Business Segment and Geographic Information

6 Months Ended

Jul. 03, 2011

Business Segment and Geographic Information [Abstract]

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

13. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the U.S. Detention & Corrections segment; the International Services segment; the GEO Care segment; and the Facility Construction & Design segment. The Company has identified these four reportable segments to reflect the current view that the Company operates four distinct business lines, each of which constitutes a material part of its overall business. The U.S. Detention & Corrections segment primarily encompasses U.S.-based privatized corrections and detention business. The International Services segment primarily consists of privatized corrections and detention operations in South Africa, Australia and the United Kingdom. The GEO Care segment, which is operated by the Company’s wholly-owned subsidiary GEO Care, Inc. and conducts its services in the U.S., represents services provided for mental health, residential and non-residential treatment, educational and community based programs, pre-release and halfway house programs, compliance technologies, monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants. The Facility Construction & Design segment consists of contracts with various state, local and federal agencies for the design and construction of facilities for which the Company has management contracts. As a result of the acquisition of Cornell, management’s review of certain segment financial data was revised with regards to the Bronx Community Re-entry Center and the Brooklyn Community Re-entry Center. These facilities now report within the GEO Care segment and are no longer included with U.S. Detention & Corrections. Disclosures for business segments reflect reclassifications for all periods presented and are as follows (in thousands):

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 3, 2011			July 4, 2010			July 3, 2011			July 4, 2010
Revenues:
U.S. Detention & Corrections	$	241,676		$	192,081		$	483,305		$	381,788
International Services		55,284			44,708			108,413			90,590
GEO Care		110,857			36,973			207,746			74,475
Facility Construction & Design		—			6,333			119			20,784
Total revenues	$	407,817		$	280,095		$	799,583		$	567,637
Depreciation and amortization:
U.S. Detention & Corrections	$	13,326		$	8,177		$	26,254		$	16,083
International Services		548			420			1,077			855
GEO Care		7,182			877			12,527			1,774
Facility Construction & Design		—			—			—			—
Total depreciation and amortization	$	21,056		$	9,474		$	39,858		$	18,712
Operating income:
U.S. Detention & Corrections	$	54,371		$	45,528		$	110,148		$	90,468
International Services		2,323			3,407			6,274			5,250
GEO Care		21,446			4,573			35,293			8,814
Facility Construction & Design		(23	)		197			80			1,145
Operating income from segments		78,117			53,705			151,795			105,677
General and administrative expenses		(27,710	)		(20,655	)		(60,498	)		(38,103	)
Total operating income	$	50,407		$	33,050		$	91,297		$	67,574

	July 3, 2011		January 2, 2011
Segment assets:
U.S. Detention & Corrections	$	1,906,439	$	1,855,067
International Services		100,878		103,004
GEO Care		765,907		301,334
Facility Construction & Design		144		26
Total segment assets	$	2,773,368	$	2,259,431

Pre-Tax Income Reconciliation of Segments

The following is a reconciliation of the Company’s total operating income from its reportable segments to the Company’s income before income taxes, equity in earnings of affiliates and discontinued operations, in each case, during the thirteen weeks ended July 3, 2011 and April 4, 2010, respectively (in thousands).

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 3, 2011			July 4, 2010			July 3, 2011			July 4, 2010
Total operating income from segments	$	78,117		$	53,705		$	151,795		$	105,677
Unallocated amounts:
General and Administrative Expenses		(27,710	)		(20,655	)		(60,498	)		(38,103	)
Net interest expense		(17,783	)		(6,961	)		(33,175	)		(13,546	)
Income before income taxes and equity in earnings of affiliates	$	32,624		$	26,089		$	58,122		$	54,028

Asset Reconciliation of Segments

The following is a reconciliation of the Company’s reportable segment assets to the Company’s total assets as of July 3, 2011 and January 2, 2011, respectively (in thousands).

	July 3, 2011		January 2, 2011
Reportable segment assets	$	2,773,368	$	2,259,431
Cash		57,453		39,664
Deferred income tax		48,919		33,062
Restricted cash and investments		102,553		90,642
Total assets	$	2,982,293	$	2,422,799

Sources of Revenue

The Company derives most of its Detention & Corrections revenue from the management of privatized correctional and detention facilities and also receives revenue from related transportation services. GEO Care derives revenue from the management of residential treatment facilities and community based re-entry facilities and also from its electronic monitoring and evidence-based supervision and treatment services. Facility Construction & Design generates its revenue from the construction and expansion of new and existing correctional, detention and residential treatment facilities. All of the Company’s revenue is generated from external customers (in thousands).

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3, 2011		July 4, 2010		July 3, 2011		July 4, 2010
Revenues:
Detention & Corrections	$	296,960	$	236,789	$	591,718	$	472,378
GEO Care		110,857		36,973		207,746		74,475
Facility Construction & Design		—		6,333		119		20,784
Total revenues	$	407,817	$	280,095	$	799,583	$	567,637

Equity in Earnings of Affiliates

Equity in earnings of affiliates includes the Company’s joint venture in South Africa, SACS. This entity is accounted for under the equity method of accounting and the Company’s investment in SACS is presented as a component of other non-current assets in the accompanying consolidated balance sheets.

A summary of financial data for SACS is as follows (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3, 2011		July 4, 2010		July 3, 2011		July 4, 2010
Statement of Operations Data
Revenues	$	12,830	$	10,994	$	25,001	$	21,755
Operating income		5,369		4,508		10,129		8,600
Net income		2,837		2,257		4,160		3,437

	July 3, 2011		January 2, 2011
Balance Sheet Data
Current assets	$	34,341	$	40,624
Non-current assets		48,347		50,613
Current liabilities		3,696		3,552
Non-current liabilities		59,104		60,129
Shareholders’ equity		19,888		27,556

During the twenty-six weeks ended July 3, 2011, the Company’s consolidated South African subsidiary, South African Custodial Holdings Pty. Ltd. (“SACH”) received a dividend of $5.4 million from SACS which reduced the Company’s investment in its joint venture. As of July 3, 2011 and January 2, 2011, the Company’s investment in SACS was $9.9 million and $13.8 million, respectively. The investment is included in other non-current assets in the accompanying consolidated balance sheets.