Business Segments and Geographic Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Business Segments and Geographic Information

12. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the U.S. Secure Services segment; the Electronic Monitoring and Supervision Services segment; the Reentry Services segment; and the International Services 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. Secure Services segment primarily encompasses U.S.-based secure services business. The Electronic Monitoring and Supervision Services segment, which conducts its services in the United States, represents technology and services provided to adults for monitoring services for community-based parolees, probationers, and pretrial defendants. The Reentry Services segment, which conducts its services in the United States represents evidence-based supervision and treatment programs provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs. The International Services segment primarily consists of secure services operations in South Africa and Australia. Segment disclosures below (in thousands) reflect the results of continuing operations. All transactions between segments are eliminated.

The Company's segment revenues from external customers and a measure of segment profit are as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Revenues:
U.S. Secure Services	$	372,543		$	353,402		$	738,500		$	704,647
Electronic Monitoring and Supervision Services		108,029			121,484			240,669			209,405
Reentry Services		67,594			65,720			131,817			127,151
International Services		45,725			47,571			91,114			98,159
Total revenues	$	593,891		$	588,177		$	1,202,100		$	1,139,362
Operating income from segments:
U.S. Secure Services	$	67,058		$	72,824		$	131,402		$	147,532
Electronic Monitoring and Supervision Services		55,121			54,245			119,809			93,165
Reentry Services		10,186			14,207			20,372			24,211
International Services		1,707			3,094			5,283			9,548
Operating income from segments	$	134,072		$	144,370		$	276,866		$	274,456
General and Administrative Expenses		(41,692	)		(49,296	)	$	(91,826	)		(97,856	)
Total Operating Income	$	92,380		$	95,074		$	185,040		$	176,600

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 and equity in earnings of affiliates (in thousands):

	Three Months Ended						Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Operating income from segments	$	134,072		$	144,370		$	276,866		$	274,456
Unallocated amounts:
General and administrative expenses		(41,692	)		(49,296	)		(91,826	)		(97,856	)
Net interest expense		(53,749	)		(27,663	)		(106,839	)		(53,656	)
Loss on extinguishment of debt		(1,618	)		-			(1,754	)		-
Gain on disposition on asset divestitures		2,175			3,680			2,175			3,053
Income before income taxes and equity in earnings of    affiliates	$	39,188		$	71,091		$	78,622		$	125,997

Equity in Earnings of Affiliates

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in South African Custodial Services Pty. Limited (“SACS”), located in South Africa, and GEOAmey PECS Limited (“GEOAmey”), located in the United Kingdom. The Company's investments in these entities are accounted for under the equity method of accounting. The Company’s investments in these entities are presented as a component of Other Non-Current Assets in the accompanying consolidated balance sheets.

The Company has recorded $1.0 million in earnings, net of tax, for SACS operations during the six months ended June 30, 2023, and $1.5 million in earnings, net of tax, for SACS operations during the six months ended June 30, 2022, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2023, and December 31, 2022, the Company’s investment in SACS was $9.3 million and $11.1 million, respectively, and represents its share of cumulative reported earnings.

The Company has recorded $1.4 million in earnings, net of tax, for GEOAmey's operations during the six months ended June 30, 2023, and $1.2 million in earnings, net of tax, for GEOAmey's operations during the six months ended June 30, 2022, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2023, and December 31, 2022, the Company’s investment in GEOAmey was $9.7 million and $9.5 million, respectively, and represents its share of cumulative reported earnings.