Condensed Consolidating Financial Information

3 Months Ended

Mar. 31, 2013

Condensed Consolidating Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Information

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Company's 6.625% Senior Notes, 7¾% Senior Notes, and 5.125% 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 March 31, 2013
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	32,986	$	19,085	$	31,653	$	—		$	83,724
Restricted cash and investments	—		—		15,780		—			15,780
Accounts receivable, less allowance for doubtful accounts	90,547		145,102		19,268		—			254,917
Deferred income tax assets, net	—		14,604		3,686		—			18,290
Prepaid expenses and other current assets	2,321		13,270		11,212		(1,154		)	25,649
Total current assets	125,854		192,061		81,599		(1,154		)	398,360
Restricted Cash and Investments	124		9,098		21,115		—			30,337
Property and Equipment, Net	591,261		975,973		112,931		—			1,680,165
Assets Held for Sale	—		1,700		—		—			1,700
Direct Finance Lease Receivable	—		—		25,010		—			25,010
Intercompany Receivable	1,229,529		414,270		—		(1,643,799		)	—
Deferred Income Tax Assets, Net	16,230		—		2,532		(16,230		)	2,532
Goodwill	34		489,502		776		—			490,312
Intangible Assets, Net	—		172,982		1,491		—			174,473
Investment in Subsidiaries	967,072		28,178		—		(995,250		)	—
Other Non-Current Assets	20,933		108,836		34,713		(79,289		)	85,193
Total Assets	$	2,951,037	$	2,392,600	$	280,167	$	(2,735,722	)	$	2,888,082
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	12,208	$	37,012	$	2,932	$	—		$	52,152
Accrued payroll and related taxes	1,664		27,001		17,651		—			46,316
Accrued expenses	65,790		25,580		21,959		(1,154		)	112,175
Current portion of capital lease obligations, long-term debt and non-recourse debt	37,522		3,230		18,875		—			59,627
Total current liabilities	117,184		92,823		61,417		(1,154		)	270,270
Deferred Income Tax Liabilities	—		31,933		—		(16,230		)	15,703
Intercompany Payable	399,871		1,224,622		19,306		(1,643,799		)	—
Other Non-Current Liabilities	24,677		136,311		823		(79,289		)	82,522
Capital Lease Obligations	—		11,678		—		—			11,678
Long-Term Debt	1,369,996		171		—		—			1,370,167
Non-Recourse Debt	—		—		97,964		—			97,964
Commitments & Contingencies
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,039,309		895,062		100,188		(995,250		)	1,039,309
Noncontrolling Interests	—		—		469		—			469
Total Shareholders’ Equity	1,039,309		895,062		100,657		(995,250		)	1,039,778
Total Liabilities and Shareholders' Equity	$	2,951,037	$	2,392,600	$	280,167	$	(2,735,722	)	$	2,888,082

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

	As of December 31, 2012
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	4,764	$	1,917	$	25,074	$	—		$	31,755
Restricted cash and investments	—		—		15,654		—			15,654
Accounts receivable, less allowance for doubtful accounts	124,670		102,704		19,261		—			246,635
Deferred income tax assets, net	13,106		1,498		3,686		—			18,290
Prepaid expenses and other current assets	8,657		5,890		11,456		(1,154		)	24,849
Total current assets	151,197		112,009		75,131		(1,154		)	337,183
Restricted Cash and Investments	7,953		—		24,803		—			32,756
Property and Equipment, Net	633,458		939,995		113,706		—			1,687,159
Assets Held for Sale	—		3,243		—		—			3,243
Direct Finance Lease Receivable	—		—		26,757		—			26,757
Intercompany Receivable	591,273		14,305		—		(605,578		)	—
Deferred Income Tax Assets, Net	16,230		—		2,532		(16,230		)	2,532
Goodwill	34		489,502		772		—			490,308
Intangible Assets, Net	—		176,666		1,652		—			178,318
Investment in Subsidiaries	1,151,998		41,356		—		(1,193,354		)	—
Other Non-Current Assets	38,574		84,931		36,584		(79,151		)	80,938
Total Assets	$	2,590,717	$	1,862,007	$	281,937	$	(1,895,467	)	$	2,839,194
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	29,889	$	17,407	$	2,814	$	—		$	50,110
Accrued payroll and related taxes	4,774		16,264		18,284		—			39,322
Accrued expenses	94,350		5,515		17,846		(1,154		)	116,557
Current portion of capital lease obligations, long-term debt and non-recourse debt	33,925		1,311		18,646		—			53,882
Total current liabilities	162,938		40,497		57,590		(1,154		)	259,871
Deferred Income Tax Liabilities	—		31,933		—		(16,230		)	15,703
Intercompany Payable	—		586,428		19,150		(605,578		)	—
Other Non-Current Liabilities	63,657		96,822		697		(79,151		)	82,025
Capital Lease Obligations	—		11,926		—		—			11,926
Long-Term Debt	1,317,310		219		—		—			1,317,529
Non-Recourse Debt	—		—		104,836		—			104,836
Commitments & Contingencies
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,046,812		1,094,182		99,172		(1,193,354		)	1,046,812
Noncontrolling Interests	—		—		492		—			492
Total Shareholders’ Equity	1,046,812		1,094,182		99,664		(1,193,354		)	1,047,304
Total Liabilities and Shareholders' Equity	$	2,590,717	$	1,862,007	$	281,937	$	(1,895,467	)	$	2,839,194

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended March 31, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	113,491		$	312,528		$	57,385		$	(106,373	)	$	377,031
Operating expenses	99,409			240,477			47,284			(106,373		)	280,797
Depreciation and amortization	5,824			15,881			1,230			—			22,935
General and administrative expenses	9,197			18,192			4,651			—			32,040
Operating income (loss)	(939		)	37,978			4,220			—			41,259
Interest income	3,960			550			1,096			(4,422		)	1,184
Interest expense	(9,920		)	(11,431		)	(2,412		)	4,422			(19,341		)
Income (loss) before income taxes and equity in earnings of affiliates	(6,899		)	27,097			2,904			—			23,102
Provision (benefit) for income taxes	(667		)	406			1,142			—			881
Equity in earnings of affiliates, net of income tax provision	—			—			1,217			—			1,217
Income (loss) before equity in income of consolidated subsidiaries	(6,232		)	26,691			2,979			—			23,438
Income from consolidated subsidiaries, net of income tax provision	29,670			—			—			(29,670		)	—
Income from continuing operations	23,438			26,691			2,979			(29,670		)	23,438
Net income	23,438			26,691			2,979			(29,670		)	23,438
Net income attributable to noncontrolling interests	—			—			(18		)				(18		)
Net income attributable to The GEO Group, Inc.	$	23,438		$	26,691		$	2,961		$	(29,670	)	$	23,420
Net income	$	23,438		$	26,691		$	2,979		$	(29,670	)	$	23,438
Other comprehensive income (loss), net of tax	—			40			(1,220		)	—			(1,180		)
Total comprehensive income	$	23,438		$	26,731		$	1,759		$	(29,670	)	$	22,258
Comprehensive loss attributable to noncontrolling interests	—			$	—		23			$	—		23
Comprehensive income attributable to The GEO Group, Inc.	$	23,438		$	26,731		$	1,782		$	(29,670	)	$	22,281

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended April 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	140,616		$	184,187		$	57,993		$	(22,754	)	$	360,042
Operating expenses	131,006			117,666			44,802			(22,754		)	270,720
Depreciation and amortization	6,855			13,252			2,132			—			22,239
General and administrative expenses	9,396			13,294			3,896			—			26,586
Operating income (loss)	(6,641		)	39,975			7,163			—			40,497
Interest income	7,807			492			1,601			(8,093		)	1,807
Interest expense	(16,915		)	(7,911		)	(4,073		)	8,093			(20,806		)
Income (loss) before income taxes and equity in earnings of affiliates	(15,749		)	32,556			4,691			—			21,498
Provision (benefit) for income taxes	(5,656		)	12,311			1,835			—			8,490
Equity in earnings of affiliates, net of income tax provision	—			—			748			—			748
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(10,093		)	20,245			3,604			—			13,756
Income from consolidated subsidiaries, net of income tax provision	23,849			—			—			(23,849		)	—
Income from continuing operations	13,756			20,245			3,604			(23,849		)	13,756
Net income (loss) from discontinued operations	1,303			1,072			322			(1,394		)	1,303
Net income	15,059			21,317			3,926			(25,243		)	15,059
Net income attributable to noncontrolling interests	—			(17		)	(17		)	—			(34		)
Net income attributable to The GEO Group, Inc.	$	15,059		$	21,300		$	3,909		$	(25,243	)	$	15,025
Net income	$	15,059		$	21,317		$	3,926		$	(25,243	)	$	15,059
Other comprehensive income, net of tax	30			—			1,957			—			1,987
Total comprehensive income	$	15,089		$	21,317		$	5,883		$	(25,243	)	$	17,046
Comprehensive income attributable to noncontrolling interests	—			(17		)	(45		)	—			(62		)
Comprehensive income attributable to The GEO Group, Inc.	$	15,089		$	21,300		$	5,838		$	(25,243	)	$	16,984

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Three Months Ended March 31, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	8,032		$	26,708		$	10,697		$	45,437
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	—			4			—			4
Proceeds from sale of assets held for sale	—			1,602						1,602
Change in restricted cash and investments	(124		)	(1,145		)	3,599			2,330
Capital expenditures	(1,414		)	(9,624		)	(364		)	(11,402		)
Net cash provided by (used in) investing activities	(1,538		)	(9,163		)	3,235			(7,466		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	410,000			—			—			410,000
Income tax benefit of equity compensation	1,127			—			—			1,127
Debt issuance costs	(5,650		)	—			—			(5,650		)
Payments on long-term debt	(351,153		)	(377		)	(6,908		)	(358,438		)
Proceeds from the exercise of stock options	3,049			—			—			3,049
Cash dividends paid	(35,711		)	—			—			(35,711		)
Proceeds from reissuance of treasury stock in connection with ESPP	66			—			—			66
Net cash provided by (used in) financing activities	21,728			(377		)	(6,908		)	14,443
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(445		)	(445		)
Net Increase in Cash and Cash Equivalents	28,222			17,168			6,579			51,969
Cash and Cash Equivalents, beginning of period	4,764			1,917			25,074			31,755
Cash and Cash Equivalents, end of period	$	32,986		$	19,085		$	31,653		$	83,724

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Three Months Ended April 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Cash provided by operating activities - continuing operations	$	24,885		$	19,198		$	22,200		$	66,283
Cash (used in) provided by operating activities - discontinued operations	1,738			1,205			(746		)	2,197
Net cash provided by operating activities of continuing operations	26,623			20,403			21,454			68,480
Cash Flow from Investing Activities:
Proceeds from sale of assets held for sale	—			297						297
Proceeds from sale of property and equipment	—			149			9			158
Change in restricted cash and investments	—			—			960			960
Capital expenditures	(27,046		)	(20,316		)	(554		)	(47,916		)
Cash (used in) provided by investing activities - continuing operations	(27,046		)	(19,870		)	415			(46,501		)
Cash used in investing activities - discontinued operations	(260		)	(825		)	—			(1,085		)
Net cash (used in) provided by investing activities	(27,306		)	(20,695		)	415			(47,586		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	53,000			—			—			53,000
Payments on long-term debt	(57,278		)	(340		)	(6,457		)	(64,075		)
Income tax benefit of equity compensation	(342		)	—			—			(342		)
Debt issuance costs	(6		)	—			(38		)	(44		)
Distribution to noncontrolling interests	—			—			(5,758		)	(5,758		)
Proceeds from the exercise of stock options	231			—			—			231
Payments for retirement of common stock	(1,035		)	—			—			(1,035		)
Net cash used in financing activities	(5,430		)	(340		)	(12,253		)	(18,023		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			995			995
Net Increase (Decrease) in Cash and Cash Equivalents	(6,113		)	(632		)	10,611			3,866
Cash and Cash Equivalents, beginning of period	15,086			3,092			25,200			43,378
Cash and Cash Equivalents, end of period	$	8,973		$	2,460		$	35,811		$	47,244