Business Segments and Geographic Information

9 Months Ended

Sep. 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						Nine Months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Revenues:
U.S. Secure Services	$	385,007		$	368,493		$	1,123,507		$	1,073,140
Electronic Monitoring and Supervision Services		94,489			137,039			335,158			346,444
Reentry Services		71,375			65,406			203,192			192,557
International Services		51,914			45,745			143,028			143,904
Total revenues	$	602,785		$	616,683		$	1,804,885		$	1,756,045
Operating income from segments:
U.S. Secure Services	$	64,187		$	67,462		$	195,589		$	214,994
Electronic Monitoring and Supervision Services		46,651			67,673			166,460			160,838
Reentry Services		16,826			9,816			37,198			34,027
International Services		3,281			3,192			8,564			12,740
Operating income from segments	$	130,945		$	148,143		$	407,811		$	422,599
General and Administrative Expenses		(47,356	)		(50,022	)	$	(139,182	)		(147,878	)
Total Operating Income	$	83,589		$	98,121		$	268,629		$	274,721

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						Nine Months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Operating income from segments	$	130,945		$	148,143		$	407,811		$	422,599
Unallocated amounts:
General and administrative expenses		(47,356	)		(50,022	)		(139,182	)		(147,878	)
Net interest expense		(54,457	)		(41,426	)		(161,296	)		(95,082	)
Loss on extinguishment of debt		(91	)		(37,487	)		(1,845	)		(37,487	)
Gain on disposition on asset divestitures		1,274			29,279			3,449			32,332
Income before income taxes and equity in earnings of    affiliates	$	30,315		$	48,487		$	108,937		$	174,484

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 $1.5 million in earnings, net of tax, for SACS operations during the nine months ended September 30, 2023, and $1.5 million in earnings, net of tax, for SACS operations during the nine months ended September 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 September 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 $1.6 million in earnings, net of tax, for GEOAmey's operations during the nine months ended September 30, 2023, and $1.2 million in earnings, net of tax, for GEOAmey's operations during the nine months ended September 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 September 30, 2023, and December 31, 2022, the Company’s investment in GEOAmey was $9.5 million and represents its share of cumulative reported earnings.