FORM10-Q
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2019
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Inc
.Florida | 65-0043078 | |||
(State or other jurisdiction of incorporation or organization) |
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| (IRS Employer Identification No.) | |||
4955 Technology Way | Boca Raton | Florida | 33431 | |
(Address of principal executive offices) | (Zip Code) |
(561)
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, $0.01 par value per share | GEO | New York Stock Exchange |
Large accelerated filer | ☑ | Accelerated filer | ||||
Non-accelerated filer | ¨ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
2018 | ||||
2018 | ||||
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2018 | ||||
2018 Revenues Operating expenses Depreciation and amortization General and administrative expenses Operating income Interest income Interest expense Income before income taxes and equity in earnings of affiliates Provision for income taxes Equity in earnings of affiliates, net of income tax provision of $200, $77, $636 and $1,785, respectively Net income Net loss attributable to noncontrolling interests Net income attributable to The GEO Group, Inc. Weighted-average common shares outstanding: Basic Diluted Net income per common share attributable to The GEO Group, Inc.: Basic: Net income per common share attributable to The GEO Group, Inc. – basic Diluted: Net income per common share attributable to The GEO Group, Inc. – diluted Dividends declared per share NINESIX MONTHS ENDEDSEPTEMBER20182019 AND 2017 Three Months Ended Nine Months Ended September 30,
2018 September 30,
2017 September 30,
2018 September 30,
2017 $ 583,530 $ 566,759 $ 1,731,956 $ 1,694,443 434,806 423,134 1,299,312 1,276,286 31,297 31,649 94,536 92,464 47,647 49,074 136,927 143,866 69,780 62,902 201,181 181,827 8,428 14,648 26,194 38,971 (37,991 ) (38,719 ) (110,779 ) (109,702 ) 40,217 38,831 116,596 111,096 3,723 1,720 12,193 5,590 2,735 1,342 7,071 4,255 39,229 38,453 111,474 109,761 60 36 223 123 $ 39,289 $ 38,489 $ 111,697 $ 109,884 119,681 122,251 120,567 119,356 120,302 122,887 121,055 120,114 $ 0.33 $ 0.31 $ 0.93 $ 0.92 $ 0.33 $ 0.31 $ 0.92 $ 0.91 $ 0.47 $ 0.47 $ 1.41 $ 1.41 Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Revenues $ 613,966 $ 583,509 $ 1,224,633 $ 1,148,426 Operating expenses 453,168 437,797 910,165 864,506 Depreciation and amortization 32,352 31,313 64,821 63,239 General and administrative expenses 47,271 47,448 93,695 89,280 Operating income 81,175 66,951 155,952 131,401 Interest income 8,045 8,667 16,441 17,766 Interest expense (38,932 ) (36,345 ) (79,212 ) (72,214 ) Loss on extinguishment of debt (5,741 ) (574 ) (5,741 ) (574 ) Income before income taxes and equity in earnings of affiliates 44,547 38,699 87,440 76,379 Provision for income taxes 4,532 3,715 9,372 8,470 Equity in earnings of affiliates, net of income tax provision (benefit) of $357, $(269), $716 and $436, respectively 1,821 2,341 4,417 4,336 Net income 41,836 37,325 82,485 72,245 Net loss attributable to noncontrolling interests 78 96 134 163 Net income attributable to The GEO Group, Inc. $ 41,914 $ 37,421 $ 82,619 $ 72,408 Weighted-average common shares outstanding: Basic 119,168 120,274 118,972 121,017 Diluted 119,544 120,659 119,517 121,461 Net income per common share attributable to The GEO Group, Inc.: Basic: Net income per common share attributable to The GEO Group, Inc. - basic $ 0.35 $ 0.31 $ 0.69 $ 0.60 Diluted: Net income per common share attributable to The GEO Group, Inc. - diluted $ 0.35 $ 0.31 $ 0.69 $ 0.60 Dividends declared per share $ 0.48 $ 0.47 $ 0.96 $ 0.94
SEPTEMBER
2018
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||
Net income | $ | 39,229 | $ | 38,453 | $ | 111,474 | $ | 109,761 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Foreign currency translation adjustments | (1,331 | ) | (179 | ) | (5,882 | ) | 2,030 | |||||||||
Pension liability adjustment, net of tax provision (benefit) of $(894), $25, $(430) and $76, respectively | (761 | ) | 64 | (31 | ) | 175 | ||||||||||
Change in fair value of derivative instrument classified as cash flow hedge, net of tax provision of $271, $307, $803 and $451, respectively | 1,536 | 1,740 | 4,550 | 2,556 | ||||||||||||
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Total other comprehensive income (loss), net of tax | (556 | ) | 1,625 | (1,363 | ) | 4,761 | ||||||||||
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Total comprehensive income | 38,673 | 40,078 | 110,111 | 114,522 | ||||||||||||
Comprehensive loss attributable to noncontrolling interests | 72 | 34 | 247 | 119 | ||||||||||||
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Comprehensive income attributable to The GEO Group, Inc. | $ | 38,745 | $ | 40,112 | $ | 110,358 | $ | 114,641 | ||||||||
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Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Net income | $ | 41,836 | $ | 37,325 | $ | 82,485 | $ | 72,245 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustments | 29 | (5,061 | ) | 1,761 | (4,540 | ) | |||||||||
Pension liability adjustment, net of tax provision of $11, $491, $22 and $463, respectively | 42 | 625 | (605 | ) | 730 | ||||||||||
Change in fair value of derivative instrument classified as cash flow hedge, net of tax provision of $809, $402, $1,014 and $532, respectively | 4,583 | 2,278 | 5,746 | 3,014 | |||||||||||
Total other comprehensive income (loss), net of tax | 4,654 | (2,158 | ) | 6,902 | (796 | ) | |||||||||
Total comprehensive income | 46,490 | 35,167 | 89,387 | 71,449 | |||||||||||
Comprehensive loss attributable to noncontrolling interests | 73 | 117 | 129 | 176 | |||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 46,563 | $ | 35,284 | $ | 89,516 | $ | 71,625 |
SEPTEMBER
2018
September 30, 2018 | December 31, 2017 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 66,007 | $ | 81,377 | ||||
Restricted cash and cash equivalents | 54,931 | 44,932 | ||||||
Accounts receivable, less allowance for doubtful accounts of $4,261 and $4,574, respectively | 403,610 | 389,916 | ||||||
Contract receivable, current portion | 9,420 | 18,142 | ||||||
Prepaid expenses and other current assets | 37,587 | 45,342 | ||||||
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Total current assets | 571,555 | 579,709 | ||||||
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Restricted Cash and Investments | 28,939 | 27,999 | ||||||
Property and Equipment, Net | 2,148,005 | 2,078,123 | ||||||
Assets Held for Sale | 2,634 | 3,915 | ||||||
Non-Current Contract Receivable | 384,794 | 404,309 | ||||||
Deferred Income Tax Assets | 26,277 | 26,277 | ||||||
Goodwill | 776,368 | 778,951 | ||||||
Intangible Assets, Net | 237,947 | 255,339 | ||||||
OtherNon-Current Assets | 65,820 | 72,286 | ||||||
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Total Assets | $ | 4,242,339 | $ | 4,226,908 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 82,284 | $ | 92,587 | ||||
Accrued payroll and related taxes | 53,597 | 71,732 | ||||||
Accrued expenses and other current liabilities | 197,459 | 176,324 | ||||||
Current portion of capital lease obligations, long-term debt andnon-recourse debt | 340,143 | 28,920 | ||||||
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Total current liabilities | 673,483 | 369,563 | ||||||
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Non-Current Deferred Income Tax Liabilities | 8,757 | 8,757 | ||||||
OtherNon-Current Liabilities | 89,214 | 96,702 | ||||||
Capital Lease Obligations | 4,954 | 6,059 | ||||||
Long-Term Debt | 2,363,318 | 2,181,544 | ||||||
Non-Recourse Debt | 22,201 | 365,364 | ||||||
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, 124,803,502 and 124,008,303 issued and 121,686,019 and 124,008,303 outstanding, respectively | 1,248 | 1,240 | ||||||
Additionalpaid-in capital | 1,204,982 | 1,190,906 | ||||||
(Distributions) in excess of earnings/earnings in excess of distributions | (29,018 | ) | 31,541 | |||||
Accumulated other comprehensive loss | (25,785 | ) | (24,446 | ) | ||||
Treasury stock, 3,117,483 and 0 shares, at cost, respectively | (70,446 | ) | — | |||||
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Total shareholders’ equity attributable to The GEO Group, Inc. | 1,080,981 | 1,199,241 | ||||||
Noncontrolling interests | (569 | ) | (322 | ) | ||||
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Total shareholders’ equity | 1,080,412 | 1,198,919 | ||||||
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Total Liabilities and Shareholders’ Equity | $ | 4,242,339 | $ | 4,226,908 | ||||
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June 30, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 21,561 | $ | 31,255 | |||
Restricted cash and cash equivalents | 56,343 | 51,678 | |||||
Accounts receivable, less allowance for doubtful accounts of $4,228 and $4,183, respectively | 394,720 | 445,526 | |||||
Contract receivable, current portion | 13,944 | 15,535 | |||||
Prepaid expenses and other current assets | 46,316 | 57,768 | |||||
Total current assets | 532,884 | 601,762 | |||||
Restricted Cash and Investments | 27,358 | 22,431 | |||||
Property and Equipment, Net | 2,148,225 | 2,158,610 | |||||
Assets Held for Sale | 4,607 | 2,634 | |||||
Contract Receivable | 365,208 | 368,178 | |||||
Operating Lease Right-of-Use Assets, Net | 132,016 | — | |||||
Deferred Income Tax Assets | 29,924 | 29,924 | |||||
Goodwill | 776,357 | 776,359 | |||||
Intangible Assets, Net | 221,222 | 232,360 | |||||
Other Non-Current Assets | 70,337 | 65,860 | |||||
Total Assets | $ | 4,308,138 | $ | 4,258,118 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 91,257 | $ | 93,032 | |||
Accrued payroll and related taxes | 71,369 | 76,009 | |||||
Accrued expenses and other current liabilities | 189,083 | 204,170 | |||||
Operating lease liabilities, current portion | 32,077 | — | |||||
Current portion of finance lease liabilities, long-term debt and non-recourse debt | 25,866 | 332,027 | |||||
Total current liabilities | 409,652 | 705,238 | |||||
Deferred Income Tax Liabilities | 13,681 | 13,681 | |||||
Other Non-Current Liabilities | 81,812 | 82,481 | |||||
Operating Lease Liabilities | 102,844 | — | |||||
Finance Lease Liabilities | 3,779 | 4,570 | |||||
Long-Term Debt | 2,354,526 | 2,397,227 | |||||
Non-Recourse Debt | 320,306 | 15,017 | |||||
Commitments and Contingencies (Note 12) | |||||||
Shareholders’ Equity | |||||||
Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued or outstanding | — | — | |||||
Common stock, $0.01 par value, 187,500,000 shares authorized, 125,422,811 and 124,794,986 issued and 121,212,557 and 120,584,732 outstanding, respectively | 1,254 | 1,248 | |||||
Additional paid-in capital | 1,220,242 | 1,210,916 | |||||
Distributions in excess of earnings | (87,339 | ) | (52,868 | ) | |||
Accumulated other comprehensive loss | (16,716 | ) | (23,618 | ) | |||
Treasury stock, 4,210,254 shares, at cost | (95,175 | ) | (95,175 | ) | |||
Total shareholders’ equity attributable to The GEO Group, Inc. | 1,022,266 | 1,040,503 | |||||
Noncontrolling interests | (728 | ) | (599 | ) | |||
Total shareholders’ equity | 1,021,538 | 1,039,904 | |||||
Total Liabilities and Shareholders’ Equity | $ | 4,308,138 | $ | 4,258,118 |
SEPTEMBER
2018
Nine Months Ended | ||||||||
September 30, 2018 | September 30, 2017 | |||||||
Cash Flow from Operating Activities: | ||||||||
Net income | $ | 111,474 | $ | 109,761 | ||||
Net loss attributable to noncontrolling interests | 223 | 123 | ||||||
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Net income attributable to The GEO Group, Inc. | 111,697 | 109,884 | ||||||
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities: | ||||||||
Depreciation and amortization expense | 94,536 | 92,464 | ||||||
Stock-based compensation | 16,351 | 14,852 | ||||||
Amortization of debt issuance costs, discount and/or premium and othernon-cash interest | 5,860 | 11,922 | ||||||
Provision for doubtful accounts | 806 | 1,597 | ||||||
Equity in earnings of affiliates, net of tax | (7,071 | ) | (4,255 | ) | ||||
Dividends received from unconsolidated joint venture | 8,710 | 5,052 | ||||||
(Gain) loss on sale/disposal of property and equipment, net | 3,652 | 2,194 | ||||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||||
Changes in accounts receivable, prepaid expenses and other assets | (13,955 | ) | 5,604 | |||||
Changes in contract receivable | (3,412 | ) | (163,083 | ) | ||||
Changes in accounts payable, accrued expenses and other liabilities | 3,049 | (18,326 | ) | |||||
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Net cash provided by operating activities | 220,223 | 57,905 | ||||||
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Cash Flow from Investing Activities: | ||||||||
Acquisition of CEC, net of cash acquired | — | (353,555 | ) | |||||
Insurance proceeds – damaged property | 5,998 | 86 | ||||||
Proceeds from sale of property and equipment | 2,061 | 856 | ||||||
Proceeds from sale of assets held for sale | 3,797 | — | ||||||
Change in restricted investments | (2,413 | ) | (3,810 | ) | ||||
Capital expenditures | (161,490 | ) | (104,130 | ) | ||||
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Net cash used in investing activities | (152,047 | ) | (460,553 | ) | ||||
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Cash Flow from Financing Activities: | ||||||||
Proceeds from long-term debt | 372,000 | 1,324,865 | ||||||
Payments on long-term debt | (186,033 | ) | (1,093,088 | ) | ||||
Payments onnon-recourse debt | (9,636 | ) | (68,887 | ) | ||||
Proceeds fromnon-recourse debt | — | 123,785 | ||||||
Taxes paid related to net share settlements of equity awards | (4,452 | ) | (4,122 | ) | ||||
Proceeds from issuance of common stock under prospectus supplement | — | 275,867 | ||||||
Proceeds from issuance of common stock in connection with ESPP | 404 | 382 | ||||||
Payment for repurchases of common stock | (70,446 | ) | — | |||||
Debt issuance costs | (990 | ) | (9,470 | ) | ||||
Proceeds from the exercise of stock options | 1,781 | 6,786 | ||||||
Cash dividends paid | (172,256 | ) | (169,152 | ) | ||||
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Net cash (used in) provided by financing activities | (69,628 | ) | 386,966 | |||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | (5,392 | ) | 863 | |||||
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Net Decrease in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | (6,844 | ) | (14,819 | ) | ||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period | 133,545 | 90,357 | ||||||
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Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period | $ | 126,701 | $ | 75,538 | ||||
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Supplemental Disclosures: | ||||||||
Non-cash Investing and Financing activities: | ||||||||
Capital expenditures in accounts payable and accrued expenses | $ | 4,152 | $ | 7,526 | ||||
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Six Months Ended | |||||||
June 30, 2019 | June 30, 2018 | ||||||
Cash Flow from Operating Activities: | |||||||
Net income | $ | 82,485 | $ | 72,245 | |||
Net loss attributable to noncontrolling interests | 134 | 163 | |||||
Net income attributable to The GEO Group, Inc. | 82,619 | 72,408 | |||||
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities: | |||||||
Depreciation and amortization expense | 64,821 | 63,239 | |||||
Stock-based compensation | 12,180 | 10,787 | |||||
Loss on extinguishment of debt | 5,741 | 574 | |||||
Amortization of debt issuance costs, discount and/or premium and other non-cash interest | 5,023 | 3,992 | |||||
Provision for doubtful accounts | 259 | 525 | |||||
Equity in earnings of affiliates, net of tax | (4,417 | ) | (4,336 | ) | |||
Dividends received from unconsolidated joint venture | 3,088 | 3,957 | |||||
Loss (gain) on sale/disposal of property and equipment, net | 1,972 | (1,001 | ) | ||||
Loss on assets held for sale | 1,083 | — | |||||
Changes in assets and liabilities, net of effects of acquisitions: | |||||||
Changes in accounts receivable, prepaid expenses and other assets | 38,866 | 19,838 | |||||
Changes in contract receivable | 3,151 | (4,919 | ) | ||||
Changes in accounts payable, accrued expenses and other liabilities | 2,681 | 15,189 | |||||
Net cash provided by operating activities | 217,067 | 180,253 | |||||
Cash Flow from Investing Activities: | |||||||
Insurance proceeds - damaged property | 10,761 | 4,036 | |||||
Proceeds from sale of property and equipment | 304 | 1,717 | |||||
Proceeds from sale of assets held for sale | — | 3,797 | |||||
Change in restricted investments | (4,816 | ) | (1,490 | ) | |||
Capital expenditures | (55,410 | ) | (107,064 | ) | |||
Net cash used in investing activities | (49,161 | ) | (99,004 | ) | |||
Cash Flow from Financing Activities: | |||||||
Proceeds from long-term debt | 170,000 | 245,000 | |||||
Payments on long-term debt | (213,926 | ) | (134,000 | ) | |||
Payments on non-recourse debt | (326,942 | ) | (7,490 | ) | |||
Proceeds from non-recourse debt | 326,127 | — | |||||
Taxes paid related to net share settlements of equity awards | (4,177 | ) | (4,391 | ) | |||
Proceeds from issuance of common stock in connection with ESPP | 252 | 264 | |||||
Payment for repurchases of common stock | — | (70,446 | ) | ||||
Debt issuance costs | (9,937 | ) | (990 | ) | |||
Proceeds from the exercise of stock options | 1,077 | 1,372 | |||||
Cash dividends paid | (116,122 | ) | (115,017 | ) | |||
Net cash used in financing activities | (173,648 | ) | (85,698 | ) | |||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | 824 | (1,881 | ) | ||||
Net Decrease in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | (4,918 | ) | (6,330 | ) | |||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period | 84,472 | 133,545 | |||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period | $ | 79,554 | $ | 127,215 | |||
Supplemental Disclosures: | |||||||
Non-cash Investing and Financing activities: | |||||||
Right-of-use assets obtained from operating lease liabilities upon adoption of new lease standard (Refer to Note 2 - Leases) | $ | 147,000 | $ | — | |||
Capital expenditures in accounts payable and accrued expenses | $ | 6,442 | $ | 5,408 |
LEASES
Revenue is recognized when controladoption. Therefore, the consolidated financial statements for the three and six months ended June 30, 2019 are presented under the new standard, while comparative years presented are not adjusted and continue to be reported in accordance with the Company's historical accounting policy. Refer to Note 15 - Recent Accounting Pronouncements for further information.
When a contract includes variable consideration, GEO determines an estimate of the variable consideration and evaluates whether the estimate needs to be constrained; therefore, GEO includes the variable considerationlease term which is used in the transaction price only to the extent that it is probable that a significant reversalcalculation 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 revenueslease liabilities and was not significant during the periods presented. One of GEO’s international contracts, related to its Ravenhall correctional facility 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 nine months ended September 30, 2018.
right-of-use assets. GEO does not disclosetypically enter into lease agreements that contain a residual guarantee or that provide for variable lease payments.
The timing of revenue recognition may differ from the timing of invoicing to customers. GEO records a receivable when services are performed which are due from its customers based on the passage of time. GEO records a contract liability if consideration is received in advance of the performance of services. Generally, GEO’s customersGEO's lease agreements do not provide payment in advance ofa readily determinable implicit rate. Therefore, the performance of services. Therefore, any contract liability is not significantCompany must estimate its incremental borrowing rate to discount the lease payments based on information available at September 30, 2018 or December 31, 2017lease commencement.
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 correctional facility (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 in Note 14 – Business Segments and Geographic Information:
Nine Months Ended September 30, 2018 (in thousands) | ||||||||||||||||||||
U.S. Corrections & Detention | GEO Care | International | Facility Construction and Design | Total | ||||||||||||||||
Owned and Leased: Corrections & Detention | $ | 817,666 | $ | — | $ | — | $ | — | $ | 817,666 | ||||||||||
Owned and Leased: Community-based | — | 127,615 | — | — | 127,615 | |||||||||||||||
Owned and Leased: Youth Services | — | 68,590 | — | — | 68,590 | |||||||||||||||
Managed Only | 289,350 | 3,724 | 193,121 | — | 486,195 | |||||||||||||||
Facility Construction and Design | — | — | — | — | — | |||||||||||||||
Non-residential Services and Other | — | 231,890 | — | — | 231,890 | |||||||||||||||
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Total Revenues | $ | 1,107,016 | $ | 431,819 | $ | 193,121 | $ | — | $ | 1,731,956 | ||||||||||
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Nine Months Ended September 30, 2017 (in thousands) | ||||||||||||||||||||
U.S. Corrections & Detention | GEO Care | International | Facility Construction and Design | Total | ||||||||||||||||
Owned and Leased – Corrections & Detention | $ | 789,230 | $ | — | $ | — | $ | — | $ | 789,230 | ||||||||||
Owned and Leased – Community-based | — | 106,996 | — | — | 106,996 | |||||||||||||||
Owned and Leased – Youth Services | — | 65,408 | — | — | 65,408 | |||||||||||||||
Managed Only | 284,610 | 2,278 | 130,261 | — | 417,149 | |||||||||||||||
Facility Construction and Design | — | — | — | 112,602 | 112,602 | |||||||||||||||
Non-residential Services and Other | — | 203,058 | — | — | 203,058 | |||||||||||||||
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Total Revenues | $ | 1,073,840 | $ | 377,740 | $ | 130,261 | $ | 112,602 | $ | 1,694,443 | ||||||||||
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Owned and Leased – Corrections & Detention
GEO recognizes revenue for corrections & detention housing 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.
Owned and Leased – Community-based
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.
Owned and Leased – Youth Services
GEO recognizes revenues for youth services where GEO owns or leases the facility in the same manner as discussed above for the housing, 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.
Managed Only
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
Facility Construction and Design revenues during the nine months ended September 30, 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 correctional facility (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 nine months ended September 30, 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
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 electonic 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 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 equipment and monitoring service is not considered to be capable of being distinct as the customer typically cannot benefit from the 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.
3. BUSINESS COMBINATIONS
Community Education Centers Acquisition
On April 5, 2017, the Company completed its acquisition of 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. Under the terms of the merger agreement, the Company acquired 100% of the voting interests in CEC for an aggregate consideration of $353.6 million. 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.
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 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 escrow and by $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 aresheet as follows (in thousands):
Acquisition Date Estimated Fair Value as of December 31, 2017 | Measurement Period Adjustments | 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 | |||||||||
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|
|
|
| |||||||
Total assets acquired | $ | 251,329 | $ | 44 | $ | 251,373 | ||||||
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| |||||||
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 | ||||||||
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| |||||||
Total liabilities assumed | $ | 63,429 | $ | (2,505 | ) | $ | 60,924 | |||||
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|
|
|
| |||||||
Total identifiable net assets | 187,900 | 2,549 | 190,449 | |||||||||
Goodwill | 165,656 | (2,549 | ) | 163,107 | ||||||||
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| |||||||
Total consideration paid, net of cash acquired | $ | 353,556 | $ | — | $ | 353,556 | ||||||
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The Company recognized a reduction
Classification on the Balance Sheet | June 30, 2019 | |||||
Assets | ||||||
Operating lease assets | Operating Lease Right-of-Use Assets, Net | $ | 132,016 | |||
Finance lease assets | Property and Equipment, Net | 3,391 | ||||
Total lease assets | $ | 135,407 | ||||
Liabilities | ||||||
Current | ||||||
Operating | Operating lease liabilities, current portion | $ | 32,077 | |||
Finance [1] | Current portion of finance liabilities, long-term debt and non-recourse debt | 1,550 | ||||
Noncurrent | ||||||
Operating | Operating Lease Liabilities | 102,844 | ||||
Finance [1] | Finance Lease Liabilities | 3,779 | ||||
Total lease liabilities | $ | 140,250 |
Septemberlease costs for finance and operating leases is presented as follows (in thousands):
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | |||||||
Operating lease cost | $ | 11,738 | $ | 24,230 | ||||
Finance lease cost: | ||||||||
Amortization of right-of-use assets | 256 | 512 | ||||||
Interest on lease liabilities | 68 | 181 | ||||||
Total finance lease cost | 324 | 693 | ||||||
Short-term lease cost | 1,640 | 3,555 | ||||||
Total Lease Cost | $ | 13,702 | $ | 28,478 | ||||
Cash paid for amounts included in the measurement of lease liabilities | ||||||||
Operating cash flows for operating leases | $ | 12,400 | $ | 25,016 | ||||
Operating cash flows for finance leases | $ | 68 | $ | 181 | ||||
Financing activities for finance leases | $ | 396 | $ | 790 | ||||
Right-of-use assets obtained in exchange for new operating lease liabilties | $ | 3,154 | $ | 6,318 | ||||
Weighted average remaining lease term: | ||||||||
Operating leases | 7.3 years | |||||||
Finance leases | 3.4 years | |||||||
Weighted average discount rate: | ||||||||
Operating leases | 4.74 | % | ||||||
Finance leases | 8.27 | % |
Operating Leases | Finance Leases | |||||||
2019 | $ | 20,548 | $ | 965 | ||||
2020 | 31,861 | 1,934 | ||||||
2021 | 24,100 | 1,936 | ||||||
2022 | 17,521 | 1,234 | ||||||
2023 | 14,189 | — | ||||||
Thereafter | 53,661 | — | ||||||
Total minimum lease payments | 161,880 | 6,069 | ||||||
Less: amount of lease payment representing interest | (26,959 | ) | (740 | ) | ||||
Present value of future minimum lease payments | 134,921 | 5,329 | ||||||
Less: current obligations under leases | (32,077 | ) | (1,550 | ) | ||||
Long-term lease obligations | $ | 102,844 | $ | 3,779 |
December 31, 2017 | Acquisition Adjustments | Foreign Currency Translation | September 30, 2018 | |||||||||||||
U.S. Corrections & Detention | $ | 317,005 | $ | (639 | ) | $ | — | $ | 316,366 | |||||||
GEO Care | 461,499 | (1,910 | ) | — | 459,589 | |||||||||||
International Services | 447 | — | (34 | ) | 413 | |||||||||||
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Total Goodwill | $ | 778,951 | $ | (2,549 | ) | $ | (34 | ) | $ | 776,368 | ||||||
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January 1, 2019 | Foreign Currency Translation | June 30, 2019 | |||||||||
GEO Secure Services | $ | 316,366 | $ | — | $ | 316,366 | |||||
GEO Care | 459,589 | — | 459,589 | ||||||||
International Services | 404 | (2 | ) | 402 | |||||||
Total Goodwill | $ | 776,359 | $ | (2 | ) | $ | 776,357 |
September 30, 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 | $ | 308,431 | $ | (122,309 | ) | $ | 186,122 | $ | 308,518 | $ | (106,724 | ) | $ | 201,794 | |||||||||||||
Covenants not to compete | 1 | 700 | (700 | ) | — | 700 | (517 | ) | 183 | |||||||||||||||||||
Technology | 7.3 | 33,700 | (27,075 | ) | 6,625 | 33,700 | (25,538 | ) | 8,162 | |||||||||||||||||||
Trade name (Indefinite lived) | Indefinite | 45,200 | — | 45,200 | 45,200 | — | 45,200 | |||||||||||||||||||||
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Total acquired intangible assets | $ | 388,031 | $ | (150,084 | ) | $ | 237,947 | $ | 388,118 | $ | (132,779 | ) | $ | 255,339 | ||||||||||||||
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June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||
Weighted Average Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Facility management contracts | 16.3 | $ | 308,515 | $ | (137,909 | ) | $ | 170,606 | $ | 308,419 | $ | (127,481 | ) | $ | 180,938 | ||||||||||
Covenants not to compete | 1 | — | — | — | 700 | (700 | ) | — | |||||||||||||||||
Technology | 7.3 | 33,700 | (28,284 | ) | 5,416 | 33,700 | (27,478 | ) | 6,222 | ||||||||||||||||
Trade names (Indefinite lived) | Indefinite | 45,200 | — | 45,200 | 45,200 | — | 45,200 | ||||||||||||||||||
Total acquired intangible assets | $ | 387,415 | $ | (166,193 | ) | $ | 221,222 | $ | 388,019 | $ | (155,659 | ) | $ | 232,360 |
Fiscal Year | Total Amortization Expense | |||
Remainder of 2018 | $ | 5,647 | ||
2019 | 22,305 | |||
2020 | 22,305 | |||
2021 | 19,782 | |||
2022 | 18,103 | |||
Thereafter | 104,605 | |||
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$ | 192,747 | |||
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5.
Fiscal Year | Total Amortization Expense | |||
Remainder of 2019 | $ | 11,171 | ||
2020 | 22,306 | |||
2021 | 19,782 | |||
2022 | 18,273 | |||
2023 | 13,632 | |||
Thereafter | 90,858 | |||
$ | 176,022 |
Fair Value Measurements at September 30, 2018 | ||||||||||||||||
Carrying Value at September 30, 2018 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Restricted investment: | ||||||||||||||||
Rabbi Trust | $ | 23,176 | $ | — | $ | 23,176 | $ | — | ||||||||
Fixed income securities | 1,871 | — | 1,871 | — | ||||||||||||
Liabilities: | ||||||||||||||||
Interest rate swap derivatives | $ | 8,638 | $ | — | $ | 8,638 | $ | — |
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 | $ | — |
Fair Value Measurements at June 30, 2019 | |||||||||||||||
Carrying Value at June 30, 2019 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Restricted investment: | |||||||||||||||
Rabbi Trust | $ | 25,708 | $ | — | $ | 25,708 | $ | — | |||||||
Fixed income securities | 1,881 | — | 1,881 | — |
Fair Value Measurements at December 31, 2018 | |||||||||||||||
Carrying Value at December 31, 2018 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Restricted investments: | |||||||||||||||
Rabbi Trust | $ | 20,892 | $ | — | $ | 20,892 | $ | — | |||||||
Fixed income securities | 1,801 | — | 1,801 | — | |||||||||||
Liabilities: | |||||||||||||||
Interest rate swap derivatives | $ | 8,638 | $ | — | $ | 8,638 | $ | — |
On May 22, 2019, the Company terminated the interest rate swap derivative liabilities in connection with a debt refinancing transaction by our Australian subsidiary. Refer to Note 10 - Derivative Financial Instruments and Note 11 - Debt for additional information.
6.
Estimated Fair Value Measurements at September 30, 2018 | ||||||||||||||||||||
Carrying Value as of September 30, 2018 | Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 66,007 | $ | 66,007 | $ | 66,007 | $ | — | $ | — | ||||||||||
Restricted cash and investments | 60,694 | 60,694 | 58,241 | 2,453 | — | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Borrowings under senior credit facility | $ | 1,243,919 | $ | 1,242,560 | $ | — | $ | 1,242,560 | $ | — | ||||||||||
5.875% Senior Notes due 2024 | 250,000 | 240,523 | — | 240,523 | — | |||||||||||||||
5.125% Senior Notes | 300,000 | 289,731 | — | 289,731 | — | |||||||||||||||
5.875% Senior Notes due 2022 | 250,000 | 252,878 | — | 252,878 | — | |||||||||||||||
6.00% Senior Notes | 350,000 | 336,872 | — | 336,872 | — | |||||||||||||||
Non-recourse debt | 357,506 | 357,736 | — | 357,736 | — |
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 | — |
Estimated Fair Value Measurements at June 30, 2019 | |||||||||||||||||||
Carrying Value as of June 30, 2019 | Total Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 21,561 | $ | 21,561 | $ | 21,561 | $ | — | $ | — | |||||||||
Restricted cash and investments | 57,993 | 57,993 | 57,993 | — | — | ||||||||||||||
Liabilities: | |||||||||||||||||||
Borrowings under senior credit facility | $ | 1,231,322 | $ | 1,206,589 | $ | — | $ | 1,206,589 | $ | — | |||||||||
5.875% Senior Notes due 2022 | 250,000 | 247,275 | — | 247,275 | — | ||||||||||||||
5.125% Senior Notes due 2023 | 300,000 | 269,220 | — | 269,220 | — | ||||||||||||||
5.875% Senior Notes due 2024 | 250,000 | 221,240 | — | 221,240 | — | ||||||||||||||
6.00% Senior Notes due 2026 | 350,000 | 305,620 | — | 305,620 | — | ||||||||||||||
Non-recourse debt | 342,233 | 339,188 | — | 339,188 | — |
Estimated Fair Value Measurements at December 31, 2018 | |||||||||||||||||||
Carrying Value as of December 31, 2018 | Total Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 31,255 | $ | 31,255 | $ | 31,255 | $ | — | $ | — | |||||||||
Restricted cash and investments | 53,217 | 53,217 | 50,499 | 2,718 | — | ||||||||||||||
Liabilities: | |||||||||||||||||||
Borrowings under senior credit facility | $ | 1,273,965 | $ | 1,188,196 | $ | — | $ | 1,188,196 | $ | — | |||||||||
5.875% Senior Notes due 2022 | 250,000 | 244,550 | — | 244,550 | — | ||||||||||||||
5.125% Senior Notes due 2023 | 300,000 | 271,992 | — | 271,992 | — | ||||||||||||||
5.875% Senior Notes due 2024 | 250,000 | 224,590 | — | 224,590 | — | ||||||||||||||
6.00% Senior Notes due 2026 | 350,000 | 310,177 | — | 310,177 | — | ||||||||||||||
Non-recourse debt | 340,910 | 348,274 | — | 348,274 | — |
7.
September 30, 2018 | September 30, 2017 | |||||||
Cash and Cash Equivalents | $ | 66,007 | $ | 51,526 | ||||
Restricted cash and cash equivalents – current | 54,931 | 12,452 | ||||||
Restricted cash and investments –non-current | 28,939 | 31,032 | ||||||
Less Restricted investments –non-current | (23,176 | ) | (19,472 | ) | ||||
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| |||||
Total cash, cash equivalents and restricted cash and cash equivalents shown in the statement of cash flows | $ | 126,701 | $ | 75,538 | ||||
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|
June 30, 2019 | June 30, 2018 | ||||||
Cash and Cash Equivalents | $ | 21,561 | $ | 65,451 | |||
Restricted cash and cash equivalents - current | 56,343 | 58,720 | |||||
Restricted cash and investments - non-current | 27,358 | 25,297 | |||||
Less Restricted investments - non-current | (25,708 | ) | (22,253 | ) | |||
Total cash, cash equivalents and restricted cash and cash equivalents shown in the statement of cash flows | $ | 79,554 | $ | 127,215 |
8.
Common shares | Additional Paid-In Capital | Earnings in Excess of Distributions/ (Distributions) in Excess of Earnings | Accumulated Other Comprehensive Loss |
Treasury shares | Noncontrolling Interests | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, January 1, 2018 | 124,008 | $ | 1,240 | $ | 1,190,906 | $ | 31,541 | $ | (24,446 | ) | — | $ | — | $ | (322 | ) | $ | 1,198,919 | ||||||||||||||||||
Proceeds from exercise of stock options | 97 | 1 | 1,780 | — | — | — | — | — | 1,781 | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 16,351 | — | — | — | — | — | 16,351 | |||||||||||||||||||||||||||
Restricted stock granted | 905 | 9 | (9 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Restricted stock canceled | (52 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Dividends paid | — | — | — | (172,256 | ) | — | — | — | — | (172,256 | ) | |||||||||||||||||||||||||
Shares withheld for net settlements of share-based awards [1] | (173 | ) | (2 | ) | (4,450 | ) | — | — | �� | — | — | — | (4,452 | ) | ||||||||||||||||||||||
Issuance of common stock – ESPP | 18 | — | 404 | — | — | — | — | — | 404 | |||||||||||||||||||||||||||
Repurchases of common stock | (3,117 | ) | — | — | — | — | 3,117 | (70,446 | ) | — | (70,446 | ) | ||||||||||||||||||||||||
Net income (loss) | — | — | — | 111,697 | — | — | — | (223 | ) | 111,474 | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (1,339 | ) | — | — | (24 | ) | (1,363 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Balance, September 30, 2018 | 121,686 | $ | 1,248 | $ | 1,204,982 | $ | (29,018 | ) | $ | (25,785 | ) | 3,117 | $ | (70,446 | ) | $ | (569 | ) | $ | 1,080,412 | ||||||||||||||||
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|
|
|
|
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|
|
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|
|
Common shares | Additional Paid-In | Distributions in Excess of | Accumulated Other Comprehensive | Treasury shares | Noncontrolling | Total Shareholders' | |||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Loss | Shares | Amount | Interests | Equity | |||||||||||||||||||||||||
Balance, January 1, 2019 | 120,585 | $ | 1,248 | $ | 1,210,916 | $ | (52,868 | ) | $ | (23,618 | ) | 4,210 | $ | (95,175 | ) | $ | (599 | ) | $ | 1,039,904 | |||||||||||||
Proceeds from exercise of stock options | 22 | — | 333 | — | — | — | — | — | 333 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 6,727 | — | — | — | — | — | 6,727 | ||||||||||||||||||||||||
Restricted stock granted | 778 | 8 | (8 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Restricted stock canceled | (6 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Dividends paid | — | — | — | (57,945 | ) | — | — | — | — | (57,945 | ) | ||||||||||||||||||||||
Shares withheld for net settlements of share-based awards [1] | (198 | ) | (2 | ) | (4,170 | ) | — | — | — | — | — | (4,172 | ) | ||||||||||||||||||||
Issuance of common stock - ESPP | 6 | — | 124 | — | — | — | — | — | 124 | ||||||||||||||||||||||||
Transition adjustment for accounting standard adoption [2] | — | — | — | (968 | ) | 968 | — | — | — | — | |||||||||||||||||||||||
Net income (loss) | — | — | — | 40,705 | — | — | — | (56 | ) | 40,649 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 1,284 | — | — | — | 1,284 | ||||||||||||||||||||||||
Balance, March 31, 2019 | 121,187 | $ | 1,254 | $ | 1,213,922 | $ | (71,076 | ) | $ | (21,366 | ) | 4,210 | $ | (95,175 | ) | $ | (655 | ) | $ | 1,026,904 | |||||||||||||
Proceeds from exercise of stock options | 42 | — | 739 | — | — | — | — | — | 739 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 5,453 | — | — | — | — | — | 5,453 | ||||||||||||||||||||||||
Restricted stock granted | 10 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Restricted stock canceled | (32 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Dividends paid | — | — | — | (58,177 | ) | — | — | — | — | (58,177 | ) | ||||||||||||||||||||||
Issuance of common stock - ESPP | 6 | — | 128 | — | — | — | — | — | 128 | ||||||||||||||||||||||||
Net income (loss) | — | — | — | 41,914 | — | — | — | (78 | ) | 41,836 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 4,650 | — | — | 5 | 4,655 | ||||||||||||||||||||||||
Balance, June 30, 2019 | 121,213 | $ | 1,254 | $ | 1,220,242 | $ | (87,339 | ) | $ | (16,716 | ) | 4,210 | $ | (95,175 | ) | $ | (728 | ) | $ | 1,021,538 |
Common shares | Additional Paid-In | Earnings in Excess of | Accumulated Other Comprehensive | Treasury shares | Noncontrolling | Total Shareholders' | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Distributions | Loss | Shares | Amount | Interests | Equity | ||||||||||||||||||||||||||
Balance, January 1, 2018 | 124,008 | $ | 1,240 | $ | 1,190,906 | $ | 31,541 | $ | (24,446 | ) | — | — | $ | (322 | ) | $ | 1,198,919 | |||||||||||||||||
Proceeds from exercise of stock options | 15 | 1 | 260 | — | — | — | — | — | — | 261 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 5,827 | — | — | — | — | — | — | 5,827 | ||||||||||||||||||||||||
Restricted stock canceled | (9 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Dividends paid | — | — | — | (58,319 | ) | — | — | — | — | (58,319 | ) | |||||||||||||||||||||||
Shares withheld for net settlements of share-based awards [1] | (169 | ) | (2 | ) | (4,355 | ) | — | — | — | — | — | — | (4,357 | ) | ||||||||||||||||||||
Issuance of common stock - ESPP | 8 | — | 141 | — | — | — | — | — | — | 141 | ||||||||||||||||||||||||
Repurchases of common stock | (1,848 | ) | — | — | — | — | — | 1,848 | (40,182 | ) | — | (40,182 | ) | |||||||||||||||||||||
Net income (loss) | — | — | — | 34,987 | — | — | — | (67 | ) | 34,920 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 1,354 | — | — | 8 | 1,362 | |||||||||||||||||||||||||
Balance, March 31, 2018 | 122,005 | $ | 1,239 | $ | 1,192,779 | $ | 8,209 | $ | (23,092 | ) | 1,848 | $ | (40,182 | ) | $ | (381 | ) | $ | 1,138,572 | |||||||||||||||
Proceeds from exercise of stock options | 62 | — | 1,111 | — | — | — | — | — | 1,111 | |||||||||||||||||||||||||
Stock-based compensation expense | — | — | 4,960 | — | — | — | — | — | 4,960 | |||||||||||||||||||||||||
Restricted stock granted | 896 | 9 | (9 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Restricted stock canceled | (19 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Dividends paid | — | — | — | (56,698 | ) | — | — | — | — | (56,698 | ) | |||||||||||||||||||||||
Shares withheld for net settlements of share-based awards [1] | (2 | ) | — | (34 | ) | — | — | — | — | — | (34 | ) | ||||||||||||||||||||||
Issuance of common stock - ESPP | 4 | — | 123 | — | — | — | — | — | 123 | |||||||||||||||||||||||||
Repurchases of common stock | (1,269 | ) | — | — | — | — | 1,269 | (30,264 | ) | — | (30,264 | ) | ||||||||||||||||||||||
Net income (loss) | — | — | — | 37,421 | — | — | — | (96 | ) | 37,325 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | (2,137 | ) | — | — | (21 | ) | (2,158 | ) | ||||||||||||||||||||||
Balance, June 30, 2018 | 121,677 | $ | 1,248 | $ | 1,198,930 | $ | (11,068 | ) | $ | (25,229 | ) | 3,117 | $ | (70,446 | ) | $ | (498 | ) | $ | 1,092,937 |
Declaration Date | Record Date | Payment Date | Distribution Per Share | Aggregate Payment Amount (in millions) | ||||||||
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 | ||||||
July 10, 2017 | July 21, 2017 | July 28, 2017 | $ | 0.47 | $ | 58.3 | ||||||
October 12, 2017 | October 23, 2017 | October 30, 2017 | $ | 0.47 | $ | 58.3 | ||||||
February 5, 2018 | February 16, 2018 | February 27, 2018 | $ | 0.47 | $ | 58.3 | ||||||
April 11, 2018 | April 23, 2018 | May 3, 2018 | $ | 0.47 | $ | 57.4 | ||||||
July 10, 2018 | July 20, 2018 | July 27, 2018 | $ | 0.47 | $ | 57.2 |
Declaration Date Record Date Payment Date Distribution Per Share Aggregate Payment Amount (in millions) February 5, 2018 February 16, 2018 February 27, 2018 $0.47 $58.3 April 11, 2018 April 23, 2018 May 3, 2018 $0.47 $57.4 July 10, 2018 July 20, 2018 July 27, 2018 $0.47 $57.2 October 15, 2018 October 26, 2018 November 2, 2018 $0.47 $57.2 February 4, 2019 February 15, 2019 February 22, 2019 $0.48 $57.9 April 3, 2019 April 15, 2019 April 22, 2019 $0.48 $58.2
2019.
Nine Months Ended September 30, 2018 (In thousands) | ||||||||||||||||
Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1) | Change in fair value of derivatives, net of tax | Pension adjustments, net of tax | Total | |||||||||||||
Balance, January 1, 2018 | $ | (7,470 | ) | $ | (11,892 | ) | $ | (5,084 | ) | $ | (24,446 | ) | ||||
Current-period other comprehensive (loss) income | (5,858 | ) | 4,550 | (31 | ) | (1,339 | ) | |||||||||
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|
|
|
|
|
|
| |||||||||
Balance, September 30, 2018 | $ | (13,328 | ) | $ | (7,342 | ) | $ | (5,115 | ) | $ | (25,785 | ) | ||||
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9.
Six Months Ended June 30, 2019 | ||||||||||||||||
(In thousands) | ||||||||||||||||
Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1) | Change in fair value of derivatives, net of tax (2) | Pension adjustments, net of tax | Total | |||||||||||||
Balance, January 1, 2019 | $ | (14,573 | ) | $ | (5,746 | ) | $ | (3,299 | ) | $ | (23,618 | ) | ||||
Current-period other comprehensive income (loss) before reclassifications | 1,761 | 1,895 | (605 | ) | 3,051 | |||||||||||
Amounts reclassified from other comprehensive income into earnings | — | 3,851 | — | 3,851 | ||||||||||||
Net current-period other comprehensive income (loss) | 1,761 | 5,746 | (605 | ) | 6,902 | |||||||||||
Balance, June 30, 2019 | $ | (12,812 | ) | $ | — | $ | (3,904 | ) | $ | (16,716 | ) |
Six Months Ended June 30, 2018 | ||||||||||||
(In thousands) | ||||||||||||
Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1) | Change in fair value of derivatives, net of tax | Pension adjustments, net of tax | Total | |||||||||
Balance, January 1, 2018 | (7,470 | ) | (11,892 | ) | (5,084 | ) | (24,446 | ) | ||||
Current-period other comprehensive (loss) income | (4,527 | ) | 3,014 | 730 | (783 | ) | ||||||
Balance, June 30, 2018 | (11,997 | ) | (8,878 | ) | (4,354 | ) | (25,229 | ) |
Shares | Wtd. Avg. Exercise Price | Wtd. Avg. Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Options outstanding at January 1, 2018 | 1,230 | $ | 25.02 | 7.33 | $ | 3,117 | ||||||||||
Options granted | 475 | 21.60 | ||||||||||||||
Options exercised | (97 | ) | 19.13 | |||||||||||||
Options forfeited/canceled/expired | (108 | ) | 25.24 | |||||||||||||
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| |||||||||||||||
Options outstanding at September 30, 2018 | 1,500 | $ | 24.30 | 7.50 | $ | 4,849 | ||||||||||
|
| |||||||||||||||
Options vested and expected to vest at September 30, 2018 | 1,404 | $ | 24.31 | 7.39 | $ | 4,580 | ||||||||||
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| |||||||||||||||
Options exercisable at September 30, 2018 | 656 | $ | 23.80 | 5.93 | $ | 2,601 | ||||||||||
|
|
2019
:Shares | Wtd. Avg. Exercise Price | Wtd. Avg. Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||
(in thousands) | (in thousands) | |||||||||||
Options outstanding at January 1, 2019 | 1,462 | $ | 24.30 | 7.20 | $ | 924 | ||||||
Options granted | 391 | 22.68 | ||||||||||
Options exercised | (64 | ) | 16.93 | |||||||||
Options forfeited/canceled/expired | (117 | ) | 24.68 | |||||||||
Options outstanding at June 30, 2019 | 1,672 | $ | 24.19 | 7.40 | $ | 1,122 | ||||||
Options vested and expected to vest at June 30, 2019 | 1,569 | $ | 24.25 | 7.29 | $ | — | ||||||
Options exercisable at June 30, 2019 | 842 | $ | 24.67 | 5.99 | $ | 1,036 |
A summary of the activity of restricted stock outstanding is as follows for the ninesix months ended SeptemberJune 30, 2018:
Shares | Wtd. Avg. Grant Date Fair Value | |||||||
(in thousands) | ||||||||
Restricted stock outstanding at January 1, 2018 | 1,770 | $ | 30.47 | |||||
Granted | 905 | 22.70 | ||||||
Vested | (577 | ) | 28.52 | |||||
Forfeited/canceled | (52 | ) | 25.00 | |||||
|
| |||||||
Restricted stock outstanding at September 30, 2018 | 2,046 | $ | 27.54 | |||||
|
|
2019:
Shares | Wtd. Avg. Grant Date Fair Value | |||||
(in thousands) | ||||||
Restricted stock outstanding at January 1, 2019 | 2,018 | $ | 27.62 | |||
Granted | 788 | 23.79 | ||||
Vested | (698 | ) | 24.08 | |||
Forfeited/canceled | (38 | ) | 24.01 | |||
Restricted stock outstanding at June 30, 2019 | 2,070 | $ | 27.29 |
2021.
Employee Stock Purchase Plan
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||
Net income | $ | 39,229 | $ | 38,453 | $ | 111,474 | $ | 109,761 | ||||||||
Net loss attributable to noncontrolling interests | 60 | 36 | 223 | 123 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income attributable to The GEO Group, Inc. | 39,289 | 38,489 | 111,697 | 109,884 | ||||||||||||
Basic earnings per share attributable to The GEO Group, Inc.: | ||||||||||||||||
Weighted average shares outstanding | 119,681 | 122,251 | 120,567 | 119,356 | ||||||||||||
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|
|
|
|
|
|
| |||||||||
Per share amount | $ | 0.33 | $ | 0.31 | $ | 0.93 | $ | 0.92 | ||||||||
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| |||||||||
Diluted earnings per share attributable to The GEO Group, Inc.: | ||||||||||||||||
Weighted average shares outstanding | 119,681 | 122,251 | 120,567 | 119,356 | ||||||||||||
Dilutive effect of equity incentive plans | 621 | 636 | 488 | 758 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Weighted average shares assuming dilution | 120,302 | 122,887 | 121,055 | 120,114 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Per share amount | $ | 0.33 | $ | 0.31 | $ | 0.92 | $ | 0.91 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | |||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||
Net income | $ | 41,836 | $ | 37,325 | $ | 82,485 | $ | 72,245 | ||||||
Net loss attributable to noncontrolling interests | 78 | 96 | 134 | 163 | ||||||||||
Net income attributable to The GEO Group, Inc. | 41,914 | 37,421 | 82,619 | 72,408 | ||||||||||
Basic earnings per share attributable to The GEO Group, Inc.: | ||||||||||||||
Weighted average shares outstanding | 119,168 | 120,274 | 118,972 | 121,017 | ||||||||||
Per share amount | $ | 0.35 | $ | 0.31 | $ | 0.69 | $ | 0.60 | ||||||
Diluted earnings per share attributable to The GEO Group, Inc.: | ||||||||||||||
Weighted average shares outstanding | 119,168 | 120,274 | 118,972 | 121,017 | ||||||||||
Dilutive effect of equity incentive plans | 376 | 385 | 545 | 444 | ||||||||||
Weighted average shares assuming dilution | 119,544 | 120,659 | 119,517 | 121,461 | ||||||||||
Per share amount | $ | 0.35 | $ | 0.31 | $ | 0.69 | $ | 0.60 |
Nine
For the nine months ended September 30, 2017, 601,453 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 662,126 common stock equivalents from restricted shares that were anti-dilutive.
11.
12.
September 30, 2018 | December 31, 2017 | |||||||
Senior Credit Facility: | ||||||||
Term loan | $ | 788,000 | $ | 794,000 | ||||
Unamortized discount on term loan | (7,192 | ) | (3,499 | ) | ||||
Unamortized debt issuance costs on term loan | (3,032 | ) | (7,612 | ) | ||||
Revolver | 455,919 | 270,559 | ||||||
|
|
|
| |||||
Total Senior Credit Facility | 1,233,695 | 1,053,448 | ||||||
6.00% Senior Notes: | ||||||||
Notes Due in 2026 | 350,000 | 350,000 | ||||||
Unamortized debt issuance costs | (4,950 | ) | (5,325 | ) | ||||
|
|
|
| |||||
Total 6.00% Senior Notes Due in 2026 | 345,050 | 344,675 | ||||||
5.875% Senior Notes: | ||||||||
Notes Due in 2024 | 250,000 | 250,000 | ||||||
Unamortized debt issuance costs | (3,078 | ) | (3,385 | ) | ||||
|
|
|
| |||||
Total 5.875% Senior Notes Due in 2024 | 246,922 | 246,615 | ||||||
5.125% Senior Notes: | ||||||||
Notes Due in 2023 | 300,000 | 300,000 | ||||||
Unamortized debt issuance costs | (3,712 | ) | (4,184 | ) | ||||
|
|
|
| |||||
Total 5.125% Senior Notes Due in 2023 | 296,288 | 295,816 | ||||||
5.875% Senior Notes: | ||||||||
Notes Due in 2022 | 250,000 | 250,000 | ||||||
Unamortized debt issuance costs | (2,702 | ) | (3,241 | ) | ||||
|
|
|
| |||||
Total 5.875% Senior Notes Due in 2022 | 247,298 | 246,759 | ||||||
Non-Recourse Debt | 357,692 | 394,008 | ||||||
Unamortized debt issuance costs onnon-recourse debt | (5,159 | ) | (9,322 | ) | ||||
Unamortized discount onnon-recourse debt | (186 | ) | (271 | ) | ||||
|
|
|
| |||||
TotalNon-Recourse Debt | 352,347 | 384,415 | ||||||
Capital Lease Obligations | 6,412 | 7,431 | ||||||
Other debt | 2,604 | 2,728 | ||||||
|
|
|
| |||||
Total debt | 2,730,616 | 2,581,887 | ||||||
Current portion of capital lease obligations, long-term debt andnon-recourse debt | (340,143 | ) | (28,920 | ) | ||||
Capital Lease Obligations, long-term portion | (4,954 | ) | (6,059 | ) | ||||
Non-Recourse Debt, long-term portion | (22,201 | ) | (365,364 | ) | ||||
|
|
|
| |||||
Long-Term Debt | $ | 2,363,318 | $ | 2,181,544 | ||||
|
|
|
|
June 30, 2019 | December 31, 2018 | ||||||
Senior Credit Facility: | |||||||
Term loan | $ | 782,000 | $ | 786,000 | |||
Unamortized discount on term loan | (2,582 | ) | (2,878 | ) | |||
Unamortized debt issuance costs on term loan | (6,124 | ) | (6,826 | ) | |||
Revolver | 451,904 | 490,843 | |||||
Total Senior Credit Facility | 1,225,198 | 1,267,139 | |||||
6.00% Senior Notes: | |||||||
Notes Due in 2026 | 350,000 | 350,000 | |||||
Unamortized debt issuance costs | (4,558 | ) | (4,820 | ) | |||
Total 6.00% Senior Notes Due in 2026 | 345,442 | 345,180 | |||||
5.875% Senior Notes: | |||||||
Notes Due in 2024 | 250,000 | 250,000 | |||||
Unamortized debt issuance costs | (2,757 | ) | (2,971 | ) | |||
Total 5.875% Senior Notes Due in 2024 | 247,243 | 247,029 | |||||
5.125% Senior Notes: | |||||||
Notes Due in 2023 | 300,000 | 300,000 | |||||
Unamortized debt issuance costs | (3,219 | ) | (3,548 | ) | |||
Total 5.125% Senior Notes Due in 2023 | 296,781 | 296,452 | |||||
5.875% Senior Notes: | |||||||
Notes Due in 2022 | 250,000 | 250,000 | |||||
Unamortized debt issuance costs | (2,137 | ) | (2,514 | ) | |||
Total 5.875% Senior Notes Due in 2022 | 247,863 | 247,486 | |||||
Non-Recourse Debt | 342,353 | 341,074 | |||||
Unamortized debt issuance costs on non-recourse debt | (5,612 | ) | (3,883 | ) | |||
Unamortized discount on non-recourse debt | (120 | ) | (164 | ) | |||
Total Non-Recourse Debt | 336,621 | 337,027 | |||||
Finance Lease Liabilities | 5,329 | 6,059 | |||||
Other debt | — | 2,469 | |||||
Total debt | 2,704,477 | 2,748,841 | |||||
Current portion of finance lease liabilities, long-term debt and non-recourse debt | (25,866 | ) | (332,027 | ) | |||
Finance Lease Liabilities, long-term portion | (3,779 | ) | (4,570 | ) | |||
Non-Recourse Debt, long-term portion | (320,306 | ) | (15,017 | ) | |||
Long-Term Debt | $ | 2,354,526 | $ | 2,397,227 |
Northwest Detention
As of SeptemberJune 30, 2018,2019, included in current restricted cash and cash equivalents is $8.3 million of funds held in trust for debt service and other reserves with respect to the above mentioned note payable to WEDFA.
offering.
At September 30, 2018,2019, the Company also had teneight other letters of credit outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling $14.7$10.8 million.
The Company had 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 will expireexpired in February 2019 when of all SACS obligationSACS' obligations in terms of the finance agreements have beenwere settled.
United Kingdom
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 had each extended a £12 million line of credit, or $15.6 million, based on exchange rates as of September 30, 2018, of which £1.3 million, or $1.7 million, based on exchange rates as of September 30, 2018, was outstanding as of September 30, 2018 to each joint venture partner. The Company’s maximum exposure relative to the joint venture is its note receivable of approximately $1.7 million, which is included in OtherNon-Current Assets in the accompanying consolidated balance sheets, and any future financial support necessary to guarantee performance under the contract. In October 2018, the note receivable to each joint venture partner was paid off in full.
13.
CONTINGENCIES
On October 22, 2014,March 31, 2019, former civil immigration detainees at the Aurora Immigration DetentionProcessing Center filed a class action lawsuit on October 22, 2014, against the Company in the United States District Court for the District of Colorado (the “Court”). The complaint alleges that the Company was in violation of the Colorado Minimum Wages of Workers Act and the federal Trafficking Victims Protection Act (“TVPA”("TVPA"). The plaintiff class claims that the Company was unjustly enriched as a resultbecause of the level of payment 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 the case are authorized by the Federal government under guidelines approved by the United States Congress. On July 6, 2015, the Court found that detainees were not employees under the Colorado Minimum Wage Order and dismissed this claim. In February 2017, the Court granted the plaintiff-class’ motion for class certification which the Company appealed to the 10th Circuit Court of Appeals. On February 9, 2018, a three-judge panel of the appellate court affirmed the class-certification order. A petition for rehearing en banc was denied on March 7, 2018. On October 2, 2018, the U.S. Supreme Court denied the Company’s petition for a writ of certiorari on the class certification order.certification. The 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. In the
District of Washington on October 9, 2017. In California, a class-action lawsuit was filed on December 19, 2017 by immigration detainees against the Company in the U.S. District Court Eastern Division of the Central District of California. All three lawsuits allege violations of the respective state’s minimum wage laws. However, the California lawsuit, like the Colorado suit, also includes claims based that the Company violated the TVPA and California’sCalifornia's equivalent state statute. On July 2, 2019, the Company filed a Motion for Summary Judgment in the Washington Attorney General’s Tacoma lawsuit based on the Company’s position that its legal defenses prevent the case from proceeding to trial. The Company intends to take all necessary steps to vigorously defend itself and has consistently refuted the allegations and claims in these lawsuits. The Company has not recorded an accrual relating to these matters at this time, as a loss is not considered probable nor reasonably estimable at this stage of the lawsuit.
lawsuits. We establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. 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. Our accruals for loss contingencies are reviewed quarterly and adjusted as additional information becomes available. We do not accrue for anticipated legal fees and costs, but expense those items as incurred.
14.
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||
Revenues: | ||||||||||||||||
U.S. Corrections & Detention | $ | 379,351 | $ | 365,071 | $ | 1,107,016 | $ | 1,073,840 | ||||||||
GEO Care | 141,808 | 134,610 | 431,819 | 377,740 | ||||||||||||
International Services | 62,371 | 45,641 | 193,121 | 130,261 | ||||||||||||
Facility Construction & Design [1] | — | 21,437 | — | 112,602 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues | $ | 583,530 | $ | 566,759 | $ | 1,731,956 | $ | 1,694,443 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income (loss) from segments: | ||||||||||||||||
U.S. Corrections & Detention | $ | 77,885 | $ | 77,551 | $ | 224,386 | $ | 224,838 | ||||||||
GEO Care | 35,959 | 31,293 | 102,795 | 94,062 | ||||||||||||
International Services | 3,583 | 3,410 | 10,927 | 8,413 | ||||||||||||
Facility Construction & Design [1] | — | (278 | ) | — | (1,620 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income from segments | $ | 117,427 | $ | 111,976 | $ | 338,108 | $ | 325,693 | ||||||||
|
|
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Revenues: | |||||||||||||||
GEO Secure Services | $ | 399,475 | $ | 368,989 | $ | 789,985 | $ | 727,670 | |||||||
GEO Care | 155,507 | 149,928 | 309,350 | 290,006 | |||||||||||
International Services | 54,388 | 64,592 | 118,612 | 130,750 | |||||||||||
Facility Construction & Design [1] | 4,596 | — | 6,686 | — | |||||||||||
Total revenues | $ | 613,966 | $ | 583,509 | $ | 1,224,633 | $ | 1,148,426 | |||||||
Operating income from segments: | |||||||||||||||
GEO Secure Services | $ | 83,865 | $ | 77,318 | $ | 160,789 | $ | 146,506 | |||||||
GEO Care | 41,661 | 35,139 | 80,199 | 66,831 | |||||||||||
International Services | 2,920 | 1,942 | 8,659 | 7,344 | |||||||||||
Facility Construction & Design [1] | — | — | — | — | |||||||||||
Operating income from segments | $ | 128,446 | $ | 114,399 | $ | 249,647 | $ | 220,681 | |||||||
General and Administrative Expenses | (47,271 | ) | (47,448 | ) | $ | (93,695 | ) | (89,280 | ) | ||||||
Total Operating Income | $ | 81,175 | $ | 66,951 | $ | 155,952 | $ | 131,401 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||
Total operating income from segments | $ | 117,427 | $ | 111,976 | $ | 338,108 | $ | 325,693 | ||||||||
Unallocated amounts: | ||||||||||||||||
General and Administrative Expenses | (47,647 | ) | (49,074 | ) | (136,927 | ) | (143,866 | ) | ||||||||
Net Interest Expense | (29,563 | ) | (24,071 | ) | (84,585 | ) | (70,731 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income taxes and equity in earnings of affiliates | $ | 40,217 | $ | 38,831 | $ | 116,596 | $ | 111,096 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Operating income from segments | $ | 128,446 | $ | 114,399 | $ | 249,647 | $ | 220,681 | |||||||
Unallocated amounts: | |||||||||||||||
General and Administrative Expenses | (47,271 | ) | (47,448 | ) | (93,695 | ) | (89,280 | ) | |||||||
Net Interest Expense | (30,887 | ) | (27,678 | ) | (62,771 | ) | (54,448 | ) | |||||||
Loss on Extinguishment of Debt | (5,741 | ) | (574 | ) | (5,741 | ) | (574 | ) | |||||||
Income before income taxes and equity in earnings of affiliates | $ | 44,547 | $ | 38,699 | $ | 87,440 | $ | 76,379 |
15.
Nine Months Ended September 30, 2018 | Year Ended December 31, 2017 | |||||||
Change in Projected Benefit Obligation | ||||||||
Projected benefit obligation, beginning of period | $ | 32,820 | $ | 28,624 | ||||
Service cost | 900 | 1,001 | ||||||
Interest cost | 931 | 1,228 | ||||||
Actuarial loss | — | 2,474 | ||||||
Benefits paid | (396 | ) | (507 | ) | ||||
|
|
|
| |||||
Projected benefit obligation, end of period | $ | 34,255 | $ | 32,820 | ||||
|
|
|
| |||||
Change in Plan Assets | ||||||||
Plan assets at fair value, beginning of period | $ | — | $ | — | ||||
Company contributions | 396 | 507 | ||||||
Benefits paid | (396 | ) | (507 | ) | ||||
|
|
|
| |||||
Plan assets at fair value, end of period | $ | — | $ | — | ||||
|
|
|
| |||||
Unfunded Status of the Plan | $ | (34,255 | ) | $ | (32,820 | ) | ||
|
|
|
|
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||
Components of Net Periodic Benefit Cost | ||||||||||||||||
Service cost | $ | 300 | $ | 250 | $ | 900 | $ | 751 | ||||||||
Interest cost | 310 | 307 | 931 | 921 | ||||||||||||
Net loss | 133 | 73 | 399 | 218 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net periodic pension cost | $ | 743 | $ | 630 | $ | 2,230 | $ | 1,890 | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019 | Year Ended December 31, 2018 | ||||||
Change in Projected Benefit Obligation | |||||||
Projected benefit obligation, beginning of period | $ | 32,474 | $ | 32,820 | |||
Service cost | 499 | 1,200 | |||||
Interest cost | 696 | 1,242 | |||||
Actuarial loss | — | (2,166 | ) | ||||
Benefits paid | (391 | ) | (622 | ) | |||
Projected benefit obligation, end of period | $ | 33,278 | $ | 32,474 | |||
Change in Plan Assets | |||||||
Plan assets at fair value, beginning of period | $ | — | $ | — | |||
Company contributions | 391 | 622 | |||||
Benefits paid | (391 | ) | (622 | ) | |||
Plan assets at fair value, end of period | $ | — | $ | — | |||
Unfunded Status of the Plan | $ | 33,278 | $ | 32,474 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Components of Net Periodic Benefit Cost | |||||||||||||||
Service cost | $ | 250 | $ | 300 | $ | 499 | $ | 600 | |||||||
Interest cost | 348 | 310 | 696 | 621 | |||||||||||
Net loss | 53 | 133 | 105 | 266 | |||||||||||
Net periodic pension cost | $ | 651 | $ | 743 | $ | 1,300 | $ | 1,487 |
In May 2014,2019:
In August 2016, the FASB issuedASU No. 2016-15, “Statement of Cash Flows,” which clarified the presentation and 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 business combination, proceeds from the settlement of 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 inASU No. 2016-15 became effective for the Company on January 1, 2018. The Company elected to apply the cumulative earnings approach to classify distributions received from its equity method investees and determined that the distributions are a return on 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,
In January 2017, the FASB issued ASUNo. 2017-01, “Business Combinations,” which clarifies the definition of a business with the 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 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 fair value of the gross assets acquired (or disposed of) is concentrated in a 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 a substantive process that together significantly contribute to the 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 input and a substantive process are present. The amendments in this update became effective for the Company 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.
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 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 Concession Arrangements – 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 was effective for the Company beginning 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. 2017-09 “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 became effective for 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.
The following accounting standards will be adopted in future periods:
In
In
In February 2018, the FASB issued ASUNo. 2018-02 “Income Statement-Reporting Comprehensive Income-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 yearsannual periods beginning after December 15, 2018, and interim periods within those fiscal years. 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 August 2017, the FASB issued ASUNo. 2017-12 “Derivatives and Hedging – 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 February 2016, FASB issued ASU2016-02, “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 in ASU2016-02 are effective for public companies for fiscal years beginning after December 15, 2018,2019, including interim periods within those fiscal years. In July 2018, the FASB issued ASU2018-11 which providesannual periods. Early adoption is permitted for an optional transition method where an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings. Consequently, an entity’s reporting for the comparativeannual periods presentedbeginning after December 15, 2018. The Company is in the financial statements in which it adopts the new lease standard will continue to be in accordance with current generally accepted accounting principles (Topic 940, “Leases”). Alternatively, lessees and lessors can elect to recognize and measure leases at the beginningprocess of the earliest period presented using a modified retrospective approach. The Company has elected to apply the new lease standard at the adoption date on January 1, 2019 under the optional transition method as outlined in ASU2018-11. There are also several practical expedients that entities may elect upon transition relating to short-term leases (twelve-month terms or less),non-lease components, reassessing certain lease decision points for existing leases, using hindsight in determining the lease term and land easements. With regard to these practical expedients, the Company has elected not to apply the recognition requirements to lease arrangements that have terms of twelve months or less. The Company has also elected to not reassess the major lease decision points for existing leases (whether a contract contains a lease, how a lease should be classified and whether previously capitalized initial direct costs meet the new standard definition). The Company has implemented a lease management software application tool and is currently assessing the impacteffect that the adoption of ASU2016-02 will have on its consolidated financial position orand 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 in Note 17 – Commitments and Contingencies in the Company’s Annual Report on Form10-K for the year ended December 31, 2017.
operations.
17.
(i) | The GEO Group, Inc., as the issuer of the notes; |
(ii) | The Subsidiary Guarantors, on a combined basis, which are 100% owned by The GEO Group, Inc., and which are guarantors of the notes; |
(iii) | The Company’s other subsidiaries, on a combined basis, which are not guarantors of the notes (the |
(iv) | Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the SubsidiaryNon-Guarantors and (b) eliminate the investments in the Company’s subsidiaries; and |
(v) | The Company and its subsidiaries on a consolidated basis. |
For the Three Months Ended September 30, 2018 | ||||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Revenues | $ | 208,607 | $ | 479,175 | $ | 65,028 | $ | (169,280 | ) | $ | 583,530 | |||||||||
Operating expenses | 171,038 | 379,892 | 53,156 | (169,280 | ) | 434,806 | ||||||||||||||
Depreciation and amortization | 6,742 | 23,621 | 934 | — | 31,297 | |||||||||||||||
General and administrative expenses | 16,878 | 25,568 | 5,201 | — | 47,647 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income | 13,949 | 50,094 | 5,737 | — | 69,780 | |||||||||||||||
Interest income | 3,415 | 1,159 | 8,660 | (4,806 | ) | 8,428 | ||||||||||||||
Interest expense | (20,765 | ) | (13,714 | ) | (8,318 | ) | 4,806 | (37,991 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income (loss) before income taxes and equity in earnings of affiliates | (3,401 | ) | 37,539 | 6,079 | — | 40,217 | ||||||||||||||
Income tax provision | 162 | 2,446 | 1,115 | — | 3,723 | |||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 2,735 | — | 2,735 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income (loss) before equity in income of consolidated subsidiaries | (3,563 | ) | 35,093 | 7,699 | — | 39,229 | ||||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 42,792 | — | — | (42,792 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | 39,229 | 35,093 | 7,699 | (42,792 | ) | 39,229 | ||||||||||||||
Net loss attributable to noncontrolling interests | — | — | 60 | — | 60 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income attributable to The GEO Group, Inc. | $ | 39,229 | $ | 35,093 | $ | 7,759 | $ | (42,792 | ) | $ | 39,289 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | $ | 39,229 | $ | 35,093 | $ | 7,699 | $ | (42,792 | ) | $ | 39,229 | |||||||||
Other comprehensive income (loss), net of tax | — | (761 | ) | 205 | — | (556 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total comprehensive income | $ | 39,229 | $ | 34,332 | $ | 7,904 | $ | (42,792 | ) | $ | 38,673 | |||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 72 | — | 72 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 39,229 | $ | 34,332 | $ | 7,976 | $ | (42,792 | ) | $ | 38,745 | |||||||||
|
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|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2019 | |||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Revenues | $ | 233,539 | $ | 498,406 | $ | 61,639 | $ | (179,618 | ) | $ | 613,966 | ||||||||
Operating expenses | 189,310 | 392,023 | 51,453 | (179,618 | ) | 453,168 | |||||||||||||
Depreciation and amortization | 7,299 | 24,208 | 845 | — | 32,352 | ||||||||||||||
General and administrative expenses | 17,813 | 24,752 | 4,706 | — | 47,271 | ||||||||||||||
Operating income | 19,117 | 57,423 | 4,635 | — | 81,175 | ||||||||||||||
Interest income | 3,497 | 2,180 | 7,716 | (5,348 | ) | 8,045 | |||||||||||||
Interest expense | (23,127 | ) | (14,703 | ) | (6,450 | ) | 5,348 | (38,932 | ) | ||||||||||
Loss on extinguishment of debt | (486 | ) | (790 | ) | (4,465 | ) | — | (5,741 | ) | ||||||||||
Income (loss) before income taxes and equity in earnings of affiliates | (999 | ) | 44,110 | 1,436 | — | 44,547 | |||||||||||||
Income tax provision | 239 | 3,550 | 743 | — | 4,532 | ||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 1,821 | — | 1,821 | ||||||||||||||
Income before equity in income of consolidated subsidiaries | (1,238 | ) | 40,560 | 2,514 | — | 41,836 | |||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 43,074 | — | — | (43,074 | ) | — | |||||||||||||
Net income | 41,836 | 40,560 | 2,514 | (43,074 | ) | 41,836 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 78 | — | 78 | ||||||||||||||
Net income attributable to The GEO Group, Inc. | $ | 41,836 | $ | 40,560 | $ | 2,592 | $ | (43,074 | ) | $ | 41,914 | ||||||||
Net income | $ | 41,836 | $ | 40,560 | $ | 2,514 | $ | (43,074 | ) | $ | 41,836 | ||||||||
Other comprehensive income, net of tax | — | 42 | 4,612 | — | 4,654 | ||||||||||||||
Total comprehensive income | $ | 41,836 | $ | 40,602 | $ | 7,126 | $ | (43,074 | ) | $ | 46,490 | ||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 73 | — | 73 | ||||||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 41,836 | $ | 40,602 | $ | 7,199 | $ | (43,074 | ) | $ | 46,563 |
For the Three Months Ended September 30, 2017 | ||||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Revenues | $ | 171,553 | $ | 464,140 | $ | 69,698 | $ | (138,632 | ) | $ | 566,759 | |||||||||
Operating expenses | 139,165 | 364,834 | 57,767 | (138,632 | ) | 423,134 | ||||||||||||||
Depreciation and amortization | 6,104 | 24,623 | 922 | — | 31,649 | |||||||||||||||
General and administrative expenses | 14,699 | 28,066 | 6,309 | — | 49,074 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income | 11,585 | 46,617 | 4,700 | — | 62,902 | |||||||||||||||
Interest income | 2,688 | 1,629 | 14,871 | (4,540 | ) | 14,648 | ||||||||||||||
Interest expense | (18,148 | ) | (13,093 | ) | (12,018 | ) | 4,540 | (38,719 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income before income taxes and equity in earnings of affiliates | (3,875 | ) | 35,153 | 7,553 | — | 38,831 | ||||||||||||||
Income tax provision | 147 | 811 | 762 | — | 1,720 | |||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 1,342 | — | 1,342 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income (loss) before equity in income of consolidated subsidiaries | (4,022 | ) | 34,342 | 8,133 | — | 38,453 | ||||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 42,475 | — | — | (42,475 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | 38,453 | 34,342 | 8,133 | (42,475 | ) | 38,453 | ||||||||||||||
Net loss attributable to noncontrolling interests | — | — | 36 | — | 36 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income attributable to The GEO Group, Inc. | $ | 38,453 | $ | 34,342 | $ | 8,169 | $ | (42,475 | ) | $ | 38,489 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | $ | 38,453 | $ | 34,342 | $ | 8,133 | $ | (42,475 | ) | $ | 38,453 | |||||||||
Other comprehensive income, net of tax | — | 64 | 1,561 | — | 1,625 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total comprehensive income | $ | 38,453 | $ | 34,406 | $ | 9,694 | $ | (42,475 | ) | $ | 40,078 | |||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 34 | — | 34 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 38,453 | $ | 34,406 | $ | 9,728 | $ | (42,475 | ) | $ | 40,112 | |||||||||
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2018 | |||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Revenues | $ | 202,186 | $ | 474,966 | $ | 67,256 | $ | (160,899 | ) | $ | 583,509 | ||||||||
Operating expenses | 161,122 | 381,040 | 56,534 | (160,899 | ) | 437,797 | |||||||||||||
Depreciation and amortization | 6,564 | 23,695 | 1,054 | — | 31,313 | ||||||||||||||
General and administrative expenses | 16,281 | 25,738 | 5,429 | — | 47,448 | ||||||||||||||
Operating income | 18,219 | 44,493 | 4,239 | — | 66,951 | ||||||||||||||
Interest income | 3,406 | 1,447 | 8,908 | (5,094 | ) | 8,667 | |||||||||||||
Interest expense | (19,073 | ) | (13,959 | ) | (8,407 | ) | 5,094 | (36,345 | ) | ||||||||||
Loss on extinguishment of debt | (574 | ) | — | — | — | (574 | ) | ||||||||||||
Income before income taxes and equity in earnings of affiliates | 1,978 | 31,981 | 4,740 | — | 38,699 | ||||||||||||||
Income tax provision | 716 | 1,442 | 1,557 | — | 3,715 | ||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 2,341 | — | 2,341 | ||||||||||||||
Income before equity in income of consolidated subsidiaries | 1,262 | 30,539 | 5,524 | — | 37,325 | ||||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 36,063 | — | — | (36,063 | ) | — | |||||||||||||
Net income | 37,325 | 30,539 | 5,524 | (36,063 | ) | 37,325 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 96 | — | 96 | ||||||||||||||
Net income attributable to The GEO Group, Inc. | $ | 37,325 | $ | 30,539 | $ | 5,620 | $ | (36,063 | ) | $ | 37,421 | ||||||||
Net income | $ | 37,325 | $ | 30,539 | $ | 5,524 | $ | (36,063 | ) | $ | 37,325 | ||||||||
Other comprehensive income (loss), net of tax | — | 625 | (2,783 | ) | — | (2,158 | ) | ||||||||||||
Total comprehensive income | $ | 37,325 | $ | 31,164 | $ | 2,741 | $ | (36,063 | ) | $ | 35,167 | ||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 117 | — | 117 | ||||||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 37,325 | $ | 31,164 | $ | 2,858 | $ | (36,063 | ) | $ | 35,284 |
For the Nine Months Ended September 30, 2018 | ||||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Revenues | $ | 606,424 | $ | 1,412,868 | $ | 201,090 | $ | (488,426 | ) | $ | 1,731,956 | |||||||||
Operating expenses | 483,982 | 1,138,897 | 164,859 | (488,426 | ) | 1,299,312 | ||||||||||||||
Depreciation and amortization | 19,766 | 71,759 | 3,011 | — | 94,536 | |||||||||||||||
General and administrative expenses | 47,499 | 73,753 | 15,675 | — | 136,927 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income | 55,177 | 128,459 | 17,545 | — | 201,181 | |||||||||||||||
Interest income | 10,998 | 4,023 | 26,951 | (15,778 | ) | 26,194 | ||||||||||||||
Interest expense | (59,034 | ) | (42,133 | ) | (25,390 | ) | 15,778 | (110,779 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income before income taxes and equity in earnings of affiliates | 7,141 | 90,349 | 19,106 | — | 116,596 | |||||||||||||||
Income tax provision | 1,055 | 6,188 | 4,950 | — | 12,193 | |||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 7,071 | — | 7,071 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income before equity in income of consolidated subsidiaries | 6,086 | 84,161 | 21,227 | — | 111,474 | |||||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 105,388 | — | — | (105,388 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | 111,474 | 84,161 | 21,227 | (105,388 | ) | 111,474 | ||||||||||||||
Net loss attributable to noncontrolling interests | — | — | 223 | — | 223 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income attributable to The GEO Group, Inc. | $ | 111,474 | $ | 84,161 | $ | 21,450 | $ | (105,388 | ) | $ | 111,697 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | $ | 111,474 | $ | 84,161 | $ | 21,227 | $ | (105,388 | ) | $ | 111,474 | |||||||||
Other comprehensive income (loss), net of tax | — | (31 | ) | (1,332 | ) | — | (1,363 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total comprehensive income | $ | 111,474 | $ | 84,130 | $ | 19,895 | $ | (105,388 | ) | $ | 110,111 | |||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 247 | — | 247 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 111,474 | $ | 84,130 | $ | 20,142 | $ | (105,388 | ) | $ | 110,358 | |||||||||
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2019 | |||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Revenues | $ | 461,921 | $ | 993,296 | $ | 130,607 | $ | (361,191 | ) | $ | 1,224,633 | ||||||||
Operating expenses | 360,826 | 804,477 | 106,053 | (361,191 | ) | 910,165 | |||||||||||||
Depreciation and amortization | 14,718 | 48,392 | 1,711 | — | 64,821 | ||||||||||||||
General and administrative expenses | 35,013 | 48,781 | 9,901 | — | 93,695 | ||||||||||||||
Operating income | 51,364 | 91,646 | 12,942 | — | 155,952 | ||||||||||||||
Interest income | 6,975 | 3,515 | 15,915 | (9,964 | ) | 16,441 | |||||||||||||
Interest expense | (46,423 | ) | (28,551 | ) | (14,202 | ) | 9,964 | (79,212 | ) | ||||||||||
Loss on extinguishment of debt | (486 | ) | (790 | ) | (4,465 | ) | — | (5,741 | ) | ||||||||||
Income before income taxes and equity in earnings of affiliates | 11,430 | 65,820 | 10,190 | — | 87,440 | ||||||||||||||
Income tax provision | 528 | 5,929 | 2,915 | — | 9,372 | ||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 4,417 | — | 4,417 | ||||||||||||||
Income before equity in income of consolidated subsidiaries | 10,902 | 59,891 | 11,692 | — | 82,485 | ||||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 71,583 | — | — | (71,583 | ) | — | |||||||||||||
Net income | 82,485 | 59,891 | 11,692 | (71,583 | ) | 82,485 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 134 | — | 134 | ||||||||||||||
Net income attributable to The GEO Group, Inc. | $ | 82,485 | $ | 59,891 | $ | 11,826 | $ | (71,583 | ) | $ | 82,619 | ||||||||
Net income | $ | 82,485 | $ | 59,891 | $ | 11,692 | $ | (71,583 | ) | $ | 82,485 | ||||||||
Other comprehensive income (loss), net of tax | — | (605 | ) | 7,507 | — | 6,902 | |||||||||||||
Total comprehensive income | $ | 82,485 | $ | 59,286 | $ | 19,199 | $ | (71,583 | ) | $ | 89,387 | ||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 129 | — | 129 | ||||||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 82,485 | $ | 59,286 | $ | 19,328 | $ | (71,583 | ) | $ | 89,516 |
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Revenues | $ | 520,986 | $ | 1,342,620 | $ | 250,618 | $ | (419,781 | ) | $ | 1,694,443 | |||||||||
Operating expenses | 406,576 | 1,076,232 | 213,259 | (419,781 | ) | 1,276,286 | ||||||||||||||
Depreciation and amortization | 18,319 | 71,404 | 2,741 | — | 92,464 | |||||||||||||||
General and administrative expenses | 43,939 | 78,479 | 21,448 | — | 143,866 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income | 52,152 | 116,505 | 13,170 | — | 181,827 | |||||||||||||||
Interest income | 12,793 | 2,858 | 39,175 | (15,855 | ) | 38,971 | ||||||||||||||
Interest expense | (51,391 | ) | (41,353 | ) | (32,813 | ) | 15,855 | (109,702 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income before income taxes and equity in earnings of affiliates | 13,554 | 78,010 | 19,532 | — | 111,096 | |||||||||||||||
Income tax provision | 441 | 3,058 | 2,091 | — | 5,590 | |||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 4,255 | — | 4,255 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income before equity in income of consolidated subsidiaries | 13,113 | 74,952 | 21,696 | — | 109,761 | |||||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 96,648 | — | — | (96,648 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | $ | 109,761 | $ | 74,952 | $ | 21,696 | $ | (96,648 | ) | $ | 109,761 | |||||||||
Net loss attributable to noncontrolling interests | — | — | 123 | — | 123 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income attributable to The GEO Group, Inc. | $ | 109,761 | $ | 74,952 | $ | 21,819 | $ | (96,648 | ) | $ | 109,884 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income | $ | 109,761 | $ | 74,952 | $ | 21,696 | $ | (96,648 | ) | $ | 109,761 | |||||||||
Other comprehensive income, net of tax | — | 175 | 4,586 | — | 4,761 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total comprehensive income | $ | 109,761 | $ | 75,127 | $ | 26,282 | $ | (96,648 | ) | $ | 114,522 | |||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 119 | — | 119 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 109,761 | $ | 75,127 | $ | 26,401 | $ | (96,648 | ) | $ | 114,641 | |||||||||
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2018 | |||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Revenues | $ | 397,816 | $ | 933,694 | $ | 136,062 | $ | (319,146 | ) | $ | 1,148,426 | ||||||||
Operating expenses | 312,944 | 759,006 | 111,702 | (319,146 | ) | 864,506 | |||||||||||||
Depreciation and amortization | 13,024 | 48,138 | 2,077 | — | 63,239 | ||||||||||||||
General and administrative expenses | 30,622 | 48,185 | 10,473 | — | 89,280 | ||||||||||||||
Operating income | 41,226 | 78,365 | 11,810 | — | 131,401 | ||||||||||||||
Interest income | 7,583 | 2,864 | 18,292 | (10,973 | ) | 17,766 | |||||||||||||
Interest expense | (37,695 | ) | (28,419 | ) | (17,073 | ) | 10,973 | (72,214 | ) | ||||||||||
Loss on extinguishment of debt | (574 | ) | — | — | — | (574 | ) | ||||||||||||
Income before income taxes and equity in earnings of affiliates | 10,540 | 52,810 | 13,029 | — | 76,379 | ||||||||||||||
Income tax provision | 893 | 3,742 | 3,835 | — | 8,470 | ||||||||||||||
Equity in earnings of affiliates, net of income tax provision | — | — | 4,336 | — | 4,336 | ||||||||||||||
Income before equity in income of consolidated subsidiaries | 9,647 | 49,068 | 13,530 | — | 72,245 | ||||||||||||||
Income from consolidated subsidiaries, net of income tax provision | 62,598 | — | — | (62,598 | ) | — | |||||||||||||
Net income | 72,245 | 49,068 | 13,530 | (62,598 | ) | 72,245 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 163 | — | 163 | ||||||||||||||
Net income attributable to The GEO Group, Inc. | $ | 72,245 | $ | 49,068 | $ | 13,693 | $ | (62,598 | ) | $ | 72,408 | ||||||||
Net income | $ | 72,245 | $ | 49,068 | $ | 13,530 | $ | (62,598 | ) | $ | 72,245 | ||||||||
Other comprehensive income (loss), net of tax | — | 730 | (1,526 | ) | — | (796 | ) | ||||||||||||
Total comprehensive income | $ | 72,245 | $ | 49,798 | $ | 12,004 | $ | (62,598 | ) | $ | 71,449 | ||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 176 | — | 176 | ||||||||||||||
Comprehensive income attributable to The GEO Group, Inc. | $ | 72,245 | $ | 49,798 | $ | 12,180 | $ | (62,598 | ) | $ | 71,625 |
As of September 30, 2018 | ||||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS |
| |||||||||||||||||||
Cash and cash equivalents | $ | 9,193 | $ | 18,059 | $ | 38,755 | $ | — | $ | 66,007 | ||||||||||
Restricted cash and cash equivalents | 5,652 | — | 49,279 | — | 54,931 | |||||||||||||||
Accounts receivable, less allowance for doubtful accounts | 178,579 | 187,231 | 33,695 | 4,105 | 403,610 | |||||||||||||||
Contract receivable, current portion | — | — | 9,420 | — | 9,420 | |||||||||||||||
Prepaid expenses and other current assets | 2,153 | 26,183 | 11,037 | (1,786 | ) | 37,587 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total current assets | 195,577 | 231,473 | 142,186 | 2,319 | 571,555 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Restricted Cash and Investments | — | 23,476 | 5,463 | — | 28,939 | |||||||||||||||
Property and Equipment, Net | 843,558 | 1,217,597 | 86,850 | — | 2,148,005 | |||||||||||||||
Non-Current Contract Receivable | — | — | 384,794 | — | 384,794 | |||||||||||||||
Assets Held for Sale | 705 | 1,929 | — | — | 2,634 | |||||||||||||||
Intercompany Receivable | 980,555 | 126,525 | 24,460 | (1,131,540 | ) | — | ||||||||||||||
Non-Current Deferred Income Tax Assets | 863 | 23,913 | 1,501 | — | 26,277 | |||||||||||||||
Goodwill | — | 775,955 | 413 | — | 776,368 | |||||||||||||||
Intangible Assets, Net | — | 237,345 | 602 | — | 237,947 | |||||||||||||||
Investment in Subsidiaries | 1,516,564 | 458,229 | 2,190 | (1,976,983 | ) | — | ||||||||||||||
OtherNon-Current Assets | 8,711 | 115,759 | 20,245 | (78,895 | ) | 65,820 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Assets | $ | 3,546,533 | $ | 3,212,201 | $ | 668,704 | $ | (3,185,099 | ) | $ | 4,242,339 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
| |||||||||||||||||||
Accounts payable | $ | 11,967 | $ | 64,568 | $ | 5,749 | $ | — | $ | 82,284 | ||||||||||
Accrued payroll and related taxes | — | 33,424 | 20,173 | — | 53,597 | |||||||||||||||
Accrued expenses and other current liabilities | 43,371 | 121,258 | 30,511 | 2,319 | 197,459 | |||||||||||||||
Current portion of capital lease obligations, long-term debt andnon-recourse debt | 8,000 | 1,998 | 330,145 | — | 340,143 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total current liabilities | 63,338 | 221,248 | 386,578 | 2,319 | 673,483 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Non-Current Deferred Income Tax Liabilities | — | — | 8,757 | — | 8,757 | |||||||||||||||
Intercompany Payable | 118,478 | 979,528 | 33,534 | (1,131,540 | ) | — | ||||||||||||||
OtherNon-Current Liabilities | 1,337 | 157,333 | 9,439 | (78,895 | ) | 89,214 | ||||||||||||||
Capital Lease Obligations | — | 4,954 | — | — | 4,954 | |||||||||||||||
Long-Term Debt | 2,282,399 | — | 80,919 | — | 2,363,318 | |||||||||||||||
Non-Recourse Debt | — | — | 22,201 | — | 22,201 | |||||||||||||||
Commitments & Contingencies and Other | ||||||||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||||
The GEO Group, Inc. Shareholders’ Equity | 1,080,981 | 1,849,138 | 127,845 | (1,976,983 | ) | 1,080,981 | ||||||||||||||
Noncontrolling Interests | — | — | (569 | ) | — | (569 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Shareholders’ Equity | 1,080,981 | 1,849,138 | 127,276 | (1,976,983 | ) | 1,080,412 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Liabilities and Shareholders’ Equity | $ | 3,546,533 | $ | 3,212,201 | $ | 668,704 | $ | (3,185,099 | ) | $ | 4,242,339 | |||||||||
|
|
|
|
|
|
|
|
|
|
As of June 30, 2019 | |||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 4,716 | $ | — | $ | 16,845 | $ | — | $ | 21,561 | |||||||||
Restricted cash and cash equivalents | 851 | — | 55,492 | — | 56,343 | ||||||||||||||
Accounts receivable, less allowance for doubtful accounts | 163,184 | 186,592 | 41,825 | 3,119 | 394,720 | ||||||||||||||
Contract receivable, current portion | — | — | 13,944 | — | 13,944 | ||||||||||||||
Prepaid expenses and other current assets | 1,019 | 37,478 | 9,768 | (1,949 | ) | 46,316 | |||||||||||||
Total current assets | 169,770 | 224,070 | 137,874 | 1,170 | 532,884 | ||||||||||||||
Restricted Cash and Investments | — | 25,708 | 1,650 | — | 27,358 | ||||||||||||||
Property and Equipment, Net | 841,260 | 1,222,261 | 84,704 | — | 2,148,225 | ||||||||||||||
Assets Held for Sale | 705 | 3,902 | — | — | 4,607 | ||||||||||||||
Contract Receivable | — | — | 365,208 | — | 365,208 | ||||||||||||||
Operating Lease Right-of-Use Assets, Net | 24,754 | 106,526 | 736 | — | 132,016 | ||||||||||||||
Intercompany Receivable | 965,511 | 238,050 | 25,732 | (1,229,293 | ) | — | |||||||||||||
Deferred Income Tax Assets | 798 | 27,928 | 1,198 | — | 29,924 | ||||||||||||||
Goodwill | — | 775,954 | 403 | — | 776,357 | ||||||||||||||
Intangible Assets, Net | — | 220,670 | 552 | — | 221,222 | ||||||||||||||
Investment in Subsidiaries | 1,479,372 | 573,816 | 2,189 | (2,055,377 | ) | — | |||||||||||||
Other Non-Current Assets | 11,361 | 116,819 | 20,424 | (78,267 | ) | 70,337 | |||||||||||||
Total Assets | $ | 3,493,531 | $ | 3,535,704 | $ | 640,670 | $ | (3,361,767 | ) | $ | 4,308,138 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Accounts payable | $ | 18,083 | $ | 67,982 | $ | 5,192 | $ | — | $ | 91,257 | |||||||||
Accrued payroll and related taxes | — | 53,505 | 17,864 | — | 71,369 | ||||||||||||||
Accrued expenses and other current liabilities | 28,829 | 132,868 | 27,639 | (253 | ) | 189,083 | |||||||||||||
Operating lease liabilities, current portion | 5,108 | 26,622 | 347 | — | 32,077 | ||||||||||||||
Current portion of finance lease liabilities, long-term debt and non-recourse debt | 8,000 | 1,550 | 16,316 | — | 25,866 | ||||||||||||||
Total current liabilities | 60,020 | 282,527 | 67,358 | (253 | ) | 409,652 | |||||||||||||
Deferred Income Tax Liabilities | — | — | 13,681 | — | 13,681 | ||||||||||||||
Intercompany Payable | 106,062 | 1,086,737 | 35,070 | (1,227,869 | ) | — | |||||||||||||
Other Non-Current Liabilities | 2,362 | 153,949 | 3,768 | (78,267 | ) | 81,812 | |||||||||||||
Operating lease Liabilities | 20,199 | 82,256 | 389 | — | 102,844 | ||||||||||||||
Finance Lease Liabilities | — | 3,779 | — | — | 3,779 | ||||||||||||||
Long-Term Debt | 2,282,622 | — | 71,904 | — | 2,354,526 | ||||||||||||||
Non-Recourse Debt | — | — | 320,306 | — | 320,306 | ||||||||||||||
Commitments & Contingencies and Other | |||||||||||||||||||
Shareholders' Equity: | |||||||||||||||||||
The GEO Group, Inc. Shareholders' Equity | 1,022,266 | 1,926,456 | 128,922 | (2,055,378 | ) | 1,022,266 | |||||||||||||
Noncontrolling Interests | — | — | (728 | ) | — | (728 | ) | ||||||||||||
Total Shareholders’ Equity | 1,022,266 | 1,926,456 | 128,194 | (2,055,378 | ) | 1,021,538 | |||||||||||||
Total Liabilities and Shareholders' Equity | $ | 3,493,531 | $ | 3,535,704 | $ | 640,670 | $ | (3,361,767 | ) | $ | 4,308,138 |
As of December 31, 2017 | ||||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS |
| |||||||||||||||||||
Cash and cash equivalents | $ | 54,666 | $ | — | $ | 26,711 | $ | — | $ | 81,377 | ||||||||||
Restricted cash and cash equivalents | — | — | 44,932 | — | 44,932 | |||||||||||||||
Accounts receivable, less allowance for doubtful accounts | 130,354 | 225,029 | 34,533 | — | 389,916 | |||||||||||||||
Contract receivable, current portion | — | — | 18,142 | — | 18,142 | |||||||||||||||
Prepaid expenses and other current assets | 2,589 | 24,163 | 18,590 | — | 45,342 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total current assets | 187,609 | 249,192 | 142,908 | — | 579,709 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Restricted Cash and Investments | — | 25,715 | 2,284 | — | 27,999 | |||||||||||||||
Property and Equipment, Net | 777,404 | 1,209,816 | 90,903 | — | 2,078,123 | |||||||||||||||
Assets Held for Sale | — | 3,915 | — | — | 3,915 | |||||||||||||||
Non-Current Contract Receivable | — | — | 404,309 | 404,309 | ||||||||||||||||
Intercompany Receivable | 1,130,189 | 88,534 | 28,218 | (1,246,941 | ) | — | ||||||||||||||
Non-Current Deferred Income Tax Assets | 863 | 23,913 | 1,501 | — | 26,277 | |||||||||||||||
Goodwill | — | 778,504 | 447 | — | 778,951 | |||||||||||||||
Intangible Assets, Net | — | 254,531 | 808 | — | 255,339 | |||||||||||||||
Investment in Subsidiaries | 1,336,665 | 456,076 | 2,190 | (1,794,931 | ) | — | ||||||||||||||
OtherNon-Current Assets | 11,141 | 115,330 | 25,210 | (79,395 | ) | 72,286 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Assets | $ | 3,443,871 | $ | 3,205,526 | $ | 698,778 | $ | (3,121,267 | ) | $ | 4,226,908 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
| |||||||||||||||||||
Accounts payable | $ | 20,643 | $ | 65,475 | $ | 6,469 | $ | — | $ | 92,587 | ||||||||||
Accrued payroll and related taxes | — | 51,780 | 19,952 | — | 71,732 | |||||||||||||||
Accrued expenses and other current liabilities | 40,344 | 115,636 | 20,344 | — | 176,324 | |||||||||||||||
Current portion of capital lease obligations, long-term debt andnon-recourse debt | 8,000 | 1,870 | 19,050 | — | 28,920 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total current liabilities | 68,987 | 234,761 | 65,815 | — | 369,563 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Non-Current Deferred Income Tax Liabilities | — | — | 8,757 | — | 8,757 | |||||||||||||||
Intercompany Payable | 79,984 | 1,129,590 | 37,367 | (1,246,941 | ) | — | ||||||||||||||
OtherNon-Current Liabilities | 4,674 | 157,200 | 14,223 | (79,395 | ) | 96,702 | ||||||||||||||
Capital Lease Obligations | — | 6,059 | — | — | 6,059 | |||||||||||||||
Long-Term Debt | 2,090,985 | — | 90,559 | — | 2,181,544 | |||||||||||||||
Non-Recourse Debt | — | — | 365,364 | — | 365,364 | |||||||||||||||
Commitments & Contingencies and Other | ||||||||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||||
The GEO Group, Inc. Shareholders’ Equity | 1,199,241 | 1,677,916 | 117,015 | (1,794,931 | ) | 1,199,241 | ||||||||||||||
Noncontrolling Interests | — | — | (322 | ) | — | (322 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Shareholders’ Equity | 1,199,241 | 1,677,916 | 116,693 | (1,794,931 | ) | 1,198,919 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Liabilities and Shareholders’ Equity | $ | 3,443,871 | $ | 3,205,526 | $ | 698,778 | $ | (3,121,267 | ) | $ | 4,226,908 | |||||||||
|
|
|
|
|
|
|
|
|
|
As of December 31, 2018 | |||||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 4,468 | $ | 7,873 | $ | 18,914 | $ | — | $ | 31,255 | |||||||||
Restricted cash and cash equivalents | 2,854 | — | 48,824 | — | 51,678 | ||||||||||||||
Accounts receivable, less allowance for doubtful accounts | 190,594 | 221,957 | 44,377 | (11,402 | ) | 445,526 | |||||||||||||
Contract receivable, current portion | — | — | 15,535 | — | 15,535 | ||||||||||||||
Prepaid expenses and other current assets | 2,011 | 50,482 | 7,114 | (1,839 | ) | 57,768 | |||||||||||||
Total current assets | 199,927 | 280,312 | 134,764 | (13,241 | ) | 601,762 | |||||||||||||
Restricted Cash and Investments | — | 21,009 | 1,422 | — | 22,431 | ||||||||||||||
Property and Equipment, Net | 845,291 | 1,227,223 | 86,096 | — | 2,158,610 | ||||||||||||||
Assets Held for Sale | 705 | 1,929 | — | — | 2,634 | ||||||||||||||
Contract Receivable | — | — | 368,178 | 368,178 | |||||||||||||||
Intercompany Receivable | 990,365 | 150,710 | 22,407 | (1,163,482 | ) | — | |||||||||||||
Deferred Income Tax Assets | 798 | 27,928 | 1,198 | — | 29,924 | ||||||||||||||
Goodwill | — | 775,955 | 404 | — | 776,359 | ||||||||||||||
Intangible Assets, Net | — | 231,787 | 573 | — | 232,360 | ||||||||||||||
Investment in Subsidiaries | 1,503,841 | 458,229 | 2,190 | (1,964,260 | ) | — | |||||||||||||
Other Non-Current Assets | 9,541 | 115,695 | 19,334 | (78,710 | ) | 65,860 | |||||||||||||
Total Assets | $ | 3,550,468 | $ | 3,290,777 | $ | 636,566 | $ | (3,219,693 | ) | $ | 4,258,118 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Accounts payable | $ | 13,566 | $ | 72,128 | $ | 7,338 | $ | — | $ | 93,032 | |||||||||
Accrued payroll and related taxes | — | 56,543 | 19,466 | — | 76,009 | ||||||||||||||
Accrued expenses and other current liabilities | 23,565 | 168,231 | 25,615 | (13,241 | ) | 204,170 | |||||||||||||
Current portion of finance lease liabilities, long-term debt and non-recourse debt | 8,000 | 2,017 | 322,010 | — | 332,027 | ||||||||||||||
Total current liabilities | 45,131 | 298,919 | 374,429 | (13,241 | ) | 705,238 | |||||||||||||
Deferred Income Tax Liabilities | — | — | 13,681 | — | 13,681 | ||||||||||||||
Intercompany Payable | 142,055 | 989,856 | 31,571 | (1,163,482 | ) | — | |||||||||||||
Other Non-Current Liabilities | 1,395 | 152,815 | 6,981 | (78,710 | ) | 82,481 | |||||||||||||
Finance Lease Liabilities | — | 4,570 | — | — | 4,570 | ||||||||||||||
Long-Term Debt | 2,321,384 | — | 75,843 | — | 2,397,227 | ||||||||||||||
Non-Recourse Debt | — | — | 15,017 | — | 15,017 | ||||||||||||||
Commitments & Contingencies and Other | |||||||||||||||||||
Shareholders' Equity: | |||||||||||||||||||
The GEO Group, Inc. Shareholders' Equity | 1,040,503 | 1,844,617 | 119,643 | (1,964,260 | ) | 1,040,503 | |||||||||||||
Noncontrolling Interests | — | — | (599 | ) | — | (599 | ) | ||||||||||||
Total Shareholders’ Equity | 1,040,503 | 1,844,617 | 119,044 | (1,964,260 | ) | 1,039,904 | |||||||||||||
Total Liabilities and Shareholders' Equity | $ | 3,550,468 | $ | 3,290,777 | $ | 636,566 | $ | (3,219,693 | ) | $ | 4,258,118 |
For the Nine Months Ended September 30, 2018 | ||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Consolidated | |||||||||||||
Cash Flow from Operating Activities: | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash provided by operating activities | $ | 112,599 | $ | 70,040 | $ | 37,584 | $ | 220,223 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Cash Flow from Investing Activities: | ||||||||||||||||
Insurance proceeds – damaged property | — | 5,998 | — | 5,998 | ||||||||||||
Proceeds from sale of property and equipment | — | — | 2,061 | 2,061 | ||||||||||||
Proceeds from sale of assets held for sale | — | 3,797 | — | 3,797 | ||||||||||||
Change in restricted investments | — | (2,413 | ) | — | (2,413 | ) | ||||||||||
Capital expenditures | (95,461 | ) | (64,015 | ) | (2,014 | ) | (161,490 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash (used in) provided by investing activities | (95,461 | ) | (56,633 | ) | 47 | (152,047 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Cash Flow from Financing Activities: | ||||||||||||||||
Proceeds from long-term debt | 372,000 | — | — | 372,000 | ||||||||||||
Payments on long-term debt | (183,000 | ) | — | (3,033 | ) | (186,033 | ) | |||||||||
Payments onnon-recourse debt | — | — | (9,636 | ) | (9,636 | ) | ||||||||||
Taxes paid related to net share settlements of equity awards | (4,452 | ) | — | — | (4,452 | ) | ||||||||||
Proceeds from issuance of common stock in connection with ESPP | 404 | — | — | 404 | ||||||||||||
Payment for repurchases of common stock | (70,446 | ) | — | — | (70,446 | ) | ||||||||||
Debt issuance costs | (990 | ) | — | — | (990 | ) | ||||||||||
Proceeds from stock options exercised | 1,781 | — | — | 1,781 | ||||||||||||
Dividends paid | (172,256 | ) | — | — | (172,256 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash used in financing activities | (56,959 | ) | — | (12,669 | ) | (69,628 | ) | |||||||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | — | — | (5,392 | ) | (5,392 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net (Decrease) Increase in Cash. Cash Equivalents and Restricted Cash and Cash Equivalents | (39,821 | ) | 13,407 | 19,570 | (6,844 | ) | ||||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period | 54,666 | 4,952 | 73,927 | 133,545 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period | $ | 14,845 | $ | 18,359 | $ | 93,497 | $ | 126,701 | ||||||||
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2019 | |||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Consolidated | ||||||||||||
Cash Flow from Operating Activities: | |||||||||||||||
Net cash provided by operating activities | $ | 130,455 | $ | 31,924 | $ | 54,688 | $ | 217,067 | |||||||
Cash Flow from Investing Activities: | |||||||||||||||
Insurance proceeds - damaged property | — | 10,761 | — | 10,761 | |||||||||||
Proceeds from sale of property and equipment | — | 112 | 192 | 304 | |||||||||||
Change in restricted investments | — | (4,816 | ) | — | (4,816 | ) | |||||||||
Capital expenditures | (12,002 | ) | (42,804 | ) | (604 | ) | (55,410 | ) | |||||||
Net cash used in investing activities | (12,002 | ) | (36,747 | ) | (412 | ) | (49,161 | ) | |||||||
Cash Flow from Financing Activities: | |||||||||||||||
Proceeds from long-term debt | 170,000 | — | — | 170,000 | |||||||||||
Payments on long-term debt | (213,926 | ) | — | — | (213,926 | ) | |||||||||
Payments on non-recourse debt | — | — | (326,942 | ) | (326,942 | ) | |||||||||
Proceeds from non-recourse debt | — | — | 326,127 | 326,127 | |||||||||||
Taxes paid related to net share settlements of equity awards | (4,177 | ) | — | — | (4,177 | ) | |||||||||
Proceeds from issuance of common stock in connection with ESPP | 252 | — | — | 252 | |||||||||||
Debt issuance costs | (4,656 | ) | — | (5,281 | ) | (9,937 | ) | ||||||||
Proceeds from stock options exercised | 1,077 | — | — | 1,077 | |||||||||||
Dividends paid | (116,122 | ) | — | — | (116,122 | ) | |||||||||
Net cash used in financing activities | (167,552 | ) | — | (6,096 | ) | (173,648 | ) | ||||||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | — | — | 824 | 824 | |||||||||||
Net (Decrease) Increase in Cash. Cash Equivalents and Restricted Cash and Cash Equivalents | (49,099 | ) | (4,823 | ) | 49,004 | (4,918 | ) | ||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period | 54,666 | 4,823 | 24,983 | 84,472 | |||||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period | $ | 5,567 | $ | — | $ | 73,987 | $ | 79,554 |
For the Nine Months Ended September 30, 2017 | ||||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Consolidated | |||||||||||||
Cash Flow from Operating Activities: | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash provided by (used in) operating activities | $ | 15,303 | $ | 79,088 | $ | (36,486 | ) | $ | 57,905 | |||||||
|
|
|
|
|
|
|
| |||||||||
Cash Flow from Investing Activities: | ||||||||||||||||
Acquisition of CEC, net of cash acquired | (353,555 | ) | — | — | (353,555 | ) | ||||||||||
Proceeds from sale of property and equipment | 845 | — | 11 | 856 | ||||||||||||
Insurance proceeds – damaged property | 86 | — | — | 86 | ||||||||||||
Change in restricted investments | — | (3,810 | ) | — | (3,810 | ) | ||||||||||
Capital expenditures | (34,679 | ) | (61,432 | ) | (8,019 | ) | (104,130 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Cash used in by investing activities | (387,303 | ) | (65,242 | ) | (8,008 | ) | (460,553 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash used in investing activities | ||||||||||||||||
Cash Flow from Financing Activities: | ||||||||||||||||
Proceeds from long-term debt | 1,324,865 | — | — | 1,324,865 | ||||||||||||
Payments on long-term debt | (1,093,088 | ) | — | — | (1,093,088 | ) | ||||||||||
Payments onnon-recourse debt | — | — | (68,887 | ) | (68,887 | ) | ||||||||||
Proceeds fromnon-recourse debt | — | — | 123,785 | 123,785 | ||||||||||||
Taxes paid related to net share settlements of equity awards | (4,122 | ) | — | — | (4,122 | ) | ||||||||||
Issuance of common stock under prospectus supplement | 275,867 | — | — | 275,867 | ||||||||||||
Proceeds from issuance of common stock in connection with ESPP | — | — | 382 | 382 | ||||||||||||
Debt issuance costs | (8,701 | ) | — | (769 | ) | (9,470 | ) | |||||||||
Proceeds from stock options exercised | 6,786 | — | — | 6,786 | ||||||||||||
Dividends paid | (169,152 | ) | — | — | (169,152 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash provided by financing activities | 332,455 | — | 54,511 | 386,966 | ||||||||||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | — | — | 863 | 863 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | (39,545 | ) | 13,846 | 10,880 | (14,819 | ) | ||||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period | 45,736 | 4,922 | 39,699 | 90,357 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period | $ | 6,191 | $ | 18,768 | $ | 50,579 | $ | 75,538 | ||||||||
|
|
|
|
|
|
|
|
18.
For the Six Months Ended June 30, 2018 | |||||||||||||||
The GEO Group, Inc. | Combined Subsidiary Guarantors | Combined Non-Guarantor Subsidiaries | Consolidated | ||||||||||||
Cash Flow from Operating Activities: | |||||||||||||||
Net cash provided by operating activities | $ | 118,354 | $ | 37,087 | $ | 24,812 | $ | 180,253 | |||||||
Cash Flow from Investing Activities: | |||||||||||||||
Proceeds from sale of property and equipment | — | — | 1,717 | 1,717 | |||||||||||
Proceeds from sale of assets held for sale | — | 3,797 | 3,797 | ||||||||||||
Insurance proceeds - damaged property | — | 4,036 | — | 4,036 | |||||||||||
Change in restricted investments | — | (1,490 | ) | — | (1,490 | ) | |||||||||
Capital expenditures | (68,607 | ) | (36,998 | ) | (1,459 | ) | (107,064 | ) | |||||||
Net cash used in investing activities | (68,607 | ) | (30,655 | ) | 258 | (99,004 | ) | ||||||||
Cash Flow from Financing Activities: | |||||||||||||||
Proceeds from long-term debt | 245,000 | — | — | 245,000 | |||||||||||
Payments on long-term debt | (134,000 | ) | — | — | (134,000 | ) | |||||||||
Payments on non-recourse debt | — | — | (7,490 | ) | (7,490 | ) | |||||||||
Taxes paid related to net share settlements of equity awards | (4,391 | ) | — | — | (4,391 | ) | |||||||||
Proceeds from issuance of common stock in connection with ESPP | 264 | — | — | 264 | |||||||||||
Debt issuance costs | (990 | ) | — | — | (990 | ) | |||||||||
Proceeds from stock options exercised | 1,372 | — | — | 1,372 | |||||||||||
Payments for repurchases of common stock | (70,446 | ) | — | — | (70,446 | ) | |||||||||
Dividends paid | (115,017 | ) | — | — | (115,017 | ) | |||||||||
Net cash used in financing activities | (78,208 | ) | — | (7,490 | ) | (85,698 | ) | ||||||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | — | — | (1,881 | ) | (1,881 | ) | |||||||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | (28,461 | ) | 6,432 | 15,699 | (6,330 | ) | |||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period | 54,666 | 4,952 | 73,927 | 133,545 | |||||||||||
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period | $ | 26,205 | $ | 11,384 | $ | 89,626 | $ | 127,215 |
Hurricane Michael
On October 10, 2018, Hurricane Michael impacted the Florida Panhandle, which resulted in widespread damage to the area. As a result, the Company’s managed-only Bay Correctional Facility was impacted and incurred significant property damage. As a result, inmates housed in that facility have been temporarilyre-located to other facilities. The Company is continuing to make a full assessment of the extent of the impact.
The Company maintains property and business interruption insurance, subject to certain deductibles, and is currently assessing claims under such policies; however, the timing and amount of insurance proceeds are uncertain and may not be sufficient to cover all losses. Timing differences are likely to exist between the capital expenditures made to repair or restore the property and recognition and receipt of insurance proceeds reflected in our financial statements. The Company expects that its results of operations related to the facility will be adversely impacted in the near term.
profitablysuccessfully manage such facilities and successfully integrate such facilities into our operations without substantial additional costs;
• | our ability to estimate the government’s level of utilization of public-private partnerships for secure services and the impact of any modifications or reductions by our government customers of their utilization of public-private partnerships; |
our exposure to rising general insurance costs;
• our ability to acquire, protect or maintain our intellectual property;
our youth services include residential, detention and shelter care and community-based services along with rehabilitative and educational programs;
our monitoring services provide our governmental clients with innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants; including services provided under the Intensive Supervision Appearance Program, which we refer to as ISAP, to the U.S. Immigration and Customs Enforcement, which we refer to as ICE, for the provision of services designed to improve the participation ofnon-detained aliens in the immigration court system;
Declaration Date | Record Date | Payment Date | Distribution Per Share | Aggregate Payment Amount (in millions) | ||||||||
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 | ||||||
July 10, 2017 | July 21, 2017 | July 28, 2017 | $ | 0.47 | $ | 58.3 | ||||||
October 12, 2017 | October 23, 2017 | October 30, 2017 | $ | 0.47 | $ | 58.3 | ||||||
February 5, 2018 | February 16, 2018 | February 27, 2018 | $ | 0.47 | $ | 58.3 | ||||||
April 11, 2018 | April 23, 2018 | May 3, 2018 | $ | 0.47 | $ | 57.4 | ||||||
July 10, 2018 | July 20, 2018 | July 27, 2018 | $ | 0.47 | $ | 57.2 |
Declaration Date | Record Date | Payment Date | Distribution Per Share | Aggregate Payment Amount (in millions) | |||
February 5, 2018 | February 16, 2018 | February 27, 2018 | $0.47 | $58.3 | |||
April 11, 2018 | April 23, 2018 | May 3, 2018 | $0.47 | $57.4 | |||
July 10, 2018 | July 20, 2018 | July 27, 2018 | $0.47 | $57.2 | |||
October 15, 2018 | October 26, 2018 | November 2, 2018 | $0.47 | $57.2 | |||
February 4, 2019 | February 15, 2019 | February 22, 2019 | $0.48 | $57.9 | |||
April 3, 2019 | April 15, 2019 | April 22, 2019 | $0.48 | $58.2 |
July 19, 2019.
Fiscal 2018 Developments
Stock Buyback Program
On February14, 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 is 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 nine months ended September 30, 2018, we purchased 3,117,483 shares of our common stock at a cost of $70.4 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.
Contract Awards/Terminations
On June 26, 2018, we announced that we have signed a contract with the Idaho Department of Correction for the housing, management and supervision of approximately 670 medium-custody inmates at the company-owned Eagle Pass Detention Facility in Eagle Pass, Texas and the company-owned Karnes Correctional Center in Karnes City, Texas. The contract will have a term of two years effective October 1, 2018 and is expected to generate approximately $17 million in annualized revenues.
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 Centre in Australia, we were unfortunately unsuccessful during the current competitive rebid process and we expect to transition the management contract in March of 2019. Upon transition, due to the requirements under the labor and employment laws in Australia, we may incur certain transition costs related to employee compensation and benefits. Any such costs are not expected to be material to our results of operations, financial condition or cash flows.
Effective in April 2018, our contract for the management of the 1,576-bed Allen Correctional Center in Kinder, Louisiana, terminated.
Developments
As of September 30, 2018, we
believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the ninesix months ended SeptemberJune 30, 2018,2019, 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 on Form10-K for the year ended December 31, 2017. With respect to the adoption of ASC Topic 606, “Revenue from Contracts with Customers” on January 1, 2018 refer to Note 2 – Revenue Recognition of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q for additional disclosures related to our revenue recognition policies.
.
2018
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Corrections & Detention | $ | 379,351 | 65.0 | % | $ | 365,071 | 64.3 | % | $ | 14,280 | 3.9 | % | ||||||||||||
GEO Care | 141,808 | 24.3 | % | 134,610 | 23.8 | % | 7,198 | 5.3 | % | |||||||||||||||
International Services | 62,371 | 10.7 | % | 45,641 | 8.1 | % | 16,730 | 36.7 | % | |||||||||||||||
Facility Construction & Design | — | — | % | 21,437 | 3.8 | % | (21,437 | ) | (100.0 | )% | ||||||||||||||
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|
|
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|
|
| |||||||||||||||
Total | $ | 583,530 | 100.0 | % | $ | 566,759 | 100.0 | % | $ | 16,771 | 3.0 | % | ||||||||||||
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|
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|
U.S. Corrections & Detention
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
GEO Secure Services | $ | 399,475 | 65.1 | % | $ | 368,989 | 63.2 | % | $ | 30,486 | 8.3 | % | ||||||||
GEO Care | 155,507 | 25.3 | % | 149,928 | 25.7 | % | 5,579 | 3.7 | % | |||||||||||
International Services | 54,388 | 8.9 | % | 64,592 | 11.1 | % | (10,204 | ) | (15.8 | )% | ||||||||||
Facility Construction & Design | 4,596 | 0.7 | % | — | — | % | 4,596 | 100.0 | % | |||||||||||
Total | $ | 613,966 | 100.0 | % | $ | 583,509 | 100.0 | % | $ | 30,457 | 5.2 | % |
Revenues for our Facility Construction & Design services during Third Quarter 2017 relate to the design and construction activity for our Ravenhall correctional facility contract with the Department of Justice
Operating Expenses
2018 | % of Segment Revenues | 2017 | % of Segment Revenues | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Corrections & Detention | $ | 282,332 | 74.4 | % | $ | 268,718 | 73.6 | % | $ | 13,614 | 5.1 | % | ||||||||||||
GEO Care | 94,169 | 66.4 | % | 90,949 | 67.6 | % | 3,220 | 3.5 | % | |||||||||||||||
International Services | 58,305 | 93.5 | % | 41,752 | 91.5 | % | 16,553 | 39.6 | % | |||||||||||||||
Facility Construction & Design | — | — | % | 21,715 | 101.3 | % | (21,715 | ) | (100.0 | )% | ||||||||||||||
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|
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|
| |||||||||||||||||||
Total | $ | 434,806 | 74.5 | % | $ | 423,134 | 74.7 | % | $ | 11,672 | 2.8 | % | ||||||||||||
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Operating expenses consist of those expenses incurred2018 and into 2019, we had facility construction & design services related to an expansion project at our Fulham Correctional Centre in Australia which is expected to be completed in the operation and managementthird quarter of our correctional, detention and community-based facilities.
U.S. Corrections & Detention
2020.
2019 | % of Segment Revenues | 2018 | % of Segment Revenues | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
GEO Secure Services | $ | 294,727 | 73.8 | % | $ | 272,695 | 73.9 | % | $ | 22,032 | 8.1 | % | ||||||||
GEO Care | 102,771 | 66.1 | % | 103,054 | 68.7 | % | (283 | ) | (0.3 | )% | ||||||||||
International Services | 51,074 | 93.9 | % | 62,048 | 96.1 | % | (10,974 | ) | (17.7 | )% | ||||||||||
Facility Construction & Design | 4,596 | 100.0 | % | — | — | % | 4,596 | 100.0 | % | |||||||||||
Total | $ | 453,168 | 73.8 | % | $ | 437,797 | 75.0 | % | $ | 15,371 | 3.5 | % |
These decreases were partially offset by $4.6 million related to increases in average client and participant counts under our ISAP and electronic monitoring services.
Operating expenses for our Facility Construction & Design services during Third Quarter 2017 relate to the design and construction activity for our Ravenhall correctional facility contract with the Department of Justice
2018 and into 2019, we had facility construction & design services related to an expansion project at our Fulham Correctional Centre in Australia which is expected to be completed in the third quarter of 2020.
2018 | % of Segment Revenue | 2017 | % of Segment Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Corrections & Detention | $ | 19,134 | 5.0 | % | $ | 18,802 | 5.2 | % | $ | 332 | 1.8 | % | ||||||||||||
GEO Care | 11,680 | 8.2 | % | 12,368 | 9.2 | % | (688 | ) | (5.6 | )% | ||||||||||||||
International Services | 483 | 0.8 | % | 479 | 1.0 | % | 4 | 0.8 | % | |||||||||||||||
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|
|
| |||||||||||||||||||
Total | $ | 31,297 | 5.4 | % | $ | 31,649 | 5.6 | % | $ | (352 | ) | (1.1 | )% | |||||||||||
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|
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U.S. Corrections & Detention
U.S. Corrections & Detention
2019 | % of Segment Revenue | 2018 | % of Segment Revenue | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
GEO Secure Services | $ | 19,589 | 4.9 | % | $ | 18,976 | 5.1 | % | $ | 613 | 3.2 | % | ||||||||
GEO Care | 12,369 | 8.0 | % | 11,735 | 7.8 | % | 634 | 5.4 | % | |||||||||||
International Services | 394 | 0.7 | % | 602 | 0.9 | % | (208 | ) | (34.6 | )% | ||||||||||
Total | $ | 32,352 | 5.3 | % | $ | 31,313 | 5.4 | % | $ | 1,039 | 3.3 | % |
centers.
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
General and Administrative Expenses | $ | 47,647 | 8.2 | % | $ | 49,074 | 9.0 | % | $ | (1,427 | ) | (2.9 | )% |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
General and Administrative Expenses | $ | 47,271 | 7.7 | % | $ | 47,448 | 7.4 | % | $ | (177 | ) | (0.4 | )% |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Interest Income | $ | 8,045 | 1.3 | % | $ | 8,667 | 1.5 | % | $ | (622 | ) | (7.2 | )% | |||||||
Interest Expense | $ | 38,932 | 6.3 | % | $ | 36,345 | 6.2 | % | $ | 2,587 | 7.1 | % |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Loss on Extinguishment of Debt | $ | 5,741 | 0.9% | $ | 574 | — | % | $ | 5,167 | 900.2 | % |
2019 | Effective Rate | 2018 | Effective Rate | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Provision for Income Taxes | $ | 4,532 | 10.2 | % | $ | 3,715 | 9.6 | % | $ | 817 | 22.0 | % |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Equity in Earnings of Affiliates | $ | 1,821 | 0.3 | % | $ | 2,341 | 0.4 | % | $ | (520 | ) | (22.2 | )% |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
GEO Secure Services | $ | 789,985 | 64.5% | $ | 727,670 | 64.0 | % | $ | 62,315 | 8.6 | % | |||||||||
GEO Care | 309,350 | 25.3% | 290,006 | 25.3 | % | 19,344 | 6.7 | % | ||||||||||||
International Services | 118,612 | 9.7% | 130,750 | 11.4 | % | (12,138 | ) | (9.3 | )% | |||||||||||
Facility Construction & Design | 6,686 | 0.5% | — | — | % | 6,686 | 100.0 | % | ||||||||||||
Total | $ | 1,224,633 | 100.0 | % | $ | 1,148,426 | 100.0 | % | $ | 76,207 | 6.6 | % |
2019 | % of Segment Revenues | 2018 | % of Segment Revenues | $ Change | % Change | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
GEO Secure Services | $ | 587,156 | 74.3% | $ | 543,143 | 74.6 | % | $ | 44,013 | 8.1 | % | ||||||||
GEO Care | $ | 207,177 | 67.0% | $ | 199,130 | 68.7 | % | $ | 8,047 | 4.0 | % | ||||||||
International Services | $ | 109,146 | 92.0% | $ | 122,233 | 93.5 | % | $ | (13,087 | ) | (10.7 | )% | |||||||
Facility Construction & Design | $ | 6,686 | 100.0% | $ | — | — | % | $ | 6,686 | 100.0 | % | ||||||||
Total | $ | 910,165 | 74.3% | $ | 864,506 | 75.3 | % | $ | 45,659 | 5.3 | % |
2019 | % of Segment Revenue | 2018 | % of Segment Revenue | $ Change | % Change | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
GEO Secure Services | $ | 39,452 | 5.0% | $ | 37,473 | 5.1 | % | $ | 1,979 | 5.3 | % | ||||||||
GEO Care | $ | 24,562 | 7.9% | $ | 22,376 | 7.7 | % | $ | 2,186 | 9.8 | % | ||||||||
International Services | $ | 807 | 0.7% | $ | 966 | 0.7 | % | $ | (159 | ) | (16.5 | )% | |||||||
Total | $ | 64,821 | 5.3% | $ | 60,815 | 5.4 | % | $ | 4,006 | 6.6 | % |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | ||||||||||||
(Dollars in thousands) | |||||||||||||||||
General and Administrative Expenses | $93,695 | 7.7% | $ | 89,280 | 7.8 | % | $ | 4,415 | 4.9 | % |
Non Operating Expenses
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest Income | $ | 8,428 | 1.4 | % | $ | 14,648 | 2.6 | % | $ | (6,220 | ) | (42.5 | )% | |||||||||||
Interest Expense | $ | 37,991 | 6.5 | % | $ | 38,719 | 6.8 | % | $ | (728 | ) | (1.9 | )% |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Interest Income | $ | 16,441 | 1.3% | $ | 17,766 | 1.5 | % | $ | (1,325 | ) | (7.5 | )% | |||||||
Interest Expense | $ | 79,212 | 6.5% | $ | 72,214 | 6.3 | % | $ | 6,998 | 9.7 | % |
Interest expense decreased slightly in Third Quarter 2018 compared to Third Quarter 2017 primarily due to less construction loan interest related to our correctional facility 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 $224 million. Also contributing to the decrease was the effect of Amendment No. 1the strengthening of the U.S. dollar against certain international currencies.
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Loss on Extinguishment of Debt | $ | 5,741 | 0.9% | $ | 574 | — | % | $ | 5,167 | 900.2 | % |
2018 | Effective Rate | 2017 | Effective Rate | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Income Taxes | $ | 3,723 | 9.3 | % | $ | 1,720 | 4.4 | % | $ | 2,003 | 116.5 | % |
2019 | Effective Rate | 2018 | Effective Rate | $ Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Provision for Income Taxes | $9,372 | 10.7 | % | $ | 8,470 | 11.1 | % | $ | 902 | 10.6 | % |
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Equity in Earnings of Affiliates | $ | 2,735 | 0.5 | % | $ | 1,342 | 0.2 | % | $ | 1,393 | 103.8 | % |
2019 | % of Revenue | 2018 | % of Revenue | $ Change | % Change | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Equity in Earnings of Affiliates | $ | 4,417 | 0.4% | $ | 4,336 | 0.4 | % | $ | 81 | 1.9 | % |
Comparison of Nine Months 2018 and Nine Months 2017
Revenues
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Corrections & Detention | $ | 1,107,016 | 63.9 | % | $ | 1,073,840 | 63.4 | % | $ | 33,176 | 3.1 | % | ||||||||||||
GEO Care | 431,819 | 24.9 | % | 377,740 | 22.3 | % | 54,079 | 14.3 | % | |||||||||||||||
International Services | 193,121 | 11.2 | % | 130,261 | 7.7 | % | 62,860 | 48.3 | % | |||||||||||||||
Facility Construction & Design | — | — | % | 112,602 | 6.6 | % | (112,602 | ) | (100.0 | )% | ||||||||||||||
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| |||||||||||||||
Total | $ | 1,731,956 | 100.0 | % | $ | 1,694,443 | 100.0 | % | $ | 37,513 | 2.2 | % | ||||||||||||
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U.S. Corrections & Detention
Revenues increased in Nine Months 2018 compared to Nine Months 2017 by $33.2 million primarily due to aggregate net increases of $46.0 million due to our acquisition of CEC on April 5, 2017 and net increases in population with our federal clients, transportation services and/or rates. We also had increases of $1.6 million resulting from the activation of our contracts at our company-owned Eagle Pass Detention Facility in Eagle Pass, Texas and our company-owned Montgomery Processing Center in Conroe, Texas. These increases were partially offset by net decreases of $14.4 million at certain of our facilities primarily due to contract terminations.
The number of compensated mandays in U.S. Corrections & Detention facilities was approximately 17.1 million in Nine Months 2018 and 16.6 million in Nine Months 2017. We experienced an aggregate net increase of approximately 500,000 mandays primarily as a result of our acquisition of CEC, activation of new contracts and net increases in population with our federal clients 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 95.1% and 93.3% of capacity in the Nine Months 2018 and Nine Months 2017, respectively, excluding idle facilities.
GEO Care
Revenues increased in Nine Months 2018 compared to Nine Months 2017 primarily due to aggregate increases of $40.2 million from our acquisition of CEC on April 5, 2017. We also experienced increases of $21.0 million primarily due to increases in average client and participant counts under our ISAP and electronic monitoring services. These increases were partially offset by $7.1 million related to net decreases in census levels at certain of our community-based and reentry centers as well as contract terminations/closures of underutilized facilities.
International Services
Revenues for International Services in Nine Months 2018 compared to Nine Months 2017 increased by $62.9 million. We experienced a net increase of $64.0 million in performance which was primarily attributable to our Australian subsidiary’s Ravenhall correctional facility project which began operations during the fourth quarter of 2017. Additionally, we had a decrease due to foreign exchange rate fluctuations of $1.1 million resulting from the strengthening of the U.S. dollar against certain international currencies.
Facility Construction & Design
Revenues for our Facility Construction & Design services during Nine Months 2017 relate to the design and construction activity for our Ravenhall correctional facility contract with the Department of Justice in the State of Victoria, Australia which was completed during the fourth quarter of 2017.
Operating Expenses
2018 | % of Segment Revenues | 2017 | % of Segment Revenues | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Corrections & Detention | $ | 825,475 | 74.6 | % | $ | 792,727 | 73.8 | % | $ | 32,748 | 4.1 | % | ||||||||||||
GEO Care | 293,299 | 67.9 | % | 248,934 | 65.9 | % | 44,365 | 17.8 | % | |||||||||||||||
International Services | 180,538 | 93.5 | % | 120,403 | 92.4 | % | 60,135 | 49.9 | % | |||||||||||||||
Facility Construction & Design | — | — | % | 114,222 | 101.4 | % | (114,222 | ) | (100.0 | )% | ||||||||||||||
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| |||||||||||||
Total | $ | 1,299,312 | 75.0 | % | $ | 1,276,286 | 75.3 | % | $ | 23,026 | 1.8 | % | ||||||||||||
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Operating expenses consist of those expenses incurred in the operation and management of our correctional, detention and community-based facilities.
U.S. Corrections & Detention
Operating expenses for U.S. Corrections & Detention increased by $32.7 million in Nine Months 2018 compared to Nine Months 2017. The increase was primarily due to our acquisition of CEC on April 5, 2017 and aggregate net increases in population, transportation services and the variable costs associated with those services of $41.9 million. We also experienced increases of $5.3 million resulting from the activation of our contracts at our company-owned Eagle Pass Detention Facility in Eagle Pass, Texas and our company-owned Montgomery Processing Center in Conroe, Texas.These increases were partially offset by decreases of $14.5 million at certain of our facilities due to contract terminations.
GEO Care
Operating expenses for GEO Care increased by $44.4 million during Nine Months 2018 from Nine Months 2017 primarily due to our acquisition of CEC on April 5, 2017 resulting in an increase to operating expenses of $45.9 million. We also experienced net increases of $8.3 million 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. These increases were partially offset by $9.8 million of net decreases in census levels at certain of our community-based and reentry centers and the associated variable costs as well as contract terminations/closures of underutilized facilities. Operating expenses as a percentage of revenues have increased during Nine Months 2018 which is primarily related to our acquisition of CEC.
International Services
Operating expenses for International Services in Nine Months 2018 compared to Nine Months 2017 increased by $60.1 million. We experienced a net increase of $61.0 million primarily attributable to our Australian subsidiary’s Ravenhall correctional facility project which began operations during the fourth quarter of 2017. Additionally, we had a decrease due to foreign exchange rate fluctuations of $0.9 million resulting from the strengthening of the U.S. dollar against certain international currencies.
Facility Construction & Design
Operating expenses for our Facility Construction & Design services during Nine Months 2017 relate to the design and construction activity for our Ravenhall correctional facility contract with the Department of Justice in the State of Victoria, Australia which was completed during the fourth quarter of 2017.
Depreciation and Amortization
2018 | % of Segment Revenue | 2017 | % of Segment Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Corrections & Detention | $ | 57,155 | 5.2 | % | $ | 56,275 | 5.2 | % | $ | 880 | 1.6 | % | ||||||||||||
GEO Care | 35,725 | 8.3 | % | 34,744 | 9.2 | % | 981 | 2.8 | % | |||||||||||||||
International Services | 1,656 | 0.9 | % | 1,445 | 1.1 | % | 211 | 14.6 | % | |||||||||||||||
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| |||||||||||||||
Total | $ | 94,536 | 5.5 | % | $ | 92,464 | 5.5 | % | $ | 2,072 | 2.2 | % | ||||||||||||
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U.S. Corrections & Detention
U.S. Corrections & Detention depreciation and amortization expense increased slightly in Nine Months 2018 compared to Nine Months 2017 primarily due to renovations made at several of our facilities and new facilities and intangible assets acquired in our acquisition of CEC on April 5, 2017.
GEO Care
GEO Care depreciation and amortization expense increased slightly in Nine Months 2018 compared to Nine Months 2017 primarily due to new facilities and intangible assets acquired in our acquisition of CEC on April 5, 2017.
International Services
Depreciation and amortization expense increased in Nine Months 2018 compared to Nine Months 2017 primarily as a result of additions in connection with the activationramp up of our Ravenhall facilityGEOAmey's court custody and escort services contract in fourth quarter 2017.
Other Unallocated Operating Expenses
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
General and Administrative Expenses | $ | 136,927 | 7.9 | % | $ | 143,866 | 8.5 | % | $ | (6,939 | ) | (4.8 | )% |
General and administrative expenses comprise substantially all of our other unallocated operating expensesScotland which primarily includes corporate management salaries and benefits, professional fees and other administrative expenses. General and administrative expenses decreased in Nine Months 2018 compared to Nine Months 2017. The decrease is primarily due to merger and acquisition expenses of $17.9 million incurred in Nine Months 2017 related to our acquisition of CEC. This decrease was partially offset by increases in legal related expenses of $4.5 million incurred in Nine Months 2018, highernon-cash stock-based compensation expense of $1.9 million and normal personnel and compensation adjustments, professional, consulting, business development and other administrative expensesbegan in the aggregatefirst quarter of $4.6 million.
Non Operating Expenses
Interest Income and Interest Expense
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest Income | $ | 26,194 | 1.5 | % | $ | 38,971 | 2.3 | % | $ | (12,777 | ) | (32.8 | )% | |||||||||||
Interest Expense | $ | 110,779 | 6.4 | % | $ | 109,702 | 6.5 | % | $ | 1,077 | 1.0 | % |
Interest income decreased in the Nine Months 2018 compared to Nine Months 2017 primarily due to a lower balance on our contract receivable related to our correctional facility 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 $224 million.
Interest expense increased in Nine Months 2018 compared to Nine Months 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 correctional 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 $224 million. Also partially offsetting the increase was the effect of Amendment No. 1 to Third Amended and Restated Credit Agreement executed on April 30, 2018 which reduced the interest rate on the term loans from LIBOR plus 2.5% to LIBOR plus 2.00%. Refer to Note12- Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q for further discussion.
Income Tax Provision
2018 | Effective Rate | 2017 | Effective Rate | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Income Taxes | $ | 12,193 | 10.5 | % | $ | 5,590 | 5.0 | % | $ | 6,603 | 118.1 | % |
The provision for income taxes during Nine Months 2018 increased compared to Nine Months 2017 along with the effective tax rate which is primarily due to a change in the composition of our income. In Nine Months 2018 more income was earned by our taxable REIT subsidiaries, which are fully subject to tax. In addition, in Nine Months 2017, there was a tax benefit on the merger and acquisition expenses of $17.9 million related to our acquisition of CEC which had the effect of lowering total taxes paid and favorably impacting the effective tax rate. Furthermore, related to our stock compensation that vested during Nine Months 2018, there was a $1.1 million discrete tax expense, whereas in the Nine Months 2017 there was a $1.5 million discrete tax benefit. These discrete items are the result of the adoption of ASUNo. 2016-09, Compensation – Stock Compensation (Topic 718) in 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 10% to 12% exclusive of any discrete items.
Equity in Earnings of Affiliates, net of Income Tax Provision
2018 | % of Revenue | 2017 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Equity in Earnings of Affiliates | $ | 7,071 | 0.4 | % | $ | 4,255 | 0.3 | % | $ | 2,816 | 66.2 | % |
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 Nine Months 2018 compared to Nine Months 2017 increased primarily due to interest income received related to favorable tax settlements at SACS.
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 million, based on exchange rates as of September 30, 2018, for GEOAmey’s operations. As of September 30, 2018, $1.7 million was outstanding to each of the joint venture partners. In October 2018, the note receivable to each joint venture partner was paid off in full.
The Credit Agreement evidences a credit facility (the “Credit Facility”) consisting of a $792.0 million term loan (the “Term Loan”) bearing interest at LIBOR plus 2.00% (with a LIBOR floor of 0.75%), and a $900.0 million Revolver initially bearing interest at LIBOR plus 2.25% (with no LIBOR floor) together with AUD275 million under the Australian LC Facility.
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.
GEO Australasia Holdings Pty Ltd, GEO Australasia Finance Holdings Pty Ltd as trustee for the GEO Australasia Finance Holding Trust, and together with GEO Australasia Holdings, collectively (“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, we 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 $72.2 million, based on exchange rates in effect as of September 30, 2018 (collectively, the “Bank Guarantee Facility”). The Bank Guarantee Facility allows us to provide letters of credit to assure performance of certain obligations of our wholly owned subsidiary relating to our correctional facility 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 September 30, 2018, there was AUD100 million, or $72.2 million based on exchange rates at September 30, 2018, in letters of credit issued under the Bank Guarantee Facility.
As of September 30, 2018,2019, we had approximately $788$782 million in aggregate borrowings outstanding, net of discount, under the Term Loanour term loan and approximately $456$452 million in borrowings under the Revolver,our revolver, and approximately $70$62 million in letters of credit which left approximately $374$386 million in additional borrowing capacity under the Revolver.our revolver. Refer to Note 12—11 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q for further discussion.
On April 18, 2016, we completed an offering of $350.0 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 to Note 12 – Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-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 to Note 12 – Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q for further discussion.
refinancing transaction and anticipate completion of the refinancing transaction in the first quarter of 2019. AsOn May 22, 2019, we currently do not yet have a financing agreement in place, the balance has been presented as current in the accompanying consolidated balance sheet as of September 30, 2018 included in Part I, Item 1 of this Quarterly Report on Form10-Q. In accordance with the terms of the Construction Facility, upon completion and commercial acceptance of the correctional facility in fourth quarter 2017, in accordance with the contract, the State made a lump sum paymentcompleted an offering of AUD 310461.6 million, or approximately $224$324.4 million, based on exchange rates as of SeptemberJune 30, 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 September 30, 2018, approximately $328 million was outstanding under the Construction Facility. Refer to Note 12 – Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q for further discussion.
On October 3, 2013, we completed an offering of $250.0 million2019, aggregate principal amount of 5.875% Seniornon-recourse senior secured notes due 2042 ("the Non-Recourse Notes"). The amortizing Non-Recourse Notes due 2022.were issued by Ravenhall Finance Co Pty Limited in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The 5.875% SeniorNon-Recourse Notes due 2022 will mature on January 15, 2022 and havewere issued with 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, 2014.4.23% with a maturity date of March 31, 2042. The net proceeds received from the 5.875% Senior Notes due 2022this offering were used together with cash on hand, to fundrefinance the repurchase, redemption or other discharge of our 7.75% senior notes due 2017outstanding Construction Facility and to pay all related fees, costs and expenses associated with the transaction. As a result of the transaction, we incurred a $4.5 million loss on extinguishment of debt related to swap termination fees and expenses. Refer to Note 12 – Debtunamortized deferred costs associated with the Construction Facility. Additionally, loan costs of approximately $7.5 million were incurred and capitalized in connection with the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-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 to Note 12 – Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q for further discussion.
offering.
2018.
On February 14, 2018, we announced that our Board
Automatic Shelf Registrationthis Quarterly Report on FormS-3
On October 20, 2017, we filed an automatic shelf registration statement 10-Q
further information.
June 30, 2018.
Additionally, cash provided by operating activities for the ninesix months ended SeptemberJune 30, 20172018 was negatively impacted by an increase in changes in contract receivable of $163.1 million. This increase relates to costs incurred and estimated earnings in excess of billings related to our correctional facilityprison project in Ravenhall, Australia. The contract receivableAustralia of $4.9 million which was expected to grow as construction services were performed. In accordance witha result of the timing of interest accruals and payments made towards the contract the project would not be billed out until completion and commercial acceptance of the facility by the State. The facility was completed and accepted by the State during the fourth quarter of 2017.
receivable.
performance.
adjustments to FFO.
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.
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||
Net income attributable to The GEO Group, Inc. | $ | 39,289 | $ | 38,489 | $ | 111,697 | $ | 109,884 | ||||||||
Add (Subtract): | ||||||||||||||||
Real estate related depreciation and amortization | 17,634 | 16,782 | 52,531 | 48,718 | ||||||||||||
Gain (loss) on sale of real estate assets * | 2,209 | — | 2,701 | (261 | ) | |||||||||||
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NAREIT Defined FFO | $ | 59,132 | $ | 55,271 | $ | 166,929 | $ | 158,341 | ||||||||
Add (Subtract): | ||||||||||||||||
Net Tax Cuts and Jobs Impact | — | — | 304 | — | ||||||||||||
Start-up expenses,pre-tax | 3,728 | — | 3,826 | — | ||||||||||||
Legal related expenses,pre-tax | — | — | 4,500 | — | ||||||||||||
CEC escrow releases,pre-tax | — | — | (2,273 | ) | — | |||||||||||
M&A related expenses,pre-tax | — | 4,974 | — | 17,930 | ||||||||||||
Loss on extinguishment of debt | — | — | 574 | — | ||||||||||||
Tax effect of adjustments to Funds From Operations ** | 74 | (1,430 | ) | (639 | ) | (3,953 | ) | |||||||||
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Normalized Funds from Operations | $ | 62,934 | $ | 58,815 | $ | 173,221 | $ | 172,318 | ||||||||
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Add (Subtract): | ||||||||||||||||
Non-real estate related depreciation and amortization | 13,663 | 14,867 | 42,005 | 43,746 | ||||||||||||
Consolidated maintenance capital expenditures | (6,162 | ) | (5,822 | ) | (17,561 | ) | (17,179 | ) | ||||||||
Stock-based compensation expense | 5,564 | 4,859 | 16,351 | 14,852 | ||||||||||||
Amortization of debt issuance costs, discount and/or premium and othernon-cash interest | 1,868 | 4,246 | 5,860 | 11,922 | ||||||||||||
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Adjusted Funds from Operations | $ | 77,867 | $ | 76,965 | $ | 219,876 | $ | 225,659 | ||||||||
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Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Net income attributable to The GEO Group, Inc. | $ | 41,914 | $ | 37,421 | $ | 82,619 | $ | 72,408 | |||||||
Add (Subtract): | |||||||||||||||
Real estate related depreciation and amortization | 17,937 | 17,509 | 36,039 | 34,897 | |||||||||||
Loss on real estate assets | — | 590 | 1,497 | 492 | |||||||||||
NAREIT Defined FFO | $ | 59,851 | $ | 55,520 | $ | 120,155 | $ | 107,797 | |||||||
Add (Subtract): | |||||||||||||||
Net Tax Cuts and Jobs Act Impact | — | — | — | 304 | |||||||||||
Start-up expenses, pre-tax | 1,874 | 98 | 1,874 | 98 | |||||||||||
Legal related expenses, pre-tax | — | 4,500 | — | 4,500 | |||||||||||
Escrow releases, pre-tax | — | (2,273 | ) | — | (2,273 | ) | |||||||||
Loss on extinguishment of debt, pre-tax | 5,741 | 574 | 5,741 | 574 | |||||||||||
Tax effect of adjustments to Funds From Operations * | (853 | ) | (713 | ) | (899 | ) | (713 | ) | |||||||
Normalized Funds from Operations | $ | 66,613 | $ | 57,706 | $ | 126,871 | $ | 110,287 | |||||||
Add (Subtract): | |||||||||||||||
Non-real estate related depreciation and amortization | 14,415 | 13,804 | 28,782 | 28,342 | |||||||||||
Consolidated maintenance capital expenditures | (5,515 | ) | (6,076 | ) | (9,149 | ) | (11,399 | ) | |||||||
Stock-based compensation expense | 5,454 | 4,960 | 12,180 | 10,787 | |||||||||||
Amortization of debt issuance costs, discount and/or premium and other non-cash interest | 2,460 | 1,855 | 5,023 | 3,992 | |||||||||||
Adjusted Funds from Operations | $ | 83,427 | $ | 72,249 | $ | 163,707 | $ | 142,009 |
With respect to our reentry services, electronic monitoring services, and youthcommunity-based services business conducted through our GEO Care business segment, we are currently pursuing a number of business development opportunities. RelativeRelated 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.
As of September 30, 2018, we
$1,244$1,234 million and approximately $70$62 million in outstanding letters of credit, as of SeptemberJune 30, 2018,2019, for every one percent increase in the average interest rate applicable to the Credit Facility, our total annual interest expense would increase by approximately $12 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 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.SeptemberJune 30, 2018,2019, every 10 percent change in historical currency rates would have approximately a $4.6$5.2 million effect on our financial position and approximately a $1$0.8 million impact on our results of operations during the ninesix months ended SeptemberJune 30, 2018.2019.
Refer to Note 2 - Leases of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional disclosures required under the new standard.
13 –12 - Commitments, Contingencies and Other in the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q.
20172018 (the “2018 Form 10-K”) includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future prospects. There have been noSet forth below is a discussion of the material changes to our existing risk factors.factors previously disclosed in the 2018 Form 10-K as modified by the Quarterly Report of Form 10-Q for the quarter ended March 31, 2019 (the "2019 Q1 Form 10-Q"). The information below updates two existing risk factors, and should be read in conjunction with, the risk factors in our 2018 Form 10-K and the 2019 Q1 Form 10-Q. We encourage you to read these risk factors in their entirety.
Period July 1, 2018 – July 31, 2018 August 1, 2018 – August 31, 2018 September 1, 2018 – September 30, 2018 Total Total Number of
Shares Purchased (1) Average Price
Paid per Share Total Number of
Shares Purchased
as Part of Publicly
Announced
Plans or Programs Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under
the Plans or Programs
(in millions) (2) 1,213 $ 25.52 — $ 129.6 1,189 $ 25.17 — $ 129.6 — $ — — $ 129.6 2,402 — (1)The Company withheld 2,402 shares through net share settlements to satisfy minimum statutory tax withholding requirements upon vesting of shares of restricted stock held by employees. These purchases were not made as part of a publicly announced plan or program.(2)On February 14, 2018, we announced that our Board of Directors authorized a stock buyback program authorizing us to repurchase up to $200.0 million of our shares of common stock. The program is effective through October 20, 2020. There were no shares of our common stock repurchased during the three months ended September 30, 2018.
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (2) | ||||||||||
April 1, 2019 - April 30, 2019 | — | $ | — | — | $ | 104.8 | ||||||||
May 1, 2019 - May 31, 2019 | — | $ | — | — | $ | 104.8 | ||||||||
June 1, 2019 - June 30, 2019 | 229 | $ | 23.69 | — | $ | 104.8 | ||||||||
Total | 229 | — |
3.1 10.1 3.2 Amendment to the Second Amended and Restated Bylaws of The GEO Group, Inc., effective September 10, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s report on Form8-K filed on September 13, 2018).31.1 31.2 32.1 32.2 101.INS XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
THE GEO GROUP, INC. | ||||||
Date: | August 2, 2019 | /s/ Brian R. Evans | ||||
Brian R. Evans | ||||||
Senior Vice President & Chief Financial Officer | ||||||
(duly authorized officer and principal financial officer) |
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