The GEO Group Discontinues Management Contract at Fort Bayard, New Mexico Medical Center by Mutual Agreement

BOCA RATON, Fla.--(BUSINESS WIRE)--The GEO Group, Inc. (NYSE:GEO) announced today the discontinuation by mutual agreement of its contract with the State of New Mexico, Department of Health for the management of the Fort Bayard Medical Center (the “Center”) effective June 30, 2008. The contract generated approximately $3.5 million in annualized operating revenues for GEO.

GEO expects the discontinuation of the Center’s management contract to have no material impact on GEO’s financial performance and previously-issued guidance.

George C. Zoley, Chairman, Chief Executive Officer and Founder of GEO, stated, “We have decided to discontinue the management services contract at the Fort Bayard Medical Center by mutual agreement. The Fort Bayard Medical Center is one of a few state nursing homes in the country, a market segment which we will no longer pursue.”

The GEO Group, Inc. ("GEO") is a world leader in the delivery of correctional, detention, and residential treatment services to federal, state, and local government agencies around the globe. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, Canada, and the United Kingdom. GEO’s worldwide operations include 67 correctional and residential treatment facilities with a total design capacity of approximately 60,000 beds.

This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially affect actual results, including statements regarding estimated earnings, revenues and costs and our ability to maintain growth and strengthen contract relationships. Factors that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to successfully pursue further growth and continue to enhance shareholder value; (2) GEO’s ability to access the capital markets in the future on satisfactory terms or at all; (3) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (4) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (5) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (6) GEO’s ability to obtain future financing on acceptable terms; (7) GEO’s ability to sustain company-wide occupancy rates at its facilities; and (8) other factors contained in GEO’s Securities and Exchange Commission filings, including the forms 10-K, 10-Q and 8-K reports.