(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” inRule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes ☐ No ☑☒

As of ~~August 4, 2017,~~April 26, 2018, the registrant had ~~124,031,856~~123,023,825 shares of common stock outstanding.


	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			March 31, 2018			March 31, 2017
Revenues	$	577,070		$	548,350		$	1,127,684		$	1,058,535		$	564,917		$	550,614
Operating expenses		438,445			416,837			853,152			805,343			426,709			414,707
Depreciation and amortization		31,866			28,652			60,815			57,103			31,926			28,949
General and administrative expenses		52,206			36,904			94,792			70,965			41,832			42,586

Operating income		54,553			65,957			118,925			125,124			64,450			64,372
Interest income		12,346			5,902			24,323			10,459			9,099			11,977
Interest expense		(35,983	)		(31,089	)		(70,983	)		(60,455	)		(35,869	)		(35,000	)
Loss on extinguishment of debt		—			(15,866	)		—			(15,866	)

Income before income taxes and equity in earnings of affiliates		30,916			24,904			72,265			59,262			37,680			41,349
Provision for income taxes		1,400			3,879			3,870			7,030			4,755			2,470
Equity in earnings of affiliates, net of income tax provision of $597, $728, $1,208 and $1,199, respectively		1,426			2,131			2,913			3,250
Equity in earnings of affiliates, net of income tax provision of $706, and $611, respectively														1,995			1,487

Net income		30,942			23,156			71,308			55,482			34,920			40,366
Net loss attributable to noncontrolling interests		50			53			87			77			67			37

Net income attributable to The GEO Group, Inc.	$	30,992		$	23,209		$	71,395		$	55,559		$	34,987		$	40,403


Weighted-average common shares outstanding:
Basic		122,125			111,066			117,885			110,940			121,768			113,599
Diluted		122,895			111,479			118,702			111,381			122,304			114,478
Net income per common share attributable to The GEO Group, Inc.:
Basic:
Net income per common share attributable to The GEO Group, Inc. – basic	$	0.25		$	0.21		$	0.61		$	0.50
Net income per common share attributable to The GEO Group, Inc. - basic														0.29			0.36

Diluted:
Net income per common share attributable to The GEO Group, Inc. – diluted	$	0.25		$	0.21		$	0.60		$	0.50
Net income per common share attributable to The GEO Group, Inc. - diluted														0.29			0.35

Dividends declared per share	$	0.47		$	0.43		$	0.94		$	0.87		$	0.47		$	0.47

The accompanying notes are an integral part of these unaudited consolidated financial statements.


	Three Months Ended					Six Months Ended					Three Months Ended
	June 30, 2017		June 30, 2016			June 30, 2017		June 30, 2016			March 31, 2018		March 31, 2017
Net income	$	30,942	$	23,156		$	71,308	$	55,482		$	34,920	$	40,366
Other comprehensive income (loss), net of tax:
Other comprehensive income, net of tax:
Foreign currency translation adjustments		513		(413	)		2,206		1,101			521		1,692
Pension liability adjustment, net of tax provision of $25, $20, $51 and $41, respectively		64		33			111		65
Unrealized gain (loss) on derivative instrument classified as cash flow hedge, net of tax (provision) benefit of $(229), $391, $(144) and $817, respectively		1,295		(2,198	)		816		(4,642	)
Pension liability adjustment, net of tax provision of $28 and $25, respectively												105		47
Change in fair value of derivative instrument classified as cash flow hedge, net of tax (provision) benefit of $(130) and $83, respectively												736		(479	)

Total other comprehensive income (loss), net of tax		1,872		(2,578	)		3,133		(3,476	)
Total other comprehensive income, net of tax												1,362		1,260

Total comprehensive income		32,814		20,578			74,441		52,006			36,282		41,626

Comprehensive loss attributable to noncontrolling interests		51		52			85		68			59		35

Comprehensive income attributable to The GEO Group, Inc.	$	32,865	$	20,630		$	74,526	$	52,074		$	36,341	$	41,661

The accompanying notes are an integral part of these unaudited consolidated financial statements.


	June 30, 2017			December 31, 2016			March 31, 2018			December 31, 2017
	(Unaudited)						(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	65,901		$	68,038		$	49,235		$	81,377
Restricted cash and investments		17,378			17,133
Accounts receivable, less allowance for doubtful accounts of $4,373 and $3,664, respectively		342,361			356,255
Restricted cash and cash equivalents								56,888			44,932
Accounts receivable, less allowance for doubtful accounts of $4,902 and $4,574, respectively								384,637			389,916
Contract receivable, current portion		238,958			224,033			14,285			18,142
Prepaid expenses and other current assets		42,467			32,210			31,177			45,342

Total current assets		707,065			697,669			536,222			579,709

*Restricted Cash and Investments*		23,020			20,848			24,394			27,999
*Property and Equipment, Net*		2,049,613			1,897,241			2,102,011			2,078,123
*Assets Held for Sale*								—			3,915
*Non-Current Contract Receivable*		358,727			219,783			407,938			404,309
*Deferred Income Tax Assets*		32,262			30,039			26,277			26,277
*Goodwill*		787,803			615,433			776,395			778,951
*Intangible Assets, Net*		268,345			203,884			249,316			255,339
*Other Non-Current Assets*		66,933			64,512			70,756			72,286

Total Assets	$	4,293,768		$	3,749,409		$	4,193,309		$	4,226,908

LIABILITIES AND SHAREHOLDERS’ EQUITY
*Current Liabilities*
Accounts payable	$	98,027		$	79,637		$	84,310		$	92,587
Accrued payroll and related taxes		63,192			55,260			57,918			71,732
Accrued expenses and other current liabilities		153,930			131,096			181,135			176,324
Current portion of capital lease obligations, long-term debt and non-recourse debt		255,404			238,065			25,189			28,920

Total current liabilities		570,553			504,058			348,552			369,563

*Non-Current Deferred Income Tax Liabilities*								8,757			8,757
*Other Non-Current Liabilities*		98,741			88,656			92,286			96,702
*Capital Lease Obligations*		6,787			7,431			5,698			6,059
*Long-Term Debt*		2,107,208			1,935,465			2,240,057			2,181,544
*Non-Recourse Debt*		283,780			238,842			359,387			365,364
*Commitments, Contingencies and Other* (Note 11)
*Commitments, Contingencies and Other* (Note 13)
*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, 123,976,106 and 112,547,544 issued and outstanding, respectively		1,240			1,125
Common stock, $0.01 par value, 187,500,000 shares authorized, 123,853,267 and 124,008,303 issued and 122,005,156 and 124,008,003 outstanding, respectively								1,239			1,240
Additional paid-in capital		1,180,038			891,993			1,192,779			1,190,906
Earnings in excess of distributions		73,299			112,763			8,209			31,541
Accumulated other comprehensive loss		(27,694	)		(30,825	)		(23,092	)		(24,446	)
Treasury stock, 1,848,111 and 0 shares, at cost, respectively								(40,182	)		—

Total shareholders’ equity attributable to The GEO Group, Inc.		1,226,883			975,056			1,138,953			1,199,241
Noncontrolling interests		(184	)		(99	)		(381	)		(322	)

Total shareholders’ equity		1,226,699			974,957			1,138,572			1,198,919

Total Liabilities and Shareholders’ Equity	$	4,293,768		$	3,749,409		$	4,193,309		$	4,226,908

The accompanying notes are an integral part of these unaudited consolidated financial statements.


	Six Months Ended						Three Months Ended
	June 30, 2017			June 30, 2016			March 31, 2018			March 31, 2017
Cash Flow from Operating Activities:
Net income	$	71,308		$	55,482		$	34,920		$	40,366
Net loss attributable to noncontrolling interests		87			77			67			37

Net income attributable to The GEO Group, Inc.		71,395			55,559			34,987			40,403
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities:
Depreciation and amortization expense		60,815			57,103			31,386			28,949
Stock-based compensation		9,993			6,489			5,827			4,963
Loss on extinguishment of debt		—			15,866
Amortization of debt issuance costs, discount and/or premium and other non-cash interest		7,676			5,027			2,138			3,806
Provision for doubtful accounts		1,227			1,170			195			378
Equity in earnings of affiliates, net of tax		(2,913	)		(3,250	)		(1,995	)		(1,487	)
Dividends received from unconsolidated joint venture		2,359			—			736			2,359
Income tax deficiency related to equity compensation		—			791
Loss on sale/disposal of property and equipment, net		1,909			172
(Gain) loss on sale/disposal of property and equipment, net								(350	)		110
Changes in assets and liabilities, net of effects of acquisitions:
Changes in accounts receivable, prepaid expenses and other assets		44,336			14,047			2,940			51,709
Changes in contract receivable		(122,006	)		(124,273	)		6,298			(69,098	)
Changes in accounts payable, accrued expenses and other liabilities		(24,077	)		9,551			(17,061	)		(14,210	)

Net cash provided by operating activities		50,714			38,252			65,101			47,882

Cash Flow from Investing Activities:
Acquisition of CEC, net of cash acquired		(354,466	)		—
Insurance proceeds – damaged property		—			548
Insurance proceeds - damaged property								4,504			—
Proceeds from sale of property and equipment		648			43			—			689
Change in restricted cash and investments		(1,835	)		(65,853	)
Proceeds from sale of assets held for sale								3,797			—
Change in restricted investments								(505	)		(2,058	)
Capital expenditures		(67,508	)		(46,014	)		(52,147	)		(34,421	)

Net cash used in investing activities		(423,161	)		(111,276	)		(44,351	)		(35,790	)

Cash Flow from Financing Activities:
Proceeds from long-term debt		1,158,574			641,000			102,000			1,083,148
Payments on long-term debt		(972,500	)		(627,506	)		(43,000	)		(918,500	)
Payments on non-recourse debt		(67,885	)		(3,044	)		(5,600	)		(67,171	)
Proceeds from non-recourse debt		91,076			159,068			—			36,020
Taxes paid related to net share settlements of equity awards		(4,092	)		(2,257	)		(4,356	)		(3,434	)
Proceeds from issuance of common stock under prospectus supplement		275,867			—			—			276,036
Proceeds from issuance of common stock in connection with ESPP		242			224			140			122
Payment for repurchases of common stock								(40,182	)		—
Debt issuance costs		(7,587	)		(19,497	)		—			(7,371	)
Income tax deficiency related to equity compensation		—			(791	)
Proceeds from the exercise of stock options		6,150			2,057			260			3,882
Cash dividends paid		(110,859	)		(97,247	)		(58,238	)		(52,504	)

Net cash provided by financing activities		368,986			52,007
Effect of Exchange Rate Changes on Cash and Cash Equivalents		1,324			244
Net cash (used in) provided by financing activities								(48,976	)		350,228
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents								3,930			2,679

Net Decrease in Cash and Cash Equivalents		(2,137	)		(20,773	)
Cash and Cash Equivalents, beginning of period		68,038			59,638
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents								(24,296	)		364,999
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period								133,545			90,357

Cash and Cash Equivalents, end of period	$	65,901		$	38,865
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period							$	109,249		$	455,356

Supplemental Disclosures:
Non-cash Investing and Financing activities:
Capital expenditures in accounts payable and accrued expenses	$	8,450		$	2,204		$	1,814		$	1,312

The accompanying notes are an integral part of these unaudited consolidated financial statements.

The GEO Group, Inc., a Florida corporation, and subsidiaries (the “Company” or “GEO”) is a fully-integrated real estate investment trust (“REIT”) specializing in the ownership, leasing and management of correctional, detention and reentry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa and the United Kingdom. The Company owns, leases and operates a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, as well as ~~community based~~community-based reentry facilities and offers an expanded delivery of offender rehabilitation services under its ‘GEO Continuum of Care’ platform. The ‘GEO Continuum of Care’ program integrates enhancedin-prison programs, which are evidence-based and include cognitive behavioral treatment and post-release services, and provides academic and vocational classes to life skills and treatment programs while helping individuals reintegrate into their communities. The Company develops new facilities based on contract awards, using its project development expertise and experience to design, construct and finance what it believes arestate-of-the-art facilities that maximize security and efficiency. The Company provides innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants. The Company also provides secure transportation services for offender and detainee populations as contracted domestically and in the United Kingdom through its joint venture GEO Amey PECS Ltd. (“GEOAmey”). At ~~June 30, 2017,~~March 31, 2018, after its acquisition of Community Education Centers (“CEC”) (Refer toNote ~~2 –~~3 - Business Combinations), the Company’s worldwide operations include the management and/or ownership of approximately ~~100,000~~96,000 beds at ~~143~~141 correctional and detention facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of community supervision services for more than ~~185,000~~192,000 offenders and pretrial defendants, including approximately 100,000 individuals through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

In March 2017, the Company’s Board of Directors declared a 3-for-2 stock split of its common stock. The stock split was completed on April 24, 2017 with respect to shareholders of record on April 10, 2017. Outstanding share and per-share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split. On April 24, 2017, the Company amended its articles of incorporation to increase the number of authorized shares of common stock to take into effect the stock split.

The Company’s unaudited consolidated financial statements included in this Quarterly Report onForm 10-Q have been prepared in accordance with accounting principles generally accepted in the United States and the instructions toForm 10-Q and consequently do not include all disclosures required byForm 10-K. The accounting policies followed for quarterly financial reporting are the same as those disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report onForm 10-K filed with the Securities and Exchange Commission on February ~~27, 2017~~26, 2018 for the year ended December 31, ~~2016.~~2017. The accompanying December 31, ~~2016~~2017 consolidated balance sheet has been derived from those audited financial statements. Additional information may be obtained by referring to the Company’sForm 10-K for the year ended December 31, ~~2016.~~2017. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the financial information for the interim periods reported in this Quarterly Report onForm 10-Q have been made. Results of operations for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 are not necessarily indicative of the results for the entire year ending December 31, ~~2017,~~2018, or for any other future interim or annual periods.

On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. The adoption of this standard did not result in a significant change to the Company’s historical revenue recognition policies and there were no significant adjustments that required a cumulative adjustment to retained earnings upon transition.

Revenue is recognized when control of the promised goods or services is transferred to GEO’s customers, in an amount that reflects the consideration GEO expects to be entitled to in exchange for those goods or services. Sales, value added and other taxes GEO collects concurrent with revenue producing activities and are subsequently remitted to governmental authorities are excluded from revenues.

2.When a contract includes variable consideration, GEO evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, GEO includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at each reporting date. A limited number of GEO’s domestic contracts have provisions upon which a small portion of the revenue for the contract is based on the performance of certain targets. Domestically, revenue based on the performance of certain targets is less than 1% of the Company’s consolidated domestic revenues and was not significant during the periods presented. One of GEO’s international contracts, related to its Ravenhall prison project (discussed further below), contains a provision where a significant portion of the revenue for the contract is based on the performance of certain targets. These performance targets are based on specific criteria to be met over specific periods of time. Such criteria includes the Company’s ability to achieve certain contractual benchmarks relative to the quality of service it provides,non-occurrence of certain disruptive events, effectiveness of its quality control programs and its responsiveness to customer requirements. The performance of these targets are measured quarterly and there was no significant constraint on the estimate of such variable consideration for this contract during the three months ended March 31, 2018.

GEO does not disclose the value of unsatisfied performance obligations for (i) contracts with an expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which GEO has the right to invoice for services performed, which is generally the case for all of GEO’s contracts. Incidental items that are immaterial in the context of the contract are recognized as expense. GEO generally does not incur incremental costs of obtaining a contract with its customers that would meet the requirement for capitalization. There were no assets recognized from costs to obtain a contract with a customer at March 31, 2018 or December 31, 2017.

The timing of revenue recognition may differ from the timing of invoicing to customers. GEO records a receivable when services are performed in advance of receiving consideration and records unearned revenue if consideration is received in advance of the performance of services. Generally, GEO’s customers do not provide payment in advance of the performance of services. Therefore, unearned revenue is not significant at March 31, 2018 or December 31, 2017 and revenue recognized during the three months ended March 31, 2018 that was included in the opening balance of unearned revenue was not significant. There have been no significant amounts of revenue recorded in the periods presented from performance obligations either wholly or partially satisfied in prior periods.

The right to consideration under GEO’s contracts is only dependent on the passage of time and is therefore considered to be unconditional. Payment terms and conditions vary by contract type, although, with the exception of the contract receivable related to GEO’s Ravenhall prison project (further discussed below), terms generally include a requirement of payment within 30 days after performance obligations are satisfied and generally do not include a significant financing component. There have been no significant changes in receivable or unearned revenue balances during the period other than regular invoicing and collection activity.

The following table disaggregates GEO’s revenue by major source and also provides a reconciliation with revenue information disclosed for reportable segments inNote 14 - Business Segments and Geographic Information:

GEO recognizes revenue for corrections & detention services where GEO owns or leases the facility as services are performed. GEO provides for the safe and secure housing and care of incarcerated individuals under public-private partnerships with federal, state and local government agencies. This includes providing24-hour care and supervision, including but not limited to, such services as medical, transportation, food service, laundry services and various programming activities. These tasks are considered to be activities to fulfill the safe and secure housing performance obligation and are not considered to be individually separate promises in the contract. Each of these activities is highly interrelated and GEO performs a significant level of integration of these activities. GEO has identified these activities as a bundle of services and determined that each day of the promised service is distinct. The services provided are part of a series of distinct services that are substantially the same and are measured using the same measure of progress (time-based output method). GEO has determined that revenue for these services are recognized over time as it’s customers simultaneously receive and consume the benefits as the services are performed, which is on a continual daily basis, and GEO has a right to payment for performance completed to date. Time-based output methods of revenue recognition are considered to be a faithful depiction of GEO’s efforts to fulfill its obligations under its contracts and therefore reflect the transfer of services to its customers. GEO’s customers generally pay for these services based on a net rate per day per individual or on a fixed monthly rate.

GEO recognizes revenue for community-based reentry services where GEO owns or leases the facility in a manner similar to its corrections and detention services discussed above. GEO provides individuals nearing the end of their sentence with the resources necessary to productively transition back into society. Through its residential reentry centers, GEO provides federal and state parolees and probationers with temporary housing, rehabilitation, substance abuse counseling and vocational and educational programs. These activities are considered to be a bundle of services which are a part of a series of distinct services recognized over time based on the same criteria as discussed above for corrections and detention revenues. GEO’s customers also generally pay for these services based on a net rate per day per individual or on a fixed monthly rate.

GEO recognizes revenues for youth services where GEO owns or leases the facility in the same manner as discussed above for the supervision, care and rehabilitation of troubled youth residents. The activities to house and care for troubled youth residents are also considered to be a bundle of services which are part of a series of distinct services recognized over time based on the same criteria discussed for the previous two revenue streams. GEO’s customers generally pay for these services based on a net rate per day per individual.

GEO recognizes revenue for its managed only contracts in the same manner as its Owned and Leased Corrections & Detention and Owned and Leased Community-based contracts as discussed above. The primary exception is that GEO does not own or lease the facility. The facility is owned by the customer. In certain circumstances, GEO’s customers may request that GEO make certain capital improvements to the facility or make other payments related to the facility. These payments are amortized as a reduction of revenues over the life of the contract. GEO’s customers generally pay for these services based on a net rate per day per individual or a fixed monthly rate.

Facility Construction and Design revenues during the three months ended March 31, 2017 consisted of one contract with the Department of Justice in the State of Victoria (the “State”) for the development and operation of a new1,300-bed Prison (the “Facility”) in Ravenhall, a locality near Melbourne, Australia. The Facility was completed during the fourth quarter of 2017 and GEO is currently managing the Facility under a25-year management contract. There were no facility construction and design revenues during the three months ended March 31, 2018. GEO’s promise to design and construct the Facility was considered to be a separate and distinct performance obligation from the management obligation which includes the safe and secure housing, care and programming activities for incarcerated individuals similar to the correction & detention services discussed above. For the obligation to manage the Facility, GEO determined revenue should be recorded over time using a time-based output method based on the same criteria as discussed above for correction and detention services. Fees included and priced in the contract for managing the Facility are considered to be stated at their individual estimated stand-alone selling prices using the adjusted market assessment approach. These services are regularly provided by GEO on a stand-alone basis to similar customers within a similar range of amounts. GEO used the expected cost plus margin approach to allocate the transaction price to the construction obligation. GEO was entitled under the contract to receive consideration in the amount of its costs plus a margin.

During the design and construction phase, GEO determined that revenue should be recorded over time and applied cost based input methods using the actual costs incurred relative to the total estimated costs (percentage of completion basis) to determine progress towards contract completion and to calculate the corresponding amount of revenue and gross profit to recognize. Cost based input methods of revenue recognition are considered to be a faithful depiction of GEO’s efforts to satisfy long-term

construction contracts and therefore reflect the transfer of goods to the customer as the customer controls the work in progress as the Facility is constructed. Cost based input methods of revenue recognition also require GEO to make estimates of net contract revenues and costs to complete the project. Significant judgment was required to evaluate the costs to complete the project, including materials, labor, contingencies and other costs. If estimated total costs on the contract are greater than the net contract revenues, the entire estimated loss on the contract is recognized in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues or costs to complete are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. Typically, the Company enters into fixed price contracts and does not perform additional work unless approved change orders are in place. Costs attributable to unapproved change orders are expensed in the period in which the costs are incurred if the Company believes that it is not probable that the costs will be recovered through a change in the contract price. If the Company believes that it is probable that the costs will be recovered through a change in the contract price, costs related to unapproved change orders are expensed in the period in which they are incurred, and contract revenue is recognized to the extent of the costs incurred. Revenue in excess of the costs attributable to unapproved change orders is not recognized until the change order is approved. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to estimated costs and income, and are recognized in the period in which the revisions are determined. For the periods presented, there were no changes in job performance, job conditions and estimated profitability that required a revision to the estimated costs and income recorded.

GEO was the primary developer of the project and subcontracted with a bonded international design and build contractor to design and construct the Facility. As the primary contractor for the project, GEO determined that it was primarily responsible for fulfilling the promise to develop and provide the Facility to the State, including overall responsibility for the acceptability of the project in meeting the State’s specifications. Therefore, GEO was considered to be a principal in the transaction and construction revenues and construction costs were recorded on a gross basis.

The cost of the project during the design and construction phase was funded by debt financing along with a capital contribution by GEO which was made in January 2017. GEO’s promise to provide the equity contribution was considered to be a separate and distinct performance obligation that is separate from the construction and facility management obligations. The contribution represents a significant financing element which provided a benefit to the State. Costs incurred and estimated earnings in excess of billings are classified as contract receivable in the accompanying consolidated balance sheets. The contract receivable will be satisfied, through a State contribution which was made in November 2017 upon commercial acceptance of the Facility, and by quarterly payments to be made over the25-year operating phase. The timing of these payments provide the State with a significant benefit of financing for the Facility as the payments by the State occur significantly after performance (construction of the Facility). Therefore, the contract receivable has been recorded at net present value based on the timing of expected future settlement. Interest income is calculated using an effective interest rate of 8.97% and has been presented separately from facility design and construction revenue. Interest income also includes an equity return for GEO’s capital contribution.

Non-residential Services and Other revenue consists of the Company’s contracts with federal and various state and local governments to provide location, alcohol and drug detecting electronic monitoring and case management services to individuals on an as needed or as requested basis. This category also includes the Company’s day reporting centers.

GEO recognizes revenues for electronic monitoring and case management services as the services are performed. Services provided consist of community-based supervision (home visits),in-person reporting, telephonic reporting and GPS and other electronic monitoring as well as overall contract management services. The rates for the various services are considered to be stated at their individual stand-alone selling prices. GEO has determined that the services to be provided are recognized over time based on the unit of occurrence of the various services as its customer simultaneously receives and consumes the benefits as the services are performed and GEO has a right to payment for performance completed to date. Generally, these services are paid based on a net rate per occurrence and a monthly fee for management services.

Certain of the Company’s electronic monitoring contracts include providing rental monitoring equipment and related monitoring services activities (using internal proprietary software platforms) to its customers. These tasks are considered to be activities to fulfill the promise to provide electronic monitoring services to individuals and are not considered to be individually separate promises in the contract. In the context of the contract, the rental equipment and monitoring service is not considered to be capable of being distinct as the customer typically cannot benefit from the rental equipment or monitoring service on its own or with other readily available resources. Management has identified these activities as a bundle of services and determined that each day or unit of the promised service is distinct. These services are part of a series of distinct services that are substantially the same and are measured using the same measure of progress (time-based output method) and are therefore accounted for as a single performance obligation. GEO has determined that services are recognized over time as the customer simultaneously receives and consumes the benefits as the services are performed and GEO has a right to payment for performance completed to date.

Services provided for GEO’s day reporting centers are similar to its Owned and Leased Community-based services discussed above with the exception of temporary housing.

On April 5, 2017, the Company completed its acquisition of ~~CEC,~~Community Education Centers (“CEC”), pursuant to a definitive merger agreement entered into on February 12, 2017 between the Company, GEO/DE/MC/01 LLC, and CEC Parent Holdings LLC. CEC is a private provider of rehabilitation services for offenders in reentry and in-prison treatment facilities as well as management services for county, state and federal correctional and detention facilities, CEC’s operations encompass over 12,000 beds nationwide. Under the terms of the merger agreement, the Company acquired 100% of the voting interests in CEC for ~~$354.5 million, net~~an aggregate consideration of ~~cash acquired of $3.0 million, in an all cash transaction, excluding transaction related expenses paid at closing of $4.1~~$353.6 million. At the time of the acquisition, approximately $115 million of CEC indebtedness, including accrued interest, was outstanding. All indebtedness of CEC was repaid by the Company with a portion of the $354.5 million merger consideration. Subsequently, the purchase price was reduced by $2.6 million as a result of the final working capital target settlement received by the Company in July 2017. Additionally, for tax periods ending on or prior to December 31, 2018, the purchase price may be adjusted for any tax benefits realized by the Company attributable to certain transaction tax deductions if such deductions are able to be taken by the Company and will result in an incremental tax benefit. The Company has estimated a maximum potential adjustment of approximately $1.9 million but has preliminarily estimated this contingency at zero at the acquisition date. The Company is still reviewing the various tax implications of the acquisition which may impact the ultimate fair value of this contingency.

GEO is identified as the acquiring company for US GAAP accounting purposes. Under the acquisition method of accounting, the purchase price for CEC was allocated to CEC’s net tangible and intangible assets based on their estimated fair values as of April 5, 2017, the date of closing and the date that the Company obtained control of CEC. In order to determine the fair values of certain tangible and intangible assets acquired, the Company engaged a third party independent valuation specialist. For all other assets acquired and liabilities assumed, the recorded fair value was determined by the Company’s management and represents an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

The allocation of the purchase price for this transaction at April 5, 2017 has not been finalized. The primary areas of the preliminary purchase price allocations that are not finalized relate to the fair values of certain tangible assets and liabilities acquired, the valuation of certain intangible assets acquired and income taxes. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that the Company determines to be material will be recorded in the reporting period in which the adjustment amounts are determined. The purchase price of $354.5 million has been preliminarily allocated to the estimated fair values of the assets acquired and liabilities assumed as of April 5, 2017 as follows (in ‘000’s):

As shown above, the Company recorded $172.3 million of goodwill related to the purchase of CEC. The strategic benefit of the merger includes the Company’s ability to further position itself to meet the demand for increasingly diversified correctional, detention and community reentry facilities and services and will allow the Company to expand the delivery of enhanced in-prison rehabilitation including evidence-based treatment, integrated with post-release support services through GEO’s Continuum of Care platform. These factors contributed to the goodwill that was recorded upon consummation of the transaction. The Company does not believe that any of the goodwill recorded as a result of the CEC acquisition will be deductible for federal income tax purposes. ~~Identifiable intangible assets purchased in~~

The allocation of the purchase price was complete as of March 31, 2018. During the three months ended March 31, 2018, the Company made measurement period adjustments to provisional amounts with respect to the CEC acquisition that were recognized at the acquisition date to reflect new information obtained about facts and ~~their weighted average amortization periods~~circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. These adjustments related to the Company’s valuation of accounts payable and accrued expenses. Of the total measurement period adjustments, accounts payable and accrued expenses decreased by $1.0 million related to an accrual for a legal settlement that was funded out of cash held in ~~total~~escrow and by ~~major intangible asset class,~~$1.4 million related to a contingency for unclaimed property. The remaining measurement period adjustments were not individually significant. The final purchase price allocation and adjustments made to the estimated acquisition date fair values during the three months ended March 31, 2018 are as ~~applicable, are included in the table below:~~

The results of operations of CEC are included in the Company’s results of operations from April 5, 2017. The following unaudited pro forma information combines the consolidated results of operations of the Company and CEC as if the acquisition had occurred at January 1, 2016, which is the beginning of the earliest period presented. The pro forma amounts are included for comparative purposes and may not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable period and may not be indicative of the results that will be attained in the futurefollows (in thousands):

The unaudited pro forma combined financial information presented above is compiled from the financial statements of the combined companies and includes pro forma adjustments for: (i) estimated changes in depreciation expense, interest expense and amortization expense; (ii) adjustments to eliminate intercompany transactions; (iii) adjustments to remove $7.8 million and $10.4 million, for the three months and six months ended June 30, 2017, respectively, of non-recurring transaction and merger related costs directly related to the acquisition that are included in the combined companies’ financial results; and (iv) the income tax impact of the adjustments.The unaudited pro forma financial information does not include any adjustments to reflect the impact of cost savings or other synergies that may result from this acquisition. As noted above, the unaudited pro forma financial information does not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined companies in the future.

The Company has included revenue and earnings of $56.7 million and $2.6 million, respectively, in its consolidated statements of operations for both the three and six months ended June 30, 2017 for CEC activity since April, 5, 2017, the date of acquisition.

The Company has recorded goodwill as a result of its various business combinations. On April 5, 2017, the Company completed its acquisition of CEC. Refer to Note ~~2 –~~3 - Business Combinations. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the tangible assets and intangible assets acquired net of liabilities assumed, including noncontrolling interests. Changes in the Company’s goodwill balances from December 31, ~~2016~~2017 to ~~June 30, 2017~~March 31, 2018 are as follows (in thousands):


	December 31, 2016		Acquisitions		Foreign Currency Translation		June 30, 2017		December 31, 2017		Acquisition Adjustments			Foreign Currency Translation			March 31, 2018
U.S. Corrections & Detention	$	277,774	$	43,086	$	—	$	320,860	$	317,005	$	(639	)	$	—		$	316,366
GEO Care		337,257		129,257		—		466,514		461,499		(1,910	)		—			459,589
International Services		402		—		27		429		447		—			(7	)		440

Total Goodwill	$	615,433		172,343	$	27	$	787,803	$	778,951		(2,549	)	$	(7	)	$	776,395

The Company has also recorded other finite and indefinite-lived intangible assets as a result of its various business combinations. Refer toNote ~~2 –~~3 - Business Combinations for a discussion of the Company’s recent acquisition of CEC. The Company’s intangible assets include facility management contracts, covenants not to compete, trade names and technology, as follows (in thousands):


	March 31, 2018									December 31, 2017
	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	$	308,577	$	(111,900	)	$	196,677	$	308,518	$	(106,724	)	$	201,794
Covenants not to compete		1		700		(692	)		8		700		(517	)		183
Technology		7.3		33,700		(26,269	)		7,431		33,700		(25,538	)		8,162
Trade name (Indefinite lived)		Indefinite		45,200		—			45,200		45,200		—			45,200

Total acquired intangible assets			$	388,177	$	(138,861	)	$	249,316	$	388,118	$	(132,779	)	$	255,339

Amortization expense was ~~$6.5~~$6.1 million and ~~$11.6~~$5.1 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017, ~~respectively. Amortization expense was $5.1 million and $10.2 million for the three and six months ended June 30, 2016,~~ respectively. Amortization expense was primarily related to the U.S. Corrections & Detention and GEO Care segments’ amortization of acquired facility management contracts. As of ~~June 30, 2017,~~March 31, 2018, the weighted average period before the next contract renewal or extension for the acquired facility management contracts was approximately ~~1.6~~1.3 years. Although the facility management contracts acquired have renewal and extension terms in the near term, the Company has historically maintained these relationships beyond the current contractual periods.

Estimated amortization expense related to the Company’s finite-lived intangible assets for the remainder of ~~2017~~2018 through ~~2021~~2022 and thereafter is as follows (in thousands):


Fiscal Year	Total Amortization Expense		Total Amortization Expense
Remainder of 2017	$	13,102
2018		22,821
Remainder of 2018			$	16,988
2019		22,310		22,313
2020		22,310		22,313
2021		20,090		19,790
2022				18,147
Thereafter		122,512		104,565

	$	223,145	$	204,116

The following tables provide a summary of the Company’s significant financial assets and liabilities carried at fair value and measured on a recurring basis as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 (in thousands):


			Fair Value Measurements at December 31, 2016								Fair Value Measurements at March 31, 2018
	Carrying Value at December 31, 2016		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Value at March 31, 2018		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investments:
Restricted investment:
Rabbi Trust	$	15,662	$	—	$	15,662	$	—	$	21,268	$	—	$	21,268	$	—
Fixed income securities		1,782		—		1,782		—		1,867		—		1,867		—
Interest rate cap derivatives		15		—		15		—
Liabilities:
Interest rate swap derivatives	$	18,679	$	—	$	18,679	$	—	$	13,126	$	—	$	13,126	$	—


			Fair Value Measurements at December 31, 2017
	Carrying Value at December 31, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investments:
Rabbi Trust	$	20,763	$	—	$	20,763	$	—
Fixed income securities		1,902		—		1,902		—
Liabilities:
Interest rate swap derivatives	$	13,992	$	—	$	13,992	$	—

The Company’s Level 2 financial instruments included in the tables above as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 consist of interest rate swap derivative liabilities ~~and interest rate cap derivative assets~~ held by the Company’s Australian subsidiary, the Company’s rabbi trust established for GEO employee and employer contributions to The GEO Group, Inc.Non-qualified Deferred Compensation Plan and an investment in Canadian dollar denominated fixed income securities. ~~The balance of the interest rate cap derivative assets at June 30, 2017 was not significant.~~

The Australian subsidiary’s interest rate swap derivative liabilities ~~and interest rate cap derivative assets~~ are valued using a discounted cash flow model based on projected Australian borrowing rates. The Company’s restricted investment in the rabbi trust is invested in Company owned life insurance policies which are recorded at their cash surrender values. These investments are valued based on the underlying investments held in the policies’ separate account. The underlying assets are equity and fixed income pooled funds that are comprised of Level 1 and Level 2 securities. The Canadian dollar denominated securities, not actively traded, are valued using quoted rates for these and similar securities.

During the first quarter of 2018, the Company transferred certain accounts receivable balances that had a carrying value of approximately $3.0 million to an unrelated third party. The transfer was accounted for as a sale and the Company has no continuing involvement with the transferred assets. The Company received cash proceeds in connection with the sale of approximately $3.0 million, and as such, there was no gain or loss in connection with the transaction.

The Company’s consolidated balance sheets reflect certain financial assets and liabilities at carrying value. The carrying value of certain debt instruments, if applicable, is net of unamortized discount. The following tables present the carrying values of those financial instruments and the estimated corresponding fair values at ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 (in thousands):


			Estimated Fair Value Measurements at December 31, 2016										Estimated Fair Value Measurements at March 31, 2018
	Carrying Value as of December 31, 2016		Total Fair Value		Level 1		Level 2		Level 3		Carrying Value as of March 31, 2018		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	68,038	$	68,038	$	68,038	$	—	$	—	$	49,235	$	49,235	$	49,235	$	—	$	—
Restricted cash and investments		22,319		22,319		19,614		2,705		—		60,014		60,014		57,289		2,725		—
Liabilities:
Borrowings under senior credit facility	$	804,500	$	795,008	$	—	$	795,008	$	—	$	1,122,155	$	1,122,155	$	—	$	1,122,155	$	—
5.875% Senior Notes due 2024		250,000		247,813		—		247,813		—		250,000		250,505		—		250,505		—
5.125% Senior Notes		300,000		292,125		—		292,125		—		300,000		297,888		—		297,888		—
5.875% Senior Notes due 2022		250,000		254,688		—		254,688		—		250,000		257,330		—		257,330		—
6.00% Senior Notes		350,000		346,938		—		346,938		—		350,000		344,467		—		344,467		—
Non-recourse debt, Australian subsidiary		454,222		454,185		—		454,185		—
Other non-recourse debt, including current portion		36,280		37,550		—		37,550		—
Non-recourse debt												382,647		383,462		—		383,462		—

													Estimated Fair Value Measurements at December 31, 2017
											Carrying Value as of December 31, 2017		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents											$	81,377	$	81,377	$	81,377	$	—	$	—
Restricted cash and investments												52,168		52,168		49,884		2,284		—
Liabilities:
Borrowings under senior credit facility											$	1,064,599	$	1,070,514	$	—	$	1,070,514	$	—
5.875% Senior Notes due 2024												250,000		262,095		—		262,095		—
5.125% Senior Notes												300,000		303,918		—		303,918		—
5.875% Senior Notes due 2022												250,000		258,338		—		258,338		—
6.00% Senior Notes												350,000		362,835		—		362,835		—
Non-recourse debt												393,737		394,671		—		394,671		—

The fair values of the Company’s cash and cash equivalents, and restricted cash approximates the carrying values of these assets at ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016.~~2017. Restricted cash consists of money market funds, bank deposits, commercial paper and time deposits used for asset replacement funds and other funds contractually required to be maintained at the Company’s Australian ~~subsidiary and contractual commitments related to the design and construction of a new facility in Ravenhall Australia.~~subsidiary. The fair value of the money market funds and bank deposits is based on quoted market prices (Level 1) and the fair value of commercial paper and time deposits is based on market prices for similar instruments (Level 2).

The fair values of the Company’s 5.875% senior unsecured notes due 2022 (“5.875% Senior Notes due 2022”), 5.875% senior unsecured notes due 2024 (“5.875% Senior Notes due 2024”), 6.00% senior unsecured notes due 2026 (“6.00% Senior Notes”), and the 5.125% senior unsecured notes due 2023 (“5.125% Senior Notes”), although not actively traded, are based on published financial data for these instruments. The fair values of the Company’snon-recourse debt related to the Washington Economic Development Finance Authority (“WEDFA”) ~~is based on market prices for similar instruments. The fair value of the non-recourse debt related to~~and the Company’s Australian subsidiary isare estimated based on market prices of similar instruments. The fair value of borrowings under the senior credit facility is based on an estimate of trading value considering the Company’s borrowing rate, the undrawn spread and similar instruments.

The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported on the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

Amounts included in restricted cash and cash equivalents are attributable to certain contractual cash restriction requirements at the Company’s wholly owned Australian subsidiary related tonon-recourse debt and asset replacement funds contractually required to be maintained and other guarantees. Restrictedinvestments -non-current (included in Restricted Cash and Investments in the accompanying consolidated balance sheets) consists of the Company’s rabbi trust established for employee and employer contributions to The GEO Group, Inc.Non-qualified Deferred Compensation Plan and is not considered to be a restricted cash equivalent. Refer toNote 5 - Financial Instruments.

The following table presents the changes in shareholders’ equity that are attributable to the Company’s shareholders and to noncontrolling interests (in thousands):


	Common shares						Additional Paid-In Capital				Earnings in Excess of Distributions				Accumulated Other Comprehensive Loss				Noncontrolling Interests			Total Shareholders’ Equity				Common shares						Additional Paid-In Capital			Earnings in Excess of Distributions				Accumulated Other Comprehensive Loss				Treasury shares							Noncontrolling Interests				Total Shareholders’ Equity
	Shares			Amount							Earnings in Excess of Distributions				Accumulated Other Comprehensive Loss			Shares							Amount						Shares	Additional Paid-In Capital						Amount												Noncontrolling Interests				Total Shareholders’ Equity
*Balance, December 31, 2016*		112,548		$	1,125		Additional Paid-In Capital			$	891,993			$	112,763			$	Noncontrolling Interests	(30,825	)	Total Shareholders’ Equity	$	(99	)		$	974,957
*Balance, January 1, 2018*																											124,008		$	1,240		$	1,190,906		Earnings in Excess of Distributions	$	31,541		Accumulated Other Comprehensive Loss		$	(24,446	)		—			$	—			$	(322	)		$	1,198,919
Proceeds from exercise of stock options		307			3			6,147				—				—				—			6,150				15			1			260			—				—				—			—				—				261
Stock-based compensation expense		—			—			9,993				—				—				—			9,993				—			—			5,827			—				—				—			—				—				5,827

Restricted stock granted		924			9			(9	)			—				—				—			—

Restricted stock canceled		(27	)		—			—				—				—				—			—				(9	)		—			—			—				—				—			—				—				—

Dividends paid		—			—			—				(110,859	)			—				—			(110,859	)			—			—			—			(58,319	)			—				—			—				—				(58,319	)

Issuance of common stock – prospectus supplement		10,350			104			275,763				—				—				—			275,867
Shares withheld for net settlements of share-based awards		(134	)		(1	)		(4,091	)			—				—				—			(4,092	)			(169	)		(2	)		(4,355	)		—				—				—			—				—				(4,357	)
Issuance of common stock – ESPP		8			—			242				—				—				—			242
Issuance of commonstock - ESPP																											8			—			141			—				—				—			—				—				141
Repurchases of common stock																											(1,848	)					—											1,848			(40,182	)			—				(40,182	)
Net income (loss)		—			—			—				71,395				—				(87	)		71,308				—			—			—			34,987				—				—			—				(67	)			34,920
Other comprehensive income		—			—			—				—				3,131				2			3,133				—			—			—			—				1,354				—			—				8				1,362

Balance, June 30, 2017		123,976		$	1,240		$	1,180,038			$	73,299			$	(27,694	)		$	(184	)	$	1,226,699
*Balance, March 31, 2018*																											122,005		$	1,239		$	1,192,779		$	8,209			$	(23,092	)			1,848		$	(40,182	)		$	(381	)		$	1,138,572

During the ~~six~~three months ended ~~June 30, 2017,~~March 31, 2018, the Company withheld shares through net share settlements to satisfy statutory tax withholding requirements upon vesting of shares of restricted stock held by employees.

~~Outstanding share and per-share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split. Refer to Note 1 – Basis of Presentation.~~

As a REIT, GEO is required to distribute annually at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and by excluding net capital gain) and began paying regular quarterly REIT dividends in 2013. The amount, timing and frequency of future dividends, however, will be at the sole discretion of GEO’s Board of Directors (the “Board”) and will be declared based upon various factors, many of which are beyond GEO’s control, including, GEO’s financial condition and operating cash flows, the amount required to maintain REIT status, limitations on distributions in GEO’s existing and future debt instruments, limitations on GEO’s ability to fund distributions using cash generated through GEO’s taxable REIT subsidiaries (“TRSs”) and other factors that GEO’s Board may deem relevant.

During the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 and the year ended December 31, ~~2016, respectively,~~2017 GEO declared and paid the following regular cash distributions to its shareholders as follows:

~~Distributions per share above have been adjusted to reflect the effects of the stock split.~~

On ~~March 7, 2017,~~February 14, 2018, the Company ~~entered into an underwriting agreement related to the issuance and sale~~announced that its Board of ~~9,000,000 shares of common~~Directors authorized a stock ~~par value $.01 per share, of the Company. The offering price to the public was $27.80 per share and the underwriters agreed to purchase the shares from~~buyback program authorizing the Company ~~pursuant~~ to the underwriting agreement at a price of $26.70 per share. In addition, under the terms of the underwriting agreement, the Company granted the underwriters an option, exercisable for 30 days, to purchaserepurchase up to ~~an additional 1,350,000~~a maximum of $200.0 million of its shares of common stock. ~~On March 8, 2017,~~The stock buyback program will be funded primarily with cash on hand, free cash flow and borrowings under the ~~underwriters exercised~~Company’s Revolver. The program shall be effective through October 20, 2020. The stock buyback program is intended to be implemented through purchases made from time to time in ~~full their option to purchase~~ the ~~additional 1,350,000 shares of common stock. On March 13, 2017, the Company announced that it had completed the sale of 10,350,000 shares of common stock~~open market or in privately negotiated transactions, in accordance with its previously announced underwritten public offering. GEO received gross proceeds (before underwriting discounts and estimated offering expenses) of approximately $288.1 million from the offering, including approximately $37.6 million in connection with the sale of the additional shares. Fees paid in connection with the offering were not significant and have been netted against additional paid-in capital. The 10,350,000 shares of common stock were issued under GEO’s currently effective shelf registration filed with theapplicable Securities and Exchange ~~Commission.~~Commission (“SEC”) requirements. The ~~net proceeds~~stock buyback program does not obligate the Company to purchase any specific amount of ~~this offering were used to repay amounts outstanding under~~our common stock and may be suspended or extended at any time at the ~~revolver portion~~discretion of the Company’s ~~senior credit facility and for general corporate purposes.~~Board of Directors. During the three months ended March 31, 2018, the Company purchased 1.8 million shares of its common stock at a cost of $40.2 million primarily purchased with proceeds from the Company’s Revolver. The ~~number of shares and per-share amounts herein have been adjusted~~Company believes it has the ability to ~~reflect the effects of~~continue to fund the stock ~~split. Refer to Note 1 – Basis of Presentation~~buyback program, its debt service requirements and its maintenance and growth capital expenditure requirements, while maintaining sufficient liquidity for other corporate purposes.

~~In September 2014,~~On October 20, 2017, the Company filed with the ~~Securities and Exchange Commission~~SEC an automatic shelf registration ~~statement~~ onForm S-3. ~~On November 10, 2014, in connection with the~~ Under this shelf registration, the Company ~~filed with the Securities and Exchange Commission a prospectus supplement related to the offer and sale~~may, from time to time, sell any combination of ~~the Company’s common stock at an aggregate offering price of up to $150.0 million through sales agents. Sales of shares of the Company’s common stock under~~securities described in the prospectus in one or more offerings. Each time that the Company may sell securities, the Company will provide a prospectus supplement that will contain specific information about the terms of that offering and the equity distribution agreements entered into with the sales agents, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933. There were no shares of common stock sold under this prospectus supplement during the six months ended June 30, 2017 or during the year ended December 31, 2016.securities being offered.

Comprehensive income (loss) represents the change in shareholders’ equity from transactions and other events and circumstances arising fromnon-shareholder sources. The Company’s total comprehensive income (loss) is comprised of net income attributable to GEO, net income attributable to noncontrolling interests, foreign currency translation adjustments that arise from consolidating foreign operations that do not impact cash flows, net unrealized gains and/or losses on derivative instruments, and pension liability adjustments within shareholders’ equity and comprehensive income (loss).

The components of accumulated other comprehensive income (loss) attributable to GEO within shareholders’ equity are as follows:

The Board has adopted The GEO Group, Inc. ~~2014~~2018 Stock Incentive Plan (the ~~“2014~~“2018 Plan”), which was approved by the Company’s shareholders on ~~May 2, 2014.~~April 24, 2018. The ~~2014~~2018 Plan replaced the ~~2006~~2014 Stock Incentive Plan (the ~~“2006~~“2014 Plan”). As of the date the ~~2014~~2018 Plan was adopted, it provided for a reserve of ~~4,625,030 shares, which consisted of 3,000,000 new shares of common stock available for issuance and 1,625,030~~4,600,000 shares of common stock that ~~were available for issuance~~may be issued pursuant to awards granted under the 2006 Plan prior to the 2014 Plan replacing it adjusted to reflect the effects of the stock split. The Company filed a Form S-8 registration statement related to the 2014 Plan on June 4, 2014, which was amended on July 18, 2014.

~~Outstanding share and per-share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split. Refer to Note 1 – Basis of Presentation.~~2018 Plan.

The Company uses a Black-Scholes option valuation model to estimate the fair value of each time based or performance based option awarded. ~~For options~~There were no stock option awards granted during the ~~six~~three months ended June 30, 2017, the fair value was estimated using the following assumptions: (i) volatility of 35.72%; (ii) expected term of 5.00 years; (iii) risk free interest rate of 1.53%; and (iv) expected dividend yield of 5.79%.March 31, 2018. A summary of the activity of stock option awards ~~issued and outstanding~~ under Company plans is as follows for the ~~six~~three months ended ~~June 30, 2017:~~March 31, 2018:

~~During~~For the ~~six~~three months ended ~~June 30,~~March 31, 2018 and March 31, 2017, the Company granted approximately 461,000 options to certain employees which had a weighted-average grant-date fair value of $5.91 per share. For the six months ended June 30, 2017 and June 30, 2016, the amount of stock-based compensation expense related to stock options was ~~$0.9~~$0.2 million and ~~$0.3~~$0.7 million, respectively. As of ~~June 30, 2017,~~March 31, 2018, the Company had ~~$2.2~~$1.7 million of unrecognized compensation costs related tonon-vested stock option awards that are expected to be recognized over a weighted average period of ~~3.4~~2.7 years.

Compensation expense for nonvested stock awards is recorded over the vesting period based on the fair value at the date of grant. Generally, the restricted stock awards vest in equal increments over either a three or four-year period. The fair value of restricted stock awards, which do not contain a market-based vesting condition, is determined using the closing price of the Company’s common stock on the date of grant. The Company has historically issued share-based awards with service-based, performance-based and market-based vesting criteria.

A summary of the activity of restricted stock outstanding is as follows for the ~~six~~three months ended ~~June 30, 2017:~~March 31, 2018:


	Shares			Wtd. Avg. Grant Date Fair Value		Shares			Wtd. Avg. Grant Date Fair Value
	(in thousands)					(in thousands)
Restricted stock outstanding at December 31, 2016		1,346		$	24.37
Restricted stock outstanding at January 1, 2018							1,770		$	30.47
Granted		924			35.40		—			—
Vested		(435	)		23.16		(562	)		28.55
Forfeited/canceled		(27	)		24.42		(9	)		28.27

Restricted stock outstanding at June 30, 2017		1,808		$	30.44
Restricted stock outstanding at March 31, 2018							1,199		$	31.10

~~During the six months ended June 30, 2017, the~~The Company ~~granted approximately 924,000~~did not grant any shares of restricted stock ~~to certain employees and executive officers. Of these awards, 295,000 are market and performance-based awards which will be forfeited if~~during the ~~Company does not achieve certain annual metrics during 2017,~~three months ended March 31, 2018.

The vesting of these performance-based restricted stock grants are subject to the achievement by GEO of two annual performance metrics as follows: (i) up to 50% of the shares of restricted stock (“TSR Target Award”) can vest at the end of a three year performance period if GEO meets certain total shareholder return (“TSR”) performance targets, as compared to the total shareholder return of a peer group of companies, over a three year period from January 1,March 31, 2017, to December 31, 2019 and (ii) up to 50% of the shares of restricted stock (“ROCE Target Award”) can vest at the end of a three year period if GEO meets certain return on capital employed (“ROCE”) performance targets over a three year period from January 1, 2017 to December 31, 2019. These market and performance awards can vest at between 0% and 200% of the target awards for both metrics. The number of shares shown for the performance-based awards is based on the target awards for both metrics.

The metric related to ROCE is considered to be a performance condition. For share-based awards that contain a performance condition, the achievement of the targets must be probable before any share-based compensation expense is recorded. The Company reviews the likelihood of which the target in the range will be achieved and if deemed probable, compensation expense is recorded at that time. If subsequent to initial measurement there is a change in the estimate of the probability of meeting the performance condition, the effect of the change in the estimated quantity of awards expected to vest is recognized by cumulatively adjusting compensation expense. If ultimately the performance targets are not met, for any awards where vesting was previously deemed probable, previously recognized compensation expense will be reversed in the period in which vesting is no longer deemed probable. The fair value of these awards was determined based on the closing price of the Company’s common stock on the date of grant.

The metric related to TSR is considered to be a market condition. For share-based awards that contain a market condition, the probability of satisfying the market condition must be considered in the estimate of grant-date fair value and previously recorded compensation expense is not reversed if the market condition is never met. The fair value of these awards was determined based on a Monte Carlo simulation, which calculates a range of possible outcomes and the probabilities that they will occur, using the following average key assumptions: (i) volatility of 42.2%; (ii) beta of 1.11; and (iii) risk free rates of 1.46%.

~~For the six months ended June 30, 2017 and June 30, 2016,~~ the Company recognized ~~$9.1~~$5.6 million and ~~$6.1~~$4.3 million, respectively, of compensation expense related to its restricted stock awards. As of ~~June 30, 2017,~~March 31, 2018, the Company had ~~$41.6~~$28.9 million of unrecognized compensation costs related tonon-vested restricted stock awards, includingnon-vested restricted stock awards with performance-based and market-based vesting, that are expected to be recognized over a weighted average period of 2.9 years.

The Company previously adopted The GEO Group Inc. 2011 Employee Stock Purchase Plan (the ~~“Plan”~~“Plan or “ESPP”) which was approved by the Company’s shareholders. The purpose of the Plan, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions by the employees of GEO and designated subsidiaries of GEO in order to increase their identification with the Company’s goals and secure a proprietary interest in the Company’s success. These deductions are used to purchase shares of the Company’s common stock at a 5% discount from the then current market price. The Company has made available up to 750,000 ~~as split adjusted,~~ shares of its common stock, which were registered with the Securities and Exchange Commission on May 4, 2012, as amended on July 18, 2014, for sale to eligible employees under the Plan.

The Plan is considered to benon-compensatory. As such, there is no compensation expense required to be recognized. Share purchases under the Plan are made on the last day of each month. During the ~~six~~three months ended ~~June 30, 2017, 4,060~~March 31, 2018, 6,867 shares of the Company’s common stock were issued in connection with the Plan.

Basic earnings per share of common ~~share~~stock is computed by dividing the net income from continuing operations attributable to The GEO Group, Inc. by the weighted average number of outstanding shares of common stock. The calculation of diluted earnings per share is similar to that of basic earnings per share except that the denominator includes dilutive common stock equivalents such as stock options and shares of restricted stock. Basic and diluted earnings per share were calculated for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ as follows (in thousands, except per share data):

~~Outstanding share and per-share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split.~~

For the three months ended ~~June 30, 2017, 486,018~~March 31, 2018, 759,382 weighted average shares of common stock underlying options were excluded from the computation of diluted earnings per share (“EPS”) because the effect would be anti-dilutive. There were ~~175,385~~757,401 common stock equivalents from restricted shares that were anti-dilutive.

For the three months ended ~~June 30, 2016, 383,195~~March 31, 2017, 449,396 weighted average shares of common stock underlying options were excluded from the computation of diluted EPS because the effect would be anti-dilutive. There were ~~267,861 common stock equivalents from restricted shares that were anti-dilutive.~~

For the six months ended June 30, 2017, 561,129 weighted average shares of common stock underlying options were excluded from the computation of diluted EPS because the effect would be anti-dilutive. There were 554,201 common stock equivalents from restricted shares that were anti-dilutive.

For the six months ended June 30, 2016, 814,647 weighted average shares of common stock underlying options were excluded from the computation of diluted EPS because the effect would be anti-dilutive. There were 397,634214,752 common stock equivalents from restricted shares that were anti-dilutive.

The Company’s primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in interest rates. The Company measures its derivative financial instruments at fair value.

The Company’s Australian subsidiary is a party to an interest rate swap agreement to fix the interest rate on its variable rate non-recourse debt (related to its Fulham facility) to 9.7%. The Company had determined the swap’s payment and expiration dates, and call provisions that coincided with the terms of the non-recourse debt, to be an effective cash flow hedge. Accordingly, the Company recorded the change in the fair value of the interest rate swap in accumulated other comprehensive income, net of applicable income taxes. Total unrealized gains recorded in other comprehensive income, net of tax, related to this cash flow hedge were not significant for the six months ended June 30, 2017 and 2016. The associated non-recourse debt was paid off during the six months ended June 30, 2017 and the interest rate swap is no longer in existence as of June 30, 2017.

The Company’s Australian subsidiary has entered into interest rate swap agreements to fix the interest rate on its variable ratenon-recourse debt related to a prison project in Ravenhall, a locality near Melbourne, Australia to ~~3.3% during the design and construction phase and~~ 4.2% during the project’s operating phase. The swaps’ notional amounts coincide with ~~construction draw fixed commitments throughout~~outstanding draws under the project. At ~~June 30, 2017,~~March 31, 2018, the swaps had a notional amount of ~~approximately AUD 671 million, or $516 million, based on exchange rates at June 30, 2017, related to the outstanding draws for the design and construction phase and~~ approximately AUD 466 million, or $358 million, based on exchange rates at ~~June 30, 2017 related to future construction draws. At the onset, the~~March 31, 2018. The Company ~~had~~has determined that the swaps have payment, expiration dates, and provisions that coincide with the terms of thenon-recourse debt ~~scheduled construction draw commitments~~ and ~~were~~are therefore considered to be effective cash flow hedges. During 2017, certain of the critical terms of the swap agreements no longer coincided with the scheduled construction draw commitments. However, the swaps are still considered to be highly effective and the measurement of any ineffectiveness was not significant during the six months ended June 30, 2017. Accordingly, the Company records the change in the fair value of the interest rate swaps in accumulated other comprehensive income, net of applicable income taxes. Total unrealized gain recorded in other comprehensive income, net of tax, related to this cash flow hedge was ~~$0.8~~$0.1 million during the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. The total fair value of the swap liability as of ~~June 30, 2017~~March 31, 2018 was ~~$17.7~~$13.1 million and is recorded as a component of OtherNon-Current liabilities within the accompanying consolidated balance sheet. There was no material ineffectiveness for the periods presented. The Company does not expect to enter into any transactions during the next twelve months which would result in the reclassification into earnings or losses associated with these swaps currently reported in accumulated other comprehensive income (loss).

Additionally, upon completion and commercial acceptance of the prison project, the Department of Justice in the State of Victoria (the “State”) in accordance with the prison contract, will make a lump sum payment of AUD 310 million, or approximately $238 million, based on exchange rates at June 30, 2017, towards a portion of the outstanding principal of the non-recourse debt. The Company’s Australian subsidiary also entered into interest rate cap agreements giving the Company the option to cap the interest rate on its variable non-recourse debt related to the project in the event that the completion of the prison project is delayed which could delay the State’s payment. These instruments do not meet the requirements for hedge accounting, and therefore, changes in fair value of the interest rate caps are recorded in earnings. Total losses related to a decrease in the fair value of the interest rate cap assets were not significant during the six months ended June 30, 2017 or 2016. The total fair value of the interest rate cap assets was not significant as of June 30, 2017 and December 31, 2016, respectively, and is recorded as a component of other non-current assets within the accompanying consolidated balance sheets.

Debt outstanding as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 consisted of the following (in thousands):


	June 30, 2017			December 31, 2016			March 31, 2018			December 31, 2017
Senior Credit Facility:
Term loan	$	798,000		$	289,500		$	792,000		$	794,000
Unamortized discount on term loan		(3,822	)		(375	)		(3,344	)		(3,499	)
Unamortized debt issuance costs on term loan		(8,313	)		—			(7,273	)		(7,612	)
Revolver		194,168			515,000			330,155			270,559

Total Senior Credit Facility	$	980,033		$	804,125		$	1,111,538		$	1,053,448
6.00% Senior Notes:
Notes Due in 2026		350,000			350,000			350,000			350,000
Unamortized debt issuance costs		(5,567	)		(5,770	)		(5,203	)		(5,325	)

Total 6.00% Senior Notes Due in 2026		344,433			344,230			344,797			344,675
5.875% Senior Notes:
Notes Due in 2024		250,000			250,000			250,000			250,000
Unamortized debt issuance costs		(3,584	)		(3,773	)		(3,285	)		(3,385	)

Total 5.875% Senior Notes Due in 2024		246,416			246,227			246,715			246,615
5.125% Senior Notes:
Notes Due in 2023		300,000			300,000			300,000			300,000
Unamortized debt issuance costs		(4,492	)		(4,786	)		(4,030	)		(4,184	)

Total 5.125% Senior Notes Due in 2023		295,508			295,214			295,970			295,816
5.875% Senior Notes
Notes Due in 2022		250,000			250,000			250,000			250,000
Unamortized debt issuance costs		(3,590	)		(3,923	)		(3,066	)		(3,241	)

Total 5.875% Senior Notes Due in 2022		246,410			246,077			246,934			246,759

Non-Recourse Debt		544,789			490,902			382,891			394,008
Unamortized debt issuance costs on non-recourse debt		(15,018	)		(18,295	)		(7,974	)		(9,322	)
Unamortized discount on non-recourse debt		(334	)		(400	)		(244	)		(271	)

Total Non-Recourse Debt		529,437			472,207			374,673			384,415
Capital Lease Obligations		8,076			8,693			7,098			7,431
Other debt		2,866			3,030			2,606			2,728

Total debt		2,653,179			2,419,803			2,630,331			2,581,887
Current portion of capital lease obligations, long-term debt and non-recourse debt		(255,404	)		(238,065	)		(25,189	)		(28,920	)
Capital Lease Obligations, long-term portion		(6,787	)		(7,431	)		(5,698	)		(6,059	)
Non-Recourse Debt, long-term portion		(283,780	)		(238,842	)		(359,387	)		(365,364	)

Long-Term Debt	$	2,107,208		$	1,935,465		$	2,240,057		$	2,181,544

On March 23, 2017, the Company executed a third amended and restated credit agreement by and among The GEO Group, Inc. and GEO Corrections Holdings, Inc., (“Corrections” and, together with The GEO Group, Inc., the “Borrowers”), the Australian Borrowers named therein, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”). The Credit Agreement refinances GEO’s prior $291.0 million term loan, reestablishes GEO’s ability to implement at a later date an Australian Dollar Letter of Credit Facility (the “Australian LC Facility”) providing for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars up to AUD275 million, an increase from the prior AUD225 million Australian ~~LC Facility,~~Dollar letter of credit facility, and certain other modifications to the prior credit agreement. Loan costs of approximately $7.0 million were incurred and capitalized in connection with the transaction.

The Credit Agreement evidences a credit facility (the “Credit Facility”) consisting of an $800 million term loan (the “Term Loan”) bearing interest at LIBOR plus 2.25% (with a LIBOR floor of 0.75%), and a $900 million revolving credit facility (the “Revolver”) initially bearing interest at LIBOR plus 2.25% (with no LIBOR floor) together with AUD275 million available solely for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars under the Australian LC Facility. As of ~~June 30, 2017,~~March 31, 2018, there were no letters of credit issued under the Australian LC Facility. Amounts to be borrowed by GEO under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing. The Term Loan component is scheduled to mature on March 23, 2024. The revolving credit commitment component is scheduled to mature on May 19, ~~2021; provided, that if on October 3, 2019 both the maturity dates of all term loans and incremental term loans have not been extended to a date that is 5~~¹⁄₂ ~~years after March 23, 2017 or a later date, and the senior secured leverage ratio exceeds 2.50 to 1.00, then the termination date will be October 3, 2019.~~2021. The Credit Agreement also has an accordion feature of $450.0 million, subject to lender demand and prevailing market conditions and satisfying the relevant borrowing conditions.

The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict GEO’s ability to, among other things (i) create, incur or assume any indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make certain restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio to exceed 6.25 to 1.00, allow the senior secured leverage ratio to exceed 3.50 to 1.00, or allow the interest coverage ratio to be less than 3.00 to 1.00, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes, except as permitted, (x) alter the business GEO conducts, and (xi) materially impair GEO’s lenders’ security interests in the collateral for its loans.

Events of default under the Credit Agreement include, but are not limited to, (i) GEO’s failure to pay principal or interest when due, (ii) GEO’s material breach of any representation or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) certain material environmental liability claims asserted against GEO, and (viii) a change in control.

All of the obligations under the Credit Agreement are unconditionally guaranteed by certain domestic subsidiaries of GEO and the Credit Agreement and the related guarantees are secured by a perfected first-priority pledge of substantially all of GEO’s present and future tangible and intangible domestic assets and all present and future tangible and intangible domestic assets of each guarantor, including but not limited to a first-priority pledge of all of the outstanding capital stock owned by GEO and each guarantor in their domestic subsidiaries.

The Australian Borrowers are wholly owned foreign subsidiaries of GEO. GEO has designated each of the Australian Borrowers as restricted subsidiaries under the Credit Agreement. However, the Australian Borrowers are not obligated to pay or perform any obligations under the Credit Agreement other than their own obligations as Australian Borrowers under the Credit Agreement. The Australian Borrowers do not pledge any of their assets to secure any obligations under the Credit Agreement.

On August 18, 2016, the Company executed a Letter of Offer by and among GEO and HSBC Bank Australia Limited (the “Letter of Offer”) providing for a bank guarantee line and bank guarantee/standbysub-facility in an aggregate amount of approximately AUD100 million, or ~~$76.9~~$77 million, based on exchange rates in effect as of ~~June 30, 2017~~March 31, 2018 (collectively, the “Bank Guarantee Facility”). The Bank Guarantee Facility allows GEO to provide letters of credit to assure performance of certain obligations of its wholly owned subsidiary relating to its prison project in Ravenhall, located near Melbourne, Australia. The Bank Guarantee Facility is unsecured. The issuance of letters of credit under the Bank Guarantee Facility is subject to the satisfaction of the conditions precedent specified in the Letter of Offer. Letters of credit issued under the bank guarantee lines are due on demand and letters of credit issued under the bank guarantee/standbysub-facility cannot have a duration exceeding twelve months. The Bank Guarantee Facility may be terminated by HSBC Bank Australia Limited on 90 days written notice. As of ~~June 30, 2017,~~March 31, 2018, there was AUD100 million in letters of credit issued under the Bank Guarantee Facility.

As of ~~June 30, 2017,~~March 31, 2018, the Company had ~~$798~~approximately $792 million in aggregate borrowings outstanding under the Term Loan, ~~$194~~approximately $330 million in borrowings under the Revolver, and approximately ~~$64~~$70 million in letters of credit which left ~~$642~~approximately $500 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Credit Agreement as of ~~June 30, 2017~~March 31, 2018 was ~~3.4%~~4.2%.

Interest on the 6.00% Senior Notes due 2026 accrues at the stated rate. The Company pays interest semi-annually in arrears on April 15 and October 15 of each year. On or after April 15, 2019, the Company may, at its option, redeem all or part of the 6.00% Senior Notes due 2026 at the redemption prices set forth in the indenture governing the 6.00% Senior Notes due 2026. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. Refer toNote ~~15-Condensed~~17 - Condensed Consolidating Financial Information.

Interest on the 5.875% Senior Notes due 2024 accrues at the stated rate. The Company pays interest semi-annually in arrears on April 15 and October 15 of each year. On or after October 15, 2019, the Company may, at its option, redeem all or part of the 5.875% Senior Notes due 2024 at the redemption prices set forth in the indenture governing the 5.875% Senior Notes due 2024. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. Refer toNote ~~15-Condensed~~17 - Condensed Consolidating Financial Information.

Interest on the 5.125% Senior Notes due 2023 accrues at the stated rate. The Company pays interest semi-annually in arrears on April 1 and October 1 of each year. On or after April 1, 2018, the Company may, at its option, redeem all or part of the 5.125% Senior Notes at the redemption prices set forth in the indenture governing the 5.125% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. Refer toNote ~~15-Condensed~~17 - Condensed Consolidating Financial Information.

Interest on the 5.875% Senior Notes due 2022 accrues at the stated rate. The Company pays interest semi-annually in arrears on January 15 and July 15 of each year. On or after January 15, 2017, the Company may, at its option, redeem all or part of the 5.875% Senior Notes due 2022 at the redemption prices set forth in the indenture governing the 5.875% Senior Notes due 2022. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. Refer toNote ~~15-Condensed~~17 - Condensed Consolidating Financial Information.

The remaining balance of the original debt service requirement under the $54.4 million note payable (“2011 Revenue Bonds”) to WEDFA will mature in October 2021 with fixed coupon rates of 5.25%, is ~~$36.7~~$30.0 million, of which ~~$6.7~~$7.0 million is classified as current in the accompanying consolidated balance sheet as of ~~June 30, 2017.~~March 31, 2018. The payment of principal and interest on the 2011 Revenue Bonds issued by WEDFA isnon-recourse to GEO.

As of ~~June 30, 2017,~~March 31, 2018, included in current restricted cash and ~~investments~~cash equivalents is ~~$8.0~~$7.9 million of funds held in trust for debt service and other reserves with respect to the above mentioned note payable to WEDFA.

At December 31, 2016, the non-recourse obligation of the Company totaled $2.8 million (AUD 3.6 million), based on the exchange rates in effect at December 31, 2016. The term of the non-recourse debt was through 2017 and it bore interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary were matched by a similar or corresponding commitment from the government of the State of Victoria. During the six months ended June 30, 2017, the remaining balance was paid in full.

In connection with a ~~new~~ design and build prison project agreement with the State, the Company entered into a syndicated facility agreement (the “Construction Facility”) with National Australia Bank Limited to provide debt financing for construction of the project. The Construction Facility ~~provides~~provided fornon-recourse funding up to AUD 791.0 million, or approximately ~~$608.0~~$607.9 million, based on exchange rates as of ~~June 30, 2017.~~March 31, 2018. Construction draws ~~are~~were funded throughout the project according to a fixed utilization schedule as defined in the syndicated facility agreement. The term of the Construction Facility is through October 2019 and bears interest at a variable rate quoted by certain Australian banks plus 200 basis points. The project ~~is being~~was developed under a public-private partnership financing structure with a capital contribution from the Company, which was made in January 2017, of approximately AUD115 million, or $88.4 million, based on exchange rates as of ~~June 30, 2017.~~March 31, 2018. After October 2019, the Construction Facility will be converted to a term loan with payments due quarterly beginning in 2019 through 2041. In accordance with the terms of the Construction Facility, upon completion and commercial acceptance of the prison in fourth quarter 2017, in accordance with the prison contract, the State ~~will make~~made a lump sum payment of AUD310 million, or approximately $238 million, based on exchange rates as of ~~June 30, 2017,~~March 31, 2018, towards a portion of the outstanding principal. The remaining outstanding principal balance will be repaid over the term of the operating agreement. As of ~~June 30, 2017,~~March 31, 2018, approximately ~~$508~~$353 million was outstanding under the Construction Facility. The Company also entered into interest rate swap and interest rate cap agreements related to itsnon-recourse debt in connection with the project. Refer toNote ~~9 –~~11 - Derivative Financial Instruments.

The Company has entered into certain guarantees in connection with the financing and construction performance of a facility in Australia. The obligations amounted to approximately AUD 100.0 million, or ~~$76.9~~approximately $77 million, based on exchange rates as of ~~June 30, 2017.~~March 31, 2018. These guarantees are secured by outstanding letters of credit under the Company’s Revolver as of ~~June 30, 2017.~~March 31, 2018.

At ~~June 30, 2017,~~March 31, 2018, the Company also had ten other letters of credit outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling $15.6 million.

In connection with the creation of South African Custodial Services Pty. Limited (“SACS”), the Company entered into certain guarantees related to the financing, construction and operation of the prison. As of ~~June 30, 2017,~~March 31, 2018, the Company guaranteed obligations amounting to ~~7.4~~2.4 million South African Rand, or ~~$0.6~~$0.2 million based on exchange rates as of ~~June 30, 2017.~~March 31, 2018. In the event SACS is unable to maintain the required funding in a rectification account maintained for the payment of certain costs in the event of contract termination, a previously existing guarantee by the Company for the shortfall will need to bere-instated. The remaining guarantee of ~~7.4~~2.4 million South African Rand is secured by outstanding letters of credit under the Company’s Revolver as of ~~June 30, 2017.~~March 31, 2018.

In addition to the above, the Company has also agreed to provide a loan, if required, of up to 20 million South African Rand, or ~~$1.5~~$1.7 million based on exchange rates as of ~~June 30, 2017,~~March 31, 2018, referred to as the Shareholder’s Loan, to SACS for the purpose of financing SACS’ obligations under its contract with the South African government. No amounts have been funded under the standby facility, and the Company does not currently anticipate that such funding will be required by SACS in the future. The Company’s obligations under the Shareholder’s Loan expire upon the earlier of full funding or SACS’s release from its obligations under its debt agreements. SACS’ ability to draw on the Shareholder’s Loan is limited to certain circumstances, including termination of the contract.

The Company has also guaranteed certain obligations of SACS to the security trustee for SACS’ lenders. The Company secured its guarantee to the security trustee by ceding its rights to claims against SACS in respect of any loans or other finance agreements, and by pledging the Company’s shares in SACS. The Company’s liability under the guarantee is limited to the cession and pledge of shares. The guarantee expires upon expiration of the cession and pledge agreements.

In connection with a design, build, finance and maintenance contract for a facility in Canada, the Company guaranteed certain potential tax obligations of a trust. The potential estimated exposure of these obligations is Canadian Dollar 1.4 million, or $1.1 million, based on exchange rates as of June 30, 2017, commencing in 2017. The liability related to this exposure is included in Other Non-Current Liabilities as of June 30, 2017 and December 31, 2016, respectively. To secure this guarantee, the Company purchased Canadian Dollar denominated securities with maturities matched to the estimated tax obligations in 2017 to 2021. The Company has recorded an asset equal to the current fair value of those securities included in Other Non-Current Assets as of June 30, 2017 and December 31, 2016 on its consolidated balance sheets. The Company maintains the facility but does not currently operate or manage it.

In connection with the creation of GEOAmey, the Company and its joint venture partner guarantee the availability of working capital in equal proportion to ensure that GEOAmey can comply with current and future contractual commitments related to the performance of its operations. The Company and the 50% joint venture partner have each extended a £12 million line of credit, or ~~$15.6~~$16.9 million, based on exchange rates as of ~~June 30, 2017,~~March 31, 2018, of which ~~£2.5~~£1.3 million, or ~~$3.3~~$1.8 million, based on exchange rates as of ~~June 30, 2017,~~March 31, 2018, was outstanding as of ~~June 30, 2017~~March 31, 2018 to each joint venture partner. The Company’s maximum exposure relative to the joint venture is its note receivable of approximately ~~$3.3~~$1.8 million, which is included in OtherNon-Current Assets in the accompanying consolidated balance sheets, and future financial support necessary to guarantee performance under the contract.

Except as discussed above, the Company does not have any off balance sheet arrangements.

On August 25, 2016, a purported shareholder class action lawsuit was filed against the Company, its Chief Executive Officer, George C. Zoley (“Mr. Zoley”), and its Chief Financial Officer, Brian R. Evans (“Mr. Evans”), in the United States District Court for the Southern District of Florida. The complaint alleged that the Company and Messrs. Zoley and Evans made false and misleading statements regarding the Company’s business, operational and compliance policies. The lawsuit alleged that it was brought by John J. Mulvaney individually and on behalf of a class consisting of all persons other than the defendants who purchased or otherwise acquired the Company’s securities during the alleged class period between March 1, 2012 through and including August 17, 2016. The complaint alleged that the Company and Messrs. Zoley and Evans violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, and alleged that Messrs. Zoley and Evans violated Section 20(a) of the Exchange Act. On December 21, 2016, the appointed lead plaintiffs filed an Amended Class Action Complaint, which reasserted the claims against the Company and Messrs. Zoley and Evans, and asserted new claims for alleged false and misleading statements in violation of Section 20(a) of the Exchange Act against the Company’s former Senior Vice President, GEO Detention & Corrections Services, John Hurley (“Mr. Hurley”) and the Company’s Senior Vice President and President, GEO Corrections & Detention, David Donahue (“Mr. Donahue”). The amended complaint sought damages, interest, attorneys’ fees, expert fees, other costs, and such other relief as the court may deem proper. On February 23, 2017, the Court entered an order granting the Company’s motion to dismiss the Amended Class Action Complaint. On March 17, 2017, the case was dismissed with prejudice and resulted in no liability to the Company.

On February 8, 2017, the Attorney General of the State of Mississippi filed a lawsuit in the Circuit Court for the First Judicial District of Hinds County, Mississippi against the Company, Cornell Companies, Inc., a subsidiary of the Company, Christopher B. Epps, the former Commissioner of the Mississippi Department of Corrections, and Cecil McCrory, a former consultant of the Company. The complaint alleges several statutory and common law claims, including violations of various public servant statutes, racketeering activity, antitrust law, civil conspiracy, unjust enrichment and fraud. The complaint seeks compensatory damages, punitive damages, exemplary damages, forfeiture of all money received by the defendants, restitution, interest, attorneys’ fees, other costs, and such other expenses or damages as the court may deem proper. The complaint claims that between 2007 and 2014, the Company and Cornell Companies, Inc. received approximately $256 million in proceeds from public contracts paid for by the State of Mississippi. The Company intends to take all necessary steps to vigorously defend itself and Cornell Companies, Inc. The Company has not recorded an accrual relating to this matter at this time, as a loss is not considered probable nor reasonably estimable at this ~~preliminary~~ stage of the lawsuit.

On October 22, 2014, ~~nine current and~~ former civil immigration detainees ~~who were detained~~ at the Aurora Immigration Detention Center filed a ~~purported~~ class action lawsuit against the Company in the United States District Court for the District of Colorado (the “Court”). The complaint ~~alleged~~alleges that the Company was in violation of the Colorado Minimum Wages of Workers Act and the federal Trafficking Victims Protection Act ~~and claimed~~(“TVPA”). The plaintiff class claims that the Company was unjustly enriched as a result of the level of payment ~~that~~ the detainees received for work performed at the facility, even though the voluntary work program as well as the wage rates and standards associated with the program that are at issue in ~~this~~the case are authorized by the Federal government under guidelines approved by the United States Congress. On July 6, 2015, the Court granted the Company’s motion to dismiss the claim against the Company under the Colorado Minimum Wages of Workers Act but otherwise denied the Company’s motion to dismiss. OnIn February ~~27,~~ 2017, the Court granted the ~~plaintiffs’~~plaintiff-class’ motion for class ~~certification. The Court ordered~~certification which the parties to file a revised Proposed Stipulated Scheduling and Discovery Order by March 27, 2017 to proceed with the case. On March 13, 2017, GEO filed for permission to appeal this class certification order directlyCompany appealed to the 10th Circuit Court of ~~Appeal.~~Appeals. On ~~April 11, 2017,~~February 9, 2018, a three-judge panel of the ~~10th Circuit Court~~appellate court affirmed the class-certification order. The Company is seeking a rehearing en banc of ~~Appeal granted GEO’s petition to hear~~ the ~~case. As a result, GEO has filed a motion to stay the proceedings in the trial court. Fact discovery in the case has not yet begun.~~panel decision. The ~~plaintiffs seek~~plaintiff class seeks actual damages, compensatory damages, exemplary damages, punitive damages, restitution, attorneys’ fees and costs, and such other relief as the Court may deem proper. Since the Colorado suit was initially filed, three similar lawsuits have beenfiled - two in Washington and one in California. In Washington, one of the two lawsuits was filed on September 9, 2017 by immigration detainees against the Company in the United States District Court for the Western District of Washington. The second of the two lawsuits was filed on September 20, 2017 by the State Attorney General against the Company in the Superior Court of the State of Washington for Pierce County. On October 9, 2017, the Company removed the lawsuit to the United States District Court for the Western District of Washington. In California, a class-action lawsuit was filed on December 19, 2017 by immigration detainees against the Company in the United States District Court Eastern Division of the Central

District of California. All lawsuits allege violations of the respective state’s minimum wage laws. However, only the California lawsuit, similar to the Colorado class-action, also includes claims based on violating the federal TVPA. The Company intends to take all necessary steps to vigorously defend itself and has consistently refuted the allegations and claims in ~~the lawsuit.~~these lawsuits. The Company has not recorded an accrual relating to ~~this matter~~these matters at this time, as a loss is not considered probable nor reasonably estimable at this ~~state~~stage of the lawsuit. ~~If the Company had to change the level of compensation under the voluntary work program, or to substitute employee work for voluntary work, this could increase costs of operating these facilities.~~

The nature of the Company’s business exposes it to various types of third-party legal claims or litigation against the Company, including, but not limited to, civil rights claims relating to conditions of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, medical malpractice claims, product liability claims, intellectual property infringement claims, claims relating to employment matters (including, but not limited to, employment discrimination claims, union grievances and wage and hour claims), property loss claims, environmental claims, automobile liability claims, indemnification claims by its customers and other third parties, contractual claims and claims for personal injury or other damages resulting from contact with the Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company does not expect the outcome of any pending claims or legal proceedings to have a material adverse effect on its financial condition, results of operations or cash flows. However, the results of these claims or proceedings cannot be predicted with certainty, and an unfavorable resolution of one or more of these claims or proceedings could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

A ~~recently~~statenon-income tax audit completed ~~state non-income tax audit~~in 2016 included tax periods for which athe state tax authority had a number of years ago processed a substantial tax refund. At the completion of the audit fieldwork, the Company received a notice of audit findings disallowing deductions that were previously claimed by the Company, approved by the state tax authority and served as the basis for the approved refund claim. In early January 2017, the Company received a formal Notice of Assessment of Taxes and Demand for Payment from the taxing authority disallowing the deductions. The total tax, penalty and interest assessed is approximately $19.6 million. The Company has filed an administrative protest and disagrees with the assessment and intends to take all necessary steps to vigorously defend its position. The Company has established a reserve based on its estimate of the most probable loss based on the facts and circumstances known to date and the advice of outside counsel in connection with this matter.

The Company currently has contractual commitments for a number of projects using Company financing. The Company’s management estimates that the cost of these existing capital projects will be approximately ~~$196.3~~$239.5 million of which ~~$46.8~~$129.7 million was spent through the first ~~six~~three months of ~~2017.~~2018. The Company estimates the remaining capital requirements related to these capital projects will be ~~$149.5~~$109.8 million which will be spent through ~~2018.~~2019.

As of ~~June 30, 2017,~~March 31, 2018, the Company is marketing approximately ~~6,600~~5,400 vacant beds at ~~six~~five of its idle facilities to potential customers. The carrying values of these idle facilities, which are included in Property and Equipment, Net in the accompanying consolidated balance sheets, totaled ~~$164.2~~$138.5 million as of ~~June 30, 2017,~~March 31, 2018, excluding equipment and other assets that can be easily transferred for use at other facilities. There was no indication of impairment related to the Company’s idle facilities at ~~June 30, 2017.~~March 31, 2018.

The Company conducts its business through four reportable business segments: the U.S. Corrections & Detention segment; the GEO Care segment; the International Services segment; and the Facility Construction & Design segment. The Company’s segment revenues from external customers and a measure of segment profit are as follows (in thousands):


	Three Months Ended					Six Months Ended					Three Months Ended
	June 30, 2017			June 30, 2016		June 30, 2017			June 30, 2016		March 31, 2018		March 31, 2017
Revenues:
U.S. Corrections & Detention	$	360,838		$	341,573	$	708,769		$	679,943	$	358,681	$	347,931
GEO Care		139,364			96,529		243,130			189,943		140,078		103,766
International Services		42,928			38,497		84,620			76,052		66,158		41,692
Facility Construction & Design (1)		33,940			71,751		91,165			112,597
Facility Construction & Design [1]												—		57,225

Total revenues	$	577,070		$	548,350	$	1,127,684		$	1,058,535	$	564,917	$	550,614

Operating income from segments:
Operating income (loss) from segments:
U.S. Corrections & Detention	$	69,801		$	74,989	$	144,697		$	142,427	$	69,188	$	74,896
GEO Care		36,533			26,580		65,359			50,551		31,692		28,826
International Services		2,117			1,074		5,003			2,836		5,402		2,886
Facility Construction & Design (1)		(1,692	)		218		(1,342	)		275
Facility Construction & Design [1]												—		350

Operating income from segments	$	106,759		$	102,861	$	213,717		$	196,089	$	106,282	$	106,958

The following is a reconciliation of the Company’s total operating income from its reportable segments to the Company’s income before income taxes and equity in earnings of affiliates (in thousands):


	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			March 31, 2018			March 31, 2017
Total operating income from segments	$	106,759		$	102,861		$	213,717		$	196,089		$	106,282		$	106,958
Unallocated amounts:
General and Administrative Expenses		(52,206	)		(36,904	)		(94,792	)		(70,965	)		(41,832	)		(42,586	)
Net Interest Expense		(23,637	)		(25,187	)		(46,660	)		(49,996	)		(26,770	)		(23,023	)
Loss on Extinguishment of Debt		—			(15,866	)		—			(15,866	)

Income before income taxes and equity in earnings of affiliates	$	30,916		$	24,904		$	72,265		$	59,262		$	37,680		$	41,349

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in SACS, located in South Africa, and GEOAmey, located in the United Kingdom. The Company’s investments in these entities are accounted for under the equity method of accounting. The Company’s investments in these entities are presented as a component of OtherNon-Current Assets in the accompanying consolidated balance sheets.

The Company has recorded ~~$1.2~~$1.6 million and ~~$2.3~~$1.1 million in earnings, net of tax, for SACS operations during the three ~~and six~~ months ended ~~June 30,~~March 31, 2018, and 2017, ~~and $0.9 million and $1.8 million in earnings, net of tax, for SACS operations during the three and six months ended June 30, 2016,~~ respectively, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the Company’s investment in SACS was ~~$12.3~~$19.9 million and ~~$11.8 million, respectively.~~

The Company has recorded $0.3 million and $0.6 million in earnings, net of tax, for GEO Amey’s operation during the the three and six months ended June 30, 2017, and $1.1 million and $1.4 million in earnings, net of tax, during the three and six months ended June 30, 2016, respectively, in the accompanying consolidated statements of operations. As of June 30, 2017 and December 31, 2016, the Company’s investment in GEOAmey was $2.0 million and $1.3$18.1 million, respectively, and represents its share of cumulative reported earnings.

~~13.~~The Company has recorded $0.4 million and $0.3 million in earnings, net of tax, for GEO Amey’s operations during the three months ended March 31, 2018 and 2017, respectively, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of March 31, 2018 and December 31, 2017, the Company’s investment in GEOAmey was $3.3 million and $2.7 million, respectively, and represents its share of cumulative reported earnings.

The following table summarizes key information related to the Company’s pension plans and retirement agreements (in thousands):


		Six Months Ended June 30, 2017			Year Ended December 31, 2016			Three Months Ended March 31, 2018			Year Ended December 31, 2017
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period		$	28,624		$	25,935		$	32,820		$	28,624
Service cost			501			995			300			1,001
Interest cost			617			1,155			310			1,228
Actuarial loss			—			1,031			—			2,474
Benefits paid			(301	)		(492	)		(82	)		(507	)

Projected benefit obligation, end of period		$	29,441		$	28,624		$	33,348		$	32,820

Change in Plan Assets
Plan assets at fair value, beginning of period	��	$	—		$	—		$	—		$	—
Company contributions			301			492			82			507
Benefits paid			(301	)		(492	)		(82	)		(507	)

Plan assets at fair value, end of period		$	—		$	—		$	—		$	—

Unfunded Status of the Plan		$	(29,441	)	$	(28,624	)	$	(33,348	)	$	(32,820	)


	Three Months Ended				Six Months Ended				Three Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016		March 31, 2018		March 31, 2017
Components of Net Periodic Benefit Cost
Service cost	$	250	$	249	$	501		497	$	300	$	250
Interest cost		307		289	$	617	$	578		310		307
Net loss		73		53		145		107		133		73

Net periodic pension cost	$	630	$	591	$	1,263	$	1,182	$	743	$	630

The long-term portion of the pension liability as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 was ~~$29.1~~$32.2 million and $28.3 million, respectively, and is included in OtherNon-Current Liabilities in the accompanying consolidated balance sheets.

The Company implemented the following accounting standards during the ~~six~~three months ended ~~June 30, 2017:~~March 31, 2018:

In ~~March 2016,~~May 2014, the Financial Accounting Standards Board (“FASB”), issued ~~Accounting Standard Update (“ASU”~~a new standard related to revenue recognition(ASU 2014-09, “Revenue from Contracts with Customers”.) ~~No. 2016-09,~~ ~~“Compensation – Stock Compensation (Topic 718)~~,” asUnder the new standard, revenue is recognized when a ~~part~~customer obtains control of ~~its simplification initiative. The Company adopted this ASU during~~promised goods or services and is recognized in an amount that reflects the ~~six months ended June 30, 2017. Key areas~~consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the ~~amendments in this standard are (i) all excess tax benefits (deficiencies)~~nature, amount, timing, and uncertainty of revenue and cash flows arising from stock plan transactions should be recognized in the income statement as opposed to being recognized in additional paid-in capital; (ii) the tax withholding threshold for triggering liability accounting on a net settlement transactioncontracts with customers. The FASB has ~~been increased from the minimum statutory rate~~issued several amendments to the ~~maximum statutory rate;~~standard, including clarification on accounting for licenses of intellectual property and ~~(iii) an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur.~~identifying performance obligations. The guidance ~~also provides clarification~~permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the ~~presentation~~cumulative effect of ~~certain components~~initially applying the guidance recognized at the date of ~~share-based awards in~~initial application (the modified retrospective transition method). The new standard became effective for the ~~statement of cash flows. The~~ Company has elected to continue estimating forfeitures expected to occur in order to determine the amount of compensation cost to be recognized each period and to apply the cash flow classification guidance prospectively. As a result, excess tax benefits are now classified as an operating activity rather than a financing activitybeginning on January 1, 2018 and the Company ~~has recorded $1.4 million of excess tax benefits from stock plan transactions as a component of income tax expense in~~used the ~~consolidated statement of operations for the six months ended June 30, 2017.~~modified retrospective transition method to implement this standard. The ~~Company has excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of its diluted earnings per share for the six months ended June 30, 2017.~~

~~In March 2016, the FASB issued ASU 2016-05, “~~~~Derivatives and Hedging,~~” which clarifies that a change in the counter party to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The Company adopted this ASU during the six months ended June 30, 2017 and elected to apply the amendments in this standard on a prospective basis. The implementationadoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows. Disclosures related to the nature, amount and timing of revenue and cash flows arising from contracts with customers are included inNote 2 - Revenue Recognition.

In ~~March~~August 2016, the FASB issued ASU ~~2016-07, “~~~~Investments – Equity Method~~No. 2016-15, “Statement of Cash Flows,” which clarified the presentation and ~~Joint Ventures~~~~,” as~~classification in the statement of cash flows for eight specific cash flow issues with the objective of reducing diversity in practice. These cash flow issues include debt prepayment or debt extinguishment costs, settlementof zero-coupon debt instruments, contingent consideration payments made after a ~~part~~business combination, proceeds from the settlement of ~~its simplification initiative.~~insurance claims, proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies), distributions received from equity method investees, beneficial interests in securitization transactions and also addresses separately identified cash flows and the application of the predominance principle. The amendments in this standard eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifyingASUNo. 2016-15 became effective for the ~~equity method of accounting, no retroactive adjustment of the investment is required.~~Company on January 1, 2018. The amendments in ASU 2016-07 also require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The Company ~~adopted this ASU during the six months ended June 30, 2017 and~~ elected to apply the ~~amendments in this standard~~cumulative earnings approach to classify distributions received from its equity method investees and determined that the distributions are a return on ~~a prospective basis.~~investment and are therefore classified as cash inflows from operating activities. The implementation of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

In October 2016, the FASB issued ASUNo. ~~2016-17,~~2016-16, “~~Consolidation – Interest Held~~IncomeTaxes - Intra-Entity Transfers of Assets Other Than Inventory,” as a part of its simplification initiative. The amendments in this standard require entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Under prior generally accepted accounting principles, the recognition of current and deferred income taxes for an intra-entity asset transfer was prohibited until the asset has been sold to an outside party. The new standard became effective for the Company on January 1, 2018. The amendments in this update should be applied on a modified retrospective basis through ~~Related Parties that are Under Common Control~~a cumulative-effect adjustment directly to retained earnings as of the beginning of the adoption period. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

In November 2016, the FASB issued ASUNo. 2016-18, “Statement of Cash Flows - Restricted Cash,” which ~~amends~~requires that a statement of cash flows explain the ~~current consolidation guidance~~change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling thebeginning-of-period andend-of-period total amounts shown on ~~how~~the statement of cash flows. The new standard became effective for the Company on January 1, 2018 and was applied using a ~~reporting entity that is~~retrospective transition method to each period presented. The adoption of this standard did not have a material impact on the ~~single decision maker~~Company’s financial position, results of operations or cash flows. As a result of the adoption of this standard, the Consolidated Statement of Cash Flows for the three months ended March 31, 2017 has been retrospectively adjusted. Refer toNote 7 - Restricted Cash and Cash Equivalents for additional disclosures required under the standard.

In January 2017, the FASB issued ASUNo. 2017-01, “Business Combinations,” which clarifies the definition of a ~~variable interest entity (“VIE”) should treat indirect interests in the entity held through related parties that are under common control~~business with the ~~reporting entity~~objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update provides a screen to determine when ~~determining whether it~~an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the ~~primary beneficiary~~fair value of ~~that VIE. The primary beneficiary of a VIE~~the gross assets acquired (or disposed of) is ~~the reporting entity that has a controlling financial interest~~concentrated in a ~~VIE,~~single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and ~~therefore consolidates~~a substantive process that together significantly contribute to the ~~VIE. A reporting entity has~~ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an ~~indirect interest~~input and a substantive process are present. The amendments in ~~a VIE if it has a direct interest in a related party that, in turn, has a direct interest in~~this update became effective for the ~~VIE. The~~ Company ~~adopted this ASU during the six months ended June 30, 2017.~~on January 1, 2018. The implementation of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

~~The following accounting standards~~In March 2017, the FASB issued ASUNo. 2017-07 “Compensation - Retirement Benefits(Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. This guidance revises how employers that sponsor defined benefit pension and other postretirement plans present the net periodic benefit cost in their income statement and requires that the service cost component of net periodic benefit cost be presented in the same income statement line items as other employee compensation costs from services rendered during the period. Of the components of net periodic benefit cost, only the service cost component will be ~~adopted in future periods:~~eligible for asset capitalization. The other components of the net periodic benefit cost must be presented separately from the line items that include the service cost and outside of any subtotal of operating income on the income statement. The new standard became effective for the Company on January 1, 2018. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

In May 2017, the FASB issued ASUNo. 2017-10 “Service ConcessionArrangements –- Determining the Customer of the Operation Services”. The objective of this guidance is to reduce diversity in practice and provide clarification on how an operating entity determines the customer of the operation services for transactions within the scope of Topic 853, Service Concessions Arrangements. The amendments in this update clarify that the grantor is the customer of the operation services in all cases for such arrangements. The new standard iswas effective for the Company beginning on January 1, 2018. The adoption of this standard isdid not ~~expected to~~ have a material impact on the Company’s financial position, results of operations or cash flows.

In May 2017, the FASB issued ASUNo. 2017-09 “Compensation –- Stock Compensation”. The objective of this guidance is to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying modification accounting for changes in the terms or conditions of share-based payment awards. An entity should account for the effects of a modification unless all of the following factors are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The new standard ~~will be~~became effective for ~~all entities for fiscal years beginning after December 15, 2017 with early adoption permitted for public companies for reporting periods for which financial statements have not yet been issued.~~the Company on January 1, 2018. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

In February 2018, the FASB issued ASUNo. 2018-02 “IncomeStatement - Reporting ComprehensiveIncome - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The amendments in this update allow an entity to elect to reclassify the income tax effects resulting from the Tax Cuts and Jobs Act on items within accumulated other comprehensive income to retained earnings. The new standard is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is in the process of evaluating whether or not the Company will make such an election and whether or not the new standard would have a material impact on the Company’s financial position, results of operations or cash flows.

In August 2017, the FASB issued ASUNo. 2017-12 “Derivatives andHedging - Targeted Improvements to Accounting for Hedging Activities”. The objective of this guidance is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Certain of the amendments in this update as they relate to cash flow hedges, eliminate the requirement to separately record hedge ineffectiveness currently in earnings. Instead, the entire change in the fair value of the hedging instrument is recorded in other comprehensive income. Those amounts are reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings. The new standard is effective for the Company beginning January 1, 2019. The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In ~~March 2017, the FASB issued ASU No. 2017-07 “~~~~Compensation – Retirement Benefits (Topic 715)-Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~”. This guidance revises how employers that sponsor defined benefit pension and other postretirement plans present the net periodic benefit cost in their income statement and requires that the service cost component of net periodic benefit cost be presented in the same income statement line items as other employee compensation costs from services rendered during the period. Of the components of net periodic benefit cost, only the service cost component will be eligible for asset capitalization. The other components of the net periodic benefit cost must be presented separately from the line items that include the service cost and outside of any subtotal of operating income on the income statement. The new standard will be effective for public companies for fiscal years beginning after December 15, 2017 on a retroactive basis. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In February 2016, FASB issuedASU 2016-02, “Leases,” which requires entities to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. For finance leases and operating leases, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and aright-of-use asset representing its right to use the underlying asset for the lease term with each initially measured at the present value of the lease payments. The FASB has recently issued several amendments to the standard, including accounting for land easements. The amendments inASU 2016-02 are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company has implemented a lease management software application tool and is currently assessing the impact that the adoption of ASU2016-02 will have on its consolidated financial position or results of operations, but expects that it will result in a significant increase in its long-term assets and liabilities given the significant number of leases as disclosed inNote 17 - Commitments and Contingencies in the ~~Company is a party to.~~Company’s Annual Report onForm 10-K for the year ended December 31, 2017.

~~In May 2014,~~Other recent accounting pronouncements issued by the FASB ~~issued a new standard related~~(including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not, or are not expected to, ~~revenue recognition (ASU 2014-09,~~~~“Revenue from Contracts with Customers~~.”) Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective transition method). The new standard is effective for the Company beginning on January 1, 2018. The Company is currently in the process of evaluating whether these standards would have a material ~~impact~~effect on the Company’s financial position, results of operation or cash flows. However, upon its initial assessment, the Company believes that the timing of revenue recognition could potentially be affected as it relates to certain variable consideration arrangements with certain of its customers. However, at this time, the Company does not believe this would result in a material impact on the Company’s financial position, results of operations or cash flows. The Company has also initially determined that it will likely use the modified retrospective transition method to implement this standard, however, that election, as well as its analysis of any impacts related to variable consideration arrangements, may change once the Company’s final assessment is completed.

As of ~~June 30, 2017,~~March 31, 2018, the Company’s 6.00% Senior Notes, 5.125% Senior Notes, the 5.875% Senior Notes due 2022 and the 5.875% Senior Notes due 2024 were fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company and certain of its wholly-owned domestic subsidiaries (the “Subsidiary Guarantors”). The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation ofRule 3-10(d) ofRegulation S-X promulgated under the Securities Act, presents the condensed consolidating financial information separately for:

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~


	For the Three Months Ended June 30, 2016															For the Three Months Ended March 31, 2018
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated			The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	174,414		$	404,798		$	112,811		$	(143,673	)	$	548,350		$	195,630		$	458,728		$	68,806		$	(158,247	)	$	564,917
Operating expenses		135,603			323,791			101,116			(143,673	)		416,837			151,822			377,966			55,168			(158,247	)		426,709
Depreciation and amortization		6,265			21,424			963			—			28,652			6,460			24,443			1,023			—			31,926
General and administrative expenses		14,846			15,250			6,808			—			36,904			14,341			22,447			5,044			—			41,832

Operating income		17,700			44,333			3,924			—			65,957			23,007			33,872			7,571			—			64,450
Interest income		5,440			409			6,013			(5,960	)		5,902			4,177			1,417			9,384			(5,879	)		9,099
Interest expense		(16,369	)		(13,932	)		(6,748	)		5,960			(31,089	)		(18,622	)		(14,460	)		(8,666	)		5,879			(35,869	)
Loss on early extinguishment of debt		(15,866	)		—			—			—			(15,866	)

Income (loss) before income taxes and equity in earnings of affiliates		(9,095	)		30,810			3,189			—			24,904
Income tax provision (benefit)		(101	)		3,099			881			—			3,879
Income before income taxes and equity in earnings of affiliates																	8,562			20,829			8,289			—			37,680
Income tax provision																	177			2,300			2,278			—			4,755
Equity in earnings of affiliates, net of income tax provision		—			—			2,131			—			2,131			—			—			1,995			—			1,995

Income (loss) before equity in income of consolidated subsidiaries		(8,994	)		27,711			4,439			—			23,156
Income before equity in income of consolidated subsidiaries																	8,385			18,529			8,006			—			34,920
Income from consolidated subsidiaries, net of income tax provision		32,150			—			—			(32,150	)		—			26,535			—			—			(26,535	)		—

Net income		23,156			27,711			4,439			(32,150	)		23,156			34,920			18,529			8,006			(26,535	)		34,920
Net loss attributable to noncontrolling interests		—			—			53			—			53			—			—			67			—			67

Net income attributable to The GEO Group, Inc.	$	23,156		$	27,711		$	4,492		$	(32,150	)	$	23,209		$	34,920		$	18,529		$	8,073		$	(26,535	)	$	34,987

Net income	$	23,156		$	27,711		$	4,439		$	(32,150	)	$	23,156		$	34,920		$	18,529		$	8,006		$	(26,535	)	$	34,920
Other comprehensive income (loss), net of tax		—			33			(2,611	)		—			(2,578	)
Other comprehensive income, net of tax																	—			105			1,257			—			1,362

Total comprehensive income	$	23,156		$	27,744		$	1,828		$	(32,150	)	$	20,578		$	34,920		$	18,634		$	9,263		$	(26,535	)	$	36,282
Comprehensive loss attributable to noncontrolling interests		—			—			52			—			52			—			—			59			—			59

Comprehensive income attributable to The GEO Group, Inc.	$	23,156		$	27,744		$	1,880		$	(32,150	)	$	20,630		$	34,920		$	18,634		$	9,322		$	(26,535	)	$	36,341

   For the Six Months Ended June 30, 2017
   The GEO
Group, Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
Revenues
   $ 349,433 $ 878,480 $ 180,920 $ (281,149 ) $ 1,127,684
Operating expenses
   267,411 711,398 155,492 (281,149 ) 853,152
Depreciation and amortization
   12,215 46,781 1,819 — 60,815
General and administrative expenses
   29,240 50,413 15,139 — 94,792


Operating income
   40,567 69,888 8,470 — 118,925
Interest income
   10,105 1,229 24,304 (11,315 ) 24,323
Interest expense
   (33,243 ) (28,260 ) (20,795 ) 11,315 (70,983 )


Income before income taxes and equity in earnings of affiliates
   17,429 42,857 11,979 — 72,265
Income tax provision (benefit)
   294 2,247 1,329 — 3,870
Equity in earnings of affiliates, net of income tax provision
   — — 2,913 — 2,913


Income before equity in income of consolidated subsidiaries
   17,135 40,610 13,563 — 71,308
Income from consolidated subsidiaries, net of income tax provision
   57,749 — — (57,749 ) —


Net income
   74,884 40,610 13,563 (57,749 ) 71,308
Net loss attributable to noncontrolling interests
   — — 87 — 87


Net income attributable to The GEO Group, Inc.
   $ 74,884 $ 40,610 $ 13,650 $ (57,749 ) $ 71,395


Net income
   $ 74,884 $ 40,610 $ 13,563 $ (57,749 ) $ 71,308
Other comprehensive income, net of tax
   — 111 3,022 — 3,133


Total comprehensive income
   $ 74,884 $ 40,721 $ 16,585 $ (57,749 ) $ 74,441
Comprehensive loss attributable to noncontrolling interests
   — — 85 — 85


Comprehensive income attributable to The GEO Group, Inc.
   $ 74,884 $ 40,721 $ 16,670 $ (57,749 ) $ 74,526

   For the Six Months Ended June 30, 2016
   The GEO
Group, Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
Revenues
   $ 342,051 $ 805,140 $ 193,776 $ (282,432 ) $ 1,058,535
Operating expenses
   273,513 643,695 170,567 (282,432 ) 805,343
Depreciation and amortization
   12,527 42,657 1,919 — 57,103
General and administrative expenses
   22,821 35,216 12,928 — 70,965


Operating income
   33,190 83,572 8,362 — 125,124
Interest income
   10,881 1,018 10,670 (12,110 ) 10,459
Interest expense
   (32,726 ) (27,876 ) (11,963 ) 12,110 (60,455 )
Loss on early extinguishment of debt
   (15,866 ) — — — (15,866 )


Income (loss) before income taxes and equity in earnings of affiliates
   (4,521 ) 56,714 7,069 — 59,262
Income tax provision (benefit)
   (91 ) 5,290 1,831 — 7,030
Equity in earnings of affiliates, net of income tax provision
   — — 3,250 — 3,250


Income (loss) before equity in income of consolidated subsidiaries
   (4,430 ) 51,424 8,488 — 55,482
Income from consolidated subsidiaries, net of income tax provision
   59,912 — — (59,912 ) —


Net income
   55,482 51,424 8,488 (59,912 ) 55,482
Net loss attributable to noncontrolling interests
   — — 77 — 77
Net income attributable to The GEO Group, Inc.
   $ 55,482 $ 51,424 $ 8,565 $ (59,912 ) $ 55,559


Net income
   $ 55,482 $ 51,424 $ 8,488 $ (59,912 ) $ 55,482
Other comprehensive income (loss), net of tax
   — 65 (3,541 ) — (3,476 )


Total comprehensive income
   55,482 51,489 4,947 (59,912 ) 52,006
Comprehensive loss attributable to noncontrolling interests
   — — 68 — 68


Comprehensive income attributable to The GEO Group, Inc.
   $ 55,482 $ 51,489 $ 5,015 $ (59,912 ) $ 52,074


(dollars in thousands)


		As of June 30, 2017															As of March 31, 2018
		The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated				The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS	ASSETS															ASSETS
Cash and cash equivalents		$	30,576		$	6,882	$	28,443		$	—		$	65,901			$	10,396	$	13,307	$	25,532		$	—		$	49,235
Restricted cash and investments			1,849			—		15,529			—			17,378
Restricted cash and cash equivalents																		6,422		—		50,466			—			56,888
Accounts receivable, less allowance for doubtful accounts			112,978			213,596		15,787			—			342,361				136,290		208,114		40,233			—			384,637
Contract receivable, current portion			—			—		238,958			—			238,958				—		—		14,285			—			14,285
Prepaid expenses and other current assets			2,249			34,588		5,630			—			42,467				2,036		19,830		9,311			—			31,177

Total current assets			147,652			255,066		304,347			—			707,065				155,144		241,251		139,827			—			536,222

Restricted Cash and Investments			(1,659	)		22,632		2,047			—			23,020				—		21,669		2,725			—			24,394
Property and Equipment, Net			744,674			1,217,685		87,254			—			2,049,613				803,053		1,208,315		90,643			—			2,102,011
Non-Current Contract Receivable			—			—		358,727			—			358,727				—		—		407,938			—			407,938
Intercompany Receivable			1,122,898			93,918		28,658			(1,245,474	)		—				988,910		120,288		26,598			(1,135,796	)		—
Non-Current Deferred Income Tax Assets			763			19,685		11,814			—			32,262				863		23,913		1,501			—			26,277
Goodwill			79			787,284		440			—			787,803				—		775,955		440			—			776,395
Intangible Assets, Net			—			267,580		765			—			268,345				—		248,469		847			—			249,316
Investment in Subsidiaries			1,315,016			457,591		2,190			(1,774,797	)		—				1,514,148		458,228		2,190			(1,974,566	)		—
Other Non-Current Assets			13,417			112,567		20,589			(79,640	)		66,933				10,237		112,458		27,289			(79,228	)		70,756

Total Assets		$	3,342,840		$	3,234,008	$	816,831		$	(3,099,911	)	$	4,293,768			$	3,472,355	$	3,210,546	$	699,998		$	(3,189,590	)	$	4,193,309


LIABILITIES AND SHAREHOLDERS’ EQUITY																LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		$	20,438		$	60,099	$	17,490		$	—		$	98,027			$	14,592	$	63,564	$	6,154		$	—		$	84,310
Accrued payroll and related taxes			—			47,674		15,518			—			63,192				—		38,308		19,610			—			57,918
Accrued expenses and other current liabilities			37,066			100,691		16,173			—			153,930				46,744		106,129		28,262			—			181,135
Current portion of capital lease obligations, long-term debt and non-recourse debt			8,000			1,746		245,658			—			255,404				8,000		1,902		15,287			—			25,189

Total current liabilities			65,504			210,210		294,839			—			570,553				69,336		209,903		69,313			—			348,552

Non-Current Deferred Income Tax Liabilities																		—		—		8,757			—			8,757
Intercompany Payable			35,092			1,174,881		35,501			(1,245,474	)		—				111,828		988,221		35,747			(1,135,796	)		—
Other Non-Current Liabilities			4,725			155,895		17,761			(79,640	)		98,741				1,336		156,465		13,713			(79,228	)		92,286
Capital Lease Obligations			—			6,787		—			—			6,787				—		5,698		—			—			5,698
Long-Term Debt			2,018,040			—		89,168			—			2,107,208				2,150,902		—		89,155			—			2,240,057
Non-Recourse Debt			—			—		283,780			—			283,780				—		—		359,387			—			359,387
Commitments & Contingencies and Other
Shareholders’ Equity:
The GEO Group, Inc. Shareholders’ Equity			1,219,479			1,686,235		95,966			(1,774,797	)		1,226,883				1,138,953		1,850,259		124,307			(1,974,566	)		1,138,953
Noncontrolling Interests			—			—		(184	)		—			(184	)			—		—		(381	)		—			(381	)

Total Shareholders’ Equity			1,219,479			1,686,235		95,782			(1,774,797	)		1,226,699				1,138,953		1,850,259		123,926			(1,974,566	)		1,138,572

Total Liabilities and Shareholders’ Equity		$	3,342,840		$	3,234,008	$	816,831		$	(3,099,911	)	$	4,293,768			$	3,472,355	$	3,210,546	$	699,998		$	(3,189,590	)	$	4,193,309


	As of December 31, 2016														As of December 31, 2017
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated				The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS														ASSETS
Cash and cash equivalents	$	45,566	$	842	$	21,630		$	—		$	68,038			$	54,666	$	—	$	26,711		$	—		$	81,377
Restricted cash and investments		—		—		17,133			—			17,133
Restricted cash and cash equivalents																—		—		44,932			—			44,932
Accounts receivable, less allowance for doubtful accounts		139,571		200,239		16,445			—			356,255				130,354		225,029		34,533			—			389,916
Contract receivable, current portion		—		—		224,033			—			224,033				—		—		18,142			—			18,142
Prepaid expenses and other current assets		677		24,096		7,437			—			32,210				2,589		24,163		18,590			—			45,342

Total current assets		185,814		225,177		286,678			—			697,669				187,609		249,192		142,908			—			579,709

Restricted Cash and Investments		170		19,742		936			—			20,848				—		25,715		2,284			—			27,999
Property and Equipment, Net		735,104		1,078,220		83,917			—			1,897,241				777,404		1,209,816		90,903			—			2,078,123
Assets Held for Sale																—		3,915		—			—			3,915
Non-Current Contract Receivable		—		—		219,783						219,783				—		—		404,309						404,309
Intercompany Receivable		918,527		141,987		27,290			(1,087,804	)		—				1,130,189		88,534		28,218			(1,246,941	)		—
Non-Current Deferred Income Tax Assets		764		17,918		11,357			—			30,039				863		23,913		1,501			—			26,277
Goodwill		79		614,941		413			—			615,433				—		778,504		447			—			778,951
Intangible Assets, Net		—		203,138		746			—			203,884				—		254,531		808			—			255,339
Investment in Subsidiaries		1,238,772		453,635		2,190			(1,694,597	)		—				1,336,665		456,076		2,190			(1,794,931	)		—
Other Non-Current Assets		15,011		108,434		20,933			(79,866	)		64,512				11,141		115,330		25,210			(79,395	)		72,286

Total Assets	$	3,094,241	$	2,863,192	$	654,243		$	(2,862,267	)	$	3,749,409			$	3,443,871	$	3,205,526	$	698,778		$	(3,121,267	)	$	4,226,908


LIABILITIES AND SHAREHOLDERS’ EQUITY														LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	8,402	$	50,200	$	21,035		$	—		$	79,637			$	20,643	$	65,475	$	6,469		$	—		$	92,587
Accrued payroll and related taxes		—		41,230		14,030			—			55,260				—		51,780		19,952			—			71,732
Accrued expenses and other current liabilities		36,792		83,906		10,398			—			131,096				40,344		115,636		20,344			—			176,324
Current portion of capital lease obligations, long-term debt and non-recourse debt		3,000		1,700		233,365			—			238,065				8,000		1,870		19,050			—			28,920

Total current liabilities		48,194		177,036		278,828			—			504,058				68,987		234,761		65,815			—			369,563

Non-Current Deferred Income Tax Liabilities																—		—		8,757			—			8,757
Intercompany Payable		133,039		920,825		33,940			(1,087,804	)		—				79,984		1,129,590		37,367			(1,246,941	)		—
Other Non-Current Liabilities		2,487		144,383		21,652			(79,866	)		88,656				4,674		157,200		14,223			(79,395	)		96,702
Capital Lease Obligations		—		7,431		—			—			7,431				—		6,059		—			—			6,059
Long-Term Debt		1,935,465		—		—			—			1,935,465				2,090,985		—		90,559			—			2,181,544
Non-Recourse Debt		—		—		238,842			—			238,842				—		—		365,364			—			365,364
Commitments & Contingencies and Other
Shareholders’ Equity:
The GEO Group, Inc. Shareholders’ Equity		975,056		1,613,517		81,080			(1,694,597	)		975,056				1,199,241		1,677,916		117,015			(1,794,931	)		1,199,241
Noncontrolling Interests		—		—		(99	)		—			(99	)			—		—		(322	)		—			(322	)

Total Shareholders’ Equity		975,056		1,613,517		80,981			(1,694,597	)		974,957				1,199,241		1,677,916		116,693			(1,794,931	)		1,198,919

Total Liabilities and Shareholders’ Equity	$	3,094,241	$	2,863,192	$	654,243		$	(2,862,267	)	$	3,749,409			$	3,443,871	$	3,205,526	$	698,778		$	(3,121,267	)	$	4,226,908


	For the Six Months Ended June 30, 2016												For the Three Months Ended March 31, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated			The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:

Net cash (used in) provided by operating activities	$	84,523		$	40,602		$	(86,873	)	$	38,252
Net cash provided by (used in) operating activities													$	(22,988	)	$	35,079		$	35,791		$	47,882

Cash Flow from Investing Activities:
Proceeds from sale of property and equipment		—			41			2			43			689			—			—			689
Insurance proceeds – damaged property		—			—			548			548
Change in restricted cash and investments		(12	)		(1,565	)		(64,276	)		(65,853	)
Change in restricted investments														—			(2,058	)		—			(2,058	)
Capital expenditures		(5,137	)		(39,078	)		(1,799	)		(46,014	)		(5,404	)		(27,062	)		(1,955	)		(34,421	)

Cash used in by investing activities														(4,715	)		(29,120	)		(1,955	)		(35,790	)

Net cash used in investing activities		(5,149	)		(40,602	)		(65,525	)		(111,276	)

Cash Flow from Financing Activities:
Proceeds from long-term debt														1,083,148			—			—			1,083,148
Taxes paid related to net share settlements of equity awards		(2,257	)		—			—			(2,257	)		(3,434	)		—			—			(3,434	)
Proceeds from long-term debt		641,000			—			—			641,000
Payments on long-term debt		(627,506	)					—			(627,506	)		(918,500	)		—			—			(918,500	)
Payments on non-recourse debt		—			—			(3,044	)		(3,044	)		—			—			(67,171	)		(67,171	)
Proceeds from stock options exercised														3,882			—			—			3,882
Proceeds from non-recourse debt		—			—			159,068			159,068			—			—			36,020			36,020
Proceeds from issuance of common stock in connection with ESPP		—			—			224			224			—						122			122
Dividends paid														(52,504	)					—			(52,504	)
Issuance of common stock under prospectus supplement														276,036			—			—			276,036
Debt issuance costs		(16,980	)		—			(2,517	)		(19,497	)		(6,992	)		—			(379	)		(7,371	)
Tax benefit related to equity compensation		(791	)		—			—			(791	)
Proceeds from stock options exercised		2,057			—			—			2,057
Dividends paid		(97,247	)		—			—			(97,247	)

Net cash (used in) provided by financing activities		(101,724	)		—			153,731			52,007
Net cash provided by (used in) financing activities														381,636			—			(31,408	)		350,228

Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			244			244
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents														—			—			2,679			2,679

Net Decrease in Cash and Cash Equivalents		(22,350	)		—			1,577			(20,773	)
Cash and Cash Equivalents, beginning of period		37,077			—			22,561			59,638
Net Increase in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents														353,933			5,959			5,107			364,999
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period														45,736			4,922			39,699			90,357

Cash and Cash Equivalents, end of period	$	14,727		$	—		$	24,138		$	38,865
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period													$	399,669		$	10,881		$	44,806		$	455,356

On ~~July 10, 2017,~~April 11, 2018, the Board of Directors declared a quarterly cash dividend of $0.47 per share of common stock which ~~was~~will be paid on ~~July 28, 2017~~May 3, 2018 to shareholders of record as of the close of business on ~~July 21, 2017.~~April 23, 2018.

On February 12, 2018, the Compensation Committee of the Board of Directors resolved to grant approximately 562,000 options and 914,000 shares of restricted stock to certain employees of the Company, subject to shareholder approval, effective April 24, 2018. Of the total shares of restricted stock granted, 352,500 are performance-based awards which vest subject to the achievement of certain total shareholder return and return on capital employed metrics over a three year period.

On April 30, 2018, the Company executed an amendment to its third amended and restated credit agreement by and among The GEO Group, Inc. and GEO Corrections Holdings, Inc., BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become a party thereto. As a result of the amendment, the refinancing lenders will make new terms loans for the purposes of refinancing all of the outstanding term loans under the Company’s existing Credit Agreement. The amendment refinances GEO’s prior Term Loan’s interest rate from LIBOR plus 2.25% to LIBOR plus 2.00%.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report onForm 10-Q and the documents incorporated by reference herein contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking” statements are any statements that are not based on historical information. Statements other than statements of historical facts included in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are “forward-looking” statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and we can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or “cautionary statements,” include, but are not limited to:

We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report onForm 10-Q.

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of numerous factors including, but not limited to, those described above under “Forward-Looking Information”, those described below under ~~“Part~~“Part II –- Item 1A. Risk Factors” and under ~~“Part~~“Part I –- Item 1A. Risk Factors” in our Annual Report onForm 10-K for the year ended December 31, ~~2016.~~2017. The discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report onForm 10-Q.

We are a real estate investment trust (“REIT”) specializing in the ownership, leasing and management of correctional, detention and reentry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, and the United Kingdom. We own, lease and operate a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, and ~~community based~~community-based reentry facilities and we offer an expanded delivery of offender rehabilitation services under our ‘GEO Continuum of Care’ platform. We offer counseling, education and/or treatment to inmates with alcohol and drug abuse problems at most of the domestic facilities we manage. We are also a provider of innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants.

At ~~June 30, 2017, after our acquisition of CEC,~~March 31, 2018, our worldwide operations include the management and/or ownership of approximately ~~100,000~~96,000 beds at ~~143~~141 correctional, detention and reentry facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of community supervision services for more than ~~185,000~~192,000 offenders andpre-trial defendants, including approximately 100,000 individuals through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

For the ~~six~~three months ended ~~June 30,~~March 31, 2018 and March 31, 2017, ~~and June 30, 2016,~~ we had consolidated revenues of ~~$1,127.7~~$564.9 million and ~~$1,058.5~~$550.6 million, ~~respectively, and we~~respectively. We maintained an average company wide facility occupancy rate of ~~91.8%~~91.5% including ~~91,777~~88,345 active beds and excluding ~~8,170~~7,846 idle beds which includes those being marketed to potential customers and beds under development for the three months ended March 31, 2018, and 93.7% including 82,897 active beds and excluding 4,808 idle beds (including those being marketed to potential customers) and beds under development for the ~~six~~three months ended June 30, 2017, and 92.4% including 82,643 active beds and excluding 4,726 idle beds (including those being marketed to potential customers) and beds under development for the six months ended June 30, 2016.March 31, 2017.

As a REIT, we are required to distribute annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and by excluding net capital gain) and we began paying regular quarterly REIT dividends in 2013. The amount, timing and frequency of future dividends, however, will be at the sole discretion of our Board of Directors (the “Board”) and will be declared based upon various factors, many of which are beyond our control, including, our financial condition and operating cash flows, the amount required to maintain REIT status, limitations on distributions in our existing and future debt instruments, limitations on our ability to fund distributions using cash generated through our taxable REIT subsidiaries (“TRSs”) and other factors that our Board may deem relevant.

During the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 and the year ended December 31, ~~2016,~~2017, respectively, we declared and paid the following regular cash distributions to our shareholders as follows:

On ~~July 10, 2017, our~~April 11, 2018, the Board ~~of Directors~~ declared a quarterly cash dividend of $0.47 per share of common stock which ~~was~~will be paid on ~~July 28, 2017~~May 3, 2018 to shareholders of record as of the close of business on ~~July 21, 2017.~~April 23, 2018.

Reference is made to Part II, Item 7 of our Annual Report onForm 10-K filed with the SEC on February ~~27, 2017,~~26, 2018, for further discussion and analysis of information pertaining to our financial condition and results of operations as of and for the fiscal year ended December 31, ~~2016.~~2017.

~~In March 2017,~~On February 14, 2018, we announced that our Board of Directors ~~declared~~authorized a ~~3-for-2~~ stock ~~split~~buyback program authorizing us to repurchase up to a maximum of $200.0 million of our shares of common stock. The stock ~~split was~~buyback program will be funded primarily with cash on hand, free cash flow and borrowings under our Revolver. The program shall be effective ~~on April 24, 2017~~through October 20, 2020. The stock buyback program is intended to be implemented through purchases made from time to time in the open market or in privately negotiated transactions, in accordance with ~~respect~~applicable Securities and Exchange Commission requirements. The stock buyback program does not obligate us to ~~shareholders~~purchase any specific amount of record on April 10, 2017. Outstanding share and per-share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split. On April 24, 2017, the Company amended its articles of incorporation to increase the number of authorized shares ofour common stock ~~to take into effect~~and may be suspended or extended at any time at the ~~stock split.~~

Onour Board of Directors. During the three months ended March ~~7, 2017,~~31, 2018, we ~~entered into an underwriting agreement related to the issuance and sale of 9,000,000~~purchased 1.8 million shares of our common stock ~~par value $.01 per share. The offering price to the public was $27.80 per share and the underwriters agreed to purchase the shares from us pursuant to the underwriting agreement~~ at a ~~price~~cost of ~~$26.70 per share. In addition, under~~$40.2 million primarily purchased with proceeds from our Revolver. We believe that we have the ~~terms of the underwriting agreement, we granted the underwriters an option, exercisable for thirty days,~~ability to ~~purchase up~~continue to an additional 1,350,000 shares of common stock. On March 8, 2017, the underwriters exercised in full their option to purchase the additional 1,350,000 shares of common stock. On March 13, 2017, we completed the sale of 10,350,000 shares of common stock pursuant to our underwritten public offering. We received gross proceeds (before underwriting discounts and estimated offering expenses) of approximately $288.1 million from the offering, including approximately $37.6 million in connection with the sale of the additional shares. The 10,350,000 shares of common stock were issued under our currently effective shelf registration filed with the Securities and Exchange Commission. The net proceeds of this offering were used to repay amounts outstanding under our revolver portion of our senior credit facility and for general corporate purposes. The number of shares and per-share amounts herein have been adjusted to reflect the effects offund the stock ~~split.~~buyback program, our debt service requirements and our maintenance and growth capital expenditure requirements, while maintaining sufficient liquidity for other corporate purposes.

On April 5, 2017, we closed on our previously announced acquisition of Community Education Centers (“CEC”), a leading private provider of rehabilitation services for offenders in reentry and in-prison treatment facilities as well as management services for county, state and federal correctional and detention facilities. We acquired CEC for $360 million in an all cash transaction, excluding transaction related expenses. CEC’s operations encompass over 12,000 beds nationwide. Refer to Note 2-Business Combinations in the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on~~Form 10-Q.~~

~~On April 13, 2017,~~March 29, 2018, we announced that ~~we have been awarded~~our transportation joint venture in the United Kingdom, GEO Amey, has signed a

contract ~~by U.S. Immigration and Customs Enforcement (“ICE”)~~with Scottish Prison Service for the ~~development~~provision of court custody and ~~operation~~prisoner escort services in Scotland. The contract

will have a base term of ~~a new company-owned 1,000-bed detention facility to be located in Conroe,~~

~~Texas. We expect to design, finance, build and operate the facility under a ten-year contract~~eight years effective January 26, 2019 with ~~ICE, inclusive of~~a renewal option ~~periods. The facility is scheduled for completion in the fourth quarter~~ of ~~2018~~four years and is expected to ~~generate~~have an

With respect to the Parklea Center in ~~annual revenues and returns on investment consitent with our company-owned facilities.~~

~~On May 26, 2017, we announced that~~Australia, we were ~~awarded two ten-year contracts, inclusive of renewal option periods, by~~unfortunately unsuccessful during the ~~Federal Bureau of Prisons (“BOP”) for~~current competitive rebid process and will be transitioning the ~~continued housing of criminal aliens under the custody of the BOP at the company- owned1,800-bed~~ ~~Big Spring Facility and the company-owned 1,732-bed Flight Line Facility, which on a combined basis were previously referred to as the Big Spring Correctional Center~~management contract in Texas. The two ten-year contracts were awarded to GEO under a long-standing procurement commonly referred to as Criminal Alien Requirement (CAR) 16, which was issued by the BOP in 2015. The contracts are expected to generate total combined revenues of approximately $664 million over their full ten-year terms. Additionally, only one of the two contracts held by Reeves County, Texas was extended by the BOP for one year.March 2019.

As of ~~June 30, 2017,~~March 31, 2018, we are marketing approximately ~~6,600~~5,400 vacant beds at ~~six~~five of our idle facilities to potential customers. The carrying values of these idle facilities totaled approximately ~~$164.2~~$138.5 million as of ~~June 30, 2017,~~March 31, 2018, excluding equipment and other assets that can be easily transferred for use at other facilities.

On ~~March 6,~~October 20, 2017, we ~~acquired~~filed an automatic shelf registration statement onForm S-3 with the ~~688-bed Maverick County Detention Center~~Securities and Exchange Commission. The shelf registration statement is automatically effective and is valid for three years. Pursuant to the shelf registration statement, we may offer common stock, preferred stock, debt securities, guarantees of debt securities, warrants and units from time to time in ~~Texas for approximately $15 million. The center, which is currently idle, was originally built by Maverick County~~amounts, at prices and ~~previously provided services for~~on terms that will be determined at the ~~U.S. Marshals Service.~~time of any such offering.

The accompanying unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We routinely evaluate our estimates based on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the ~~six~~three months ended ~~June 30, 2017,~~March 31, 2018, we did not experience any significant changes in estimates or judgments inherent in the preparation of our consolidated financial statements. A summary of our significant accounting policies is contained in Note 1 to our consolidated financial statements included in our Annual Report onForm 10-K for the year ended December 31, ~~2016.~~2017.

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the notes to our unaudited consolidated financial statements included in Part I, Item 1, of this Quarterly Report onForm 10-Q.

Comparison of ~~Second~~First Quarter ~~2017~~2018 and ~~Second~~First Quarter ~~2016~~2017


	2017		% of Revenue			2016		% of Revenue			$ Change			% Change			2018		% of Revenue			2017		% of Revenue			$ Change			% Change
	(Dollars in thousands)																(Dollars in thousands)
U.S. Corrections & Detention	$	360,838		62.5	%	$	341,573		62.3	%	$	19,265			5.6	%	$	358,681		63.5	%	$	347,931		63.2	%	$	10,750			3.1	%
GEO Care		139,364		24.2	%		96,529		17.6	%		42,835			44.4	%		140,078		24.8	%		103,766		18.8	%		36,312			35.0	%
International Services		42,928		7.4	%		38,497		7.0	%		4,431			11.5	%		66,158		11.7	%		41,692		7.6	%		24,466			58.7	%
Facility Construction & Design		33,940		5.9	%		71,751		13.1	%		(37,811	)		(52.7	)%		—		—	%		57,225		10.4	%		(57,225	)		(100.0	)%

Total	$	577,070		100.0	%	$	548,350		100.0	%	$	28,720			5.2	%	$	564,917		100.0	%	$	550,614		100.0	%	$	14,303			2.6	%

Revenues increased in ~~Second~~First Quarter ~~2017~~2018 compared to ~~Second~~First Quarter ~~2016~~2017 primarily due to aggregate increases of ~~$24.4~~$18.0 million ~~as a result of~~primarily due to our acquisition of CEC on April 5, ~~2017 as well as the activation and intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center correctional facility in January~~ 2017. Refer toNote 2-3 - Business Combinations of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q for further discussion on our acquisition of CEC. These increases were partially offset by net decreases of ~~$5.1~~$7.3 million at certain of our facilities due to aggregate net decreases in population, transportation services and/or ~~rates.~~rates and contract terminations.

The number of compensated mandays in U.S. Corrections & Detention facilities was approximately ~~5.7~~5.6 million in ~~Second~~First Quarter ~~2017~~2018 and ~~5.5~~5.4 million in ~~Second~~First Quarter ~~2016.~~2017. We experienced an aggregate net increase of approximately ~~207,000~~200,000 mandays as a result of our acquisition of CEC ~~and contract activation~~ discussed above. We look at the average occupancy in our facilities to determine how we are managing our available beds. The average occupancy is calculated by taking compensated mandays as a percentage of capacity. The average occupancy in our U.S. Corrections & Detention facilities was ~~92.2% and 93.3%~~94.0% of capacity in the ~~Second~~First Quarter ~~2017~~2018 and ~~Second~~First Quarter ~~2016, respectively,~~2017, excluding idle facilities.

Revenues increased in ~~Second~~First Quarter ~~2017~~2018 compared to ~~Second~~First Quarter ~~2016~~2017 primarily due to aggregate increases of ~~$36.6~~$39.3 million from our acquisition of CEC on April 5, 2017. We also experienced increases of ~~$7.1~~$1.8 million primarily due to increases in average client and participant counts under our ~~Intensive Supervision Appearance Program (“ISAP”)~~ISAP and electronic monitoring services. These increases were partially offset by ~~$0.9~~$4.8 million related to net decreases in census levels at certain of our ~~community based~~community-based and reentry ~~centers.~~centers as well as contract terminations.

Revenues for International Services in ~~Second~~First Quarter 2018 compared to First Quarter 2017 ~~compared to Second Quarter 2016~~ increased by ~~$4.4 million~~$24.5 million. We experienced a net increase of ~~$3.8~~$21.7 million in performance which was primarily attributable to ~~net population increases at~~ our Australian ~~subsidiary.~~subsidiary’s Ravenhall Prison Project which began operations during the fourth quarter of 2017. Additionally, we had an increase due to foreign exchange rate fluctuations of ~~$0.6~~$2.8 million resulting from the weakening of the U.S. dollar against certain international currencies.

Revenues for our Facility Construction & Design services during First Quarter 2017 relate to the ~~commencement of~~ design and construction activity for our ~~new~~ Ravenhall Prison Contract ~~executed in September 2014~~ with the Department of Justice in the State of Victoria, ~~Australia. The decrease is due to decreased construction activity~~Australia which was completed during ~~2017 as~~ the ~~project gets closer to completion. These construction revenues have little to no margin.~~fourth quarter of 2017.


	2017		% of Segment Revenues			2016		% of Segment Revenues			$ Change			% Change			2018		% of Segment Revenues			2017		% of Segment Revenues			$ Change			% Change
	(Dollars in thousands)																(Dollars in thousands)
U.S. Corrections & Detention	$	268,972		74.5	%	$	248,019		72.6	%	$	20,953			8.4	%	$	270,448		75.4	%	$	255,037		73.3	%	$	15,411			6.0	%
GEO Care		93,498		67.1	%		60,381		62.6	%		33,117			54.8	%		96,076		68.6	%		64,487		62.1	%		31,589			49.0	%
International Services		40,343		94.0	%		36,904		95.9	%		3,439			9.3	%		60,185		91.0	%		38,308		91.9	%		21,877			57.1	%
Facility Construction & Design		35,632		105.0	%		71,533		99.7	%		(35,901	)		(50.2	)%		—		—	%		56,875		99.4	%		(56,875	)		(100.0	)%

Total	$	438,445		76.0	%	$	416,837		76.0	%	$	21,608			5.2	%	$	426,709		75.5	%	$	414,707		75.3	%	$	12,002			2.9	%

Operating expenses consist of those expenses incurred in the operation and management of our correctional, detention and ~~community based~~community-based facilities.

~~The increase in operating~~Operating expenses for U.S. Corrections & Detention ~~reflects an~~increased by $15.4 million in First Quarter 2018 compared to First Quarter 2017. The increase ~~of $20.5 million resulting from~~was primarily due to our acquisition of CEC on April 5, ~~2017 as well as the activation and intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center correctional facility in January~~ 2017. We also had aggregate net increases in operating expenses of $0.4 million at certain of our facilities primarily due to net increases in population, transportation services and the variable costs associated with those increases. Operating expenses as a percentage of revenues have increased during ~~Second~~First Quarter ~~2017~~2018 which is primarily related to our acquisition of CEC. As we continue to integrate CEC into our operations, we expect to realize cost savings and other synergies in line with our other ~~domestic correctional facilities.~~U.S. corrections and detention centers.

Operating expenses for GEO Care increased by ~~$33.1~~$31.6 million during ~~Second~~First Quarter 2018 from First Quarter 2017 ~~from Second Quarter 2016~~ primarily due to ~~$28.6 million from~~ our acquisition of CEC on April 5, 2017. We also experienced net increases of ~~$4.5~~$1.1 million ~~primarily~~ due to increases in average client and participant counts under our ISAP and electronic monitoring services and program growth at our ~~community based~~community-based and reentry centers. Operating expenses as a percentage of revenues have increased during ~~Second~~First Quarter ~~2017~~2018 which is primarily related to our acquisition of CEC. As we continue to integrate CEC into our operations, we expect to realize cost savings and other synergies in line with our other ~~community based~~community-based and reentry centers.

Operating expenses for International Services in ~~Second~~First Quarter 2018 compared to First Quarter 2017 ~~compared to Second Quarter 2016~~ increased by ~~$3.4~~$21.9 million. We experienced a net increase of ~~$2.6~~$19.3 million primarily attributable to ~~net population increases at~~ our Australian ~~subsidiary.~~subsidiary’s Ravenhall Prison Project which began operations during the fourth quarter of 2017. Additionally, we had an increase due to foreign exchange rate fluctuations of ~~$0.8~~$2.6 million resulting from the weakening of the U.S. dollar against certain international currencies. ~~Operating expenses have decreased as a percentage of revenue primarily due to certain nonrecurring labor related issues at our South African subsidiary in Second Quarter 2016.~~

Operating expenses for our Facility Construction & Design services during First Quarter 2017 relate to the ~~commencement of~~ design and construction activity for our ~~new~~ Ravenhall Prison Contract ~~executed in September 2014~~ with the Department of Justice in the State of Victoria, ~~Australia. The decrease is due to decreased construction activity~~Australia which was completed during ~~2017 as~~ the ~~project gets closer to completion. We experienced an increase in operating expenses as a percentage~~fourth quarter of ~~revenue due to a loss related to construction overruns recorded during Second Quarter~~ 2017. ~~Refer to Note 12- Business Segments and Geographic Information of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~


	2017		% of Segment Revenue			2016		% of Segment Revenue			$ Change			% Change			2018		% of Segment Revenue			2017		% of Segment Revenue			$ Change		% Change
	(Dollars in thousands)																(Dollars in thousands)
U.S. Corrections & Detention	$	19,475		5.4	%	$	18,565		5.4	%	$	910			4.9	%	$	19,045		5.3	%	$	17,998		5.2	%	$	1,047		5.8	%
GEO Care		11,923		8.6	%		9,568		9.9	%		2,355			24.6	%		12,310		8.8	%		10,453		10.1	%		1,857		17.8	%
International Services		468		1.1	%		519		1.3	%		(51	)		(9.8	)%		571		0.9	%		498		1.2	%		73		14.7	%

Total	$	31,866		5.5	%	$	28,652		5.2	%	$	3,214			11.2	%	$	31,926		5.7	%	$	28,949		5.3	%	$	2,977		10.3	%

U.S. Corrections & Detention depreciation and amortization expense increased slightly in ~~Second~~First Quarter 2018 compared to First Quarter 2017 ~~compared to Second Quarter 2016~~ primarily due to renovations made at several of our facilities ~~as well as~~and new facilities and intangible assets acquired in our acquisition of CEC on April 5, 2017.

GEO Care depreciation and amortization expense increased in ~~Second~~First Quarter ~~2017~~2018 compared to ~~Second~~First Quarter ~~2016~~2017 primarily due to new facilities and intangible assets acquired in our acquisition of CEC on April 5, 2017.

Depreciation and amortization expense remained relatively consistent in ~~Second~~First Quarter ~~2017~~2018 compared to ~~Second~~First Quarter ~~2016~~2017 as a result of certain assets becoming fully depreciated and there were no significant additions or renovations during ~~2016~~2017 or ~~2017~~2018 at our international subsidiaries.

General and administrative expenses comprise substantially all of our other unallocated operating expenses which primarily includes corporate management salaries and benefits, professional fees and other administrative expenses. ~~The increase in general~~General and administrative expenses decreased slightly in ~~Second~~First Quarter ~~2017~~2018 compared to ~~Second~~First Quarter ~~2016 was~~2017. The decrease is primarily ~~attributable to (i) merger and acquisition expenses of $10.3 million related to our acquisition of CEC; (ii) higher non-cash stock-based compensation expense of $1.8 million compared~~due to the ~~prior year and (iii) increases related~~timing of the issuance of stock based compensation awards. In 2017, the Company granted stock based compensation awards to ~~normal personnel and compensation adjustments, professional, consulting, business development and other administrative fees~~certain of its employees in ~~the aggregate of $3.2 million.~~March, in 2018 similar awards were not granted until April.


	2018		% of Revenue			2017		% of Revenue			$ Change			% Change
	(Dollars in thousands)
Interest Income	$	9,099		1.6	%	$	11,977		2.2	%	$	(2,878	)		(24.0	)%
Interest Expense	$	35,869		6.3	%	$	35,000		6.4	%	$	869			2.5	%

Interest income ~~increased~~decreased in the ~~Second~~First Quarter ~~2017~~2018 compared to ~~Second~~First Quarter ~~2016~~2017 primarily due to ~~interest income earned~~a lower balance on our contract receivable related to our prison project in Ravenhall, Australia. When the facility was completed during the fourth quarter 2017, the State of Victoria made a principal payment towards the balance of approximately $242 million.

Interest expense increased slightly in First Quarter 2018 compared to First Quarter 2017 primarily due to additional interest incurred on higher debt balances resulting from our acquisition of CEC on April 5, 2017. Partially offsetting the increase was less construction loan interest related to our prison project in Ravenhall, Australia due to a lower loan balance compared to the prior period. Upon completion of the facility in fourth quarter 2017, the State of Victoria made a payment towards the loan balance of approximately $242 million. Refer toNote ~~12—Business Segments and Geographic Information~~12 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm ~~10-Q.~~10-Q

Interest expense increased in Second Quarter 2017 compared to Second Quarter 2016 primarily due to additional interest incurred on higher debt balances resulting from our acquisition of CEC on April 5, 2017. Also contributing to the increase was the construction loan interest related to our prison project in Ravenhall, Australia. Refer to Note 10—Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

During Second Quarter 2016, we completed a tender offer and redemption of our 6.625% Senior Notes due 2021 which resulted in a loss of $15.9 million related to the tender premium and deferred costs associated with the 6.625% Senior Notes due 2021. for further discussion

The provision for income taxes during ~~Second~~First Quarter ~~2017 decreased~~2018 increased compared to ~~Second~~First Quarter ~~2016~~2017 along with the effective tax rate. ~~The decrease is primarily due~~In the First Quarter 2018, there was a $1.2 million discrete tax expense which partially removes the tax benefit related to stock compensation that vested during the period. In contrast, in First Quarter 2017, there was a $1.1 million discrete tax benefit partially adding to the tax benefit ~~on the merger and acquisition expenses of $10.3 million~~ related to ~~our acquisition of CEC incurred in Second Quarter 2017 as well as the debt extinguishment costs incurred by the REIT in Second Quarter 2016 which carried no tax benefit but had~~stock compensation that vested during that period. These discrete items are the result of ~~increasing~~ the ~~effective rate~~ adoption of ASUNo. 2016-09,Compensation - Stock Compensation (Topic 718)in ~~that quarter.~~2017. As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn are allowed a deduction for the distribution at the REIT level. Our wholly-owned taxable REIT subsidiaries continue to be fully subject to federal, state and foreign income taxes, as applicable. We estimate our annual effective tax rate to be in the range of approximately 7%10% to 9%12% exclusive of any discrete items.

Equity in earnings of affiliates, presented net of income taxes, represents the earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates during Second Quarter 2017 compared to Second Quarter 2016 decreased due to nonrecurring favorable contract adjustments received in Second Quarter 2016 by GEOAmey.

Revenues increased in First Half 2017 compared to First Half 2016 primarily due to aggregate increases of $29.2 million as a result of our acquisition of CEC on April 5, 2017 as well as the activation, intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center correctional facility in January 2017. These increases were partially offset by net decreases of $0.4 million at certain of our facilities due to aggregate net decreases in population, transportation services and/or rates.

The number of compensated mandays in U.S. Corrections & Detention facilities was approximately 11.2 million in First Half 2017 and 10.9 million in First Half 2016. We experienced an aggregate net increase of approximately 278,000 mandays as a result of our acquisition of CEC and contract activation discussed above. We look at the average occupancy in our facilities to determine how we are managing our available beds. The average occupancy is calculated by taking compensated mandays as a percentage of capacity. The average occupancy in our U.S. Corrections & Detention facilities was 93.5% and 92.6% of capacity in First Half 2017 and First Half 2016, respectively, excluding idle facilities.

Revenues increased in First Half 2017 compared to First Half 2016 primarily due to aggregate increases of $36.6 million from our acquisition of CEC on April 5, 2017. We also experienced increases of $17.6 million primarily due to increases in average client and participant counts under our ISAP and electronic monitoring services. These increases were partially offset by $1.0 million related to net decreases in census levels at certain of our community based and reentry centers.

Revenues for International Services in First Half 2017 compared to First Half 2016 increased by $8.6 million We experienced a net increase of $5.9 million primarily attributable to net population increases at our Australian subsidiary. Additionally, we had an increase due to foreign exchange rate fluctuations of $2.7 million resulting from the weakening of the U.S. dollar against certain international currencies.

Revenues for our Facility Construction & Design services relate to the commencement of design and construction activity for our new Ravenhall Prison Contract executed in September 2014 with the Department of Justice in the State of Victoria, Australia. The decrease is due to decreased construction activity during 2017 as the project gets closer to completion. These construction revenues have little to no margin.

~~Operating expenses consist of those expenses incurred in the operation and management of our correctional, detention and community based facilities.~~

The increase in operating expenses for U.S. Corrections & Detention reflects an increase of $23.9 million resulting from our acquisition of CEC on April 5, 2017 as well as the activation and intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center correctional facility in January 2017. These increases were partially offset by aggregate decreases in operating expenses of $0.3 million at certain of our facilities primarily due to net decreases in population, transportation services and the variable costs associated with those decreases.

Operating expenses for GEO Care increased by $37.5 million during First Half 2017 from First Half 2016 primarily due to $28.6 million from our acquisition of CEC on April 5, 2017. We also experienced increases of $8.9 million primarily due to increases in average client and participant counts under our ISAP and electronic monitoring services and program growth at our community based and reentry centers.

Operating expenses for International Services in First Half 2017 compared to First Half 2016 increased by $6.5 million. We experienced a net increase of $3.7 million primarily attributable to net population increases at our Australian subsidiary. Additionally, we had an increase due to foreign exchange rate fluctuations of $2.8 million resulting from the weakening of the U.S. dollar against certain international currencies. Operating expenses have decreased as a percentage of revenue primarily due to certain nonrecurring labor related issues at our South African subsidiary in First Half 2016.

Operating expenses for our Facility Construction & Design services relate to the commencement of design and construction activity for our new Ravenhall Prison Contract executed in September 2014 with the Department of Justice in the State of Victoria, Australia. The decrease is due to decreased construction activity during 2017. We experienced an increase in operating expenses as a percentage of revenue due to a loss related to construction overruns recorded during First Half 2017. Refer to Note 12- Business Segments and Geographic Information of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

U.S. Corrections & Detention depreciation and amortization expense increased slightly in First Half 2017 compared to First Half 2016 primarily due to renovations made at several of our facilities as well as our acquisition of CEC on April 5, 2017.

GEO Care depreciation and amortization expense increased in First Half 2017 compared to First Half 2016 primarily due to new facilities and intangible assets acquired in our acquisition of CEC on April 5, 2017.

Depreciation and amortization expense decreased slightly in First Half 2017 compared to First Half 2016 as a result of certain assets becoming fully depreciated and there were no significant additions or renovations during 2016 or 2017 at our international subsidiaries.

Interest income increased in the First Half 2017 compared to First Half 2016 primarily due to interest income earned on our contract receivable related to our prison project in Ravenhall, Australia. Refer to Note 12—Business Segments and Geographic Information of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Interest expense increased in First Half 2017 compared to First Half 2016 primarily due to additional interest incurred on higher debt balances resulting from our acquisition of CEC on April 5, 2017. Also contributing to the increase was the construction loan interest related to our prison project in Ravenhall, Australia. Refer to Note 10—Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

During First Half 2016, we completed a tender offer and redemption of our 6.625% Senior Notes due 2021 which resulted in a loss of $15.9 million related to the tender premium and deferred costs associated with the 6.625% Senior Notes due 2021.

The provision for income taxes during First Half 2017 decreased compared to First Half 2016 along with the effective tax rate. The decrease is primarily due to the tax benefit on the merger and acquisition expenses of $10.3 million related to our acquisition of CEC incurred in First Half 2017 as well as the debt extinguishment costs incurred by the REIT in First Half 2016 which carried no tax benefit but had the result of increasing the effective rate in that half. Additionally, we had a $1.4 million discrete tax benefit related to the adoption of ASU No. 2016-09,~~Compensation—Stock Compensation (Topic 718).~~Refer to Note 14—Recent Accounting Pronouncements of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn are allowed a deduction for the distribution at the REIT level. Our wholly-owned taxable REIT subsidiaries continue to be fully subject to federal, state and foreign income taxes, as applicable. We estimate our annual effective tax rate to be in the range of approximately 7% to 9% exclusive of any discrete items.

Equity in earnings of affiliates, presented net of income taxes, represents the earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates during First ~~Half 2017~~Quarter 2018 compared to First ~~Half 2016 decreased~~Quarter 2017 increased primarily due to ~~nonrecurring~~interest income received related to favorable ~~contract adjustments received in First Half 2016 by GEOAmey.~~tax settlements at SACS.

Our current cash requirements consist of amounts needed for working capital, distributions of our REIT taxable income in order to maintain our REIT qualification, debt service, supply purchases, investments in joint ventures, and capital expenditures related to either the development of new correctional, detention and reentry facilities, or the maintenance of existing facilities. In addition, some of our management contracts require us to make substantial initial expenditures of cash in connection with opening or renovating a facility. Generally, these initial expenditures are subsequently fully or partially recoverable as pass-through costs or are billable as a component of the per diem rates or monthly fixed fees to the contracting agency over the original term of the contract. In connection with GEOAmey, our joint venture in the United Kingdom, we and our joint venture partner have each provided a line of credit of £12 million, or ~~$15.6~~$16.9 million, based on exchange rates as of ~~June 30, 2017,~~March 31, 2018, for GEOAmey’s operations. As of ~~June 30, 2017, $3.3~~March 31, 2018, $1.8 million was outstanding to each of the joint ~~ventures.~~ventures partners.

We currently have contractual commitments for a number of projects using Company financing. We estimate that the cost of these existing capital projects will be approximately ~~$196.3~~$239.5 million of which ~~$46.8~~$129.7 million was spent through ~~June 30, 2017.~~March 31, 2018. We estimate that the remaining capital requirements related to these capital projects will be ~~$149.5~~$109.8 million which will be spent through 2018. Additionally, in connection with the Ravenhall Prison Project, we have a contractual commitment for construction of the facility and have entered into a syndicated facility agreement with National Australia Bank Limited to provide funding for the project up to AUD 791.0 million, or $608.0 million, based on exchange rates as of June 30, 2017.2019.

On March 23, 2017, we executed a third amended and restated credit agreement by and among The GEO Group, Inc. and GEO Corrections Holdings, Inc., (“Corrections” and, together with GEO, the “Borrowers”), the Australian Borrowers named therein, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”). The Credit Agreement refinances our prior $291.0 million term loan, reestablishes our ability to implement at a later date an Australian Dollar Letter of Credit Facility (the “Australian LC Facility”) providing for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars up to AUD275 million, an increase from the prior AUD225 million Australian ~~LC Facility,~~Dollar letter of credit facility, and certain other modifications to the prior credit agreement. Loan costs of approximately $7.0 million were incurred and capitalized in connection with the transaction.

The Credit Agreement evidences a credit facility (the “Credit Facility”) consisting of an $800 million term loan (the “Term Loan”) bearing interest at LIBOR plus 2.25% (with a LIBOR floor of 0.75%), and a $900 million revolving credit facility (the “Revolver”) initially bearing interest at LIBOR plus 2.25%% (with no LIBOR floor) together with AUD275 million under the Australian LC Facility. As of ~~June 30, 2017,~~March 31, 2018, there were no letters of credit issued under the Australian LC Facility. Amounts to be borrowed by GEO under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing. The Term Loan component is scheduled to mature on March 23, 2024. The revolving credit commitment component is scheduled to mature on May 19, ~~2021; provided, that if on October 3, 2019 both the maturity dates of all term loans and incremental term loans have not been extended to a date that is 5~~¹⁄₂ ~~years after March 23, 2017 or a later date, and the senior secured leverage ratio exceeds 2.50 to 1.00, then the termination date will be October 3, 2019.~~2021. The Credit Agreement also has an accordion feature of $450.0 million, subject to lender demand and prevailing market conditions and satisfying the relevant borrowing conditions.

The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict our ability to, among other things (i) create, incur or assume any indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make certain restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio to exceed 6.25 to 1.00, allow the senior secured leverage ratio to exceed 3.50 to 1.00, or allow the interest coverage ratio to be less than 3.00 to 1.00, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes, except as permitted, (x) alter the business we conduct, and (xi) materially impair our lenders’ security interests in the collateral for its loans.

Events of default under the Credit Agreement include, but are not limited to, (i) our failure to pay principal or interest when due, (ii) our material breach of any representation or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) certain material environmental liability claims which have been asserted against us, and (viii) a change in control.

All of the obligations under the Credit Agreement are unconditionally guaranteed by certain domestic subsidiaries of GEO and the Credit Agreement and the related guarantees are secured by a perfected first-priority pledge of substantially all of our present and future tangible and intangible domestic assets and all present and future tangible and intangible domestic assets of each guarantor, including but not limited to a first-priority pledge of all of the outstanding capital stock owned by us and each guarantor in our domestic subsidiaries.

The Australian Borrowers are wholly owned foreign subsidiaries of GEO. We have designated each of the Australian Borrowers as restricted subsidiaries under the Credit Agreement. However, the Australian Borrowers are not obligated to pay or perform any obligations under the Credit Agreement other than their own obligations as Australian Borrowers under the Credit Agreement. The Australian Borrowers do not pledge any of their assets to secure any obligations under the Credit Agreement.

On August 18, 2016, the Company executed a Letter of Offer by and among GEO and HSBC Bank Australia Limited (the “Letter of Offer”) providing for a bank guarantee line and bank guarantee/standbysub-facility in an aggregate amount of AUD100 million, or $76.9 million, based on exchange rates in effect as of ~~June 30, 2017~~March 31, 2018 (collectively, the “Bank Guarantee Facility”). The Bank Guarantee Facility allows GEO to provide letters of credit to assure performance of certain obligations of its wholly owned subsidiary relating to its prison project in Ravenhall, located near Melbourne, Australia. The Bank Guarantee Facility is unsecured. The issuance of letters of credit under the Bank Guarantee Facility is subject to the satisfaction of the conditions precedent specified in the Letter of Offer. Letters of credit issued under the bank guarantee lines are due on demand and letters of credit issued under the bank guarantee/standbysub-facility cannot have a duration exceeding twelve months. The Bank Guarantee Facility may be terminated by HSBC Bank Australia Limited on 90 days written notice. As of ~~June 30, 2017,~~March 31, 2018, there was AUD100 million, or ~~76.9~~$76.9 million based on exchange rates at ~~June 30, 2017,~~March 31, 2018, in letters of credit issued under the Bank Guarantee Facility.

As of ~~June 30, 2017,~~March 31, 2018, we had ~~$798.0~~$792 million in aggregate borrowings outstanding, net of discount, under the Term Loan and ~~$194.0~~$330 million in borrowings under the Revolver, and approximately ~~$64.0~~$70 million in letters of credit which left ~~$642.0~~$500 million in additional borrowing capacity under the Revolver. Refer toNote ~~10 –~~12 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q for further discussion.

On April 18, 2016, we completed an offering of $350 million aggregate principal amount of 6.00% Senior Notes due 2026. The notes will mature on April 15, 2026 and have a coupon rate and yield to maturity of 6.00%. Interest is payable semi-annually in cash in arrears on April 15 and October 15 of each year. The proceeds were used to fund the tender offer and the redemption of all of our 6.625% Senior Notes due 2021, to pay all related fees, costs and expenses and for general corporate purposes including repaying borrowings under our Revolver. Refer toNote 12 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q for further discussion.

On September 25, 2014, we completed an offering of $250.0 million aggregate principal amount of 5.875% Senior Notes due 2024. The notes will mature on October 15, 2024 and have a coupon rate and yield to maturity of 5.875%. Interest is payable semi-annually in cash in arrears on April 15 and October 15, which commenced on April 15, 2015. The proceeds received from the 5.875% Senior Notes due 2024 were used to pay down outstanding borrowings under our Revolver and pay related fees, costs and expenses. Refer toNote ~~10 –~~12 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q for further discussion.

In connection with a ~~new~~ design and build prison project agreement in Ravenhall, Australia with the State of Victoria, in September 2014, we entered into a syndicated facility agreement (the “Construction Facility”) with National Australia Bank Limited to provide debt financing for construction of the project. The project was completed during fourth quarter of 2017. The Construction Facility ~~provides~~provided fornon-recourse funding up to AUD ~~791~~791.0 million, or approximately ~~$608~~$607.9 million, based on exchange rates as of ~~June 30, 2017.~~March 31, 2018. Construction draws ~~are~~were funded throughout the project according to a fixed utilization schedule as defined in the syndicated facility agreement. The term of the Construction Facility is through October 2019 and bears interest at a variable rate quoted by certain Australian banks plus 200 basis points. After October 2019, the Construction Facility will be converted to a term loan with payments due quarterly beginning in 2019 through 2041. In accordance with the terms of the Construction Facility, upon completion and commercial acceptance of the prison in fourth quarter 2017, in accordance with the prison contract, the State ~~will make~~made a lump sum payment of AUD 310 million, or approximately $238 million, based on exchange rates as of ~~June 30, 2017,~~March 31, 2018, towards a portion of the outstanding principal. The remaining outstanding principal balance will be repaid over the term of the operating agreement. As of ~~June 30, 2017,~~March 31, 2018, approximately ~~$508~~$353 million was outstanding under the Construction Facility. ~~We also entered into interest rate swap and interest rate cap agreements related to our non-recourse debt in connection with the project.~~ Refer to Note ~~9 – Derivative Financial Instruments~~12 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q for further discussion.

On October 3, 2013, we completed an offering of $250.0 million aggregate principal amount of 5.875% Senior Notes due 2022. The 5.875% Senior Notes due 2022 will mature on January 15, 2022 and have a coupon rate and yield to maturity of 5.875%. Interest is payable semi-annually on January 15 and July 15 each year, which commenced on January 15, 2014. The proceeds received from the 5.875% Senior Notes due 2022 were used, together with cash on hand, to fund the repurchase, redemption or other discharge of our 7.75% senior notes due 2017 and to pay related transaction fees and expenses. Refer toNote 12 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q for further discussion.

On March 19, 2013, we completed an offering of $300.0 million aggregate principal amount of 5.125% Senior Notes. The 5.125% Senior Notes will mature on April 1, 2023 and have a coupon rate and yield to maturity of 5.125%. Interest is payable semi-annually on April 1 and October 1 each year, which commenced on October 1, 2013. A portion of the proceeds received from the 5.125% Senior Notes were used to repay the prior revolver credit draws outstanding under the prior senior credit facility. Refer toNote ~~10 –~~12 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q for further discussion.

In addition to the debt outstanding under the Credit Facility, the 6.00% Senior Notes, the 5.125% Senior Notes, the 5.875^.% Senior Notes due 2022 and the 5.875% Senior Notes due 2024 discussed above, we also have significant debt obligations which, although these obligations arenon-recourse to us, require cash expenditures for debt service. Our significant debt obligations could have material consequences. See “Risk ~~Factors-Risks~~Factors - Risks Related to Our High Level of Indebtedness” in Item 1A of our Annual Report onForm 10-K for the year ended December 31, ~~2016.~~2017. We are exposed to various commitments and contingencies which may have a material adverse effect on our liquidity. We also have guaranteed certain obligations for certain of our international subsidiaries. Thesenon-recourse obligations, commitments and contingencies and guarantees are further discussed in our Annual Report onForm 10-K for the year ended December 31, ~~2016.~~2017.

We consider opportunities for future business and/or asset acquisitions as we deem appropriate when market conditions present opportunities. If we are successful in our pursuit of any new projects, our cash on hand, cash flows from operations and borrowings under the existing Credit Facility may not provide sufficient liquidity to meet our capital needs and we could be forced to seek additional financing or refinance our existing indebtedness. There can be no assurance that any such financing or refinancing would be available to us on terms equal to or more favorable than our current financing terms, or at all. In the future, our access to capital and ability to compete for future capital intensive projects will also be dependent upon, among other things, our ability to meet certain financial covenants in the indenture governing the 5.125% Senior Notes, the indenture governing the 5.875% Senior Notes due 2022, the indenture governing the 5.875% Senior Notes due 2024, the indenture governing the 6.00% Senior Notes due 2026 and our Credit Agreement. A substantial decline in our financial performance could limit our access to capital pursuant to these covenants and have a material adverse affect on our liquidity and capital resources and, as a result, on our financial condition and results of operations. In addition to these foregoing potential constraints on our capital, a number of state government agencies have been suffering from budget deficits and liquidity issues. While we expect to be in compliance with our debt covenants, if these constraints were to intensify, our liquidity could be materially adversely impacted as could our ability to remain in compliance with these debt covenants.

On March 7, 2017, we entered into an underwriting agreement related to the issuance and sale of 9,000,000 shares of our common stock, par value $.01 per share. The offering price to the public was $27.80 per share and the underwriters agreed to purchase the shares from us pursuant to the underwriting agreement at a price of $26.70 per share. In addition, under the terms of the underwriting agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 1,350,000 shares of common stock. On March 8, 2017, the underwriters exercised in full their option to purchase the additional 1,350,000 shares of common stock. On March 13, 2017, we announced that we had completed the sale of 10,350,000 shares of common stock with its previously announced underwritten public offering. We received gross proceeds (before underwriting discounts and estimated offering expenses) of approximately $288.1 million from the offering, including approximately $37.6 million in connection with the sale of the additional shares. The 10,350,000 shares of common stock were issued under our currently effective shelf registration filed with the Securities and Exchange Commission as discussed below. The net proceeds of this offering were used to repay amounts outstanding under the revolver portion of our senior credit facility and for general corporate purposes.

~~In September 2014, we filed with the Securities and Exchange Commission an automatic shelf registration statement onForm S-3.~~ On November 10, 2014, in connection with the shelf registration, we filed with the Securities and Exchange Commission a prospectus supplement related to the offer and sale from time to time of our common stock at an aggregate offering price of up to $150.0 million through sales agents. Sales of shares of our common stock under the prospectus supplement and the equity distribution agreements entered into with the sales agents, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933. There were no shares of common stock sold under this prospectus supplement during the six months ended June 30, 2017 or during the year ended December 31, 2016. We sold 10,350,000 shares of common stock in a public offering during the six months ended June 30, 2017 pursuant to this automatic shelf registration statement under the preliminary prospectus supplement filed on March 7, 2017 and the final prospectus supplement filed on March 9, 2017.

As a REIT, we are subject to a number of organizational and operational requirements, including a requirement that we annually distribute to our shareholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for dividends paid and by excluding any net capital gain). Generally, we expect to distribute all or substantially all of our REIT taxable income so as not to be subject to the income or excise tax on undistributed REIT taxable income. The amount, timing and frequency of distributions will be at the sole discretion of our Board ~~of Directors~~ and will be based upon various factors.

We plan to fund all of our capital needs, including distributions of our REIT taxable income in order to maintain our REIT qualification, and capital expenditures, from cash on hand, cash from operations, borrowings under our Credit Facility and any other financings which our management and Board, ~~of Directors,~~ in their discretion, may consummate. Currently, our primary source of liquidity to meet these requirements is cash flow from operations and borrowings under the $900.0 million Revolver. Our management believes that cash on hand, cash flows from operations and availability under our Credit Facility will be adequate to support our capital requirements for ~~2017~~2018 as disclosed under “Capital Requirements” above.

On February 14, 2018, we announced that our Board of Directors authorized a stock buyback program authorizing us to repurchase up to a maximum of $200.0 million of our shares of common stock. The stock buyback program will be funded primarily with cash on hand, free cash flow and borrowings under our Revolver. The program shall be effective through October 20, 2020. The stock buyback program is intended to be implemented through purchases made from time to time in the open market or in privately negotiated transactions, in accordance with applicable Securities and Exchange Commission requirements. The stock buyback program does not obligate us to purchase any specific amount of our common stock and may be suspended or extended at any time at the discretion of our Board of Directors. During the three months ended March 31, 2018, we purchased 1.8 million shares of our common stock at a cost of $40.2 million primarily purchased with proceeds from our Revolver. We believe that we have the ability to continue to fund the stock buyback program, our debt service requirements and our maintenance and growth capital expenditure requirements, while maintaining sufficient liquidity for other corporate purposes.

On October 20, 2017, we filed an automatic shelf registration statement onForm S-3 with the Securities and Exchange Commission. The shelf registration statement is automatically effective and is valid for three years. Pursuant to the shelf registration statement, we may offer common stock, preferred stock, debt securities, guarantees of debt securities, warrants and units from time to time in amounts, at prices and on terms that will be determined at the time of any such offering.

We have anon-qualified deferred compensation agreement with our Chief Executive Officer (“CEO”). The current agreement, as amended, provides for a lump sum payment upon retirement, no sooner than age 55. ~~As of January 1, 2013, our~~Our CEO ~~had~~has reached age 55 and ~~was~~is eligible to receive the payment upon retirement. If our CEO had retired as of ~~June 30, 2017,~~March 31, 2018, we would have had to pay him approximately ~~$8.0~~$8.3 million. Based on our current capitalization, we do not believe that making this payment would materially adversely impact our liquidity.

Except as discussed above, and in the notes to our Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report onForm 10-Q, we do not have anyoff-balance sheet arrangements.

Cash, cash equivalents and restricted cash and cash equivalents as of ~~June 30, 2017~~March 31, 2018 was ~~$65.9~~$109.2 million, compared to ~~$68.0~~$133.5 million as of December 31, ~~2016.~~2017.

Cash provided by operating activities amounted to ~~$50.7~~$65.1 million for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 versus cash provided by operating activities of ~~$38.3~~$47.9 million for the ~~six~~three months ended ~~June 30, 2016.~~March 31, 2017. Cash provided by operating activities during the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 was positively impacted by net income attributable to GEO,non-cash expenses such as depreciation and amortization, amortization of debt issuance costs, and stock-based compensation expense. Equity in earnings of affiliates negatively impacted cash. Changes in accounts receivable, prepaid expenses and other assets decreased in total by ~~$44.3~~$2.9 million, representing a positive impact on cash. The decrease was primarily driven by the timing of billings and collections. Changes in accounts payable, accrued expenses and other liabilities decreased by ~~$24.1~~$17.1 million which negatively impacted cash. The decrease was primarily driven by the timing of payments.

Additionally, cash provided by operating activities for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 was ~~negatively~~positively impacted by ~~an increase~~a decrease in changes in contract receivable ~~of $122.0 million. This increase relates to costs incurred and estimated earnings in excess of billings~~ related to ~~the~~our prison project in Ravenhall, ~~Australia. The~~Australia of $6.3 million which was a result of payments made towards the contract receivable now that the facility is expected to grow as construction services are performed and will continue to have a negative impact on cash from operating activities until the balance is ultimately settled. In accordance with the contract, the project will not be billed out until completion and commercial acceptance of the facility.in operation.

Cash provided by operating activities amounted to ~~$38.3~~$47.9 million for the ~~six~~three months ended ~~June 30, 2016.~~March 31, 2017. Cash provided by operating activities during the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 was positively impacted by net income attributable to GEO,non-cash expenses such as depreciation and amortization, amortization of debt issuance costs, and stock-based compensation expense. Equity in earnings of affiliates negatively impacted cash. Changes in accounts receivable, prepaid expenses and other assets decreased in total by ~~$14.0~~$51.7 million, representing a positive impact on cash. The decrease was primarily driven by the timing of billings and collections. Changes in accounts payable, accrued expenses and other liabilities ~~increased~~decreased by ~~$9.6~~$14.2 million which ~~positively~~negatively impacted cash. The ~~increase~~decrease was primarily driven by the timing of payments.

Additionally, cash provided by operating activities for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 was negatively impacted by an increase in changes in contract receivable of ~~$124.3~~$69.1 million. This increase relates to costs incurred and estimated earnings in excess of billings related to the prison project in Ravenhall, Australia. The contract receivable iswas expected to grow as construction services ~~are performed and will continue to have a negative impact on cash from operating activities until the balance is ultimately settled.~~were performed. In accordance with the contract, the project ~~will~~would not be billed out until completion and commercial acceptance of the ~~facility.~~facility by the State. The facility was completed and accepted by the State during the fourth quarter of 2017.

Cash used in investing activities of ~~$423.2~~$44.4 million during the ~~six~~three months ended ~~June 30,~~March 31, 2018 was primarily the result of capital expenditures of $52.1 million. Cash used in investing activities of $35.8 million during the three months ended March 31, 2017 was primarily the result of capital expenditures of $67.5 million and our acquisition of CEC, net of cash acquired, of $354.5 million. Cash used in investing activities of $111.3 million during the six months ended June 30, 2016 was primarily the result of capital expenditures of $46.0$34.4 million and changes in restricted cash and ~~investmentsof $65.9~~investments of $2.1 million.

Cash ~~provided by~~used in financing activities during the ~~six~~three months ended ~~June 30, 2017 amounted to $369.0~~March 31, 2018 was approximately $49.0 million compared to cash provided by financing activities of ~~$52.0~~$350.2 million during the ~~six~~three months ended ~~June 30, 2016.~~March 31, 2017. Cash used in financing activities during the three months ended March 31, 2018 was primarily the result of proceeds from long-term debt of $102.0 million. This increase was partially offset by a decrease for dividends paid of $58.2 million, payments on long-term debt of $43.0 million and payments onnon-recourse debt of $5.6 million. Cash provided by financing activities during the ~~six~~three months ended ~~June 30,~~March 31, 2017 was approximately $350.2 million. Cash provided by financing activities during the three months ended March 31, 2017 was primarily the result of proceeds from long-term debt of ~~$1,158.6~~$1,083.1 million which included proceeds received from ~~the Company’s~~our Term Loan which was modified on March 23, 2017. Additionally, we had proceeds fromnon-recourse debt of ~~$91.1~~$36.0 million related to construction draws for our prison project in Ravenhall, Australia. These increases were partially offset by a decrease for dividends paid of ~~$110.9~~$52.5 million, payments on long-term debt of ~~$972.5~~$918.5 million and payments onnon-recourse debt of ~~$67.9~~$67.2 million. Cash provided by financing activities during the six months ended June 30, 2016 amounted to $52.0 million. Cash provided by financing activities during the six months ended June 30, 2016 was primarily the result of proceeds from long-term debt of $641.0 million which included the issuance of our 6.00% Senior Notes. Additionally, we had proceeds from non-recourse debt of $159.1 million related to construction draws for our prison project in Ravenhall, Australia. These increases were partially offset by a decrease for dividends paid of $97.2 million and payments on long-term debt of $627.5 million which included the redemption of our 6.625% Senior Notes due 2021.

Funds from Operations (“FFO”) is a widely accepted supplementalnon-GAAP measure utilized to evaluate the operating performance of real estate investment trusts. It is defined in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income (loss) attributable to common shareholders (computed in accordance with Generally Accepted Accounting Principles), excluding real estate related depreciation and amortization, excluding gains and losses from the cumulative effects of accounting changes, extraordinary items and sales of properties, and including adjustments for unconsolidated partnerships and joint ventures.

We also present Normalized Funds From Operations, or Normalized FFO, and Adjusted Funds from Operations, or AFFO, supplementalnon-GAAP financial measures of real estate investment trusts’ operating performances.

Normalized FFO is defined as FFO adjusted for certain items which by their nature are not comparable from period to period or that tend to obscure the Company’s actual operating performance, including for the periods presented ~~loss on extinguishment of debt, start-up expenses,~~ mergers and acquisitions (“M&A”) related expenses, the Net Tax Cuts and Jobs Act impact and the tax effect of those adjustments.

AFFO is defined as Normalized FFO adjusted by addingnon-cash expenses such asnon-real estate related depreciation and amortization, stock based compensation expense, the amortization of debt issuance costs, discount and/or premium and othernon-cash interest, and by subtracting recurring consolidated maintenance capital expenditures.

Because of the unique design, structure and use of our correctional facilities, we believe that assessing the performance of our correctional facilities without the impact of depreciation or amortization is useful and meaningful to investors. Although NAREIT has published its definition of FFO, companies often modify this definition as they seek to provide financial measures that meaningfully reflect their distinctive operations. We have modified FFO to derive Normalized FFO and AFFO that meaningfully reflect our operations. Our assessment of our operations is focused on long-term sustainability. The adjustments we make to derive thenon-GAAP measures of Normalized FFO and AFFO exclude items which may cause short-term fluctuations in income from continuing operations but have no impact on our cash flows, or we do not consider them to be fundamental attributes or the primary drivers of our business plan and they do not affect our overall long-term operating performance.

We may make adjustments to FFO from time to time for certain other income and expenses that do not reflect a necessary component of our operational performance on the basis discussed above, even though such items may require cash settlement. Because FFO, Normalized FFO and AFFO exclude depreciation and amortization unique to real estate as well asnon-operational items and certain other charges that are highly variable from year to year, they provide our investors with performance measures that reflect the impact to operations from trends in occupancy rates, per diem rates, operating costs and interest costs, providing a perspective not immediately apparent from income from continuing operations. We believe the presentation of FFO, Normalized FFO and AFFO provide useful information to investors as they provide an indication of our ability to fund capital expenditures and expand our business. FFO, Normalized FFO and AFFO provide disclosure on the same basis as that used by our management and provide consistency in our financial reporting, facilitate internal and external comparisons of our historical operating performance and our business units and provide continuity to investors for comparability purposes. Additionally, FFO, Normalized FFO and AFFO are widely recognized measures in our industry as a real estate investment trust.

Our reconciliation of net income attributable to The GEO Group, Inc. to FFO, Normalized FFO and AFFO for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ is as follows (in thousands):


	Three Months Ended						Six Months Ended						Three Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			March 31, 2018			March 31, 2017
Funds From Operations
Net income attributable to The GEO Group, Inc.	$	30,992		$	23,209		$	71,395		$	55,559		$	34,987		$	40,403
Real estate related depreciation and amortization		16,550			15,221			31,936			30,363			17,388			15,386
Gain on sale of real estate assets *		—			—			(261	)		—			(98	)		(261	)

NAREIT Defined FFO		47,542			38,430			103,070			85,922		$	52,277		$	55,528
Loss on extinguishment of debt		—			15,866			—			15,866
Start-up expenses		—			—			—			1,939
Net Tax Cuts and Jobs Impact														304			—
M&A related expenses		10,336			—			12,956			—			—			2,620
Tax effect of adjustments to Funds From Operations **		(2,487	)		—			(2,523	)		(749	)		—			(36	)

Normalized Funds from Operations	$	55,391		$	54,296		$	113,503		$	102,978		$	52,581		$	58,112

Non-real estate related depreciation and amortization		15,316			13,431			28,879			26,740			14,538			13,563
Consolidated maintenance capital expenditures		(4,934	)		(5,954	)		(11,367	)		(11,194	)		(5,323	)		(6,423	)
Stock-based compensation expense		5,030			3,248			9,993			6,489			5,827			4,963
Amortization of debt issuance costs, discount and/or premium and other non-cash interest		3,870			2,661			7,676			5,027			2,138			3,806

Adjusted Funds from Operations	$	74,673		$	67,682		$	148,684		$	130,040		$	69,761		$	74,021

The following discussion contains statements that are not historical statements and, therefore, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied in the forward-looking statements. Please refer to ~~“Part~~“Part I –- Item 1A. Risk Factors” and the “Forward LookingStatements –- Safe Harbor” sections in our Annual Report onForm 10-K for the fiscal year ended December 31, ~~2016,~~2017, as well as the “Forward-LookingStatements –- Safe Harbor” section and other disclosures contained in thisForm 10-Q for further discussion on forward-looking statements and the risks and other factors that could prevent us from achieving our goals and cause the assumptions underlying the forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements.

We continue to be encouraged by the current landscape of growth opportunities; however any positive trends may, to some extent, be adversely impacted by government budgetary constraints or any changes to the government’s willingness to maintain or grow public-private partnerships in the future. While state finances overall are stable, future budgetary pressures may cause state correctional agencies to pursue a number of cost savings initiatives which may include reductions in per diem rates and/or the scope of services provided by private operators. These potential cost savings initiatives could have a material adverse impact on our current operations and/or our ability to pursue new business opportunities. Additionally, if state budgetary constraints, as discussed above, persist or intensify, our state customers’ ability to pay us may be impaired and/or we may be forced to renegotiate our management contracts on less favorable terms and our financial condition, results of operations or cash flows could be materially adversely impacted. We plan to actively bid on any new projects that fit our target profile for profitability and operational risk. Although we are pleased with the overall industry outlook, positive trends in the industry may be offset by several factors, including budgetary constraints, contract modifications, contract terminations, contractnon-renewals, and/or contractre-bids and the impact of any other potential changes to the willingness to maintain or grow public-private partnerships on the part of other government agencies. We believe we have a strong relationship with our government partners and we believe that we operate facilities that maximize security and efficiency while offering our suite of GEO Continuum of Care services and resources. During the second quarter of 2017, we experienced lower utilization rates across U.S. Immigration and Customs Enforcement (“ICE”) facilities compared to the same period last year. During the first half of 2017, Southwest border crossings and apprehensions have declined compared to the first half of 2016 according to data from U.S. Customs and Border Protection. Policy changes implemented at the federal level have resulted in increased border enforcement and are expected to result in increased enforcement in the interior of the country over time. During the third and fourth quarters of 2017, we expect utilization rates across ICE facilities to begin to increase sequentially from the second quarter 2017 but to be below previously projected levels.

Although we have historically had a relatively high contract renewal rate, there can be no assurance that we will be able to renew our expiring management contracts on favorable terms, or at all. Also, while we are pleased with our track record inre-bid situations, we cannot assure that we will prevail in any such future situations.

Internationally, we are exploring a number of opportunities in our current markets and will continue to actively bid on any opportunities that fit our target profile for profitability and operational risk. In September 2014, we announced that a consortium led by us and comprised of The GEO Group Australia Pty. Ltd., John Holland Construction and Honeywell signed a contract with the Department of Justice in the State of Victoria for the development and operation of a1,300-bed capacity prison in Ravenhall, Australia. The Ravenhall facility ~~will be~~was developed under a public-private partnership financing structure with a capital contribution from us, which was made in January 2017, of approximately AUD 115 million, or $88.4 million, based on exchange rates as of ~~June 30, 2017,~~March 31, 2018, and we anticipate returns on investment consistent with our company-owned facilities. The project was completed during the fourth quarter of 2017 and is now operational. On March 29, 2018, we announced that our transportation joint venture in the United Kingdom, GEO Amey, has signed a contract with Scottish Prison Service for the provision of court custody and prisoner escort services in Scotland. The contract will have a base term of eight years effective January 26, 2019 with a renewal option of four years and is expected to have an average annual revenue of approximately $39 million. With respect to the Parklea Center in Australia, we were unfortunately unsuccessful during the current competitive rebid process and will be transitioning the management contract in March 2019.

With respect to our reentry services, electronic monitoring services, and youth services business conducted through our GEO Care business segment, we are currently pursuing a number of business development opportunities. Relative to opportunities for community-based reentry services, we are working with our existing federal, state, and local correctional clients to leverage new opportunities for both residential reentry facilities as well asnon-residential day reporting centers. We continue to expend resources on informing federal, state and local governments about the benefits of public-private partnerships, and we anticipate that there will be new opportunities in the future as those efforts continue to yield results. We believe we are well positioned to capitalize on any suitable opportunities that become available in this area.

Operating expenses consist of those expenses incurred in the operation and management of our contracts to provide services to our governmental clients. Labor and related costs represented ~~52.9%~~58.5% of our operating expenses during the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. Additional significant operating expenses include food, utilities and inmate medical costs. During the ~~six~~three months ended ~~June 30, 2017,~~March 31, 2018, operating expenses totaled ~~75.7%~~75.5% of our consolidated revenues. Our operating expenses as a percentage of revenues in ~~2017~~2018 will be impacted by the opening of any new or existing idle facilities as a result of the cost of transitioning and/orstart-up operations related to a facility opening. During ~~2017,~~2018, we will incur carrying costs for facilities that are currently vacant. As of ~~June 30, 2017,~~March 31, 2018, our worldwide operations include the management and/or ownership of approximately ~~100,000~~96,000 beds at ~~143~~141 correctional and detention facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of community supervision services for more than ~~185,000~~192,000 offenders and pretrial defendants, including approximately 100,000 individuals through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

General and administrative expenses consist primarily of corporate management salaries and benefits, professional fees and other administrative expenses. During the ~~six~~three months ended ~~June 30, 2017,~~March 31, 2018, general and administrative expenses totaled ~~8.4%~~7.4% of our consolidated revenues. We expect general and administrative expenses as a percentage of revenues in ~~2017~~2018 to remain consistent or decrease as a result of cost savings initiatives. We expect business development costs to remain consistent or increase slightly as we pursue additional business development opportunities in all of our business lines. We also plan to continue expending resources from time to time on the evaluation of potential acquisition targets.

As of ~~June 30, 2017,~~March 31, 2018, we are marketing approximately ~~6,600~~5,400 vacant beds at ~~six~~five of our idle facilities to potential customers. The annual carrying cost of our idle facilities in ~~2017~~2018 is estimated to be ~~$11.7~~$18.8 million, including depreciation expense of ~~$1.5~~$4.6 million. As of ~~June 30, 2017,~~March 31, 2018, these facilities had a net book value of ~~$164.2~~$138.5 million. We currently do not have any firm commitment or agreement in place to activate these facilities. Historically, some facilities have been idle for multiple years before they received a new contract award. These idle facilities are included in the U.S. Corrections & Detention segment. The per diem rates that we charge our clients often vary by contract across our portfolio. However, if all of these idle facilities were to be activated using our U.S. Corrections & Detention average per diem rate in ~~2017~~2018 (calculated as the U.S. Corrections & Detention revenue divided by the number of U.S. Corrections & Detention mandays) and based on the average occupancy rate in our U.S. Corrections & Detention facilities through ~~June 30, 2017,~~March 31, 2018, we would expect to receive incremental annualized revenue of approximately ~~$140~~$118 million and an annualized increase in earnings per share of approximately ~~$0.20~~$0.15 to ~~$0.25~~$0.20 per share based on our average U.S. Corrections and Detention operating margin.

We are exposed to market risks related to changes in interest rates with respect to our Credit Facility. Payments under the Credit Facility are indexed to a variable interest rate. Based on borrowings outstanding under the Credit Facility of ~~$992.2~~$1,122.2 million and ~~$64.0~~$70.3 million in outstanding letters of credit, as of ~~June 30, 2017,~~March 31, 2018, for every one percent increase in the average interest rate applicable to the Credit Facility, our total annual interest expense would increase by ~~$10.0~~approximately $11.0 million.

We have entered into certain interest rate swap arrangements for hedging purposes, fixing the interest rates on our Australiannon-recourse debt related to our Ravenhall Project to ~~3.3% during the design and construction phase and~~ 4.2% during the operating phase. The difference between the floating rate and the swap rate on these instruments is recognized in interest expense within the respective entity. Because the interest rates with respect to these instruments are fixed, a hypothetical one percent change in the current interest rate would not have a material impact on our financial condition or results of operations.

Additionally, we invest our cash in a variety of short-term financial instruments to provide a return. These instruments generally consist of highly liquid investments with original maturities at the date of purchase of three months or less. While these instruments are subject to interest rate risk, a hypothetical 100 basis point increase or decrease in market interest rates would not have a material impact on our financial condition or results of operations.

We are also exposed to market risks related to fluctuations in foreign currency exchange rates between the U.S. dollar, and the Australian dollar, the South African Rand and the British Pound currency exchange rates. Based upon our foreign currency exchange rate exposure at ~~June 30, 2017,~~March 31, 2018, every 10 percent change in historical currency rates would have approximately a ~~$2.7~~$4.9 million effect on our financial position and approximately a ~~$0.9~~$0.7 million impact on our results of operations during the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined inRules 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act), as of the end of the period covered by this report. On the basis of this review, our management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed in our reports filed with the SEC, under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

It should be noted that the effectiveness of our system of disclosure controls and procedures is subject to certain limitations inherent in any system of disclosure controls and procedures, including the exercise of judgment in designing, implementing and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events, and the inability to eliminate misconduct completely. Accordingly, there can be no assurance that our disclosure controls and procedures will detect all errors or fraud. As a result, by its nature, our system of disclosure controls and procedures can provide only reasonable assurance regarding management’s control objectives.

Our management is responsible to report any changes in our internal control over financial reporting (as such term is defined inRules 13a-15(f) and15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management believes that there have not been any changes in our internal control over financial reporting (as such term is defined inRules 13a-15(f) and15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We implemented internal controls to ensure we adequately evaluated our contracts and properly assessed the impact of the new accounting standard related to revenue recognition on our financial statements, including relevant disclosures, to facilitate its adoption on January 1, 2018. There were no significant changes to our internal control over financial reporting due to the adoption of this standard.

The information required herein is incorporated by reference fromNote ~~11 –~~13 - Commitments, Contingencies and Other in the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q.

Item 1A of Part I of our Annual Report onForm 10-K for the year ended December 31, ~~2016~~2017 includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future prospects.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Florida		65-0043078
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

One Park Place, 621 NW 53rd Street, Suite 700, Boca Raton, Florida		33487
(Address of principal executive offices)		(Zip Code)


PART I –- FINANCIAL INFORMATION			3

ITEM 1. FINANCIAL STATEMENTS			3

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE ~~AND SIX~~ MONTHS ENDED ~~JUNE 30,~~MARCH 31, 2018 AND 2017 ~~AND 2016~~			3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE ~~AND SIX~~ MONTHS ENDED ~~JUNE 30,~~MARCH 31, 2018 AND 2017 ~~AND 2016~~			4

CONSOLIDATED BALANCE SHEETS AS OF ~~JUNE 30, 2017~~MARCH 31, 2018 (UNAUDITED) AND DECEMBER 31, ~~2016~~2017			5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE ~~SIX~~THREE MONTHS ENDED ~~JUNE 30,~~MARCH 31, 2018 AND 2017 ~~AND 2016~~			6

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS			7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			41

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			6459

ITEM 4. CONTROLS AND PROCEDURES			6459

PART II –- OTHER INFORMATION			6560

ITEM 1. LEGAL PROCEEDINGS			6560

ITEM 1A. RISK FACTORS			6560

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			6560

ITEM 3. DEFAULTS UPON SENIOR SECURITIES			6560

ITEM 4. MINE SAFETY DISCLOSURES			6560

ITEM 5. OTHER INFORMATION			6560

ITEM 6. EXHIBITS			6661

SIGNATURES			6762


Accounts Receivable	$	29,936
Prepaid and other current assets		5,032
Property and equipment		126,510
Intangible assets		76,000
Favorable lease assets		3,110
Deferred income tax assets		2,223
Other non-current assets		4,327

Total assets acquired	$	247,138

Accounts payable and accrued expenses		53,800
Unfavorable lease liabilities		1,299
Other non-current liabilities		9,917

Total liabilities assumed	$	65,016

Total identifiable net assets		182,122
Goodwill		172,343

Total consideration paid, net of cash acquired	$	354,465


	Three Months Ended				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Pro forma revenues	$	579,681	$	610,512	$	1,189,890	$	1,183,502
Pro forma net income attributable to the GEO Group, Inc.	$	38,960	$	23,999	$	80,800	$	55,850


	Three Months Ended March 31, 2018
	U.S. Corrections & Detention		GEO Care		International		Facility Construction and Design		Total
Owned and Leased: Corrections & Detention	$	263,558	$	—	$	—	$	—	$	263,558
Owned and Leased: Community-based		—		41,335		—		—		41,335
Owned and Leased: Youth Services		—		22,385		—		—		22,385
Managed Only		95,123		1,223		66,158		—		162,504
Facility Construction and Design		—		—		—		—		—
Non-residential Services and Other		—		75,135		—		—		75,135

Total Revenues	$	358,681	$	140,078	$	66,158	$	—	$	564,917


	Three Months Ended March 31, 2017
	U.S. Corrections & Detention		GEO Care		International		Facility Construction and Design		Total
Owned and Leased - Corrections & Detention	$	265,412	$	—	$	—	$	—	$	265,412
Owned and Leased - Community-based		—		16,942		—		—		16,942
Owned and Leased - Youth Services		—		21,467		—		—		21,467
Managed Only		82,519		—		41,692		—		124,211
Facility Construction and Design		—		—		—		57,225		57,225
Non-residential Services and Other		—		65,357		—		—		65,357

Total Revenues	$	347,931	$	103,766	$	41,692	$	57,225	$	550,614


	Weighted Average Useful Life (years)		Fair Value as of April 5, 2017
Facility management contracts		18.3	$	75,300
Covenants not to compete		1		700

Total acquired intangible assets			$	76,000


	Acquisition Date Estimated Fair Value as of December 31, 2017		Measurement Period Adjustments during the three months ended March 31, 2018			Final Acquisition Date Fair Value as of March 31, 2018
Accounts Receivable	$	32,869	$	—		$	32,869
Prepaid and other current assets		4,397		—			4,397
Property and equipment		126,510		—			126,510
Intangible assets		76,000		—			76,000
Favorable lease assets		3,110		—			3,110
Deferred income tax assets		4,116		44			4,160
Othernon-current assets		4,327		—			4,327

Total assets acquired	$	251,329	$	44		$	251,373

Accounts payable and accrued expenses		51,651		(1,339	)		50,312
Unfavorable lease liabilities		1,299		—			1,299
Othernon-current liabilities		10,479		(1,166	)		9,313

Total liabilities assumed	$	63,429	$	(2,505	)	$	60,924

Total identifiable net assets		187,900		2,549			190,449
Goodwill		165,656		(2,549	)		163,107

Total consideration paid, net of cash acquired	$	353,556	$	—		$	353,556


	June 30, 2017									December 31, 2016
	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	$	308,474	$	(96,345	)	$	212,129	$	233,136	$	(87,256	)	$	145,880
Covenants not to compete		1		700		(167	)		533		—		—			—
Technology		7.3		33,700		(23,217	)		10,483		33,700		(20,896	)		12,804
Trade name (Indefinite lived)		Indefinite		45,200		—			45,200		45,200		—			45,200

Total acquired intangible assets			$	388,074	$	(119,729	)	$	268,345	$	312,036	$	(108,152	)	$	203,884


			Fair Value Measurements at June 30, 2017
	Carrying Value at June 30, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investment:
Rabbi Trust	$	18,624	$	—	$	18,624	$	—
Fixed income securities		1,853		—		1,853		—
Liabilities:
Interest rate swap derivatives	$	19,248	$	—	$	19,248	$	—


			Estimated Fair Value Measurements at June 30, 2017
	Carrying Value as of June 30, 2017		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	65,901	$	65,901	$	65,901	$	—	$	—
Restricted cash and investments		21,774		21,774		19,727		2,047		—
Liabilities:
Borrowings under senior credit facility	$	992,168	$	996,158	$	—	$	996,158	$	—
5.875% Senior Notes due 2024		250,000		259,930		—		259,930		—
5.125% Senior Notes		300,000		303,234		—		303,234		—
5.875% Senior Notes due 2022		250,000		260,793		—		260,793		—
6.00% Senior Notes		350,000		364,854		—		364,854		—
Non-recourse debt, Australian subsidiary		508,109		508,109		—		508,109		—
Other non-recourse debt, including current portion		36,680		37,555		—		37,555		—


Declaration Date	Record Date	Payment Date	Distribution Per Share		Aggregate Payment Amount (in millions)
February 3, 2016	February 16, 2016	February 26, 2016	$	0.43	$	48.5
April 20, 2016	May 2, 2016	May 12, 2016	$	0.43	$	48.7
July 20, 2016	August 1, 2016	August 12, 2016	$	0.43	$	48.7
October 18, 2016	October 31, 2016	November 10, 2016	$	0.43	$	48.8
February 6, 2017	February 17, 2017	February 27, 2017	$	0.47	$	52.5
April 25, 2017	May 9, 2017	May 19, 2017	$	0.47	$	58.4


	Six Months Ended June 30, 2017 (In thousands)
	Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1)			Unrealized (loss)/gain on derivatives, net of tax			Pension adjustments, net of tax			Total
Balance, December 31, 2016	$	(11,284	)	$	(15,877	)	$	(3,664	)	$	(30,825	)
Current-period other comprehensive (loss) income		2,204			816			111			3,131

Balance, June 30, 2017	$	(9,080	)	$	(15,061	)	$	(3,553	)	$	(27,694	)


	Three Months Ended March 31, 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 income		513			736			105			1,354

Balance, March 31, 2018	$	(6,957	)	$	(11,156	)	$	(4,979	)	$	(23,092	)


	Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)		Aggregate Intrinsic Value
	(in thousands)							(in thousands)
Options outstanding at December 31, 2016		1,211		$	20.65		7.14	$	5,466
Options granted		461			32.27
Options exercised		(308	)		19.81
Options forfeited/canceled/expired		(23	)		24.86

Options outstanding at June 30, 2017		1,341		$	24.76		7.81	$	7,675

Options vested and expected to vest at June 30, 2017		661		$	24.52		7.71	$	7,373

Options exercisable at June 30, 2017		585		$	21.53		6.44	$	4,946


	Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)		Aggregate Intrinsic Value
	(in thousands)							(in thousands)
Options outstanding at January 1, 2018		1,230		$	25.02		7.33	$	3,117
Options granted		—			—
Options exercised		(15	)		16.83
Options forfeited/canceled/expired		(22	)		29.35

Options outstanding at March 31, 2018		1,193		$	25.04		7.12	$	1,381

Options vested and expected to vest at March 31, 2018		1,141		$	24.89		7.06	$	1,368

Options exercisable at March 31, 2018		755		$	23.43		6.41	$	1,259


	For the Three Months Ended June 30, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	171,260		$	465,286		$	79,436		$	(138,912	)	$	577,070
Operating expenses		135,244			373,399			68,714			(138,912	)		438,445
Depreciation and amortization		6,065			24,906			895			—			31,866
General and administrative expenses		15,573			29,432			7,201			—			52,206

Operating income		14,378			37,549			2,626			—			54,553
Interest income		6,751			409			12,476			(7,290	)		12,346
Interest expense		(17,451	)		(15,775	)		(10,047	)		7,290			(35,983	)

Income before income taxes and equity in earnings of affiliates		3,678			22,183			5,055			—			30,916
Income tax provision		147			793			460			—			1,400
Equity in earnings of affiliates, net of income tax provision		—			—			1,426			—			1,426

Income before equity in income of consolidated subsidiaries		3,531			21,390			6,021			—			30,942
Income from consolidated subsidiaries, net of income tax provision		27,411			—			—			(27,411	)		—

Net income		30,942			21,390			6,021			(27,411	)		30,942
Net loss attributable to noncontrolling interests		—			—			50			—			50

Net income attributable to The GEO Group, Inc.	$	30,942		$	21,390		$	6,071		$	(27,411	)	$	30,992

Net income	$	30,942		$	21,390		$	6,021		$	(27,411	)	$	30,942
Other comprehensive income, net of tax		—			64			1,808			—			1,872

Total comprehensive income	$	30,942		$	21,454		$	7,829		$	(27,411	)	$	32,814
Comprehensive loss attributable to noncontrolling interests		—			—			51			—			51

Comprehensive income attributable to The GEO Group, Inc.	$	30,942		$	21,454		$	7,880		$	(27,411	)	$	32,865


	For the Six Months Ended June 30, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	349,433		$	878,480		$	180,920		$	(281,149	)	$	1,127,684
Operating expenses		267,411			711,398			155,492			(281,149	)		853,152
Depreciation and amortization		12,215			46,781			1,819			—			60,815
General and administrative expenses		29,240			50,413			15,139			—			94,792

Operating income		40,567			69,888			8,470			—			118,925
Interest income		10,105			1,229			24,304			(11,315	)		24,323
Interest expense		(33,243	)		(28,260	)		(20,795	)		11,315			(70,983	)

Income before income taxes and equity in earnings of affiliates		17,429			42,857			11,979			—			72,265
Income tax provision (benefit)		294			2,247			1,329			—			3,870
Equity in earnings of affiliates, net of income tax provision		—			—			2,913			—			2,913

Income before equity in income of consolidated subsidiaries		17,135			40,610			13,563			—			71,308
Income from consolidated subsidiaries, net of income tax provision		57,749			—			—			(57,749	)		—

Net income		74,884			40,610			13,563			(57,749	)		71,308
Net loss attributable to noncontrolling interests		—			—			87			—			87

Net income attributable to The GEO Group, Inc.	$	74,884		$	40,610		$	13,650		$	(57,749	)	$	71,395

Net income	$	74,884		$	40,610		$	13,563		$	(57,749	)	$	71,308
Other comprehensive income, net of tax		—			111			3,022			—			3,133

Total comprehensive income	$	74,884		$	40,721		$	16,585		$	(57,749	)	$	74,441
Comprehensive loss attributable to noncontrolling interests		—			—			85			—			85

Comprehensive income attributable to The GEO Group, Inc.	$	74,884		$	40,721		$	16,670		$	(57,749	)	$	74,526


	2017		% of Revenue			2016		% of Revenue			$ Change		% Change
	(Dollars in thousands)
General and Administrative Expenses	$	52,206		9.0	%	$	36,904		6.7	%	$	15,302		41.5	%


	2017		Effective Rate			2016		Effective Rate			$ Change			% Change
	(Dollars in thousands)
Income Taxes	$	1,400		4.5	%	$	3,879		15.6	%	$	(2,479	)		(63.9	)	%


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
April 1, 2017 – April 30, 2017		—	$	—		—	$	—
May 1, 2017 – May 31, 2017		—	$	—		—	$	—
June 1, 2017 – June 30, 2017		21,377	$	30.55		—	$	—

Total		21,377				—	$	—


Period	Total Number of Shares Purchased (1)(2)		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
January 1, 2018 - January 31, 2018		—	$	—		—	$	—
February 1, 2018 - February 28, 2018		1,193,159	$	21.49		1,193,159	$	174.3
March 1, 2018 - March 31, 2018		823,697	$	22.02		654,952	$	159.8

Total		2,016,856				1,848,111



~~3.1~~		Articles of Amendment to the Amended and Restated Articles of Incorporation of The GEO Group, Inc. (Incorporated by reference from Exhibit 3.1 to the Form 8-K filed with the Securities and Exchange Commission on April 26, 2017).

~~3.2~~		~~Second Amended and Restated Bylaws of The GEO Group, Inc. (Incorporated by reference from Exhibit 3.1 to the Form 8-K filed with the Securities and Exchange Commission on April 17, 2017).~~

31.1		SECTION 302 CEO Certification.

31.2		SECTION 302 CFO Certification.

32.1		SECTION 906 CEO Certification.

32.2		SECTION 906 CFO Certification.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase


						THE GEO GROUP, INC.

Date: ~~August 7, 2017~~April 30, 2018						/s/ Brian R. Evans
						Brian R. Evans
						Senior Vice President & Chief Financial Officer
						(duly authorized officer and principal financial officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐~~(Do~~ (Do not check if a smaller reporting company)

Smaller reporting company

Emerging growth company