Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2012

Condensed Consolidating Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Information

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Company's 6.625% Senior Notes and 7¾% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company and certain of its wholly-owned domestic subsidiaries (the “Subsidiary Guarantors”). The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(d) of Regulation S-X promulgated under the Securities Act, presents the condensed consolidating financial information separately for:

(i) The GEO Group, Inc., as the issuer of the Notes;

(ii) The Subsidiary Guarantors, on a combined basis, which are 100% owned by The GEO Group, Inc., and which are guarantors of the Notes;

(iii) The Company’s other subsidiaries, on a combined basis, which are not guarantors of the Notes (the “Non-Guarantor Subsidiaries”);

(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 Company’s subsidiaries; and

(v) The Company and its subsidiaries on a consolidated basis.

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)

	As of September 30, 2012
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	45,827	$	4,402	$	18,856	$	—		$	69,085
Restricted cash and investments	—		—		15,530		—			15,530
Accounts receivable, less allowance for doubtful accounts	117,313		113,123		21,023		—			251,459
Deferred income tax assets, net	14,063		13,348		3,788		—			31,199
Prepaid expenses and other current assets	5,781		6,425		13,994		(1,154		)	25,046
Current assets of discontinued operations	5,346		982		—		—			6,328
Total current assets	188,330		138,280		73,191		(1,154		)	398,647
Restricted Cash and Investments	9,460		—		34,824		—			44,284
Property and Equipment, Net	633,794		961,568		114,266		—			1,709,628
Assets Held for Sale	3,083		3,507		—		—			6,590
Direct Finance Lease Receivable	—		—		28,128		—			28,128
Intercompany Receivable	475,241		14,212		9,866		(499,319		)	—
Deferred Income Tax Assets, Net	—		—		1,711		—			1,711
Goodwill	34		507,272		772		—			508,078
Intangible Assets, Net	—		184,513		1,716		—			186,229
Investment in Subsidiaries	1,264,286		38,702		—		(1,302,988		)	—
Other Non-Current Assets	38,329		86,930		37,995		(78,980		)	84,274
Non-Current Assets of Discontinued Operations	—		—		—		—			—
Total Assets	$	2,612,557	$	1,934,984	$	302,469	$	(1,882,441	)	$	2,967,569
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	12,846	$	37,950	$	2,847	$	—		$	53,643
Accrued payroll and related taxes	20,218		11,039		19,159		—			50,416
Accrued expenses	89,808		23,645		22,307		(1,154		)	134,606
Current portion of capital lease obligations, long-term debt and non-recourse debt	28,328		1,400		18,112		—			47,840
Current liabilities of discontinued operations	315		4		—		—			319
Total current liabilities	151,515		74,038		62,425		(1,154		)	286,824
Deferred Income Tax Liabilities	42,879		76,557		34		—			119,470
Intercompany Payable	9,866		472,038		17,415		(499,319		)	—
Other Non-Current Liabilities	32,365		103,393		2,428		(78,980		)	59,206
Capital Lease Obligations	—		12,192		—		—			12,192
Long-Term Debt	1,324,653		249		—		—			1,324,902
Non-Recourse Debt	—		—		113,136		—			113,136
Commitments & Contingencies
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,051,279		1,196,510		106,478		(1,302,988		)	1,051,279
Noncontrolling Interests	—		7		553		—			560
Total Shareholders’ Equity	1,051,279		1,196,517		107,031		(1,302,988		)	1,051,839
Total Liabilities and Shareholders' Equity	$	2,612,557	$	1,934,984	$	302,469	$	(1,882,441	)	$	2,967,569

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)

	As of January 1, 2012
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	15,085	$	3,155	$	26,513	$	—		$	44,753
Restricted cash and investments	—		—		42,535		—			42,535
Accounts receivable, less allowance for doubtful accounts	123,426		139,574		22,810		—			285,810
Deferred income tax assets, net	14,063		10,875		3,788		—			28,726
Prepaid expenses and other current assets	17,170		23,791		10,539		(1,154		)	50,346
Current assets of discontinued operations	5,021		2,138		—		—			7,159
Total current assets	174,765		179,533		106,185		(1,154		)	459,329
Restricted Cash and Investments	8,016		—		49,896		—			57,912
Property and Equipment, Net	620,124		834,345		250,837		—			1,705,306
Assets Held for Sale	3,083		1,280		—		—			4,363
Direct Finance Lease Receivable	—		—		32,146		—			32,146
Intercompany Receivable	386,026		14,305		14,028		(414,359		)	—
Deferred Income Tax Assets, Net	—		—		1,711		—			1,711
Goodwill	34		507,272		760		—			508,066
Intangible Assets, Net	—		198,477		1,865		—			200,342
Investment in Subsidiaries	1,333,885		9,784		—		(1,343,669		)	—
Other Non-Current Assets	40,695		73,480		31,022		(65,621		)	79,576
Non-Current Assets of Discontinued Operations	697		168		—		—			865
Total Assets	$	2,567,325	$	1,818,644	$	488,450	$	(1,824,803	)	$	3,049,616
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	47,159	$	18,531	$	3,942	$	—		$	69,632
Accrued payroll and related taxes	2,855		18,273		17,002		—			38,130
Accrued expenses	69,585		33,500		24,751		(1,154		)	126,682
Current portion of capital lease obligations, long-term debt and non-recourse debt	19,037		1,363		33,266		—			53,666
Current liabilities of discontinued operations	542		166		—		—			708
Total current liabilities	139,178		71,833		78,961		(1,154		)	288,818
Deferred Income Tax Liabilities	42,879		82,296		34		—			125,209
Intercompany Payable	14,027		378,005		22,327		(414,359		)	—
Other Non-Current Liabilities	29,384		28,654		63,964		(65,621		)	56,381
Capital Lease Obligations	—		13,087		—		—			13,087
Long-Term Debt	1,318,639		429		—		—			1,319,068
Non-Recourse Debt	—		—		208,532		—			208,532
Commitments & Contingencies
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,023,218		1,229,553		114,116		(1,343,669		)	1,023,218
Noncontrolling Interests	—		14,787		516		—			15,303
Total Shareholders’ Equity	1,023,218		1,244,340		114,632		(1,343,669		)	1,038,521
Total Liabilities and Shareholders' Equity	$	2,567,325	$	1,818,644	$	488,450	$	(1,824,803	)	$	3,049,616

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

(dollars in thousands)

(unaudited)

	For the Thirteen Weeks Ended September 30, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	152,627		$	217,333		$	61,846		$	(20,282	)	$	411,524
Operating expenses	129,012			144,573			52,529			(20,282		)	305,832
Depreciation and amortization	7,328			14,465			1,968			—			23,761
General and administrative expenses	9,625			13,703			3,900			—			27,228
Operating income	6,662			44,592			3,449			—			54,703
Interest income	8,178			385			1,640			(8,552		)	1,651
Interest expense	(17,289		)	(8,433		)	(3,436		)	8,552			(20,606		)
Loss on early extinguishment of debt	—			(8,462		)	—			—			(8,462		)
Income (loss) before income taxes and equity in earnings of affiliates	(2,449		)	28,082			1,653			—			27,286
Provision (benefit) for income taxes	(993		)	10,981			1,316			—			11,304
Equity in earnings of affiliates, net of income tax provision	—			—			474			—			474
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(1,456		)	17,101			811			—			16,456
Income from consolidated subsidiaries, net of income tax provision	17,912			—			—			(17,912		)	—
Income from continuing operations	16,456			17,101			811			(17,912		)	16,456
Net income (loss) from discontinued operations	(1,729		)	(36		)	—			36			(1,729		)
Net income	14,727			17,065			811			(17,876		)	14,727
Net loss attributable to noncontrolling interests	—			—			890			—			890
Net income attributable to The GEO Group, Inc.	$	14,727		$	17,065		$	1,701		$	(17,876	)	$	15,617
Net income	$	14,727		$	17,065		$	811		$	(17,876	)	$	14,727
Other comprehensive income, net of tax	30			—			85			—			115
Total comprehensive income	$	14,757		$	17,065		$	896		$	(17,876	)	$	14,842
Comprehensive loss attributable to noncontrolling interests	—						903			$	—		903
Comprehensive income attributable to The GEO Group, Inc.	$	14,757		$	17,065		$	1,799		$	(17,876	)	$	15,745

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

(dollars in thousands)

(unaudited)

	For the Thirteen Weeks Ended October 2, 2011
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	141,084		$	218,972		$	55,389		$	(19,762	)	$	395,683
Operating expenses	126,613			148,313			42,536			(19,762		)	297,700
Depreciation and amortization	5,420			14,574			1,856			—			21,850
General and administrative expenses	9,091			13,483			3,348			—			25,922
Operating income (loss)	(40		)	42,602			7,649			—			50,211
Interest income	7,754			405			1,648			(8,040		)	1,767
Interest expense	(15,805		)	(8,065		)	(3,497		)	8,040			(19,327		)
Income (loss) before income taxes and equity in earnings of affiliates	(8,091		)	34,942			5,800			—			32,651
Provision (benefit) for income taxes	(3,127		)	13,502			1,880			—			12,255
Equity in earnings of affiliates, net of income tax provision	—			—			272			—			272
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(4,964		)	21,440			4,192			—			20,668
Income from consolidated subsidiaries, net of income tax provision	25,632			—			—			(25,632		)	—
Income from continuing operations	20,668			21,440			4,192			(25,632		)	20,668
Net income from discontinued operations	625			207			—			(207		)	625
Net income	21,293			21,647			4,192			(25,839		)	21,293
Net loss attributable to noncontrolling interests	—			(1		)	226			—			225
Net income attributable to The GEO Group, Inc.	$	21,293		$	21,646		$	4,418		$	(25,839	)	$	21,518
Net income	$	21,293		$	21,647		$	4,192		$	(25,839	)	$	21,293
Other comprehensive income (loss), net of tax	9			—			(7,530		)	—			(7,521		)
Total comprehensive income	$	21,302		$	21,647		$	(3,338	)	$	(25,839	)	$	13,772
Comprehensive loss attributable to noncontrolling interests	—			—			325			—			325
Comprehensive income attributable to The GEO Group, Inc.	$	21,302		$	21,647		$	(3,013	)	$	(25,839	)	$	14,097

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (dollars in thousands) (unaudited)
	For the Thirty-nine Weeks Ended September 30, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	446,997		$	653,809		$	185,020		$	(60,697	)	$	1,225,129
Operating expenses	390,472			439,448			149,904			(60,697		)	919,127
Depreciation and amortization	21,572			42,783			6,288			—			70,643
General and administrative expenses	28,405			41,549			11,758			—			81,712
Operating income	6,548			130,029			17,070			—			153,647
Interest income	23,833			1,271			4,902			(24,787		)	5,219
Interest expense	(51,043		)	(24,270		)	(11,504		)	24,787			(62,030		)
Loss on early extinguishment of debt	—			(8,462		)	—			—			(8,462		)
Income (loss) before income taxes and equity in earnings of affiliates	(20,662		)	98,568			10,468			—			88,374
Provision (benefit) for income taxes	(7,316		)	37,974			4,854			—			35,512
Equity in earnings of affiliates, net of income tax provision	—			—			1,652			—			1,652
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(13,346		)	60,594			7,266			—			54,514
Income from consolidated subsidiaries, net of income tax provision	67,860			—			—			(67,860		)	—
Income from continuing operations	54,514			60,594			7,266			(67,860		)	54,514
Net income (loss) from discontinued operations	(2,252		)	187			—			(187		)	(2,252		)
Net income	52,262			60,781			7,266			(68,047		)	52,262
Net income attributable to noncontrolling interests	—			—			881			—			881
Net income attributable to The GEO Group, Inc.	$	52,262		$	60,781		$	8,147		$	(68,047	)	$	53,143
Net income	$	52,262		$	60,781		$	7,266		$	(68,047	)	$	52,262
Other comprehensive income (loss), net of tax	89			—			(469		)	—			(380		)
Total comprehensive income	$	52,351		$	60,781		$	6,797		$	(68,047	)	$	51,882
Comprehensive income attributable to noncontrolling interests	—			—			900			—			900
Comprehensive income attributable to The GEO Group, Inc.	$	52,351		$	60,781		$	7,697		$	(68,047	)	$	52,782

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (dollars in thousands) (unaudited)
	For the Thirty-nine Weeks Ended October 2, 2011
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	414,896		$	646,942		$	168,404		$	(57,411	)	$	1,172,831
Operating expenses	377,637			434,589			131,142			(57,411		)	885,957
Depreciation and amortization	14,275			41,633			5,588			—			61,496
General and administrative expenses	30,055			44,850			11,515			—			86,420
Operating income (loss)	(7,071		)	125,870			20,159			—			138,958
Interest income	21,258			1,142			4,673			(22,108		)	4,965
Interest expense	(45,044		)	(21,987		)	(10,777		)	22,108			(55,700		)
Income (loss) before income taxes and equity in earnings of affiliates	(30,857		)	105,025			14,055			—			88,223
Provision (benefit) for income taxes	(11,836		)	40,582			5,183			—			33,929
Equity in earnings of affiliates, net of income tax provision	—			—			2,352			—			2,352
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(19,021		)	64,443			11,224			—			56,646
Income from consolidated subsidiaries, net of income tax provision	75,667			—			—			(75,667		)	—
Income from continuing operations	56,646			64,443			11,224			(75,667		)	56,646
Net income from discontinued operations	2,190			710			—			(710		)	2,190
Net income	58,836			65,153			11,224			(76,377		)	58,836
Net loss attributable to noncontrolling interests	—			1			1,049			—			1,050
Net income attributable to The GEO Group, Inc.	$	58,836		$	65,154		$	12,273		$	(76,377	)	$	59,886
Net income	$	58,836		$	65,153		$	11,224		$	(76,377	)	$	58,836
Other comprehensive income (loss), net of tax	28			—			(6,747		)	—			(6,719		)
Total comprehensive income	58,864			65,153			4,477			(76,377		)	52,117
Comprehensive loss attributable to noncontrolling interests	—			—			1,160			—			1,160
Comprehensive income attributable to The GEO Group, Inc.	$	58,864		$	65,153		$	5,637		$	(76,377	)	$	53,277

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Thirty-nine Weeks Ended September 30, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	85,762		$	76,993		$	63,640		$	226,395
Cash Flow from Investing Activities:
Acquisition of ownership interests in MCF	—			(35,154		)	—			(35,154		)
Proceeds from sale of property and equipment	302			203			103			608
Proceeds from sale of assets held for sale	—			5,641			—			5,641
Change in restricted cash and investments	119			—			40,659			40,778
Capital expenditures	(58,800		)	(30,537		)	(3,019		)	(92,356		)
Net cash (used in) provided by investing activities	(58,379		)	(59,847		)	37,743			(80,483		)
Cash Flow from Financing Activities:
Payments on long-term debt	(247,834		)	(1,038		)	(103,259		)	(352,131		)
Proceeds from long-term debt	263,000			—			—			263,000
Distribution to noncontrolling interests	—			—			(5,758		)	(5,758		)
Proceeds from the exercise of stock options	1,846			—			—			1,846
Debt issuance costs	(880		)	—			(37		)	(917		)
Payment of make-whole provision and other fees for early extinguishment of debt	—			(14,861		)	—			(14,861		)
Payments for purchase of treasury shares	(48		)	—			—			(48		)
Income tax provision of equity compensation	241			—			—			241
Payments for retirement of common stock	(1,035		)	—			—			(1,035		)
Proceeds from reissuance of treasury stock in connection with ESPP	373			—			—			373
Cash dividends paid	(12,304		)	—			—			(12,304		)
Net cash provided by (used in) financing activities	3,359			(15,899		)	(109,054		)	(121,594		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			14			14
Net (Decrease) Increase in Cash and Cash Equivalents	30,742			1,247			(7,657		)	24,332
Cash and Cash Equivalents, beginning of period	15,085			3,155			26,513			44,753
Cash and Cash Equivalents, end of period	$	45,827		$	4,402		$	18,856		$	69,085

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Thirty-nine Weeks Ended October 2, 2011
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by (used in) operating activities	$	118,955		$	7,802		$	37,367		$	164,124
Cash Flow from Investing Activities:
Acquisition of BI, cash consideration, net of cash acquired	(409,607		)	—			—			(409,607		)
Proceeds from sale of property and equipment	—			781			14			795
Proceeds from assets held for sale	—			7,121			—			7,121
Change in restricted cash and investments	—			—			(4,126		)	(4,126		)
Capital expenditures	(164,926		)	(11,196		)	(1,534		)	(177,656		)
Net cash (used in) provided by investing activities	(574,533		)	(3,294		)	(5,646		)	(583,473		)
Cash Flow from Financing Activities:
Payments on long-term debt	(102,925		)	(935		)	(23,684		)	(127,544		)
Proceeds from long-term debt	617,247			—			—			617,247
Distribution to noncontrolling interests	—			—			(4,012		)	(4,012		)
Proceeds from the exercise of stock options	2,446			—			—			2,446
Income tax benefit of equity compensation	536			—			—			536
Debt issuance costs	(11,192		)	—			—			(11,192		)
Payments for purchase of treasury shares	(49,987		)	—			—			(49,987		)
Net cash provided by (used in) financing activities	456,125			(935		)	(27,696		)	427,494
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(3,853		)	(3,853		)
Net Increase in Cash and Cash Equivalents	547			3,573			172			4,292
Cash and Cash Equivalents, beginning of period	2,614			221			36,829			39,664
Cash and Cash Equivalents, end of period	$	3,161		$	3,794		$	37,001		$	43,956