費用約為 63 萬美元。

How much, 30?

多少錢，30？

630,000.

630,000。

630,000 more per quarter?

每季增加 63 萬人？

Total.

全部的。

That's for the year?

那是過年的嗎？

Yes.

是的。

So that is three or four cents for the year? A little less than a penny a quarter?

那麼一年的費用是三四美分嗎？每季不到一便士？

Yes, because we are about 2.1 million for G&A this year, and we should be about 2.5 million this year.

是的，因為我們今年的 G&A 大約是 210 萬，今年應該是 250 萬左右。

That's right at 3.5, 4 cents.

正好是 3.5, 4 美分。

On the acquisition front, if 75 million is your goal what do you think the timing of that is?

在收購方面，如果7500萬是你的目標，你認為這個時機是什麼？

The timing is always the big issue because of the size. A couple we are looking at are in the $5 million range and a couple of them are considerably larger than that. I do think in the first half of the year we will achieve good progress on that total. So --.

由於規模的原因，時機始終是個大問題。我們正在尋找的一些價格在 500 萬美元範圍內，其中一些比這個價格大得多。我確實認為今年上半年我們將在這個總數上取得良好進展。所以 - 。

I'm sorry in the first half of the year?

上半年對不起？

I think we will make good progress on it on the first-half, yes.

我認為我們會在上半場取得良好進展，是的。

So you think you will have something closed by the second quarter?

所以你認為你會在第二季關閉一些東西？

Well that is certainly the objective.

嗯，這當然是目標。

Okay.

好的。

I think we have reasonable prospects to do that.

我認為我們有合理的前景做到這一點。

Thank you.

謝謝。

Todd Van Fleet of First Analysis.

弗利特（Todd Van Fleet）的《首次分析》。

Chuck what is your read on North Carolina at this point? Can you give us any more insights or details on what you expect to happen this year?

查克，您現在對北卡羅來納州有何看法？您能否給我們更多關於您預計今年會發生什麼的見解或細節？

It is total silence right now. We've talked about some insurance issues, but until the elected officials convene, I just don't have any feel.

現在一片寂靜。我們已經討論了一些保險問題，但在民選官員開會之前，我只是沒有任何感覺。

Okay, and I guess day two questions on the financials. The G&A, give us an idea the magnitude of the impact over the restricted shares and how any additional details as far as how those are going to be accounted for in magnitude. And if you have the cash balance for us at the end of the year, that would be great.

好吧，我想第二天會問關於財務的問題。 G&A 讓我們了解限制性股票影響的程度，以及如何解釋這些影響的影響程度的其他細節。如果您在年底有現金餘額，那就太好了。

The cash balance at of the end of the year was about 700,000 excluding the restricted cash, which is about $7.2 million.

截至年底現金餘額約70萬，不包括限制性現金，約720萬美元。

Okay.

好的。

And the magnitude of restricted stock, as far as in the accounting for it we've filed a form four back in January for both Chuck and I. We -- Chuck was given 2000 restricted shares and I was given 500 restricted shares. And they way it is accounted for it is multiplied restricted number of restricted shares by the stock price on that day, and that is amortized over the vesting period.

至於限制性股票的規模，就會計而言，我們在一月份為查克和我提交了表格四。他們的會計方式是用限制性股票數量乘以當日股價，然後在等待期內攤提。

Which is how long?

哪個是多長？

Which is basically very exactly the same as our stock options were 25 percent upon grant and then the other 75 percent over the remaining three years.

這基本上與我們的股票選擇權在授予時為 25%，然後在剩餘三年內為 75% 的股票選擇權完全相同。

Okay.

好的。

From an order of magnitude in the past I had received somewhere between 30 and 50,000 stock options per year, and this year I received 2000 restricted shares. Dave typically received 10,000 options, and he got 500 restricted shares. So you can see it is going to go a heck of a lot farther. In the 2002 plan that is out there now that with shares in it, we've just got to amend that so that we can use those shares that have already been set aside. We don't need any more that have already been set aside. We just need authorization from the shareholders to award those as restricted shares. So order of magnitude its considerably less to achieve the same level. So diluted it is much different. And we don't have to worry about black shoals and the values and how we're going to account for it instead it is just restricted shares, market value right to the P&L.

與過去的一個數量級相比，我每年收到了 30 到 50,000 份股票選擇權，今年我收到了 2000 份限制性股票。 Dave 通常會獲得 10,000 份選擇權，並獲得 500 股限制性股票。所以你可以看到它會走得更遠。現在2002年的計畫裡有股份，我們只需修改一下，這樣我們就可以使用那些已經預留的股份。我們不需要更多已經預留的東西。我們只需要股東的授權即可授予限制性股票。因此，達到相同水平的數量級要小得多。所以稀釋後就大不一樣了。我們不必擔心黑灘和價值以及我們將如何解釋它，相反它只是限制性股票，市場價值直接計入損益表。

Right, okay and then you mentioned the amortization costs on the new bank line I think it was 103,000. In the most recent quarter, do you expect that to come up a little bit? I'm trying to just map out the interest expense line here for next year or this year.

好吧，然後你提到了新銀行額度的攤銷成本，我認為是 103,000。在最近一個季度，您預計這一數字會有所上升嗎？我正在嘗試繪製明年或今年的利息支出線。

Yes, the amortization in the fourth quarter was just down slightly because the old facilities matured October first, and the new one was placed on November, later November. So basically you had -- basically one month, 1.5 months for fourth-quarter.

是的，第四季度的攤銷額略有下降，因為舊設施在 10 月首先到期，而新設施則在 11 月、11 月晚些時候放置。所以基本上第四季有 1 個月、1.5 個月的時間。

Were really looking at about 200,000 again?

真的又看了20萬左右嗎？

Yes, it will be back to where it was. I think the estimate for next year, 2004 amortization should be about $800,000. Very similar to the old facility.

是的，它會回到原來的位置。我認為明年，2004年的攤提費用應該在80萬美元左右。與舊設施非常相似。

Okay, that's helpful. One more question, if I could. The CPI increase that your factoring in at 1.5 percent, how that's fair relative to December quarter?

好的，這很有幫助。如果可以的話，還有一個問題。您考慮的 CPI 漲幅為 1.5%，相對於 12 月季度而言是否公平？

Well, my last one that rolled I rolled at 1.7 percent. So I just have been trying to guesstimate and sort of using that as a metric.

好吧，我最後一次滾動的結果是 1.7%。所以我只是嘗試猜測並使用它作為衡量標準。

So December quarter was actually 1.7 and you are factoring a 1.5 for next year?

那麼 12 月季度實際上是 1.7，而您為明年考慮 1.5？

Yes.

是的。

Okay, thanks guys.

好的，謝謝大家。

Private investor Harold Whitehill (ph) .

私人投資者哈羅德·懷特希爾（Harold Whitehill）。

I am interested in the acquisition strategy. I think that's very important and I was just wondering if you have any suggestions to what you're feeling is about it.

我對收購策略感興趣。我認為這非常重要，我只是想知道您是否對您的感受有什麼建議。

Harold, I want to reiterate one of the -- in the past because it was a basically just me and we had very limited capital to go after acquisitions, so we were very, very focused and really set our sights on a particular property we want and then we went after it, because again we had very limited purchasing power from a liquidity standpoint, and now we can cast a much, much wider net because we've got 95 million in liquidity right now plus the ability to raise that debt capacity once we use that 95 or as we come close to using that 95. So we really have taken that effort, and we've divided it. Stewart McFarland, who is our new Director of Product Development is aggressively going after the direct government market. I'm working with him in that at the various legislatures while I am continuing to work private operators that we've had relationships with over the years. But we are casting a much broader net than we have the past because we do have the new platform and the increase in liquidity and debt capacity.

哈羅德，我想重申其中一點——在過去，因為基本上只有我一個人，我們用於收購的資金非常有限，所以我們非常非常專注，並且真正將目光投向了我們想要的特定財產然後我們就追趕它，因為從流動性的角度來看，我們的購買力非常有限，現在我們可以撒一個更廣泛的網，因為我們現在有9500 萬的流動性，加上提高債務能力的能力一旦我們使用了那個95 或當我們接近使用那個95 時。史都華·麥克法蘭（Stewart McFarland）是我們新任產品開發總監，他正在積極進軍直接政府市場。我正在各個立法機構與他合作，同時我繼續與我們多年來有關係的私人業者合作。但我們正在撒下比過去更廣泛的網，因為我們確實擁有新平台以及流動性和債務能力的增加。

Is there a scarcity of prisons that are available at the present time?

目前可用的監獄是否短缺？

Well, there are some empty beds out there that I think are going to be absorbed. We're seeing absorption there, but yes, generally there is a scarcity and particularly at the federal level, especially on the border areas on our country. And we are seeing some aggressive procurement there, especially large facilities. And I think that is going to continue. We are also seeing states considering privatization for the first time, dealing with difficult issues. So I think there still continues to be quite a demand.

嗯，那裡有一些空床位，我認為它們將會被吸收。我們看到那裡的吸收，但是，是的，總體上存在稀缺，特別是在聯邦層級，尤其是在我國的邊境地區。我們在那裡看到了一些積極的採購，尤其是大型設施。我認為這種情況將會持續下去。我們也看到一些國家首次考慮私有化，處理棘手的問題。所以我認為仍然有相當大的需求。

Thank you very much.

非常感謝。

(OPERATOR INSTRUCTIONS) Todd Van Fleet of First Analysis.

（操作員說明）First Analysis 的 Todd Van Fleet。

The 75 million that you guys are looking at for this year acquisition-wise, can you tell us whether you think that is more likely to be from the private versus public kind of state-owned assets versus private assets?

你們今年考慮收購的 7,500 萬美元，你們能告訴我們你們是否認為這更有可能來自私人資產、公共資產、國有資產或私人資產？

When I use that 75, I am assuming zero from the government. Anything that comes in the government direct would be in addition to that. If the goal is 75 from the private operator environment. And anything in addition to that would be wonderful, but I'm counting on zero from the direct government market. They are big-ticket items and if they come in I think it is going to be a big change for the market and for us. So I'm factoring zero right now. Stewart just breathed a big sigh of relief here.

當我使用 75 時，我假設政府的數字為零。除此之外，政府直接提供的任何東西都將包括在內。如果目標是來自私人業者環境的 75。除此之外的任何事情都很棒，但我指望直接政府市場的零。它們是高價產品，如果它們進來，我認為這對市場和我們來說都將是一個巨大的變化。所以我現在將零因式分解。史都華說到這裡才長長地舒了一口氣。

Thanks.

謝謝。

Ross Nussbaum of Smith Barney.

史密斯‧巴尼 (Smith Barney) 的羅斯‧努斯鮑姆 (Ross Nussbaum)。

Chuck, what probability would you put on North Carolina buying the two facilities?

查克，您認為北卡羅來納州購買這兩個設施的可能性有多大？

We just don't hear from them, and those facilities on our last report are both over 100 percent utilized, so they are heavily, heavily utilized. So the essentiality of them is very high. I think it is reasonable to give it a 50-50, and that is purely a guess because we just don't have any input. Our relationship is all at the DOC level and it is not something that is in their hands, it is at the legislative elected official level.

我們只是沒有收到他們的消息，而我們上次報告中的這些設施的利用率都超過 100%，因此它們的利用率很高。所以它們的重要性非常高。我認為給它 50-50 是合理的，這純粹是一個猜測，因為我們沒有任何輸入。我們的關係都是在商務部層面，而不是在他們手中，而是在立法選舉的官員層面。

And your guidance assumes that you continue to own those through 2004?

您的指導假設您在 2004 年之前繼續持有這些股票？

That is correct. We get about 12 cents in FFO from each one of those on an annual basis.

那是對的。我們每年從其中每個人那裡獲得大約 12 美分的 FFO。

Okay, and I just wanted to make sure I'm understanding the interest expense line item. You had 1 million 184 in the fourth quarter. Where does that go, and I guess what additional fees are in there in the first quarter?

好的，我只是想確保我理解利息費用行項目。第四季你有 100 萬 184。那去哪了？

Well you got a full -- in the fourth-quarter, Ross, we had basically 103,000 of amortization of credit facility costs and our bond costs. That should go up probably another 100,000 or so each quarter.

好吧，羅斯，在第四季度，我們基本上有 103,000 美元的信貸融資成本和債券成本攤提。每個季度這個數字可能還會增加 10 萬左右。

Okay, thank you.

好的謝謝。

I show no further questions at this time.

我目前沒有提出任何進一步的問題。

Thank you for participating, and we appreciate your support. We will talk to you next quarter.

感謝您的參與，我們感謝您的支持。我們將在下個季度與您交談。

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Thank you, and have a great day.

女士們、先生們，感謝你們參加今天的會議。程式到此結束。您現在可以斷開連線。謝謝您，祝您有美好的一天。