þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
Florida | 65-0043078 | |
(State or Other Jurisdiction of | (IRS Employer Identification No.) | |
Incorporation or Organization) | ||
One Park Place, 621 NW 53rd Street, Suite 700, | ||
Boca Raton, Florida | 33487 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company o |
2
Thirteen Weeks Ended | ||||||||
April 3, 2011 | April 4, 2010 | |||||||
Revenues |
$ | 391,766 | $ | 287,542 | ||||
Operating expenses |
299,286 | 226,332 | ||||||
Depreciation and amortization |
18,802 | 9,238 | ||||||
General and administrative expenses |
32,788 | 17,448 | ||||||
Operating income |
40,890 | 34,524 | ||||||
Interest income |
1,569 | 1,229 | ||||||
Interest expense |
(16,961 | ) | (7,814 | ) | ||||
Income before income taxes and equity in earnings of affiliate |
25,498 | 27,939 | ||||||
Provision for income taxes |
9,780 | 10,821 | ||||||
Equity in earnings of affiliate, net of income tax provision of $1,024 and $786 |
662 | 590 | ||||||
Net income |
16,380 | 17,708 | ||||||
Net (income) loss attributable to noncontrolling interests |
410 | (36 | ) | |||||
Net income attributable to The GEO Group, Inc. |
$ | 16,790 | $ | 17,672 | ||||
Weighted-average common shares outstanding: |
||||||||
Basic |
64,291 | 50,711 | ||||||
Diluted |
64,731 | 51,640 | ||||||
Income per Common Share Attributable to The GEO Group, Inc. Basic |
$ | 0.26 | $ | 0.35 | ||||
Income per Common Share Attributable to The GEO Group, Inc. Diluted |
$ | 0.26 | $ | 0.34 | ||||
Comprehensive income: |
||||||||
Net income |
$ | 16,380 | $ | 17,708 | ||||
Total other comprehensive income, net of tax |
305 | 184 | ||||||
Total comprehensive income |
16,685 | 17,892 | ||||||
Comprehensive (income) loss attributable to noncontrolling interests |
417 | (55 | ) | |||||
Comprehensive income attributable to The GEO Group, Inc. |
$ | 17,102 | $ | 17,837 | ||||
3
April 3, 2011 | January 2, 2011 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 85,894 | $ | 39,664 | ||||
Restricted cash and investments (including VIEs1 of $30,608 and $34,049, respectively) |
37,593 | 41,150 | ||||||
Accounts receivable, less allowance for doubtful accounts of $1,605 and $1,308 |
278,654 | 275,778 | ||||||
Deferred income tax assets, net |
47,983 | 32,126 | ||||||
Prepaid expenses and other current assets |
31,897 | 36,377 | ||||||
Total current assets |
482,021 | 425,095 | ||||||
Restricted Cash and Investments (including VIEs of $30,540 and $33,266, respectively) |
49,974 | 49,492 | ||||||
Property and Equipment, Net (including VIEs of $166,073 and $167,209, respectively) |
1,568,517 | 1,511,292 | ||||||
Assets Held for Sale |
10,269 | 9,970 | ||||||
Direct Finance Lease Receivable |
36,758 | 37,544 | ||||||
Deferred Income Tax Assets, Net |
936 | 936 | ||||||
Goodwill |
527,118 | 244,009 | ||||||
Intangible Assets, Net |
210,598 | 87,813 | ||||||
Other Non-Current Assets |
69,944 | 56,648 | ||||||
Total Assets |
$ | 2,956,135 | $ | 2,422,799 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 80,158 | $ | 73,880 | ||||
Accrued payroll and related taxes |
48,834 | 33,361 | ||||||
Accrued expenses |
117,446 | 120,670 | ||||||
Current portion of capital lease obligations, long-term debt and non-recourse debt (including
VIEs of $19,570 and $19,365, respectively) |
50,047 | 41,574 | ||||||
Total current liabilities |
296,485 | 269,485 | ||||||
Deferred Income Tax Liabilities |
107,370 | 63,546 | ||||||
Other Non-Current Liabilities |
61,905 | 46,862 | ||||||
Capital Lease Obligations |
13,888 | 13,686 | ||||||
Long-Term Debt |
1,236,241 | 798,336 | ||||||
Non-Recourse Debt (including VIEs of $126,320 and $132,078, respectively) |
184,867 | 191,394 | ||||||
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, 90,000,000 shares authorized, 84,948,682 and 84,506,772 issued
and 64,874,369 and 64,432,459 outstanding, respectively |
849 | 845 | ||||||
Additional paid-in capital |
721,701 | 718,489 | ||||||
Retained earnings |
445,335 | 428,545 | ||||||
Accumulated other comprehensive income |
10,383 | 10,071 | ||||||
Treasury stock 20,074,313 shares |
(139,049 | ) | (139,049 | ) | ||||
Total shareholders equity attributable to The GEO Group, Inc. |
1,039,219 | 1,018,901 | ||||||
Noncontrolling interests |
16,160 | 20,589 | ||||||
Total shareholders equity |
1,055,379 | 1,039,490 | ||||||
Total Liabilities and Shareholders Equity |
$ | 2,956,135 | $ | 2,422,799 | ||||
1 | Variable interest entities or VIEs |
4
Thirteen Weeks Ended | ||||||||
April 3, 2011 | April 4, 2010 | |||||||
Cash Flow from Operating Activities: |
||||||||
Net Income |
$ | 16,380 | $ | 17,708 | ||||
Net (income) loss attributable to noncontrolling interests |
410 | (36 | ) | |||||
Net income attributable to The GEO Group, Inc. |
16,790 | 17,672 | ||||||
Adjustments to reconcile net income attributable to The GEO Group,
Inc. to net cash provided by operating activities: |
||||||||
Depreciation and amortization expense |
18,802 | 9,238 | ||||||
Amortization of debt issuance costs and discount |
226 | 1,272 | ||||||
Restricted stock expense |
738 | 816 | ||||||
Stock option plan expense |
1,323 | 376 | ||||||
Provision for doubtful accounts |
407 | | ||||||
Equity in earnings of affiliates, net of tax |
(662 | ) | (590 | ) | ||||
Income tax benefit of equity compensation |
(172 | ) | (112 | ) | ||||
Loss on sale of property and equipment |
132 | | ||||||
Dividends received from unconsolidated joint venture |
5,402 | 3,909 | ||||||
Changes in assets and liabilities, net of acquisition: |
||||||||
Changes in accounts receivable, prepaid expenses and other assets |
29,142 | 21,465 | ||||||
Changes in accounts payable, accrued expenses and other liabilities |
(3,051 | ) | 10,688 | |||||
Net cash provided by operating activities |
69,077 | 64,734 | ||||||
Cash Flow from Investing Activities: |
||||||||
Acquisition, cash consideration, net of cash acquired |
(409,607 | ) | | |||||
Just Care purchase price adjustment |
| (41 | ) | |||||
Proceeds from sale of property and equipment |
250 | 100 | ||||||
Change in restricted cash |
3,199 | (2,257 | ) | |||||
Capital expenditures |
(38,696 | ) | (15,737 | ) | ||||
Net cash used in investing activities |
(444,854 | ) | (17,935 | ) | ||||
Cash Flow from Financing Activities: |
||||||||
Payments on long-term debt |
(21,666 | ) | (12,799 | ) | ||||
Proceeds from long-term debt |
461,000 | 15,000 | ||||||
Distribution to MCF partners |
(4,012 | ) | | |||||
Payments for purchase of treasury shares |
| (53,845 | ) | |||||
Proceeds from the exercise of stock options |
983 | 1,138 | ||||||
Income tax benefit of equity compensation |
172 | 112 | ||||||
Debt issuance costs |
(9,277 | ) | | |||||
Net cash provided by (used in) financing activities |
427,200 | (50,394 | ) | |||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
(5,193 | ) | 15 | |||||
Net Increase in Cash and Cash Equivalents |
46,230 | (3,580 | ) | |||||
Cash and Cash Equivalents, beginning of period |
39,664 | 33,856 | ||||||
Cash and Cash Equivalents, end of period |
$ | 85,894 | $ | 30,276 | ||||
Supplemental Disclosures: |
||||||||
Non-cash Investing and Financing activities: |
||||||||
Capital expenditures in accounts payable and accrued expenses |
$ | 21,834 | $ | 8,412 | ||||
5
6
7
Preliminary | ||||
Purchase Price | ||||
Allocation | ||||
Accounts receivable |
$ | 18,321 | ||
Prepaid and other current assets |
3,783 | |||
Deferred income tax assets |
15,970 | |||
Property and equipment |
22,359 | |||
Intangible assets |
126,900 | |||
Other long-term assets |
8,884 | |||
Total assets acquired |
196,217 | |||
Accounts payable |
(3,977 | ) | ||
Accrued expenses |
(8,461 | ) | ||
Deferred income tax liabilities |
(43,824 | ) | ||
Long-term debt |
(2,014 | ) | ||
Other long-term liabilities |
(11,431 | ) | ||
Total liabilities assumed |
(69,707 | ) | ||
Total identifiable net assets |
126,510 | |||
Goodwill |
283,097 | |||
Total cash consideration |
$ | 409,607 | ||
8
Acquisition Date | Adjusted Acquisition | |||||||||||
Estimated Fair Value as of | Measurement Period | Date Estimated Fair | ||||||||||
January 2, 2011 | Adjustments | Value as of April 3, 2011 | ||||||||||
Accounts receivable |
$ | 55,142 | 294 | $ | 55,436 | |||||||
Prepaid and other current assets |
13,314 | (333 | ) | 12,981 | ||||||||
Deferred income tax assets |
21,273 | | 21,273 | |||||||||
Restricted assets |
44,096 | | 44,096 | |||||||||
Property and equipment |
462,771 | | 462,771 | |||||||||
Intangible assets |
75,800 | | 75,800 | |||||||||
Out of market lease assets |
472 | | 472 | |||||||||
Other long-term assets |
7,510 | | 7,510 | |||||||||
Total assets acquired |
680,378 | (39 | ) | 680,339 | ||||||||
Accounts payable and accrued
expenses |
(56,918 | ) | 977 | (55,941 | ) | |||||||
Fair value of non-recourse debt |
(120,943 | ) | | (120,943 | ) | |||||||
Out of market lease liabilities |
(24,071 | ) | | (24,071 | ) | |||||||
Deferred income tax liabilities |
(42,771 | ) | | (42,771 | ) | |||||||
Other long-term liabilities |
(1,368 | ) | | (1,368 | ) | |||||||
Total liabilities assumed |
(246,071 | ) | 977 | (245,094 | ) | |||||||
Total identifiable net assets |
434,307 | 938 | 435,245 | |||||||||
Goodwill |
204,724 | (938 | ) | 203,786 | ||||||||
Fair value of Cornells net assets |
639,031 | | 639,031 | |||||||||
Noncontrolling interest |
(20,700 | ) | | (20,700 | ) | |||||||
Total consideration for Cornell,
net of cash acquired |
$ | 618,331 | $ | | $ | 618,331 | ||||||
Thirteen Weeks Ended | ||||||||
April 3 , 2011 | April 4 , 2010 | |||||||
Pro forma revenues |
$ | 405,357 | $ | 412,991 | ||||
Pro forma net income attributable to The GEO Group, Inc. shareholders |
$ | 20,061 | $ | 20,103 |
9
Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||||
Common shares | Paid-In | Retained | Comprehensive | Treasury shares | Noncontrolling | Shareholders | ||||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Income (Loss) | Shares | Amount | Interests | Equity | ||||||||||||||||||||||||||||
Balance January 2, 2011 |
64,432 | $ | 845 | $ | 718,489 | $ | 428,545 | $ | 10,071 | 20,074 | $ | (139,049 | ) | $ | 20,589 | $ | 1,039,490 | |||||||||||||||||||
Stock option and
restricted stock award
transactions |
442 | 4 | 979 | 983 | ||||||||||||||||||||||||||||||||
Tax benefit related to
equity compensation |
172 | 172 | ||||||||||||||||||||||||||||||||||
Stock based
compensation expense |
2,061 | 2,061 | ||||||||||||||||||||||||||||||||||
Distribution to
noncontrolling interest |
(4,012 | ) | (4,012 | ) | ||||||||||||||||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||||||||||||||
Net income (loss): |
16,790 | (410 | ) | 16,380 | ||||||||||||||||||||||||||||||||
Change in foreign
currency translation,
net |
480 | (7 | ) | 473 | ||||||||||||||||||||||||||||||||
Pension liability, net |
9 | 9 | ||||||||||||||||||||||||||||||||||
Unrealized
loss on
derivative
instruments, net |
(177 | ) | (177 | ) | ||||||||||||||||||||||||||||||||
Total comprehensive
income (loss) |
16,790 | 312 | (417 | ) | 16,685 | |||||||||||||||||||||||||||||||
Balance April 3, 2011 |
64,874 | $ | 849 | $ | 721,701 | $ | 445,335 | $ | 10,383 | 20,074 | $ | (139,049 | ) | $ | 16,160 | $ | 1,055,379 | |||||||||||||||||||
10
April 3, 2011 | ||||||||||||||||
Wtd. Avg. | Wtd. Avg. | Aggregate | ||||||||||||||
Exercise | Remaining | Intrinsic | ||||||||||||||
Fiscal Year | Shares | Price | Contractual Term | Value | ||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Options outstanding at January 2, 2011 |
1,401 | $ | 15.01 | 5.84 | $ | 13,517 | ||||||||||
Options granted |
503 | 24.61 | ||||||||||||||
Options exercised |
(72 | ) | 13.67 | |||||||||||||
Options forfeited/canceled/expired |
(11 | ) | 22.17 | |||||||||||||
Options outstanding at April 3, 2011 |
1,821 | 17.67 | 6.76 | $ | 15,531 | |||||||||||
Options exercisable at April 3, 2011 |
1,134 | 14.64 | 5.25 | $ | 13,107 | |||||||||||
Wtd. Avg. | ||||||||
Grant Date | ||||||||
Shares | Fair Value | |||||||
Restricted stock outstanding at January 2, 2011 |
160,530 | $ | 21.12 | |||||
Granted |
370,010 | 24.59 | ||||||
Vested |
| |||||||
Forfeited/canceled |
| |||||||
Restricted stock outstanding at April 3, 2011 |
530,540 | $ | 23.54 |
11
Thirteen Weeks Ended | ||||||||
April 3, 2011 | April 4, 2010 | |||||||
Net income |
$ | 16,380 | $ | 17,708 | ||||
Net (income) loss attributable to noncontrolling interests |
410 | (36 | ) | |||||
Income attributable to The GEO Group, Inc. |
$ | 16,790 | $ | 17,672 | ||||
Basic earnings per share attributable to The GEO Group, Inc.: |
||||||||
Weighted average shares outstanding |
64,291 | 50,711 | ||||||
Per share amount |
$ | 0.26 | $ | 0.35 | ||||
Diluted earnings per share attributable to The GEO Group, Inc.: |
||||||||
Weighted average shares outstanding |
64,291 | 50,711 | ||||||
Effect of dilutive securities: |
||||||||
Stock options and restricted stock |
440 | 929 | ||||||
Weighted average shares assuming dilution |
64,731 | 51,640 | ||||||
Per share amount |
$ | 0.26 | $ | 0.34 | ||||
12
Foreign | ||||||||||||||||
currency | ||||||||||||||||
January 2, 2011 | Acquisitions | translation | April 3, 2011 | |||||||||||||
U.S. Detention & Corrections |
$ | 175,990 | $ | | $ | | $ | 175,990 | ||||||||
GEO Care |
67,257 | 283,097 | | 350,354 | ||||||||||||
International Services |
762 | | 12 | 774 | ||||||||||||
Total Goodwill |
$ | 244,009 | $ | 283,097 | $ | 12 | $ | 527,118 | ||||||||
Useful Life | U.S. Detention & | International | ||||||||||||||||||
in Years | Corrections | Services | GEO Care | Total | ||||||||||||||||
Finite-lived intangible assets: |
||||||||||||||||||||
Management contracts |
1-17 | $ | 49,850 | $ | 2,754 | $ | 41,300 | $ | 93,904 | |||||||||||
Covenants not to compete |
1-4 | 4,349 | | 2,821 | 7,170 | |||||||||||||||
Gross carrying value of January 2, 2011 |
54,199 | 2,754 | 44,121 | 101,074 | ||||||||||||||||
Changes to gross carrying value during the
thirteen weeks ended April 3, 2011: |
||||||||||||||||||||
Finite-lived intangible assets: |
||||||||||||||||||||
Management contracts BI Acquisition |
11-14 | | | 61,600 | 61,600 | |||||||||||||||
Covenants not to compete BI Acquisition |
2 | | | 1,400 | 1,400 | |||||||||||||||
Technology BI Acquisition |
7 | | | 21,800 | 21,800 | |||||||||||||||
Foreign currency translation |
| (28 | ) | | (28 | ) | ||||||||||||||
Indefinite-lived intangible assets: |
||||||||||||||||||||
Trade names BI Acquisition |
Indefinite | | 42,100 | 42,100 | ||||||||||||||||
Gross carrying value as of April 3, 2011 |
54,199 | 2,726 | 171,021 | 227,946 | ||||||||||||||||
Accumulated amortization expense |
(11,640 | ) | (359 | ) | (5,349 | ) | (17,348 | ) | ||||||||||||
Net carrying value at April 3, 2011 |
$ | 42,559 | $ | 2,367 | $ | 165,672 | $ | 210,598 | ||||||||||||
13
U.S. Detention & | International | |||||||||||||||
Corrections | Services | GEO Care | Total | |||||||||||||
Management contracts |
$ | 10,567 | $ | 359 | $ | 3,757 | $ | 14,683 | ||||||||
Technology |
| | 441 | 441 | ||||||||||||
Covenants not to compete |
1,073 | | 1,151 | 2,224 | ||||||||||||
Total accumulated amortization expense |
$ | 11,640 | $ | 359 | $ | 5,349 | $ | 17,348 | ||||||||
U.S. Detention & | International | |||||||||||||||
Corrections | Services | GEO Care | ||||||||||||||
Expense | Expense | Expense | Total Expense | |||||||||||||
Fiscal Year | Amortization | Amortization | Amortization | Amortization | ||||||||||||
Remainder of 2011 |
$ | 4,289 | $ | 112 | $ | 10,307 | $ | 14,708 | ||||||||
2012 |
4,894 | 149 | 13,025 | 18,068 | ||||||||||||
2013 |
3,556 | 149 | 11,451 | 15,156 | ||||||||||||
2014 |
3,556 | 149 | 11,236 | 14,941 | ||||||||||||
2015 |
3,556 | 149 | 11,205 | 14,910 | ||||||||||||
Thereafter |
22,708 | 1,659 | 66,348 | 90,715 | ||||||||||||
$ | 42,559 | $ | 2,367 | $ | 123,572 | $ | 168,498 | |||||||||
14
Fair Value Measurements at April 3, 2011 | ||||||||||||||||
Total Carrying | Quoted Prices in | Significant Other | Significant | |||||||||||||
Value at | Active Markets | Observable Inputs | Unobservable | |||||||||||||
April 3, 2011 | (Level 1) | (Level 2) | Inputs (Level 3) | |||||||||||||
Assets: |
||||||||||||||||
Interest rate swap derivative assets |
$ | 3,837 | $ | | $ | 3,837 | $ | | ||||||||
Investments other than derivatives |
7,573 | | 7,573 | |
Fair Value Measurements at January 2, 2011 | ||||||||||||||||
Total Carrying | Quoted Prices in | Significant Other | Significant | |||||||||||||
Value at | Active Markets | Observable Inputs | Unobservable | |||||||||||||
January 2, 2011 | (Level 1) | (Level 2) | Inputs (Level 3) | |||||||||||||
Assets: |
||||||||||||||||
Interest rate swap derivative assets |
$ | 5,131 | $ | | $ | 5,131 | $ | | ||||||||
Investments
other than derivatives |
7,533 | | 7,533 | |
April 3, 2011 | ||||||||
Carrying | Estimated | |||||||
Value | Fair Value | |||||||
Assets: |
||||||||
Cash and cash equivalents |
$ | 85,894 | $ | 85,894 | ||||
Restricted cash and investments, including current portion |
87,567 | 87,567 | ||||||
Liabilities: |
||||||||
Borrowings under the Senior Credit Facility |
$ | 703,465 | $ | 710,203 | ||||
73/4% Senior Notes |
249,148 | 267,813 | ||||||
6.625% Senior Notes |
300,000 | 298,689 | ||||||
Non-recourse debt, Australian subsidiary |
45,638 | 45,013 | ||||||
Other non-recourse debt, including current portion |
170,915 | 172,664 |
January 2, 2011 | ||||||||
Carrying | Estimated | |||||||
Value | Fair Value | |||||||
Assets: |
||||||||
Cash and cash equivalents |
$ | 39,664 | $ | 39,664 | ||||
Restricted cash and investments, including current portion |
90,642 | 90,642 | ||||||
Liabilities: |
||||||||
Borrowings under the Senior Credit Facility |
$ | 557,758 | $ | 562,610 | ||||
73/4% Senior Notes |
250,078 | 265,000 | ||||||
Non-recourse debt, Australian subsidiary |
46,300 | 46,178 | ||||||
Other non-recourse debt, including current portion |
176,384 | 180,340 |
15
16
Interest Rate under the Revolver, | ||
Term Loan A and Term Loan A-2 | ||
LIBOR borrowings |
LIBOR plus 2.00% to 3.00%. | |
Base rate borrowings |
Prime Rate plus 1.00% to 2.00%. | |
Letters of credit |
2.00% to 3.00%. | |
Unused Revolver |
0.375% to 0.50%. |
Total Leverage Ratio | ||||
Period | Maximum Ratio | |||
Through and including the last day of the fiscal year 2011 |
5.25 to 1.00 | |||
First day of fiscal year 2012 through and including the last day of fiscal year 2012 |
5.00 to 1.00 | |||
First day of fiscal year 2013 through and including the last day of fiscal year 2013 |
4.75 to 1.00 | |||
Thereafter |
4.25 to 1.00 |
17
Senior Secured Leverage Ratio | ||||
Period | Maximum Ratio | |||
Through and including the last day of the second quarter of the fiscal year 2012 |
3.25 to 1.00 | |||
First day of the third quarter of fiscal year 2012 through and including the last
day of the second quarter of the fiscal year 2013 |
3.00 to 1.00 | |||
Thereafter |
2.75 to 1.00 |
Year | Percentage | |||
2016 |
103.3125 | % | ||
2017 |
102.2083 | % | ||
2018 |
101.1042 | % | ||
2019 and thereafter |
100.0000 | % |
18
Year | Percentage | |||
2013 |
103.875 | % | ||
2014 |
101.938 | % | ||
2015 and thereafter |
100.000 | % |
19
20
21
22
23
Thirteen Weeks Ended | ||||||||
April 3, 2011 | April 4, 2010 | |||||||
Revenues: |
||||||||
U.S. Detention & Corrections |
$ | 241,630 | $ | 189,709 | ||||
International Services |
53,128 | 45,880 | ||||||
GEO Care |
96,889 | 37,502 | ||||||
Facility Construction & Design |
119 | 14,451 | ||||||
Total revenues |
$ | 391,766 | $ | 287,542 | ||||
Depreciation and amortization: |
||||||||
U.S. Detention & Corrections |
$ | 12,930 | $ | 7,905 | ||||
International Services |
527 | 435 | ||||||
GEO Care |
5,345 | 898 | ||||||
Facility Construction & Design |
| | ||||||
Total depreciation and amortization |
$ | 18,802 | $ | 9,238 | ||||
Operating income: |
||||||||
U.S. Detention & Corrections |
$ | 55,773 | $ | 44,944 | ||||
International Services |
3,952 | 1,841 | ||||||
GEO Care |
13,850 | 4,239 | ||||||
Facility Construction & Design |
103 | 948 | ||||||
Operating income from segments |
73,678 | 51,972 | ||||||
General and administrative expenses |
(32,788 | ) | (17,448 | ) | ||||
Total operating income |
$ | 40,890 | $ | 34,524 | ||||
April 3, 2011 | January 2, 2011 | |||||||
Segment assets: |
||||||||
U.S. Detention & Corrections |
$ | 1,869,843 | $ | 1,855,067 | ||||
International Services |
97,210 | 103,004 | ||||||
GEO Care |
766,676 | 301,334 | ||||||
Facility Construction & Design |
26 | 26 | ||||||
Total segment assets |
$ | 2,733,755 | $ | 2,259,431 | ||||
Thirteen Weeks Ended | ||||||||
April 3, 2011 | April 4, 2010 | |||||||
Total operating income from segments |
$ | 73,678 | $ | 51,972 | ||||
Unallocated amounts: |
||||||||
General and Administrative Expenses |
(32,788 | ) | (17,448 | ) | ||||
Net interest expense |
(15,392 | ) | (6,585 | ) | ||||
Income before income taxes and equity in earnings of affiliates |
$ | 25,498 | $ | 27,939 | ||||
April 3, 2011 | January 2, 2011 | |||||||
Reportable segment assets |
$ | 2,733,755 | $ | 2,259,431 | ||||
Cash |
85,894 | 39,664 | ||||||
Deferred income tax |
48,919 | 33,062 | ||||||
Restricted cash and investments |
87,567 | 90,642 | ||||||
Total assets |
$ | 2,956,135 | $ | 2,422,799 | ||||
24
Thirteen Weeks Ended | ||||||||
April 3 , 2011 | April 4 , 2010 | |||||||
Revenues: |
||||||||
Detention & Corrections |
$ | 294,758 | $ | 235,589 | ||||
GEO Care |
96,889 | 37,502 | ||||||
Facility Construction & Design |
119 | 14,451 | ||||||
Total revenues |
$ | 391,766 | $ | 287,542 | ||||
Thirteen Weeks Ended | ||||||||
April 3, 2011 | April 4, 2010 | |||||||
Statement of Operations Data |
||||||||
Revenues |
$ | 12,171 | $ | 10,761 | ||||
Operating income |
4,760 | 4,092 | ||||||
Net income |
1,323 | 1,180 |
April 3, 2011 | January 2, 2011 | |||||||
Balance Sheet Data |
||||||||
Current assets |
$ | 27,815 | $ | 40,624 | ||||
Non-current assets |
49,248 | 50,613 | ||||||
Current liabilities |
3,627 | 3,552 | ||||||
Non-current liabilities |
56,363 | 60,129 | ||||||
Shareholders equity |
17,073 | 27,556 |
25
April 3 , 2011 | January 2, 2011 | |||||||
(in thousands) | ||||||||
Change in Projected Benefit Obligation |
||||||||
Projected benefit obligation, beginning of period |
$ | 13,830 | $ | 16,206 | ||||
Service cost |
161 | 525 | ||||||
Interest cost |
167 | 746 | ||||||
Actuarial gain |
| 986 | ||||||
Benefits paid |
(59 | ) | (4,633 | ) | ||||
Projected benefit obligation, end of period |
$ | 14,099 | $ | 13,830 | ||||
Change in Plan Assets |
||||||||
Plan assets at fair value, beginning of period |
$ | | $ | | ||||
Company contributions |
59 | 4,633 | ||||||
Benefits paid |
(59 | ) | (4,633 | ) | ||||
Plan assets at fair value, end of period |
$ | | $ | | ||||
Unfunded Status of the Plan |
$ | (14,099 | ) | $ | (13,830 | ) | ||
Amounts Recognized in Accumulated Other
Comprehensive Income |
||||||||
Prior service cost |
| | ||||||
Net loss |
1,655 | 1,671 | ||||||
Accrued pension cost |
$ | 1,655 | $ | 1,671 | ||||
Thirteen Weeks Ended | ||||||||
April 3 , 2011 | April 4 , 2010 | |||||||
Components of Net Periodic Benefit Cost |
||||||||
Service cost |
$ | 161 | $ | 131 | ||||
Interest cost |
167 | 187 | ||||||
Amortization of: Prior service cost |
| 10 | ||||||
Net loss |
16 | 8 | ||||||
Net periodic pension cost |
$ | 344 | $ | 336 | ||||
Weighted Average Assumptions for Expense |
||||||||
Discount rate |
5.50 | % | 5.75 | % | ||||
Expected return on plan assets |
N/A | N/A | ||||||
Rate of compensation increase |
Various by Plan | 4.50 | % |
26
27
(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 Companys other subsidiaries, on a combined basis, which are not guarantors of the Notes (the Subsidiary Non-Guarantors); | ||
(iv) | Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the Subsidiary Non-Guarantors and (b) eliminate the investments in the Companys subsidiaries; and | ||
(v) | The Company and its subsidiaries on a consolidated basis. |
28
As of April 3, 2011 | ||||||||||||||||||||
Combined | ||||||||||||||||||||
Combined | Non- | |||||||||||||||||||
Subsidiary | Guarantor | |||||||||||||||||||
The GEO Group, Inc. | Guarantors | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
$ | 38,601 | $ | 3,441 | $ | 43,852 | $ | | $ | 85,894 | ||||||||||
Restricted cash and investments |
| | 37,593 | | 37,593 | |||||||||||||||
Accounts receivable, less allowance for
doubtful accounts |
102,510 | 153,087 | 23,057 | | 278,654 | |||||||||||||||
Deferred income tax assets, net |
15,191 | 28,665 | 4,127 | | 47,983 | |||||||||||||||
Prepaid expenses and other current assets |
5,733 | 18,527 | 8,791 | (1,154 | ) | 31,897 | ||||||||||||||
Total current assets |
162,035 | 203,720 | 117,420 | (1,154 | ) | 482,021 | ||||||||||||||
Restricted Cash and Investments |
7,253 | | 42,721 | | 49,974 | |||||||||||||||
Property and Equipment, Net |
474,807 | 883,741 | 209,969 | | 1,568,517 | |||||||||||||||
Assets Held for Sale |
3,083 | 7,186 | | | 10,269 | |||||||||||||||
Direct Finance Lease Receivable |
| | 36,758 | | 36,758 | |||||||||||||||
Intercompany Receivable |
395,287 | 14,212 | 1,871 | (411,370 | ) | | ||||||||||||||
Deferred Income Tax Assets, Net |
| | 936 | 936 | ||||||||||||||||
Goodwill |
34 | 526,311 | 773 | | 527,118 | |||||||||||||||
Intangible Assets, Net |
| 208,231 | 2,367 | | 210,598 | |||||||||||||||
Investment in Subsidiaries |
1,395,641 | | | (1,395,641 | ) | | ||||||||||||||
Other Non-Current Assets |
32,000 | 68,170 | 22,812 | (53,038 | ) | 69,944 | ||||||||||||||
$ | 2,470,140 | $ | 1,911,571 | $ | 435,627 | $ | (1,861,203 | ) | $ | 2,956,135 | ||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||||
Accounts payable |
$ | 47,736 | $ | 30,199 | $ | 3,377 | $ | (1,154 | ) | $ | 80,158 | |||||||||
Accrued payroll and related taxes |
20,059 | 12,836 | 15,939 | | 48,834 | |||||||||||||||
Accrued expenses |
52,717 | 41,712 | 23,017 | | 117,446 | |||||||||||||||
Current portion of capital lease
obligations, long-term debt and
non-recourse debt |
17,000 | 1,360 | 31,687 | | 50,047 | |||||||||||||||
Total current liabilities |
137,512 | 86,107 | 74,020 | (1,154 | ) | 296,485 | ||||||||||||||
Deferred Income Tax Liabilities |
15,874 | 91,476 | 20 | | 107,370 | |||||||||||||||
Intercompany Payable |
1,871 | 391,550 | 17,949 | (411,370 | ) | | ||||||||||||||
Other Non-Current Liabilities |
23,891 | 39,074 | 51,978 | (53,038 | ) | 61,905 | ||||||||||||||
Capital Lease Obligations |
| 13,888 | | | 13,888 | |||||||||||||||
Long-Term Debt |
1,235,613 | 628 | | | 1,236,241 | |||||||||||||||
Non-Recourse Debt |
| | 184,867 | | 184,867 | |||||||||||||||
Commitments & Contingencies |
||||||||||||||||||||
Total Shareholders Equity |
1,055,379 | 1,288,848 | 106,793 | (1,395,641 | ) | 1,055,379 | ||||||||||||||
$ | 2,470,140 | $ | 1,911,571 | $ | 435,627 | $ | (1,861,203 | ) | $ | 2,956,135 | ||||||||||
29
As of January 2, 2011 | ||||||||||||||||||||
Combined | ||||||||||||||||||||
Combined | Non- | |||||||||||||||||||
Subsidiary | Guarantor | |||||||||||||||||||
The GEO Group, Inc. | Guarantors | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
$ | 2,614 | $ | 221 | $ | 36,829 | $ | | $ | 39,664 | ||||||||||
Restricted cash and investments |
| | 41,150 | | 41,150 | |||||||||||||||
Accounts receivable, less allowance for
doubtful accounts |
121,749 | 130,197 | 23,832 | | 275,778 | |||||||||||||||
Deferred income tax assets, net |
15,191 | 12,808 | 4,127 | | 32,126 | |||||||||||||||
Prepaid expenses and other current assets |
12,325 | 23,222 | 9,256 | (8,426 | ) | 36,377 | ||||||||||||||
Total current assets |
151,879 | 166,448 | 115,194 | (8,426 | ) | 425,095 | ||||||||||||||
Restricted Cash and Investments |
6,168 | | 43,324 | | 49,492 | |||||||||||||||
Property and Equipment, Net |
433,219 | 867,046 | 211,027 | | 1,511,292 | |||||||||||||||
Assets Held for Sale |
3,083 | 6,887 | | | 9,970 | |||||||||||||||
Direct Finance Lease Receivable |
| | 37,544 | | 37,544 | |||||||||||||||
Intercompany Receivable |
203,703 | 14,380 | 1,805 | (219,888 | ) | | ||||||||||||||
Deferred Income Tax Assets, Net |
| 936 | 936 | |||||||||||||||||
Goodwill |
34 | 243,213 | 762 | | 244,009 | |||||||||||||||
Intangible Assets, Net |
| 85,384 | 2,429 | | 87,813 | |||||||||||||||
Investment in Subsidiaries |
1,184,297 | | | (1,184,297 | ) | | ||||||||||||||
Other Non-Current Assets |
24,020 | 45,820 | 28,558 | (41,750 | ) | 56,648 | ||||||||||||||
$ | 2,006,403 | $ | 1,429,178 | $ | 441,579 | $ | (1,454,361 | ) | $ | 2,422,799 | ||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||||
Accounts payable |
$ | 57,015 | $ | 13,254 | $ | 3,611 | $ | | $ | 73,880 | ||||||||||
Accrued payroll and related taxes |
6,535 | 10,965 | 15,861 | | 33,361 | |||||||||||||||
Accrued expenses |
55,081 | 40,391 | 33,624 | (8,426 | ) | 120,670 | ||||||||||||||
Current portion of capital lease
obligations, long-term debt and
non-recourse debt |
9,500 | 782 | 31,292 | | 41,574 | |||||||||||||||
Total current liabilities |
128,131 | 65,392 | 84,388 | (8,426 | ) | 269,485 | ||||||||||||||
Deferred Income Tax Liabilities |
15,874 | 47,652 | 20 | | 63,546 | |||||||||||||||
Intercompany Payable |
1,805 | 199,994 | 18,089 | (219,888 | ) | | ||||||||||||||
Other Non-Current Liabilities |
22,767 | 25,839 | 40,006 | (41,750 | ) | 46,862 | ||||||||||||||
Capital Lease Obligations |
| 13,686 | | | 13,686 | |||||||||||||||
Long-Term Debt |
798,336 | | | | 798,336 | |||||||||||||||
Non-Recourse Debt |
| | 191,394 | | 191,394 | |||||||||||||||
Commitments & Contingencies |
||||||||||||||||||||
Total Shareholders Equity |
1,039,490 | 1,076,615 | 107,682 | (1,184,297 | ) | 1,039,490 | ||||||||||||||
$ | 2,006,403 | $ | 1,429,178 | $ | 441,579 | $ | (1,454,361 | ) | $ | 2,422,799 | ||||||||||
30
For the Thirteen Weeks Ended April 3, 2011 | ||||||||||||||||||||
Combined | Combined | |||||||||||||||||||
Subsidiary | Non-Guarantor | |||||||||||||||||||
The GEO Group, Inc. | Guarantors | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Revenues |
$ | 143,391 | $ | 211,226 | $ | 55,501 | $ | (18,352 | ) | $ | 391,766 | |||||||||
Operating expenses |
131,874 | 143,703 | 42,061 | (18,352 | ) | 299,286 | ||||||||||||||
Depreciation and amortization |
4,256 | 12,690 | 1,856 | | 18,802 | |||||||||||||||
General and administrative expenses |
11,465 | 16,886 | 4,437 | | 32,788 | |||||||||||||||
Operating
income (loss) |
(4,204 | ) | 37,947 | 7,147 | | 40,890 | ||||||||||||||
Interest income |
5,736 | 325 | 1,463 | (5,955 | ) | 1,569 | ||||||||||||||
Interest expense |
(13,353 | ) | (5,939 | ) | (3,624 | ) | 5,955 | (16,961 | ) | |||||||||||
Income (loss) before income taxes and equity in
earnings of affiliates |
(11,821 | ) | 32,333 | 4,986 | | 25,498 | ||||||||||||||
Provision for income taxes |
(4,568 | ) | 12,493 | 1,855 | | 9,780 | ||||||||||||||
Equity in earnings of affiliates, net of income
tax provision |
| | 662 | | 662 | |||||||||||||||
Income (loss) before equity income of consolidated
subsidiaries |
(7,253 | ) | 19,840 | 3,793 | | 16,380 | ||||||||||||||
Income from consolidated subsidiaries, net of
income tax provision |
23,633 | | | (23,633 | ) | | ||||||||||||||
Net income |
16,380 | 19,840 | 3,793 | (23,633 | ) | 16,380 | ||||||||||||||
Net loss attributable to noncontrolling interests |
| | | 410 | 410 | |||||||||||||||
Net income attributable to the GEO Group, Inc. |
$ | 16,380 | $ | 19,840 | $ | 3,793 | $ | (23,223 | ) | $ | 16,790 | |||||||||
31
For the Thirteen Weeks Ended April 4, 2010 | ||||||||||||||||||||
Combined | Combined | |||||||||||||||||||
Subsidiary | Non-Guarantor | |||||||||||||||||||
The GEO Group, Inc. | Guarantors | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Revenues |
$ | 152,860 | $ | 86,996 | $ | 60,490 | $ | (12,804 | ) | $ | 287,542 | |||||||||
Operating expenses |
131,019 | 55,975 | 52,142 | (12,804 | ) | 226,332 | ||||||||||||||
Depreciation and amortization |
4,212 | 4,047 | 979 | | 9,238 | |||||||||||||||
General and administrative expenses |
8,880 | 5,055 | 3,513 | | 17,448 | |||||||||||||||
Operating income |
8,749 | 21,919 | 3,856 | | 34,524 | |||||||||||||||
Interest income |
301 | 346 | 1,169 | (587 | ) | 1,229 | ||||||||||||||
Interest expense |
(5,759 | ) | (508 | ) | (2,134 | ) | 587 | (7,814 | ) | |||||||||||
Income before income taxes and equity in
earnings of affiliates |
3,291 | 21,757 | 2,891 | | 27,939 | |||||||||||||||
Provision for income taxes |
1,323 | 8,750 | 748 | | 10,821 | |||||||||||||||
Equity in earnings of affiliates, net of
income tax provision |
| | 590 | | 590 | |||||||||||||||
Income before equity income of consolidated
subsidiaries |
1,968 | 13,007 | 2,733 | | 17,708 | |||||||||||||||
Income from consolidated subsidiaries, net of
income tax provision |
15,740 | | | (15,740 | ) | | ||||||||||||||
Net income |
17,708 | 13,007 | 2,733 | (15,740 | ) | 17,708 | ||||||||||||||
Net income attributable to noncontrolling
interests |
| | | (36 | ) | (36 | ) | |||||||||||||
Net income attributable to The GEO Group, Inc. |
$ | 17,708 | $ | 13,007 | $ | 2,733 | $ | (15,776 | ) | $ | 17,672 | |||||||||
32
For the Thirteen Weeks Ended April 3, 2011 | ||||||||||||||||
Combined | Combined | |||||||||||||||
Subsidiary | Non-Guarantor | |||||||||||||||
The GEO Group, Inc. | Guarantors | Subsidiaries | Consolidated | |||||||||||||
Cash Flow from Operating Activities: |
||||||||||||||||
Net cash provided by operating activities |
$ | 41,403 | $ | 8,025 | $ | 19,649 | $ | 69,077 | ||||||||
Cash Flow from Investing Activities: |
||||||||||||||||
Acquisition, cash consideration, net of cash acquired |
(409,607 | ) | | | (409,607 | ) | ||||||||||
Proceeds from sale of property and equipment |
| 250 | | 250 | ||||||||||||
Change in restricted cash |
| | 3,199 | 3,199 | ||||||||||||
Capital expenditures |
(33,312 | ) | (4,848 | ) | (536 | ) | (38,696 | ) | ||||||||
Net cash used in investing activities |
(442,919 | ) | (4,598 | ) | 2,663 | (444,854 | ) | |||||||||
Cash Flow from Financing Activities: |
||||||||||||||||
Payments on long-term debt |
(15,375 | ) | (207 | ) | (6,084 | ) | (21,666 | ) | ||||||||
Proceeds from long-term debt |
461,000 | | | 461,000 | ||||||||||||
Distribution to MCF partners |
| | (4,012 | ) | (4,012 | ) | ||||||||||
Proceeds from the exercise of stock options |
983 | | | 983 | ||||||||||||
Income tax benefit of equity compensation |
172 | | | 172 | ||||||||||||
Debt issuance costs |
(9,277 | ) | | | (9,277 | ) | ||||||||||
Net cash provided by (used in) financing activities |
437,503 | (207 | ) | (10,096 | ) | 427,200 | ||||||||||
Effect of Exchange Rate Changes on Cash and Cash
Equivalents |
| | (5,193 | ) | (5,193 | ) | ||||||||||
Net Increase in Cash and Cash Equivalents |
35,987 | 3,220 | 7,023 | 46,230 | ||||||||||||
Cash and Cash Equivalents, beginning of period |
2,614 | 221 | 36,829 | 39,664 | ||||||||||||
Cash and Cash Equivalents, end of period |
$ | 38,601 | $ | 3,441 | $ | 43,852 | $ | 85,894 | ||||||||
33
For the Thirteen Weeks Ended April 4 , 2010 | ||||||||||||||||
Combined | Combined | |||||||||||||||
Subsidiary | Non-Guarantor | |||||||||||||||
The GEO Group, Inc. | Guarantors | Subsidiaries | Consolidated | |||||||||||||
Cash Flow from Operating Activities: |
||||||||||||||||
Net cash (used in) provided by operating activities |
$ | 54,412 | $ | (2,588 | ) | $ | 12,910 | $ | 64,734 | |||||||
Cash Flow from Investing Activities: |
||||||||||||||||
Just Care purchase price adjustment |
| (41 | ) | | (41 | ) | ||||||||||
Proceeds from sale of property and equipment |
| 100 | | 100 | ||||||||||||
Change in restricted cash |
| | (2,257 | ) | (2,257 | ) | ||||||||||
Capital expenditures |
(13,610 | ) | (1,918 | ) | (209 | ) | (15,737 | ) | ||||||||
Net cash used in investing activities |
(13,610 | ) | (1,859 | ) | (2,466 | ) | (17,935 | ) | ||||||||
Cash Flow from Financing Activities: |
||||||||||||||||
Payments on long-term debt |
(6,940 | ) | (171 | ) | (5,688 | ) | (12,799 | ) | ||||||||
Proceeds from long-term debt |
15,000 | | | 15,000 | ||||||||||||
Payments for purchase of treasury shares |
(53,845 | ) | | | (53,845 | ) | ||||||||||
Income tax benefit of equity compensation |
112 | | | 112 | ||||||||||||
Proceeds from the exercise of stock options |
1,138 | | | 1,138 | ||||||||||||
Net cash used in financing activities |
(44,535 | ) | (171 | ) | (5,688 | ) | (50,394 | ) | ||||||||
Effect of Exchange Rate Changes on Cash and Cash
Equivalents |
| | 15 | 15 | ||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents |
(3,733 | ) | (4,618 | ) | 4,771 | (3,580 | ) | |||||||||
Cash and Cash Equivalents, beginning of period |
12,376 | 5,333 | 16,147 | 33,856 | ||||||||||||
Cash and Cash Equivalents, end of period |
$ | 8,643 | $ | 715 | $ | 20,918 | $ | 30,276 | ||||||||
34
| our ability to timely build and/or open facilities as planned, profitably manage such facilities and successfully integrate such facilities into our operations without substantial additional costs; | |
| the instability of foreign exchange rates, exposing us to currency risks in Australia, the United Kingdom, and South Africa, or other countries in which we may choose to conduct our business; | |
| our ability to activate the inactive beds at our idle facilities; | |
| an increase in unreimbursed labor rates; | |
| our ability to expand, diversify and grow our correctional, mental health, residential treatment, re-entry, supervision and monitoring and secure transportation services business; | |
| our ability to win management contracts for which we have submitted proposals and to retain existing management contracts; | |
| our ability to raise new project development capital given the often short-term nature of the customers commitment to use newly developed facilities; | |
| our ability to estimate the governments level of dependency on privatized correctional services; | |
| our ability to accurately project the size and growth of the U.S. and international privatized corrections industry; | |
| our ability to develop long-term earnings visibility; | |
| our ability to identify suitable acquisitions, and to successfully complete and integrate such acquisitions on satisfactory terms; | |
| our ability to successfully integrate Cornell Companies Inc., which we refer to as Cornell, and BII Holding Corporation, which we refer to as BI Holding into our business within our expected time-frame and estimates regarding integration costs; | |
| our ability to accurately estimate the growth to our aggregate annual revenues and the amount of annual synergies we can achieve as a result of our acquisitions of Cornell and BI Holding; | |
| our ability to successfully address any difficulties encountered in maintaining relationships with customers, employees or suppliers as a result of our acquisitions of Cornell and BI Holding; |
35
| our ability to obtain future financing on satisfactory terms or at all, including our ability to secure the funding we need to complete ongoing capital projects; | |
| our exposure to rising general insurance costs; | |
| our exposure to state and federal income tax law changes internationally and domestically and our exposure as a result of federal and international examinations of our tax returns or tax positions; | |
| our exposure to claims for which we are uninsured; | |
| our exposure to rising employee and inmate medical costs; | |
| our ability to maintain occupancy rates at our facilities; | |
| our ability to manage costs and expenses relating to ongoing litigation arising from our operations; | |
| our ability to accurately estimate on an annual basis, loss reserves related to general liability, workers compensation and automobile liability claims; | |
| the ability of our government customers to secure budgetary appropriations to fund their payment obligations to us; and | |
| other factors contained in our filings with the Securities and Exchange Commission, or the SEC, including, but not limited to, those detailed in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K and our Current Reports on Form 8-K filed with the SEC. |
36
| our correctional and detention management services involve the provision of security, administrative, rehabilitation, education, health and food services, primarily at adult male correctional and detention facilities; | ||
| our mental health and residential treatment services involve working with governments to deliver quality care, innovative programming and active patient treatment, primarily in state-owned mental healthcare facilities; | ||
| our community-based services involve supervision of adult parolees and probationers and the provision of temporary housing, programming, employment assistance and other services with the intention of the successful reintegration of residents into the community; | ||
| our youth services include residential, detention and shelter care and community-based services along with rehabilitative, educational and treatment 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 to ICE for the provision of services designed to improve the participation of non-detained aliens in the immigration court system; | ||
| we develop new facilities, using our project development experience to design, construct and finance what we believe are state-of-the-art facilities that maximize security and efficiency; and | ||
| we provide secure transportation services for offender and detainee populations as contracted. |
37
Capacity | ||||||||||||||||||||
Following | Estimated | |||||||||||||||||||
Additional | Expansion/ | Completion | ||||||||||||||||||
Facilities Under Construction | Beds | Construction | Date | Customer | Financing | |||||||||||||||
Adelanto Facility, California |
n/a | 650 | Q2 2011 | (1 | ) | GEO | ||||||||||||||
North Lake Correctional Facility, Michigan |
832 | 2,580 | (2 | ) | CDCR (2) | GEO | ||||||||||||||
Karnes County Civil Detention Facility, Texas |
600 | 600 | Q1 2012 | ICE (3) | GEO | |||||||||||||||
New Castle Correctional Facility, Indiana |
512 | 3,196 | Q1 2012 | IDOC | GEO | |||||||||||||||
Riverbend Correctional Facility, Georgia |
1,500 | 1,500 | Q1 2012 | GDOC | GEO | |||||||||||||||
Total |
3,444 |
38
(1) | We currently do not have a customer for this facility but are marketing these beds to various local, state and federal agencies. | |
(2) | On November 4, 2010, we announced our signing of a contract with the State of California, Department of Corrections and Rehabilitation for the out-of-state housing of California inmates at the North Lake Correctional Facility. As a result of this new contract, we will complete a cell conversion on the existing 1,748-bed facility in Q3 2011 and expect to complete the expansion of this facility by 832 beds as required to meet the scheduled ramp-up of CDCR inmates. | |
(3) | We will provide services at this facility through an Inter-Governmental Agreement, or IGA, with Karnes County. |
39
40
41
42
2011 | % of Revenue | 2010 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Detention & Corrections |
$ | 241,630 | 61.7 | % | $ | 189,709 | 66.0 | % | $ | 51,921 | 27.4 | % | ||||||||||||
International Services |
53,128 | 13.6 | % | 45,880 | 16.0 | % | 7,248 | 15.8 | % | |||||||||||||||
GEO Care |
96,889 | 24.7 | % | 37,502 | 13.0 | % | 59,387 | 158.4 | % | |||||||||||||||
Facility Construction & Design |
119 | 0.0 | % | 14,451 | 5.0 | % | (14,332 | ) | (99.2 | )% | ||||||||||||||
Total |
$ | 391,766 | 100.0 | % | $ | 287,542 | 100.0 | % | $ | 104,224 | 36.2 | % | ||||||||||||
43
% of Segment | % of Segment | |||||||||||||||||||||||
2011 | Revenues | 2010 | Revenues | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Detention & Corrections |
$ | 172,927 | 71.6 | % | $ | 136,860 | 72.1 | % | $ | 36,067 | 26.4 | % | ||||||||||||
International Services |
48,649 | 91.6 | % | 43,604 | 95.0 | % | 5,045 | 11.6 | % | |||||||||||||||
GEO Care |
77,694 | 80.2 | % | 32,365 | 86.3 | % | 45,329 | 140.1 | % | |||||||||||||||
Facility Construction & Design |
16 | 13.4 | % | 13,503 | 93.4 | % | (13,487 | ) | (99.9 | )% | ||||||||||||||
Total |
$ | 299,286 | 76.4 | % | $ | 226,332 | 78.7 | % | $ | 72,954 | 32.2 | % | ||||||||||||
44
% of Segment | % of Segment | |||||||||||||||||||||||
2011 | Revenue | 2010 | Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
U.S. Detention & Corrections |
$ | 12,930 | 5.4 | % | $ | 7,905 | 4.2 | % | $ | 5,025 | 63.6 | % | ||||||||||||
International Services |
527 | 1.0 | % | 435 | 0.9 | % | 92 | 21.1 | % | |||||||||||||||
GEO Care |
5,345 | 5.5 | % | 898 | 2.4 | % | 4,447 | 495.2 | % | |||||||||||||||
Facility Construction & Design |
| | | | | | ||||||||||||||||||
Total |
$ | 18,802 | 4.8 | % | $ | 9,238 | 3.2 | % | $ | 9,564 | 103.5 | % | ||||||||||||
2011 | % of Revenue | 2010 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
General and Administrative Expenses |
$ | 32,788 | 8.4 | % | $ | 17,448 | 6.1 | % | $ | 15,340 | 87.9 | % |
2011 | % of Revenue | 2010 | % of Revenue | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest Income |
$ | 1,569 | 0.4 | % | $ | 1,229 | 0.4 | % | $ | 340 | 27.7 | % | ||||||||||||
Interest Expense |
$ | 16,961 | 4.3 | % | $ | 7,814 | 2.7 | % | $ | 9,147 | 117.1 | % |
45
2011 | Effective Rate | 2010 | Effective Rate | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Income Taxes |
$ | 9,780 | 38.4 | % | $ | 10,821 | 38.7 | % | $ | (1,041 | ) | (9.6 | )% |
46
47
Interest Rate under the Revolver, | ||
Term Loan A and Term Loan A-2 | ||
LIBOR borrowings
|
LIBOR plus 2.00% to 3.00%. | |
Base rate borrowings
|
Prime Rate plus 1.00% to 2.00%. | |
Letters of credit
|
2.00% to 3.00%. | |
Unused Revolver
|
0.375% to 0.50%. |
Total Leverage Ratio | ||
Period | Maximum Ratio | |
Through and including the last day of the fiscal year 2011 |
5.25 to 1.00 | |
First day of fiscal year 2012 through and including the last day of fiscal year 2012 |
5.00 to 1.00 | |
First day of fiscal year 2013 through and including the last day of fiscal year 2013 |
4.75 to 1.00 | |
Thereafter |
4.25 to 1.00 |
48
Senior Secured Leverage Ratio | ||
Period | Maximum Ratio | |
Through and including the last day of the second quarter of the fiscal year 2012 |
3.25 to 1.00 | |
First day of the third quarter of fiscal year 2012 through and including the last
day of the second quarter of the fiscal year 2013 |
3.00 to 1.00 | |
Thereafter |
2.75 to 1.00 |
Year | Percentage | |||
2016 |
103.3125 | % | ||
2017 |
102.2083 | % | ||
2018 |
101.1042 | % | ||
2019 and thereafter |
100.0000 | % |
49
Year | Percentage | |||
2013 |
103.875 | % | ||
2014 |
101.938 | % | ||
2015 and thereafter |
100.000 | % |
50
51
52
53
54
55
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. | CONTROLS AND PROCEDURES. |
(a) | Evaluation of Disclosure Controls and Procedures. |
56
(b) | Changes in Internal Control Over Financial Reporting. |
ITEM 1. | LEGAL PROCEEDINGS. |
57
ITEM 1A. | RISK FACTORS. |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
ITEM 4. | REMOVED AND RESERVED. |
ITEM 5. | OTHER INFORMATION. |
ITEM 6. | EXHIBITS. |
(A) | Exhibits |
4.3
|
Indenture, dated as of February 10, 2011, by and among GEO, the Guarantors party thereto, and Wells Fargo Bank, National Association as Trustee relating to the 6 5/8% Senior Notes due 2021 (incorporated by reference to Exhibit 4.1 to the Companys report on Form 8-K, filed on February 16, 2011). | |
10.31
|
Amended and Restated Senior Officer Employment Agreement, effective December 17, 2008, by and between the GEO Group, Inc. and Jorge A. Dominicis (filed herewith). | |
10.32
|
First Amendment to Amended and Restated Senior Officer Employment Agreement, effective March 1, 2011, by and between the GEO Group, Inc. and Jorge A. Dominicis (filed herewith). | |
10.33
|
First Amendment, dated as of February 8, 2011, to the Credit Agreement between the Company, as Borrower, certain of GEOs subsidiaries, as Guarantors, the lenders signatory thereto and BNP Paribas, as Administrative Agent. | |
10.34
|
Series A-2 Incremental Loan Agreement, dated as of February 8, 2011, between the Company, as Borrower, certain of GEOs subsidiaries, as Guarantors, the lenders signatory thereto and BNP Paribas, as Administrative Agent. | |
10.35
|
Registration Rights Agreement, dated as of February 10, 2011, by and among GEO, the Guarantors party thereto, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., J.P. Morgan Securities LLC and SunTrust Robinson Humphrey, Inc. as representatives of the Initial Purchasers (incorporated herein by reference to Exhibit 10.1 to the Companys report on Form 8-K, filed on February 16, 2011). | |
31.1
|
SECTION 302 CEO Certification. |
58
31.2
|
SECTION 302 CFO Certification. | |
32.1
|
SECTION 906 CEO Certification. | |
32.2
|
SECTION 906 CFO Certification. | |
101.INS
|
XBRL Instance Document | |
101.SCH
|
XBRL Taxonomy Extension Schema | |
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase | |
101.LAB
|
XBRL Taxonomy Extension Label Linkbase | |
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase |
59
THE GEO GROUP, INC. |
||||
Date: May 10, 2011 | /s/ Brian R. Evans | |||
Brian R. Evans | ||||
Senior Vice President & Chief Financial Officer (duly authorized officer and principal financial officer) |
||||
60
A. | Annual Base Salary. The Employee shall be paid his current annual base salary of $375,000.00 for the remainder of calendar year 2008 (as such may be amended from time to time, the Annual Base Salary). The Company may increase the Annual Base Salary paid to the Employee in an amount to be determined by the Chief Executive Officer of the Company. The Annual Base Salary shall be payable at such regular times and intervals as the Company customarily pays its employees from time to time. | ||
B. | Annual Performance Award. For each fiscal year of employment during which the Company employs the Employee, the Employee shall be entitled to receive a target annual performance award in accordance with the terms of any plan governing employee performance awards then in effect as established by the Board (the Annual Performance Award). |
A. | Termination of Employment Without Cause or Upon the Death or Disability of the Employee. Upon the termination of the Employees |
2
employment under this Agreement by the Company without Cause or the death or disability of the Employee, the following shall apply: |
(i) | Termination Payment. The Employee shall be entitled to and paid a termination payment (the Termination Payment) equal to two (2) years Annual Base Salary as set forth in Section 4 based upon the then current salary level. The Termination Payment shall be made within 10 days of any termination pursuant to this Section 7(A). | ||
(ii) | Termination Benefits. The Company shall continue to provide the Employee and any covered dependents of the Employee (and if applicable, his beneficiaries) with the Employee Benefits (as described in Section 5 hereof) for a period of 2 years after the date of termination of the Employees employment with the Company. Such Employee Benefits shall be provided at no cost to the Employee in no less than the same amount, and on the same terms and conditions, as in effect on the date on which the termination of employment occurs. If the Employee dies during the 2-year period following a termination pursuant to this Section 7(A), the Company shall continue to provide the Employee Benefits to the Employees covered dependents under the same terms as were being provided prior to the Employees death and, to the extent applicable, to the Employees estate. | ||
(iii) | Termination Automobile. Within 10 days following termination, the Company shall transfer all of its interest in any automobile used by the Employee pursuant to the Companys Employee Automobile Policy (the Employee Automobile Policy) and shall pay the balance of any outstanding loans or leases on such automobile (whether such obligations are those of the Employee or the Company) so that the Employee owns the automobile outright (in the event such automobile is leased, the Company shall pay the residual cost of such lease). | ||
(iv) | Termination Stock Options. All of the outstanding unvested stock options granted to the Employee prior to termination will fully vest immediately upon termination. |
B. | Termination of Employment by Resignation of Employee or by the Company With Cause. Upon the termination of the Employees employment by the voluntary resignation of the Employee or by the Company with Cause, the Employee shall be due no further compensation under this Agreement related to Annual Base Salary, Annual Performance Award, Employee Benefits, or Termination Payment other than what is due and owing through the effective date of the Employees resignation or termination. |
3
C. | Retirement Plan Rights Unaffected. Termination of the Employees employment under this Agreement for any reason whatsoever shall not affect the Employees rights under the Companys retirement plan applicable to the Employee. |
A. | General. The Company and the Employee hereby acknowledge and agree that (i) the Employee is in possession of trade secrets (as defined in Section 688.002(4) of the Florida Statutes) of the Company (the Trade Secrets), (ii) the restrictive covenants contained in this Section 8 are justified by legitimate business interests of the Company, including, but not limited to, the protection of the Trade Secrets, in accordance with Section 542.335(1)(e) of the Florida Statutes, and (iii) the restrictive covenants contained in this Section 8 are reasonably necessary to protect such legitimate business interests of the Company. | ||
B. | Non-Competition. During the period of the Employees employment with the Company and until two (2) years after the termination of the Employees employment with the Company, the Employee will not, directly or indirectly, either (i) on the Employees own behalf or as a partner, officer, director, trustee, employee, agent, consultant or member of any person, firm or corporation, or otherwise, enter into the employ of, render any service to, or engage in any business or activity which is the same as or competitive with any business or activity conducted by the Company or any of its affiliates or majority-owned subsidiaries or (ii) become an officer, employee or consultant of, or otherwise assume a substantial role or relationship with, any governmental entity, agency or political subdivision that is a client or customer of the Company or any subsidiary or affiliate of the Company; provided, however, that the foregoing shall not be deemed to prevent the Employee from investing in securities of any company having a class of securities which is publicly traded, so long as through such investment holdings in the aggregate, the Employee is not deemed to be the beneficial owner of more than 5% of the class of securities that is so publicly traded. During the period of the Employees employment and until two (2) years after the termination of the Employees employment, the Employee will not, directly or indirectly, on the Employees own behalf or as a partner, shareholder, officer, employee, director, trustee, agent, consultant or member of any person, firm or corporation or otherwise, seek to employ or otherwise seek the services of any employee of the Company or any of its affiliates or majority-owned subsidiaries. | ||
C. | Confidentiality. During and following the period of the Employees employment with the Company, the Employee will not use for the Employees own benefit or for the benefit of others, or divulge to others, any information, Trade Secrets, knowledge or data of a secret or |
4
confidential nature and otherwise not available to members of the general public that concerns the business or affairs of the Company or its subsidiaries or affiliates and which was acquired by the Employee at any time prior to or during the term of the Employees employment with the Company, except with the specific prior written consent of the Company. | |||
D. | Work Product. The Employee agrees that all programs, inventions, innovations, improvements, developments, methods, designs, analyses, reports and all similar or related information which relate to the business of the Company and its subsidiaries and affiliates, actual or anticipated, or to any actual or anticipated research and development conducted in connection with the business of the Company and its subsidiaries affiliates, and all existing or future products or services, which are conceived, developed or made by the Employee (alone or with others) during the term of this Agreement (Work Product) belong to the Company. The Employee will cooperate fully in the establishment and maintenance of all rights of the Company and its subsidiaries and affiliates in such Work Product. The provisions of this Section 8(D) will survive termination of this Agreement indefinitely to the extent necessary to require actions to be taken by the Employee after the termination of the Agreement with respect to Work Product created during the term of this Agreement. | ||
E. | Enforcement. The Parties agree and acknowledge that the restrictions contained in this Section 8 are reasonable in scope and duration and are necessary to protect the Company or any of its subsidiaries or affiliates. If any covenant or agreement contained in this Section 8 is found by a court having jurisdiction to be unreasonable in duration, geographical scope or character of restriction, the covenant or agreement will not be rendered unenforceable thereby but rather the duration, geographical scope or character of restriction of such covenant or agreement will be reduced or modified with retroactive effect to make such covenant or agreement reasonable, and such covenant or agreement will be enforced as so modified. The Employee agrees and acknowledges that the breach of this Section 8 will cause irreparable injury to the Company or any of its subsidiaries or affiliates and upon the breach of any provision of this Section 8, the Company or any of its subsidiaries or affiliates shall be entitled to injunctive relief, specific performance or other equitable relief, without being required to post a bond; provided, however, that, this shall in no way limit any other remedies which the Company or any of its subsidiaries or affiliates may have (including, without limitation, the right to seek monetary damages). |
5
6
A. | GENERAL. It is the intention of both the Company and the Employee that the benefits and rights to which the Employee is entitled pursuant to this Agreement comply with Code Section 409A, to the extent that the requirements of Code Section 409A are applicable thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention. If the Employee or the Company believes, at any time, that any such benefit or right that is subject to Code Section 409A does not so comply, it shall promptly advise the other and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Code Section 409A (with the most limited possible economic effect on the Employee and on the Company). | ||
B. | DISTRIBUTIONS ON ACCOUNT OF SEPARATION FROM SERVICE. To the extent required to comply with Code Section 409A, any payment or benefit required to be paid under this Agreement on account of termination of the Employees service (or any other similar term) shall be made only in connection with a separation from service with respect to the Employee within the meaning of Code Section 409A. | ||
C. | NO ACCELERATION OF PAYMENTS. Neither the Company nor the Employee, individually or in combination, may accelerate any payment or benefit |
7
that is subject to Code Section 409A, except in compliance with Code Section 409A and the provisions of this Agreement, and no amount that is subject to Code Section 409A shall be paid prior to the earliest date on which it may be paid without violating Code Section 409A. | |||
D. | SIX MONTH DELAY FOR SPECIFIED EMPLOYEES. In the event that the Employee is a specified employee (as described in Code Section 409A), and any payment or benefit payable pursuant to this Agreement constitutes deferred compensation under Code Section 409A, then the Company and the Employee shall cooperate in good faith to undertake any actions that would cause such payment or benefit not to constitute deferred compensation under Code Section 409A. In the event that, following such efforts, the Company determines (after consultation with its counsel) that such payment or benefit is still subject to the six-month delay requirement described in Code Section 409A(2)(b) in order for such payment or benefit to comply with the requirements of Code Section 409A, then no such payment or benefit shall be made before the date that is six months after the Employees separation from service (as described in Code Section 409A) (or, if earlier, the date of the Employees death). Any payment or benefit delayed by reason of the prior sentence shall be paid out or provided in a single lump sum at the end of such required delay period in order to catch up to the original payment schedule. | ||
E. | TREATMENT OF EACH INSTALLMENT AS A SEPARATE PAYMENT. For purposes of applying the provisions of Code Section 409A to this Agreement, each separately identified amount to which the Employee is entitled under this Agreement shall be treated as a separate payment. In addition, to the extent permissible under Code Section 409A, any series of installment payments under this Agreement shall be treated as a right to a series of separate payments. | ||
F. | REIMBURSEMENTS AND IN-KIND BENEFITS. With respect to reimbursements and in-kind benefits that may be provided under the Agreement (the Reimbursement Plans), to the extent any benefits provided under the Reimbursement Plans are subject to Section 409A, the Reimbursement Plans shall meet the following requirements: |
8
G. | EMPLOYEE BENEFITS. With respect to any Employee Benefits that do not comply with (or are not exempt from) Code Section 409A, to the extent applicable, the Employee shall be deemed to receive from the Company a monthly payment necessary for the Employee to purchase the benefit in question. |
THE GEO GROUP, INC. |
||||
By: | /s/ George C. Zoley | |||
Name: | George C. Zoley | |||
Title: | Chairman & Chief Executive Officer | |||
EMPLOYEE |
||||
By: | /s/ Jorge A. Dominicis | |||
Name: | Jorge A. Dominicis | |||
Title: | Senior Vice President, The GEO Group,
Inc., President, GEO Care, Inc.
The GEO Group, Inc. |
|||
9
THE GEO GROUP, INC. |
||||
By: | /s/ George C. Zoley | |||
Name: | George C. Zoley | |||
Title: | Chairman and Chief Executive Officer | |||
EMPLOYEE |
||||
By: | /s/ Jorge A. Dominicis | |||
Name: | Jorge A. Dominicis | |||
2
-2-
-3-
-4-
-5-
-6-
Period | Maximum Ratio | |
Effective Date through and including the last day of the
fiscal year 2011
|
5.25 to 1.00 | |
First day of the fiscal year 2012 through and including
the last day of the fiscal year 2012
|
5.00 to 1.00 | |
First day of the fiscal year 2013 through and including
the last day of the fiscal year 2013
|
4.75 to 1.00 | |
Thereafter
|
4.25 to 1.00 |
-7-
Period | Maximum Ratio | |
Effective Date through and including the last day of the
second quarter of the fiscal year 2012
|
3.25 to 1.00 | |
First day of the third quarter of the fiscal year 2012
through and including the last day of the second quarter
of the fiscal year 2013
|
3.00 to 1.00 | |
Thereafter
|
2.75 to 1.00 |
Section 4. Conditions Precedent. The amendments set forth in Section 2 hereof shall become effective on the date that each of the following conditions shall have been satisfied: |
-8-
THE GEO GROUP, INC., as Borrower |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R.EVANS | |||
Title: | Sr. VP & CFO The GEO Group, Inc. |
|||
GUARANTORS: CORRECTIONAL SERVICES CORPORATION |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP & Treasurer Correctional Services Corp. |
|||
CORRECTIONAL PROPERTIES PRISON FINANCE LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, Finance Correctional Prperties Prison Finance LLC |
|||
CPT LIMITED PARTNER, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, Finance CPT Limited Partner, LLC |
|||
CPT OPERATING PARTNERSHIP L.P. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, Finance CPT Operating Partnership L.P. |
|||
GEO ACQUISITION II, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, Finance GEO Acquisition II, Inc. |
|||
GEO ACQUISITION IV, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | Vice President-Finance | |||
GEO CARE, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | Treasurer GEO Care, Inc. |
|||
GEO HOLDINGS I, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, Finance GEO Holdings I, Inc. |
|||
GEO RE HOLDINGS LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | SVP & Treasurer GEO RE Holdings LLC |
|||
GEO TRANSPORT, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP & Treasurer BEO Transport Inc. |
|||
JUST CARE, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP & Treasurer Just Care, Inc. |
|||
PUBLIC PROPERTIES DEVELOPMENT AND LEASING LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | Public Properties Development & Leasing LLC | |||
CORNELL COMPANIES, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CCG I CORPORATION |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL ABRAXAS GROUP, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL COMPANIES ADMINISTRATION, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL COMPANIES MANAGEMENT, LP |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL COMPANIES MANAGEMENT SERVICES, LIMITED PARTNERSHIP |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS MANAGEMENT, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF ALASKA, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF CALIFORNIA, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF RHODE ISLAND, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF TEXAS, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORNELL INTERVENTIONS, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
CORRECTIONAL SYSTEMS, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
WBP LEASING, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
WBP LEASING, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | BRIAN R. EVANS | |||
Title: | VP, CFO | |||
BNP PARIBAS, as Administrative Agent |
||||
By: | /s/ Brendan Heneghan | |||
Name: | BRENDAN HENEGHAN | |||
Title: | Vice President | |||
By: | /s/ John Treadwell, Jr. | |||
Name: | John Treadwell, Jr. | |||
Title: | Vice President | |||
Lender Signatories Hereto * |
Abraxas Academy |
||
Mailing:
|
Site: | |
P.O. Box 645
|
1000 Academy Drive | |
Morgantown, PA 19543
|
New Morgan, PA 19543 | |
Owner: WBP Leasing, Inc. |
* | Certain portions of the Series A-2 Incremental Loan Agreement have been omitted based upon a request for confidential treatment filed with the Securities and Exchange Commission. The non-public information has been filed with the Securities and Exchange Commission. |
Principal Payment Date | Principal Amount | |||
Each of the Principal Payment Dates falling after the
Amendment No. 1 Effective Date and on or before the
second anniversary of the Amendment No. 1 Effective Date |
$ | 1,875,000 | ||
Each of the Principal Payment Dates falling after the
second anniversary of the Amendment No. 1 Effective Date
and on or before the third anniversary of the Amendment
No. 1 Effective Date |
$ | 3,750,000 | ||
Each of the Principal Payment Dates falling after the
third anniversary of the Amendment No. 1 Effective Date
and on or before the fourth anniversary of the Amendment
No. 1 Effective Date |
$ | 7,500,000 | ||
Each of the Principal Payment Dates falling after the
fourth anniversary of the Amendment No. 1 Effective Date
and on or before the fifth anniversary of the Effective
Date |
$ | 45,000,000 |
ABR | Eurodollar | |||||||||||||
Applicable | Applicable | Commitment | ||||||||||||
Category | Total Leverage Ratio | Rate | Rate | Fee Rate | ||||||||||
1 | >4.25 to 1.00 |
2.00 | % | 3.00 | % | 0.500 | % | |||||||
2 | >3.75 to 1.00
and £4.25 to
1.00 |
1.75 | % | 2.75 | % | 0.500 | % | |||||||
3 | >3.25 to 1.00
and £3.75 to
1.00 |
1.50 | % | 2.50 | % | 0.500 | % |
ABR | Eurodollar | |||||||||||||
Applicable | Applicable | Commitment | ||||||||||||
Category | Total Leverage Ratio | Rate | Rate | Fee Rate | ||||||||||
4 | >2.50 to 1.00
and £3.25 to
1.00 |
1.25 | % | 2.25 | % | 0.500 | % | |||||||
5 | <2.50 to 1.00 |
1.00 | % | 2.00 | % | 0.375 | % |
THE GEO GROUP, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | Sr. VP & CFO | |||
CORRECTIONAL SERVICES CORPORATION |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP & Treasurer | |||
CORRECTIONAL PROPERTIES PRISON FINANCE LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, Finance | |||
CPT LIMITED PARTNER, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, Finance | |||
CPT OPERATING PARTNERSHIP L.P. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, Finance | |||
GEO ACQUISITION II, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, Finance | |||
GEO ACQUISITION IV, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP-Finance | |||
GEO CARE, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | Treasurer | |||
GEO HOLDINGS I, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, Finance | |||
GEO RE HOLDINGS LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | SVP & Treasurer | |||
GEO TRANSPORT, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP & Treasurer | |||
JUST CARE, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP & Treasurer | |||
PUBLIC PROPERTIES DEVELOPMENT AND LEASING LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, Finance | |||
CORNELL COMPANIES, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CCG I CORPORATION |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL ABRAXAS GROUP, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL COMPANIES ADMINISTRATION, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL COMPANIES MANAGEMENT, LP |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL COMPANIES MANAGEMENT SERVICES, LIMITED PARTNERSHIP |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS MANAGEMENT, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF ALASKA, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF CALIFORNIA, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF RHODE ISLAND, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL CORRECTIONS OF TEXAS, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORNELL INTERVENTIONS, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
CORRECTIONAL SYSTEMS, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
WBP LEASING, INC. |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
WBP LEASING, LLC |
||||
By: | /s/ Brian R. Evans | |||
Name: | Brian R. Evans | |||
Title: | VP, CFO | |||
ADMINISTRATIVE AGENT BNP PARIBAS, as Administrative Agent |
||||
By: | /s/ Brendan Heneghan | |||
Name: | Brendan Heneghan | |||
Title: | Vice President | |||
By: | /s/ John Treadwell, Jr. | |||
Name: | John Treadwell, Jr. | |||
Title: | Vice President | |||
* | Confidential terms omitted and provided separately to the Securities and Exchange Commission. |
1. | I have reviewed this quarterly report on Form 10-Q of The GEO Group, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 10, 2011 | /s/ George C. Zoley | |||
George C. Zoley | ||||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of The GEO Group, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 10, 2011 | /s/ Brian R. Evans | |||
Brian R. Evans | ||||
Chief Financial Officer |
(1) | The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
(2) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ George C. Zoley | ||||
George C. Zoley | ||||
Chief Executive Officer | ||||
(1) | The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
(2) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Brian R. Evans | ||||
Brian R. Evans | ||||
Chief Financial Officer | ||||
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