|
☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Florida
|
|
|
|
65-0043078
|
(State or other jurisdiction of
incorporation or organization)
|
|
|
|
(IRS Employer
Identification No.)
|
|
|
|
|
|
4955 Technology Way
|
Boca Raton
|
Florida
|
|
33431
|
(Address of principal executive offices)
|
|
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
|
GEO
|
|
New York Stock Exchange
|
Large accelerated filer
|
☑
|
Accelerated filer
|
¨
|
|
|
|
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
|
|
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2019 (UNAUDITED) AND DECEMBER 31, 2018
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Revenues
|
$
|
613,966
|
|
|
$
|
583,509
|
|
|
$
|
1,224,633
|
|
|
$
|
1,148,426
|
|
Operating expenses
|
453,168
|
|
|
437,797
|
|
|
910,165
|
|
|
864,506
|
|
||||
Depreciation and amortization
|
32,352
|
|
|
31,313
|
|
|
64,821
|
|
|
63,239
|
|
||||
General and administrative expenses
|
47,271
|
|
|
47,448
|
|
|
93,695
|
|
|
89,280
|
|
||||
Operating income
|
81,175
|
|
|
66,951
|
|
|
155,952
|
|
|
131,401
|
|
||||
Interest income
|
8,045
|
|
|
8,667
|
|
|
16,441
|
|
|
17,766
|
|
||||
Interest expense
|
(38,932
|
)
|
|
(36,345
|
)
|
|
(79,212
|
)
|
|
(72,214
|
)
|
||||
Loss on extinguishment of debt
|
(5,741
|
)
|
|
(574
|
)
|
|
(5,741
|
)
|
|
(574
|
)
|
||||
Income before income taxes and equity in earnings of affiliates
|
44,547
|
|
|
38,699
|
|
|
87,440
|
|
|
76,379
|
|
||||
Provision for income taxes
|
4,532
|
|
|
3,715
|
|
|
9,372
|
|
|
8,470
|
|
||||
Equity in earnings of affiliates, net of income tax provision (benefit) of $357, $(269), $716 and $436, respectively
|
1,821
|
|
|
2,341
|
|
|
4,417
|
|
|
4,336
|
|
||||
Net income
|
41,836
|
|
|
37,325
|
|
|
82,485
|
|
|
72,245
|
|
||||
Net loss attributable to noncontrolling interests
|
78
|
|
|
96
|
|
|
134
|
|
|
163
|
|
||||
Net income attributable to The GEO Group, Inc.
|
$
|
41,914
|
|
|
$
|
37,421
|
|
|
$
|
82,619
|
|
|
$
|
72,408
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
119,168
|
|
|
120,274
|
|
|
118,972
|
|
|
121,017
|
|
||||
Diluted
|
119,544
|
|
|
120,659
|
|
|
119,517
|
|
|
121,461
|
|
||||
Net income per common share attributable to The GEO Group, Inc.:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to The GEO Group, Inc. - basic
|
$
|
0.35
|
|
|
$
|
0.31
|
|
|
$
|
0.69
|
|
|
$
|
0.60
|
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to The GEO Group, Inc. - diluted
|
$
|
0.35
|
|
|
$
|
0.31
|
|
|
$
|
0.69
|
|
|
$
|
0.60
|
|
Dividends declared per share
|
$
|
0.48
|
|
|
$
|
0.47
|
|
|
$
|
0.96
|
|
|
$
|
0.94
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Net income
|
$
|
41,836
|
|
|
$
|
37,325
|
|
|
$
|
82,485
|
|
|
$
|
72,245
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
29
|
|
|
(5,061
|
)
|
|
1,761
|
|
|
(4,540
|
)
|
||||
Pension liability adjustment, net of tax provision of $11, $491, $22 and $463, respectively
|
42
|
|
|
625
|
|
|
(605
|
)
|
|
730
|
|
||||
Change in fair value of derivative instrument classified as cash flow hedge, net of tax provision of $809, $402, $1,014 and $532, respectively
|
4,583
|
|
|
2,278
|
|
|
5,746
|
|
|
3,014
|
|
||||
Total other comprehensive income (loss), net of tax
|
4,654
|
|
|
(2,158
|
)
|
|
6,902
|
|
|
(796
|
)
|
||||
Total comprehensive income
|
46,490
|
|
|
35,167
|
|
|
89,387
|
|
|
71,449
|
|
||||
Comprehensive loss attributable to noncontrolling interests
|
73
|
|
|
117
|
|
|
129
|
|
|
176
|
|
||||
Comprehensive income attributable to The GEO Group, Inc.
|
$
|
46,563
|
|
|
$
|
35,284
|
|
|
$
|
89,516
|
|
|
$
|
71,625
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
21,561
|
|
|
$
|
31,255
|
|
Restricted cash and cash equivalents
|
56,343
|
|
|
51,678
|
|
||
Accounts receivable, less allowance for doubtful accounts of $4,228 and $4,183, respectively
|
394,720
|
|
|
445,526
|
|
||
Contract receivable, current portion
|
13,944
|
|
|
15,535
|
|
||
Prepaid expenses and other current assets
|
46,316
|
|
|
57,768
|
|
||
Total current assets
|
532,884
|
|
|
601,762
|
|
||
Restricted Cash and Investments
|
27,358
|
|
|
22,431
|
|
||
Property and Equipment, Net
|
2,148,225
|
|
|
2,158,610
|
|
||
Assets Held for Sale
|
4,607
|
|
|
2,634
|
|
||
Contract Receivable
|
365,208
|
|
|
368,178
|
|
||
Operating Lease Right-of-Use Assets, Net
|
132,016
|
|
|
—
|
|
||
Deferred Income Tax Assets
|
29,924
|
|
|
29,924
|
|
||
Goodwill
|
776,357
|
|
|
776,359
|
|
||
Intangible Assets, Net
|
221,222
|
|
|
232,360
|
|
||
Other Non-Current Assets
|
70,337
|
|
|
65,860
|
|
||
Total Assets
|
$
|
4,308,138
|
|
|
$
|
4,258,118
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
91,257
|
|
|
$
|
93,032
|
|
Accrued payroll and related taxes
|
71,369
|
|
|
76,009
|
|
||
Accrued expenses and other current liabilities
|
189,083
|
|
|
204,170
|
|
||
Operating lease liabilities, current portion
|
32,077
|
|
|
—
|
|
||
Current portion of finance lease liabilities, long-term debt and non-recourse debt
|
25,866
|
|
|
332,027
|
|
||
Total current liabilities
|
409,652
|
|
|
705,238
|
|
||
Deferred Income Tax Liabilities
|
13,681
|
|
|
13,681
|
|
||
Other Non-Current Liabilities
|
81,812
|
|
|
82,481
|
|
||
Operating Lease Liabilities
|
102,844
|
|
|
—
|
|
||
Finance Lease Liabilities
|
3,779
|
|
|
4,570
|
|
||
Long-Term Debt
|
2,354,526
|
|
|
2,397,227
|
|
||
Non-Recourse Debt
|
320,306
|
|
|
15,017
|
|
||
Commitments and Contingencies (Note 12)
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
||||
Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 187,500,000 shares authorized, 125,422,811 and 124,794,986 issued and 121,212,557 and 120,584,732 outstanding, respectively
|
1,254
|
|
|
1,248
|
|
||
Additional paid-in capital
|
1,220,242
|
|
|
1,210,916
|
|
||
Distributions in excess of earnings
|
(87,339
|
)
|
|
(52,868
|
)
|
||
Accumulated other comprehensive loss
|
(16,716
|
)
|
|
(23,618
|
)
|
||
Treasury stock, 4,210,254 shares, at cost
|
(95,175
|
)
|
|
(95,175
|
)
|
||
Total shareholders’ equity attributable to The GEO Group, Inc.
|
1,022,266
|
|
|
1,040,503
|
|
||
Noncontrolling interests
|
(728
|
)
|
|
(599
|
)
|
||
Total shareholders’ equity
|
1,021,538
|
|
|
1,039,904
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
4,308,138
|
|
|
$
|
4,258,118
|
|
|
Six Months Ended
|
||||||
|
June 30, 2019
|
|
June 30, 2018
|
||||
Cash Flow from Operating Activities:
|
|
|
|
||||
Net income
|
$
|
82,485
|
|
|
$
|
72,245
|
|
Net loss attributable to noncontrolling interests
|
134
|
|
|
163
|
|
||
Net income attributable to The GEO Group, Inc.
|
82,619
|
|
|
72,408
|
|
||
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
64,821
|
|
|
63,239
|
|
||
Stock-based compensation
|
12,180
|
|
|
10,787
|
|
||
Loss on extinguishment of debt
|
5,741
|
|
|
574
|
|
||
Amortization of debt issuance costs, discount and/or premium and other non-cash interest
|
5,023
|
|
|
3,992
|
|
||
Provision for doubtful accounts
|
259
|
|
|
525
|
|
||
Equity in earnings of affiliates, net of tax
|
(4,417
|
)
|
|
(4,336
|
)
|
||
Dividends received from unconsolidated joint venture
|
3,088
|
|
|
3,957
|
|
||
Loss (gain) on sale/disposal of property and equipment, net
|
1,972
|
|
|
(1,001
|
)
|
||
Loss on assets held for sale
|
1,083
|
|
|
—
|
|
||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
||||
Changes in accounts receivable, prepaid expenses and other assets
|
38,866
|
|
|
19,838
|
|
||
Changes in contract receivable
|
3,151
|
|
|
(4,919
|
)
|
||
Changes in accounts payable, accrued expenses and other liabilities
|
2,681
|
|
|
15,189
|
|
||
Net cash provided by operating activities
|
217,067
|
|
|
180,253
|
|
||
Cash Flow from Investing Activities:
|
|
|
|
||||
Insurance proceeds - damaged property
|
10,761
|
|
|
4,036
|
|
||
Proceeds from sale of property and equipment
|
304
|
|
|
1,717
|
|
||
Proceeds from sale of assets held for sale
|
—
|
|
|
3,797
|
|
||
Change in restricted investments
|
(4,816
|
)
|
|
(1,490
|
)
|
||
Capital expenditures
|
(55,410
|
)
|
|
(107,064
|
)
|
||
Net cash used in investing activities
|
(49,161
|
)
|
|
(99,004
|
)
|
||
Cash Flow from Financing Activities:
|
|
|
|
||||
Proceeds from long-term debt
|
170,000
|
|
|
245,000
|
|
||
Payments on long-term debt
|
(213,926
|
)
|
|
(134,000
|
)
|
||
Payments on non-recourse debt
|
(326,942
|
)
|
|
(7,490
|
)
|
||
Proceeds from non-recourse debt
|
326,127
|
|
|
—
|
|
||
Taxes paid related to net share settlements of equity awards
|
(4,177
|
)
|
|
(4,391
|
)
|
||
Proceeds from issuance of common stock in connection with ESPP
|
252
|
|
|
264
|
|
||
Payment for repurchases of common stock
|
—
|
|
|
(70,446
|
)
|
||
Debt issuance costs
|
(9,937
|
)
|
|
(990
|
)
|
||
Proceeds from the exercise of stock options
|
1,077
|
|
|
1,372
|
|
||
Cash dividends paid
|
(116,122
|
)
|
|
(115,017
|
)
|
||
Net cash used in financing activities
|
(173,648
|
)
|
|
(85,698
|
)
|
||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
|
824
|
|
|
(1,881
|
)
|
||
Net Decrease in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
|
(4,918
|
)
|
|
(6,330
|
)
|
||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period
|
84,472
|
|
|
133,545
|
|
||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period
|
$
|
79,554
|
|
|
$
|
127,215
|
|
Supplemental Disclosures:
|
|
|
|
||||
Non-cash Investing and Financing activities:
|
|
|
|
||||
Right-of-use assets obtained from operating lease liabilities upon adoption of new lease standard (Refer to Note 2 - Leases)
|
$
|
147,000
|
|
|
$
|
—
|
|
Capital expenditures in accounts payable and accrued expenses
|
$
|
6,442
|
|
|
$
|
5,408
|
|
|
|
Classification on the Balance Sheet
|
|
June 30, 2019
|
||
Assets
|
|
|
|
|
||
Operating lease assets
|
|
Operating Lease Right-of-Use Assets, Net
|
|
$
|
132,016
|
|
Finance lease assets
|
|
Property and Equipment, Net
|
|
3,391
|
|
|
Total lease assets
|
|
|
|
$
|
135,407
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Operating
|
|
Operating lease liabilities, current portion
|
|
$
|
32,077
|
|
Finance [1]
|
|
Current portion of finance liabilities, long-term debt and non-recourse debt
|
|
1,550
|
|
|
Noncurrent
|
|
|
|
|
||
Operating
|
|
Operating Lease Liabilities
|
|
102,844
|
|
|
Finance [1]
|
|
Finance Lease Liabilities
|
|
3,779
|
|
|
Total lease liabilities
|
|
|
|
$
|
140,250
|
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating lease cost
|
|
$
|
11,738
|
|
|
$
|
24,230
|
|
Finance lease cost:
|
|
|
|
|
||||
Amortization of right-of-use assets
|
|
256
|
|
|
512
|
|
||
Interest on lease liabilities
|
|
68
|
|
|
181
|
|
||
Total finance lease cost
|
|
324
|
|
|
693
|
|
||
Short-term lease cost
|
|
1,640
|
|
|
3,555
|
|
||
Total Lease Cost
|
|
$
|
13,702
|
|
|
$
|
28,478
|
|
|
|
|
|
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
||||
Operating cash flows for operating leases
|
|
$
|
12,400
|
|
|
$
|
25,016
|
|
Operating cash flows for finance leases
|
|
$
|
68
|
|
|
$
|
181
|
|
Financing activities for finance leases
|
|
$
|
396
|
|
|
$
|
790
|
|
Right-of-use assets obtained in exchange for new operating lease liabilties
|
|
$
|
3,154
|
|
|
$
|
6,318
|
|
|
|
|
|
|
||||
Weighted average remaining lease term:
|
|
|
|
|
||||
Operating leases
|
|
7.3 years
|
|
|
|
|||
Finance leases
|
|
3.4 years
|
|
|
|
|||
Weighted average discount rate:
|
|
|
|
|
||||
Operating leases
|
|
4.74
|
%
|
|
|
|||
Finance leases
|
|
8.27
|
%
|
|
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019
|
|
$
|
20,548
|
|
|
$
|
965
|
|
2020
|
|
31,861
|
|
|
1,934
|
|
||
2021
|
|
24,100
|
|
|
1,936
|
|
||
2022
|
|
17,521
|
|
|
1,234
|
|
||
2023
|
|
14,189
|
|
|
—
|
|
||
Thereafter
|
|
53,661
|
|
|
—
|
|
||
Total minimum lease payments
|
|
161,880
|
|
|
6,069
|
|
||
Less: amount of lease payment representing interest
|
|
(26,959
|
)
|
|
(740
|
)
|
||
Present value of future minimum lease payments
|
|
134,921
|
|
|
5,329
|
|
||
Less: current obligations under leases
|
|
(32,077
|
)
|
|
(1,550
|
)
|
||
Long-term lease obligations
|
|
$
|
102,844
|
|
|
$
|
3,779
|
|
|
January 1, 2019
|
|
Foreign Currency Translation
|
|
June 30, 2019
|
||||||
GEO Secure Services
|
$
|
316,366
|
|
|
$
|
—
|
|
|
$
|
316,366
|
|
GEO Care
|
459,589
|
|
|
—
|
|
|
459,589
|
|
|||
International Services
|
404
|
|
|
(2
|
)
|
|
402
|
|
|||
Total Goodwill
|
$
|
776,359
|
|
|
$
|
(2
|
)
|
|
$
|
776,357
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Weighted Average Useful Life (years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Facility management contracts
|
16.3
|
|
$
|
308,515
|
|
|
$
|
(137,909
|
)
|
|
$
|
170,606
|
|
|
$
|
308,419
|
|
|
$
|
(127,481
|
)
|
|
$
|
180,938
|
|
Covenants not to compete
|
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
700
|
|
|
(700
|
)
|
|
—
|
|
||||||
Technology
|
7.3
|
|
33,700
|
|
|
(28,284
|
)
|
|
5,416
|
|
|
33,700
|
|
|
(27,478
|
)
|
|
6,222
|
|
||||||
Trade names (Indefinite lived)
|
Indefinite
|
|
45,200
|
|
|
—
|
|
|
45,200
|
|
|
45,200
|
|
|
—
|
|
|
45,200
|
|
||||||
Total acquired intangible assets
|
|
|
$
|
387,415
|
|
|
$
|
(166,193
|
)
|
|
$
|
221,222
|
|
|
$
|
388,019
|
|
|
$
|
(155,659
|
)
|
|
$
|
232,360
|
|
Fiscal Year
|
|
Total Amortization Expense
|
||
Remainder of 2019
|
|
$
|
11,171
|
|
2020
|
|
22,306
|
|
|
2021
|
|
19,782
|
|
|
2022
|
|
18,273
|
|
|
2023
|
|
13,632
|
|
|
Thereafter
|
|
90,858
|
|
|
|
|
$
|
176,022
|
|
|
|
|
Fair Value Measurements at June 30, 2019
|
||||||||||||
|
Carrying Value at June 30, 2019
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Restricted investment:
|
|
|
|
|
|
|
|
||||||||
Rabbi Trust
|
$
|
25,708
|
|
|
$
|
—
|
|
|
$
|
25,708
|
|
|
$
|
—
|
|
Fixed income securities
|
1,881
|
|
|
—
|
|
|
1,881
|
|
|
—
|
|
|
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||
|
Carrying Value at December 31, 2018
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Restricted investments:
|
|
|
|
|
|
|
|
||||||||
Rabbi Trust
|
$
|
20,892
|
|
|
$
|
—
|
|
|
$
|
20,892
|
|
|
$
|
—
|
|
Fixed income securities
|
1,801
|
|
|
—
|
|
|
1,801
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap derivatives
|
$
|
8,638
|
|
|
$
|
—
|
|
|
$
|
8,638
|
|
|
$
|
—
|
|
|
|
|
Estimated Fair Value Measurements at June 30, 2019
|
||||||||||||||||
|
Carrying Value as of June 30, 2019
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
21,561
|
|
|
$
|
21,561
|
|
|
$
|
21,561
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash and investments
|
57,993
|
|
|
57,993
|
|
|
57,993
|
|
|
—
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under senior credit facility
|
$
|
1,231,322
|
|
|
$
|
1,206,589
|
|
|
$
|
—
|
|
|
$
|
1,206,589
|
|
|
$
|
—
|
|
5.875% Senior Notes due 2022
|
250,000
|
|
|
247,275
|
|
|
—
|
|
|
247,275
|
|
|
—
|
|
|||||
5.125% Senior Notes due 2023
|
300,000
|
|
|
269,220
|
|
|
—
|
|
|
269,220
|
|
|
—
|
|
|||||
5.875% Senior Notes due 2024
|
250,000
|
|
|
221,240
|
|
|
—
|
|
|
221,240
|
|
|
—
|
|
|||||
6.00% Senior Notes due 2026
|
350,000
|
|
|
305,620
|
|
|
—
|
|
|
305,620
|
|
|
—
|
|
|||||
Non-recourse debt
|
342,233
|
|
|
339,188
|
|
|
—
|
|
|
339,188
|
|
|
—
|
|
|
|
|
Estimated Fair Value Measurements at December 31, 2018
|
||||||||||||||||
|
Carrying Value as of December 31, 2018
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
31,255
|
|
|
$
|
31,255
|
|
|
$
|
31,255
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash and investments
|
53,217
|
|
|
53,217
|
|
|
50,499
|
|
|
2,718
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under senior credit facility
|
$
|
1,273,965
|
|
|
$
|
1,188,196
|
|
|
$
|
—
|
|
|
$
|
1,188,196
|
|
|
$
|
—
|
|
5.875% Senior Notes due 2022
|
250,000
|
|
|
244,550
|
|
|
—
|
|
|
244,550
|
|
|
—
|
|
|||||
5.125% Senior Notes due 2023
|
300,000
|
|
|
271,992
|
|
|
—
|
|
|
271,992
|
|
|
—
|
|
|||||
5.875% Senior Notes due 2024
|
250,000
|
|
|
224,590
|
|
|
—
|
|
|
224,590
|
|
|
—
|
|
|||||
6.00% Senior Notes due 2026
|
350,000
|
|
|
310,177
|
|
|
—
|
|
|
310,177
|
|
|
—
|
|
|||||
Non-recourse debt
|
340,910
|
|
|
348,274
|
|
|
—
|
|
|
348,274
|
|
|
—
|
|
|
June 30, 2019
|
|
June 30, 2018
|
||||
Cash and Cash Equivalents
|
$
|
21,561
|
|
|
$
|
65,451
|
|
Restricted cash and cash equivalents - current
|
56,343
|
|
|
58,720
|
|
||
Restricted cash and investments - non-current
|
27,358
|
|
|
25,297
|
|
||
Less Restricted investments - non-current
|
(25,708
|
)
|
|
(22,253
|
)
|
||
Total cash, cash equivalents and restricted cash and cash equivalents shown in the statement of cash flows
|
$
|
79,554
|
|
|
$
|
127,215
|
|
|
Common shares
|
|
Additional
Paid-In
|
|
Distributions in Excess of
|
|
Accumulated
Other
Comprehensive
|
|
Treasury shares
|
|
Noncontrolling
|
|
Total
Shareholders'
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Loss
|
|
Shares
|
|
Amount
|
|
Interests
|
|
Equity
|
||||||||||||||||
Balance, January 1, 2019
|
120,585
|
|
|
$
|
1,248
|
|
|
$
|
1,210,916
|
|
|
$
|
(52,868
|
)
|
|
$
|
(23,618
|
)
|
|
4,210
|
|
|
$
|
(95,175
|
)
|
|
$
|
(599
|
)
|
|
$
|
1,039,904
|
|
Proceeds from exercise of stock options
|
22
|
|
|
—
|
|
|
333
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
333
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
6,727
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,727
|
|
|||||||
Restricted stock granted
|
778
|
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted stock canceled
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,945
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,945
|
)
|
|||||||
Shares withheld for net settlements of share-based awards [1]
|
(198
|
)
|
|
(2
|
)
|
|
(4,170
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,172
|
)
|
|||||||
Issuance of common stock - ESPP
|
6
|
|
|
—
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|||||||
Transition adjustment for accounting standard adoption [2]
|
—
|
|
|
—
|
|
|
—
|
|
|
(968
|
)
|
|
968
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
40,705
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
40,649
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,284
|
|
|||||||
Balance, March 31, 2019
|
121,187
|
|
|
$
|
1,254
|
|
|
$
|
1,213,922
|
|
|
$
|
(71,076
|
)
|
|
$
|
(21,366
|
)
|
|
4,210
|
|
|
$
|
(95,175
|
)
|
|
$
|
(655
|
)
|
|
$
|
1,026,904
|
|
Proceeds from exercise of stock options
|
42
|
|
|
—
|
|
|
739
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
739
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
5,453
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,453
|
|
|||||||
Restricted stock granted
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Restricted stock canceled
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,177
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,177
|
)
|
|||||||
Issuance of common stock - ESPP
|
6
|
|
|
—
|
|
|
128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
41,914
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
41,836
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,650
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
4,655
|
|
|||||||
Balance, June 30, 2019
|
121,213
|
|
|
$
|
1,254
|
|
|
$
|
1,220,242
|
|
|
$
|
(87,339
|
)
|
|
$
|
(16,716
|
)
|
|
4,210
|
|
|
$
|
(95,175
|
)
|
|
$
|
(728
|
)
|
|
$
|
1,021,538
|
|
|
Common shares
|
|
Additional
Paid-In |
|
Earnings in Excess of
|
|
Accumulated
Other Comprehensive |
|
Treasury shares
|
|
Noncontrolling
|
|
Total
Shareholders' |
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Distributions
|
|
Loss
|
|
Shares
|
|
Amount
|
|
Interests
|
|
Equity
|
|||||||||||||||||
Balance, January 1, 2018
|
124,008
|
|
|
$
|
1,240
|
|
|
$
|
1,190,906
|
|
|
$
|
31,541
|
|
|
$
|
(24,446
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(322
|
)
|
|
$
|
1,198,919
|
|
||
Proceeds from exercise of stock options
|
15
|
|
|
1
|
|
|
260
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
261
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
5,827
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,827
|
|
|||||||
Restricted stock canceled
|
(9
|
)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,319
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,319
|
)
|
||||||||
Shares withheld for net settlements of share-based awards [1]
|
(169
|
)
|
|
(2
|
)
|
|
(4,355
|
)
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,357
|
)
|
|||||||
Issuance of common stock - ESPP
|
8
|
|
|
—
|
|
|
141
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|||||||
Repurchases of common stock
|
(1,848
|
)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
1,848
|
|
|
(40,182
|
)
|
|
—
|
|
|
(40,182
|
)
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
34,987
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
34,920
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,354
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
1,362
|
|
||||||||
Balance, March 31, 2018
|
122,005
|
|
|
$
|
1,239
|
|
|
$
|
1,192,779
|
|
|
$
|
8,209
|
|
|
$
|
(23,092
|
)
|
|
1,848
|
|
|
$
|
(40,182
|
)
|
|
$
|
(381
|
)
|
|
$
|
1,138,572
|
|
|
Proceeds from exercise of stock options
|
62
|
|
|
—
|
|
|
1,111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,111
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
4,960
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,960
|
|
||||||||
Restricted stock granted
|
896
|
|
|
9
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted stock canceled
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,698
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,698
|
)
|
||||||||
Shares withheld for net settlements of share-based awards [1]
|
(2
|
)
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||||||
Issuance of common stock - ESPP
|
4
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
||||||||
Repurchases of common stock
|
(1,269
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,269
|
|
|
(30,264
|
)
|
|
—
|
|
|
(30,264
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
37,421
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96
|
)
|
|
37,325
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,137
|
)
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(2,158
|
)
|
||||||||
Balance, June 30, 2018
|
121,677
|
|
|
$
|
1,248
|
|
|
$
|
1,198,930
|
|
|
$
|
(11,068
|
)
|
|
$
|
(25,229
|
)
|
|
3,117
|
|
|
$
|
(70,446
|
)
|
|
$
|
(498
|
)
|
|
$
|
1,092,937
|
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||
|
|
Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1)
|
|
Change in fair value of derivatives, net of tax (2)
|
|
Pension adjustments, net of tax
|
|
Total
|
||||||||
Balance, January 1, 2019
|
|
$
|
(14,573
|
)
|
|
$
|
(5,746
|
)
|
|
$
|
(3,299
|
)
|
|
$
|
(23,618
|
)
|
Current-period other comprehensive income (loss) before reclassifications
|
|
1,761
|
|
|
1,895
|
|
|
(605
|
)
|
|
3,051
|
|
||||
Amounts reclassified from other comprehensive income into earnings
|
|
—
|
|
|
3,851
|
|
|
—
|
|
|
3,851
|
|
||||
Net current-period other comprehensive income (loss)
|
|
1,761
|
|
|
5,746
|
|
|
(605
|
)
|
|
6,902
|
|
||||
Balance, June 30, 2019
|
|
$
|
(12,812
|
)
|
|
$
|
—
|
|
|
$
|
(3,904
|
)
|
|
$
|
(16,716
|
)
|
|
|
Six Months Ended June 30, 2018
|
||||||||||
|
|
(In thousands)
|
||||||||||
|
|
Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1)
|
|
Change in fair value of derivatives, net of tax
|
|
Pension adjustments, net of tax
|
|
Total
|
||||
Balance, January 1, 2018
|
|
(7,470
|
)
|
|
(11,892
|
)
|
|
(5,084
|
)
|
|
(24,446
|
)
|
Current-period other comprehensive (loss) income
|
|
(4,527
|
)
|
|
3,014
|
|
|
730
|
|
|
(783
|
)
|
Balance, June 30, 2018
|
|
(11,997
|
)
|
|
(8,878
|
)
|
|
(4,354
|
)
|
|
(25,229
|
)
|
|
Shares
|
|
Wtd. Avg.
Exercise
Price
|
|
Wtd. Avg.
Remaining
Contractual Term (years)
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|||||
Options outstanding at January 1, 2019
|
1,462
|
|
|
$
|
24.30
|
|
|
7.20
|
|
$
|
924
|
|
Options granted
|
391
|
|
|
22.68
|
|
|
|
|
|
|||
Options exercised
|
(64
|
)
|
|
16.93
|
|
|
|
|
|
|||
Options forfeited/canceled/expired
|
(117
|
)
|
|
24.68
|
|
|
|
|
|
|||
Options outstanding at June 30, 2019
|
1,672
|
|
|
$
|
24.19
|
|
|
7.40
|
|
$
|
1,122
|
|
Options vested and expected to vest at June 30, 2019
|
1,569
|
|
|
$
|
24.25
|
|
|
7.29
|
|
$
|
—
|
|
Options exercisable at June 30, 2019
|
842
|
|
|
$
|
24.67
|
|
|
5.99
|
|
$
|
1,036
|
|
|
Shares
|
|
Wtd. Avg.
Grant Date
Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Restricted stock outstanding at January 1, 2019
|
2,018
|
|
|
$
|
27.62
|
|
Granted
|
788
|
|
|
23.79
|
|
|
Vested
|
(698
|
)
|
|
24.08
|
|
|
Forfeited/canceled
|
(38
|
)
|
|
24.01
|
|
|
Restricted stock outstanding at June 30, 2019
|
2,070
|
|
|
$
|
27.29
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Net income
|
$
|
41,836
|
|
|
$
|
37,325
|
|
$
|
82,485
|
|
|
$
|
72,245
|
|
Net loss attributable to noncontrolling interests
|
78
|
|
|
96
|
|
134
|
|
|
163
|
|
||||
Net income attributable to The GEO Group, Inc.
|
41,914
|
|
|
37,421
|
|
82,619
|
|
|
72,408
|
|
||||
Basic earnings per share attributable to The GEO Group, Inc.:
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding
|
119,168
|
|
|
120,274
|
|
118,972
|
|
|
121,017
|
|
||||
Per share amount
|
$
|
0.35
|
|
|
$
|
0.31
|
|
$
|
0.69
|
|
|
$
|
0.60
|
|
Diluted earnings per share attributable to The GEO Group, Inc.:
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
119,168
|
|
|
120,274
|
|
118,972
|
|
|
121,017
|
|
||||
Dilutive effect of equity incentive plans
|
376
|
|
|
385
|
|
545
|
|
|
444
|
|
||||
Weighted average shares assuming dilution
|
119,544
|
|
|
120,659
|
|
119,517
|
|
|
121,461
|
|
||||
Per share amount
|
$
|
0.35
|
|
|
$
|
0.31
|
|
$
|
0.69
|
|
|
$
|
0.60
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
|||
Senior Credit Facility:
|
|
|
|
||||
Term loan
|
$
|
782,000
|
|
|
$
|
786,000
|
|
Unamortized discount on term loan
|
(2,582
|
)
|
|
(2,878
|
)
|
||
Unamortized debt issuance costs on term loan
|
(6,124
|
)
|
|
(6,826
|
)
|
||
Revolver
|
451,904
|
|
|
490,843
|
|
||
Total Senior Credit Facility
|
1,225,198
|
|
|
1,267,139
|
|
||
6.00% Senior Notes:
|
|
|
|
||||
Notes Due in 2026
|
350,000
|
|
|
350,000
|
|
||
Unamortized debt issuance costs
|
(4,558
|
)
|
|
(4,820
|
)
|
||
Total 6.00% Senior Notes Due in 2026
|
345,442
|
|
|
345,180
|
|
||
5.875% Senior Notes:
|
|
|
|
||||
Notes Due in 2024
|
250,000
|
|
|
250,000
|
|
||
Unamortized debt issuance costs
|
(2,757
|
)
|
|
(2,971
|
)
|
||
Total 5.875% Senior Notes Due in 2024
|
247,243
|
|
|
247,029
|
|
||
5.125% Senior Notes:
|
|
|
|
||||
Notes Due in 2023
|
300,000
|
|
|
300,000
|
|
||
Unamortized debt issuance costs
|
(3,219
|
)
|
|
(3,548
|
)
|
||
Total 5.125% Senior Notes Due in 2023
|
296,781
|
|
|
296,452
|
|
||
5.875% Senior Notes:
|
|
|
|
||||
Notes Due in 2022
|
250,000
|
|
|
250,000
|
|
||
Unamortized debt issuance costs
|
(2,137
|
)
|
|
(2,514
|
)
|
||
Total 5.875% Senior Notes Due in 2022
|
247,863
|
|
|
247,486
|
|
||
Non-Recourse Debt
|
342,353
|
|
|
341,074
|
|
||
Unamortized debt issuance costs on non-recourse debt
|
(5,612
|
)
|
|
(3,883
|
)
|
||
Unamortized discount on non-recourse debt
|
(120
|
)
|
|
(164
|
)
|
||
Total Non-Recourse Debt
|
336,621
|
|
|
337,027
|
|
||
Finance Lease Liabilities
|
5,329
|
|
|
6,059
|
|
||
Other debt
|
—
|
|
|
2,469
|
|
||
Total debt
|
2,704,477
|
|
|
2,748,841
|
|
||
Current portion of finance lease liabilities, long-term debt and non-recourse debt
|
(25,866
|
)
|
|
(332,027
|
)
|
||
Finance Lease Liabilities, long-term portion
|
(3,779
|
)
|
|
(4,570
|
)
|
||
Non-Recourse Debt, long-term portion
|
(320,306
|
)
|
|
(15,017
|
)
|
||
Long-Term Debt
|
$
|
2,354,526
|
|
|
$
|
2,397,227
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
GEO Secure Services
|
$
|
399,475
|
|
|
$
|
368,989
|
|
|
$
|
789,985
|
|
|
$
|
727,670
|
|
GEO Care
|
155,507
|
|
|
149,928
|
|
|
309,350
|
|
|
290,006
|
|
||||
International Services
|
54,388
|
|
|
64,592
|
|
|
118,612
|
|
|
130,750
|
|
||||
Facility Construction & Design [1]
|
4,596
|
|
|
—
|
|
|
6,686
|
|
|
—
|
|
||||
Total revenues
|
$
|
613,966
|
|
|
$
|
583,509
|
|
|
$
|
1,224,633
|
|
|
$
|
1,148,426
|
|
Operating income from segments:
|
|
|
|
|
|
|
|
||||||||
GEO Secure Services
|
$
|
83,865
|
|
|
$
|
77,318
|
|
|
$
|
160,789
|
|
|
$
|
146,506
|
|
GEO Care
|
41,661
|
|
|
35,139
|
|
|
80,199
|
|
|
66,831
|
|
||||
International Services
|
2,920
|
|
|
1,942
|
|
|
8,659
|
|
|
7,344
|
|
||||
Facility Construction & Design [1]
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Operating income from segments
|
$
|
128,446
|
|
|
$
|
114,399
|
|
|
$
|
249,647
|
|
|
$
|
220,681
|
|
General and Administrative Expenses
|
(47,271
|
)
|
|
(47,448
|
)
|
|
$
|
(93,695
|
)
|
|
(89,280
|
)
|
|||
Total Operating Income
|
$
|
81,175
|
|
|
$
|
66,951
|
|
|
$
|
155,952
|
|
|
$
|
131,401
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Operating income from segments
|
$
|
128,446
|
|
|
$
|
114,399
|
|
|
$
|
249,647
|
|
|
$
|
220,681
|
|
Unallocated amounts:
|
|
|
|
|
|
|
|
||||||||
General and Administrative Expenses
|
(47,271
|
)
|
|
(47,448
|
)
|
|
(93,695
|
)
|
|
(89,280
|
)
|
||||
Net Interest Expense
|
(30,887
|
)
|
|
(27,678
|
)
|
|
(62,771
|
)
|
|
(54,448
|
)
|
||||
Loss on Extinguishment of Debt
|
(5,741
|
)
|
|
(574
|
)
|
|
(5,741
|
)
|
|
(574
|
)
|
||||
Income before income taxes and equity in earnings of affiliates
|
$
|
44,547
|
|
|
$
|
38,699
|
|
|
$
|
87,440
|
|
|
$
|
76,379
|
|
|
Six Months Ended June 30, 2019
|
|
Year Ended December 31, 2018
|
||||
Change in Projected Benefit Obligation
|
|
|
|
||||
Projected benefit obligation, beginning of period
|
$
|
32,474
|
|
|
$
|
32,820
|
|
Service cost
|
499
|
|
|
1,200
|
|
||
Interest cost
|
696
|
|
|
1,242
|
|
||
Actuarial loss
|
—
|
|
|
(2,166
|
)
|
||
Benefits paid
|
(391
|
)
|
|
(622
|
)
|
||
Projected benefit obligation, end of period
|
$
|
33,278
|
|
|
$
|
32,474
|
|
Change in Plan Assets
|
|
|
|
||||
Plan assets at fair value, beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
Company contributions
|
391
|
|
|
622
|
|
||
Benefits paid
|
(391
|
)
|
|
(622
|
)
|
||
Plan assets at fair value, end of period
|
$
|
—
|
|
|
$
|
—
|
|
Unfunded Status of the Plan
|
$
|
33,278
|
|
|
$
|
32,474
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
250
|
|
|
$
|
300
|
|
|
$
|
499
|
|
|
$
|
600
|
|
Interest cost
|
348
|
|
|
310
|
|
|
696
|
|
|
621
|
|
||||
Net loss
|
53
|
|
|
133
|
|
|
105
|
|
|
266
|
|
||||
Net periodic pension cost
|
$
|
651
|
|
|
$
|
743
|
|
|
$
|
1,300
|
|
|
$
|
1,487
|
|
(i)
|
The GEO Group, Inc., as the issuer of the notes;
|
(ii)
|
The Subsidiary Guarantors, on a combined basis, which are 100% owned by The GEO Group, Inc., and which are guarantors of the notes;
|
(iii)
|
The Company’s other subsidiaries, on a combined basis, which are not guarantors of the notes (the “Non-Guarantor Subsidiaries”);
|
(iv)
|
Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the Subsidiary Non-Guarantors and (b) eliminate the investments in the Company’s subsidiaries; and
|
(v)
|
The Company and its subsidiaries on a consolidated basis.
|
|
For the Three Months Ended June 30, 2019
|
||||||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
233,539
|
|
|
$
|
498,406
|
|
|
$
|
61,639
|
|
|
$
|
(179,618
|
)
|
|
$
|
613,966
|
|
Operating expenses
|
189,310
|
|
|
392,023
|
|
|
51,453
|
|
|
(179,618
|
)
|
|
453,168
|
|
|||||
Depreciation and amortization
|
7,299
|
|
|
24,208
|
|
|
845
|
|
|
—
|
|
|
32,352
|
|
|||||
General and administrative expenses
|
17,813
|
|
|
24,752
|
|
|
4,706
|
|
|
—
|
|
|
47,271
|
|
|||||
Operating income
|
19,117
|
|
|
57,423
|
|
|
4,635
|
|
|
—
|
|
|
81,175
|
|
|||||
Interest income
|
3,497
|
|
|
2,180
|
|
|
7,716
|
|
|
(5,348
|
)
|
|
8,045
|
|
|||||
Interest expense
|
(23,127
|
)
|
|
(14,703
|
)
|
|
(6,450
|
)
|
|
5,348
|
|
|
(38,932
|
)
|
|||||
Loss on extinguishment of debt
|
(486
|
)
|
|
(790
|
)
|
|
(4,465
|
)
|
|
—
|
|
|
(5,741
|
)
|
|||||
Income (loss) before income taxes and equity in earnings of affiliates
|
(999
|
)
|
|
44,110
|
|
|
1,436
|
|
|
—
|
|
|
44,547
|
|
|||||
Income tax provision
|
239
|
|
|
3,550
|
|
|
743
|
|
|
—
|
|
|
4,532
|
|
|||||
Equity in earnings of affiliates, net of income tax provision
|
—
|
|
|
—
|
|
|
1,821
|
|
|
—
|
|
|
1,821
|
|
|||||
Income before equity in income of consolidated subsidiaries
|
(1,238
|
)
|
|
40,560
|
|
|
2,514
|
|
|
—
|
|
|
41,836
|
|
|||||
Income from consolidated subsidiaries, net of income tax provision
|
43,074
|
|
|
—
|
|
|
—
|
|
|
(43,074
|
)
|
|
—
|
|
|||||
Net income
|
41,836
|
|
|
40,560
|
|
|
2,514
|
|
|
(43,074
|
)
|
|
41,836
|
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
|||||
Net income attributable to The GEO Group, Inc.
|
$
|
41,836
|
|
|
$
|
40,560
|
|
|
$
|
2,592
|
|
|
$
|
(43,074
|
)
|
|
$
|
41,914
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
41,836
|
|
|
$
|
40,560
|
|
|
$
|
2,514
|
|
|
$
|
(43,074
|
)
|
|
$
|
41,836
|
|
Other comprehensive income, net of tax
|
—
|
|
|
42
|
|
|
4,612
|
|
|
—
|
|
|
4,654
|
|
|||||
Total comprehensive income
|
$
|
41,836
|
|
|
$
|
40,602
|
|
|
$
|
7,126
|
|
|
$
|
(43,074
|
)
|
|
$
|
46,490
|
|
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|||||
Comprehensive income attributable to The GEO Group, Inc.
|
$
|
41,836
|
|
|
$
|
40,602
|
|
|
$
|
7,199
|
|
|
$
|
(43,074
|
)
|
|
$
|
46,563
|
|
|
For the Three Months Ended June 30, 2018
|
||||||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
202,186
|
|
|
$
|
474,966
|
|
|
$
|
67,256
|
|
|
$
|
(160,899
|
)
|
|
$
|
583,509
|
|
Operating expenses
|
161,122
|
|
|
381,040
|
|
|
56,534
|
|
|
(160,899
|
)
|
|
437,797
|
|
|||||
Depreciation and amortization
|
6,564
|
|
|
23,695
|
|
|
1,054
|
|
|
—
|
|
|
31,313
|
|
|||||
General and administrative expenses
|
16,281
|
|
|
25,738
|
|
|
5,429
|
|
|
—
|
|
|
47,448
|
|
|||||
Operating income
|
18,219
|
|
|
44,493
|
|
|
4,239
|
|
|
—
|
|
|
66,951
|
|
|||||
Interest income
|
3,406
|
|
|
1,447
|
|
|
8,908
|
|
|
(5,094
|
)
|
|
8,667
|
|
|||||
Interest expense
|
(19,073
|
)
|
|
(13,959
|
)
|
|
(8,407
|
)
|
|
5,094
|
|
|
(36,345
|
)
|
|||||
Loss on extinguishment of debt
|
(574
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(574
|
)
|
|||||
Income before income taxes and equity in earnings of affiliates
|
1,978
|
|
|
31,981
|
|
|
4,740
|
|
|
—
|
|
|
38,699
|
|
|||||
Income tax provision
|
716
|
|
|
1,442
|
|
|
1,557
|
|
|
—
|
|
|
3,715
|
|
|||||
Equity in earnings of affiliates, net of income tax provision
|
—
|
|
|
—
|
|
|
2,341
|
|
|
—
|
|
|
2,341
|
|
|||||
Income before equity in income of consolidated subsidiaries
|
1,262
|
|
|
30,539
|
|
|
5,524
|
|
|
—
|
|
|
37,325
|
|
|||||
Income from consolidated subsidiaries, net of income tax provision
|
36,063
|
|
|
—
|
|
|
—
|
|
|
(36,063
|
)
|
|
—
|
|
|||||
Net income
|
37,325
|
|
|
30,539
|
|
|
5,524
|
|
|
(36,063
|
)
|
|
37,325
|
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
|||||
Net income attributable to The GEO Group, Inc.
|
$
|
37,325
|
|
|
$
|
30,539
|
|
|
$
|
5,620
|
|
|
$
|
(36,063
|
)
|
|
$
|
37,421
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
37,325
|
|
|
$
|
30,539
|
|
|
$
|
5,524
|
|
|
$
|
(36,063
|
)
|
|
$
|
37,325
|
|
Other comprehensive income (loss), net of tax
|
—
|
|
|
625
|
|
|
(2,783
|
)
|
|
—
|
|
|
(2,158
|
)
|
|||||
Total comprehensive income
|
$
|
37,325
|
|
|
$
|
31,164
|
|
|
$
|
2,741
|
|
|
$
|
(36,063
|
)
|
|
$
|
35,167
|
|
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
117
|
|
|||||
Comprehensive income attributable to The GEO Group, Inc.
|
$
|
37,325
|
|
|
$
|
31,164
|
|
|
$
|
2,858
|
|
|
$
|
(36,063
|
)
|
|
$
|
35,284
|
|
|
For the Six Months Ended June 30, 2019
|
||||||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary Guarantors |
|
Combined
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
461,921
|
|
|
$
|
993,296
|
|
|
$
|
130,607
|
|
|
$
|
(361,191
|
)
|
|
$
|
1,224,633
|
|
Operating expenses
|
360,826
|
|
|
804,477
|
|
|
106,053
|
|
|
(361,191
|
)
|
|
910,165
|
|
|||||
Depreciation and amortization
|
14,718
|
|
|
48,392
|
|
|
1,711
|
|
|
—
|
|
|
64,821
|
|
|||||
General and administrative expenses
|
35,013
|
|
|
48,781
|
|
|
9,901
|
|
|
—
|
|
|
93,695
|
|
|||||
Operating income
|
51,364
|
|
|
91,646
|
|
|
12,942
|
|
|
—
|
|
|
155,952
|
|
|||||
Interest income
|
6,975
|
|
|
3,515
|
|
|
15,915
|
|
|
(9,964
|
)
|
|
16,441
|
|
|||||
Interest expense
|
(46,423
|
)
|
|
(28,551
|
)
|
|
(14,202
|
)
|
|
9,964
|
|
|
(79,212
|
)
|
|||||
Loss on extinguishment of debt
|
(486
|
)
|
|
(790
|
)
|
|
(4,465
|
)
|
|
—
|
|
|
(5,741
|
)
|
|||||
Income before income taxes and equity in earnings of affiliates
|
11,430
|
|
|
65,820
|
|
|
10,190
|
|
|
—
|
|
|
87,440
|
|
|||||
Income tax provision
|
528
|
|
|
5,929
|
|
|
2,915
|
|
|
—
|
|
|
9,372
|
|
|||||
Equity in earnings of affiliates, net of income tax provision
|
—
|
|
|
—
|
|
|
4,417
|
|
|
—
|
|
|
4,417
|
|
|||||
Income before equity in income of consolidated subsidiaries
|
10,902
|
|
|
59,891
|
|
|
11,692
|
|
|
—
|
|
|
82,485
|
|
|||||
Income from consolidated subsidiaries, net of income tax provision
|
71,583
|
|
|
—
|
|
|
—
|
|
|
(71,583
|
)
|
|
—
|
|
|||||
Net income
|
82,485
|
|
|
59,891
|
|
|
11,692
|
|
|
(71,583
|
)
|
|
82,485
|
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
134
|
|
|||||
Net income attributable to The GEO Group, Inc.
|
$
|
82,485
|
|
|
$
|
59,891
|
|
|
$
|
11,826
|
|
|
$
|
(71,583
|
)
|
|
$
|
82,619
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
82,485
|
|
|
$
|
59,891
|
|
|
$
|
11,692
|
|
|
$
|
(71,583
|
)
|
|
$
|
82,485
|
|
Other comprehensive income (loss), net of tax
|
—
|
|
|
(605
|
)
|
|
7,507
|
|
|
—
|
|
|
6,902
|
|
|||||
Total comprehensive income
|
$
|
82,485
|
|
|
$
|
59,286
|
|
|
$
|
19,199
|
|
|
$
|
(71,583
|
)
|
|
$
|
89,387
|
|
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||
Comprehensive income attributable to The GEO Group, Inc.
|
$
|
82,485
|
|
|
$
|
59,286
|
|
|
$
|
19,328
|
|
|
$
|
(71,583
|
)
|
|
$
|
89,516
|
|
|
For the Six Months Ended June 30, 2018
|
||||||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary Guarantors |
|
Combined
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
397,816
|
|
|
$
|
933,694
|
|
|
$
|
136,062
|
|
|
$
|
(319,146
|
)
|
|
$
|
1,148,426
|
|
Operating expenses
|
312,944
|
|
|
759,006
|
|
|
111,702
|
|
|
(319,146
|
)
|
|
864,506
|
|
|||||
Depreciation and amortization
|
13,024
|
|
|
48,138
|
|
|
2,077
|
|
|
—
|
|
|
63,239
|
|
|||||
General and administrative expenses
|
30,622
|
|
|
48,185
|
|
|
10,473
|
|
|
—
|
|
|
89,280
|
|
|||||
Operating income
|
41,226
|
|
|
78,365
|
|
|
11,810
|
|
|
—
|
|
|
131,401
|
|
|||||
Interest income
|
7,583
|
|
|
2,864
|
|
|
18,292
|
|
|
(10,973
|
)
|
|
17,766
|
|
|||||
Interest expense
|
(37,695
|
)
|
|
(28,419
|
)
|
|
(17,073
|
)
|
|
10,973
|
|
|
(72,214
|
)
|
|||||
Loss on extinguishment of debt
|
(574
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(574
|
)
|
|||||
Income before income taxes and equity in earnings of affiliates
|
10,540
|
|
|
52,810
|
|
|
13,029
|
|
|
—
|
|
|
76,379
|
|
|||||
Income tax provision
|
893
|
|
|
3,742
|
|
|
3,835
|
|
|
—
|
|
|
8,470
|
|
|||||
Equity in earnings of affiliates, net of income tax provision
|
—
|
|
|
—
|
|
|
4,336
|
|
|
—
|
|
|
4,336
|
|
|||||
Income before equity in income of consolidated subsidiaries
|
9,647
|
|
|
49,068
|
|
|
13,530
|
|
|
—
|
|
|
72,245
|
|
|||||
Income from consolidated subsidiaries, net of income tax provision
|
62,598
|
|
|
—
|
|
|
—
|
|
|
(62,598
|
)
|
|
—
|
|
|||||
Net income
|
72,245
|
|
|
49,068
|
|
|
13,530
|
|
|
(62,598
|
)
|
|
72,245
|
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
163
|
|
|||||
Net income attributable to The GEO Group, Inc.
|
$
|
72,245
|
|
|
$
|
49,068
|
|
|
$
|
13,693
|
|
|
$
|
(62,598
|
)
|
|
$
|
72,408
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
72,245
|
|
|
$
|
49,068
|
|
|
$
|
13,530
|
|
|
$
|
(62,598
|
)
|
|
$
|
72,245
|
|
Other comprehensive income (loss), net of tax
|
—
|
|
|
730
|
|
|
(1,526
|
)
|
|
—
|
|
|
(796
|
)
|
|||||
Total comprehensive income
|
$
|
72,245
|
|
|
$
|
49,798
|
|
|
$
|
12,004
|
|
|
$
|
(62,598
|
)
|
|
$
|
71,449
|
|
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
176
|
|
|
—
|
|
|
176
|
|
|||||
Comprehensive income attributable to The GEO Group, Inc.
|
$
|
72,245
|
|
|
$
|
49,798
|
|
|
$
|
12,180
|
|
|
$
|
(62,598
|
)
|
|
$
|
71,625
|
|
|
As of June 30, 2019
|
||||||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
4,716
|
|
|
$
|
—
|
|
|
$
|
16,845
|
|
|
$
|
—
|
|
|
$
|
21,561
|
|
Restricted cash and cash equivalents
|
851
|
|
|
—
|
|
|
55,492
|
|
|
—
|
|
|
56,343
|
|
|||||
Accounts receivable, less allowance for doubtful accounts
|
163,184
|
|
|
186,592
|
|
|
41,825
|
|
|
3,119
|
|
|
394,720
|
|
|||||
Contract receivable, current portion
|
—
|
|
|
—
|
|
|
13,944
|
|
|
—
|
|
|
13,944
|
|
|||||
Prepaid expenses and other current assets
|
1,019
|
|
|
37,478
|
|
|
9,768
|
|
|
(1,949
|
)
|
|
46,316
|
|
|||||
Total current assets
|
169,770
|
|
|
224,070
|
|
|
137,874
|
|
|
1,170
|
|
|
532,884
|
|
|||||
Restricted Cash and Investments
|
—
|
|
|
25,708
|
|
|
1,650
|
|
|
—
|
|
|
27,358
|
|
|||||
Property and Equipment, Net
|
841,260
|
|
|
1,222,261
|
|
|
84,704
|
|
|
—
|
|
|
2,148,225
|
|
|||||
Assets Held for Sale
|
705
|
|
|
3,902
|
|
|
—
|
|
|
—
|
|
|
4,607
|
|
|||||
Contract Receivable
|
—
|
|
|
—
|
|
|
365,208
|
|
|
—
|
|
|
365,208
|
|
|||||
Operating Lease Right-of-Use Assets, Net
|
24,754
|
|
|
106,526
|
|
|
736
|
|
|
—
|
|
|
132,016
|
|
|||||
Intercompany Receivable
|
965,511
|
|
|
238,050
|
|
|
25,732
|
|
|
(1,229,293
|
)
|
|
—
|
|
|||||
Deferred Income Tax Assets
|
798
|
|
|
27,928
|
|
|
1,198
|
|
|
—
|
|
|
29,924
|
|
|||||
Goodwill
|
—
|
|
|
775,954
|
|
|
403
|
|
|
—
|
|
|
776,357
|
|
|||||
Intangible Assets, Net
|
—
|
|
|
220,670
|
|
|
552
|
|
|
—
|
|
|
221,222
|
|
|||||
Investment in Subsidiaries
|
1,479,372
|
|
|
573,816
|
|
|
2,189
|
|
|
(2,055,377
|
)
|
|
—
|
|
|||||
Other Non-Current Assets
|
11,361
|
|
|
116,819
|
|
|
20,424
|
|
|
(78,267
|
)
|
|
70,337
|
|
|||||
Total Assets
|
$
|
3,493,531
|
|
|
$
|
3,535,704
|
|
|
$
|
640,670
|
|
|
$
|
(3,361,767
|
)
|
|
$
|
4,308,138
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Accounts payable
|
$
|
18,083
|
|
|
$
|
67,982
|
|
|
$
|
5,192
|
|
|
$
|
—
|
|
|
$
|
91,257
|
|
Accrued payroll and related taxes
|
—
|
|
|
53,505
|
|
|
17,864
|
|
|
—
|
|
|
71,369
|
|
|||||
Accrued expenses and other current liabilities
|
28,829
|
|
|
132,868
|
|
|
27,639
|
|
|
(253
|
)
|
|
189,083
|
|
|||||
Operating lease liabilities, current portion
|
5,108
|
|
|
26,622
|
|
|
347
|
|
|
—
|
|
|
32,077
|
|
|||||
Current portion of finance lease liabilities, long-term debt and non-recourse debt
|
8,000
|
|
|
1,550
|
|
|
16,316
|
|
|
—
|
|
|
25,866
|
|
|||||
Total current liabilities
|
60,020
|
|
|
282,527
|
|
|
67,358
|
|
|
(253
|
)
|
|
409,652
|
|
|||||
Deferred Income Tax Liabilities
|
—
|
|
|
—
|
|
|
13,681
|
|
|
—
|
|
|
13,681
|
|
|||||
Intercompany Payable
|
106,062
|
|
|
1,086,737
|
|
|
35,070
|
|
|
(1,227,869
|
)
|
|
—
|
|
|||||
Other Non-Current Liabilities
|
2,362
|
|
|
153,949
|
|
|
3,768
|
|
|
(78,267
|
)
|
|
81,812
|
|
|||||
Operating lease Liabilities
|
20,199
|
|
|
82,256
|
|
|
389
|
|
|
—
|
|
|
102,844
|
|
|||||
Finance Lease Liabilities
|
—
|
|
|
3,779
|
|
|
—
|
|
|
—
|
|
|
3,779
|
|
|||||
Long-Term Debt
|
2,282,622
|
|
|
—
|
|
|
71,904
|
|
|
—
|
|
|
2,354,526
|
|
|||||
Non-Recourse Debt
|
—
|
|
|
—
|
|
|
320,306
|
|
|
—
|
|
|
320,306
|
|
|||||
Commitments & Contingencies and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
The GEO Group, Inc. Shareholders' Equity
|
1,022,266
|
|
|
1,926,456
|
|
|
128,922
|
|
|
(2,055,378
|
)
|
|
1,022,266
|
|
|||||
Noncontrolling Interests
|
—
|
|
|
—
|
|
|
(728
|
)
|
|
—
|
|
|
(728
|
)
|
|||||
Total Shareholders’ Equity
|
1,022,266
|
|
|
1,926,456
|
|
|
128,194
|
|
|
(2,055,378
|
)
|
|
1,021,538
|
|
|||||
Total Liabilities and Shareholders' Equity
|
$
|
3,493,531
|
|
|
$
|
3,535,704
|
|
|
$
|
640,670
|
|
|
$
|
(3,361,767
|
)
|
|
$
|
4,308,138
|
|
|
As of December 31, 2018
|
||||||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
4,468
|
|
|
$
|
7,873
|
|
|
$
|
18,914
|
|
|
$
|
—
|
|
|
$
|
31,255
|
|
Restricted cash and cash equivalents
|
2,854
|
|
|
—
|
|
|
48,824
|
|
|
—
|
|
|
51,678
|
|
|||||
Accounts receivable, less allowance for doubtful accounts
|
190,594
|
|
|
221,957
|
|
|
44,377
|
|
|
(11,402
|
)
|
|
445,526
|
|
|||||
Contract receivable, current portion
|
—
|
|
|
—
|
|
|
15,535
|
|
|
—
|
|
|
15,535
|
|
|||||
Prepaid expenses and other current assets
|
2,011
|
|
|
50,482
|
|
|
7,114
|
|
|
(1,839
|
)
|
|
57,768
|
|
|||||
Total current assets
|
199,927
|
|
|
280,312
|
|
|
134,764
|
|
|
(13,241
|
)
|
|
601,762
|
|
|||||
Restricted Cash and Investments
|
—
|
|
|
21,009
|
|
|
1,422
|
|
|
—
|
|
|
22,431
|
|
|||||
Property and Equipment, Net
|
845,291
|
|
|
1,227,223
|
|
|
86,096
|
|
|
—
|
|
|
2,158,610
|
|
|||||
Assets Held for Sale
|
705
|
|
|
1,929
|
|
|
—
|
|
|
—
|
|
|
2,634
|
|
|||||
Contract Receivable
|
—
|
|
|
—
|
|
|
368,178
|
|
|
|
|
368,178
|
|
||||||
Intercompany Receivable
|
990,365
|
|
|
150,710
|
|
|
22,407
|
|
|
(1,163,482
|
)
|
|
—
|
|
|||||
Deferred Income Tax Assets
|
798
|
|
|
27,928
|
|
|
1,198
|
|
|
—
|
|
|
29,924
|
|
|||||
Goodwill
|
—
|
|
|
775,955
|
|
|
404
|
|
|
—
|
|
|
776,359
|
|
|||||
Intangible Assets, Net
|
—
|
|
|
231,787
|
|
|
573
|
|
|
—
|
|
|
232,360
|
|
|||||
Investment in Subsidiaries
|
1,503,841
|
|
|
458,229
|
|
|
2,190
|
|
|
(1,964,260
|
)
|
|
—
|
|
|||||
Other Non-Current Assets
|
9,541
|
|
|
115,695
|
|
|
19,334
|
|
|
(78,710
|
)
|
|
65,860
|
|
|||||
Total Assets
|
$
|
3,550,468
|
|
|
$
|
3,290,777
|
|
|
$
|
636,566
|
|
|
$
|
(3,219,693
|
)
|
|
$
|
4,258,118
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Accounts payable
|
$
|
13,566
|
|
|
$
|
72,128
|
|
|
$
|
7,338
|
|
|
$
|
—
|
|
|
$
|
93,032
|
|
Accrued payroll and related taxes
|
—
|
|
|
56,543
|
|
|
19,466
|
|
|
—
|
|
|
76,009
|
|
|||||
Accrued expenses and other current liabilities
|
23,565
|
|
|
168,231
|
|
|
25,615
|
|
|
(13,241
|
)
|
|
204,170
|
|
|||||
Current portion of finance lease liabilities, long-term debt and non-recourse debt
|
8,000
|
|
|
2,017
|
|
|
322,010
|
|
|
—
|
|
|
332,027
|
|
|||||
Total current liabilities
|
45,131
|
|
|
298,919
|
|
|
374,429
|
|
|
(13,241
|
)
|
|
705,238
|
|
|||||
Deferred Income Tax Liabilities
|
—
|
|
|
—
|
|
|
13,681
|
|
|
—
|
|
|
13,681
|
|
|||||
Intercompany Payable
|
142,055
|
|
|
989,856
|
|
|
31,571
|
|
|
(1,163,482
|
)
|
|
—
|
|
|||||
Other Non-Current Liabilities
|
1,395
|
|
|
152,815
|
|
|
6,981
|
|
|
(78,710
|
)
|
|
82,481
|
|
|||||
Finance Lease Liabilities
|
—
|
|
|
4,570
|
|
|
—
|
|
|
—
|
|
|
4,570
|
|
|||||
Long-Term Debt
|
2,321,384
|
|
|
—
|
|
|
75,843
|
|
|
—
|
|
|
2,397,227
|
|
|||||
Non-Recourse Debt
|
—
|
|
|
—
|
|
|
15,017
|
|
|
—
|
|
|
15,017
|
|
|||||
Commitments & Contingencies and Other
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
The GEO Group, Inc. Shareholders' Equity
|
1,040,503
|
|
|
1,844,617
|
|
|
119,643
|
|
|
(1,964,260
|
)
|
|
1,040,503
|
|
|||||
Noncontrolling Interests
|
—
|
|
|
—
|
|
|
(599
|
)
|
|
—
|
|
|
(599
|
)
|
|||||
Total Shareholders’ Equity
|
1,040,503
|
|
|
1,844,617
|
|
|
119,044
|
|
|
(1,964,260
|
)
|
|
1,039,904
|
|
|||||
Total Liabilities and Shareholders' Equity
|
$
|
3,550,468
|
|
|
$
|
3,290,777
|
|
|
$
|
636,566
|
|
|
$
|
(3,219,693
|
)
|
|
$
|
4,258,118
|
|
|
For the Six Months Ended June 30, 2019
|
||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Consolidated
|
||||||||
Cash Flow from Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
$
|
130,455
|
|
|
$
|
31,924
|
|
|
$
|
54,688
|
|
|
$
|
217,067
|
|
Cash Flow from Investing Activities:
|
|
|
|
|
|
|
|
||||||||
Insurance proceeds - damaged property
|
—
|
|
|
10,761
|
|
|
—
|
|
|
10,761
|
|
||||
Proceeds from sale of property and equipment
|
—
|
|
|
112
|
|
|
192
|
|
|
304
|
|
||||
Change in restricted investments
|
—
|
|
|
(4,816
|
)
|
|
—
|
|
|
(4,816
|
)
|
||||
Capital expenditures
|
(12,002
|
)
|
|
(42,804
|
)
|
|
(604
|
)
|
|
(55,410
|
)
|
||||
Net cash used in investing activities
|
(12,002
|
)
|
|
(36,747
|
)
|
|
(412
|
)
|
|
(49,161
|
)
|
||||
Cash Flow from Financing Activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from long-term debt
|
170,000
|
|
|
—
|
|
|
—
|
|
|
170,000
|
|
||||
Payments on long-term debt
|
(213,926
|
)
|
|
—
|
|
|
—
|
|
|
(213,926
|
)
|
||||
Payments on non-recourse debt
|
—
|
|
|
—
|
|
|
(326,942
|
)
|
|
(326,942
|
)
|
||||
Proceeds from non-recourse debt
|
—
|
|
|
—
|
|
|
326,127
|
|
|
326,127
|
|
||||
Taxes paid related to net share settlements of equity awards
|
(4,177
|
)
|
|
—
|
|
|
—
|
|
|
(4,177
|
)
|
||||
Proceeds from issuance of common stock in connection with ESPP
|
252
|
|
|
—
|
|
|
—
|
|
|
252
|
|
||||
Debt issuance costs
|
(4,656
|
)
|
|
—
|
|
|
(5,281
|
)
|
|
(9,937
|
)
|
||||
Proceeds from stock options exercised
|
1,077
|
|
|
—
|
|
|
—
|
|
|
1,077
|
|
||||
Dividends paid
|
(116,122
|
)
|
|
—
|
|
|
—
|
|
|
(116,122
|
)
|
||||
Net cash used in financing activities
|
(167,552
|
)
|
|
—
|
|
|
(6,096
|
)
|
|
(173,648
|
)
|
||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
|
—
|
|
|
—
|
|
|
824
|
|
|
824
|
|
||||
Net (Decrease) Increase in Cash. Cash Equivalents and Restricted Cash and Cash Equivalents
|
(49,099
|
)
|
|
(4,823
|
)
|
|
49,004
|
|
|
(4,918
|
)
|
||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period
|
54,666
|
|
|
4,823
|
|
|
24,983
|
|
|
84,472
|
|
||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period
|
$
|
5,567
|
|
|
$
|
—
|
|
|
$
|
73,987
|
|
|
$
|
79,554
|
|
|
For the Six Months Ended June 30, 2018
|
||||||||||||||
|
The GEO Group, Inc.
|
|
Combined
Subsidiary
Guarantors
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Consolidated
|
||||||||
Cash Flow from Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
$
|
118,354
|
|
|
$
|
37,087
|
|
|
$
|
24,812
|
|
|
$
|
180,253
|
|
Cash Flow from Investing Activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from sale of property and equipment
|
—
|
|
|
—
|
|
|
1,717
|
|
|
1,717
|
|
||||
Proceeds from sale of assets held for sale
|
—
|
|
|
3,797
|
|
|
|
|
|
3,797
|
|
||||
Insurance proceeds - damaged property
|
—
|
|
|
4,036
|
|
|
—
|
|
|
4,036
|
|
||||
Change in restricted investments
|
—
|
|
|
(1,490
|
)
|
|
—
|
|
|
(1,490
|
)
|
||||
Capital expenditures
|
(68,607
|
)
|
|
(36,998
|
)
|
|
(1,459
|
)
|
|
(107,064
|
)
|
||||
Net cash used in investing activities
|
(68,607
|
)
|
|
(30,655
|
)
|
|
258
|
|
|
(99,004
|
)
|
||||
Cash Flow from Financing Activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from long-term debt
|
245,000
|
|
|
—
|
|
|
—
|
|
|
245,000
|
|
||||
Payments on long-term debt
|
(134,000
|
)
|
|
—
|
|
|
—
|
|
|
(134,000
|
)
|
||||
Payments on non-recourse debt
|
—
|
|
|
—
|
|
|
(7,490
|
)
|
|
(7,490
|
)
|
||||
Taxes paid related to net share settlements of equity awards
|
(4,391
|
)
|
|
—
|
|
|
—
|
|
|
(4,391
|
)
|
||||
Proceeds from issuance of common stock in connection with ESPP
|
264
|
|
|
—
|
|
|
—
|
|
|
264
|
|
||||
Debt issuance costs
|
(990
|
)
|
|
—
|
|
|
—
|
|
|
(990
|
)
|
||||
Proceeds from stock options exercised
|
1,372
|
|
|
—
|
|
|
—
|
|
|
1,372
|
|
||||
Payments for repurchases of common stock
|
(70,446
|
)
|
|
—
|
|
|
—
|
|
|
(70,446
|
)
|
||||
Dividends paid
|
(115,017
|
)
|
|
—
|
|
|
—
|
|
|
(115,017
|
)
|
||||
Net cash used in financing activities
|
(78,208
|
)
|
|
—
|
|
|
(7,490
|
)
|
|
(85,698
|
)
|
||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
|
—
|
|
|
—
|
|
|
(1,881
|
)
|
|
(1,881
|
)
|
||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
|
(28,461
|
)
|
|
6,432
|
|
|
15,699
|
|
|
(6,330
|
)
|
||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period
|
54,666
|
|
|
4,952
|
|
|
73,927
|
|
|
133,545
|
|
||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period
|
$
|
26,205
|
|
|
$
|
11,384
|
|
|
$
|
89,626
|
|
|
$
|
127,215
|
|
•
|
our ability to timely build and/or open facilities as planned, successfully manage such facilities and successfully integrate such facilities into our operations without substantial additional costs;
|
•
|
our ability to fulfill our debt service obligations and its impact on our liquidity;
|
•
|
our ability to successfully refinance any of our debt service obligations within the anticipated timing;
|
•
|
our ability to estimate the government’s level of utilization of public-private partnerships for secure services and the impact of any modifications or reductions by our government customers of their utilization of public-private partnerships;
|
•
|
our ability to accurately project the size and growth of public-private partnerships for secure services in the U.S. and internationally and our ability to capitalize on opportunities for public-private partnerships;
|
•
|
our ability to successfully respond to any challenges or concerns that our government customers may raise regarding their use of public-private partnerships for secure services;
|
•
|
our ability to successfully respond to delays encountered by states pursuing public-private partnerships for secure services and cost savings initiatives implemented by a number of states;
|
•
|
our ability to activate the inactive beds at our idle facilities;
|
•
|
our ability to maintain or increase occupancy rates at our facilities;
|
•
|
our ability to expand, diversify and grow our secure services, reentry, community-based services, monitoring services, evidence-based supervision and treatment programs and secure transportation services businesses;
|
•
|
our ability to win management contracts for which we have submitted proposals, retain existing management contracts and meet any performance standards required by such management contracts;
|
•
|
our ability to control operating costs associated with contract start-ups;
|
•
|
our ability to raise new project development capital given the often short-term nature of the customers’ commitment to use newly developed facilities;
|
•
|
our ability to develop long-term earnings visibility;
|
•
|
our ability to identify suitable acquisitions, and to successfully complete and integrate such acquisitions on satisfactory terms, to enhance occupancy levels and the financial performance of assets acquired and estimate the synergies to be achieved as a result of such acquisitions;
|
•
|
our exposure to the impairment of goodwill and other intangible assets as a result of our acquisitions;
|
•
|
our ability to successfully conduct our operations in the United Kingdom, South Africa and Australia through joint ventures or a consortium;
|
•
|
our ability to obtain future financing on satisfactory terms or at all, including our ability to secure the funding we need to complete ongoing capital projects;
|
•
|
our exposure to political and economic instability and other risks impacting our international operations;
|
•
|
the instability of foreign exchange rates, exposing us to currency risks in Australia, the United Kingdom, and
|
•
|
our exposure to risks impacting our information systems, including those that may cause an interruption, delay or failure in the provision of our services;
|
•
|
our exposure to rising general insurance costs;
|
•
|
an increase in unreimbursed labor rates;
|
•
|
our exposure to federal, state and foreign income tax law changes, including changes to the REIT provisions and the Tax Cuts and Jobs Act and our exposure as a result of federal, state and international examinations of our tax returns or tax positions and examinations of non-income tax filings as well as changes in related laws;
|
•
|
our exposure to claims for which we are uninsured;
|
•
|
our exposure to rising medical costs;
|
•
|
our ability to manage costs and expenses relating to ongoing litigation arising from our operations;
|
•
|
our ability to accurately estimate on an annual basis, loss reserves related to general liability, workers compensation and automobile liability claims;
|
•
|
the ability of our government customers to secure budgetary appropriations to fund their payment obligations to us and continue to operate under our existing agreements and/or renew our existing agreements;
|
•
|
our ability to pay quarterly dividends consistent with our requirements as a REIT, and expectations as to timing and amounts;
|
•
|
our ability to remain qualified for taxation as a real estate investment trust, or REIT;
|
•
|
our ability to comply with government regulations and applicable contractual requirements;
|
•
|
the risk that a number of factors could adversely affect the market price of our common stock;
|
•
|
our ability to fully implement our stock buyback program and the timing and amounts of any future stock repurchases; and
|
•
|
other factors contained in our filings with the Securities and Exchange Commission, or the SEC, including, but not limited to, those detailed in our Quarterly Reports on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2018 and our Current Reports on Form 8-K filed with the SEC.
|
•
|
our secure services management services involve the provision of security, administrative, rehabilitation, education and provision of meals, primarily at adult male secure services facilities;
|
•
|
our community-based services involve supervision of parolees and probationers and the provision of temporary housing, programming, employment assistance and other rehabilitative and educational program and services with the intention of the successful reintegration of residents into the community;
|
•
|
our monitoring services provide our governmental clients with innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants; including services provided under the Intensive Supervision Appearance Program, which we refer to as ISAP, for the provision of services designed to improve the participation in the immigration court system;
|
•
|
we develop new facilities using our project development experience to design, construct and finance what we believe are state-of-the-art facilities that maximize security and efficiency;
|
•
|
we provide secure transportation services for individuals as contracted domestically and internationally - our joint venture GEOAmey is responsible for providing escort and custody services in the United Kingdom, including all of Wales and England except London and the East of England; and
|
•
|
our services are provided at facilities which we either own, lease or are owned by our customers.
|
|
2019
|
|
% of Revenue
|
|
2018
|
|
% of Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
GEO Secure Services
|
$
|
399,475
|
|
|
65.1
|
%
|
|
$
|
368,989
|
|
|
63.2
|
%
|
|
$
|
30,486
|
|
|
8.3
|
%
|
GEO Care
|
155,507
|
|
|
25.3
|
%
|
|
149,928
|
|
|
25.7
|
%
|
|
5,579
|
|
|
3.7
|
%
|
|||
International Services
|
54,388
|
|
|
8.9
|
%
|
|
64,592
|
|
|
11.1
|
%
|
|
(10,204
|
)
|
|
(15.8
|
)%
|
|||
Facility Construction & Design
|
4,596
|
|
|
0.7
|
%
|
|
—
|
|
|
—
|
%
|
|
4,596
|
|
|
100.0
|
%
|
|||
Total
|
$
|
613,966
|
|
|
100.0
|
%
|
|
$
|
583,509
|
|
|
100.0
|
%
|
|
$
|
30,457
|
|
|
5.2
|
%
|
|
2019
|
|
% of Segment
Revenues |
|
2018
|
|
% of Segment
Revenues |
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
GEO Secure Services
|
$
|
294,727
|
|
|
73.8
|
%
|
|
$
|
272,695
|
|
|
73.9
|
%
|
|
$
|
22,032
|
|
|
8.1
|
%
|
GEO Care
|
102,771
|
|
|
66.1
|
%
|
|
103,054
|
|
|
68.7
|
%
|
|
(283
|
)
|
|
(0.3
|
)%
|
|||
International Services
|
51,074
|
|
|
93.9
|
%
|
|
62,048
|
|
|
96.1
|
%
|
|
(10,974
|
)
|
|
(17.7
|
)%
|
|||
Facility Construction & Design
|
4,596
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
%
|
|
4,596
|
|
|
100.0
|
%
|
|||
Total
|
$
|
453,168
|
|
|
73.8
|
%
|
|
$
|
437,797
|
|
|
75.0
|
%
|
|
$
|
15,371
|
|
|
3.5
|
%
|
|
2019
|
|
% of Segment
Revenue |
|
2018
|
|
% of Segment
Revenue |
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
GEO Secure Services
|
$
|
19,589
|
|
|
4.9
|
%
|
|
$
|
18,976
|
|
|
5.1
|
%
|
|
$
|
613
|
|
|
3.2
|
%
|
GEO Care
|
12,369
|
|
|
8.0
|
%
|
|
11,735
|
|
|
7.8
|
%
|
|
634
|
|
|
5.4
|
%
|
|||
International Services
|
394
|
|
|
0.7
|
%
|
|
602
|
|
|
0.9
|
%
|
|
(208
|
)
|
|
(34.6
|
)%
|
|||
Total
|
$
|
32,352
|
|
|
5.3
|
%
|
|
$
|
31,313
|
|
|
5.4
|
%
|
|
$
|
1,039
|
|
|
3.3
|
%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
General and Administrative Expenses
|
$
|
47,271
|
|
|
7.7
|
%
|
|
$
|
47,448
|
|
|
7.4
|
%
|
|
$
|
(177
|
)
|
|
(0.4
|
)%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Interest Income
|
$
|
8,045
|
|
|
1.3
|
%
|
|
$
|
8,667
|
|
|
1.5
|
%
|
|
$
|
(622
|
)
|
|
(7.2
|
)%
|
Interest Expense
|
$
|
38,932
|
|
|
6.3
|
%
|
|
$
|
36,345
|
|
|
6.2
|
%
|
|
$
|
2,587
|
|
|
7.1
|
%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Loss on Extinguishment of Debt
|
$
|
5,741
|
|
|
0.9%
|
|
$
|
574
|
|
|
—
|
%
|
|
$
|
5,167
|
|
|
900.2
|
%
|
|
2019
|
|
Effective Rate
|
|
2018
|
|
Effective Rate
|
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Provision for Income Taxes
|
$
|
4,532
|
|
|
10.2
|
%
|
|
$
|
3,715
|
|
|
9.6
|
%
|
|
$
|
817
|
|
|
22.0
|
%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Equity in Earnings of Affiliates
|
$
|
1,821
|
|
|
0.3
|
%
|
|
$
|
2,341
|
|
|
0.4
|
%
|
|
$
|
(520
|
)
|
|
(22.2
|
)%
|
|
2019
|
|
% of Revenue
|
|
2018
|
|
% of Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
GEO Secure Services
|
$
|
789,985
|
|
|
64.5%
|
|
$
|
727,670
|
|
|
64.0
|
%
|
|
$
|
62,315
|
|
|
8.6
|
%
|
|
GEO Care
|
309,350
|
|
|
25.3%
|
|
290,006
|
|
|
25.3
|
%
|
|
19,344
|
|
|
6.7
|
%
|
||||
International Services
|
118,612
|
|
|
9.7%
|
|
130,750
|
|
|
11.4
|
%
|
|
(12,138
|
)
|
|
(9.3
|
)%
|
||||
Facility Construction & Design
|
6,686
|
|
|
0.5%
|
|
—
|
|
|
—
|
%
|
|
6,686
|
|
|
100.0
|
%
|
||||
Total
|
$
|
1,224,633
|
|
|
100.0
|
%
|
|
$
|
1,148,426
|
|
|
100.0
|
%
|
|
$
|
76,207
|
|
|
6.6
|
%
|
|
2019
|
|
% of Segment
Revenues |
|
2018
|
|
% of Segment
Revenues |
|
$ Change
|
|
% Change
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
GEO Secure Services
|
$
|
587,156
|
|
|
74.3%
|
|
$
|
543,143
|
|
|
74.6
|
%
|
|
$
|
44,013
|
|
|
8.1
|
%
|
GEO Care
|
$
|
207,177
|
|
|
67.0%
|
|
$
|
199,130
|
|
|
68.7
|
%
|
|
$
|
8,047
|
|
|
4.0
|
%
|
International Services
|
$
|
109,146
|
|
|
92.0%
|
|
$
|
122,233
|
|
|
93.5
|
%
|
|
$
|
(13,087
|
)
|
|
(10.7
|
)%
|
Facility Construction & Design
|
$
|
6,686
|
|
|
100.0%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
6,686
|
|
|
100.0
|
%
|
Total
|
$
|
910,165
|
|
|
74.3%
|
|
$
|
864,506
|
|
|
75.3
|
%
|
|
$
|
45,659
|
|
|
5.3
|
%
|
|
2019
|
|
% of Segment
Revenue |
|
2018
|
|
% of Segment
Revenue |
|
$ Change
|
|
% Change
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
GEO Secure Services
|
$
|
39,452
|
|
|
5.0%
|
|
$
|
37,473
|
|
|
5.1
|
%
|
|
$
|
1,979
|
|
|
5.3
|
%
|
GEO Care
|
$
|
24,562
|
|
|
7.9%
|
|
$
|
22,376
|
|
|
7.7
|
%
|
|
$
|
2,186
|
|
|
9.8
|
%
|
International Services
|
$
|
807
|
|
|
0.7%
|
|
$
|
966
|
|
|
0.7
|
%
|
|
$
|
(159
|
)
|
|
(16.5
|
)%
|
Total
|
$
|
64,821
|
|
|
5.3%
|
|
$
|
60,815
|
|
|
5.4
|
%
|
|
$
|
4,006
|
|
|
6.6
|
%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
||||||
|
(Dollars in thousands)
|
||||||||||||||||
General and Administrative Expenses
|
$93,695
|
|
7.7%
|
|
$
|
89,280
|
|
|
7.8
|
%
|
|
$
|
4,415
|
|
|
4.9
|
%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Interest Income
|
$
|
16,441
|
|
|
1.3%
|
|
$
|
17,766
|
|
|
1.5
|
%
|
|
$
|
(1,325
|
)
|
|
(7.5
|
)%
|
Interest Expense
|
$
|
79,212
|
|
|
6.5%
|
|
$
|
72,214
|
|
|
6.3
|
%
|
|
$
|
6,998
|
|
|
9.7
|
%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Loss on Extinguishment of Debt
|
$
|
5,741
|
|
|
0.9%
|
|
$
|
574
|
|
|
—
|
%
|
|
$
|
5,167
|
|
|
900.2
|
%
|
|
2019
|
|
Effective Rate
|
|
2018
|
|
Effective Rate
|
|
$ Change
|
|
% Change
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||||||
Provision for Income Taxes
|
$9,372
|
|
10.7
|
%
|
|
$
|
8,470
|
|
|
11.1
|
%
|
|
$
|
902
|
|
|
10.6
|
%
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
|
$ Change
|
|
% Change
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Equity in Earnings of Affiliates
|
$
|
4,417
|
|
|
0.4%
|
|
$
|
4,336
|
|
|
0.4
|
%
|
|
$
|
81
|
|
|
1.9
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income attributable to The GEO Group, Inc.
|
$
|
41,914
|
|
|
$
|
37,421
|
|
|
$
|
82,619
|
|
|
$
|
72,408
|
|
Add (Subtract):
|
|
|
|
|
|
|
|
||||||||
Real estate related depreciation and amortization
|
17,937
|
|
|
17,509
|
|
|
36,039
|
|
|
34,897
|
|
||||
Loss on real estate assets
|
—
|
|
|
590
|
|
|
1,497
|
|
|
492
|
|
||||
NAREIT Defined FFO
|
$
|
59,851
|
|
|
$
|
55,520
|
|
|
$
|
120,155
|
|
|
$
|
107,797
|
|
Add (Subtract):
|
|
|
|
|
|
|
|
||||||||
Net Tax Cuts and Jobs Act Impact
|
—
|
|
|
—
|
|
|
—
|
|
|
304
|
|
||||
Start-up expenses, pre-tax
|
1,874
|
|
|
98
|
|
|
1,874
|
|
|
98
|
|
||||
Legal related expenses, pre-tax
|
—
|
|
|
4,500
|
|
|
—
|
|
|
4,500
|
|
||||
Escrow releases, pre-tax
|
—
|
|
|
(2,273
|
)
|
|
—
|
|
|
(2,273
|
)
|
||||
Loss on extinguishment of debt, pre-tax
|
5,741
|
|
|
574
|
|
|
5,741
|
|
|
574
|
|
||||
Tax effect of adjustments to Funds From Operations *
|
(853
|
)
|
|
(713
|
)
|
|
(899
|
)
|
|
(713
|
)
|
||||
Normalized Funds from Operations
|
$
|
66,613
|
|
|
$
|
57,706
|
|
|
$
|
126,871
|
|
|
$
|
110,287
|
|
Add (Subtract):
|
|
|
|
|
|
|
|
||||||||
Non-real estate related depreciation and amortization
|
14,415
|
|
|
13,804
|
|
|
28,782
|
|
|
28,342
|
|
||||
Consolidated maintenance capital expenditures
|
(5,515
|
)
|
|
(6,076
|
)
|
|
(9,149
|
)
|
|
(11,399
|
)
|
||||
Stock-based compensation expense
|
5,454
|
|
|
4,960
|
|
|
12,180
|
|
|
10,787
|
|
||||
Amortization of debt issuance costs, discount and/or premium and other non-cash interest
|
2,460
|
|
|
1,855
|
|
|
5,023
|
|
|
3,992
|
|
||||
Adjusted Funds from Operations
|
$
|
83,427
|
|
|
$
|
72,249
|
|
|
$
|
163,707
|
|
|
$
|
142,009
|
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (2)
|
||||||
April 1, 2019 - April 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
104.8
|
|
May 1, 2019 - May 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
104.8
|
|
June 1, 2019 - June 30, 2019
|
|
229
|
|
|
$
|
23.69
|
|
|
—
|
|
|
$
|
104.8
|
|
Total
|
|
229
|
|
|
|
|
—
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
THE GEO GROUP, INC.
|
|
|
|
|
Date:
|
August 2, 2019
|
|
/s/ Brian R. Evans
|
|
|
|
Brian R. Evans
|
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
|
(duly authorized officer and principal financial officer)
|
Exhibit 10.1
EXECUTION VERSION
Certain identified information has been excluded from the exhibit because it is both (1) not material and (2) would be competitively harmful if publicly disclosed.
AMENDMENT NO. 2 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 12, 2019 (this Amendment), by and among each of the Revolving Credit Lenders, each of the Issuing Lenders, the Swingline Lender and any other Lender party hereto (each, a Consenting Lender), The GEO Group, Inc. (GEO), GEO Corrections Holdings, Inc. (Corrections, and together with GEO, the Borrowers), GEO Australasia Holdings PTY LTD (GEO Australasia Holdings), GEO Australasia Finance Holdings PTY LTD as trustee of the GEO Australasia Finance Holding Trust (the Australasian Trust) (the Australian Trustee and together with GEO Australasia Holdings, collectively, the Australian Borrowers) and BNP Paribas, as administrative agent for the Lenders under the Existing Credit Agreement and the Amended Credit Agreement, each referred to below (in such capacities, the Administrative Agent). Capitalized terms used but not defined herein have the meaning given to such terms in the Existing Credit Agreement.
WHEREAS, reference is made to the Third Amended and Restated Credit Agreement, dated as of March 23, 2017 (as amended pursuant to Amendment No. 1 dated as of April 30, 2018 and as further amended, restated, supplemented or otherwise modified to the Amendment Effective Time (as defined below), the Existing Credit Agreement; and as amended by this Amendment, the Amended Credit Agreement), among the Borrowers, the Australian Borrowers, the Lenders from time to time party thereto and the Administrative Agent;
WHEREAS, the Borrowers and the Australian Borrowers have requested that the Existing Credit Agreement be amended to extend the maturity date of the revolving credit facility thereunder and otherwise in the manner and at the time set forth in Section 1 below;
WHEREAS, pursuant to Section 9.02(b) of the Existing Credit Agreement, such amendment requires the consent of the Administrative Agent, each of the Issuing Lenders, the Swingline Lender and each of the Revolving Credit Lenders; and
WHEREAS, the Consenting Lenders are willing to so amend the Existing Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in good and valuable consideration for the promises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:
1. Amendment of the Existing Credit Agreement. Immediately upon the Amendment Effective Time, the Existing Credit Agreement shall be amended as follows:
(a) Section 1.01 of the Existing Credit Agreement is hereby amended by adding the following definitions in appropriate alphabetical order:
(i) Amendment No. 2 means that certain Amendment No. 2 to Third Amended and Restated Credit Agreement, dated as of the Amendment No. 2 Effective Date, by and among the Borrowers, the Australian Borrowers, the Administrative Agent, the Swingline Lender, each of the Issuing Lenders, each of the Revolving Credit Lenders and any other Lender party thereto.
(ii) Amendment No. 2 Effective Date means June 12, 2019.
(iii) Beneficial Ownership Certification means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
(iv) Beneficial Ownership Regulation means 31 C.F.R. § 1010.230.
(b) The definition of Excluded Swap Obligation set out in Section 1.01 of the Existing Credit Agreement is hereby amended by inserting the words (i) any obligations and liabilities under Hedging Agreements entered into in connection with any Indebtedness permitted by Section 6.01(k) and (ii) immediately after the word means at the beginning thereof.
(c) [ ]
(d) The definition of Revolving Credit Commitment Termination Date set out in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety to read as follows:
Revolving Credit Commitment Termination Date means May 17, 2024.
(e) The Existing Credit Agreement is hereby amended by inserting the following new Section 1.10 immediately after Section 1.09 thereof:
Section 1.10 Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdictions laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.
(g) The Existing Credit Agreement is hereby amended by replacing the period at the end of Section 5.01(h) thereof with ; and, and adding the following new Section 5.01(i) immediately thereafter:
(i) promptly following any request therefor, such additional information and documentation regarding each Loan Party reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable know your customer and AML Laws, including without limitation the Patriot Act and the Beneficial Ownership Regulation.
(h) Section 6.02(h) of the Existing Credit Agreement is hereby amended by inserting the words or any obligations or liabilities under any related Hedging Agreements immediately after the reference therein to Indebtedness permitted by Section 6.01(k).
(i) Section 6.03(f) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
(f) GEO or any Restricted Subsidiary may sell or discount without recourse accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof in the ordinary course of business, provided that the aggregate face or principal amount of all such accounts receivable sold at less than par value or otherwise discounted after the Amendment No. 2 Effective Date shall not exceed $25,000,000;.
2
(j) The Existing Credit Agreement is hereby amended by inserting the following new Section 9.18 immediately after Section 9.17 thereof:
Section 9.18 Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap Obligations or any other agreement or instrument that is a QFC (such support, QFC Credit Support, and each such QFC, a Supported QFC), the parties hereto acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the U.S. Special Resolution Regimes) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
(a) In the event a Covered Entity that is party to a Supported QFC (each, a Covered Party) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b) As used in this Section 9.18, the following terms have the following meanings:
(i) BHC Act Affiliate of a party means an affiliate (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
(ii) Covered Entity means any of the following: (i) a covered entity as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a covered bank as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a covered FSI as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
(iii) Default Right has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
(iv) QFC has the meaning assigned to the term qualified financial contract in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
3
2. Conditions to Amendment Effective Time. The effectiveness of this Amendment is contingent upon (i) satisfaction (or waiver in accordance with Section 4) of the conditions set forth in Section III of Annex I hereto and (ii) receipt by the Administrative Agent of fully compiled and executed counterparts of this Amendment (or Lender Addenda hereto) duly executed by the Administrative Agent, each Issuing Lender, the Swingline Lender, each Revolving Credit Lender, the Required Lenders, the Borrowers and the Australian Borrowers, in each case on the date hereof (the first time at which clauses (i) and (ii) are satisfied, the Amendment Effective Time).
3. Representations and Warranties. (a) By its execution of this Amendment, each of the Borrowers hereby certifies that all of the representations and warranties of (i) the Borrowers set forth in Section I of Annex I hereto are true and correct in all respects and (ii) the Loan Parties set forth in the Loan Documents are true and correct in all material respects (provided that any such representations and warranties qualified as to materiality, Material Adverse Effect or similar language are true and correct in all respects), in each case under clauses (i) and (iii) as of the Amendment Effective Time (or, to the extent such representations and warranties referred to in clause (ii) specifically refer to an earlier date or time, as of such earlier date or time).
(a) By its execution of this Amendment, each of the Australian Borrowers hereby certifies that all of the representations and warranties of the Australian Borrowers, (i) set forth in Section II of Annex I hereto are true and correct in all respects and (ii) set forth in the Loan Documents are true and correct in all material respects (provided that any such representations and warranties qualified as to materiality, Material Adverse Effect or similar language are true and correct in all respects), in each case under clauses (i) and (iii) as of the Amendment Effective Time (or, to the extent such representations and warranties referred to in clause (ii) specifically refer to an earlier date or time, as of such earlier date or time).
4. Amendment, Modification and Waiver. This Amendment may not be amended nor may any provision hereof be waived except pursuant to a writing signed by each of the parties hereto.
5. Entire Agreement; References. This Amendment, the Existing Credit Agreement, the Amended Credit Agreement and the other Loan Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof. Each reference to hereof, hereunder, herein and hereby and each other similar reference and each reference to this Agreement and each other similar reference contained in the Existing Credit Agreement shall, from the Amendment Effective Time, refer to the Amended Credit Agreement.
6. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Amendment and any claim, controversy or dispute arising under or related to this Amendment, whether in tort, contract (at law or in equity) or otherwise, shall be construed in accordance with and governed by the laws of the State of New York.
(b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York and of the United States District Court of the Southern District of New York, in each case sitting in New York County, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Amendment, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final
4
judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in any Loan Document shall affect any right that the Administrative Agent or any Consenting Lender may otherwise have to bring any action or proceeding relating to any Loan Document against the Loan Parties or their respective properties in the courts of any jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to any Loan Document in any court referred to in Section 6(b) above. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Amendment irrevocably consents to service of process in the manner provided for notices in Sections 9.01 and 9.09(d) of the Existing Credit Agreement. Nothing in any Loan Document will affect the right of any party to this Amendment to serve process in any other manner permitted by applicable law.
7. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
8. Severability. Any term or provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality or enforceability of the remaining terms and provisions of this Amendment or affecting the validity or enforceability of any of the terms or provisions of this Amendment, and the invalidity of a particular term or provision in a particular jurisdiction shall not invalidate such term or provision in any other jurisdiction. If any term or provision of this Amendment is so broad as to be unenforceable, the term or provision shall be interpreted to be only so broad as would be enforceable.
9. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall constitute a single agreement.
10. Special Acknowledgement and Agreement. It is hereby (x) acknowledged that the Collateral excludes, for so long as the Administrative Agent elects (in its sole discretion), at GEOs request, to not encumber such Material Real Property in accordance with Section 5.10 of the Existing Credit Agreement, the Loan Parties facility known as the Montgomery Processing Center located in Conroe, Texas, and (y) agreed that GEO shall be deemed to have timely complied with the written notice requirements of clause (x) of Section 5.11(c) of the Existing Credit Agreement with respect to the extension of the Revolving Credit Commitment Termination Date contemplated by this Amendment if such notice shall have been furnished to the Lenders at least one day prior to the Amendment Effective Time.
5
11. Loan Document. This Amendment constitutes a Loan Document for purposes of the Existing Credit Agreement and the other Loan Documents.
[Remainder of Page Intentionally Left Blank]
6
IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Amendment as of the date first written above.
BNP PARIBAS, as the Administrative Agent, an Issuing Lender, the Swingline Lender and a Revolving Credit Lender |
By: |
/s/ Merie Smith |
Name: | Merie Smith | |
Title: | Vice President |
By: |
/s/ Sang W. Han |
Name: | Sang W. Han | |
Title: | Director |
[Amendment No. 2 to Third Amended and Restated Credit Agreement The GEO Group, Inc.]
THE GEO GROUP, INC. |
By: |
/s/ Brian R. Evans |
Name: | Brian R. Evans | |
Title: |
Senior Vice President & Chief Financial Officer |
GEO CORRECTIONS HOLDINGS, INC. |
By: |
/s/ Brian R. Evans |
Name: | Brian R. Evans | |
Title: |
Vice President & Chief Financial Officer |
[Amendment No. 2 to Third Amended and Restated Credit Agreement The GEO Group, Inc.]
[Amendment No. 2 to Third Amended and Restated Credit Agreement The GEO Group, Inc.]
ANNEX I
TO AMENDMENT NO.2
TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
OTHER TERMS AND CONDITIONS
I. Additional Representations and Warranties of the Borrowers.
To induce the Consenting Lenders and the Administrative Agent to enter into this Amendment and to consent to the amendments to the Existing Credit Agreement contemplated hereby, the Borrowers hereby represent and warrant as of the Amendment Effective Time that:
1. Corporate Power; Authorization; Enforceable Obligations.
(a) Each Loan Party is duly organized or incorporated and validly existing and has all the corporate or other organizational power and authority to execute, deliver and perform its obligations under this Amendment and the Confirmation and Reaffirmation Agreement delivered in connection herewith (the Confirmation), as applicable. Each Loan Party has taken all necessary corporate or other action to authorize the execution, delivery and performance of this Amendment and the Confirmation, as applicable.
(b) Each of this Amendment and the Confirmation have been duly executed and delivered on behalf of each Loan Party party hereto or thereto, and constitutes a legal, valid and binding obligation of each Loan Party party hereto or thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and the implied covenants of good faith and fair dealing.
2. No Event of Default. Immediately before and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing.
3. No Legal Bar. The execution, delivery and performance of this Amendment and the Confirmation by each Loan Party party hereto or thereto (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except for such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of GEO or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture or other agreement or instrument binding upon GEO or any of its Subsidiaries or assets, or give rise to a right thereunder to require any payment, repurchase or redemption to be made by any such Person, or result in, termination, cancellation or acceleration of any obligation thereunder and (d) will not result in the creation or imposition of any Lien on any asset of GEO or any of its Subsidiaries (other than any Liens created under the Loan Documents), except (in the case of each of clauses (a), (b) and (c) of this paragraph) to the extent that the failure to obtain or make such consent, approval, registration, filing or action, or such violation, as the case may be, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
4. Solvency. GEO and its Subsidiaries are (when taken as a whole on a consolidated basis), and immediately after giving effect this Amendment will be, Solvent.
Annex I-1
5. Beneficial Ownership Certification. As of the Amendment Effective Time, to the best knowledge of GEO, the information included in the Beneficial Ownership Certification provided on (or as of) the date hereof to the Administrative Agent or any Lender in connection with this Amendment is true and correct in all respects.
II. Additional Representations and Warranties of the Australian Borrowers.
To induce the Consenting Lenders and the Administrative Agent to enter into this Amendment and to consent to the amendments to the Existing Credit Agreement contemplated hereby, each Australian Borrower, as to itself, hereby represents and warrants as of the Amendment Effective Time that:
1. Corporate Power; Authorization; Enforceable Obligations.
(a) Such Australian Borrower is duly organized or incorporated and validly existing and has all the corporate or other organizational power and authority to execute, deliver and perform its obligations under this Amendment. Such Australian Borrower has taken all necessary corporate or other action to authorize the execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered on behalf of such Australian Borrower party hereto, and constitutes a legal, valid and binding obligation of such Australian Borrower party hereto, enforceable against each such Australian Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and the implied covenants of good faith and fair dealing.
2. No Legal Bar. The execution, delivery and performance of this Amendment by such Australian Borrower (a) does not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except for such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of such Australian Borrower or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture or other agreement or instrument binding upon such Australian Borrower or assets, or give rise to a right thereunder to require any payment, repurchase or redemption to be made by any such Person, or result in, termination, cancellation or acceleration of any obligation thereunder and (d) will not result in the creation or imposition of any Lien on any asset of such Australian Borrower, except (in the case of each of clauses (a), (b) and (c) of this paragraph) to the extent that the failure to obtain or make such consent, approval, registration, filing or action, or such violation, as the case may be, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
III. Conditions to the Amendment Effective Time.
In addition to the other conditions set forth in this Amendment and this Annex, the agreement of each Consenting Lender is subject to the satisfaction (or waiver in accordance with Section 4 of this Amendment) of the following conditions precedent:
(a) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the date of the Amendment Effective Time) (i) of Akerman LLP, counsel for the Borrowers and the Guarantors, covering such matters relating to the Borrowers, the Guarantors, this Amendment, the other Loan Documents or the transactions contemplated by this Amendment, as the Administrative Agent shall reasonably request (and each
Annex I-2
Borrower for itself and on behalf of each Guarantor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent), (ii) of Hughes Gorski Seedorf Odsen & Tervooren, LLC, Alaska counsel for certain Guarantors, covering such matters relating to such Guarantors as the Administrative Agent shall reasonably request (and GEO, on behalf of such Guarantors, hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent), (iii) of Allens, Australia counsel to the Australian Borrowers, with respect to matters of Australian law, all in form and substance reasonably satisfactory to the Administrative Agent (and each Australian Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent), and (iv) of the in-house general counsel for the Borrowers and the Guarantors, covering such other matters relating to the Borrowers, the Guarantors, this Agreement, the other Loan Documents or the transactions contemplated by this Amendment, as the Administrative Agent shall reasonably request (and each Borrower for itself and on behalf of each Guarantor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent).
(b) The Administrative Agent shall have received the Confirmation dated as of the date of this Amendment and duly executed and delivered by each of the Borrowers and the Guarantors.
(c) The Administrative Agent shall have received a certificate of each Loan Party, dated as of the date of the Amendment Effective Time, in form and substance reasonably satisfactory to the Administrative Agent, certifying and attaching (x) the incumbency and genuineness of the signature of each officer of such Loan Party executing this Amendment, the Confirmation and any other Loan Documents and (y) that:
(i) as to each Loan Party, either (x) such Loan Partys articles of incorporation, bylaws or similar charter documents certified and delivered to the Administrative Agent on the Second Restatement Effective Date, the Third Restatement Effective Date or the Amendment No. 1 Effective Date, as applicable, remain in full force and effect on the date hereof without modification or amendment since such original delivery or (y) attached thereto are true, correct and complete copies of (A) the articles of incorporation or similar charter documents of such Loan Party certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of organization, and (B) the bylaws or operating agreement or similar governing documents of such Loan Party, in each case under this clause (y) as in effect on the date hereof;
(ii) attached thereto is a true, correct and complete copy of resolutions duly adopted by the Board of Directors of each Loan Party authorizing the execution, delivery and performance of this Amendment or such other Loan Documents to which such Loan Party is a party;
(iii) attached thereto is a certificate, as of a recent date, of the good standing of each Loan Party under the laws of its jurisdiction of organization (or equivalent) (to the extent such concept exists in such jurisdiction) and a certificate of the relevant taxing authorities of such jurisdiction, if available, certifying that such Person has filed all required tax returns and owes no delinquent taxes (to the extent such certificates are issued by a Governmental Authority in such jurisdiction); and
(iv) in the case of each Australian Borrower, (x) there will be no default or contravention of, and neither is it prohibited by, Chapter 2E or 2J or any other provision (to the extent relevant) of the Australian Corporations Act from entering into and delivering this Amendment or any other Loan Documents to which it is a party and the performance of any of its obligations under those documents, (y) it is solvent and there are no reasonable grounds it will become insolvent by entering into and complying with its obligations under the Loan Documents.
Annex I-3
(d) The Administrative Agent shall have received a certificate, dated the date hereof and signed by the President, a Vice President or a Financial Officer of GEO, providing certifications to the effect that, on and as of the date hereof (including at the Amendment Effective Time), (i) the representations and warranties of each Loan Party set forth in this Amendment and each other Loan Documents are true and correct in all material respects (provided that any such representations and warranties qualified as to materiality, Material Adverse Effect or similar language are true and correct in all respects), as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), and (ii) no Default has occurred and is continuing.
(e) The Administrative Agent and BNP Paribas Securities Corp. (the Lead Arranger) shall have received all fees and other amounts previously agreed in writing by the Borrowers and the Administrative Agent or the Lead Arranger to be due and payable on or prior to the Amendment Effective Time, as applicable, including reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party under any Loan Document.
(f) The Administrative Agent shall have received a certificate, dated the date hereof, from the chief financial officer of GEO certifying the Solvency of GEO and its Subsidiaries, on a consolidated basis, as of the Amendment Effective Time.
(g) The Administrative Agent shall have received all documentation and other information about the Loan Parties requested in connection with applicable know your customer and AML Laws, including the Patriot Act and the Beneficial Ownership Regulation (and including a Beneficial Ownership Certification), that in each case has been reasonably requested by the Administrative Agent or any Lender in writing prior to the Amendment Effective Time.
[Remainder of page left intentionally blank]
Annex I-4
EXHIBIT 31.1
THE GEO GROUP, INC.
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, George C. Zoley, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q of The GEO Group, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: August 2, 2019 |
/s/ George C. Zoley |
|||||
George C. Zoley | ||||||
Chief Executive Officer |
EXHIBIT 31.2
THE GEO GROUP, INC.
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Brian R. Evans, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q of The GEO Group, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 2, 2019 |
/s/ Brian R. Evans |
|||||
Brian R. Evans | ||||||
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of The GEO Group, Inc. (the Company) for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, George C. Zoley, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ George C. Zoley |
George C. Zoley |
Chief Executive Officer |
Date: August 2, 2019
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of The GEO Group, Inc. (the Company) for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Brian R. Evans, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Brian R. Evans |
Brian R. Evans |
Chief Financial Officer |
Date: August 2, 2019