10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from            to            

Commission file number 1-14260

The GEO Group, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Florida	65-0043078
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
One Park Place, 621 NW 53rd Street, Suite 700, Boca Raton, Florida	33487
(Address of Principal Executive Offices)	(Zip Code)

(561) 893-0101

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

As of August 6, 2013, the registrant had 72,000,856 shares of common stock outstanding.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS	3
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND JULY 1, 2012	3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND JULY 1, 2012	4
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2013 (UNAUDITED) AND DECEMBER 31, 2012	5
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND JULY 1, 2012	6
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	49
ITEM 4. CONTROLS AND PROCEDURES	49
PART II—OTHER INFORMATION	50
ITEM 1. LEGAL PROCEEDINGS	50
ITEM 1A. RISK FACTORS	50
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	51
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	51
ITEM 4. MINE SAFETY DISCLOSURES	51
ITEM 5. OTHER INFORMATION	51
ITEM 6. EXHIBITS	52
SIGNATURES	53

2

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2013 AND JULY 1, 2012

(In thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Revenues	$	381,653		$	371,173		$	758,684		$	731,215
Operating expenses		279,246			269,141			560,043			539,861
Depreciation and amortization		23,657			22,962			46,592			45,201
General and administrative expenses		27,363			26,129			59,403			52,715
Operating income		51,387			52,941			92,646			93,438
Interest income		1,165			1,761			2,349			3,568
Interest expense		(21,103	)		(20,618	)		(40,444	)		(41,424	)
Loss on extinguishment of debt		(5,527	)		—			(5,527	)		—
Income before income taxes, equity in earnings of affiliates and discontinued operations		25,922			34,084			49,024			55,582
Income tax (benefit) provision		(7,268	)		13,660			(6,387	)		22,150
Equity in earnings of affiliates, net of income tax provision of $417, $303, $894 and $624, respectively		1,029			430			2,246			1,178
Income from continuing operations		34,219			20,854			57,657			34,610
Income from discontinued operations, net of income tax provision of $0, $973, $0 and $1,729, respectively		—			1,622			—			2,925
Net income		34,219			22,476			57,657			37,535
Net (income) loss attributable to noncontrolling interests		(12	)		25			(30	)		(9	)
Net income attributable to The GEO Group, Inc.	$	34,207		$	22,501		$	57,627		$	37,526
Weighted-average common shares outstanding:
Basic		71,083			60,839			70,967			60,803
Diluted		71,607			61,066			71,510			60,984
Income per common share attributable to The GEO Group, Inc.:
Basic:
Income from continuing operations	$	0.48		$	0.34		$	0.81		$	0.57
Income from discontinued operations		—			0.03			—			0.05
Income per common share attributable to The GEO Group, Inc.—basic	$	0.48		$	0.37		$	0.81		$	0.62
Diluted:
Income from continuing operations	$	0.48		$	0.34		$	0.81		$	0.57
Income from discontinued operations		—			0.03			—			0.05
Income per common share attributable to The GEO Group, Inc.—diluted	$	0.48		$	0.37		$	0.81		$	0.62

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2013 AND JULY 1, 2012

(In thousands)

	Three Months Ended						Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Net income	$	34,219		$	22,476		$	57,657		$	37,535
Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax (benefit) provision of $0, $(195), $0 and $125, respectively		(5,328	)		(2,068	)		(6,661	)		(142	)
Pension liability adjustment, net of tax benefit of $25, $19, $51 and $38, respectively		40			29			81			59
Unrealized gain (loss) on derivative instrument classified as cash flow hedge, net of tax provision (benefit) of $16, ($203), $77 and ($220), respectively		28			(430	)		140			(399	)
Total other comprehensive loss, net of tax		(5,260	)		(2,469	)		(6,440	)		(482	)
Total comprehensive income		28,959			20,007			51,217			37,053
Comprehensive (income) loss attributable to noncontrolling interests		19			58			42			(4	)
Comprehensive income attributable to The GEO Group, Inc.	$	28,978		$	20,065		$	51,259		$	37,049

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

THE GEO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2013 AND DECEMBER 31, 2012

(In thousands, except share data)

	June 30, 2013			December 31, 2012
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	38,511		$	31,755
Restricted cash and investments (including VIEs1 of $6,308 and $6,182, respectively)		15,646			15,654
Accounts receivable, less allowance for doubtful accounts of $2,163 and $2,546, respectively		239,001			246,635
Current deferred income tax assets		18,290			18,290
Prepaid expenses and other current assets		25,142			24,849
Total current assets		336,590			337,183
Restricted Cash and Investments (including VIEs of $16,943 and $15,521, respectively)		37,748			32,756
Property and Equipment, Net (including VIEs of $25,544 and $25,840, respectively)		1,739,986			1,687,159
Assets Held for Sale		1,200			3,243
Direct Finance Lease Receivable		20,445			26,757
Non-Current Deferred Income Tax Assets		2,532			2,532
Goodwill		490,216			490,308
Intangible Assets, Net		170,743			178,318
Other Non-Current Assets		88,742			80,938
Total Assets	$	2,888,202		$	2,839,194
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	47,391		$	50,110
Accrued payroll and related taxes		34,314			39,322
Accrued expenses		109,179			116,557
Current portion of capital lease obligations, long-term debt and non-recourse debt (including VIEs of $5,450 and $5,200, respectively)		22,341			53,882
Total current liabilities		213,225			259,871
Non-Current Deferred Income Tax Liabilities		15,703			15,703
Other Non-Current Liabilities		74,137			82,025
Capital Lease Obligations		11,426			11,926
Long-Term Debt		1,444,475			1,317,529
Non-Recourse Debt (including VIEs of $11,588 and $16,997 respectively)		93,352			104,836
Commitments and Contingencies (Note 12)
Shareholders’ Equity
Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued or outstanding		—			—
Common stock, $0.01 par value, 90,000,000 shares authorized, 86,586,630 and 86,007,433 issued and 72,000,856 and 71,417,034 outstanding, respectively		865			860
Additional paid-in capital		841,097			832,230
Earnings in excess of distributions		250,767			264,667
Accumulated other comprehensive income (loss)		(3,698	)		2,670
Treasury stock, 14,585,774 and 14,590,399 shares, at cost, respectively		(53,597	)		(53,615	)
Total shareholders’ equity attributable to The GEO Group, Inc.		1,035,434			1,046,812
Noncontrolling interests		450			492
Total shareholders’ equity		1,035,884			1,047,304
Total Liabilities and Shareholders’ Equity	$	2,888,202		$	2,839,194

¹  Variable interest entities or “VIEs”

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

FOR THE SIX MONTHS ENDED

JUNE 30, 2013 AND JULY 1, 2012

(In thousands)

	Six Months Ended
	June 30, 2013			July 1, 2012
Cash Flow from Operating Activities:
Net Income	$	57,657		$	37,535
Net income attributable to noncontrolling interests		(30	)		(9	)
Net income attributable to The GEO Group, Inc.		57,627			37,526
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities:
Stock-based compensation		705			1,433
Loss on extinguishment of debt		5,527			—
Depreciation and amortization expense		46,632			45,201
Amortization of debt issuance costs, discount and/or premium		3,015			1,369
Restricted stock expense		2,640			2,061
Provision for doubtful accounts		158			517
Equity in earnings of affiliates, net of tax		(2,246	)		(1,178	)
Income tax (benefit) provision related to equity compensation		(1,308	)		270
Release of reserve for uncertain tax positions		(6,356	)		—
Loss on sale/disposal of property and equipment		603			915
Changes in assets and liabilities:
Changes in accounts receivable, prepaid expenses and other assets		9,501			23,373
Changes in accounts payable, accrued expenses and other liabilities		(15,184	)		5,445
Cash provided by operating activities—continuing operations		101,314			116,932
Cash provided by operating activities—discontinued operations		—			10,034
Net cash provided by operating activities		101,314			126,966
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment		51			231
Proceeds from sale of assets held for sale		1,968			297
Net working capital adjustment from RTS divestiture		(996	)		—
Change in restricted cash and investments		(5,910	)		553
Capital expenditures		(89,921	)		(69,536	)
Cash used in investing activities—continuing operations		(94,808	)		(68,455	)
Cash used in investing activities—discontinued operations		—			(2,537	)
Net cash used in investing activities		(94,808	)		(70,992	)
Cash Flow from Financing Activities:
Distribution to noncontrolling interests		—			(5,758	)
Proceeds from long term debt		785,000			145,000
Payments on long-term debt		(697,748	)		(169,282	)
Payments for retirement of common stock		—			(1,035	)
Proceeds from reissuance of treasury stock in connection with ESPP		155			—
Debt issuance costs		(17,017	)		(44	)
Income tax benefit (provision) related to equity compensation		1,308			(270	)
Proceeds from the exercise of stock options		4,082			396
Cash dividends paid		(71,527	)		—
Net cash provided by (used in) financing activities		4,253			(30,993	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(4,003	)		(43	)
Net Increase in Cash and Cash Equivalents		6,756			24,938
Cash and Cash Equivalents, beginning of period		31,755			43,378
Cash and Cash Equivalents, end of period	$	38,511		$	68,316
Supplemental Disclosures:
Non-cash Investing and Financing activities:
Capital expenditures in accounts payable and accrued expenses	$	2,739		$	6,801

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

THE GEO GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The GEO Group, Inc., a Florida corporation, and subsidiaries (the “Company” or “GEO”), is a real estate investment trust (“REIT”) specializing in the ownership, leasing and management of correctional, detention and re-entry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, the United Kingdom and Canada. The Company owns, leases and operates a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, as well as community based re-entry facilities. The Company develops new facilities based on contract awards, using its project development expertise and experience to design, construct and finance what it believes are state-of-the-art facilities that maximize security and efficiency. GEO provides innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants. The Company also provides secure transportation services for offender and detainee populations as contracted domestically and in the United Kingdom through its joint venture GEO Amey PECS Ltd. (“GEOAmey”). As of June 30, 2013, the Company’s worldwide operations included the management and/or ownership of approximately 72,000 beds at 95 correctional and detention facilities, including projects under development, and also included the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states.

The Company’s unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States and the instructions to Form 10-Q and consequently do not include all disclosures required by Form 10-K. The accounting policies followed for quarterly financial reporting are the same as those disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2013 for the fiscal year ended December 31, 2012. The accompanying December 31, 2012 consolidated balance sheet has been derived from those audited financial statements. Additional information may be obtained by referring to the Company’s Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the financial information for the interim periods reported in this Form 10-Q have been made. Results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2013, or for any other future interim or annual periods.

REIT Conversion - GEO began operating as a REIT for federal income tax purposes effective January 1, 2013. As a result of the REIT conversion, GEO reorganized its operations and moved non-real estate components into taxable REIT subsidiaries (“TRS”). Through the TRS structure, the portion of GEO’s businesses which are non-real estate related, such as its managed-only contracts, international operations, electronic monitoring services, and other non-residential and community based facilities, are part of wholly-owned taxable subsidiaries of the REIT. Most of GEO’s business segments, which are real estate related and involve company-owned and company-leased facilities, are part of the REIT. The TRS structure allows the Company to maintain the strategic alignment of almost all of its diversified business segments under one entity. The TRS assets and operations will continue to be subject to federal and state corporate income taxes and to foreign taxes as applicable in the jurisdictions in which those assets and operations are located. As a REIT, GEO is required to make distributions of its REIT taxable income to its shareholders. Refer to Note 5 - Shareholders’ Equity.

Divestiture of Residential Treatment Services - The operating results of Residential Treatment Services (“RTS”), which was divested on December 31, 2012, have been retroactively reclassified to discontinued operations for the three and six months ended July 1, 2012. Refer to Note 8 - Discontinued Operations.

Change of Reporting Segment Name from GEO Care to GEO Community Services - The Company’s GEO Care reporting segment previously consisted of four aggregated operating segments including Residential Treatment Services, Community Based Services, Youth Services and B.I. Incorporated (“BI”). The GEO Care reporting segment was renamed GEO Community Services concurrent with the divestiture of the Company’s Residential Treatment Services operating segment. All current and prior year financial position and results of operations amounts presented for this reporting segment are referred to as GEO Community Services.

Fiscal Year - In connection with the REIT conversion, effective December 31, 2012, the Company changed to a calendar year from a fiscal year that ended on the Sunday closest to the calendar year end and changed its fiscal quarters to coincide with each calendar quarter. The second fiscal quarter of 2013 began on April 1, 2013 and ended on June 30, 2013, and is referred to as the three months ended June 30, 2013. The six month period of 2013 began on January 1, 2013 and ended on June 30, 2013, and is referred to as the six months ended June 30, 2013. The second fiscal quarter of 2012 began on April 2, 2012 and ended on July 1, 2012, and is referred to as the three months ended July 1, 2012. The six month period of 2012 began on January 2, 2012 and ended on July 1, 2012, and is referred to as the six months ended July 1, 2012.

7

2. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has recorded goodwill as a result of its business combinations. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible assets, other intangible assets acquired and liabilities assumed, including noncontrolling interests. Changes in goodwill from December 31, 2012 to June 30, 2013 are related solely to fluctuations in foreign currency exchange rates.

The Company has also recorded other finite and indefinite lived intangible assets as a result of business combinations completed prior to 2013. Changes in the gross carrying amounts from December 31, 2012 to June 30, 2013 are solely related to fluctuations in foreign currency exchange rates. The Company’s intangible assets include facility management contracts, non-compete agreements and the trade name and technology of BI, as follows (in thousands):

	June 30, 2013									December 31, 2012
	Weighted Average Useful Life (years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Facility management contracts		13.4	$	151,683	$	(38,897	)	$	112,786	$	151,913	$	(33,141	)	$	118,772
Covenants not to compete		2.0		8,570		(8,570	)		—		8,570		(8,495	)		75
Technology		7.0		21,200		(7,243	)		13,957		21,200		(5,729	)		15,471
Trade name (Indefinite lived)		Indefinite		44,000		—			44,000		44,000		—			44,000
Total acquired intangible assets			$	225,453	$	(54,710	)	$	170,743	$	225,683	$	(47,365	)	$	178,318

Amortization expense was $3.6 million and $7.3 million, respectively, for the three months and six months ended June 30, 2013. Amortization expense was $4.6 million and $9.2 million, respectively, for the three months and six months ended July 1, 2012. Amortization expense was primarily related to the U.S. Corrections & Detention and GEO Community Services segments’ amortization of acquired facility management contracts. As of June 30, 2013, the weighted average period before the next contract renewal or extension for the facility management contracts was approximately 1.3 years. Although the facility management contracts acquired have renewal and extension terms in the near term, the Company has historically maintained these relationships beyond the contractual periods.

Estimated amortization expense related to the Company’s finite-lived intangible assets for the remainder of fiscal year 2013 through fiscal year 2017 and thereafter is as follows (in thousands):

Fiscal Year	Total Amortization Expense
Remainder of 2013	$	7,266
2014		14,531
2015		14,531
2016		14,531
2017		14,531
Thereafter		61,353
	$	126,743

8

3. FINANCIAL INSTRUMENTS

The following tables provide a summary of the Company’s significant financial assets and liabilities carried at fair value and measured on a recurring basis as of June 30, 2013 and December 31, 2012 (in thousands):

			Fair Value Measurements at June 30, 2013
	Carrying Value at June  30, 2013		Quoted Prices in Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap derivative assets	$	4,599	$	—	$	4,599	$	—
Restricted investments:
Guaranteed Investment Contract		5,742		—		5,742		—
Rabbi Trust		8,163		8,163		—		—
Fixed income securities		1,996		—		1,996		—
Liabilities:
Interest rate swap derivative liabilities	$	490	$	—	$	490	$	—
			Fair Value Measurements at December 31, 2012
	Carrying Value at December 31, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap derivative assets	$	6,212	$	—	$	6,212	$	—
Restricted investments:
Guaranteed Investment Contract		5,742		—		5,742		—
Rabbi Trust		7,718		7,718		—		—
Fixed income securities		2,152		—		2,152		—
Liabilities:
Interest rate swap derivative liabilities	$	708	$	—	$	708	$	—

The Company’s Level 1 investment included in the tables above as of June 30, 2013 and December 31, 2012 relates to the Company’s rabbi trust established for GEO employee and employer contributions to The GEO Group Inc. Non-qualified Deferred Compensation Plan. These contributions are invested in cash and mutual funds for which quoted market prices in active markets are available.

The Company’s Level 2 financial instruments included in the tables above as of June 30, 2013 and December 31, 2012 consist of an interest rate swap liability held by the Company’s Australian subsidiary, other interest rate swap assets of the Company, an investment in Canadian dollar denominated fixed income securities, and a guaranteed investment contract which is a restricted investment related to CSC of Tacoma LLC (“CSC”). The Australian subsidiary’s interest rate swap liability is valued using a discounted cash flow model based on projected Australian borrowing rates. The Company’s other interest rate swap assets are based on pricing models which consider prevailing interest rates, credit risk and similar instruments. The Canadian dollar denominated securities, not actively traded, are valued using quoted rates for these and similar securities. The restricted investment in the guaranteed investment contract is valued using quoted rates for these and similar securities.

9

4. FAIR VALUE OF ASSETS AND LIABILITIES

The Company’s consolidated balance sheets reflect certain financial assets and liabilities at carrying value. The carrying value of certain debt instruments, if applicable, is net of unamortized discount. The following tables present the carrying values of those financial instruments and the estimated corresponding fair values at June 30, 2013 and December 31, 2012 (in thousands):

			Estimated Fair Value Measurements at June 30, 2013
	Carrying Value as of  June 30, 2013		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	38,511	$	38,511	$	38,511	$	—	$	—
Restricted cash		39,489		39,489		39,489		—		—
Liabilities:
Borrowings under Senior Credit Facility	$	595,000	$	597,250	$	—	$	597,250	$	—
7 3/4% Senior Notes		247,756		262,345		—		262,345		—
6.625% Senior Notes		300,000		316,314		—		316,314		—
5.125% Senior Notes		300,000		288,375		—		288,375		—
Non-recourse debt, Australian subsidiary		27,817		28,531		—		28,531		—
Other non-recourse debt, including current portion		83,665		86,639		—		86,639		—
			Estimated Fair Value Measurements at December 31, 2012
	Carrying Value as of  December 31, 2012		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	31,755	$	31,755	$	31,755	$	—	$	—
Restricted cash		34,949		34,949		34,949		—		—
Liabilities:
Borrowings under Senior Credit Facility	$	797,430	$	803,097	$	—	$	803,097	$	—
7 3/4% Senior Notes		247,543		270,313		—		270,313		—
6.625% Senior Notes		300,000		335,814		—		335,814		—
Non-recourse debt, Australian subsidiary		34,832		34,973		—		34,973		—
Other non-recourse debt, including current portion		88,650		91,345		—		91,345		—

The fair values of the Company’s cash and cash equivalents, and restricted cash approximates the carrying values of these assets at June 30, 2013 and December 31, 2012. Restricted cash consists of debt service funds used for payments on the Company’s non-recourse debt and rabbi trust funds. The fair values of the Company’s 7 ³/₄% senior unsecured notes due 2017 (“7 ³/₄% Senior Notes”), 6.625% senior unsecured notes due 2021 (“6.625% Senior Notes”), and the 5.125% senior unsecured notes due 2023 (“5.125% Senior Notes”), although not actively traded, are based on published financial data for these instruments. The fair values of the Company’s non-recourse debt related to South Texas Local Development Corporation (“STLDC”) and Washington Economic Development Finance Authority (“WEDFA”) are based on market prices for similar instruments. The fair value of the non-recourse debt related to the Company’s Australian subsidiary is estimated using a discounted cash flow model based on current Australian borrowing rates for similar instruments. The fair value of borrowings under the Senior Credit Facility is based on an estimate of trading value considering the Company’s borrowing rate, the undrawn spread and similar instruments.

10

5. SHAREHOLDERS’ EQUITY

The following table presents the changes in shareholders’ equity that are attributable to the Company’s shareholders and to noncontrolling interests (in thousands):

	Common shares				Additional Paid-In Capital			Earnings in Excess of Distributions			Accumulated Other Comprehensive Income (Loss)			Treasury shares						Noncontrolling Interests			Total Shareholders’ Equity
	Shares		Amount											Shares			Amount
Balance, December 31, 2012		71,417	$	860	$	832,230		$	264,667		$	2,670			14,590		$	(53,615	)	$	492		$	1,047,304
Proceeds from exercise of stock options		234		2		4,080			—			—			—			—			—			4,082
Tax benefit related to equity compensation		—		—		1,308			—			—			—			—			—			1,308
Stock based compensation expense		—		—		705			—			—			—			—			—			705
Restricted stock granted		345		3		(3	)		—			—						—			—			—
Amortization of restricted stock		—		—		2,640			—			—			—			—			—			2,640
Dividends paid		—		—		—			(71,527	)		—			—			—			—			(71,527	)
Re-issuance of treasury shares (ESPP)		5		—		137			—			—			(5	)		18			—			155
Net income		—		—		—			57,627			—			—			—			30			57,657
Other comprehensive income (loss)		—		—		—			—			(6,368	)		—			—			(72	)		(6,440	)
Balance, June 30, 2013		72,001	$	865	$	841,097		$	250,767		$	(3,698	)		14,585		$	(53,597	)	$	450		$	1,035,884

REIT Distributions

As a REIT, GEO is required to distribute annually at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and by excluding net capital gain) and began paying regular quarterly REIT dividends in 2013. The amount, timing and frequency of future dividends, however, will be at the sole discretion of GEO’s Board of Directors (“the Board”) and will be declared based upon various factors, many of which are beyond GEO’s control, including, GEO’s financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income taxes that GEO otherwise would be required to pay, limitations on distributions in GEO’s existing and future debt instruments, limitations on GEO’s ability to fund distributions using cash generated through GEO’s TRS and other factors that GEO’s Board may deem relevant. Dividends of $0.50 per share of common stock were paid during the quarter ended March 31, 2013. Dividends of $0.50 per share of common stock were paid during the quarter ended June 30, 2013.

Prospectus Supplement

On May 8, 2013, the Company filed with the Securities and Exchange Commission a prospectus supplement related to the offer and sale from time to time of the Company’s common stock at an aggregate offering price of up to $100 million through sales agents. Sales of shares of the Company’s common stock under the prospectus supplement and equity distribution agreement entered into with the sales agents, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933. There were no sales of shares of the Company’s common stock under the prospectus supplement during the six months ended June 30, 2013.

Comprehensive Income (Loss)

Comprehensive income (loss) represents the change in shareholders’ equity from transactions and other events and circumstances arising from non-shareholder sources. The Company’s total comprehensive income is comprised of net income attributable to GEO, net income attributable to noncontrolling interests, foreign currency translation adjustments that arise from consolidating foreign operations that do not impact cash flows, net unrealized gains and/or losses on derivative instruments, and pension liability adjustments in the consolidated statements of shareholders’ equity and comprehensive income.

11

The components of accumulated other comprehensive income (loss) attributable to GEO included in the consolidated statement of shareholders’ equity are as follows:

	Six Months Ended June 30, 2013 (In thousands)
	Foreign currency translation adjustments, net of tax attributable to  The GEO Group, Inc. [1]			Unrealized (loss)/gain on derivatives, net of tax			Pension adjustments, net of tax			Total
Beginning balance	$	5,755		$	(457	)	$	(2,628	)	$	2,670
Current-period other comprehensive (loss) income		(6,589	)		140			81			(6,368	)
Ending Balance	$	(834	)	$	(317	)	$	(2,547	)	$	(3,698	)

^[1] The foreign currency translation, net of tax, related to noncontrolling interests was not significant at June 30, 2013 or December 31, 2012, respectively.

6. EQUITY INCENTIVE PLANS

As of June 30, 2013, under the 2006 Stock Incentive Plan (“2006 Plan”), the Company had 1,704,344 shares of common stock available for issuance pursuant to future awards that may be granted under the plan of which up to 404,104 shares were available for the issuance of awards other than stock options.

Stock Options

The Company uses a Black-Scholes option valuation model to estimate the fair value of each option awarded. A summary of the activity of stock option awards issued and outstanding under Company plans is as follows for the six months ended June 30, 2013:

	Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)		Aggregate Intrinsic Value
	(in thousands)							(in thousands)
Options outstanding at December 31, 2012		1,198		$	18.92		6.85	$	11,090
Options granted		—			—
Options exercised		(234	)	$	17.43
Options forfeited/canceled/expired		(5	)	$	21.34
Options outstanding at June 30, 2013		959		$	19.28		6.75	$	14,074
Options vested and expected to vest at June 30, 2013		929		$	19.21		6.71	$	13,701
Options exercisable at June 30, 2013		594		$	18.23		6.13	$	9,346

The Company did not grant any stock options during the six months ended June 30, 2013. For the six months ended June 30, 2013 and July 1, 2012, the amount of stock-based compensation expense related to stock options was $0.7 million and $1.4 million, respectively. As of June 30, 2013, the Company had $1.8 million of unrecognized compensation costs related to non-vested stock option awards that are expected to be recognized over a weighted average period of 1.8 years.

Restricted Stock

Compensation expense for nonvested stock awards is recorded over the vesting period based on the fair value at the date of grant. Generally, the restricted stock awards vest in equal increments over either a three or four year period. The Company has issued share-based awards with service-based, performance-based and market-based vesting criteria.

12

A summary of the activity of restricted stock outstanding is as follows for the six months ended June 30, 2013:

	Shares			Wtd. Avg. Grant  Date Fair Value
	(in thousands)
Restricted stock outstanding at December 31, 2012		670		$	18.14
Granted		345			37.40
Vested		(131	)		21.29
Forfeited/canceled		—			—
Restricted stock outstanding at June 30, 2013		884		$	23.00

During the six months ended June 30, 2013, the Company granted 345,060 shares of restricted stock to certain employees and executive officers. Of these awards, 92,810 are performance-based awards which will be forfeited if the Company does not achieve certain annual metrics during 2013, 2014 and 2015.

The vesting of these performance-based restricted stock grants are subject to the achievement by GEO of two annual performance metrics as follows: (i) up to 75% of the shares of restricted stock (“Target Award”) can vest at the end of a three-year performance period if GEO meets certain total shareholder return (“TSR”) performance targets, as compared to the total shareholder return of a peer group of companies, during 2013, 2014 and 2015; and (ii) up to 25% of the shares of restricted stock (“Target Award”) can vest at the end of a three-year period if GEO meets certain return on capital employed (“ROCE”) performance targets in 2013, 2014 and 2015. These performance awards can vest at between 0% and 200% of the Target Awards for both metrics. The number of shares shown for the performance-based awards is based on the Target Awards for both metrics.

The metric related to ROCE is considered to be a performance condition. For share-based awards that contain a performance condition, the achievement of the targets must be probable before any share-based compensation expense is recorded. The Company reviews the likelihood of which target in the range will be achieved and if deemed probable, compensation expense is recorded at that time. If subsequent to initial measurement there is a change in the estimate of the probability of meeting the performance condition, the effect of the change in the estimated quantity of awards expected to vest is recognized by cumulatively adjusting compensation expense. If ultimately the performance targets are not met, for any awards where vesting was previously deemed probable, previously recognized compensation expense will be reversed in the period in which vesting is no longer deemed probable. The fair value of these awards was determined based on the closing price of the Company’s common stock on the date of grant.

The metric related to TSR is considered to be a market condition. For share-based awards that contain a market condition, the probability of satisfying the market condition must be considered in the estimate of grant-date fair value and previously recorded compensation expense is not reversed if the market condition is never met. The fair value of these awards was determined based on a Monte Carlo simulation, which calculates a range of possible outcomes and the probabilities that they will occur, using the following key assumptions: (i) volatility of 26.6%; (ii) beta of 0.681; and (iii) risk free rate of 0.42%.

For the six months ended June 30, 2013 and July 1, 2012, the Company recognized $2.6 million and $2.1 million, respectively, of compensation expense related to its restricted stock awards. As of June 30, 2013, the Company had $18.2 million of unrecognized compensation costs related to non-vested restricted stock awards, including non-vested restricted stock awards with performance-based and market-based vesting, that are expected to be recognized over a weighted average period of 3.1 years.

Employee Stock Purchase Plan

The Company adopted The GEO Group Inc. 2011 Employee Stock Purchase Plan (the “Plan”). The purpose of the Plan, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions by the employees of GEO and designated subsidiaries of GEO in order to increase their identification with the Company’s goals and secure a proprietary interest in the Company’s success. These deductions are used to purchase shares of the Company’s common stock at a 5% discount from the then current market price. The Company has made available up to 500,000 shares of its common stock, which were registered with the Securities and Exchange Commission on May 4, 2012, for sale to eligible employees.

The Plan is considered to be non-compensatory. As such, there is no compensation expense required to be recognized. Share purchases under the Plan are made on the last day of each month. During the six months ended June 30, 2013, 4,625 shares were issued out of the Company’s treasury stock in connection with the Plan.

13

7. EARNINGS PER SHARE FROM CONTINUING OPERATIONS

Basic earnings per share is computed by dividing the income from continuing operations attributable to The GEO Group, Inc. shareholders by the weighted average number of outstanding shares of common stock. The calculation of diluted earnings per share is similar to that of basic earnings per share except that the denominator includes dilutive common stock equivalents such as stock options and shares of restricted stock. Basic and diluted earnings per share (“EPS”) from continuing operations were calculated for the three and six months ended June 30, 2013 and July 1, 2012 as follows (in thousands, except per share data):

	Three Months Ended					Six Months Ended
	June 30, 2013			July 1, 2012		June 30, 2013			July 1, 2012
Income from continuing operations	$	34,219		$	20,854	$	57,657		$	34,610
Net (income) loss attributable to noncontrolling interests		(12	)		25		(30	)		(9	)
Net income from continuing operations attributable to The GEO Group, Inc.		34,207			20,879		57,627			34,601
Basic earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding		71,083			60,839		70,967			60,803
Per share amount from continuing operations	$	0.48		$	0.34	$	0.81		$	0.57
Diluted earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding		71,083			60,839		70,967			60,803
Effect of dilutive securities: Stock options and restricted stock		524			227		543			181
Weighted average shares assuming dilution		71,607			61,066		71,510			60,984
Per share amount from continuing operations	$	0.48		$	0.34	$	0.81		$	0.57

Three Months

For the three months ended June 30, 2013 no shares of common stock underlying options or shares of restricted stock were anti-dilutive.

For the three months ended July 1, 2012 57,937 weighted average shares of common stock underlying options and 1,642 shares of restricted stock were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

Six Months

For the six months ended June 30, 2013 no shares of common stock underlying options or shares of restricted stock were anti-dilutive.

For the six months ended July 1, 2012 112,428 weighted average shares of common stock underlying options and 1,584 shares of restricted stock were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

8. DISCONTINUED OPERATIONS

The Company reports the results of operations of a component of an entity that either has been disposed of or is classified as held for sale or where the management contracts with that component have terminated, either by expiration or otherwise, in discontinued operations. The Company presents such events as discontinued operations so long as the financial results can be clearly identified, the future operations and cash flows are completely eliminated from ongoing operations, and so long as the Company does not have any significant continuing involvement in the operations of the component after the disposal or termination transaction.

When a component of an entity has been disposed of or classified as held for sale or a management contract is terminated, the Company looks at its overall relationship with the customer. If the operations or cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the transaction and the entity will not have significant continuing involvement in the operations of the component after the transaction, the results of operations of the component of an entity are reported in discontinued operations. If the Company will continue to maintain a relationship generating significant cash flows and having continuing involvement with the customer, the disposal, the asset held for sale classification or the loss of the management contract(s) is not treated as discontinued operations. If the disposal, the asset held for sale classification or the loss of the management contract(s) results in a loss in the overall customer relationship as no future significant cash flows will be generated and the Company will have no continuing involvement with the customer, the results are classified in discontinued operations.

14

Divestiture of RTS Operations

On December 31, 2012, the Company completed the divestiture of its RTS operating component, which was purchased by GEO Care Holdings LLC, an entity owned by certain current and former members of GEO’s management team (the “MBO Group”). Cash proceeds received on December 31, 2012 from the divestiture amounted to $33.3 million, net of an initial working capital adjustment, subject to a final working capital adjustment determined within 105 days of the transaction closing date. The final working capital adjustment resulted in a net cash sale price of $32.3 million In accordance with the purchase agreement, the MBO Group would also be obligated to pay up to an additional $5.0 million in purchase price on a contingent earn-out basis if certain potential future contract awards are received by RTS. In addition, the purchase agreement provides for (i) a purchase price adjustment in favor of the MBO Group in the event certain client consents are not obtained within one year following the divestiture, and (ii) a purchase price adjustment in favor of the MBO Group if certain key contracts (as defined in the Purchase Agreement) are terminated up to one year following the divestiture. There were no amounts recorded under these earn-out provisions during the three or six months ended June 30, 2013.

In connection with the RTS divestiture, the Company and GEO Care Holdings LLC entered into a services agreement pursuant to which the Company will provide accounting support, information systems services, legal support services, risk management services, property management and design services and office space for a five-year term in return for an annual fee of $1.8 million payable in equal monthly installments (the “Services Agreement”). The Company and GEO Care Holdings LLC also executed a license agreement pursuant to which the Company granted to GEO Care Holdings LLC an exclusive license for a five-year term to use the GEO Care service mark and domain name in connection with the RTS business in return for an annual fee of $0.4 million payable in equal monthly installments (the “License Agreement”). In addition, the Company and GEO Care Holdings LLC entered into employment agreements with certain executive officers in order to allocate the services to be provided by the executive officers and related compensation and benefits between the Company and GEO Care Holdings LLC. During the three and six months ended June 30, 2013, the Company earned fees under the above noted Services Agreement and License Agreement amounting to an aggregate of $0.6 million and $1.2 million, respectively, which have been recorded as an offset to operating expenses in the accompanying consolidated statements of operations.

During the three months ended July 1, 2012, RTS had revenue and pre-tax income of $41.2 million and $3.5 million, respectively. During the six months ended July 1, 2012, RTS had revenue and pre-tax income of $82.4 million and $5.5 million, respectively. The operating results and cash flows of RTS for the three and six months ended July 1, 2012 have been retrospectively reflected as discontinued operations in the accompanying consolidated statements of operations and cash flows.

U.S. Corrections & Detention

On April 19, 2012, the Company announced its discontinuation of its managed-only contract with the State of Mississippi, Department of Corrections for the 1,500-bed East Mississippi Correctional Facility (“East Mississippi”) effective July 19, 2012. In connection with the discontinuation of East Mississippi, the Company has also discontinued all other management contracts with the State of Mississippi Department of Corrections (“MDOC”) including its managed-only contracts for the 1,000-bed Marshall County Correctional Facility effective August 13, 2012, and the 1,450-bed Walnut Grove Youth Correctional Facility effective July 1, 2012.

During the three months ended July 1, 2012, revenues and a pre-tax loss relating to the operations of MDOC were $11.2 million and $(0.9) million, respectively. During the six months ended July 1, 2012, RTS had revenue and a pre-tax loss of $22.3 million and $(0.9) million, respectively. The operating results and cash flows relating to the operations of MDOC for the three and six months ended July 1, 2012 are reflected as discontinued operations in the accompanying consolidated statements of operations and cash flows.

All income from discontinued operations included in the consolidated statements of operations is attributable to The GEO Group, Inc.

9. DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in interest rates. The Company measures its derivative financial instruments at fair value.

15

As of June 30, 2013, the Company had four interest rate swap agreements in the aggregate notional amount of $100.0 million. The Company has designated these interest rate swaps as hedges against changes in the fair value of a designated portion of the 7 ³/₄% Senior Notes due to changes in underlying interest rates. These swap agreements, which have payment, expiration dates and call provisions that mirror the terms of the 7 ³/₄% Senior Notes, effectively convert $100.0 million of the 7 ³/₄% Senior Notes into variable rate obligations. Each of the swaps has a termination clause that gives the counterparty the right to terminate the interest rate swaps at fair value, as defined in the swap agreements, under certain circumstances. In addition to the termination clause, the agreements also have call provisions which specify that the lender can elect to settle the swap for the call option price. Under the agreements, the Company receives a fixed interest rate payment from the financial counterparties to the agreements equal to 7 ³/₄% per year calculated on the notional $100.0 million amount, while it makes a variable interest rate payment to the same counterparties equal to the three-month LIBOR plus a fixed margin of between 4.16% and 4.29%, also calculated on the notional $100.0 million amount. Changes in the fair value of the interest rate swaps are recorded in earnings along with related designated changes in the value of the 7 ³/₄% Senior Notes. Total net losses, entirely offset by a corresponding increase in the fair value of the variable rate portion of the 7 ³/₄% Senior Notes, recognized and recorded in earnings related to these fair value hedges were $0.9 million and $1.6 million during the three months and six months ended June 30, 2013, respectively. As of June 30, 2013 and December 31, 2012, the swap assets’ fair values were $4.6 million and $6.2 million, respectively, and are included as Other Non-Current Assets in the accompanying consolidated balance sheets. There was no material ineffectiveness of these interest rate swaps during the quarters ended June 30, 2013 or July 1, 2012.

The Company’s Australian subsidiary is a party to an interest rate swap agreement to fix the interest rate on its variable rate non-recourse debt to 9.7%. The Company has determined the swap, which has a notional amount of AUD 50.9 million, payment and expiration dates, and call provisions that coincide with the terms of the non-recourse debt to be an effective cash flow hedge. Accordingly, the Company records the change in the value of the interest rate swap in accumulated other comprehensive income, net of applicable income taxes. Total unrealized gains recorded in other comprehensive income, net of tax, related to this cash flow hedge was $0.0 million and $0.1 million for the three months and six months ended June 30, 2013, respectively. The total fair value of the swap liability as of June 30, 2013 and December 31, 2012 was $0.5 million and $0.7 million, respectively, and is recorded as a component of other assets within the accompanying consolidated balance sheets. There was no material ineffectiveness of this interest rate swap for the periods presented. The Company does not expect to enter into any transactions during the next twelve months which would result in the reclassification into earnings or losses associated with this swap currently reported in accumulated other comprehensive income (loss).

10. VARIABLE INTEREST ENTITIES AND INVESTMENT IN AFFILIATES

The Company evaluates its joint ventures and other entities in which it has a variable interest (a “VIE”), generally in the form of investments, loans, guarantees, or equity in order to determine if it has a controlling financial interest and is required to consolidate the entity as a result. The reporting entity with a variable interest that provides the entity with a controlling financial interest in the VIE will have both of the following characteristics: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company consolidates South Texas Local Development Corporation (“STLDC”), a VIE. STLDC was created to finance construction for the development of a 1,904-bed facility in Frio County, Texas. STLDC, the owner of the complex, issued $49.5 million in taxable revenue bonds and has an operating agreement with the Company, which provides the Company with the sole and exclusive right to operate and manage the detention center. The operating agreement and bond indenture require the revenue from the contract to be used to fund the periodic debt service requirements as they become due. The net revenues, if any, after various expenses such as trustee fees, property taxes and insurance premiums are distributed to the Company to cover operating expenses and management fees. The Company is responsible for the entire operations of the facility including the payment of all operating expenses whether or not there are sufficient revenues. The bonds have a 10-year term and are non-recourse to the Company. At the end of the 10-year term of the bonds, title and ownership of the facility transfers from STLDC to the Company. The carrying value of the facility as of June 30, 2013 and December 31, 2012 was $25.7 million and $25.8 million, respectively, and is included in Property and Equipment in the accompanying consolidated balance sheets.

The Company does not consolidate its 50% owned South African joint venture interest in South African Custodial Services Pty. Limited (“SACS”), a VIE. SACS joint venture investors are GEO and Kensani Corrections, Pty. Ltd (an independent third party); each partner owns a 50% share. The Company has determined it is not the primary beneficiary of SACS since it does not have the power to direct the activities of SACS that most significantly impact its performance. As such, the Company’s investment in this entity is accounted for under the equity method of accounting. SACS was established and subsequently, in 2001, was awarded a 25-year contract to design, finance and build the Kutama Sinthumule Correctional Centre in Louis Trichardt, South Africa. To fund the construction of the prison SACS obtained long-term financing from its equity partners and lenders, the repayment of which is fully guaranteed by the South African government, except in the event of a default by SACS, in which case the government guarantee is reduced to 80%. The Company’s maximum exposure for loss under this contract is limited to its investment in the joint venture of $8.3 million at June 30, 2013 and its guarantees related to SACS that are discussed in Note 11 - Debt.

16

The Company does not consolidate its 50% owned joint venture in the United Kingdom. In February 2011, The GEO Group Limited, the Company’s wholly-owned subsidiary in the United Kingdom (“GEO UK”), executed a shareholders agreement (the “Shareholders Agreement”) with Amey Community Limited (“Amey”) and Amey UK PLC (“Amey Guarantor”) to form GEO Amey PECS Limited (“GEOAmey”), a private company limited by shares incorporated in England and Wales. GEOAmey was formed by GEO UK and Amey (an independent third party) for the purpose of performing prisoner escort and related custody services in England and Wales. In order to form this private company, GEOAmey issued share capital of £100 divided into 100 shares of £1 each and allocated the shares 50/50 to GEO UK and Amey. GEO UK and Amey each have three directors appointed to the board of directors and neither party has the power to direct the activities that most significantly impact the performance of GEOAmey. As such, the Company’s investment in this entity is accounted for under the equity method of accounting. Both parties provide lines of credit of £12 million, or $18.3 million, based on exchange rates in effect as of June 30, 2013, to ensure that GEOAmey can comply with future contractual commitments related to the performance of its operations. As of June 30, 2013, $18.4 million, including accrued interest, was owed to the Company by GEOAmey under the line of credit. GEOAmey commenced operations on August 29, 2011. Refer to Note 11—Debt for further discussion of the Company’s maximum exposure for loss relating to GEOAmey.

11. DEBT

Debt outstanding as of June 30, 2013 and December 31, 2012 consisted of the following (in thousands):

	June 30, 2013			December 31, 2012
Credit Facility:
Term loan	$	300,000		$	563,625
Unamortized discount on term loan		—			(1,195	)
Revolver		295,000			235,000
Total Senior Credit Facility		595,000			797,430
5.125% Senior Notes:
Notes due in 2023		300,000			—
6.625% Senior Notes:
Notes due in 2021		300,000			300,000
7 3/4% Senior Notes:
Notes due in 2017		250,000			250,000
Unamortized discount on Notes		(2,244	)		(2,457	)
Swap on Notes		4,599			6,212
Total 7 3/4% Senior Notes		252,355			253,755
Non-Recourse Debt :
Non-Recourse Debt		112,732			124,947
Unamortized discount on Non-Recourse Debt		(1,250	)		(1,465	)
Total Non-Recourse Debt		111,482			123,482
Capital Lease Obligations		12,422			12,994
Other debt		335			512
Total debt		1,571,594			1,488,173
Current portion of capital lease obligations, long-term debt and non-recourse debt		(22,341	)		(53,882	)
Capital Lease Obligations, long-term portion		(11,426	)		(11,926	)
Non-Recourse Debt		(93,352	)		(104,836	)
Long-Term Debt	$	1,444,475		$	1,317,529

17

New Credit Agreement

On April 3, 2013, the Company terminated its Forth Amended and Restated Credit Agreement (“Prior Senior Credit Facility”), which consisted of a Term Loan A, Term Loan A-2, Term Loan A-3, Term Loan B (“Prior Term Loans) and a Revolver (“Prior Revolver”), and entered into a new credit agreement by and among GEO and GEO Corrections Holdings, Inc., as Borrowers, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”). The Credit Agreement consists of a $300 million Term Loan B (the “Term Loan B”) bearing interest at LIBOR plus 2.50% (with a LIBOR floor of 0.75%), and a $700 million revolving credit facility (the “Revolver”) currently bearing interest at LIBOR plus 2.50% (with no LIBOR floor). The Revolver component is scheduled to mature on April 3, 2018 and the Term Loan B component is scheduled to mature on April 3, 2020. The Term Loan B and Revolver may be prepaid in whole or in part by the Company at any time without premium or penalty, subject to certain conditions.

The Company has accounted for the termination of the Prior Term Loans component of its Prior Senior Credit Facility as an extinguishment of debt and has accounted for the termination of the Prior Revolver component of the Prior Senior Credit Facility based upon the borrowing capacity accounting guidance for modification of revolving credit arrangements. Loan costs of $10.2 million were incurred in connection with the Credit Agreement transaction, of which $1.1 million was expensed as incurred as this amount was associated with the extinguishment of the Prior Term Loan component, and $9.1 million has been capitalized as deferred financing fees and is included in Other Non-Current Assets in the accompanying consolidated balance sheet as of June 30, 2013, and will be amortized to interest expense using an effective interest method throughout the term of the Revolver or Term Loan B as applicable. In addition, the Company wrote off $1.1 million in unamortized debt discount and $3.3 million of unamortized deferred financing costs pertaining to the Prior Term Loans related to the termination of the Prior Senior Credit Facility. The remaining unamortized deferred financing fees pertaining to the Prior Revolver will be amortized to interest expense using an effective interest method throughout the term of the Revolver.

As of June 30, 2013, the Company had $300.0 million in aggregate borrowings outstanding under the Term Loan B, $295.0 million in borrowings under the Revolver, and approximately $58.2 million in letters of credit which left $346.8 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Credit Agreement as of June 30, 2013 was 3.0%.

Indebtedness under the Revolver bears interest based on the Total Leverage Ratio, as defined in the Credit Agreement, as of the most recent determination date, as defined, in each of the instances below at the stated rate:

LIBOR borrowings	LIBOR plus 1.75% to 2.75%.
Base rate borrowings	Prime Rate plus 0.75% to 1.75%.
Letters of credit	1.75% to 2.75%.
Unused Revolver	0.35% to 0.375%.

The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict the Company’s ability to, among other things, (i) create, incur or assume indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio or senior secured leverage ratio to exceed certain maximum ratios or allow the interest coverage ratio to be less than a certain ratio, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes, (x) alter the business the Company conducts, and (xi) materially impair the Company’s lenders’ security interests in the collateral for its loans.

The Credit Agreement requires the Company to meet certain financial covenants as follows: (i) the Company must not exceed a Total Leverage Ratio (as defined) of 5.75 to 1.00; (ii) the Company must not exceed a Senior Secured Leverage Ratio (as defined) of 3.50 to 1.00; (iii) there is an Interest Coverage Ratio (as defined) under which the lenders will not permit a ratio of less than 3.00 to 1.00 relative to (a) Adjusted EBITDA for any period of four consecutive fiscal quarters to (b) Interest Expense, less that attributable to non-recourse debt of unrestricted subsidiaries.

Events of default under the Credit Agreement include, but are not limited to, (i) the Company’s failure to pay principal or interest when due, (ii) the Company’s material breach of any representations or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) material environmental liability claims which have been asserted against the Company, and (viii) a change in control. All of the obligations under the Credit Agreement are unconditionally guaranteed by certain of the Company’s subsidiaries and secured by substantially all of the Company’s present and future tangible and intangible assets and all present and future tangible and intangible assets of each guarantor, including but not limited to (i) a first-priority pledge of substantially all of the outstanding capital stock owned by the Company and each guarantor, and (ii) perfected first-priority security interests in substantially all of the Company’s, and each guarantors, present and future tangible and intangible assets and the present and future tangible and intangible assets of each guarantor. The

18

Company’s failure to comply with any of the covenants under its Credit Agreement could cause an event of default under such documents and result in an acceleration of all outstanding senior secured indebtedness. The Company believes it was in compliance with all of the covenants of the Credit Agreement as of June 30, 2013.

5.125% Senior Notes

On March 19, 2013, the Company completed an offering of $300.0 million aggregate principal amount of senior unsecured notes. The notes will mature on April 1, 2023 and have a coupon rate and yield to maturity of 5.125%. Interest is payable semi-annually on April 1 and October 1 each year, beginning October 1, 2013. The 5.125% Senior Notes are guaranteed on a senior unsecured basis by all of the Company’s restricted subsidiaries that guarantee obligations under the amended and restated Senior Credit Facility, the Company’s 6.625% Senior Notes, and the Company’s 7¾% Senior Notes. The 5.125% Senior Notes and the guarantees are the Company’s general unsecured senior obligations and rank equally in right of payment with all of the Company’s and the guarantors’ existing and future unsecured senior debt, including the Company’s 7¾% Senior Notes and 6.625% Senior Notes. The 5.125% Senior Notes and the guarantees are effectively subordinated to any of the Company’s and the guarantors’ existing and future secured debt to the extent of the value of the assets securing such debt, including all anticipated borrowings under the amended and restated Senior Credit Facility. The 5.125% Senior Notes are structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries that do not guarantee the 5.125% Senior Notes.

At any time on or prior to April 1, 2016, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of outstanding 5.125% Senior Notes issued under the indenture governing the 5.125% Senior Notes (including any additional notes) at a redemption price of 105.125% of their principal amount plus accrued and unpaid interest and Liquidated Damages (as defined in the indenture), if any, to the redemption date, with the net cash proceeds of one or more equity offerings (as defined in the indenture); provided, that: (1) at least 65% of the aggregate principal amount of notes issued under the indenture (including any additional notes) remains outstanding immediately after the occurrence of such redemption (excluding notes held by us and our Subsidiaries); and (2) the redemption occurs within 90 days of the date of the closing of such equity offering.

At any time prior to April 1, 2018, the Company may, at its option, redeem all or a part of the 5.125% Senior Notes upon not less than 30 days nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) the Applicable Premium (as defined in the indenture) as of the date of redemption, plus (iii) accrued and unpaid interest and Liquidated Damages, if any, to the date of redemption. On or after April 1, 2018, the Company may, at its option, redeem all or a part of the 5.125% Senior Notes upon not less than 30 days nor more than 60 days’ notice at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Liquidated Damages, if any, on the 5.125% Senior Notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below:

Year	Percentage
2018		102.563
2019		101.708
2020		100.854
2021 and thereafter		100.000

The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information). The Company believes it was in compliance with all of the covenants of the indenture as of June 30, 2013.

Under the terms of a registration rights agreement dated as of March 19, 2013 among GEO, the guarantors and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the representative of the initial purchasers of the 5.125% Senior Notes (the “Registration Rights Agreement”), GEO has agreed to register under the Securities Act notes having terms identical in all material respects to the 5.125% Senior Notes (the “Exchange Notes”) and to make an offer to exchange the Exchange Notes for the 5.125% Senior Notes. Pursuant to the terms of the Registration Rights Agreement GEO has agreed to file a registration statement with respect to an offer to exchange the Exchange Notes for the 5.125% Senior Notes on or prior to 75 days after the closing of the offering of the 5.125% Senior Notes and to use its reasonable best efforts to have the registration statement declared effective on or prior to 180 days after the closing of the offering of the 5.125% Senior Notes. If GEO fails to satisfy certain filing and other obligations described in the Registration Rights Agreement, GEO will be

19

obligated to pay additional interest of 0.25% per annum for the first 90-day period and an additional 0.25% per annum with respect to each subsequent 90-day period thereafter, until GEO’s registration obligations are fulfilled, up to a maximum of 1.00% per annum. GEO filed the registration statement on May 30, 2013.

A portion of the proceeds received from the 5.125% Senior Notes were used on the date of financing to repay the Revolver loans outstanding under the Senior Credit Facility. As discussed above, on April 3, 2013, the Company’s Senior Credit Facility was refinanced and a portion of the proceeds of the 5.125% Senior Notes were used to pay a portion of the outstanding term loans and a portion of the Revolver credit draws outstanding under the Senior Credit Facility.

7 ³/₄% Senior Notes

Interest on the 7 ³/₄% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on April 15 and October 15 of each year. On or after October 15, 2013, the Company may, at its option, redeem all or a part of the 7 ³/₄% Senior Notes at the redemption prices set forth in the indenture governing the 7 ³/₄% Senior Notes. The indenture contains certain covenants including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information). The Company believes it was in compliance with all of the covenants of the indenture as of June 30, 2013.

6.625% Senior Notes

Interest on the 6.625% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on February 15 and August 15 of each year. On or after February 15, 2016, the Company may, at its option, redeem all or part of the 6.625% Senior Notes at the redemption prices set forth in the indenture governing the 6.625% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information). The Company believes it was in compliance with all of the covenants of the indenture governing the 6.625% Senior Notes as of June 30, 2013.

Non-Recourse Debt

South Texas Detention Complex

As of June 30, 2013, the remaining balance of the debt service requirement under the STLDC financing agreement for the $49.5 million taxable revenue bonds maturing in February 2016 with fixed coupon rates between 4.63% and 5.07%, is $17.2 million, of which $5.5 million is due within the next twelve months. Also, as of June 30, 2013, included in current restricted cash and investments and non-current restricted cash and investments is $6.3 million and $16.9 million, respectively, of funds held in trust with respect to the STLDC for debt service and other reserves.

Northwest Detention Center

As of June 30, 2013, the remaining balance of the debt service requirement under the $57.0 million note payable (“2003 Revenue Bonds”) and the $54.4 million note payable (“2011 Revenue Bonds”) to the Washington Economic Finance Authority (“WEDFA”) maturing in October 2014 and October 2021 with fixed coupon rates ranging from 4.10% to 5.25%, respectively, is $67.7 million, of which $6.5 million is classified as current in the accompanying consolidated balance sheet.

The payment of principal and interest on 2011 Revenue Bonds issued by WEDFA is non-recourse to GEO. None of the bonds nor CSC’s obligations under the loan from WEDFA are obligations of GEO nor are they guaranteed by GEO.

As of June 30, 2013, included in current restricted cash and investments and non-current restricted cash and investments is $9.3 million and $4.1 million, respectively, of funds held in trust with respect to the Northwest Detention Center for debt service and other reserves.

Australia

The non-recourse obligations to the Company total $27.8 million (AUD 30.4 million) and $34.8 million (AUD 33.6 million), based on the exchange rates in effect at June 30, 2013 and December 31, 2012, respectively. The term of the non-recourse debt is through 2017 and it bears interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary are matched by a similar or corresponding commitment from the government of the State of Victoria. As a condition of the loan, the Company is required to maintain a restricted cash balance of AUD 5.0 million, which, based on exchange rates as of June 30, 2013, was $4.6 million. This amount is included in non-current restricted cash and investments and the annual maturities of the future debt obligation are included in Non-Recourse Debt.

20

Guarantees

In connection with the creation of SACS, the Company entered into certain guarantees related to the financing, construction and operation of the prison. As of June 30, 2013, the Company guaranteed obligations amounting to 34.8 million South African Rand, or $3.5 million based on exchange rates as of June 30, 2013. In the event SACS is unable to maintain the required funding in a rectification account maintained for the payment of certain costs in the event of contract termination, a previously existing guarantee by the Company for the shortfall will need to be re-instated. The remaining guarantee of 34.8 million South African Rand is secured by outstanding letters of credit under the Company’s Revolver as of June 30, 2013.

In addition to the above, the Company has also agreed to provide a loan, if required, of up to 20 million South African Rand, or $2.0 million based on exchange rates as of June 30, 2013, referred to as the Shareholder’s Loan, to SACS for the purpose of financing SACS’ obligations under its contract with the South African government. No amounts have been funded under the standby facility, and the Company does not currently anticipate that such funding will be required by SACS in the future. The Company’s obligations under the Shareholder’s Loan expire upon the earlier of full funding or SACS’s release from its obligations under its debt agreements. The lenders’ ability to draw on the Shareholder’s Loan is limited to certain circumstances, including termination of the contract.

The Company has also guaranteed certain obligations of SACS to the security trustee for SACS’ lenders. The Company secured its guarantee to the security trustee by ceding its rights to claims against SACS in respect of any loans or other finance agreements, and by pledging the Company’s shares in SACS. The Company’s liability under the guarantee is limited to the cession and pledge of shares. The guarantee expires upon expiration of the cession and pledge agreements.

In connection with a design, build, finance and maintenance contract for a facility in Canada, the Company guaranteed certain potential tax obligations of a trust. The potential estimated exposure of these obligations is Canadian Dollar (“CAD”) 2.5 million, or $2.4 million, based on exchange rates as of June 30, 2013, commencing in 2017. The Company has a liability of $2.2 million and $2.0 million related to this exposure included in Other Non-Current Liabilities as of June 30, 2013 and December 31, 2012, respectively. To secure this guarantee, the Company purchased Canadian dollar denominated securities with maturities matched to the estimated tax obligations in 2017 to 2021. The Company has recorded an asset equal to the current fair value of those securities included in Other Non-Current Assets as of June 30, 2013 and December 31, 2012, respectively, on its consolidated balance sheets. The Company does not currently operate or manage this facility.

At June 30, 2013, the Company also had eight letters of guarantee outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling $11.1 million.

In connection with the creation of GEOAmey, the Company and its joint venture partner guarantee the availability of working capital in equal proportion to ensure that GEOAmey can comply with current and future contractual commitments related to the performance of its operations. The Company and the 50% joint venture partner have each extended a £12 million line of credit of which £12.1 million, or $18.4 million based on exchange rates as of June 30, 2013, was outstanding as of June 30, 2013. The Company’s maximum exposure relative to the joint venture is its note receivable of $18.4 million, including accrued interest of $0.2 million, and future financial support necessary to guarantee performance under the contract.

Except as discussed above, the Company does not have any off balance sheet arrangements.

12. COMMITMENTS, CONTINGENCIES AND OTHER TAX MATTERS

Litigation, Claims and Assessments

In June 2004, the Company received notice of a third-party claim for property damage incurred during 2001 and 2002 at several detention facilities formerly operated by its Australian subsidiary. The claim relates to property damage caused by detainees at the detention facilities. The notice was given by the Australian government’s insurance provider and did not specify the amount of damages being sought. In August 2007, a lawsuit (Commonwealth of Australia v. Australasian Correctional Services PTY, Limited No. SC 656) was filed against the Company in the Supreme Court of the Australian Capital Territory seeking damages of up to approximately AUD 18 million or $16.5 million based on exchange rates as of June 30, 2013, plus interest. The pre-judgment interest rate in Australia is currently 7.00%. The Company had established a reserve based on its estimate of the most probable loss based on the facts and circumstances known to date and the advice of legal counsel in connection with this matter. In May 2013, the case was settled. The settlement was within the Company’s reserves and did not have a material impact on the Company’s consolidated balance sheet or results of operations as of and for the three and six months ended June 30, 2013.

The nature of the Company’s business exposes it to various types of third-party legal claims or litigation against the Company, including, but not limited to, civil rights claims relating to conditions of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, medical malpractice claims, product liability claims, intellectual property infringement claims, claims relating to employment matters (including, but not limited to, employment discrimination claims, union grievances and wage and hour claims), property loss claims, environmental claims, automobile liability claims, indemnification claims by its customers and other third parties, contractual claims and claims for personal injury or other

21

damages resulting from contact with the Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company does not expect the outcome of any pending claims or legal proceedings to have a material adverse effect on its financial condition, results of operations or cash flows.

Construction Commitments

The Company currently has contractual commitments for a number of projects using Company financing. The Company’s management estimates that the cost of these existing capital projects will range from $31.0 million to $35.0 million of which $24.0 million was spent through the second quarter of 2013. The Company estimates the remaining capital requirements related to these capital projects will range from $7.0 million to $11.0 million which will be spent through fiscal year 2013. Capital expenditures related to facility maintenance costs are expected to range between $30.0 million and $35.0 million for fiscal year 2013.

Facility Purchase

On May 7, 2013, the Company executed a definitive agreement for the purchase of the land, buildings and improvements, and tangible personal property and fixtures of the 1,287 bed Joe Corley Detention Center (the “Center”) located in Montgomery County, Texas for a purchase price of approximately $65.0 million. The Center was previously managed by the Company under a managed-only contract with Montgomery County and will continue to house federal detainees for U.S. Immigration and Customs Enforcement and the U.S. Marshals Service under an Intergovernmental Services Agreement. The transaction closed on June 7, 2013.

Employment Agreement

On April 29, 2013, GEO and Mr. George C. Zoley, the Company’s Chief Executive Officer, entered into the First Amendment to Third Amended and Restated Executive Employment Agreement (the “Amendment”). The Amendment modifies Mr. Zoley’s employment agreement by eliminating the automatic cost of living increase applicable to his annual base salary and instead provides that his annual base salary may be increased in the sole discretion of the Board for cost of living increases to be determined by the Board. Additionally, the Amendment modifies the termination payment Mr. Zoley would receive in the event of a termination of employment other than a termination by GEO for cause (as defined in the Third Amended and Restated Executive Employment Agreement) or a termination by Mr. Zoley without good reason (as defined in the Third Amended and Restated Executive Employment Agreement) from three times the amount of Mr. Zoley’s base salary plus annual bonus to two times the amount of Mr. Zoley’s base salary plus annual bonus.

On May 29, 2013, the Company and the Chief Executive Officer entered into the Second Amendment to Third Amended and Restated Executive Employment Agreement (the “Amendment”). The Amendment modifies the Chief Executive Officer’s employment agreement by decreasing the maximum target annual performance award he may receive from 150% of his annual base salary to 100% of his annual base salary.

Idle Facilities

The Company is currently marketing approximately 6,000 vacant beds at seven of its idle facilities to potential customers. The carrying values of these idle facilities, which are included in Property and Equipment, Net and Assets Held for Sale in the consolidated balance sheets, totaled $237.3 million as of June 30, 2013, excluding equipment and other assets that can be easily transferred for use at other facilities.

Other Tax Matters

• As a result of the REIT conversion as more fully discussed in Note 1—Basis of Presentation, the Company reorganized its operations and moved non-real estate components into TRS. The TRS structure requires the provisions of services between affiliated companies which are conducted at arm’s length subject to applicable tax law and promulgated tax regulations. The Company has, with the assistance of its tax advisors, undertaken substantial analysis to determine and document the appropriateness of the arm’s length compensation used in compliance with such tax rules which is reviewed on a periodic basis.

• During 2013 GEO had a tax benefit relating to its REIT conversion as well as a net release of tax reserves primarily due to the settlement of IRS audit years 2010 and 2011, partially offset by an initial reserve for uncertain tax positions relating to the REIT conversion. Together these items had a favorable impact to the effective tax rate and resulted in a tax benefit of $7.3 million and $6.4 million for the three months and six months ended June 30, 2013, respectively.

13. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the U.S. Corrections & Detention segment; the GEO Community Services segment; the International Services segment; and the Facility Construction & Design segment. The Facility Construction & Design segment did not have any operating activity during the 2013 and 2012 periods presented. The GEO Community Services segment was previously referred to as the GEO Care segment but was renamed concurrent with the divestiture of RTS. The U.S. Corrections and Detention and the GEO Community Services segments have been retroactively reclassified during the three and six months ended July 1, 2012 for the results of discontinued operations. Refer to Note 8—Discontinued Operations. In addition, the Company has reclassified the results of it’s operations in Canada to the International Services segment for all periods presented. Canada’s results, which were previously included in the U.S. Corrections &

22

Detention segment, were not significant during 2013 or 2012. 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, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Revenues:
U.S. Corrections & Detention	$	254,043	$	245,916	$	502,815	$	480,710
GEO Community Services		75,072		72,767		149,013		145,025
International Services		52,538		52,490		106,856		105,480
Total revenues	$	381,653	$	371,173	$	758,684	$	731,215
Operating income:
U.S. Corrections & Detention	$	56,631	$	59,762	$	110,723	$	106,861
GEO Community Services		18,854		17,093		36,259		33,342
International Services		3,265		2,215		5,067		5,950
Operating income from segments	$	78,750	$	79,070	$	152,049	$	146,153

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, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Total operating income from segments	$	78,750		$	79,070		$	152,049		$	146,153
Unallocated amounts:
General and Administrative Expenses		(27,363	)		(26,129	)		(59,403	)		(52,715	)
Net Interest Expense		(19,938	)		(18,857	)		(38,095	)		(37,856	)
Loss on Extinguishment of Debt		(5,527	)		—			(5,527	)		—
Income before income taxes and equity in earnings of affiliates, and discontinued operations	$	25,922		$	34,084		$	49,024		$	55,582

Equity in Earnings of Affiliates

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in SACS, located in South Africa, and GEOAmey, located in the United Kingdom. Our 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 $1.3 million and $2.5 million in earnings, net of tax, for SACS operations during the three months and six months ended June 30, 2013, respectively, and $1.3 million and $2.6 million in earnings, net of tax, during the three months and six months ended July 1, 2012, respectively. SACS earnings are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2013 and December 31, 2012, the Company’s investment in SACS was $8.3 million and $7.8 million, respectively.

The Company has recorded $0.2 million and $0.3 million in losses, net of tax, for GEOAmey’s operations during the three months and six months ended June 30, 2013, respectively, and $0.9 million and $1.4 million in losses, net of tax, during both the three months and six months ended July 1, 2012, respectively. GEOAmey’s earnings are included in equity in earnings of affiliates, net of income tax provision, in the accompanying consolidated statements of operations. As of June 30, 2013 and December 31, 2012, the Company’s investment in GEOAmey was $(4.4) million and $(4.1) million, respectively, and represents its share of cumulative reported losses. Losses in excess of the Company’s investment have been recognized as the Company has provided certain loans and guarantees to provide financial support to GEOAmey (Refer to Note 11-Debt.)

23

14. BENEFIT PLANS

The following table summarizes key information related to the Company’s pension plans and retirement agreements (in thousands):

	Six months ended June 30, 2013			Fiscal Year Ended December 31, 2012
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period	$	19,761		$	16,879
Service cost		462			774
Interest cost		415			787
Plan amendments		—			569
Actuarial loss		—			945
Benefits paid		(120	)		(193	)
Projected benefit obligation, end of period	$	20,518		$	19,761
Change in Plan Assets
Plan assets at fair value, beginning of period	$	—		$	—
Company contributions		120			193
Benefits paid		(120	)		(193	)
Plan assets at fair value, end of period	$	—		$	—
Unfunded Status of the Plan	$	(20,518	)	$	(19,761	)

	Three Months Ended				Six Months Ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Components of Net Periodic Benefit Cost
Service cost	$	231	$	193	$	462	$	387
Interest cost		207		197		415		393
Net loss		66		48		131		97
Net periodic pension cost	$	504	$	438	$	1,008	$	877

The long-term portion of the pension liability as of June 30, 2013 and December 31, 2012 was $20.3 million and $19.5 million, respectively, and is included in Other Non-Current Liabilities in the accompanying consolidated balance sheets.

15. RECENT ACCOUNTING STANDARDS

In March 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force) (“ASU 2013-05”). The objective of ASU 2013-05 is to resolve diversity in practice regarding the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. ASU 2013-05 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2013. The Company is currently evaluating the potential impact of this ASU on its condensed unaudited consolidated financial statements.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not, or are not expected to, have a material effect on the Company’s results of operations or financial position.

16. SUBSEQUENT EVENTS

Dividend

On July 30, 2013 the Board of Directors declared a quarterly cash dividend of $0.50 per share of common stock, which is to be paid on August 29, 2013 to shareholders of record as of the close of business on August 19, 2013.

24

17. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Company’s 6.625% Senior Notes, 7 ³/₄% 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.

25

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	118,859		$	314,120		$	55,585		$	(106,911	)	$	381,653
Operating expenses		102,108			239,194			44,855			(106,911	)		279,246
Depreciation and amortization		5,875			16,556			1,226			—			23,657
General and administrative expenses		8,156			15,420			3,787			—			27,363
Operating income (loss)		2,720			42,950			5,717			—			51,387
Interest income		4,029			359			1,123			(4,346	)		1,165
Interest expense		(10,373	)		(12,708	)		(2,368	)		4,346			(21,103	)
Loss on extinguishment of debt		(2,600	)		(2,927	)		—			—			(5,527	)
Income (loss) before income taxes and equity in earnings of affiliates		(6,224	)		27,674			4,472			—			25,922
Income tax (benefit) provision		(8,339	)		226			845			—			(7,268	)
Equity in earnings of affiliates, net of income tax provision		—			—			1,029			—			1,029
Income (loss) before equity in income of consolidated subsidiaries		2,115			27,448			4,656			—			34,219
Income from consolidated subsidiaries, net of income tax provision		32,104			—			—			(32,104	)		—
Income from continuing operations		34,219			27,448			4,656			(32,104	)		34,219
Net income (loss) from discontinued operations		—			—			—			—			—
Net income		34,219			27,448			4,656			(32,104	)		34,219
Net income attributable to noncontrolling interests		—			—			(12	)		—			(12	)
Net income attributable to The GEO Group, Inc.	$	34,219		$	27,448		$	4,644		$	(32,104	)	$	34,207
Net income	$	34,219		$	27,448		$	4,656		$	(32,104	)	$	34,219
Other comprehensive income (loss), net of tax		—			40			(5,300	)		—			(5,260	)
Total comprehensive income	$	34,219		$	27,488		$	(644	)	$	(32,104	)	$	28,959
Comprehensive loss attributable to noncontrolling interests		—			—			19			—			19
Comprehensive income attributable to The GEO Group, Inc.	$	34,219		$	27,488		$	(625	)	$	(32,104	)	$	28,978

26

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended July 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	153,753		$	177,301		$	57,780		$	(17,661	)	$	371,173
Operating expenses		130,454			110,339			46,009			(17,661	)		269,141
Depreciation and amortization		7,389			13,433			2,140			—			22,962
General and administrative expenses		9,384			12,783			3,962			—			26,129
Operating income		6,526			40,746			5,669			—			52,941
Interest income		7,847			394			1,661			(8,141	)		1,761
Interest expense		(16,837	)		(7,926	)		(3,996	)		8,141			(20,618	)
Income (loss) before income taxes and equity in earnings of affiliates		(2,464	)		33,214			3,334			—			34,084
Income tax (benefit) provision		(667	)		12,860			1,467			—			13,660
Equity in earnings of affiliates, net of income tax provision		—			—			430			—			430
Income (loss) from continuing operations before equity in income of consolidated subsidiaries		(1,797	)		20,354			2,297			—			20,854
Income from consolidated subsidiaries, net of income tax provision		22,651			—			—			(22,651	)		—
Income from continuing operations		20,854			20,354			2,297			(22,651	)		20,854
Net income from discontinued operations		1,622			2,046			233			(2,279	)		1,622
Net income		22,476			22,400			2,530			(24,930	)		22,476
Net income attributable to noncontrolling interests		—			—			25			—			25
Net income attributable to The GEO Group, Inc.	$	22,476		$	22,400		$	2,555		$	(24,930	)	$	22,501
Net income	$	22,476		$	22,400		$	2,530		$	(24,930	)	$	22,476
Other comprehensive income (loss), net of tax		29			—			(2,498	)		—			(2,469	)
Total comprehensive income	$	22,505		$	22,400		$	32		$	(24,930	)	$	20,007
Comprehensive income attributable to noncontrolling interests		—			—			58			—			58
Comprehensive income attributable to The GEO Group, Inc.	$	22,505		$	22,400		$	90		$	(24,930	)	$	20,065

27

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Six Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	232,348		$	626,649		$	112,970		$	(213,283	)	$	758,684
Operating expenses		201,518			479,671			92,137			(213,283	)		560,043
Depreciation and amortization		11,697			32,438			2,457			—			46,592
General and administrative expenses		17,354			33,612			8,437			—			59,403
Operating income (loss)		1,779			80,928			9,939			—			92,646
Interest income		7,989			909			2,219			(8,768	)		2,349
Interest expense		(20,292	)		(24,139	)		(4,781	)		8,768			(40,444	)
Loss on extinguishment of debt		(2,600	)		(2,927	)		—			—			(5,527	)
Income (loss) before income taxes and equity in earnings of affiliates		(13,124	)		54,771			7,377			—			49,024
Income tax (benefit) provision		(9,006	)		632			1,987			—			(6,387	)
Equity in earnings of affiliates, net of income tax provision		—			—			2,246			—			2,246
Income (loss) from continuing operations before equity in income of consolidated subsidiaries		(4,118	)		54,139			7,636			—			57,657
Income from consolidated subsidiaries, net of income tax provision		61,775			—			—			(61,775	)		—
Income from continuing operations		57,657			54,139			7,636			(61,775	)		57,657
Net income loss from discontinued operations		—			—			—			—			—
Net income		57,657			54,139			7,636			(61,775	)		57,657
Net income attributable to noncontrolling interests		—			—			(30	)		—			(30	)
Net income attributable to The GEO Group, Inc.	$	57,657		$	54,139		$	7,606		$	(61,775	)	$	57,627
Net income	$	57,657		$	54,139		$	7,636		$	(61,775	)	$	57,657
Other comprehensive income (loss), net of tax		—			80			(6,520	)		—			(6,440	)
Total comprehensive income		57,657			54,219			1,116			(61,775	)		51,217
Comprehensive loss attributable to noncontrolling interests		—			—			42			—			42
Comprehensive income attributable to The GEO Group, Inc.	$	57,657		$	54,219		$	1,158		$	(61,775	)	$	51,259

28

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Six Months Ended July 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	294,370		$	361,488		$	115,772		$	(40,415	)	$	731,215
Operating expenses		261,460			228,005			90,811			(40,415	)		539,861
Depreciation and amortization		14,244			26,685			4,272			—			45,201
General and administrative expenses		18,780			26,077			7,858			—			52,715
Operating income (loss)		(114	)		80,721			12,831			—			93,438
Interest income		15,655			886			3,262			(16,235	)		3,568
Interest expense		(33,754	)		(15,837	)		(8,068	)		16,235			(41,424	)
Income (loss) before income taxes and equity in earnings of affiliates		(18,213	)		65,770			8,025			—			55,582
Income tax (benefit) provision		(6,323	)		25,172			3,301			—			22,150
Equity in earnings of affiliates, net of income tax provision		—			—			1,178			—			1,178
Income (loss) from continuing operations before equity in income of consolidated subsidiaries		(11,890	)		40,598			5,902			—			34,610
Income from consolidated subsidiaries, net of income tax provision		46,500			—			—			(46,500	)		—
Income from continuing operations		34,610			40,598			5,902			(46,500	)		34,610
Net income from discontinued operations		2,925			3,118			553			(3,671	)		2,925
Net income		37,535			43,716			6,455			(50,171	)		37,535
Net income attributable to noncontrolling interests		—			—			(9	)		—			(9	)
Net income attributable to The GEO Group, Inc.	$	37,535		$	43,716		$	6,446		$	(50,171	)	$	37,526
Net income	$	37,535		$	43,716		$	6,455		$	(50,171	)	$	37,535
Other comprehensive income (loss), net of tax		59			—			(541	)		—			(482	)
Total comprehensive income	$	37,594		$	43,716		$	5,914		$	(50,171	)	$	37,053
Comprehensive income attributable to noncontrolling interests		—			—			(4	)		—			(4	)
Comprehensive income attributable to The GEO Group, Inc.	$	37,594		$	43,716		$	5,910		$	(50,171	)	$	37,049

29

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)

	As of June 30, 2013
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	5,736	$	1,084	$	31,691		$	—		$	38,511
Restricted cash and investments		—		—		15,646			—			15,646
Accounts receivable, less allowance for doubtful accounts		82,406		137,948		18,647			—			239,001
Deferred income tax assets, net		—		14,604		3,686			—			18,290
Prepaid expenses and other current assets		1,168		13,253		11,875			(1,154	)		25,142
Total current assets		89,310		166,889		81,545			(1,154	)		336,590
Restricted Cash and Investments		134		9,410		28,204			—			37,748
Property and Equipment, Net		654,956		973,246		111,784			—			1,739,986
Assets Held for Sale		—		1,200		—			—			1,200
Direct Finance Lease Receivable		—		—		20,445			—			20,445
Intercompany Receivable		937,073		128,058		(1,300	)		(1,063,831	)		—
Deferred Income Tax Assets, Net		16,230		—		2,532			(16,230	)		2,532
Goodwill		34		489,502		680			—			490,216
Intangible Assets, Net		—		169,375		1,368			—			170,743
Investment in Subsidiaries		954,156		442,679		—			(1,396,835	)		—
Other Non-Current Assets		26,815		107,330		34,018			(79,421	)		88,742
Total Assets	$	2,678,708	$	2,487,689	$	279,276		$	(2,557,471	)	$	2,888,202
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	5,290	$	38,898	$	3,203		$	—		$	47,391
Accrued payroll and related taxes		1,827		15,868		16,619			—			34,314
Accrued expenses		61,014		30,678		18,641			(1,154	)		109,179
Current portion of capital lease obligations, long-term debt and non-recourse debt		3,000		1,212		18,129			—			22,341
Total current liabilities		71,131		86,656		56,592			(1,154	)		213,225
Deferred Income Tax Liabilities		—		31,933		—			(16,230	)		15,703
Intercompany Payable		113,567		930,800		19,457			(1,063,824	)		—
Other Non-Current Liabilities		14,101		136,207		3,257			(79,428	)		74,137
Capital Lease Obligations		—		11,426		—			—			11,426
Long-Term Debt		1,444,475		—		—			—			1,444,475
Non-Recourse Debt		—		—		93,352			—			93,352
Commitments & Contingencies Shareholders’ Equity:
The GEO Group, Inc. Shareholders’ Equity		1,035,434		1,290,667		106,168			(1,396,835	)		1,035,434
Noncontrolling Interests		—		—		450			—			450
Total Shareholders’ Equity		1,035,434		1,290,667		106,618			(1,396,835	)		1,035,884
Total Liabilities and Shareholders’ Equity	$	2,678,708	$	2,487,689	$	279,276		$	(2,557,471	)	$	2,888,202

30

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

31

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Six Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	58,343		$	18,932		$	24,039		$	101,314
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment		—			51			—			51
Proceeds from sale of assets held for sale		—			1,968			—			1,968
Net working capital adjustment from RTS divestiture		(996	)		—			—			(996	)
Change in restricted cash and investments		(134	)		(1,457	)		(4,319	)		(5,910	)
Capital expenditures		(69,567	)		(19,666	)		(688	)		(89,921	)
Net cash used in investing activities		(70,697	)		(19,104	)		(5,007	)		(94,808	)
Cash Flow from Financing Activities:
Proceeds from long-term debt		785,000			—			—			785,000
Income tax benefit of equity compensation		1,308			—			—			1,308
Debt issuance costs		(17,017	)		—			—			(17,017	)
Payments on long-term debt		(688,675	)		(661	)		(8,412	)		(697,748	)
Proceeds from the exercise of stock options		4,082			—			—			4,082
Cash dividends paid		(71,527	)		—			—			(71,527	)
Proceeds from reissuance of treasury stock in connection with ESPP		155			—			—			155
Net cash provided by (used in) financing activities		13,326			(661	)		(8,412	)		4,253
Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			(4,003	)		(4,003	)
Net Increase (Decrease) in Cash and Cash Equivalents		972			(833	)		6,617			6,756
Cash and Cash Equivalents, beginning of period		4,764			1,917			25,074			31,755
Cash and Cash Equivalents, end of period	$	5,736		$	1,084		$	31,691		$	38,511

32

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Six Months Ended July 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	$	98,442		$	11,721		$	6,769		$	116,932
Cash provided by operating activities—discontinued operations		752			6,827			2,455			10,034
Net cash provided by operating activities		99,194			18,548			9,224			126,966
Cash Flow from Investing Activities:
Proceeds from sale of assets held for sale		—			297			—			297
Proceeds from sale of property and equipment		—			162			69			231
Change in restricted cash and investments		(484	)		(1,350	)		2,387			553
Capital expenditures		(53,933	)		(13,363	)		(2,240	)		(69,536	)
Cash (used in) provided by investing activities—continuing operations		(54,417	)		(14,254	)		216			(68,455	)
Cash used in investing activities—discontinued operations		(311	)		(2,226	)		—			(2,537	)
Net cash (used in) provided by investing activities		(54,728	)		(16,480	)		216			(70,992	)
Cash Flow from Financing Activities:
Proceeds from long-term debt		145,000			—			—			145,000
Payments on long-term debt		(160,556	)		(693	)		(8,033	)		(169,282	)
Income tax provision of equity compensation		(270	)		—			—			(270	)
Debt issuance costs		(6	)		—			(38	)		(44	)
Distribution to noncontrolling interests		—			—			(5,758	)		(5,758	)
Proceeds from the exercise of stock options		396			—			—			396
Payments for retirement of common stock		(1,035	)		—			—			(1,035	)
Net cash used in financing activities		(16,471	)		(693	)		(13,829	)		(30,993	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			(43	)		(43	)
Net Increase (Decrease) in Cash and Cash Equivalents		27,995			1,375			(4,432	)		24,938
Cash and Cash Equivalents, beginning of period		15,086			3,092			25,200			43,378
Cash and Cash Equivalents, end of period	$	43,081		$	4,467		$	20,768		$	68,316

33

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Information

This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking” statements are any statements that are not based on historical information. Statements other than statements of historical facts included in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are “forward-looking” statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and we can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or “cautionary statements,” include, but are not limited to:

• our ability to timely build and/or open facilities as planned, profitably manage such facilities and successfully integrate such facilities into our operations without substantial additional costs;

• our ability to remain qualified for taxation as a real estate investment trust, or REIT;

• our ability to fulfill our debt service obligations and its impact on our liquidity;

• the instability of foreign exchange rates, exposing us to currency risks in Australia, Canada, the United Kingdom, and South Africa, or other countries in which we may choose to conduct our business;

• our ability to activate the inactive beds at our idle facilities;

• our ability to maintain occupancy rates at our facilities;

• an increase in unreimbursed labor rates;

• our ability to expand, diversify and grow our correctional, detention, re-entry, community-based services, youth services, monitoring services, evidence-based supervision and treatment programs and secure transportation services businesses;

• our ability to win management contracts for which we have submitted proposals, retain existing management contracts and meet any performance standards required by such management contracts;

• our ability to control operating costs associated with contract start-ups;

• our ability to raise new project development capital given the often short-term nature of the customers’ commitment to use newly developed facilities;

• our ability to estimate the government’s level of dependency on privatized correctional services;

• our ability to accurately project the size and growth of the U.S. and international privatized corrections industry and our ability to capitalize on opportunities for public-private partnerships;

• our ability to successfully respond to delays encountered by states privatizing correctional services and cost savings initiatives implemented by a number of states;

• our ability to develop long-term earnings visibility;

• our ability to identify suitable acquisitions, and to successfully complete and integrate such acquisitions on satisfactory terms, and estimate the synergies to be achieved as a result of such acquisitions;

• our exposure to the impairment of goodwill and other intangible assets as a result of our acquisitions;

• our ability to successfully conduct our operations in the United Kingdom and South Africa through joint ventures;

34

• our ability to obtain future financing on satisfactory terms or at all, including our ability to secure the funding we need to complete ongoing capital projects;

• our exposure to political and economic instability and other risks impacting our international operations;

• our exposure to risks impacting our information systems, including those that may cause an interruption, delay or failure in the provision of our services;

• our exposure to rising general insurance costs;

• our exposure to state and federal income tax law changes internationally and domestically, including changes to the REIT provisions and our exposure as a result of federal and international examinations of our tax returns or tax positions;

• our exposure to claims for which we are uninsured;

• our exposure to rising employee and inmate medical costs;

• our ability to manage costs and expenses relating to ongoing litigation arising from our operations;

• our ability to accurately estimate on an annual basis, loss reserves related to general liability, workers compensation and automobile liability claims;

• the ability of our government customers to secure budgetary appropriations to fund their payment obligations to us and continue to operate under our existing agreements and/ or renew our existing agreements;

• our ability to pay quarterly dividends consistent with our requirements as a REIT, and expectations as to timing and amounts;

• our ability to comply with government regulations and applicable contractual requirements;

• our ability to acquire, protect or maintain our intellectual property;

• the risk that future sales of shares of our common stock could adversely affect the market price of our common stock and may be dilutive; and

• other factors contained in our filings with the Securities and Exchange Commission, or the SEC, including, but not limited to, those detailed in this Quarterly Report on Form 10-Q, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and our Current Reports on Form 8-K filed with the SEC.

We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q.

Introduction

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of numerous factors including, but not limited to, those described above under “Forward Looking Information”, those described below under “Part II—Item 1A. Risk Factors” and under “Part I—Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

We are a real estate investment trust (“REIT”) specializing in the ownership, leasing and management of correctional, detention and re-entry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, the United Kingdom and Canada. We own, lease and operate a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, and community based re-entry facilities. We offer counseling, education and/or treatment to inmates with alcohol and drug abuse problems at most of the domestic facilities we manage. We are also a provider of innovative compliance

35

technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants. Additionally, we have an exclusive contract with the U.S. Immigration and Customs Enforcement, which we refer to as ICE, to provide supervision and reporting services designed to improve the participation of non-detained aliens in the immigration court system. We develop new facilities based on contract awards, using our project development expertise and experience to design, construct and finance what we believe are state-of-the-art facilities that maximize security and efficiency. We also provide secure transportation services for offender and detainee populations as contracted domestically and in the United Kingdom through our joint venture, GEO Amey PECS Ltd., which we refer to as GEOAmey.

As of June 30, 2013, our worldwide operations included the management and/or ownership of approximately 72,000 beds at 95 correctional, detention and re-entry facilities, including idle facilities and projects under development and also included the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states.

We provide a diversified scope of services on behalf of our government clients:

• our correctional and detention management services involve the provision of security, administrative, rehabilitation, education, health and food services, primarily at adult male correctional and detention facilities;

• our community-based services involve supervision of adult parolees and probationers and the provision of temporary housing, programming, employment assistance and other services with the intention of the successful reintegration of residents into the community;

• our youth services include residential, detention and shelter care and community-based services along with rehabilitative, educational and treatment programs;

• our monitoring services provide our governmental clients with innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants; including services provided under the Intensive Supervision Appearance Program, which we refer to as ISAP, to ICE for the provision of services designed to improve the participation of non-detained aliens in the immigration court system;

• we develop new facilities using our project development experience to design, construct and finance what we believe are state-of-the-art facilities that maximize security and efficiency; and

• we provide secure transportation services for offender and detainee populations as contracted domestically, and internationally, our joint venture GEOAmey is responsible for providing prisoner escort and custody services in the United Kingdom, including all of Wales and England except London and The East of England.

For the three months ended June 30, 2013 and July 1, 2012, we had consolidated revenues of $381.7 million and $371.2 million, respectively. For the six months ended June 30, 2013 and July 1, 2012, we had consolidated revenues of $758.7 million and $731.2 million, respectively. For the six months ended June 30, 2013, we maintained an average company wide facility occupancy rate of 95.2% including 66,370 active beds and excluding 6,056 idle beds marketed to potential customers for the six months ended June 30, 2013, and 95.7% including 69,983 active beds and excluding 7,056 idle beds marketed to potential customers for the six months ended July 1, 2012.

REIT Conversion—we began operating as a REIT for federal income tax purposes effective January 1, 2013. As a result of the REIT conversion, we reorganized our operations and moved non-real estate components into taxable REIT subsidiaries (“TRS”). Through the TRS structure, the portion of our businesses which are non-real estate related, such as our managed-only contracts, international operations, electronic monitoring services, and other non-residential and community based facilities, are part of wholly-owned taxable subsidiaries of the REIT. Most of our business segments, which are real estate related and involve company-owned and company-leased facilities, are part of the REIT. The TRS structure allows us to maintain the strategic alignment of almost all of our diversified business segments under one entity. The TRS assets and operations will continue to be subject to federal and state corporate income taxes and to foreign taxes as applicable in the jurisdictions in which those assets and operations are located.

As a REIT, we are required to distribute annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and by excluding net capital gain) and we began paying regular distributions in 2013. On January 17, 2013, our Board declared GEO’s first quarterly REIT cash dividend of $0.50 per share of common stock, which was paid on

36

March 1, 2013 to shareholders of record as of the close of business on February 15, 2013. On May 7, 2013, the Board of Directors declared a quarterly cash dividend of $0.50 per share of common stock, which was paid on June 3, 2013 to shareholders of record as of the close of business on May 20, 2013.

Divestiture of Residential Treatment Services—Applicable REIT rules substantially restrict the ability of REITs to operate health care facilities. As a result, in order to achieve and preserve our REIT status, on December 31, 2012, we completed the divestiture of all of our residential treatment health care facility assets and related management contracts (“Residential Treatment Services” or “RTS”). The operating results of RTS have been retroactively reclassified to discontinued operations for the three months and six months ended July 1, 2012. Refer to Note 8—Discontinued Operations of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

Change of Reporting Segment Name from GEO Care to GEO Community Services—Our GEO Care reporting segment previously consisted of four aggregated operating segments including Residential Treatment Services, Community Based Services, Youth Services and B.I. Incorporated (“BI”). The GEO Care reporting segment was renamed concurrent with the divestiture of our Residential Treatment Services operating segment. All GEO Community Services current and prior year financial position and results of operations amounts presented for this reporting segment are referred to as GEO Community Services.

Fiscal Year- In connection with the REIT conversion discussed above, effective December 31, 2012, we changed to a calendar year from a fiscal year that ended on the Sunday closest to the calendar year end and changed our fiscal quarters to coincide with each calendar quarter. The second fiscal quarter of 2013 began on April 1, 2013 and ended on June 30, 2013, and is referred to as the “Second Quarter 2013”. The six month period began on January 1, 2013 and ended on June 30, 2013 and is referred to as the “First Half 2013”. The second fiscal quarter of 2012 began on April 2, 2012 and ended on July 1, 2012, and is referred to as the “Second Quarter 2012”. The six month period began on January 2, 2012 and ended on July 1, 2012 and is referred to as the “First Half 2012”.

Reference is made to Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on March 1, 2013, for further discussion and analysis of information pertaining to our financial condition and results of operations as of and for the fiscal year ended December 31, 2012.

Fiscal 2013 Developments

Contract Awards, Activations and Terminations

We are currently marketing approximately 6,000 vacant beds at seven of our idle facilities to potential customers. The carrying values of these idle facilities totaled $237.3 million as of June 30, 2013, excluding equipment and other assets that can be easily transferred for use at other facilities.

Critical Accounting Policies

The accompanying unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We routinely evaluate our estimates based on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the six months ended June 30, 2013, we did not experience any changes in estimates or judgments inherent in the preparation of our consolidated financial statements except that we began operating as a REIT for federal income tax purposes effective January 1, 2013. As a result of the REIT conversion, we reorganized our operations and moved non-real estate components into TRS. Our TRS structure requires the provisions of services between affiliated companies which are conducted at arm’s length subject to applicable tax law and promulgated tax regulations. We have, with the assistance of our tax advisors, undertaken substantial analysis to determine and document the appropriateness of the arm’s length compensation used in compliance with the underlying tax rules and regulations. A summary of our significant accounting policies is contained in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

37

RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the notes to our unaudited consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q. The results of operations presented herein do not include the results of operations related to the Company’s discontinued operations for all periods presented. Refer to Note 8-Discontinued Operations of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Comparison of Second Quarter 2013 and Second Quarter 2012

Revenues

	2013		% of Revenue			2012		% of Revenue			$ Change		% Change
	(Dollars in thousands)
U.S. Corrections & Detention	$	254,043		66.5	%	$	245,916		66.3	%	$	8,127		3.3	%
GEO Community Services		75,072		19.7	%		72,767		19.6	%		2,305		3.2	%
International Services		52,538		13.8	%		52,490		14.1	%		48		0.1	%
Total	$	381,653		100.0	%	$	371,173		100.0	%	$	10,480		2.8	%

U.S. Corrections & Detention

Revenues increased in Second Quarter 2013 compared to Second Quarter 2012 primarily due to aggregate increases of $6.9 million resulting from the activation and intake of inmates at our expanded 650-bed Adelanto ICE Processing Center East (“Adelanto East”) in August 2012 and the commencement of services under our contract, signed in October 2012, with the United States Marshals Service for the housing of up to 320 federal detainees at our Aurora Detention Facility. We also experienced aggregate increases in revenues of $7.2 million at certain of our facilities primarily due to increases in population, transportation services and/or rates, including the expansion to the New Castle Correctional Facility (“New Castle”) in the first quarter of 2012. These increases were partially offset by an aggregate decrease of $6.0 million primarily due to decreases related to lower populations, transportation services and/or rates at certain facilities.

The number of compensated mandays in U.S. Corrections & Detention facilities was 4.3 million in Second Quarter 2013 and 4.2 million in Second Quarter 2012. We experienced an aggregate net increase of approximately 139,000 mandays as a result of our new contracts discussed above and also as a result of increases in population at certain facilities. These increases were offset by decreases related to lower populations at certain facilities. We look at the average occupancy in our facilities to determine how we are managing our available beds. The average occupancy is calculated by taking compensated mandays as a percentage of capacity. The average occupancy in our U.S. Corrections & Detention facilities was 96.0% and 96.4% of capacity in Second Quarter 2013 and Second Quarter 2012, respectively, excluding idle facilities.

GEO Community Services

The increase in revenues for GEO Community Services in Second Quarter 2013 compared to Second Quarter 2012 is primarily attributable to increases of $2.0 million due to new electronic monitoring contracts and an increase in ISAP services at BI. In addition, we experienced a net increase of $1.2 million primarily due to population increases at certain youth facilities and new programs and program growth at our community based and re-entry centers. These increases were partially offset by decreases in revenues of $1.0 million related to census declines at certain facilities.

International Services

The slight increase in revenues for International Services in Second Quarter 2013 compared to Second Quarter 2012 is due to aggregate net increases of $1.8 million primarily attributable to our Australian and South African subsidiaries related to population increases, contractual increases linked to the inflationary index and the provision of additional services under certain contracts. These increases were partially offset by a decrease of $1.7 million as a result of foreign exchange rate fluctuations caused by the strengthening of the U.S. dollar against certain foreign currencies.

38

Operating Expenses

	2013		% of  Segment Revenues			2012		% of  Segment Revenues			$ Change			% Change
	(Dollars in thousands)
U.S. Corrections & Detention	$	181,855		71.6	%	$	170,425		69.3	%	$	11,430			6.7	%
GEO Community Services		48,753		64.9	%		48,983		67.3	%		(230	)		(0.5	)%
International Services		48,638		92.6	%		49,733		94.7	%		(1,095	)		(2.2	)%
Total	$	279,246		73.2	%	$	269,141		72.5	%	$	10,105			3.8	%

Operating expenses consist of those expenses incurred in the operation and management of our correctional, detention and community based facilities.

U.S. Corrections & Detention

The increase in operating expenses for U.S. Corrections & Detention reflects the following: (i) the activation and intake of inmates at the Adelanto East expansion and services provided under our contract with the United States Marshals at our Aurora facility which contributed an aggregate increase to operating expenses of $4.5 million; and (ii) increases of $4.7 million at certain of our facilities primarily attributable to net population increases and increased transportation services and the variable costs associated with those increases. In addition, in Second Quarter 2012, we received approximately $2.0 million in net operating tax refunds, not related to income taxes, for certain previously disputed claims in various jurisdictions which did not recur in 2013.

GEO Community Services

Operating expenses for GEO Community Services decreased by $0.2 million during Second Quarter 2013 from Second Quarter 2012 primarily due to census declines of $1.2 million These decreases were partially offset by increases of $1.0 million due to the following: (i) variable costs associated with increases in electronic monitoring contracts and ISAP services at BI; (ii) population increases at certain youth facilities and the related variable costs; and (iii) new programs and program growth at our community based and re-entry centers.

International Services

Operating expenses for our International Services segment during Second Quarter 2013 decreased $1.1 million over Second Quarter 2012 which was primarily attributable to the impact of foreign currency exchange rate fluctuations of $(1.7) million caused by the strengthening of the U.S. dollar against certain foreign currencies. This decrease was offset by a net increase of $0.5 million primarily attributable to our Australian and South African subsidiaries due to population increases, contractual increases in labor and additional services provided under new contracts at those facilities.

Depreciation and Amortization

	2013		% of  Segment Revenue			2012		% of  Segment Revenue			$ Change			% Change
	(Dollars in thousands)
U.S. Corrections & Detention	$	15,557		6.1	%	$	15,729		6.4	%	$	(172	)		(1.1	)%
GEO Community Services		7,465		9.9	%		6,691		9.2	%		774			11.6	%
International Services		635		1.2	%		542		1.0	%		93			17.2	%
Total	$	23,657		6.2	%	$	22,962		6.2	%	$	695			3.0	%

U.S. Corrections & Detention

U.S. Corrections & Detention depreciation and amortization expense decreased slightly in Second Quarter 2013 compared to Second Quarter 2012 primarily due to certain intangible assets which became fully amortized towards the end of 2012.

GEO Community Services

GEO Community Services depreciation and amortization expense increased by $0.8 million in Second Quarter 2013 compared to Second Quarter 2012. The increase is primarily due to an increase in monitoring and other equipment at BI in 2012 and 2013 related to certain contract wins.

39

International Services

Depreciation and amortization expense increased slightly in Second Quarter 2013 over Second Quarter 2012 primarily from increases in capital expenditures at our Australian subsidiary which were slightly offset by the result of foreign exchange rate fluctuations caused by the strengthening of the U.S. dollar against certain foreign currencies.

Other Unallocated Operating Expenses

	2013		% of Revenue			2012		% of Revenue			$ Change		% Change
	(Dollars in thousands)
General and Administrative Expenses	$	27,363		7.2	%	$	26,129		7.04	%	$	1,234		4.7	%

General and administrative expenses comprise substantially all of our other unallocated operating expenses primarily including corporate management salaries and benefits, professional fees and other administrative expenses. The increase in general and administrative expenses in Second Quarter 2013 compared to Second Quarter 2012 was primarily attributable to professional fees incurred in Second Quarter 2013 associated with our conversion to a REIT.

Non Operating Expenses

Interest Income and Interest Expense

	2013		% of Revenue			2012		% of Revenue			$ Change			% Change
	(Dollars in thousands)
Interest Income	$	1,165		0.3	%	$	1,761		0.5	%	$	(596	)		(33.8	)%
Interest Expense	$	21,103		5.5	%	$	20,618		5.6	%	$	485			2.4	%

The majority of our interest income generated in Second Quarter 2013 and Second Quarter 2012 is from the cash balances at our foreign subsidiaries. Interest income decreased in Second Quarter 2013 primarily due to lower cash balances at our foreign subsidiaries along with declining interest rates in 2013.

The increase in interest expense of $0.5 million in Second Quarter 2013 compared to Second Quarter 2012 is primarily attributable to an increase in interest expense of $4.0 million related to the completion of our $300 million 5.125% Senior Notes offering in March 2013. This increase was partially offset by a decrease due to the extinguishment of the 8.47% Taxable Revenue Bonds, Series 2001, issued by Municipal Corrections Finance L.P. (the “MCF Bonds”) in the third quarter of 2012. Interest expense on the MCF Bonds in Second Quarter 2012 was $1.2 million. In addition, interest expense decreased in Second Quarter 2013 by $2.4 million as a result of the termination of our Fourth Amended and Restated Credit Agreement (the “Prior Senior Credit Facility”) and our entering into a new Credit Agreement in Second Quarter 2013. Refer to Note 11—Debt of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

Loss on Extinguishment of Debt

	2013		% of Revenue			2012		% of Revenue			$ Change		% Change
	(Dollars in thousands)
Loss on Extinguishment of Debt	$	5,527		1.4	%	$	—		—	%	$	5,527		100.0	%

The loss on extinguishment of debt in Second Quarter 2013 is the result of us terminating our Prior Senior Credit Facility and entering into a new Credit Agreement. In connection with the termination, we wrote off $4.4 million of unamortized deferred financing costs and unamortized debt discount pertaining to the Prior Senior Credit Facility and expensed $1.1 million in fees related to the new Credit Agreement. Refer to Note 11—Debt of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

40

Income Tax (Benefit) Provision

	2013			Effective Rate			2012		Effective Rate			$ Change			% Change
	(Dollars in thousands)
Income Taxes	$	(7,268	)		(28.0	)%	$	13,660		40.1	%	$	(20,928	)		(153.2	)%

The provision (benefit) for income taxes during Second Quarter 2013 decreased by $21.0 million compared to Second Quarter 2012 and the effective tax rate decreased from 40.1% to (28.0%). The decrease is primarily attributable to our REIT conversion which became effective January 1, 2013. As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn are allowed a deduction for the distribution at the REIT level. The Company’s wholly-owned taxable REIT subsidiaries continue to be fully subject to federal, state and foreign income taxes, as applicable. In addition, during Second Quarter 2013 GEO had a net tax benefit relating to its REIT conversion and miscellaneous nonrecurring items of $2.0 million, as well as a release of $6.4 million of tax reserves primarily due to the settlement of IRS audit years 2010 and 2011. Together these items had a favorable impact to the effective tax rate.

Equity in Earnings of Affiliates, net of Income Tax Provision

	2013		% of Revenue			2012		% of Revenue			$ Change		% Change
	(Dollars in thousands)
Equity in Earnings of Affiliates	$	1,029		0.3	%	$	430		0.1	%	$	599		139.3	%

Equity in earnings of affiliates, presented net of income taxes, represents the earnings (loss) of SACS and GEOAmey, respectively. Overall, we experienced an increase in equity in earnings of affiliates during Second Quarter 2013 compared to Second Quarter 2012, which is primarily due to increased performance from the operations of GEOAmey in Second Quarter 2013 compared to Second Quarter 2012.

Comparison of First Half 2013 and First Half 2012

Revenues

	2013		% of Revenue			2012		% of Revenue			$ Change		% Change
	(Dollars in thousands)
U.S. Corrections & Detention	$	502,815		66.3	%	$	480,710		65.8	%	$	22,105		4.6	%
GEO Community Services		149,013		19.6	%		145,025		19.8	%		3,988		2.7	%
International Services		106,856		14.1	%		105,480		14.4	%		1,376		1.3	%
Total	$	758,684		100.0	%	$	731,215		100.0	%	$	27,469		3.8	%

U.S. Corrections & Detention

Revenues increased in First Half 2013 compared to First Half 2012 primarily due to aggregate increases of $12.8 million resulting from the activation and intake of inmates at Adelanto East in August 2012 and the commencement of services under our contract, signed in October 2012, with the United States Marshals Service for the housing of up to 320 federal detainees at our Aurora Detention Facility. We also experienced aggregate increases in revenues of $12.7 million at certain of our facilities primarily due to increases in population, transportation services and/or rates, including the expansion to New Castle in the first quarter of 2012. These increases were partially offset by an aggregate decrease of $3.4 million primarily due to lower populations, transportation services and/or rates at certain facilities.

The number of compensated mandays in U.S. Corrections & Detention facilities was 8.5 million in First Half 2013 and 8.2 million in First Half 2012. We experienced an aggregate net increase of approximately 321,000 mandays as a result of our new contracts discussed above and also as a result of increases in population at certain facilities. These increases were offset by decreases resulting from lower populations at certain facilities. We look at the average occupancy in our facilities to determine how we are managing our available beds. The average occupancy is calculated by taking compensated mandays as a percentage of capacity. The average occupancy in our U.S. Detention & Corrections facilities was 96.0% and 96.2% of capacity in First Half 2013 and First Half 2012 respectively, excluding idle facilities.

41

GEO Community Services

The increase in revenues for GEO Community Services in First Half 2013 compared to First Half 2012 is primarily attributable to increases of $3.3 million due to new electronic monitoring contracts and an increase in ISAP services at BI. In addition, we experienced a net increase of $2.3 million primarily due to population increases at certain youth facilities and new programs and program growth at our community based and re-entry centers. These increases were partially offset by decreases in revenues of $1.7 million related to census declines at certain facilities.

International Services

The increase in revenues for International Services in First Half 2013 compared to First Half 2012 is due to aggregate net increases of $4.6 million primarily attributable to our Australian and South African subsidiaries related to population increases, contractual increases linked to the inflationary index and the provision of additional services under certain contracts. These increases were partially offset by a decrease of $3.2 million as a result of foreign exchange rate fluctuations caused by the strengthening of the U.S. dollar against certain foreign currencies.

Operating Expenses

	2013		% of Segment Revenues			2012		% of Segment Revenues			$ Change			% Change
	(Dollars in thousands)
U.S. Corrections & Detention	$	361,438		71.9	%	$	342,952		71.3	%	$	18,486			5.4	%
GEO Community Services		98,086		65.8	%		98,453		67.9	%		(367	)		(0.4	)%
International Services		100,519		94.1	%		98,456		93.3	%		2,063			2.1	%
Total	$	560,043		73.8	%	$	539,861		73.8	%	$	20,182			3.7	%

Operating expenses consist of those expenses incurred in the operation and management of our correctional, detention and community based facilities.

U.S. Corrections & Detention

The increase in operating expenses for U.S. Corrections & Detention reflects the following: (i) the activation and intake of inmates at the Adelanto East expansion and services provided under our contract with the United States Marshals at our Aurora facility which contributed an aggregate increase to operating expenses of $8.8 million; and (ii) increases of $9.6 million at certain of our facilities primarily attributable to net population increases and increased transportation services and the variable costs associated with those increases.

GEO Community Services

Operating expenses for GEO Community Services decreased by $0.4 million during First Half 2013 from First Half 2012 primarily due to census declines of $1.6 million. These decreases were partially offset by increases of $1.2 million due to the following: (i) variable costs associated with increases in electronic monitoring contracts and ISAP services at BI; (ii) population increases at certain youth facilities and the related variable costs; and (iii) new programs and program growth at our community based and re-entry centers.

International Services

Operating expenses for our International Services segment during First Half 2013 increased $2.1 million over First Half 2012 due to an aggregate net increase of $5.1 million primarily attributable to our Australian and South African subsidiaries related to population increases, contractual increases in labor and additional services provided under new contracts at those facilities. These increases were partially offset by a decrease of $3.0 million as a result of foreign exchange rate fluctuations caused by the strengthening of the U.S. dollar against certain foreign currencies.

42

Depreciation and Amortization

	2013		% of Segment Revenue			2012		% of Segment Revenue			$ Change			% Change
	(Dollars in thousands)
U.S. Corrections & Detention	$	30,654		6.1	%	$	30,897		6.4	%	$	(243	)		(0.8	)%
GEO Community Services		14,668		9.8	%		13,230		9.1	%		1,438			10.9	%
International Services		1,270		1.2	%		1,074		1.0	%		196			18.2	%
Total	$	46,592		6.1	%	$	45,201		6.2	%	$	1,391			3.1	%

U.S. Corrections & Detention

U.S. Corrections & Detention depreciation and amortization expense decreased slightly in First Half 2013 compared to First Half 2012 primarily due to certain intangible assets which became fully amortized towards the end of 2012.

GEO Community Services

GEO Community Services depreciation and amortization expense increased by $1.4 million in First Half 2013 compared to First Half 2012. The increase is primarily due to an increase in monitoring and other equipment at BI in 2012 and 2013 related to certain contract wins.

International Services

Depreciation and amortization expense increased slightly in First Half 2013 over First Half 2012 primarily from increases in capital expenditures at our Australian subsidiary which were slightly offset by foreign exchange rate fluctuations caused by the strengthening of the U.S. dollar against certain foreign currencies.

Other Unallocated Operating Expenses

	2013		% of  Revenue			2012		% of  Revenue			$ Change		% Change
	(Dollars in thousands)
General and Administrative Expenses	$	59,403		7.8	%	$	52,715		7.2	%	$	6,688		12.7	%

General and administrative expenses comprise substantially all of our other unallocated operating expenses primarily including corporate management salaries and benefits, professional fees and other administrative expenses. The increase in general and administrative expenses in First Half 2013 compared to First Half 2012 was primarily attributable to approximately $7 million of professional fees incurred in First Half 2013 associated with our conversion to a REIT. In addition, there were professional fees incurred in First Half 2012 related to the redemption of the MCF bonds in Third Quarter 2012 that did not recur in 2013 which partially offset the increase.

Non Operating Expenses

Interest Income and Interest Expense

	2013		% of  Revenue			2012		% of  Revenue			$ Change			% Change
	(Dollars in thousands)
Interest Income	$	2,349		0.3	%	$	3,568		0.5	%	$	(1,219	)		(34.2	)%
Interest Expense	$	40,444		5.3	%	$	41,424		5.7	%	$	(980	)		(2.4	)%

The majority of our interest income generated in First Half 2013 and First Half 2012 is from the cash balances at our foreign subsidiaries. Interest income decreased in First Half 2013 primarily due to lower cash balances at our foreign subsidiaries along with declining interest rates in 2013.

The decrease in interest expense of $1.0 million in First Half 2013 compared to First Half 2012 is primarily attributable to the extinguishment of the MCF bonds in the third quarter of 2012. Interest expense on the MCF bonds in First Half 2012 was $2.5 million. In addition interest expense decreased in First Half 2013 by $2.9 million as a result of the termination of our Prior Senior Credit Facility and our entering into a new Credit Agreement in Second Quarter 2013. These decreases were partially offset by an increase in interest expense of $4.4 million related to the completion of our $300 million 5.125% Senior Notes offering in March 2013. Refer to Note 11—Debt of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

43

Loss on Extinguishment of Debt

	2013		% of  Revenue			2012		% of  Revenue			$ Change		% Change
	(Dollars in thousands)
Loss on Extinguishment of Debt	$	5,527		0.7	%	$	—		—	%	$	5,527		100.0	%

The loss on extinguishment of debt in First Half 2013 is the result of us terminating our Prior Senior Credit Facility and entering into a new Credit Agreement. In connection with the termination, we wrote off $4.4 million of unamortized deferred financing costs and unamortized debt discount pertaining to the Prior Senior Credit Facility and expensed $1.1 million in fees related to the new Credit Agreement. Refer to Note 11—Debt of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

Income Tax (Benefit) Provision

	2013			Effective Rate			2012		Effective Rate			$ Change			% Change
	(Dollars in thousands)
Income Taxes	$	(6,387	)		(13.0	)%	$	22,150		39.9	%	$	(28,537	)		(128.8	)%

The provision (benefit) for income taxes during First Half 2013 decreased by $28.5 million compared to First Half 2012 and the effective tax rate decreased from 39.9% to (13.0%). The decrease is primarily attributable to our REIT conversion which became effective January 1, 2013. As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn are allowed a deduction for the distribution at the REIT level. The Company’s wholly-owned taxable REIT subsidiaries continue to be fully subject to federal, state and foreign income taxes, as applicable. In addition, during First Half 2013 GEO had a net tax benefit relating to its REIT conversion and miscellaneous nonrecurring items of $2.9 million, as well as a release of $6.4 million of tax reserves primarily due to the settlement of IRS audit years 2010 and 2011. Together these items had a favorable impact to the effective tax rate.

Equity in Earnings of Affiliates, net of Income Tax Provision

	2013		% of  Revenue			2012		% of  Revenue			$ Change		% Change
	(Dollars in thousands)
Equity in Earnings of Affiliates	$	2,246		0.3	%	$	1,178		0.2	%	$	1,068		90.7	%

Equity in earnings of affiliates, presented net of income taxes, represents the earnings (loss) of SACS and GEOAmey, respectively. Overall, we experienced an increase in equity in earnings of affiliates during First Half 2013 compared to First Half 2012, which is primarily due to increased performance from the operations of GEOAmey in First Half 2013 compared to First Half 2012.

Financial Condition

Capital Requirements

Our current cash requirements consist of amounts needed for working capital, distributions of our REIT taxable income in order to maintain our REIT qualification, debt service, supply purchases, investments in joint ventures, and capital expenditures related to either the development of new correctional, detention and re-entry facilities, or the maintenance of existing facilities. In addition, some of our management contracts require us to make substantial initial expenditures of cash in connection with opening or renovating a facility. Generally, these initial expenditures are subsequently fully or partially recoverable as pass-through costs or are billable as a component of the per diem rates or monthly fixed fees to the contracting agency over the original term of the contract. In connection with GEOAmey, our joint venture in the United Kingdom, we and our joint venture partner have each provided a line of credit of £12 million, or $18.3 million, based on exchange rates as of June 30, 2013, for GEOAmey’s operations. As of June 30, 2013, $18.4 million, including accrued interest was owed to us by GEOAmey under the line of credit. Additional capital needs may also arise in the future with respect to possible acquisitions, other corporate transactions or other corporate purposes.

44

We currently have contractual commitments for a number of projects using Company financing. We estimate that the cost of these existing capital projects will range from $21.0 million to $26.0 million of which $15.0 million was spent through the second quarter of 2013. We estimate that the remaining capital requirements related to these capital projects will range from $6.0 million to $11.0 million which will be spent through fiscal year 2013. Capital expenditures related to facility maintenance costs are expected to range between $30.0 million and $35.0 million for fiscal year 2013.

Liquidity and Capital Resources

On April 3, 2013, we terminated our Forth Amended and Restated Credit Agreement (“Prior Senior Credit Facility”), which consisted of a Term Loan A, Term Loan A-2, Term Loan A-3, and Term Loan B (“Prior Term Loans”) and a Revolver (“Prior Revolver”), and entered into a new credit agreement by and among GEO and GEO Corrections Holdings, Inc., as Borrowers, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”). The Credit Agreement consists of a $300.0 million Term Loan B (the “Term Loan B”) bearing interest at LIBOR plus 2.50% (with a LIBOR floor of 0.75%), and a $700.0 million revolving credit facility (the “Revolver”) initially bearing interest at LIBOR plus 2.50% (with no LIBOR floor). The Revolver component is scheduled to mature on April 3, 2018 and the Term Loan B component is scheduled to mature on April 3, 2020. The Term Loan B and Revolver may be prepaid in whole or in part by the Company at any time without premium or penalty, subject to certain conditions.

As of June 30, 2013, we had $300.0 million in aggregate borrowings outstanding, net of discount, under the Term Loan B and $295.0 million in borrowings under the Revolver, and approximately $58.2 million in letters of credit which left $346.8 million in additional borrowing capacity under the Revolver. Refer to Note 11—Debt of Notes to Unaudited Consolidated Financial Statements for further discussion.

On March 19, 2013, we completed an offering of $300.0 million aggregate principal amount of senior unsecured notes. The notes will mature on April 1, 2023 and have a coupon rate and yield to maturity of 5.125% (the “5.125% Senior Notes”). Interest is payable semi-annually on April 1 and October 1 each year, beginning October 1, 2013. A portion of the proceeds received from the 5.125% Senior Notes were used on the date of the financing to repay the prior revolver credit draws outstanding under the Prior Senior Credit Facility. Refer to Note 11—Debt of Notes to Unaudited Consolidated Financial Statements for further discussion.

In October 2009, we completed an offering of $250.0 million in aggregate principal of our 7 ³/₄% Senior Notes due 2017, which we refer to as the 7 ³/₄% Senior Notes. Interest on the 7 ³/₄% Senior Notes accrues interest at the stated rate. We pay interest semi-annually in arrears on April 15 and October 15 of each year. On or after October 15, 2013, we may, at our option, redeem all or a part of the 7 ³/₄% Senior Notes at the redemption prices set forth in the indenture governing the 7 ³/₄% Senior Notes.

In connection with our acquisition of BI in February 2011, we completed an offering of $300.0 million in aggregate principal of our 6.625% Senior Notes due 2021, which we refer to as the 6.625% Senior Notes. Interest on the 6.625% Senior Notes accrues at the stated rate. We pay interest semi-annually in arrears on February 15 and August 15. On or after February 15, 2016, we may, at our option, redeem all or part of the 6.625% Senior Notes at the redemption prices set forth in the indenture governing the 6.625% Senior Notes.

In addition to the debt outstanding under the Credit Facility, 7 ³/₄% Senior Notes, the 6.625% Senior Notes and the 5.125% Senior Notes discussed above, we also have significant debt obligations which, although these obligations are non-recourse to us, require cash expenditures for debt service. Our significant debt obligations could have material consequences. See “Risk Factors-Risks Related to Our High Level of Indebtedness” in Item 1A of our 2012 Annual Report on Form 10-K. We are exposed to various commitments and contingencies which may have a material adverse effect on our liquidity. See Part II-Item 1. Legal Proceedings of this quarterly report on Form 10-Q. We also have guaranteed certain obligations for our South African joint venture and other of our international subsidiaries. These non-recourse obligations, commitments and contingencies and guarantees are further discussed in our 2012 Annual Report on Form 10-K.

We are also considering opportunities for future business and/or asset acquisitions. If we are successful in our pursuit of these new projects, our cash on hand, cash flows from operations and borrowings under the existing Credit Facility may not provide sufficient liquidity to meet our capital needs through 2014 and we could be forced to seek additional financing or refinance our existing indebtedness. There can be no assurance that any such financing or refinancing would be available to us on terms equal to or more favorable than our current financing terms, or at all. In the future, our access to capital and ability to compete for future capital intensive projects will also be dependent upon, among other things, our ability to meet certain financial covenants in the indenture governing the 7 ³/₄% Senior Notes, the indenture governing the 6.625% Senior Notes, the indenture governing the 5.125% Senior Notes, and our Credit Agreement. A substantial decline in our financial performance could limit our access to capital pursuant to these covenants and have a material adverse affect on our liquidity and capital resources and, as a result, on our financial condition and results of operations. In addition to these foregoing potential constraints on our

45

capital, a number of state government agencies have been suffering from budget deficits and liquidity issues. While we expect to be in compliance with our debt covenants, if these constraints were to intensify, our liquidity could be materially adversely impacted as could our ability to remain in compliance with these debt covenants.

As a REIT, we are subject to a number of organizational and operational requirements, including a requirement that we annually distribute to our shareholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for dividends paid and excluding any net capital gain). Generally, we expect to distribute all or substantially all of our REIT taxable income so as not to be subject to the income or excise tax on undistributed REIT taxable income. On January 17, 2013, the Board declared our first quarterly REIT cash dividend of $0.50 per share of common stock, which was paid on March 1, 2013 to shareholders of record as of the close of business on February 15, 2013. On May 7, 2013, the Board of Directors declared a quarterly cash dividend of $0.50 per share of common stock, which was paid on June 3, 2013 to shareholders of record as of the close of business on May 20, 2013. On July 30, 2013, the Board of Directors declared a quarterly cash dividend of $0.50 per share of common stock, which is to be paid on August 29, 2013 to shareholders of record as of the close of business on August 19, 2013. The amount, timing and frequency of distributions will be at the sole discretion of our Board of Directors and will be based upon various factors.

We plan to fund all of our capital needs, including distributions of our REIT taxable income in order to maintain our REIT qualification, and capital expenditures, from cash on hand, cash from operations, borrowings under our Credit Facility and any other financings which our management and Board, in their discretion, may consummate. Currently, our primary source of liquidity to meet these requirements is cash flow from operations and borrowings under the $700.0 million Revolver. Our management believes that cash on hand, cash flows from operations and availability under our Credit Facility will be adequate to support our capital requirements for 2013 as disclosed under “Capital Requirements” above.

Executive Retirement Agreement

We have a non-qualified deferred compensation agreement with our Chief Executive Officer (“CEO”). The current agreement, as amended, provides for a lump sum payment upon retirement, no sooner than age 55. As of January 1, 2013, our CEO had reached age 55 and was eligible to receive the payment upon retirement. If our CEO had retired as of June 30, 2013, the Company would have had to pay him $6.6 million. Based on our current capitalization, we do not believe that making this payment would materially adversely impact our liquidity.

Cash Flow

Cash and cash equivalents as of June 30, 2013 was $38.5 million, compared to $31.8 million as of December 31, 2012.

Operating Activities

Cash provided by operating activities from continuing operations amounted to $101.3 million in the First Half 2013 versus cash provided by operating activities from continuing operations of $116.9 million in the First Half 2012. Cash provided by operating activities from continuing operations during the First Half 2013 was positively impacted by increases in net income attributable to GEO, non-cash expenses such as depreciation and amortization, loss on extinguishment of debt and stock-based compensation expense. These positive impacts were offset by increases in equity in earnings of affiliates, net of tax, a release of reserves for uncertain tax positions and a net decrease in accounts receivable, prepaid expenses and other assets. Accounts receivable, prepaid expenses and other assets decreased in total by a net $9.5 million, representing a positive impact on cash. The decrease was primarily driven by the timing of billings and collections. Accounts payable, accrued expenses and other liabilities decreased by $15.2 million which negatively impacted cash. The decrease was primarily driven by the payment of annual bonuses accrued at December 31, 2012 which were paid out in the first quarter of 2013, litigation settlements in 2013 which were accrued at December 31, 2012 and the timing of payments. These decreases were partially offset by an increase in accrued interest related to our 5.125% Senior Notes which were issued at the end of First Quarter 2013, the initial semi-annual interest payment for which is not due until October 1, 2013.

Cash provided by operating activities from continuing operations in the First Half 2012 was positively impacted by increases in net income attributable to GEO, non-cash expenses such as depreciation and amortization and stock based compensation expense, as well changes in our working capital components which were primarily driven by decreases in accounts receivable, prepaid expenses and other assets. Accounts receivable, prepaid expenses and other assets decreased by $23.4 million in the First Half 2012, and represented a source of cash. The decrease was primarily caused by a decrease in accounts receivable due to timing of collections at certain facilities and an IRS refund of approximately $10 million during the First Half 2012 which was recorded as a reduction to prepaid income taxes.

46

Investing Activities

Cash used in investing activities from continuing operations of $94.8 million in the First Half 2013 was primarily the result of capital expenditures of $89.9 million. Cash used in investing activities from continuing operations in the First Half 2012 of $68.5 million was primarily the result of capital expenditures.

Financing Activities

Cash provided by financing activities from continuing operations in the First Half 2013 amounted to $4.3 million compared to cash used by financing activities of $31.0 million in the First Half 2012. Cash provided by financing activities in the First Half 2013 reflects proceeds from long term debt of $785.0 million, including $300.0 million from the 5.125% Senior Notes as well as $485.0 million of borrowings under our Revolver, and proceeds from the exercise of stock options of $4.1 million. These increases were offset by payments of $697.7 million on indebtedness, cash dividends paid of $71.5 million and debt issuance costs of $17.0 million. Cash used in financing activities in the the First Half 2012 reflects payments of $169.3 million on indebtedness offset by $145.0 million of borrowings under our prior revolver. We also made a cash distribution of $5.8 million to the noncontrolling interests in the First Half 2012.

Outlook

The following discussion contains statements that are not historical statements and, therefore, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied in the forward-looking statements. Please refer to “Part I—Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, the “Forward-Looking Statements—Safe Harbor” section in our Annual Report on Form 10-K, as well as the other disclosures contained in our Annual Report on Form 10-K, and the “Forward-Looking Information” and the “Part II—Item 1A. Risk Factors” sections in this Form 10-Q for further discussion on forward-looking statements and the risks and other factors that could prevent us from achieving our goals and cause the assumptions underlying the forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements.

Revenue

Domestically, we continue to pursue a number of opportunities for corrections and detention facilities. Continued need for corrections facilities in various states and the need for bed space at federal prisons and detention facilities are two of the factors that have contributed to these opportunities. At the state level, we have responded to competitive procurements issued by the State of Michigan for 960 beds and the State of California for 1,225 beds. In Florida, the Department of Management Services has issued a request for proposal for the rebid of 3,854 contract prison beds which are currently managed by a different private operator. At the federal level, we have responded to a procurement issued by the Federal Bureau of Prisons totaling up to 1,600 beds. We continue to be encouraged by opportunities as discussed above; however any positive trends may, to some extent, be adversely impacted by government budgetary constraints in the future. While the general outlook from state officials is one of stability and stable revenue performance so far in fiscal year 2013 continues to be a key factor in the improved condition of state finances, uncertainty still hovers over state finances, as the impact of federal sequestration remains unclear, according to a recent survey conducted in the Spring of 2013 by the National Conference of State Legislatures. As a result of budgetary pressures, state correctional agencies may pursue a number of cost savings initiatives which may include reductions in per diem rates and/or the scope of services provided by private operators. These potential cost savings initiatives could have a material adverse impact on our current operations and/or our ability to pursue new business opportunities. Additionally, if state budgetary constraints, as discussed above, persist or intensify, our state customers’ ability to pay us may be impaired and/or we may be forced to renegotiate our management contracts on less favorable terms and our financial condition, results of operations or cash flows could be materially adversely impacted. We plan to actively bid on any new projects that fit our target profile for profitability and operational risk. Although we are pleased with the overall industry outlook, positive trends in the industry may be offset by several factors, including budgetary constraints, unanticipated contract terminations, contract non-renewals, and/or contract re-bids. Although we have historically had a relatively high contract renewal rate, there can be no assurance that we will be able to renew our expiring management contracts on favorable terms, or at all. Also, while we are pleased with our track record in re-bid situations, we cannot assure that we will prevail in any such future situations.

Internationally, we are exploring a number of opportunities in our current markets and will continue to actively bid on any opportunities that fit our target profile for profitability and operational risk.

With respect to our re-entry services, electronic monitoring services, and youth services business conducted through our GEO Community Services business segment, we are currently pursuing a number of business development opportunities. In connection with our merger with Cornell in August 2010 and our acquisition of BI in February 2011, we have significantly expanded the service offerings of our GEO Community Services business segment by adding electronic monitoring services,

47

community re-entry and immigration related supervision services. Relative to opportunities for community-based re-entry centers, we expect to compete for several formal solicitations from the Bureau of Prisons (the “BOP”) for re-entry centers across the country and are also working with our existing local and state correctional clients to leverage new opportunities for both residential facilities as well as non-residential day reporting centers. We continue to expend resources on informing state and local governments about the benefits of public-private partnerships, and we anticipate that there will be new opportunities in the future as those efforts begin to yield results. We believe we are well positioned to capitalize on any suitable opportunities that become available in this area.

Operating Expenses

Operating expenses consist of those expenses incurred in the operation and management of our contracts to provide services to our governmental clients. Labor and related cost represented 58.8% of our operating expenses in First Half 2013. Additional significant operating expenses include food, utilities and inmate medical costs. In First Half 2013, operating expenses totaled 73.8% of our consolidated revenues. Our operating expenses as a percentage of revenue in 2013 will be impacted by the opening of any new or existing facilities as a result of the cost of transitioning and/or start-up operations related to a facility opening. During 2013, we will incur carrying costs for facilities that are currently vacant in 2013. As of June 30, 2013, our worldwide operations include the management and/or ownership of approximately 72,000 beds at 95 correctional, detention, re-entry, youth services and community-based facilities including idle facilities, and also include the provision of monitoring of approximately 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states.

General and Administrative Expenses

General and administrative expenses consist primarily of corporate management salaries and benefits, professional fees and other administrative expenses. In the First Half 2013, general and administrative expenses totaled 7.8% of our consolidated revenues. We expect general and administrative expenses as a percentage of revenue in 2013 to decrease as a result of cost savings initiatives and decreases in nonrecurring costs related to our REIT conversion. We expect business development costs to remain consistent or increase slightly as we pursue additional business development opportunities in all of our business lines. We also plan to continue expending resources from time to time on the evaluation of potential acquisition targets.

Idle Facilities

We are currently marketing approximately 6,000 vacant beds at seven of our idle facilities to potential customers. The annual carrying cost of idle facilities in 2013 is estimated to be $14.4 million, including depreciation expense of $7.3 million. As of June 30, 2013 these facilities had a net book value of $237.3 million. We currently do not have any firm commitment or agreement in place to activate these facilities. Historically, some facilities have been idle for multiple years before they received a new contract award. Currently, our North Lake Correctional Facility located in Baldwin, Michigan and our Great Plains Correctional Facility located in Hinton, Oklahoma have been idle the longest of our idle facility inventory. These idle facilities are included in the U.S. Corrections & Detention segment. The per diem rates that we charge our clients often vary by contract across our portfolio. However, if all of these idle facilities were to be activated using our U.S. Corrections & Detention average per diem rate in 2013, (calculated as the U.S. Corrections & Detention revenue divided by the number of U.S. Corrections & Detention mandays) and based on the average occupancy rate in our U.S. Corrections & Detention facilities for 2013, we would expect to receive incremental annualized revenue of approximately $125 million and an annualized increase in earnings per share of approximately $0.35 to $0.40 per share based on our average U.S. Corrections and Detention operating margin.

48

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

We are exposed to market risks related to changes in interest rates with respect to our Credit Facility. Payments under the Credit Facility are indexed to a variable interest rate. Based on borrowings outstanding under the Credit Facility of $595.0 million and $58.2 million in outstanding letters of credit, as of June 30, 2013, for every one percent increase in the average interest rate applicable to the Credit Facility, our total annual interest expense would increase by $6.0 million.

As of June 30, 2013, we had four interest rate swap agreements in the aggregate notional amount of $100.0 million. These interest rate swaps, which have payment, expiration dates and call provisions that mirror the terms of the 7 ³/₄% Senior Notes, effectively convert $100.0 million of the 7 ³/₄% Senior Notes into variable rate obligations. Under these interest rate swaps, we receive a fixed interest rate payment from the financial counterparties to the agreements equal to 7 ³/₄% per year calculated on the notional $100.0 million amount, while we make a variable interest rate payment to the same counterparties equal to the three-month LIBOR plus a fixed margin of between 4.16% and 4.29%, also calculated on the notional $100.0 million amount. For every one percent increase in the interest rate applicable to our aggregate notional $100.0 million of swap agreements relative to the 7 ³/₄% Senior Notes, our annual interest expense would increase by $1.0 million.

We have entered into certain interest rate swap arrangements for hedging purposes, fixing the interest rate on our Australian non-recourse debt to 9.7%. The difference between the floating rate and the swap rate on these instruments is recognized in interest expense within the respective entity. Because the interest rates with respect to these instruments are fixed, a hypothetical 100 basis point change in the current interest rate would not have a material impact on our financial condition or results of operations.

Additionally, we invest our cash in a variety of short-term financial instruments to provide a return. The majority of our cash is invested internationally. These instruments generally consist of highly liquid investments with original maturities at the date of purchase of three months or less. While these instruments are subject to interest rate risk, a hypothetical 100 basis point increase or decrease in market interest rates would not have a material impact on our financial condition or results of operations.

Foreign Currency Exchange Rate Risk

We are also exposed to market risks related to fluctuations in foreign currency exchange rates between the U.S. dollar, the Australian dollar, the Canadian dollar, the South African Rand and the British Pound currency exchange rates. Based upon our foreign currency exchange rate exposure at June 30, 2013, every 10 percent change in historical currency rates would have approximately a $4.9 million effect on our financial position and approximately a $0.5 million impact on our results of operations during First Half 2013.

ITEM 4. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act), as of the end of the period covered by this report. On the basis of this review, our management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed in our reports filed with the SEC, under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

It should be noted that the effectiveness of our system of disclosure controls and procedures is subject to certain limitations inherent in any system of disclosure controls and procedures, including the exercise of judgment in designing, implementing and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events, and the inability to eliminate misconduct completely. Accordingly, there can be no assurance that our disclosure controls and procedures will detect all errors or fraud. As a result, by its nature, our system of disclosure controls and procedures can provide only reasonable assurance regarding management’s control objectives.

(b) Changes in Internal Control Over Financial Reporting.

49

Our management is responsible to report any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management believes that there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The information required herein is incorporated by reference from Note 12—Commitments, Contingencies and Other Tax Matters in the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS.

Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2012 and Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future prospects.

50

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

Not Applicable.

51

ITEM 6. EXHIBITS.

(A) Exhibits

10.51	Amended and Restated Credit Agreement, dated as of April 3, 2013, by and among The GEO Group, Inc. and GEO Corrections Holdings, Inc., as Borrowers, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.) (1)
10.52	First Amendment to Third Amended and Restated Executive Employment Agreement, dated April 29, 2013, by and between The GEO Group, Inc. and George C. Zoley. (2)
10.53	Second Amendment to Third Amended and Restated Executive Employment Agreement, dated May 29, 2013, by and between The GEO Group, Inc. and George C. Zoley. (3)
31.1	SECTION 302 CEO Certification.
31.2	SECTION 302 CFO Certification.
32.1	SECTION 906 CEO Certification.
32.2	SECTION 906 CFO Certification.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

(1) Incorporated by reference to the Company’s Current Report on Form 8-K, filed on April 9, 2013.

(2) Incorporated by reference to the Company’s Current Report on Form 8-K, filed on April 30, 2013.

(3) Incorporated by reference to the Company’s Current Report on Form 8-K, filed on June 4, 2013.

52

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE GEO GROUP, INC.
Date: August 8, 2013	/s/ Brian R. Evans
	Brian R. Evans
	Senior Vice President & Chief Financial Officer
	(duly authorized officer and principal financial officer)

53

EX-31.1

EXHIBIT 31.1

THE GEO GROUP, INC.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, George C. Zoley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The GEO Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2013	/s/ George C. Zoley
	George C. Zoley
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

THE GEO GROUP, INC.

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Brian R. Evans, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The GEO Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2013	/s/ Brian R. Evans
	Brian R. Evans
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of The GEO Group, Inc. (the “Company”) for the period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, George C. Zoley, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ George C. Zoley

George C. Zoley

Chief Executive Officer

Date: August 8, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of The GEO Group, Inc. (the “Company”) for the period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Brian R. Evans, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brian R. Evans

Brian R. Evans

Chief Financial Officer

Date: August 8, 2013

XML

Derivative Financial Instruments

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in interest rates. The Company measures its derivative financial instruments at fair value.

As of June 30, 2013, the Company had four interest rate swap agreements in the aggregate notional amount of $100.0 million. The Company has designated these interest rate swaps as hedges against changes in the fair value of a designated portion of the 7¾% Senior Notes due to changes in underlying interest rates. These swap agreements, which have payment, expiration dates and call provisions that mirror the terms of the 7¾% Senior Notes, effectively convert $100.0 million of the 7¾% Senior Notes into variable rate obligations. Each of the swaps has a termination clause that gives the counterparty the right to terminate the interest rate swaps at fair value, as defined in the swap agreements, under certain circumstances. In addition to the termination clause, the agreements also have call provisions which specify that the lender can elect to settle the swap for the call option price. Under the agreements, the Company receives a fixed interest rate payment from the financial counterparties to the agreements equal to 7¾% per year calculated on the notional $100.0 million amount, while it makes a variable interest rate payment to the same counterparties equal to the three-month LIBOR plus a fixed margin of between 4.16% and 4.29%, also calculated on the notional $100.0 million amount. Changes in the fair value of the interest rate swaps are recorded in earnings along with related designated changes in the value of the 7¾% Senior Notes. Total net losses, entirely offset by a corresponding increase in the fair value of the variable rate portion of the 7¾% Senior Notes, recognized and recorded in earnings related to these fair value hedges were $0.9 million and $1.6 million during the three months and six months ended June 30, 2013, respectively. As of June 30, 2013 and December 31, 2012, the swap assets’ fair values were $4.6 million and $6.2 million, respectively, and are included as Other Non-Current Assets in the accompanying consolidated balance sheets. There was no material ineffectiveness of these interest rate swaps during the quarters ended June 30, 2013 or July 1, 2012.

The Company’s Australian subsidiary is a party to an interest rate swap agreement to fix the interest rate on its variable rate non-recourse debt to 9.7%. The Company has determined the swap, which has a notional amount of AUD 50.9 million, payment and expiration dates, and call provisions that coincide with the terms of the non-recourse debt to be an effective cash flow hedge. Accordingly, the Company records the change in the value of the interest rate swap in accumulated other comprehensive income, net of applicable income taxes. Total unrealized gains recorded in other comprehensive income, net of tax, related to this cash flow hedge was $0.0 million and $0.1 million for the three months and six months ended June 30, 2013, respectively. The total fair value of the swap liability as of June 30, 2013 and December 31, 2012 was $0.5 million and $0.7 million, respectively, and is recorded as a component of other assets within the accompanying consolidated balance sheets. There was no material ineffectiveness of this interest rate swap for the periods presented. The Company does not expect to enter into any transactions during the next twelve months which would result in the reclassification into earnings or losses associated with this swap currently reported in accumulated other comprehensive income (loss).

XML

Debt Debt Outstanding (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Term loan	$ 300,000	$ 563,625
Unamortized discount	0	(1,195)
Revolver	295,000	235,000
Total Senior Credit Facility	595,000	797,430
Non-Recourse Debt	112,732	124,947
Total Non-Recourse Debt	111,482	123,482
Capital Lease Obligations	12,422	12,994
Other debt	335	512
Total debt	1,571,594	1,488,173
Current portion of capital lease obligations, long-term debt and non-recourse debt	(22,341)	(53,882)
Capital Lease Obligations, long-term portion	(11,426)	(11,926)
Non-Recourse Debt	(93,352)	(104,836)
Long-Term Debt	1,444,475	1,317,529
5.125% Senior Notes
Debt Instrument [Line Items]
Senior Notes	300,000	0
6.625% Senior Notes [Member]
Debt Instrument [Line Items]
Senior Notes	300,000	300,000
7.75% Senior Notes [Member]
Debt Instrument [Line Items]
Unamortized discount	(2,244)	(2,457)
Senior Notes	250,000	250,000
Swap on Notes	4,599	6,212
Total 7 3/4% Senior Notes	252,355	253,755
Non Recourse Debt [Member]
Debt Instrument [Line Items]
Unamortized discount	$ (1,250)	$ (1,465)

XML

Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Net income	$ 34,219	$ 22,476	$ 57,657	$ 37,535
Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax (benefit) provision of $0, $(195), $0 and $125, respectively	(5,328)	(2,068)	(6,661)	(142)
Pension liability adjustment, net of tax benefit of $25, $19, $51 and $38, respectively	40	29	81	59
Unrealized gain (loss) on derivative instrument classified as cash flow hedge, net of tax provision (benefit) of $16, ($203), $77 and ($220), respectively	28	(430)	140	(399)
Total other comprehensive loss, net of tax	(5,260)	(2,469)	(6,440)	(482)
Total comprehensive income	28,959	20,007	51,217	37,053
Comprehensive (income) loss attributable to noncontrolling interests	19	58	42	(4)
Comprehensive income attributable to The GEO Group, Inc.	$ 28,978	$ 20,065	$ 51,259	$ 37,049

XML

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has recorded goodwill as a result of its business combinations. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible assets, other intangible assets acquired and liabilities assumed, including noncontrolling interests. Changes in goodwill from December 31, 2012 to June 30, 2013 are related solely to fluctuations in foreign currency exchange rates.

The Company has also recorded other finite and indefinite lived intangible assets as a result of business combinations completed prior to 2013. Changes in the gross carrying amounts from December 31, 2012 to June 30, 2013 are solely related to fluctuations in foreign currency exchange rates. The Company's intangible assets include facility management contracts, non-compete agreements and the trade name and technology of BI, as follows (in thousands):

		June 30, 2013							December 31, 2012
	Weighted Average Useful Life (years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Facility management contracts	13.4	$	151,683	$	(38,897	)	$	112,786	$	151,913	$	(33,141	)	$	118,772
Covenants not to compete	2.0	8,570		(8,570		)	—		8,570		(8,495		)	75
Technology	7.0	21,200		(7,243		)	13,957		21,200		(5,729		)	15,471
Trade name (Indefinite lived)	Indefinite	44,000		—			44,000		44,000		—			44,000
Total acquired intangible assets		$	225,453	$	(54,710	)	$	170,743	$	225,683	$	(47,365	)	$	178,318

Amortization expense was $3.6 million and $7.3 million, respectively, for the three months and six months ended June 30, 2013. Amortization expense was $4.6 million and $9.2 million, respectively, for the three months and six months ended July 1, 2012. Amortization expense was primarily related to the U.S. Corrections & Detention and GEO Community Services segments' amortization of acquired facility management contracts. As of June 30, 2013, the weighted average period before the next contract renewal or extension for the facility management contracts was approximately 1.3 years. Although the facility management contracts acquired have renewal and extension terms in the near term, the Company has historically maintained these relationships beyond the contractual periods.

Estimated amortization expense related to the Company's finite-lived intangible assets for the remainder of fiscal year 2013 through fiscal year 2017 and thereafter is as follows (in thousands):

Fiscal Year	Total Amortization Expense
Remainder of 2013	$	7,266
2014	14,531
2015	14,531
2016	14,531
2017	14,531
Thereafter	61,353
	$	126,743

XML

Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Dividend

On July 30, 2013 the Board of Directors declared a quarterly cash dividend of $0.50 per share of common stock, which is to be paid on August 29, 2013 to shareholders of record as of the close of business on August 19, 2013.

XML

Subsequent Events (Details) (Subsequent Event, USD $)	0 Months Ended
	Jul. 30, 2013
Subsequent Event
Subsequent Event [Line Items]
Cash dividend per share of common stock declared	$ 0.50

XML

Debt Senior Notes (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	6 Months Ended
	Mar. 19, 2013	Jun. 30, 2013
Debt Instrument [Line Items]
Interest rate		7.75%
Senior Notes Due 2013 | Senior Notes
Debt Instrument [Line Items]
Interest rate		7.75%
Senior Unsecured Notes Due April 2023
Debt Instrument [Line Items]
Redemption Period After Closing of Offering		0 years 0 months 90 days
Senior Unsecured Notes Due April 2023 | Senior Notes
Debt Instrument [Line Items]
Face amount	$ 300,000
Debt Instrument, Maturity Date	Apr. 01, 2023
Interest rate	5.125%	5.125%
Debt Instrument, Redemption Price Calculation Contributor, Percentage	100.00%
Debt Instrument, Redemption Price, Percentage	105.125%
Redemption period beginning April 1, 2018		12 months
Registration Rights Agreement [Member]
Debt Instrument [Line Items]
File Period After Closing of Offering	0 years 0 months 75 days
Declare Period After Closing of Offering	0 years 0 months 180 days
Registration Rights Agreement [Member] | Senior Notes
Debt Instrument [Line Items]
Additional Interest	0.25%
Senior Notes Due 2021 | Senior Notes
Debt Instrument [Line Items]
Interest rate		6.625%
Maximum | Senior Unsecured Notes Due April 2023
Debt Instrument [Line Items]
Notice Period Prior to Redemption		0 years 0 months 60 days
Maximum | Senior Unsecured Notes Due April 2023 | Senior Notes
Debt Instrument [Line Items]
Debt Instrument, Redemption Period, Percentage of Principal Amount Redeemable	35.00%
Maximum | Registration Rights Agreement [Member]
Debt Instrument [Line Items]
Additional Interest	1.00%
Minimum | Senior Unsecured Notes Due April 2023
Debt Instrument [Line Items]
Notice Period Prior to Redemption		0 years 0 months 30 days
Minimum | Senior Unsecured Notes Due April 2023 | Senior Notes
Debt Instrument [Line Items]
Debt Instrument, Redemption Price, Percentage of Principal Remaining After Redemption	65.00%

XML

Variable Interest Entities And Investment In Affiliates

6 Months Ended

Jun. 30, 2013

Variable Interest Entities [Abstract]

Variable Interest Entities and Investment in Affiliates

VARIABLE INTEREST ENTITIES AND INVESTMENT IN AFFILIATES

The Company evaluates its joint ventures and other entities in which it has a variable interest (a “VIE”), generally in the form of investments, loans, guarantees, or equity in order to determine if it has a controlling financial interest and is required to consolidate the entity as a result. The reporting entity with a variable interest that provides the entity with a controlling financial interest in the VIE will have both of the following characteristics: (i) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (ii) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company consolidates South Texas Local Development Corporation (“STLDC”), a VIE. STLDC was created to finance construction for the development of a 1,904-bed facility in Frio County, Texas. STLDC, the owner of the complex, issued $49.5 million in taxable revenue bonds and has an operating agreement with the Company, which provides the Company with the sole and exclusive right to operate and manage the detention center. The operating agreement and bond indenture require the revenue from the contract to be used to fund the periodic debt service requirements as they become due. The net revenues, if any, after various expenses such as trustee fees, property taxes and insurance premiums are distributed to the Company to cover operating expenses and management fees. The Company is responsible for the entire operations of the facility including the payment of all operating expenses whether or not there are sufficient revenues. The bonds have a 10-year term and are non-recourse to the Company. At the end of the 10-year term of the bonds, title and ownership of the facility transfers from STLDC to the Company. The carrying value of the facility as of June 30, 2013 and December 31, 2012 was $25.7 million and $25.8 million, respectively, and is included in Property and Equipment in the accompanying consolidated balance sheets.

The Company does not consolidate its 50% owned South African joint venture interest in South African Custodial Services Pty. Limited (“SACS”), a VIE. SACS joint venture investors are GEO and Kensani Corrections, Pty. Ltd (an independent third party); each partner owns a 50% share. The Company has determined it is not the primary beneficiary of SACS since it does not have the power to direct the activities of SACS that most significantly impact its performance. As such, the Company's investment in this entity is accounted for under the equity method of accounting. SACS was established and subsequently, in 2001, was awarded a 25-year contract to design, finance and build the Kutama Sinthumule Correctional Centre in Louis Trichardt, South Africa. To fund the construction of the prison SACS obtained long-term financing from its equity partners and lenders, the repayment of which is fully guaranteed by the South African government, except in the event of a default by SACS, in which case the government guarantee is reduced to 80%. The Company's maximum exposure for loss under this contract is limited to its investment in the joint venture of $8.3 million at June 30, 2013 and its guarantees related to SACS that are discussed in Note 11 - Debt.

The Company does not consolidate its 50% owned joint venture in the United Kingdom. In February 2011, The GEO Group Limited, the Company's wholly-owned subsidiary in the United Kingdom (“GEO UK”), executed a shareholders agreement (the “Shareholders Agreement”) with Amey Community Limited (“Amey”) and Amey UK PLC (“Amey Guarantor”) to form GEO Amey PECS Limited (“GEOAmey”), a private company limited by shares incorporated in England and Wales. GEOAmey was formed by GEO UK and Amey (an independent third party) for the purpose of performing prisoner escort and related custody services in England and Wales. In order to form this private company, GEOAmey issued share capital of £100 divided into 100 shares of £1 each and allocated the shares 50/50 to GEO UK and Amey. GEO UK and Amey each have three directors appointed to the board of directors and neither party has the power to direct the activities that most significantly impact the performance of GEOAmey. As such, the Company's investment in this entity is accounted for under the equity method of accounting. Both parties provide lines of credit of £12 million, or $18.3 million, based on exchange rates in effect as of June 30, 2013, to ensure that GEOAmey can comply with future contractual commitments related to the performance of its operations. As of June 30, 2013, $18.4 million, including accrued interest, was owed to the Company by GEOAmey under the line of credit. GEOAmey commenced operations on August 29, 2011. Refer to Note 11 - Debt for further discussion of the Company's maximum exposure for loss relating to GEOAmey.

XML

Equity Incentive Plans (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012
Equity Incentive Plans (Additional Textual) [Abstract]
Granted shares	345,000
Number of annual performance metrics	2
Expected volatility rate	26.60%
Beta of Portfolio	681
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.42%
Share based compensation awards other than option [Member]
Equity Incentive Plans (Additional Textual) [Abstract]
Common stock available for the issuance of awards	404,104
Restricted Stock [Member]
Equity Incentive Plans (Additional Textual) [Abstract]
Share based compensation expense	$ 2.6	$ 2.1
Unrecognized compensation costs related to non vested stock option awards	18.2
Expected weighted average period to recognize expense	3 years 1 month 6 days
Granted shares	345,060
Vesting period	3 years
Restricted Stock [Member] | Minimum
Equity Incentive Plans (Additional Textual) [Abstract]
Vesting period	3 years
Restricted Stock [Member] | Maximum
Equity Incentive Plans (Additional Textual) [Abstract]
Vesting period	4 years
Vesting rights, percentage weighted towards earnings per share performance	75.00%
Award vesting rights, percentage weighted towards capital performance targets	25.00%
Employee Stock Purchase Plan [Member]
Equity Incentive Plans (Additional Textual) [Abstract]
Discount on purchase of Common Stock for employee from the current market price	5.00%
Maximum Shares Authorized Under ESPP for Sale Offer to Eligible Employees	500,000
Stock Issued During Period, Shares, Employee Stock Purchase Plans	4,625
Stock Options [Member]
Equity Incentive Plans (Additional Textual) [Abstract]
Share based compensation expense	0.7	1.4
Unrecognized compensation costs related to non vested stock option awards	$ 1.8
Expected weighted average period to recognize expense	1 year 10 months 2 days
Performance Based Share [Member]
Equity Incentive Plans (Additional Textual) [Abstract]
Granted shares	92,810
Performance Based Share [Member] | Minimum
Equity Incentive Plans (Additional Textual) [Abstract]
Vesting percentage of target	0.00%
Performance Based Share [Member] | Maximum
Equity Incentive Plans (Additional Textual) [Abstract]
Vesting percentage of target	200.00%
Stock Incentive Plan [Member]
Equity Incentive Plans (Additional Textual) [Abstract]
Common stock available for the issuance of awards	1,704,344

XML

Debt Non-Recourse Debt (Details)			6 Months Ended			6 Months Ended		6 Months Ended
	Jun. 30, 2013 USD ($)	Dec. 31, 2012 USD ($)	Jun. 30, 2013 Taxable Revenue Bonds STLDC [Member]	Jun. 30, 2013 Subordinate Notes STLDC USD ($)	Jun. 30, 2013 Non Recourse Debt Two Thousand Three Revenue Bonds [Member] USD ($)	Jun. 30, 2013 Non Recourse Debt Northwest Detention Center [Member] USD ($)	Jun. 30, 2013 Non Recourse Debt Two Thousand Eleven Revenue Bonds [Member] USD ($)	Jun. 30, 2013 Australian Subsidiaries Non Recourse Debt [Member] USD ($)	Jun. 30, 2013 Australian Subsidiaries Non Recourse Debt [Member] AUD	Dec. 31, 2012 Australian Subsidiaries Non Recourse Debt [Member] USD ($)	Dec. 31, 2012 Australian Subsidiaries Non Recourse Debt [Member] AUD	Jun. 30, 2013 South Texas Detention Complex Carrying Value USD ($)
Debt Instrument [Line Items]
Face amount					$ 57,000,000							$ 49,500,000
Long-Term Debt	1,444,475,000	1,317,529,000					54,400,000
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum			4.63%			4.10%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum			5.07%			5.25%
Current Portion of Non recourse Debt				5,500,000		6,500,000
Restricted Cash and Cash Equivalents, Current				6,300,000		9,300,000
Total Non-Recourse Debt	111,482,000	123,482,000		17,200,000		67,700,000		27,800,000	30,400,000	34,800,000	33,600,000
Basis spread on variable rate								1.40%	1.40%
Debt Instrument, Interest Rate Terms								variable rate quoted by certain Australian banks plus 140 basis points	variable rate quoted by certain Australian banks plus 140 basis points
Restricted Cash and Cash Equivalents, Noncurrent				$ 16,900,000		$ 4,100,000		$ 4,600,000	5,000,000

XML

Goodwill and Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Schedule of intangible assets
Gross Carrying Amount	$ 225,453	$ 225,683
Accumulated Amortization	(54,710)	(47,365)
Net Carrying Amount	126,743
Intangible Assets, Net (Excluding Goodwill)	170,743	178,318
Facility management contracts
Goodwill [Line Items]
Weighted Average Useful Life (years)	13 years 4 months 24 days
Schedule of intangible assets
Gross Carrying Amount	151,683	151,913
Accumulated Amortization	(38,897)	(33,141)
Net Carrying Amount	112,786	118,772
Covenants not to compete
Goodwill [Line Items]
Weighted Average Useful Life (years)	2 years
Schedule of intangible assets
Gross Carrying Amount	8,570	8,570
Accumulated Amortization	(8,570)	(8,495)
Net Carrying Amount	0	75
Technology
Goodwill [Line Items]
Weighted Average Useful Life (years)	7 years
Schedule of intangible assets
Gross Carrying Amount	21,200	21,200
Accumulated Amortization	(7,243)	(5,729)
Net Carrying Amount	13,957	15,471
Trade names
Schedule of intangible assets
Accumulated Amortization	0	0
Trade name (Indefinite lived)	44,000	44,000
Trade name	$ 44,000	$ 44,000

XML

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

The Company's intangible assets include facility management contracts, non-compete agreements and the trade name and technology of BI, as follows (in thousands):

		June 30, 2013							December 31, 2012
	Weighted Average Useful Life (years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Facility management contracts	13.4	$	151,683	$	(38,897	)	$	112,786	$	151,913	$	(33,141	)	$	118,772
Covenants not to compete	2.0	8,570		(8,570		)	—		8,570		(8,495		)	75
Technology	7.0	21,200		(7,243		)	13,957		21,200		(5,729		)	15,471
Trade name (Indefinite lived)	Indefinite	44,000		—			44,000		44,000		—			44,000
Total acquired intangible assets		$	225,453	$	(54,710	)	$	170,743	$	225,683	$	(47,365	)	$	178,318

Estimated amortization expense for the remainder

Estimated amortization expense related to the Company's finite-lived intangible assets for the remainder of fiscal year 2013 through fiscal year 2017 and thereafter is as follows (in thousands):

Fiscal Year	Total Amortization Expense
Remainder of 2013	$	7,266
2014	14,531
2015	14,531
2016	14,531
2017	14,531
Thereafter	61,353
	$	126,743

XML

Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Consolidation policy

VARIABLE INTEREST ENTITIES AND INVESTMENT IN AFFILIATES

The Company evaluates its joint ventures and other entities in which it has a variable interest (a “VIE”), generally in the form of investments, loans, guarantees, or equity in order to determine if it has a controlling financial interest and is required to consolidate the entity as a result. The reporting entity with a variable interest that provides the entity with a controlling financial interest in the VIE will have both of the following characteristics: (i) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (ii) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company consolidates South Texas Local Development Corporation (“STLDC”), a VIE. STLDC was created to finance construction for the development of a 1,904-bed facility in Frio County, Texas. STLDC, the owner of the complex, issued $49.5 million in taxable revenue bonds and has an operating agreement with the Company, which provides the Company with the sole and exclusive right to operate and manage the detention center. The operating agreement and bond indenture require the revenue from the contract to be used to fund the periodic debt service requirements as they become due. The net revenues, if any, after various expenses such as trustee fees, property taxes and insurance premiums are distributed to the Company to cover operating expenses and management fees. The Company is responsible for the entire operations of the facility including the payment of all operating expenses whether or not there are sufficient revenues. The bonds have a 10-year term and are non-recourse to the Company. At the end of the 10-year term of the bonds, title and ownership of the facility transfers from STLDC to the Company. The carrying value of the facility as of June 30, 2013 and December 31, 2012 was $25.7 million and $25.8 million, respectively, and is included in Property and Equipment in the accompanying consolidated balance sheets.

The Company does not consolidate its 50% owned South African joint venture interest in South African Custodial Services Pty. Limited (“SACS”), a VIE. SACS joint venture investors are GEO and Kensani Corrections, Pty. Ltd (an independent third party); each partner owns a 50% share. The Company has determined it is not the primary beneficiary of SACS since it does not have the power to direct the activities of SACS that most significantly impact its performance. As such, the Company's investment in this entity is accounted for under the equity method of accounting. SACS was established and subsequently, in 2001, was awarded a 25-year contract to design, finance and build the Kutama Sinthumule Correctional Centre in Louis Trichardt, South Africa. To fund the construction of the prison SACS obtained long-term financing from its equity partners and lenders, the repayment of which is fully guaranteed by the South African government, except in the event of a default by SACS, in which case the government guarantee is reduced to 80%. The Company's maximum exposure for loss under this contract is limited to its investment in the joint venture of $8.3 million at June 30, 2013 and its guarantees related to SACS that are discussed in Note 11 - Debt.

The Company does not consolidate its 50% owned joint venture in the United Kingdom. In February 2011, The GEO Group Limited, the Company's wholly-owned subsidiary in the United Kingdom (“GEO UK”), executed a shareholders agreement (the “Shareholders Agreement”) with Amey Community Limited (“Amey”) and Amey UK PLC (“Amey Guarantor”) to form GEO Amey PECS Limited (“GEOAmey”), a private company limited by shares incorporated in England and Wales. GEOAmey was formed by GEO UK and Amey (an independent third party) for the purpose of performing prisoner escort and related custody services in England and Wales. In order to form this private company, GEOAmey issued share capital of £100 divided into 100 shares of £1 each and allocated the shares 50/50 to GEO UK and Amey. GEO UK and Amey each have three directors appointed to the board of directors and neither party has the power to direct the activities that most significantly impact the performance of GEOAmey. As such, the Company's investment in this entity is accounted for under the equity method of accounting. Both parties provide lines of credit of £12 million, or $18.3 million, based on exchange rates in effect as of June 30, 2013, to ensure that GEOAmey can comply with future contractual commitments related to the performance of its operations. As of June 30, 2013, $18.4 million, including accrued interest, was owed to the Company by GEOAmey under the line of credit. GEOAmey commenced operations on August 29, 2011. Refer to Note 11 - Debt for further discussion of the Company's maximum exposure for loss relating to GEOAmey.

XML

Equity Incentive Plans (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Summary of the activity of stock option awards
Options outstanding, Beginning Balance, Shares	1,198
Options outstanding, Beginning Balance, Wtd. Avg. Exercise Price	$ 18.92
Options outstanding, Beginning Balance, Wtd. Avg., Remaining Contractual Term	6 years 9 months	6 years 10 months 6 days
Options outstanding, Beginning Balance, Aggregate Intrinsic Value	$ 11,090
Options granted, Shares	0
Options granted, Wtd. Avg. Exercise Price	$ 0.00
Options exercised, Shares	(234)
Options exercised, Wtd. Avg. Exercise Price	$ 17.43
Options forfeited/canceled/expired, Shares	(5)
Options forfeited/canceled/expired, Wtd. Avg. Exercise Price	$ 21.34
Options outstanding, Ending Balance, Shares	959	1,198
Options outstanding, Ending Balance, Wtd. Avg. Exercise Price	$ 19.28	$ 18.92
Options outstanding, Ending Balance, Wtd. Avg., Remaining Contractual Term	6 years 9 months	6 years 10 months 6 days
Options outstanding, Ending Balance, Aggregate Intrinsic Value	14,074	11,090
Options vested and expected to vest at June 30, 2013, Shares	929
Options vested and expected to vest at June 30, 2013, Wtd. Avg. Exercise Price	$ 19.21
Options vested and expected to vest at June 30, Wtd. Avg., Remaining Contractual Term	6 years 8 months 16 days
Options vested and expected to vest at June 30, 2013, Aggregate Intrinsic Value	13,701
Options exercisable at June 30, 2013 Shares	594
Options exercisable at June 30, 2013, Wtd. Avg. Exercise Price	$ 18.23
Options exercisable at June 30, 2013, Wtd. Avg. Remaining Contractual Term	6 years 1 month 17 days
Options exercisable at June 30, 2013, Aggregate Intrinsic Value	$ 9,346

XML

Business Segments and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Operating and Reporting Segments

	Three Months Ended				Six Months Ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Revenues:
U.S. Corrections & Detention	$	254,043	$	245,916	$	502,815	$	480,710
GEO Community Services	75,072		72,767		149,013		145,025
International Services	52,538		52,490		106,856		105,480
Total revenues	$	381,653	$	371,173	$	758,684	$	731,215
Operating income:
U.S. Corrections & Detention	$	56,631	$	59,762	$	110,723	$	106,861
GEO Community Services	18,854		17,093		36,259		33,342
International Services	3,265		2,215		5,067		5,950
Operating income from segments	$	78,750	$	79,070	$	152,049	$	146,153

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, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Total operating income from segments	$	78,750		$	79,070		$	152,049		$	146,153
Unallocated amounts:
General and Administrative Expenses	(27,363		)	(26,129		)	(59,403		)	(52,715		)
Net Interest Expense	(19,938		)	(18,857		)	(38,095		)	(37,856		)
Loss on Extinguishment of Debt	(5,527		)	—			(5,527		)	—
Income before income taxes and equity in earnings of affiliates, and discontinued operations	$	25,922		$	34,084		$	49,024		$	55,582

XML

Goodwill and Other Intangible Assets (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Goodwill And Other Intangible Assets Net (Textual) [Abstract]
Amortization expense	$ 3.6	$ 4.6	$ 7.3	$ 9.2
Facility management contracts
Goodwill And Other Intangible Assets Net (Textual) [Abstract]
Weighted average period			1 year 3 months 18 days

XML

Earnings Per Share From Continuing Operations (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Earnings Per Share, Basic and Diluted [Abstract]
Income from continuing operations	$ 34,219	$ 20,854	$ 57,657	$ 34,610
Net (income) loss attributable to noncontrolling interests	(12)	25	(30)	(9)
Net income from continuing operations attributable to The GEO Group, Inc.	$ 34,207	$ 20,879	$ 57,627	$ 34,601
Basic earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding	71,083,000	60,839,000	70,967,000	60,803,000
Per share amount from continuing operations	$ 0.48	$ 0.34	$ 0.81	$ 0.57
Diluted earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding	71,083,000	60,839,000	70,967,000	60,803,000
Effect of dilutive securities: Stock options and restricted stock	524,000	227,000	543,000	181,000
Weighted average shares assuming dilution	71,607,000	61,066,000	71,510,000	60,984,000
Income from continuing operations (in dollars per share)	$ 0.48	$ 0.34	$ 0.81	$ 0.57
Basic and diluted earnings per share (Textual) [Abstract]
Antidilutive securities excluded from computation of earnings per share	0		0
Restricted Stock [Member]
Basic and diluted earnings per share (Textual) [Abstract]
Antidilutive securities excluded from computation of earnings per share		1,642		1,584
Stock Options [Member]
Basic and diluted earnings per share (Textual) [Abstract]
Antidilutive securities excluded from computation of earnings per share		57,937		112,428

XML

Equity Incentive Plans (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of the activity of stock option awards

The Company uses a Black-Scholes option valuation model to estimate the fair value of each option awarded. A summary of the activity of stock option awards issued and outstanding under Company plans is as follows for the six months ended June 30, 2013:

	Shares		Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)	Aggregate Intrinsic Value
	(in thousands)					(in thousands)
Options outstanding at December 31, 2012	1,198		$	18.92	6.85	$	11,090
Options granted	—		—
Options exercised	(234	)	$	17.43
Options forfeited/canceled/expired	(5	)	$	21.34
Options outstanding at June 30, 2013	959		$	19.28	6.75	$	14,074
Options vested and expected to vest at June 30, 2013	929		$	19.21	6.71	$	13,701
Options exercisable at June 30, 2013	594		$	18.23	6.13	$	9,346

Summary of the activity of restricted stock

A summary of the activity of restricted stock outstanding is as follows for the six months ended June 30, 2013:

	Shares		Wtd. Avg. Grant  Date Fair Value
	(in thousands)
Restricted stock outstanding at December 31, 2012	670		$	18.14
Granted	345		37.40
Vested	(131	)	21.29
Forfeited/canceled	—		—
Restricted stock outstanding at June 30, 2013	884		$	23.00

XML

Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012	Dec. 31, 2012
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period			$ 19,761	$ 16,879	$ 16,879
Service cost	231	193	462	387	774
Interest cost	207	197	415	393	787
Plan amendments			0		569
Actuarial loss			0		945
Benefits paid			(120)		(193)
Projected benefit obligation, end of period	20,518		20,518		19,761
Change in Plan Assets
Plan assets at fair value, beginning of period			0	0	0
Company contributions			120		193
Benefits paid			(120)		(193)
Plan assets at fair value, end of period	0		0		0
Unfunded Status of the Plan	$ (20,518)		$ (20,518)		$ (19,761)

XML

Business Segments and Geographic Information (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012	Dec. 31, 2012
Business Segment and Geographical Information (Textual) [Abstract]
Number of reportable business segment			4
Ownership percentage in Entity			50.00%
Equity in earnings of affiliates, net of income tax provision	$ 1,029,000	$ 430,000	$ 2,246,000	$ 1,178,000
SACS
Business Segment and Geographical Information (Textual) [Abstract]
Ownership percentage in Entity			50.00%
Equity in earnings of affiliates, net of income tax provision	1,300,000	1,300,000	2,500,000	2,600,000
Investment in Joint Ventures	8,300,000		8,300,000		7,800,000
Geo Amey
Business Segment and Geographical Information (Textual) [Abstract]
Equity in earnings of affiliates, net of income tax provision	200,000	900,000	300,000	1,400,000
Investment in Joint Ventures	$ (4,400,000)		$ (4,400,000)		$ (4,100,000)

XML

Fair Value of Assets and Liabilities (Details Textual)	Jun. 30, 2013	Mar. 19, 2013
Fair Value of Assets and Liabilities (Textual) [Abstract]
Interest rate	7.75%
Senior Note Due 2017
Fair Value of Assets and Liabilities (Textual) [Abstract]
Interest rate	7.75%
Senior Notes Due 2021
Fair Value of Assets and Liabilities (Textual) [Abstract]
Interest rate	6.625%
Senior Notes Due 2023
Fair Value of Assets and Liabilities (Textual) [Abstract]
Interest rate		5.125%
Senior Unsecured Notes Due April 2023 | Senior Notes
Fair Value of Assets and Liabilities (Textual) [Abstract]
Interest rate	5.125%	5.125%

XML

Condensed Consolidating Financial Information (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012		Jul. 01, 2012	Jan. 01, 2012
Assets
Cash and cash equivalents	$ 38,511		$ 31,755		$ 68,316	$ 43,378
Restricted cash and investments, current	15,646	[1]	15,654	[1]
Accounts receivable, less allowance for doubtful accounts	239,001		246,635
Current deferred income tax assets	18,290		18,290
Prepaid expenses and other current assets	25,142		24,849
Total current assets	336,590		337,183
Restricted cash and investments, non-current	37,748		32,756
Property and equipment, net	1,739,986		1,687,159
Assets Held for Sale	1,200		3,243
Direct Finance Lease Receivable	20,445		26,757
Intercompany Receivable	0		0
Deferred Income Tax Assets, Net	2,532		2,532
Goodwill	490,216		490,308
Intangible Assets, Net	170,743		178,318
Investment in Subsidiaries	0		0
Other Non-Current Assets	88,742		80,938
Total Assets	2,888,202		2,839,194
Current Liabilities
Accounts payable	47,391		50,110
Accrued payroll and related taxes	34,314		39,322
Accrued expenses	109,179		116,557
Current portion of capital lease obligations, long-term debt and non-recourse debt	22,341		53,882
Total current liabilities	213,225		259,871
Deferred Income Tax Liabilities	15,703		15,703
Intercompany Payable	0		0
Other Non-Current Liabilities	74,137		82,025
Capital Lease Obligations	11,426		11,926
Long-Term Debt	1,444,475		1,317,529
Non-recourse debt	93,352		104,836
Commitments and Contingencies
Total shareholders’ equity attributable to The GEO Group, Inc.	1,035,434		1,046,812
Noncontrolling interests	450		492
Total shareholders’ equity	1,035,884		1,047,304
Total Liabilities and Shareholders’ Equity	2,888,202		2,839,194
The GEO Group Inc.
Assets
Cash and cash equivalents	5,736		4,764		43,081	15,086
Restricted cash and investments, current	0		0
Accounts receivable, less allowance for doubtful accounts	82,406		124,670
Current deferred income tax assets	0		13,106
Prepaid expenses and other current assets	1,168		8,657
Total current assets	89,310		151,197
Restricted cash and investments, non-current	134		7,953
Property and equipment, net	654,956		633,458
Assets Held for Sale	0		0
Direct Finance Lease Receivable	0		0
Intercompany Receivable	937,073		591,273
Deferred Income Tax Assets, Net	16,230		16,230
Goodwill	34		34
Intangible Assets, Net	0		0
Investment in Subsidiaries	954,156		1,151,998
Other Non-Current Assets	26,815		38,574
Total Assets	2,678,708		2,590,717
Current Liabilities
Accounts payable	5,290		29,889
Accrued payroll and related taxes	1,827		4,774
Accrued expenses	61,014		94,350
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000		33,925
Total current liabilities	71,131		162,938
Deferred Income Tax Liabilities	0		0
Intercompany Payable	113,567		0
Other Non-Current Liabilities	14,101		63,657
Capital Lease Obligations	0		0
Long-Term Debt	1,444,475		1,317,310
Non-recourse debt	0		0
Commitments and Contingencies
Total shareholders’ equity attributable to The GEO Group, Inc.	1,035,434		1,046,812
Noncontrolling interests	0		0
Total shareholders’ equity	1,035,434		1,046,812
Total Liabilities and Shareholders’ Equity	2,678,708		2,590,717
Combined Subsidiary Guarantors [Member]
Assets
Cash and cash equivalents	1,084		1,917		4,467	3,092
Restricted cash and investments, current	0		0
Accounts receivable, less allowance for doubtful accounts	137,948		102,704
Current deferred income tax assets	14,604		1,498
Prepaid expenses and other current assets	13,253		5,890
Total current assets	166,889		112,009
Restricted cash and investments, non-current	9,410		0
Property and equipment, net	973,246		939,995
Assets Held for Sale	1,200		3,243
Direct Finance Lease Receivable	0		0
Intercompany Receivable	128,058		14,305
Deferred Income Tax Assets, Net	0		0
Goodwill	489,502		489,502
Intangible Assets, Net	169,375		176,666
Investment in Subsidiaries	442,679		41,356
Other Non-Current Assets	107,330		84,931
Total Assets	2,487,689		1,862,007
Current Liabilities
Accounts payable	38,898		17,407
Accrued payroll and related taxes	15,868		16,264
Accrued expenses	30,678		5,515
Current portion of capital lease obligations, long-term debt and non-recourse debt	1,212		1,311
Total current liabilities	86,656		40,497
Deferred Income Tax Liabilities	31,933		31,933
Intercompany Payable	930,800		586,428
Other Non-Current Liabilities	136,207		96,822
Capital Lease Obligations	11,426		11,926
Long-Term Debt	0		219
Non-recourse debt	0		0
Commitments and Contingencies
Total shareholders’ equity attributable to The GEO Group, Inc.	1,290,667		1,094,182
Noncontrolling interests	0		0
Total shareholders’ equity	1,290,667		1,094,182
Total Liabilities and Shareholders’ Equity	2,487,689		1,862,007
Combined Non-Guarantor Subsidiaries [Member]
Assets
Cash and cash equivalents	31,691		25,074		20,768	25,200
Restricted cash and investments, current	15,646		15,654
Accounts receivable, less allowance for doubtful accounts	18,647		19,261
Current deferred income tax assets	3,686		3,686
Prepaid expenses and other current assets	11,875		11,456
Total current assets	81,545		75,131
Restricted cash and investments, non-current	28,204		24,803
Property and equipment, net	111,784		113,706
Assets Held for Sale	0		0
Direct Finance Lease Receivable	20,445		26,757
Intercompany Receivable	(1,300)		0
Deferred Income Tax Assets, Net	2,532		2,532
Goodwill	680		772
Intangible Assets, Net	1,368		1,652
Investment in Subsidiaries	0		0
Other Non-Current Assets	34,018		36,584
Total Assets	279,276		281,937
Current Liabilities
Accounts payable	3,203		2,814
Accrued payroll and related taxes	16,619		18,284
Accrued expenses	18,641		17,846
Current portion of capital lease obligations, long-term debt and non-recourse debt	18,129		18,646
Total current liabilities	56,592		57,590
Deferred Income Tax Liabilities	0		0
Intercompany Payable	19,457		19,150
Other Non-Current Liabilities	3,257		697
Capital Lease Obligations	0		0
Long-Term Debt	0		0
Non-recourse debt	93,352		104,836
Commitments and Contingencies
Total shareholders’ equity attributable to The GEO Group, Inc.	106,168		99,172
Noncontrolling interests	450		492
Total shareholders’ equity	106,618		99,664
Total Liabilities and Shareholders’ Equity	279,276		281,937
Eliminations [Member]
Assets
Cash and cash equivalents	0		0
Restricted cash and investments, current	0		0
Accounts receivable, less allowance for doubtful accounts	0		0
Current deferred income tax assets	0		0
Prepaid expenses and other current assets	(1,154)		(1,154)
Total current assets	(1,154)		(1,154)
Restricted cash and investments, non-current	0		0
Property and equipment, net	0		0
Assets Held for Sale	0		0
Direct Finance Lease Receivable	0		0
Intercompany Receivable	(1,063,831)		(605,578)
Deferred Income Tax Assets, Net	(16,230)		(16,230)
Goodwill	0		0
Intangible Assets, Net	0		0
Investment in Subsidiaries	(1,396,835)		(1,193,354)
Other Non-Current Assets	(79,421)		(79,151)
Total Assets	(2,557,471)		(1,895,467)
Current Liabilities
Accounts payable	0		0
Accrued payroll and related taxes	0		0
Accrued expenses	(1,154)		(1,154)
Current portion of capital lease obligations, long-term debt and non-recourse debt	0		0
Total current liabilities	(1,154)		(1,154)
Deferred Income Tax Liabilities	(16,230)		(16,230)
Intercompany Payable	(1,063,824)		(605,578)
Other Non-Current Liabilities	(79,428)		(79,151)
Capital Lease Obligations	0		0
Long-Term Debt	0		0
Non-recourse debt	0		0
Commitments and Contingencies
Total shareholders’ equity attributable to The GEO Group, Inc.	(1,396,835)		(1,193,354)
Noncontrolling interests	0		0
Total shareholders’ equity	(1,396,835)		(1,193,354)
Total Liabilities and Shareholders’ Equity	$ (2,557,471)		$ (1,895,467)

[1] Variable interest entities or “VIEs”

XML

Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 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 STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	118,859		$	314,120		$	55,585		$	(106,911	)	$	381,653
Operating expenses	102,108			239,194			44,855			(106,911		)	279,246
Depreciation and amortization	5,875			16,556			1,226			—			23,657
General and administrative expenses	8,156			15,420			3,787			—			27,363
Operating income (loss)	2,720			42,950			5,717			—			51,387
Interest income	4,029			359			1,123			(4,346		)	1,165
Interest expense	(10,373		)	(12,708		)	(2,368		)	4,346			(21,103		)
Loss on extinguishment of debt	(2,600		)	(2,927		)	—			—			(5,527		)
Income (loss) before income taxes and equity in earnings of affiliates	(6,224		)	27,674			4,472			—			25,922
Income tax (benefit) provision	(8,339		)	226			845			—			(7,268		)
Equity in earnings of affiliates, net of income tax provision	—			—			1,029			—			1,029
Income (loss) before equity in income of consolidated subsidiaries	2,115			27,448			4,656			—			34,219
Income from consolidated subsidiaries, net of income tax provision	32,104			—			—			(32,104		)	—
Income from continuing operations	34,219			27,448			4,656			(32,104		)	34,219
Net income (loss) from discontinued operations	—			—			—			—			—
Net income	34,219			27,448			4,656			(32,104		)	34,219
Net income attributable to noncontrolling interests	—			—			(12		)	—			(12		)
Net income attributable to The GEO Group, Inc.	$	34,219		$	27,448		$	4,644		$	(32,104	)	$	34,207
Net income	$	34,219		$	27,448		$	4,656		$	(32,104	)	$	34,219
Other comprehensive income (loss), net of tax	—			40			(5,300		)	—			(5,260		)
Total comprehensive income	$	34,219		$	27,488		$	(644	)	$	(32,104	)	$	28,959
Comprehensive loss attributable to noncontrolling interests	—			—			19			—			19
Comprehensive income attributable to The GEO Group, Inc.	$	34,219		$	27,488		$	(625	)	$	(32,104	)	$	28,978

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended July 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	153,753		$	177,301		$	57,780		$	(17,661	)	$	371,173
Operating expenses	130,454			110,339			46,009			(17,661		)	269,141
Depreciation and amortization	7,389			13,433			2,140			—			22,962
General and administrative expenses	9,384			12,783			3,962			—			26,129
Operating income	6,526			40,746			5,669			—			52,941
Interest income	7,847			394			1,661			(8,141		)	1,761
Interest expense	(16,837		)	(7,926		)	(3,996		)	8,141			(20,618		)
Income (loss) before income taxes and equity in earnings of affiliates	(2,464		)	33,214			3,334			—			34,084
Income tax (benefit) provision	(667		)	12,860			1,467			—			13,660
Equity in earnings of affiliates, net of income tax provision	—			—			430			—			430
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(1,797		)	20,354			2,297			—			20,854
Income from consolidated subsidiaries, net of income tax provision	22,651			—			—			(22,651		)	—
Income from continuing operations	20,854			20,354			2,297			(22,651		)	20,854
Net income from discontinued operations	1,622			2,046			233			(2,279		)	1,622
Net income	22,476			22,400			2,530			(24,930		)	22,476
Net income attributable to noncontrolling interests	—			—			25			—			25
Net income attributable to The GEO Group, Inc.	$	22,476		$	22,400		$	2,555		$	(24,930	)	$	22,501
Net income	$	22,476		$	22,400		$	2,530		$	(24,930	)	$	22,476
Other comprehensive income (loss), net of tax	29			—			(2,498		)	—			(2,469		)
Total comprehensive income	$	22,505		$	22,400		$	32		$	(24,930	)	$	20,007
Comprehensive income attributable to noncontrolling interests	—			—			58			—			58
Comprehensive income attributable to The GEO Group, Inc.	$	22,505		$	22,400		$	90		$	(24,930	)	$	20,065

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Six Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	232,348		$	626,649		$	112,970		$	(213,283	)	$	758,684
Operating expenses	201,518			479,671			92,137			(213,283		)	560,043
Depreciation and amortization	11,697			32,438			2,457			—			46,592
General and administrative expenses	17,354			33,612			8,437			—			59,403
Operating income (loss)	1,779			80,928			9,939			—			92,646
Interest income	7,989			909			2,219			(8,768		)	2,349
Interest expense	(20,292		)	(24,139		)	(4,781		)	8,768			(40,444		)
Loss on extinguishment of debt	(2,600		)	(2,927		)	—			—			(5,527		)
Income (loss) before income taxes and equity in earnings of affiliates	(13,124		)	54,771			7,377			—			49,024
Income tax (benefit) provision	(9,006		)	632			1,987			—			(6,387		)
Equity in earnings of affiliates, net of income tax provision	—			—			2,246			—			2,246
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(4,118		)	54,139			7,636			—			57,657
Income from consolidated subsidiaries, net of income tax provision	61,775			—			—			(61,775		)	—
Income from continuing operations	57,657			54,139			7,636			(61,775		)	57,657
Net income loss from discontinued operations	—			—			—			—			—
Net income	57,657			54,139			7,636			(61,775		)	57,657
Net income attributable to noncontrolling interests	—			—			(30		)	—			(30		)
Net income attributable to The GEO Group, Inc.	$	57,657		$	54,139		$	7,606		$	(61,775	)	$	57,627
Net income	$	57,657		$	54,139		$	7,636		$	(61,775	)	$	57,657
Other comprehensive income (loss), net of tax	—			80			(6,520		)	—			(6,440		)
Total comprehensive income	57,657			54,219			1,116			(61,775		)	51,217
Comprehensive loss attributable to noncontrolling interests	—			—			42			—			42
Comprehensive income attributable to The GEO Group, Inc.	$	57,657		$	54,219		$	1,158		$	(61,775	)	$	51,259

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Six Months Ended July 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	294,370		$	361,488		$	115,772		$	(40,415	)	$	731,215
Operating expenses	261,460			228,005			90,811			(40,415		)	539,861
Depreciation and amortization	14,244			26,685			4,272			—			45,201
General and administrative expenses	18,780			26,077			7,858			—			52,715
Operating income (loss)	(114		)	80,721			12,831			—			93,438
Interest income	15,655			886			3,262			(16,235		)	3,568
Interest expense	(33,754		)	(15,837		)	(8,068		)	16,235			(41,424		)
Income (loss) before income taxes and equity in earnings of affiliates	(18,213		)	65,770			8,025			—			55,582
Income tax (benefit) provision	(6,323		)	25,172			3,301			—			22,150
Equity in earnings of affiliates, net of income tax provision	—			—			1,178			—			1,178
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(11,890		)	40,598			5,902			—			34,610
Income from consolidated subsidiaries, net of income tax provision	46,500			—			—			(46,500		)	—
Income from continuing operations	34,610			40,598			5,902			(46,500		)	34,610
Net income from discontinued operations	2,925			3,118			553			(3,671		)	2,925
Net income	37,535			43,716			6,455			(50,171		)	37,535
Net income attributable to noncontrolling interests	—			—			(9		)	—			(9		)
Net income attributable to The GEO Group, Inc.	$	37,535		$	43,716		$	6,446		$	(50,171	)	$	37,526
Net income	$	37,535		$	43,716		$	6,455		$	(50,171	)	$	37,535
Other comprehensive income (loss), net of tax	59			—			(541		)	—			(482		)
Total comprehensive income	$	37,594		$	43,716		$	5,914		$	(50,171	)	$	37,053
Comprehensive income attributable to noncontrolling interests	—			—			(4		)	—			(4		)
Comprehensive income attributable to The GEO Group, Inc.	$	37,594		$	43,716		$	5,910		$	(50,171	)	$	37,049

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)

	As of June 30, 2013
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	5,736	$	1,084	$	31,691		$	—		$	38,511
Restricted cash and investments	—		—		15,646			—			15,646
Accounts receivable, less allowance for doubtful accounts	82,406		137,948		18,647			—			239,001
Deferred income tax assets, net	—		14,604		3,686			—			18,290
Prepaid expenses and other current assets	1,168		13,253		11,875			(1,154		)	25,142
Total current assets	89,310		166,889		81,545			(1,154		)	336,590
Restricted Cash and Investments	134		9,410		28,204			—			37,748
Property and Equipment, Net	654,956		973,246		111,784			—			1,739,986
Assets Held for Sale	—		1,200		—			—			1,200
Direct Finance Lease Receivable	—		—		20,445			—			20,445
Intercompany Receivable	937,073		128,058		(1,300		)	(1,063,831		)	—
Deferred Income Tax Assets, Net	16,230		—		2,532			(16,230		)	2,532
Goodwill	34		489,502		680			—			490,216
Intangible Assets, Net	—		169,375		1,368			—			170,743
Investment in Subsidiaries	954,156		442,679		—			(1,396,835		)	—
Other Non-Current Assets	26,815		107,330		34,018			(79,421		)	88,742
Total Assets	$	2,678,708	$	2,487,689	$	279,276		$	(2,557,471	)	$	2,888,202
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	5,290	$	38,898	$	3,203		$	—		$	47,391
Accrued payroll and related taxes	1,827		15,868		16,619			—			34,314
Accrued expenses	61,014		30,678		18,641			(1,154		)	109,179
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000		1,212		18,129			—			22,341
Total current liabilities	71,131		86,656		56,592			(1,154		)	213,225
Deferred Income Tax Liabilities	—		31,933		—			(16,230		)	15,703
Intercompany Payable	113,567		930,800		19,457			(1,063,824		)	—
Other Non-Current Liabilities	14,101		136,207		3,257			(79,428		)	74,137
Capital Lease Obligations	—		11,426		—			—			11,426
Long-Term Debt	1,444,475		—		—			—			1,444,475
Non-Recourse Debt	—		—		93,352			—			93,352
Commitments & Contingencies
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,035,434		1,290,667		106,168			(1,396,835		)	1,035,434
Noncontrolling Interests	—		—		450			—			450
Total Shareholders’ Equity	1,035,434		1,290,667		106,618			(1,396,835		)	1,035,884
Total Liabilities and Shareholders' Equity	$	2,678,708	$	2,487,689	$	279,276		$	(2,557,471	)	$	2,888,202

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 CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Six Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	58,343		$	18,932		$	24,039		$	101,314
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	—			51			—			51
Proceeds from sale of assets held for sale	—			1,968			—			1,968
Net working capital adjustment from RTS divestiture	(996		)	—			—			(996		)
Change in restricted cash and investments	(134		)	(1,457		)	(4,319		)	(5,910		)
Capital expenditures	(69,567		)	(19,666		)	(688		)	(89,921		)
Net cash used in investing activities	(70,697		)	(19,104		)	(5,007		)	(94,808		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	785,000			—			—			785,000
Income tax benefit of equity compensation	1,308			—			—			1,308
Debt issuance costs	(17,017		)	—			—			(17,017		)
Payments on long-term debt	(688,675		)	(661		)	(8,412		)	(697,748		)
Proceeds from the exercise of stock options	4,082			—			—			4,082
Cash dividends paid	(71,527		)	—			—			(71,527		)
Proceeds from reissuance of treasury stock in connection with ESPP	155			—			—			155
Net cash provided by (used in) financing activities	13,326			(661		)	(8,412		)	4,253
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(4,003		)	(4,003		)
Net Increase (Decrease) in Cash and Cash Equivalents	972			(833		)	6,617			6,756
Cash and Cash Equivalents, beginning of period	4,764			1,917			25,074			31,755
Cash and Cash Equivalents, end of period	$	5,736		$	1,084		$	31,691		$	38,511

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Six Months Ended July 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	$	98,442		$	11,721		$	6,769		$	116,932
Cash provided by operating activities - discontinued operations	752			6,827			2,455			10,034
Net cash provided by operating activities	99,194			18,548			9,224			126,966
Cash Flow from Investing Activities:
Proceeds from sale of assets held for sale	—			297			—			297
Proceeds from sale of property and equipment	—			162			69			231
Change in restricted cash and investments	(484		)	(1,350		)	2,387			553
Capital expenditures	(53,933		)	(13,363		)	(2,240		)	(69,536		)
Cash (used in) provided by investing activities - continuing operations	(54,417		)	(14,254		)	216			(68,455		)
Cash used in investing activities - discontinued operations	(311		)	(2,226		)	—			(2,537		)
Net cash (used in) provided by investing activities	(54,728		)	(16,480		)	216			(70,992		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	145,000			—			—			145,000
Payments on long-term debt	(160,556		)	(693		)	(8,033		)	(169,282		)
Income tax provision of equity compensation	(270		)	—			—			(270		)
Debt issuance costs	(6		)	—			(38		)	(44		)
Distribution to noncontrolling interests	—			—			(5,758		)	(5,758		)
Proceeds from the exercise of stock options	396			—			—			396
Payments for retirement of common stock	(1,035		)	—			—			(1,035		)
Net cash used in financing activities	(16,471		)	(693		)	(13,829		)	(30,993		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(43		)	(43		)
Net Increase (Decrease) in Cash and Cash Equivalents	27,995			1,375			(4,432		)	24,938
Cash and Cash Equivalents, beginning of period	15,086			3,092			25,200			43,378
Cash and Cash Equivalents, end of period	$	43,081		$	4,467		$	20,768		$	68,316

XML

Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Current Assets
Cash and cash equivalents	$ 38,511		$ 31,755
Restricted cash and investments (including VIEs1 of $6,308 and $6,182, respectively)	15,646	[1]	15,654	[1]
Accounts receivable, less allowance for doubtful accounts of $2,163 and $2,546, respectively	239,001		246,635
Current deferred income tax assets	18,290		18,290
Prepaid expenses and other current assets	25,142		24,849
Total current assets	336,590		337,183
Restricted Cash and Investments (including VIEs of $16,943 and $15,521, respectively)	37,748		32,756
Property and Equipment, Net (including VIEs of $25,544 and $25,840, respectively)	1,739,986		1,687,159
Assets Held for Sale	1,200		3,243
Direct Finance Lease Receivable	20,445		26,757
Non-Current Deferred Income Tax Assets	2,532		2,532
Goodwill	490,216		490,308
Intangible Assets, Net	170,743		178,318
Other Non-Current Assets	88,742		80,938
Total Assets	2,888,202		2,839,194
Current Liabilities
Accounts payable	47,391		50,110
Accrued payroll and related taxes	34,314		39,322
Accrued expenses	109,179		116,557
Current portion of capital lease obligations, long-term debt and non-recourse debt (including VIEs of $5,450 and $5,200, respectively)	22,341		53,882
Total current liabilities	213,225		259,871
Non-Current Deferred Income Tax Liabilities	15,703		15,703
Other Non-Current Liabilities	74,137		82,025
Capital Lease Obligations	11,426		11,926
Long-Term Debt	1,444,475		1,317,529
Non-Recourse Debt (including VIEs of $11,588 and $16,997 respectively)	93,352		104,836
Commitments and Contingencies (Note 12)
Shareholders’ Equity
Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued or outstanding	0		0
Common stock, $0.01 par value, 90,000,000 shares authorized, 86,586,630 and 86,007,433 issued and 72,000,856 and 71,417,034 outstanding, respectively	865		860
Additional paid-in capital	841,097		832,230
Earnings in excess of distributions	250,767		264,667
Accumulated other comprehensive income (loss)	(3,698)	[2]	2,670	[2]
Treasury stock, 14,585,774 and 14,590,399 shares, at cost, respectively	(53,597)		(53,615)
Total shareholders’ equity attributable to The GEO Group, Inc.	1,035,434		1,046,812
Noncontrolling interests	450		492
Total shareholders’ equity	1,035,884		1,047,304
Total Liabilities and Shareholders’ Equity	$ 2,888,202		$ 2,839,194

[1] Variable interest entities or “VIEs”

[2] The foreign currency translation, net of tax, related to noncontrolling interests was not significant at June 30, 2013 or December 31, 2012, respectively.

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012
Cash Flow from Operating Activities:
Net Income	$ 57,657	$ 37,535
Net income attributable to noncontrolling interests	(30)	(9)
Net income attributable to The GEO Group, Inc.	57,627	37,526
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities:
Stock-based compensation	705	1,433
Loss on extinguishment of debt	5,527	0
Depreciation and amortization expense	46,632	45,201
Amortization of debt issuance costs, discount and/or premium	3,015	1,369
Restricted stock expense	2,640	2,061
Provision for doubtful accounts	158	517
Equity in earnings of affiliates, net of tax	(2,246)	(1,178)
Income tax (benefit) provision related to equity compensation	(1,308)	270
Release of reserve for uncertain tax positions	(6,356)	0
Loss on sale/disposal of property and equipment	603	915
Changes in assets and liabilities:
Changes in accounts receivable, prepaid expenses and other assets	9,501	23,373
Changes in accounts payable, accrued expenses and other liabilities	(15,184)	5,445
Cash provided by operating activities - continuing operations	101,314	116,932
Cash provided by operating activities - discontinued operations	0	10,034
Net cash provided by operating activities	101,314	126,966
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	51	231
Proceeds from sale of assets held for sale	1,968	297
Net working capital adjustment from RTS divestiture	(996)	0
Change in restricted cash and investments	(5,910)	553
Capital expenditures	(89,921)	(69,536)
Cash (used in) provided by investing activities - continuing operations	(94,808)	(68,455)
Cash used in investing activities - discontinued operations	0	(2,537)
Net cash used in investing activities	(94,808)	(70,992)
Cash Flow from Financing Activities:
Distribution to noncontrolling interests	0	(5,758)
Proceeds from long term debt	785,000	145,000
Payments on long-term debt	(697,748)	(169,282)
Payments for retirement of common stock	0	(1,035)
Proceeds from reissuance of treasury stock in connection with ESPP	155	0
Debt issuance costs	(17,017)	(44)
Income tax benefit (provision) of equity compensation	1,308	(270)
Proceeds from the exercise of stock options	4,082	396
Cash dividends paid	(71,527)	0
Net cash provided by (used in) financing activities	4,253	(30,993)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(4,003)	(43)
Net Increase in Cash and Cash Equivalents	6,756	24,938
Cash and Cash Equivalents, beginning of period	31,755	43,378
Cash and Cash Equivalents, end of period	38,511	68,316
Non-cash Investing and Financing activities:
Capital expenditures in accounts payable and accrued expenses	$ 2,739	$ 6,801

XML

Financial Instruments

6 Months Ended

Jun. 30, 2013

Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

The following tables provide a summary of the Company’s significant financial assets and liabilities carried at fair value and measured on a recurring basis as of June 30, 2013 and December 31, 2012 (in thousands):

			Fair Value Measurements at June 30, 2013
	Carrying Value at June 30, 2013		Quoted Prices in Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap derivative assets	$	4,599	$	—	$	4,599	$	—
Restricted investments:
Guaranteed Investment Contract	5,742		—		5,742		—
Rabbi Trust	8,163		8,163		—		—
Fixed income securities	1,996		—		1,996		—
Liabilities:
Interest rate swap derivative liabilities	$	490	$	—	$	490	$	—

			Fair Value Measurements at December 31, 2012
	Carrying Value at December 31, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap derivative assets	$	6,212	$	—	$	6,212	$	—
Restricted investments:
Guaranteed Investment Contract	5,742		—		5,742		—
Rabbi Trust	7,718		7,718		—		—
Fixed income securities	2,152		—		2,152		—
Liabilities:
Interest rate swap derivative liabilities	$	708	$	—	$	708	$	—

The Company’s Level 1 investment included in the tables above as of June 30, 2013 and December 31, 2012 relates to the Company's rabbi trust established for GEO employee and employer contributions to The GEO Group Inc. Non-qualified Deferred Compensation Plan. These contributions are invested in cash and mutual funds for which quoted market prices in active markets are available.

The Company’s Level 2 financial instruments included in the tables above as of June 30, 2013 and December 31, 2012 consist of an interest rate swap liability held by the Company's Australian subsidiary, other interest rate swap assets of the Company, an investment in Canadian dollar denominated fixed income securities, and a guaranteed investment contract which is a restricted investment related to CSC of Tacoma LLC ("CSC"). The Australian subsidiary’s interest rate swap liability is valued using a discounted cash flow model based on projected Australian borrowing rates. The Company’s other interest rate swap assets are based on pricing models which consider prevailing interest rates, credit risk and similar instruments. The Canadian dollar denominated securities, not actively traded, are valued using quoted rates for these and similar securities. The restricted investment in the guaranteed investment contract is valued using quoted rates for these and similar securities.

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

The GEO Group, Inc., a Florida corporation, and subsidiaries (the “Company” or “GEO”), is a real estate investment trust (“REIT”) specializing in the ownership, leasing and management of correctional, detention and re-entry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, the United Kingdom and Canada. The Company owns, leases and operates a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, as well as community based re-entry facilities. The Company develops new facilities based on contract awards, using its project development expertise and experience to design, construct and finance what it believes are state-of-the-art facilities that maximize security and efficiency. GEO provides innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants. The Company also provides secure transportation services for offender and detainee populations as contracted domestically and in the United Kingdom through its joint venture GEO Amey PECS Ltd. (“GEOAmey”). As of June 30, 2013, the Company’s worldwide operations included the management and/or ownership of approximately 72,000 beds at 95 correctional and detention facilities, including projects under development, and also included the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states.

The Company's unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States and the instructions to Form 10-Q and consequently do not include all disclosures required by Form 10-K. The accounting policies followed for quarterly financial reporting are the same as those disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2013 for the fiscal year ended December 31, 2012. The accompanying December 31, 2012 consolidated balance sheet has been derived from those audited financial statements. Additional information may be obtained by referring to the Company’s Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the financial information for the interim periods reported in this Form 10-Q have been made. Results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2013, or for any other future interim or annual periods.

REIT Conversion - GEO began operating as a REIT for federal income tax purposes effective January 1, 2013. As a result of the REIT conversion, GEO reorganized its operations and moved non-real estate components into taxable REIT subsidiaries (“TRS”). Through the TRS structure, the portion of GEO's businesses which are non-real estate related, such as its managed-only contracts, international operations, electronic monitoring services, and other non-residential and community based facilities, are part of wholly-owned taxable subsidiaries of the REIT. Most of GEO's business segments, which are real estate related and involve company-owned and company-leased facilities, are part of the REIT. The TRS structure allows the Company to maintain the strategic alignment of almost all of its diversified business segments under one entity. The TRS assets and operations will continue to be subject to federal and state corporate income taxes and to foreign taxes as applicable in the jurisdictions in which those assets and operations are located. As a REIT, GEO is required to make distributions of its REIT taxable income to its shareholders. Refer to Note 5 - Shareholders' Equity.

Divestiture of Residential Treatment Services - The operating results of Residential Treatment Services (“RTS”), which was divested on December 31, 2012, have been retroactively reclassified to discontinued operations for the three and six months ended July 1, 2012. Refer to Note 8 - Discontinued Operations.

Change of Reporting Segment Name from GEO Care to GEO Community Services - The Company's GEO Care reporting segment previously consisted of four aggregated operating segments including Residential Treatment Services, Community Based Services, Youth Services and B.I. Incorporated (“BI”). The GEO Care reporting segment was renamed GEO Community Services concurrent with the divestiture of the Company's Residential Treatment Services operating segment. All current and prior year financial position and results of operations amounts presented for this reporting segment are referred to as GEO Community Services.

Fiscal Year - In connection with the REIT conversion, effective December 31, 2012, the Company changed to a calendar year from a fiscal year that ended on the Sunday closest to the calendar year end and changed its fiscal quarters to coincide with each calendar quarter. The second fiscal quarter of 2013 began on April 1, 2013 and ended on June 30, 2013, and is referred to as the three months endedJune 30, 2013. The six month period of 2013 began on January 1, 2013 and ended on June 30, 2013, and is referred to as the six months endedJune 30, 2013. The second fiscal quarter of 2012 began on April 2, 2012 and ended on July 1, 2012, and is referred to as the three months endedJuly 1, 2012. The six month period of 2012 began on January 2, 2012 and ended on July 1, 2012, and is referred to as the six months endedJuly 1, 2012.

XML

Financial Instruments (Details) (Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Carrying value and estimated fair value of financial instruments
Interest rate swap derivative assets	$ 4,599	$ 6,212
Restricted investments:
Guaranteed Investment Contract	5,742	5,742
Rabbi Trust	8,163	7,718
Fixed income securities	1,996	2,152
Liabilities:
Interest rate swap derivative liabilities	490	708
Quoted Prices in Active Markets (Level 1)
Carrying value and estimated fair value of financial instruments
Interest rate swap derivative assets	0	0
Restricted investments:
Guaranteed Investment Contract	0	0
Rabbi Trust	8,163	7,718
Fixed income securities	0	0
Liabilities:
Interest rate swap derivative liabilities	0	0
Significant Other Observable Inputs (Level 2)
Carrying value and estimated fair value of financial instruments
Interest rate swap derivative assets	4,599	6,212
Restricted investments:
Guaranteed Investment Contract	5,742	5,742
Rabbi Trust	0	0
Fixed income securities	1,996	2,152
Liabilities:
Interest rate swap derivative liabilities	490	708
Significant Unobservable Inputs (Level 3)
Carrying value and estimated fair value of financial instruments
Interest rate swap derivative assets	0	0
Restricted investments:
Guaranteed Investment Contract	0	0
Rabbi Trust	0	0
Fixed income securities	0	0
Liabilities:
Interest rate swap derivative liabilities	$ 0	$ 0

XML

Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]

Fair value assets and liabilities measured on recurring basis

The following tables provide a summary of the Company’s significant financial assets and liabilities carried at fair value and measured on a recurring basis as of June 30, 2013 and December 31, 2012 (in thousands):

			Fair Value Measurements at June 30, 2013
	Carrying Value at June 30, 2013		Quoted Prices in Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap derivative assets	$	4,599	$	—	$	4,599	$	—
Restricted investments:
Guaranteed Investment Contract	5,742		—		5,742		—
Rabbi Trust	8,163		8,163		—		—
Fixed income securities	1,996		—		1,996		—
Liabilities:
Interest rate swap derivative liabilities	$	490	$	—	$	490	$	—

			Fair Value Measurements at December 31, 2012
	Carrying Value at December 31, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap derivative assets	$	6,212	$	—	$	6,212	$	—
Restricted investments:
Guaranteed Investment Contract	5,742		—		5,742		—
Rabbi Trust	7,718		7,718		—		—
Fixed income securities	2,152		—		2,152		—
Liabilities:
Interest rate swap derivative liabilities	$	708	$	—	$	708	$	—

XML

Earnings Per Share From Continuing Operations (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Basic and diluted earnings per share

Basic and diluted earnings per share (“EPS”) from continuing operations were calculated for the three and six months ended June 30, 2013 and July 1, 2012 as follows (in thousands, except per share data):

	Three Months Ended					Six Months Ended
	June 30, 2013			July 1, 2012		June 30, 2013			July 1, 2012
Income from continuing operations	$	34,219		$	20,854	$	57,657		$	34,610
Net (income) loss attributable to noncontrolling interests	(12		)	25		(30		)	(9		)
Net income from continuing operations attributable to The GEO Group, Inc.	34,207			20,879		57,627			34,601
Basic earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding	71,083			60,839		70,967			60,803
Per share amount from continuing operations	$	0.48		$	0.34	$	0.81		$	0.57
Diluted earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding	71,083			60,839		70,967			60,803
Effect of dilutive securities: Stock options and restricted stock	524			227		543			181
Weighted average shares assuming dilution	71,607			61,066		71,510			60,984
Per share amount from continuing operations	$	0.48		$	0.34	$	0.81		$	0.57

XML

Condensed Consolidating Financial Information (Details Textual)	Jun. 30, 2013	Jun. 30, 2013 Senior Notes Due 2021	Mar. 19, 2013 Senior Notes Due 2023	Jun. 30, 2013 7.75% Senior Notes [Member]
Debt Instrument [Line Items]
Notes bear interest at a rate	7.75%	6.625%	5.125%	7.75%
Percentage of subsidiary owned	100.00%

XML

Basis of Presentation (Details Textual)	Jun. 30, 2013 agency state person bed facility
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of beds	72,000
Correctional, detention and residential treatment facilities including projects under development	95
Provision of monitoring services tracking offenders (more than 70,000)	70,000
Number of federal, state and local correctional agencies to which company provides monitoring services	900
Number of states in which the company operates	50

XML

Condensed Consolidating Financial Information (Details 3) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012
Cash Flow from Operating Activities:
Cash provided by operating activities - continuing operations	$ 101,314	$ 116,932
Cash provided by operating activities - discontinued operations	0	10,034
Net cash provided by operating activities	101,314	126,966
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	51	231
Proceeds from sale of assets held for sale	1,968	297
Net working capital adjustment from RTS divestiture	(996)	0
Change in restricted cash and investments	(5,910)	553
Capital expenditures	(89,921)	(69,536)
Cash (used in) provided by investing activities - continuing operations	(94,808)	(68,455)
Cash used in investing activities - discontinued operations	0	(2,537)
Net cash provided by (used in) investing activities	(94,808)	(70,992)
Cash Flow from Financing Activities:
Proceeds from long term debt	785,000	145,000
Income tax benefit (provision) of equity compensation	1,308	(270)
Distribution to noncontrolling interests	0	(5,758)
Debt issuance costs	(17,017)	(44)
Payments on long-term debt	(697,748)	(169,282)
Proceeds from the exercise of stock options	4,082	396
Cash dividends paid	(71,527)	0
Proceeds from reissuance of treasury stock in connection with ESPP	155	0
Payments for retirement of common stock	0	(1,035)
Net cash provided by (used in) financing activities	4,253	(30,993)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(4,003)	(43)
Net Increase in Cash and Cash Equivalents	6,756	24,938
Cash and Cash Equivalents, beginning of period	31,755	43,378
Cash and Cash Equivalents, end of period	38,511	68,316
The GEO Group Inc.
Cash Flow from Operating Activities:
Cash provided by operating activities - continuing operations		98,442
Cash provided by operating activities - discontinued operations		752
Net cash provided by operating activities	58,343	99,194
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	0	0
Proceeds from sale of assets held for sale	0	0
Net working capital adjustment from RTS divestiture	(996)
Change in restricted cash and investments	(134)	(484)
Capital expenditures	(69,567)	(53,933)
Cash (used in) provided by investing activities - continuing operations		(54,417)
Cash used in investing activities - discontinued operations		(311)
Net cash provided by (used in) investing activities	(70,697)	(54,728)
Cash Flow from Financing Activities:
Proceeds from long term debt	785,000	145,000
Income tax benefit (provision) of equity compensation	1,308	(270)
Distribution to noncontrolling interests		0
Debt issuance costs	(17,017)	(6)
Payments on long-term debt	(688,675)	(160,556)
Proceeds from the exercise of stock options	4,082	396
Cash dividends paid	(71,527)
Proceeds from reissuance of treasury stock in connection with ESPP	155
Payments for retirement of common stock		(1,035)
Net cash provided by (used in) financing activities	13,326	(16,471)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	0	0
Net Increase in Cash and Cash Equivalents	972	27,995
Cash and Cash Equivalents, beginning of period	4,764	15,086
Cash and Cash Equivalents, end of period	5,736	43,081
Combined Subsidiary Guarantors [Member]
Cash Flow from Operating Activities:
Cash provided by operating activities - continuing operations		11,721
Cash provided by operating activities - discontinued operations		6,827
Net cash provided by operating activities	18,932	18,548
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	51	162
Proceeds from sale of assets held for sale	1,968	297
Net working capital adjustment from RTS divestiture	0
Change in restricted cash and investments	(1,457)	(1,350)
Capital expenditures	(19,666)	(13,363)
Cash (used in) provided by investing activities - continuing operations		(14,254)
Cash used in investing activities - discontinued operations		(2,226)
Net cash provided by (used in) investing activities	(19,104)	(16,480)
Cash Flow from Financing Activities:
Proceeds from long term debt	0	0
Income tax benefit (provision) of equity compensation	0	0
Distribution to noncontrolling interests		0
Debt issuance costs	0	0
Payments on long-term debt	(661)	(693)
Proceeds from the exercise of stock options	0	0
Cash dividends paid	0
Proceeds from reissuance of treasury stock in connection with ESPP	0
Payments for retirement of common stock		0
Net cash provided by (used in) financing activities	(661)	(693)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	0	0
Net Increase in Cash and Cash Equivalents	(833)	1,375
Cash and Cash Equivalents, beginning of period	1,917	3,092
Cash and Cash Equivalents, end of period	1,084	4,467
Combined Non-Guarantor Subsidiaries [Member]
Cash Flow from Operating Activities:
Cash provided by operating activities - continuing operations		6,769
Cash provided by operating activities - discontinued operations		2,455
Net cash provided by operating activities	24,039	9,224
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	0	69
Proceeds from sale of assets held for sale	0	0
Net working capital adjustment from RTS divestiture	0
Change in restricted cash and investments	(4,319)	2,387
Capital expenditures	(688)	(2,240)
Cash (used in) provided by investing activities - continuing operations		216
Cash used in investing activities - discontinued operations		0
Net cash provided by (used in) investing activities	(5,007)	216
Cash Flow from Financing Activities:
Proceeds from long term debt	0	0
Income tax benefit (provision) of equity compensation	0	0
Distribution to noncontrolling interests		(5,758)
Debt issuance costs	0	(38)
Payments on long-term debt	(8,412)	(8,033)
Proceeds from the exercise of stock options	0	0
Cash dividends paid	0
Proceeds from reissuance of treasury stock in connection with ESPP	0
Payments for retirement of common stock		0
Net cash provided by (used in) financing activities	(8,412)	(13,829)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(4,003)	(43)
Net Increase in Cash and Cash Equivalents	6,617	(4,432)
Cash and Cash Equivalents, beginning of period	25,074	25,200
Cash and Cash Equivalents, end of period	$ 31,691	$ 20,768

XML

Debt Credit Facility Interest Rates (Details)	6 Months Ended
	Jun. 30, 2013
Unused Letters of Credit
Line of Credit Facility [Line Items]
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum	1.75%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum	2.75%
Unused Revolver
Line of Credit Facility [Line Items]
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum	0.35%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum	0.375%
Minimum
Line of Credit Facility [Line Items]
Debt Instrument Interest Rate in Addition to Libor	1.75%
Debt Instrument Interest Rate in Addition to Base Rate Borrowings	0.75%
Maximum
Line of Credit Facility [Line Items]
Debt Instrument Interest Rate in Addition to Libor	2.75%
Debt Instrument Interest Rate in Addition to Base Rate Borrowings	1.75%

XML

Discontinued Operations (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended				12 Months Ended		3 Months Ended	6 Months Ended
	Dec. 31, 2012	Jul. 01, 2012 RTS	Jul. 01, 2012 RTS	Jul. 01, 2012 MDOC	Jul. 01, 2012 MDOC	Jul. 19, 2012 East Mississippi Correctional Facility bed	Aug. 13, 2012 Marshall County Correctional Facility bed	Jul. 01, 2012 Walnut Grove Youth Correctional Facility bed	Dec. 31, 2012 Services Agreement	Dec. 31, 2012 License Agreement	Jun. 30, 2013 Services and Licensing Agreement	Jun. 30, 2013 Services and Licensing Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of businesses	$ 33.3
Period of working capital adjustment after divestiture	0 years 0 months 105 days
Proceeds from divestiture of business, final	32.3
Long-Term Purchase Commitment, Earn-Out	5.0
Services Agreement Contract Term										5 years
Sales Revenue, Services, Other									1.8
Licensing Agreement Contract Term										5 years
Licenses Revenue										0.4
Sales Service Revenue Other and License Revenue											0.6	1.2
Number of beds discontinued						1,500	1,000	1,450
Disposal Group, Including Discontinued Operation, Revenue		41.2	82.4	11.2	22.3
Disposal Group, Including Discontinued Operation, Operating Income (Loss)		$ 3.5	$ 5.5	$ (0.9)	$ (0.9)

XML

Shareholders' Equity - Components of Accumulated Other Comprehensive Income (Details) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Mar. 31, 2013		Jun. 30, 2013		May 08, 2013
Components of Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			$ 2,670,000	[1]	$ 2,670,000	[1]
Other comprehensive income (loss), attributable to Parent					(6,368,000)
Ending Balance	(3,698,000)	[1]			(3,698,000)	[1]
Minimum percentage of taxable income to be distributed as REIT					90.00%
Cash dividend	$ 0.50		$ 0.50
Maximum common stock value authorized under prospectus supplement							100,000,000
Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc.
Components of Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			5,755,000	[1]	5,755,000	[1]
Other comprehensive income (loss), attributable to Parent					(6,589,000)
Ending Balance	(834,000)	[1]			(834,000)	[1]
Unrealized (loss)/gain on derivatives, net of tax
Components of Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(457,000)		(457,000)
Other comprehensive income (loss), attributable to Parent					140,000
Ending Balance	(317,000)				(317,000)
Pension adjustments, net of tax
Components of Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(2,628,000)		(2,628,000)
Other comprehensive income (loss), attributable to Parent					81,000
Ending Balance	$ (2,547,000)				$ (2,547,000)

[1] The foreign currency translation, net of tax, related to noncontrolling interests was not significant at June 30, 2013 or December 31, 2012, respectively.

XML

Consolidated Statements of Operations (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Income tax provision on equity in earnings of affiliates	$ 417	$ 303	$ 894	$ 624
Income tax provision (benefit) on income (loss) from discontinued operations	$ 0	$ 973	$ 0	$ 1,729

XML

Equity Incentive Plans

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plans

EQUITY INCENTIVE PLANS

As of June 30, 2013, under the 2006 Stock Incentive Plan ("2006 Plan"), the Company had 1,704,344 shares of common stock available for issuance pursuant to future awards that may be granted under the plan of which up to 404,104 shares were available for the issuance of awards other than stock options.

Stock Options

The Company uses a Black-Scholes option valuation model to estimate the fair value of each option awarded. A summary of the activity of stock option awards issued and outstanding under Company plans is as follows for the six months ended June 30, 2013:

	Shares		Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)	Aggregate Intrinsic Value
	(in thousands)					(in thousands)
Options outstanding at December 31, 2012	1,198		$	18.92	6.85	$	11,090
Options granted	—		—
Options exercised	(234	)	$	17.43
Options forfeited/canceled/expired	(5	)	$	21.34
Options outstanding at June 30, 2013	959		$	19.28	6.75	$	14,074
Options vested and expected to vest at June 30, 2013	929		$	19.21	6.71	$	13,701
Options exercisable at June 30, 2013	594		$	18.23	6.13	$	9,346

The Company did not grant any stock options during the six months ended June 30, 2013. For the six months ended June 30, 2013 and July 1, 2012, the amount of stock-based compensation expense related to stock options was $0.7 million and $1.4 million, respectively. As of June 30, 2013, the Company had $1.8 million of unrecognized compensation costs related to non-vested stock option awards that are expected to be recognized over a weighted average period of 1.8 years.

Restricted Stock

Compensation expense for nonvested stock awards is recorded over the vesting period based on the fair value at the date of grant. Generally, the restricted stock awards vest in equal increments over either a three or four year period. The Company has issued share-based awards with service-based, performance-based and market-based vesting criteria.

A summary of the activity of restricted stock outstanding is as follows for the six months ended June 30, 2013:

	Shares		Wtd. Avg. Grant  Date Fair Value
	(in thousands)
Restricted stock outstanding at December 31, 2012	670		$	18.14
Granted	345		37.40
Vested	(131	)	21.29
Forfeited/canceled	—		—
Restricted stock outstanding at June 30, 2013	884		$	23.00

During the six months ended June 30, 2013, the Company granted 345,060 shares of restricted stock to certain employees and executive officers. Of these awards, 92,810 are performance-based awards which will be forfeited if the Company does not achieve certain annual metrics during 2013, 2014 and 2015.

The vesting of these performance-based restricted stock grants are subject to the achievement by GEO of two annual performance metrics as follows: (i) up to 75% of the shares of restricted stock ("Target Award") can vest at the end of a three-year performance period if GEO meets certain total shareholder return ("TSR") performance targets, as compared to the total shareholder return of a peer group of companies, during 2013, 2014 and 2015; and (ii) up to 25% of the shares of restricted stock ("Target Award") can vest at the end of a three-year period if GEO meets certain return on capital employed ("ROCE") performance targets in 2013, 2014 and 2015. These performance awards can vest at between 0% and 200% of the Target Awards for both metrics. The number of shares shown for the performance-based awards is based on the Target Awards for both metrics.

The metric related to ROCE is considered to be a performance condition. For share-based awards that contain a performance condition, the achievement of the targets must be probable before any share-based compensation expense is recorded. The Company reviews the likelihood of which target in the range will be achieved and if deemed probable, compensation expense is recorded at that time. If subsequent to initial measurement there is a change in the estimate of the probability of meeting the performance condition, the effect of the change in the estimated quantity of awards expected to vest is recognized by cumulatively adjusting compensation expense. If ultimately the performance targets are not met, for any awards where vesting was previously deemed probable, previously recognized compensation expense will be reversed in the period in which vesting is no longer deemed probable. The fair value of these awards was determined based on the closing price of the Company's common stock on the date of grant.

The metric related to TSR is considered to be a market condition. For share-based awards that contain a market condition, the probability of satisfying the market condition must be considered in the estimate of grant-date fair value and previously recorded compensation expense is not reversed if the market condition is never met. The fair value of these awards was determined based on a Monte Carlo simulation, which calculates a range of possible outcomes and the probabilities that they will occur, using the following key assumptions: (i) volatility of 26.6%; (ii) beta of 0.681; and (iii) risk free rate of 0.42%.

For the six months ended June 30, 2013 and July 1, 2012, the Company recognized $2.6 million and $2.1 million, respectively, of compensation expense related to its restricted stock awards. As of June 30, 2013, the Company had $18.2 million of unrecognized compensation costs related to non-vested restricted stock awards, including non-vested restricted stock awards with performance-based and market-based vesting, that are expected to be recognized over a weighted average period of 3.1 years.

Employee Stock Purchase Plan

The Company adopted The GEO Group Inc. 2011 Employee Stock Purchase Plan (the “Plan”). The purpose of the Plan, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions by the employees of GEO and designated subsidiaries of GEO in order to increase their identification with the Company’s goals and secure a proprietary interest in the Company’s success. These deductions are used to purchase shares of the Company’s common stock at a 5% discount from the then current market price. The Company has made available up to 500,000 shares of its common stock, which were registered with the Securities and Exchange Commission on May 4, 2012, for sale to eligible employees.

The Plan is considered to be non-compensatory. As such, there is no compensation expense required to be recognized. Share purchases under the Plan are made on the last day of each month. During the six months ended June 30, 2013, 4,625 shares were issued out of the Company's treasury stock in connection with the Plan.

XML

Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Tax (benefit) provision on foreign currency translation adjustments	$ 0	$ (195)	$ 0	$ 125
Tax provision on defined benefit pension plans	25	19	51	38
Tax provision on loss on derivative instrument classified as a cash flow hedge	$ 16	$ (203)	$ 77	$ (220)

XML

Debt Guarantees (Details) In Millions, unless otherwise specified	6 Months Ended				6 Months Ended
	Jun. 30, 2013 USD ($) guarantees	Jun. 30, 2013 ZAR	Jun. 30, 2013 CAD	Dec. 31, 2012 USD ($)	Jun. 30, 2013 Geo Amey USD ($)	Jun. 30, 2013 Geo Amey GBP (£)
Line of Credit Facility [Line Items]
Remaining Guarantee under Letter of Credit	$ 3.5	34.8
Maximum Loan Amount under Stand by Facility	2.0	20.0
Potential Estimated Exposure of tax obligations	2.4		2.5
Liability Related to Potential Tax Exposure	2.2			2.0
Number of letters of guarantee outstanding under separate international facilities relating to performance guarantees	8	8
Letters of Guarantee Outstanding Relating to Performance Guarantees	11.1
Variable Interest Entity Ownership Percentage in Joint Venture	50.00%	50.00%
Working Capital Line of Credit					18.3	12.0
Line of Credit Facility, Amount Outstanding					18.4	12.1
Line of Credit Facility, Increase, Accrued Interest					$ 0.2

XML

Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Revenues	$ 381,653	$ 371,173	$ 758,684	$ 731,215
Operating expenses	279,246	269,141	560,043	539,861
Depreciation and amortization	23,657	22,962	46,592	45,201
General and administrative expenses	27,363	26,129	59,403	52,715
Operating income	51,387	52,941	92,646	93,438
Interest income	1,165	1,761	2,349	3,568
Interest expense	(21,103)	(20,618)	(40,444)	(41,424)
Loss on extinguishment of debt	(5,527)	0	(5,527)	0
Income before income taxes, equity in earnings of affiliates and discontinued operations	25,922	34,084	49,024	55,582
Income tax (benefit) provision	(7,268)	13,660	(6,387)	22,150
Equity in earnings of affiliates, net of income tax provision of $417, $303, $894 and $624, respectively	1,029	430	2,246	1,178
Income from continuing operations	34,219	20,854	57,657	34,610
Income from discontinued operations, net of income tax provision of $0, $973, $0 and $1,729, respectively	0	1,622	0	2,925
Net income	34,219	22,476	57,657	37,535
Net (income) loss attributable to noncontrolling interests	(12)	25	(30)	(9)
Net income attributable to The GEO Group, Inc.	$ 34,207	$ 22,501	$ 57,627	$ 37,526
Weighted-average common shares outstanding:
Basic (in shares)	71,083	60,839	70,967	60,803
Diluted (in shares)	71,607	61,066	71,510	60,984
Basic:
Income from continuing operations (in dollars per share)	$ 0.48	$ 0.34	$ 0.81	$ 0.57
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.03	$ 0.00	$ 0.05
Income per common share attributable to The GEO Group, Inc. - basic (in dollars per share)	$ 0.48	$ 0.37	$ 0.81	$ 0.62
Diluted:
Income from continuing operations (in dollars per share)	$ 0.48	$ 0.34	$ 0.81	$ 0.57
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.03	$ 0.00	$ 0.05
Income per common share attributable to The GEO Group, Inc. - diluted (in dollars per share)	$ 0.48	$ 0.37	$ 0.81	$ 0.62

XML

Derivative Financial Instruments (Details Textual)	3 Months Ended		6 Months Ended				3 Months Ended	6 Months Ended
	Jun. 30, 2013 USD ($)	Jul. 01, 2012 USD ($)	Jun. 30, 2013 USD ($) agreement	Jul. 01, 2012 USD ($)	Jun. 30, 2013 AUD	Dec. 31, 2012 USD ($)	Jun. 30, 2013 Fair Value Hedging Interest Rate Swap USD ($)	Jun. 30, 2013 Fair Value Hedging Interest Rate Swap USD ($)	Jun. 30, 2013 Minimum	Jun. 30, 2013 Maximum
Derivative Instruments, Gain (Loss) [Line Items]
Gains (loss) recognized and recorded in earnings related to fair value hedge							$ 900,000	$ 1,600,000
Interest Rate Swaps [Abstract]
Number of Interest Rate Swap Agreements			4
Interest rate	7.75%		7.75%
Notional amount coincide with the terms of the non-recourse debt	100,000,000		100,000,000
Variable interest rate payment to the same counterparties									4.16%	4.29%
Fair value of the swap assets included as Other Non-Current Assets	4,600,000		4,600,000			6,200,000
Ineffective portion of Fair value interest rate swap	0	0
Fixed interest rate on cash flow interest rate derivative	9.70%		9.70%
Interest Rate Swap Agreements					50,900,000
Net unrealized loss recognized in the periods and recorded in accumulated other comprehensive income, net of tax	0		100,000
Interest Rate Cash Flow Hedge Liability at Fair Value	500,000		500,000			700,000
Ineffective portion of Cash Flow Hedge interest rate swap	$ 0	$ 0	$ 0	$ 0

XML

Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Carrying value and estimated fair value of financial instruments

The following tables present the carrying values of those financial instruments and the estimated corresponding fair values at June 30, 2013 and December 31, 2012 (in thousands):

			Estimated Fair Value Measurements at June 30, 2013
	Carrying Value as of June 30, 2013		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	38,511	$	38,511	$	38,511	$	—	$	—
Restricted cash	39,489		39,489		39,489		—		—
Liabilities:
Borrowings under Senior Credit Facility	$	595,000	$	597,250	$	—	$	597,250	$	—
7¾% Senior Notes	247,756		262,345		—		262,345		—
6.625% Senior Notes	300,000		316,314		—		316,314		—
5.125% Senior Notes	300,000		288,375		—		288,375		—
Non-recourse debt, Australian subsidiary	27,817		28,531		—		28,531		—
Other non-recourse debt, including current portion	83,665		86,639		—		86,639		—

			Estimated Fair Value Measurements at December 31, 2012
	Carrying Value as of December 31, 2012		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	31,755	$	31,755	$	31,755	$	—	$	—
Restricted cash	34,949		34,949		34,949		—		—
Liabilities:
Borrowings under Senior Credit Facility	$	797,430	$	803,097	$	—	$	803,097	$	—
7¾% Senior Notes	247,543		270,313		—		270,313		—
6.625% Senior Notes	300,000		335,814		—		335,814		—
Non-recourse debt, Australian subsidiary	34,832		34,973		—		34,973		—
Other non-recourse debt, including current portion	88,650		91,345		—		91,345		—

XML

Recent Accounting Standards

6 Months Ended

Jun. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Standards

RECENT ACCOUNTING STANDARDS

In March 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force) (“ASU 2013-05”). The objective of ASU 2013-05 is to resolve diversity in practice regarding the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or

group of assets that is a nonprofit activity or a business within a foreign entity. ASU 2013-05 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2013. The Company is currently evaluating the potential impact of this ASU on its condensed unaudited consolidated financial statements.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not, or are not expected to, have a material effect on the Company's results of operations or financial position.

XML

Shareholders' Equity (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			$ 1,047,304
Proceeds from stock options exercised, shares			234
Net income attributable to The GEO Group, Inc.	34,207	22,501	57,627	37,526
Net Income	34,219	22,476	57,657	37,535
Other comprehensive income (loss)	(5,260)	(2,469)	(6,440)	(482)
Ending Balance	1,035,884		1,035,884
Common shares
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			860
Beginning Balance, shares			71,417
Proceeds from stock options exercised, shares			234
Proceeds from stock options exercised, value			2
Restricted stock granted, shares			345
Restricted stock granted			3
Re-issuance of treasury shares (ESPP), shares			5
Ending Balance	865		865
Ending Balance, shares	72,001		72,001
Additional Paid-in Capital
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			832,230
Proceeds from stock options exercised, value			4,080
Tax provision related to equity compensation			1,308
Stock based compensation expense			705
Restricted stock granted			(3)
Amortization of restricted stock			2,640
Re-issuance of treasury shares (ESPP), value			137
Ending Balance	841,097		841,097
Earnings in Excess of Distributions
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			264,667
Dividends, Common Stock, Cash			(71,527)
Re-issuance of treasury shares (ESPP), value			0
Net income attributable to The GEO Group, Inc.			57,627
Ending Balance	250,767		250,767
Accumulated Other Comprehensive Income (Loss)
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			2,670
Other comprehensive income (loss)			(6,368)
Ending Balance	(3,698)		(3,698)
Treasury shares
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			(53,615)
Beginning Balance, shares			14,590
Re-issuance of treasury shares (ESPP), shares			(5)
Re-issuance of treasury shares (ESPP), value			18
Ending Balance	(53,597)		(53,597)
Ending Balance, shares	14,585		14,585
Noncontrolling Interests
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			492
Net Income			30
Other comprehensive income (loss)			(72)
Ending Balance	450		450
Stockholders' Equity, Total
Changes in shareholders' equity that are attributable to the Company's shareholders and to non controlling interests
Beginning Balance			1,047,304
Proceeds from stock options exercised, value			4,082
Tax provision related to equity compensation			1,308
Stock based compensation expense			705
Restricted stock granted			0
Amortization of restricted stock			2,640
Dividends, Common Stock, Cash			(71,527)
Re-issuance of treasury shares (ESPP), value			155
Net Income			57,657
Other comprehensive income (loss)			(6,440)
Ending Balance	$ 1,035,884		$ 1,035,884

XML

Debt Senior Credit Facility (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Term Loan A	Jun. 30, 2013 Term Loan A2	Jun. 30, 2013 Term Loan B	Apr. 03, 2013 Term Loan B	Jun. 30, 2013 Revolver	Apr. 03, 2013 Revolver	Jun. 30, 2013 Letter of Credit	Jun. 30, 2013 Additional Revolver	Apr. 03, 2013 London Interbank Offered Rate (LIBOR) [Member] Term Loan B
Line of Credit Facility [Line Items]
Face amount						$ 300,000,000
Basis spread on variable rate			2.75%	2.75%	2.75%		2.75%				2.50%
Floor interest rate											0.75%
Current borrowing capacity								700,000,000
Debt Issuance Cost	10,200,000
Payments of Debt Extinguishment Costs	1,100,000
Payments of Financing Costs	9,100,000
Write off unamortized debt discount	1,100,000
Write off of Deferred Debt Issuance Cost	3,300,000
Line of Credit Facility, Remaining Borrowing Capacity	295,000,000
Long-term Debt					300,000,000				58,200,000	346,800,000
Revolver	$ 295,000,000	$ 235,000,000
Long-term Debt, Weighted Average Interest Rate	3.00%
Total Leverage Ratio	5.75
Senior Secured Leverage Ratio	3.50
Interest Coverage Ratio	3.00

XML

Benefit Plans (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012	Dec. 31, 2012
Components of Net Periodic Benefit Cost
Service cost	$ 231	$ 193	$ 462	$ 387	$ 774
Interest cost	207	197	415	393	787
Net loss	66	48	131	97
Net periodic pension cost	$ 504	$ 438	$ 1,008	$ 877

XML

Goodwill and Other Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Estimated amortization expense for the remainder
Remainder of 2013	$ 7,266
2014	14,531
2015	14,531
2016	14,531
2017	14,531
Thereafter	61,353
Net Carrying Amount	$ 126,743

XML

Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Components of Company Plan Benefit Expense

The following table summarizes key information related to the Company’s pension plans and retirement agreements (in thousands):

	Six months ended June 30, 2013			Fiscal Year Ended December 31, 2012
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period	$	19,761		$	16,879
Service cost	462			774
Interest cost	415			787
Plan amendments	—			569
Actuarial loss	—			945
Benefits paid	(120		)	(193		)
Projected benefit obligation, end of period	$	20,518		$	19,761
Change in Plan Assets
Plan assets at fair value, beginning of period	$	—		$	—
Company contributions	120			193
Benefits paid	(120		)	(193		)
Plan assets at fair value, end of period	$	—		$	—
Unfunded Status of the Plan	$	(20,518	)	$	(19,761	)

Components of Net Periodic Benefit Cost

	Three Months Ended				Six Months Ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Components of Net Periodic Benefit Cost
Service cost	$	231	$	193	$	462	$	387
Interest cost	207		197		415		393
Net loss	66		48		131		97
Net periodic pension cost	$	504	$	438	$	1,008	$	877

XML

Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2013

Condensed Consolidating Financial Information Disclosure [Abstract]

CONDENSED CONSOLIDATING BALANCE SHEET

	As of June 30, 2013
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	5,736	$	1,084	$	31,691		$	—		$	38,511
Restricted cash and investments	—		—		15,646			—			15,646
Accounts receivable, less allowance for doubtful accounts	82,406		137,948		18,647			—			239,001
Deferred income tax assets, net	—		14,604		3,686			—			18,290
Prepaid expenses and other current assets	1,168		13,253		11,875			(1,154		)	25,142
Total current assets	89,310		166,889		81,545			(1,154		)	336,590
Restricted Cash and Investments	134		9,410		28,204			—			37,748
Property and Equipment, Net	654,956		973,246		111,784			—			1,739,986
Assets Held for Sale	—		1,200		—			—			1,200
Direct Finance Lease Receivable	—		—		20,445			—			20,445
Intercompany Receivable	937,073		128,058		(1,300		)	(1,063,831		)	—
Deferred Income Tax Assets, Net	16,230		—		2,532			(16,230		)	2,532
Goodwill	34		489,502		680			—			490,216
Intangible Assets, Net	—		169,375		1,368			—			170,743
Investment in Subsidiaries	954,156		442,679		—			(1,396,835		)	—
Other Non-Current Assets	26,815		107,330		34,018			(79,421		)	88,742
Total Assets	$	2,678,708	$	2,487,689	$	279,276		$	(2,557,471	)	$	2,888,202
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	5,290	$	38,898	$	3,203		$	—		$	47,391
Accrued payroll and related taxes	1,827		15,868		16,619			—			34,314
Accrued expenses	61,014		30,678		18,641			(1,154		)	109,179
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000		1,212		18,129			—			22,341
Total current liabilities	71,131		86,656		56,592			(1,154		)	213,225
Deferred Income Tax Liabilities	—		31,933		—			(16,230		)	15,703
Intercompany Payable	113,567		930,800		19,457			(1,063,824		)	—
Other Non-Current Liabilities	14,101		136,207		3,257			(79,428		)	74,137
Capital Lease Obligations	—		11,426		—			—			11,426
Long-Term Debt	1,444,475		—		—			—			1,444,475
Non-Recourse Debt	—		—		93,352			—			93,352
Commitments & Contingencies
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,035,434		1,290,667		106,168			(1,396,835		)	1,035,434
Noncontrolling Interests	—		—		450			—			450
Total Shareholders’ Equity	1,035,434		1,290,667		106,618			(1,396,835		)	1,035,884
Total Liabilities and Shareholders' Equity	$	2,678,708	$	2,487,689	$	279,276		$	(2,557,471	)	$	2,888,202

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 STATEMENTS OF INCOME

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	118,859		$	314,120		$	55,585		$	(106,911	)	$	381,653
Operating expenses	102,108			239,194			44,855			(106,911		)	279,246
Depreciation and amortization	5,875			16,556			1,226			—			23,657
General and administrative expenses	8,156			15,420			3,787			—			27,363
Operating income (loss)	2,720			42,950			5,717			—			51,387
Interest income	4,029			359			1,123			(4,346		)	1,165
Interest expense	(10,373		)	(12,708		)	(2,368		)	4,346			(21,103		)
Loss on extinguishment of debt	(2,600		)	(2,927		)	—			—			(5,527		)
Income (loss) before income taxes and equity in earnings of affiliates	(6,224		)	27,674			4,472			—			25,922
Income tax (benefit) provision	(8,339		)	226			845			—			(7,268		)
Equity in earnings of affiliates, net of income tax provision	—			—			1,029			—			1,029
Income (loss) before equity in income of consolidated subsidiaries	2,115			27,448			4,656			—			34,219
Income from consolidated subsidiaries, net of income tax provision	32,104			—			—			(32,104		)	—
Income from continuing operations	34,219			27,448			4,656			(32,104		)	34,219
Net income (loss) from discontinued operations	—			—			—			—			—
Net income	34,219			27,448			4,656			(32,104		)	34,219
Net income attributable to noncontrolling interests	—			—			(12		)	—			(12		)
Net income attributable to The GEO Group, Inc.	$	34,219		$	27,448		$	4,644		$	(32,104	)	$	34,207
Net income	$	34,219		$	27,448		$	4,656		$	(32,104	)	$	34,219
Other comprehensive income (loss), net of tax	—			40			(5,300		)	—			(5,260		)
Total comprehensive income	$	34,219		$	27,488		$	(644	)	$	(32,104	)	$	28,959
Comprehensive loss attributable to noncontrolling interests	—			—			19			—			19
Comprehensive income attributable to The GEO Group, Inc.	$	34,219		$	27,488		$	(625	)	$	(32,104	)	$	28,978

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended July 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	153,753		$	177,301		$	57,780		$	(17,661	)	$	371,173
Operating expenses	130,454			110,339			46,009			(17,661		)	269,141
Depreciation and amortization	7,389			13,433			2,140			—			22,962
General and administrative expenses	9,384			12,783			3,962			—			26,129
Operating income	6,526			40,746			5,669			—			52,941
Interest income	7,847			394			1,661			(8,141		)	1,761
Interest expense	(16,837		)	(7,926		)	(3,996		)	8,141			(20,618		)
Income (loss) before income taxes and equity in earnings of affiliates	(2,464		)	33,214			3,334			—			34,084
Income tax (benefit) provision	(667		)	12,860			1,467			—			13,660
Equity in earnings of affiliates, net of income tax provision	—			—			430			—			430
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(1,797		)	20,354			2,297			—			20,854
Income from consolidated subsidiaries, net of income tax provision	22,651			—			—			(22,651		)	—
Income from continuing operations	20,854			20,354			2,297			(22,651		)	20,854
Net income from discontinued operations	1,622			2,046			233			(2,279		)	1,622
Net income	22,476			22,400			2,530			(24,930		)	22,476
Net income attributable to noncontrolling interests	—			—			25			—			25
Net income attributable to The GEO Group, Inc.	$	22,476		$	22,400		$	2,555		$	(24,930	)	$	22,501
Net income	$	22,476		$	22,400		$	2,530		$	(24,930	)	$	22,476
Other comprehensive income (loss), net of tax	29			—			(2,498		)	—			(2,469		)
Total comprehensive income	$	22,505		$	22,400		$	32		$	(24,930	)	$	20,007
Comprehensive income attributable to noncontrolling interests	—			—			58			—			58
Comprehensive income attributable to The GEO Group, Inc.	$	22,505		$	22,400		$	90		$	(24,930	)	$	20,065

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Six Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	232,348		$	626,649		$	112,970		$	(213,283	)	$	758,684
Operating expenses	201,518			479,671			92,137			(213,283		)	560,043
Depreciation and amortization	11,697			32,438			2,457			—			46,592
General and administrative expenses	17,354			33,612			8,437			—			59,403
Operating income (loss)	1,779			80,928			9,939			—			92,646
Interest income	7,989			909			2,219			(8,768		)	2,349
Interest expense	(20,292		)	(24,139		)	(4,781		)	8,768			(40,444		)
Loss on extinguishment of debt	(2,600		)	(2,927		)	—			—			(5,527		)
Income (loss) before income taxes and equity in earnings of affiliates	(13,124		)	54,771			7,377			—			49,024
Income tax (benefit) provision	(9,006		)	632			1,987			—			(6,387		)
Equity in earnings of affiliates, net of income tax provision	—			—			2,246			—			2,246
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(4,118		)	54,139			7,636			—			57,657
Income from consolidated subsidiaries, net of income tax provision	61,775			—			—			(61,775		)	—
Income from continuing operations	57,657			54,139			7,636			(61,775		)	57,657
Net income loss from discontinued operations	—			—			—			—			—
Net income	57,657			54,139			7,636			(61,775		)	57,657
Net income attributable to noncontrolling interests	—			—			(30		)	—			(30		)
Net income attributable to The GEO Group, Inc.	$	57,657		$	54,139		$	7,606		$	(61,775	)	$	57,627
Net income	$	57,657		$	54,139		$	7,636		$	(61,775	)	$	57,657
Other comprehensive income (loss), net of tax	—			80			(6,520		)	—			(6,440		)
Total comprehensive income	57,657			54,219			1,116			(61,775		)	51,217
Comprehensive loss attributable to noncontrolling interests	—			—			42			—			42
Comprehensive income attributable to The GEO Group, Inc.	$	57,657		$	54,219		$	1,158		$	(61,775	)	$	51,259

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Six Months Ended July 1, 2012
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	294,370		$	361,488		$	115,772		$	(40,415	)	$	731,215
Operating expenses	261,460			228,005			90,811			(40,415		)	539,861
Depreciation and amortization	14,244			26,685			4,272			—			45,201
General and administrative expenses	18,780			26,077			7,858			—			52,715
Operating income (loss)	(114		)	80,721			12,831			—			93,438
Interest income	15,655			886			3,262			(16,235		)	3,568
Interest expense	(33,754		)	(15,837		)	(8,068		)	16,235			(41,424		)
Income (loss) before income taxes and equity in earnings of affiliates	(18,213		)	65,770			8,025			—			55,582
Income tax (benefit) provision	(6,323		)	25,172			3,301			—			22,150
Equity in earnings of affiliates, net of income tax provision	—			—			1,178			—			1,178
Income (loss) from continuing operations before equity in income of consolidated subsidiaries	(11,890		)	40,598			5,902			—			34,610
Income from consolidated subsidiaries, net of income tax provision	46,500			—			—			(46,500		)	—
Income from continuing operations	34,610			40,598			5,902			(46,500		)	34,610
Net income from discontinued operations	2,925			3,118			553			(3,671		)	2,925
Net income	37,535			43,716			6,455			(50,171		)	37,535
Net income attributable to noncontrolling interests	—			—			(9		)	—			(9		)
Net income attributable to The GEO Group, Inc.	$	37,535		$	43,716		$	6,446		$	(50,171	)	$	37,526
Net income	$	37,535		$	43,716		$	6,455		$	(50,171	)	$	37,535
Other comprehensive income (loss), net of tax	59			—			(541		)	—			(482		)
Total comprehensive income	$	37,594		$	43,716		$	5,914		$	(50,171	)	$	37,053
Comprehensive income attributable to noncontrolling interests	—			—			(4		)	—			(4		)
Comprehensive income attributable to The GEO Group, Inc.	$	37,594		$	43,716		$	5,910		$	(50,171	)	$	37,049

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	For the Six Months Ended June 30, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	58,343		$	18,932		$	24,039		$	101,314
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	—			51			—			51
Proceeds from sale of assets held for sale	—			1,968			—			1,968
Net working capital adjustment from RTS divestiture	(996		)	—			—			(996		)
Change in restricted cash and investments	(134		)	(1,457		)	(4,319		)	(5,910		)
Capital expenditures	(69,567		)	(19,666		)	(688		)	(89,921		)
Net cash used in investing activities	(70,697		)	(19,104		)	(5,007		)	(94,808		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	785,000			—			—			785,000
Income tax benefit of equity compensation	1,308			—			—			1,308
Debt issuance costs	(17,017		)	—			—			(17,017		)
Payments on long-term debt	(688,675		)	(661		)	(8,412		)	(697,748		)
Proceeds from the exercise of stock options	4,082			—			—			4,082
Cash dividends paid	(71,527		)	—			—			(71,527		)
Proceeds from reissuance of treasury stock in connection with ESPP	155			—			—			155
Net cash provided by (used in) financing activities	13,326			(661		)	(8,412		)	4,253
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(4,003		)	(4,003		)
Net Increase (Decrease) in Cash and Cash Equivalents	972			(833		)	6,617			6,756
Cash and Cash Equivalents, beginning of period	4,764			1,917			25,074			31,755
Cash and Cash Equivalents, end of period	$	5,736		$	1,084		$	31,691		$	38,511

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Six Months Ended July 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	$	98,442		$	11,721		$	6,769		$	116,932
Cash provided by operating activities - discontinued operations	752			6,827			2,455			10,034
Net cash provided by operating activities	99,194			18,548			9,224			126,966
Cash Flow from Investing Activities:
Proceeds from sale of assets held for sale	—			297			—			297
Proceeds from sale of property and equipment	—			162			69			231
Change in restricted cash and investments	(484		)	(1,350		)	2,387			553
Capital expenditures	(53,933		)	(13,363		)	(2,240		)	(69,536		)
Cash (used in) provided by investing activities - continuing operations	(54,417		)	(14,254		)	216			(68,455		)
Cash used in investing activities - discontinued operations	(311		)	(2,226		)	—			(2,537		)
Net cash (used in) provided by investing activities	(54,728		)	(16,480		)	216			(70,992		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	145,000			—			—			145,000
Payments on long-term debt	(160,556		)	(693		)	(8,033		)	(169,282		)
Income tax provision of equity compensation	(270		)	—			—			(270		)
Debt issuance costs	(6		)	—			(38		)	(44		)
Distribution to noncontrolling interests	—			—			(5,758		)	(5,758		)
Proceeds from the exercise of stock options	396			—			—			396
Payments for retirement of common stock	(1,035		)	—			—			(1,035		)
Net cash used in financing activities	(16,471		)	(693		)	(13,829		)	(30,993		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(43		)	(43		)
Net Increase (Decrease) in Cash and Cash Equivalents	27,995			1,375			(4,432		)	24,938
Cash and Cash Equivalents, beginning of period	15,086			3,092			25,200			43,378
Cash and Cash Equivalents, end of period	$	43,081		$	4,467		$	20,768		$	68,316

XML

Shareholders' Equity

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Shareholders' Equity

SHAREHOLDERS’ EQUITY

The following table presents the changes in shareholders’ equity that are attributable to the Company’s shareholders and to noncontrolling interests (in thousands):

	Common shares			Additional Paid-In			Earnings in Excess of			Accumulated Other Comprehensive			Treasury shares					Noncontrolling			Total Shareholders'
	Shares	Amount		Capital			Distributions			Income (Loss)			Shares		Amount			Interests			Equity
Balance, December 31, 2012	71,417	$	860	$	832,230		$	264,667		$	2,670		14,590		$	(53,615	)	$	492		$	1,047,304
Proceeds from exercise of stock options	234	2		4,080			—			—			—		—			—			4,082
Tax benefit related to equity compensation	—	—		1,308			—			—			—		—			—			1,308
Stock based compensation expense	—	—		705			—			—			—		—			—			705
Restricted stock granted	345	3		(3		)	—			—					—			—			—
Amortization of restricted stock	—	—		2,640			—			—			—		—			—			2,640
Dividends paid	—	—		—			(71,527		)	—			—		—			—			(71,527		)
Re-issuance of treasury shares (ESPP)	5	—		137			—			—			(5	)	18			—			155
Net income	—	—		—			57,627			—			—		—			30			57,657
Other comprehensive income (loss)	—	—		—			—			(6,368		)	—		—			(72		)	(6,440		)
Balance, June 30, 2013	72,001	$	865	$	841,097		$	250,767		$	(3,698	)	14,585		$	(53,597	)	$	450		$	1,035,884

REIT Distributions

As a REIT, GEO is required to distribute annually at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and by excluding net capital gain) and began paying regular quarterly REIT dividends in 2013. The amount, timing and frequency of future dividends, however, will be at the sole discretion of GEO's Board of Directors (“the Board”) and will be declared based upon various factors, many of which are beyond GEO's control, including, GEO's financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income taxes that GEO otherwise would be required to pay, limitations on distributions in GEO's existing and future debt instruments, limitations on GEO's ability to fund distributions using cash generated through GEO's TRS and other factors that GEO's Board may deem relevant. Dividends of $0.50 per share of common stock were paid during the quarter ended March 31, 2013. Dividends of $0.50 per share of common stock were paid during the quarter ended June 30, 2013.

Prospectus Supplement

On May 8, 2013, the Company filed with the Securities and Exchange Commission a prospectus supplement related to the offer and sale from time to time of the Company's common stock at an aggregate offering price of up to $100 million through sales agents. Sales of shares of the Company's common stock under the prospectus supplement and equity distribution agreement entered into with the sales agents, if any, may be made in negotiated transactions or transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act of 1933. There were no sales of shares of the Company's common stock under the prospectus supplement during the six months ended June 30, 2013.

Comprehensive Income (Loss)

Comprehensive income (loss) represents the change in shareholders' equity from transactions and other events and circumstances arising from non-shareholder sources. The Company's total comprehensive income is comprised of net income attributable to GEO, net income attributable to noncontrolling interests, foreign currency translation adjustments that arise from consolidating foreign operations that do not impact cash flows, net unrealized gains and/or losses on derivative instruments, and pension liability adjustments in the consolidated statements of shareholders' equity and comprehensive income.

The components of accumulated other comprehensive income (loss) attributable to GEO included in the consolidated statement of shareholders' equity are as follows:

	Six Months Ended June 30, 2013
	(In thousands)
	Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. [1]			Unrealized (loss)/gain on derivatives, net of tax			Pension adjustments, net of tax			Total
Beginning balance	$	5,755		$	(457	)	$	(2,628	)	$	2,670
Current-period other comprehensive (loss) income	(6,589		)	140			81			(6,368		)
Ending Balance	$	(834	)	$	(317	)	$	(2,547	)	$	(3,698	)

^[1] The foreign currency translation, net of tax, related to noncontrolling interests was not significant at June 30, 2013 or December 31, 2012, respectively.

XML

Business Segments and Geographic Information (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Pre-Tax Income Reconciliation of Segments
Total operating income from segments	$ 78,750	$ 79,070	$ 152,049	$ 146,153
Unallocated Amount:
General and Administrative Expenses	(27,363)	(26,129)	(59,403)	(52,715)
Net Interest Expense	(19,938)	(18,857)	(38,095)	(37,856)
Loss on extinguishment of debt	(5,527)	0	(5,527)	0
Income before income taxes, equity in earnings of affiliates and discontinued operations	$ 25,922	$ 34,084	$ 49,024	$ 55,582

XML

Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Changes in shareholders' equity that are attributable to the Company's shareholders and to noncontrolling interests

The following table presents the changes in shareholders’ equity that are attributable to the Company’s shareholders and to noncontrolling interests (in thousands):

	Common shares			Additional Paid-In			Earnings in Excess of			Accumulated Other Comprehensive			Treasury shares					Noncontrolling			Total Shareholders'
	Shares	Amount		Capital			Distributions			Income (Loss)			Shares		Amount			Interests			Equity
Balance, December 31, 2012	71,417	$	860	$	832,230		$	264,667		$	2,670		14,590		$	(53,615	)	$	492		$	1,047,304
Proceeds from exercise of stock options	234	2		4,080			—			—			—		—			—			4,082
Tax benefit related to equity compensation	—	—		1,308			—			—			—		—			—			1,308
Stock based compensation expense	—	—		705			—			—			—		—			—			705
Restricted stock granted	345	3		(3		)	—			—					—			—			—
Amortization of restricted stock	—	—		2,640			—			—			—		—			—			2,640
Dividends paid	—	—		—			(71,527		)	—			—		—			—			(71,527		)
Re-issuance of treasury shares (ESPP)	5	—		137			—			—			(5	)	18			—			155
Net income	—	—		—			57,627			—			—		—			30			57,657
Other comprehensive income (loss)	—	—		—			—			(6,368		)	—		—			(72		)	(6,440		)
Balance, June 30, 2013	72,001	$	865	$	841,097		$	250,767		$	(3,698	)	14,585		$	(53,597	)	$	450		$	1,035,884

Schedule of accumulated other comprehensive income (loss)

The components of accumulated other comprehensive income (loss) attributable to GEO included in the consolidated statement of shareholders' equity are as follows:

	Six Months Ended June 30, 2013
	(In thousands)
	Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. [1]			Unrealized (loss)/gain on derivatives, net of tax			Pension adjustments, net of tax			Total
Beginning balance	$	5,755		$	(457	)	$	(2,628	)	$	2,670
Current-period other comprehensive (loss) income	(6,589		)	140			81			(6,368		)
Ending Balance	$	(834	)	$	(317	)	$	(2,547	)	$	(3,698	)

^[1] The foreign currency translation, net of tax, related to noncontrolling interests was not significant at June 30, 2013 or December 31, 2012, respectively.

XML

Fair Value of Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jul. 01, 2012	Jan. 01, 2012
Assets:
Cash and cash equivalents	$ 38,511	$ 31,755	$ 68,316	$ 43,378
Liabilities:
Non-recourse debt, Australian subsidiary	111,482	123,482
Carrying Value [Member]
Assets:
Cash and cash equivalents	38,511	31,755
Restricted cash	39,489	34,949
Liabilities:
Borrowings under Senior Credit Facility	595,000	797,430
Carrying Value [Member] | 7.75% Senior Notes
Liabilities:
Senior Notes	247,756	247,543
Carrying Value [Member] | 6.625% Senior Notes
Liabilities:
Senior Notes	300,000	300,000
Carrying Value [Member] | 5.125% Senior Notes
Liabilities:
Senior Notes	300,000
Carrying Value [Member] | Other [Member]
Liabilities:
Other non-recourse debt, including current portion	83,665	88,650
Estimate of Fair Value [Member]
Assets:
Cash and cash equivalents	38,511	31,755
Restricted cash	39,489	34,949
Liabilities:
Borrowings under Senior Credit Facility	597,250	803,097
Estimate of Fair Value [Member] | 7.75% Senior Notes
Liabilities:
Senior Notes	262,345	270,313
Estimate of Fair Value [Member] | 6.625% Senior Notes
Liabilities:
Senior Notes	316,314	335,814
Estimate of Fair Value [Member] | 5.125% Senior Notes
Liabilities:
Senior Notes	288,375
Estimate of Fair Value [Member] | Other [Member]
Liabilities:
Other non-recourse debt, including current portion	86,639	91,345
Fair Value, Inputs, Level 1 [Member]
Assets:
Cash and cash equivalents	38,511	31,755
Restricted cash	39,489	34,949
Liabilities:
Borrowings under Senior Credit Facility	0	0
Fair Value, Inputs, Level 1 [Member] | 7.75% Senior Notes
Liabilities:
Senior Notes	0	0
Fair Value, Inputs, Level 1 [Member] | 6.625% Senior Notes
Liabilities:
Senior Notes	0	0
Fair Value, Inputs, Level 1 [Member] | 5.125% Senior Notes
Liabilities:
Senior Notes	0
Fair Value, Inputs, Level 1 [Member] | Other [Member]
Liabilities:
Other non-recourse debt, including current portion	0	0
Fair Value, Inputs, Level 2 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Liabilities:
Borrowings under Senior Credit Facility	597,250	803,097
Fair Value, Inputs, Level 2 [Member] | 7.75% Senior Notes
Liabilities:
Senior Notes	262,345	270,313
Fair Value, Inputs, Level 2 [Member] | 6.625% Senior Notes
Liabilities:
Senior Notes	316,314	335,814
Fair Value, Inputs, Level 2 [Member] | 5.125% Senior Notes
Liabilities:
Senior Notes	288,375
Fair Value, Inputs, Level 2 [Member] | Other [Member]
Liabilities:
Other non-recourse debt, including current portion	86,639	91,345
Fair Value, Inputs, Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Liabilities:
Borrowings under Senior Credit Facility	0	0
Fair Value, Inputs, Level 3 [Member] | 7.75% Senior Notes
Liabilities:
Senior Notes	0	0
Fair Value, Inputs, Level 3 [Member] | 6.625% Senior Notes
Liabilities:
Senior Notes	0	0
Fair Value, Inputs, Level 3 [Member] | 5.125% Senior Notes
Liabilities:
Senior Notes	0
Fair Value, Inputs, Level 3 [Member] | Other [Member]
Liabilities:
Other non-recourse debt, including current portion	0	0
Australian Subsidiary [Member] | Carrying Value [Member]
Liabilities:
Non-recourse debt, Australian subsidiary	27,817	34,832
Australian Subsidiary [Member] | Estimate of Fair Value [Member]
Liabilities:
Non-recourse debt, Australian subsidiary	28,531	34,973
Australian Subsidiary [Member] | Fair Value, Inputs, Level 1 [Member]
Liabilities:
Non-recourse debt, Australian subsidiary	0	0
Australian Subsidiary [Member] | Fair Value, Inputs, Level 2 [Member]
Liabilities:
Non-recourse debt, Australian subsidiary	28,531	34,973
Australian Subsidiary [Member] | Fair Value, Inputs, Level 3 [Member]
Liabilities:
Non-recourse debt, Australian subsidiary	$ 0	$ 0

XML

Discontinued Operations

6 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

The Company reports the results of operations of a component of an entity that either has been disposed of or is classified as held for sale or where the management contracts with that component have terminated, either by expiration or otherwise, in discontinued operations. The Company presents such events as discontinued operations so long as the financial results can be clearly identified, the future operations and cash flows are completely eliminated from ongoing operations, and so long as the Company does not have any significant continuing involvement in the operations of the component after the disposal or termination transaction.

When a component of an entity has been disposed of or classified as held for sale or a management contract is terminated, the Company looks at its overall relationship with the customer. If the operations or cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the transaction and the entity will not have significant continuing involvement in the operations of the component after the transaction, the results of operations of the component of an entity are reported in discontinued operations. If the Company will continue to maintain a relationship generating significant cash flows and having continuing involvement with the customer, the disposal, the asset held for sale classification or the loss of the management contract(s) is not treated as discontinued operations. If the disposal, the asset held for sale classification or the loss of the management contract(s) results in a loss in the overall customer relationship as no future significant cash flows will be generated and the Company will have no continuing involvement with the customer, the results are classified in discontinued operations.

Divestiture of RTS Operations

On December 31, 2012, the Company completed the divestiture of its RTS operating component, which was purchased by GEO Care Holdings LLC, an entity owned by certain current and former members of GEO's management team (the “MBO Group”). Cash proceeds received on December 31, 2012 from the divestiture amounted to $33.3 million, net of an initial working capital adjustment, subject to a final working capital adjustment determined within 105 days of the transaction closing date. The final working capital adjustment resulted in a net cash sale price of $32.3 million In accordance with the purchase agreement, the MBO Group would also be obligated to pay up to an additional $5.0 million in purchase price on a contingent earn-out basis if certain potential future contract awards are received by RTS. In addition, the purchase agreement provides for (i) a purchase price adjustment in favor of the MBO Group in the event certain client consents are not obtained within one year following the divestiture, and (ii) a purchase price adjustment in favor of the MBO Group if certain key contracts (as defined in the Purchase Agreement) are terminated up to one year following the divestiture. There were no amounts recorded under these earn-out provisions during the three or six months ended June 30, 2013.

In connection with the GEO Care divestiture, the Company and GEO Care Holdings LLC entered into a services agreement pursuant to which the Company will provide accounting support, information systems services, legal support services, risk management services, property management and design services and office space for a five-year term in return for an annual fee of $1.8 million payable in equal monthly installments (the “Services Agreement”). The Company and GEO Care Holdings LLC also executed a license agreement pursuant to which the Company granted to GEO Care Holdings LLC an exclusive license for a five-year term to use the GEO Care service mark and domain name in connection with the RTS business in return for an annual fee of $0.4 million payable in equal monthly installments (the “License Agreement”). In addition, the Company and GEO Care Holdings LLC entered into employment agreements with certain executive officers in order to allocate the services to be provided by the executive officers and related compensation and benefits between the Company and GEO Care Holdings LLC. During the three and six months ended June 30, 2013, the Company earned fees under the above noted Services Agreement and License Agreement amounting to an aggregate of $0.6 million and $1.2 million, respectively, which have been recorded as an offset to operating expenses in the accompanying consolidated statements of operations.

During the three months ended July 1, 2012, RTS had revenue and pre-tax income of $41.2 million and $3.5 million, respectively. During the six months ended July 1, 2012, RTS had revenue and pre-tax income of $82.4 million and $5.5 million, respectively. The operating results and cash flows of RTS for the three and six months ended July 1, 2012 have been retrospectively reflected as discontinued operations in the accompanying consolidated statements of operations and cash flows.

U.S. Corrections & Detention

On April 19, 2012, the Company announced its discontinuation of its managed-only contract with the State of Mississippi, Department of Corrections for the 1,500-bed East Mississippi Correctional Facility (“East Mississippi”) effective July 19, 2012. In connection with the discontinuation of East Mississippi, the Company has also discontinued all other management contracts with the State of Mississippi Department of Corrections (“MDOC”) including its managed-only contracts for the 1,000-bed Marshall County Correctional Facility effective August 13, 2012, and the 1,450-bed Walnut Grove Youth Correctional Facility effective July 1, 2012.

During the three months ended July 1, 2012, revenues and a pre-tax loss relating to the operations of MDOC were $11.2 million and $(0.9) million, respectively. During the six months ended July 1, 2012, RTS had revenue and a pre-tax loss of $22.3 million and $(0.9) million, respectively. The operating results and cash flows relating to the operations of MDOC for the three and six months ended July 1, 2012 are reflected as discontinued operations in the accompanying consolidated statements of operations and cash flows.

All income from discontinued operations included in the consolidated statements of operations is attributable to The GEO Group, Inc.

XML

Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

FAIR VALUE OF ASSETS AND LIABILITIES

The Company’s consolidated balance sheets reflect certain financial assets and liabilities at carrying value. The carrying value of certain debt instruments, if applicable, is net of unamortized discount. The following tables present the carrying values of those financial instruments and the estimated corresponding fair values at June 30, 2013 and December 31, 2012 (in thousands):

			Estimated Fair Value Measurements at June 30, 2013
	Carrying Value as of June 30, 2013		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	38,511	$	38,511	$	38,511	$	—	$	—
Restricted cash	39,489		39,489		39,489		—		—
Liabilities:
Borrowings under Senior Credit Facility	$	595,000	$	597,250	$	—	$	597,250	$	—
7¾% Senior Notes	247,756		262,345		—		262,345		—
6.625% Senior Notes	300,000		316,314		—		316,314		—
5.125% Senior Notes	300,000		288,375		—		288,375		—
Non-recourse debt, Australian subsidiary	27,817		28,531		—		28,531		—
Other non-recourse debt, including current portion	83,665		86,639		—		86,639		—

			Estimated Fair Value Measurements at December 31, 2012
	Carrying Value as of December 31, 2012		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	31,755	$	31,755	$	31,755	$	—	$	—
Restricted cash	34,949		34,949		34,949		—		—
Liabilities:
Borrowings under Senior Credit Facility	$	797,430	$	803,097	$	—	$	803,097	$	—
7¾% Senior Notes	247,543		270,313		—		270,313		—
6.625% Senior Notes	300,000		335,814		—		335,814		—
Non-recourse debt, Australian subsidiary	34,832		34,973		—		34,973		—
Other non-recourse debt, including current portion	88,650		91,345		—		91,345		—

The fair values of the Company’s cash and cash equivalents, and restricted cash approximates the carrying values of these assets at June 30, 2013 and December 31, 2012. Restricted cash consists of debt service funds used for payments on the Company’s non-recourse debt and rabbi trust funds. The fair values of the Company's 7¾% senior unsecured notes due 2017 (“7¾% Senior Notes”), 6.625% senior unsecured notes due 2021 (“6.625% Senior Notes”), and the 5.125% senior unsecured notes due 2023 ("5.125% Senior Notes"), although not actively traded, are based on published financial data for these instruments. The fair values of the Company's non-recourse debt related to South Texas Local Development Corporation ("STLDC") and Washington Economic Development Finance Authority ("WEDFA") are based on market prices for similar instruments. The fair value of the non-recourse debt related to the Company’s Australian subsidiary is estimated using a discounted cash flow model based on current Australian borrowing rates for similar instruments. The fair value of borrowings under the Senior Credit Facility is based on an estimate of trading value considering the Company’s borrowing rate, the undrawn spread and similar instruments.

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Restricted cash and investments, current	$ 15,646	[1]	$ 15,654	[1]
Allowance for doubtful accounts	2,163		2,546
Restricted cash and investments, non-current	37,748		32,756
Property and equipment, net	1,739,986		1,687,159
Current portion of capital lease obligations, long-term debt and non-recourse debt	22,341		53,882
Non-recourse debt	93,352		104,836
Preferred stock, par value	$ 0.01		$ 0.01
Preferred stock, shares authorized	30,000,000		30,000,000
Preferred stock, shares issued	0		0
Preferred stock, shares outstanding	0		0
Common stock, par value	$ 0.01		$ 0.01
Common stock, shares authorized	90,000,000		90,000,000
Common stock, shares issued	86,589,630		86,007,433
Common stock, shares outstanding	72,003,856		71,417,034
Treasury stock, shares	14,585,774		14,590,399
Variable Interest Entity, Primary Beneficiary
Restricted cash and investments, current	6,308		6,182
Restricted cash and investments, non-current	16,943		15,521
Property and equipment, net	25,544		25,840
Current portion of capital lease obligations, long-term debt and non-recourse debt	5,450		5,200
Non-recourse debt	$ 11,588		$ 16,997

[1] Variable interest entities or “VIEs”

XML

Variable Interest Entities And Investment In Affiliates (Details Textual)	1 Months Ended	6 Months Ended							6 Months Ended		1 Months Ended
	Feb. 28, 2011 director	Jun. 30, 2013 USD ($) bed	Dec. 31, 2012 USD ($)	Jun. 30, 2013 South Texas Detention Complex Carrying Value USD ($)	Jun. 30, 2013 Variable Interest Entity, Primary Beneficiary USD ($)	Dec. 31, 2012 Variable Interest Entity, Primary Beneficiary USD ($)	Jun. 30, 2013 Variable Interest Entity, Primary Beneficiary South Texas Detention Complex Carrying Value Subordinate Notes STLDC USD ($)	Dec. 31, 2012 Variable Interest Entity, Primary Beneficiary South Texas Detention Complex Carrying Value Subordinate Notes STLDC USD ($)	Jun. 30, 2013 South African Custodial Services Pty Limited USD ($)	Dec. 31, 2012 South African Custodial Services Pty Limited USD ($)	Feb. 28, 2011 Geo Amey GBP (£)	Jun. 30, 2013 Geo Amey USD ($)	Jun. 30, 2013 Geo Amey GBP (£)	Dec. 31, 2012 Geo Amey USD ($)	Feb. 02, 2012 Geo Amey GBP (£)
Variable Interest Entities (Textual) [Abstract]
Number of beds in detention Complex		1,904
Aggregate principal amount of taxable revenue bonds				$ 49,500,000
Term period of non-recourse bonds of the Company		10 years
Property and equipment, net		1,739,986,000	1,687,159,000		25,544,000	25,840,000	25,700,000	25,800,000
Ownership percentage in South African Custodial Services Pty. Limited		50.00%							50.00%
Life term of contract									25 years
Reduction of government guarantee in case of default		80.00%
Equity Method Investments									8,300,000	7,800,000		(4,400,000)		(4,100,000)
Not consolidated owned joint venture in United kingdom		50.00%
Issued share capital											100
Issued share capital divided in no. of share															100
Par value of share issued															£ 1
Directors appointed to board by each party	3
Lines of credit provided by GEO UK and Amey												18,300,000	12,000,000
Line of Credit Facility, Amount Outstanding												$ 18,400,000	£ 12,100,000

XML

Equity Incentive Plans (Details 1) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Summary of the activity of restricted stock
Restricted stock outstanding shares, Beginning Balance	670
Restricted stock outstanding Wtd. Avg. Grant Date Fair Value, Beginning Balance	$ 18.14
Granted shares	345
Granted Wtd. Avg. Grant Date Fair Value	$ 37.40
Vested shares	(131)
Vested Wtd. Avg. Grant Date Fair Value	$ 21.29
Forfeited/canceled shares	0
Forfeited/canceled Wtd. Avg. Grant Date Fair Value	$ 0.00
Restricted stock outstanding shares, Ending Balance	884
Restricted stock outstanding Wtd. Avg. Grant Date Fair Value, Ending Balance	$ 23.00

XML

Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Summary of Debt

Debt outstanding as of June 30, 2013 and December 31, 2012 consisted of the following (in thousands):

	June 30, 2013			December 31, 2012
Credit Facility:
Term loan	$	300,000		$	563,625
Unamortized discount on term loan	—			(1,195		)
Revolver	295,000			235,000
Total Senior Credit Facility	595,000			797,430
5.125% Senior Notes:
Notes due in 2023	300,000			—
6.625% Senior Notes:
Notes due in 2021	300,000			300,000
7 3/4% Senior Notes:
Notes due in 2017	250,000			250,000
Unamortized discount on Notes	(2,244		)	(2,457		)
Swap on Notes	4,599			6,212
Total 7 3/4% Senior Notes	252,355			253,755
Non-Recourse Debt :
Non-Recourse Debt	112,732			124,947
Unamortized discount on Non-Recourse Debt	(1,250		)	(1,465		)
Total Non-Recourse Debt	111,482			123,482
Capital Lease Obligations	12,422			12,994
Other debt	335			512
Total debt	1,571,594			1,488,173
Current portion of capital lease obligations, long-term debt and non-recourse debt	(22,341		)	(53,882		)
Capital Lease Obligations, long-term portion	(11,426		)	(11,926		)
Non-Recourse Debt	(93,352		)	(104,836		)
Long-Term Debt	$	1,444,475		$	1,317,529

Indebtedness under the revolver and the term loan A and term loan A -2 bears interest

Indebtedness under the Revolver bears interest based on the Total Leverage Ratio, as defined in the Credit Agreement, as of the most recent determination date, as defined, in each of the instances below at the stated rate:

LIBOR borrowings	LIBOR plus 1.75% to 2.75%.
Base rate borrowings	Prime Rate plus 0.75% to 1.75%.
Letters of credit	1.75% to 2.75%.
Unused Revolver	0.35% to 0.375%.

Debt Instrument Redemption

On or after April 1, 2018, the Company may, at its option, redeem all or a part of the 5.125% Senior Notes upon not less than 30 days nor more than 60 days' notice at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Liquidated Damages, if any, on the 5.125% Senior Notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below:

Year	Percentage
2018	102.563
2019	101.708
2020	100.854
2021 and thereafter	100.000

XML

Benefit Plans (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Benefit Plans (Textual) [Abstract]
Long-term portion of the pension liability	$ 20.3	$ 19.5

XML

Debt Summary of Redemption Percentages (Details) (Senior Unsecured Notes Due April 2023, Senior Notes)	Jun. 30, 2013
Senior Unsecured Notes Due April 2023 | Senior Notes
Debt Instrument Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage, 2018	102.563%
Debt Instrument, Redemption Price, Percentage, 2019	101.708%
Debt Instrument, Redemption Price, Percentage, 2020	100.854%
Debt Instrument, Redemption Price, Percentage, 2021 and thereafter	100.00%

XML

Debt

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt

DEBT

Debt outstanding as of June 30, 2013 and December 31, 2012 consisted of the following (in thousands):

	June 30, 2013			December 31, 2012
Credit Facility:
Term loan	$	300,000		$	563,625
Unamortized discount on term loan	—			(1,195		)
Revolver	295,000			235,000
Total Senior Credit Facility	595,000			797,430
5.125% Senior Notes:
Notes due in 2023	300,000			—
6.625% Senior Notes:
Notes due in 2021	300,000			300,000
7 3/4% Senior Notes:
Notes due in 2017	250,000			250,000
Unamortized discount on Notes	(2,244		)	(2,457		)
Swap on Notes	4,599			6,212
Total 7 3/4% Senior Notes	252,355			253,755
Non-Recourse Debt :
Non-Recourse Debt	112,732			124,947
Unamortized discount on Non-Recourse Debt	(1,250		)	(1,465		)
Total Non-Recourse Debt	111,482			123,482
Capital Lease Obligations	12,422			12,994
Other debt	335			512
Total debt	1,571,594			1,488,173
Current portion of capital lease obligations, long-term debt and non-recourse debt	(22,341		)	(53,882		)
Capital Lease Obligations, long-term portion	(11,426		)	(11,926		)
Non-Recourse Debt	(93,352		)	(104,836		)
Long-Term Debt	$	1,444,475		$	1,317,529

New Credit Agreement

On April 3, 2013, the Company terminated its Forth Amended and Restated Credit Agreement ("Prior Senior Credit Facility"), which consisted of a Term Loan A, Term Loan A-2, Term Loan A-3, Term Loan B ("Prior Term Loans) and a Revolver ("Prior Revolver"), and entered into a new credit agreement by and among GEO and GEO Corrections Holdings, Inc., as Borrowers, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”). The Credit Agreement consists of a $300 million Term Loan B (the “Term Loan B”) bearing interest at LIBOR plus 2.50% (with a LIBOR floor of 0.75%), and a $700 million revolving credit facility (the “Revolver”) currently bearing interest at LIBOR plus 2.50% (with no LIBOR floor). The Revolver component is scheduled to mature on April 3, 2018 and the Term Loan B component is scheduled to mature on April 3, 2020. The Term Loan B and Revolver may be prepaid in whole or in part by the Company at any time without premium or penalty, subject to certain conditions.

The Company has accounted for the termination of the Prior Term Loans component of its Prior Senior Credit Facility as an extinguishment of debt and has accounted for the termination of the Prior Revolver component of the Prior Senior Credit Facility based upon the borrowing capacity accounting guidance for modification of revolving credit arrangements. Loan costs of $10.2 million were incurred in connection with the Credit Agreement transaction, of which $1.1 million was expensed as incurred as this amount was associated with the extinguishment of the Prior Term Loan component, and $9.1 million has been capitalized as deferred financing fees and is included in Other Non-Current Assets in the accompanying consolidated balance sheet as of June 30, 2013, and will be amortized to interest expense using an effective interest method throughout the term of the Revolver or Term Loan B as applicable. In addition, the Company wrote off $1.1 million in unamortized debt discount and $3.3 million of unamortized deferred financing costs pertaining to the Prior Term Loans related to the termination of the Prior Senior Credit Facility. The remaining unamortized deferred financing fees pertaining to the Prior Revolver will be amortized to interest expense using an effective interest method throughout the term of the Revolver.

As of June 30, 2013, the Company had $300.0 million in aggregate borrowings outstanding under the Term Loan B, $295.0 million in borrowings under the Revolver, and approximately $58.2 million in letters of credit which left $346.8 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Credit Agreement as of June 30, 2013 was 3.0%.

Indebtedness under the Revolver bears interest based on the Total Leverage Ratio, as defined in the Credit Agreement, as of the most recent determination date, as defined, in each of the instances below at the stated rate:

LIBOR borrowings	LIBOR plus 1.75% to 2.75%.
Base rate borrowings	Prime Rate plus 0.75% to 1.75%.
Letters of credit	1.75% to 2.75%.
Unused Revolver	0.35% to 0.375%.

The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict the Company's ability to, among other things, (i) create, incur or assume indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio or senior secured leverage ratio to exceed certain maximum ratios or allow the interest coverage ratio to be less than a certain ratio, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes, (x) alter the business the Company conducts, and (xi) materially impair the Company's lenders' security interests in the collateral for its loans.

The Credit Agreement requires the Company to meet certain financial covenants as follows: (i) the Company must not exceed a Total Leverage Ratio (as defined) of 5.75 to 1.00; (ii) the Company must not exceed a Senior Secured Leverage Ratio (as defined) of 3.50 to 1.00; (iii) there is an Interest Coverage Ratio (as defined) under which the lenders will not permit a ratio of less than 3.00 to 1.00 relative to (a) Adjusted EBITDA for any period of four consecutive fiscal quarters to (b) Interest Expense, less that attributable to non-recourse debt of unrestricted subsidiaries.

Events of default under the Credit Agreement include, but are not limited to, (i) the Company's failure to pay principal or interest when due, (ii) the Company's material breach of any representations or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) material environmental liability claims which have been asserted against the Company, and (viii) a change in control. All of the obligations under the Credit Agreement are unconditionally guaranteed by certain of the Company's subsidiaries and secured by substantially all of the Company's present and future tangible and intangible assets and all present and future tangible and intangible assets of each guarantor, including but not limited to (i) a first-priority pledge of substantially all of the outstanding capital stock owned by the Company and each guarantor, and (ii) perfected first-priority security interests in substantially all of the Company's, and each guarantors, present and future tangible and intangible assets and the present and future tangible and intangible assets of each guarantor. The Company's failure to comply with any of the covenants under its Credit Agreement could cause an event of default under such documents and result in an acceleration of all outstanding senior secured indebtedness. The Company believes it was in compliance with all of the covenants of the Credit Agreement as of June 30, 2013.

5.125% Senior Notes

On March 19, 2013, the Company completed an offering of $300.0 million aggregate principal amount of senior unsecured notes. The notes will mature on April 1, 2023 and have a coupon rate and yield to maturity of 5.125%. Interest is payable semi-annually on April 1 and October 1 each year, beginning October 1, 2013. The 5.125% Senior Notes are guaranteed on a senior unsecured basis by all of the Company's restricted subsidiaries that guarantee obligations under the amended and restated Senior Credit Facility, the Company's 6.625% Senior Notes, and the Company's 7¾% Senior Notes. The 5.125% Senior Notes and the guarantees are the Company's general unsecured senior obligations and rank equally in right of payment with all of the Company's and the guarantors' existing and future unsecured senior debt, including the Company's 7¾% Senior Notes and 6.625% Senior Notes. The 5.125% Senior Notes and the guarantees are effectively subordinated to any of the Company's and the guarantors' existing and future secured debt to the extent of the value of the assets securing such debt, including all anticipated borrowings under the amended and restated Senior Credit Facility. The 5.125% Senior Notes are structurally subordinated to all existing and future liabilities (including trade payables) of the Company's subsidiaries that do not guarantee the 5.125% Senior Notes.

At any time on or prior to April 1, 2016, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of outstanding 5.125% Senior Notes issued under the indenture governing the 5.125% Senior Notes (including any additional notes) at a redemption price of 105.125% of their principal amount plus accrued and unpaid interest and Liquidated Damages (as defined in the indenture), if any, to the redemption date, with the net cash proceeds of one or more equity offerings (as defined in the indenture); provided, that: (1) at least 65% of the aggregate principal amount of notes issued under the indenture (including any additional notes) remains outstanding immediately after the occurrence of such redemption (excluding notes held by us and our Subsidiaries); and (2) the redemption occurs within 90 days of the date of the closing of such equity offering.

At any time prior to April 1, 2018, the Company may, at its option, redeem all or a part of the 5.125% Senior Notes upon not less than 30 days nor more than 60 days' prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) the Applicable Premium (as defined in the indenture) as of the date of redemption, plus (iii) accrued and unpaid interest and Liquidated Damages, if any, to the date of redemption. On or after April 1, 2018, the Company may, at its option, redeem all or a part of the 5.125% Senior Notes upon not less than 30 days nor more than 60 days' notice at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Liquidated Damages, if any, on the 5.125% Senior Notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below:

Year	Percentage
2018	102.563
2019	101.708
2020	100.854
2021 and thereafter	100.000

The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information). The Company believes it was in compliance with all of the covenants of the indenture as of June 30, 2013.

Under the terms of a registration rights agreement dated as of March 19, 2013, among GEO the guarantors and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the representative of the initial purchasers of the 5.125% Notes (the “Registration Rights Agreement”), GEO has agreed to register under the Securities Act notes having terms identical in all material respects to the 5.125% Notes (the “Exchange Notes”) and to make an offer to exchange the Exchange Notes for the 5.125% Notes. Pursuant to the terms of the Registration Rights Agreement GEO has agreed to file a registration statement with respect to an offer to exchange the Exchange Notes for the 5.125% Notes on or prior to 75 days after the closing of the offering of the 5.125% Notes and to use its reasonable best efforts to have the registration statement declared effective on or prior to 180 days after the closing of the offering of the 5.125% Notes. If GEO fails to satisfy certain filing and other obligations described in the Registration Rights Agreement, GEO will be obligated to pay additional interest of 0.25% per annum for the first 90-day period and an additional 0.25% per annum with respect to each subsequent 90-day period thereafter, until GEO's registration obligations are fulfilled, up to a maximum of 1.00% per annum. GEO filed the registration statement on May 30, 2013.

A portion of the proceeds received from the 5.125% Senior Notes were used on the date of financing to repay the Revolver loans outstanding under the Senior Credit Facility. As discussed above, on April 3, 2013, the Company's Senior Credit Facility was refinanced and a portion of the proceeds of the 5.125% Senior Notes were used to pay a portion of the outstanding term loans and a portion of the Revolver credit draws outstanding under the Senior Credit Facility.

7¾%Senior Notes

Interest on the 7¾% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on April 15 and October 15 of each year. On or after October 15, 2013, the Company may, at its option, redeem all or a part of the 7¾% Senior Notes at the redemption prices set forth in the indenture governing the 7¾% Senior Notes. The indenture contains certain covenants including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information). The Company believes it was in compliance with all of the covenants of the indenture as of June 30, 2013.

6.625% Senior Notes

Interest on the 6.625% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on February 15 and August 15 of each year. On or after February 15, 2016, the Company may, at its option, redeem all or part of the 6.625% Senior Notes at the redemption prices set forth in the indenture governing the 6.625% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information). The Company believes it was in compliance with all of the covenants of the indenture governing the 6.625% Senior Notes as of June 30, 2013.

Non-Recourse Debt

South Texas Detention Complex

As of June 30, 2013, the remaining balance of the debt service requirement under the STLDC financing agreement for the $49.5 million taxable revenue bonds maturing in February 2016 with fixed coupon rates between 4.63% and 5.07%, is $17.2 million, of which $5.5 million is due within the next twelve months. Also, as of June 30, 2013, included in current restricted cash and investments and non-current restricted cash and investments is $6.3 million and $16.9 million, respectively, of funds held in trust with respect to the STLDC for debt service and other reserves.

Northwest Detention Center

As of June 30, 2013, the remaining balance of the debt service requirement under the $57.0 million note payable ("2003 Revenue Bonds") and the $54.4 million note payable ("2011 Revenue Bonds") to the Washington Economic Finance Authority ("WEDFA") maturing in October 2014 and October 2021 with fixed coupon rates ranging from 4.10% to 5.25%, respectively, is $67.7 million, of which $6.5 million is classified as current in the accompanying consolidated balance sheet.

The payment of principal and interest on 2011 Revenue Bonds issued by WEDFA is non-recourse to GEO. None of the bonds nor CSC's obligations under the loan from WEDFA are obligations of GEO nor are they guaranteed by GEO.

As of June 30, 2013, included in current restricted cash and investments and non-current restricted cash and investments is $9.3 million and $4.1 million, respectively, of funds held in trust with respect to the Northwest Detention Center for debt service and other reserves.

Australia

The non-recourse obligations to the Company total $27.8 million (AUD 30.4 million) and $34.8 million (AUD 33.6 million), based on the exchange rates in effect at June 30, 2013 and December 31, 2012, respectively. The term of the non-recourse debt is through 2017 and it bears interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary are matched by a similar or corresponding commitment from the government of the State of Victoria. As a condition of the loan, the Company is required to maintain a restricted cash balance of AUD 5.0 million, which, based on exchange rates as of June 30, 2013, was $4.6 million. This amount is included in non-current restricted cash and investments and the annual maturities of the future debt obligation are included in Non-Recourse Debt.

Guarantees

In connection with the creation of SACS, the Company entered into certain guarantees related to the financing, construction and operation of the prison. As of June 30, 2013, the Company guaranteed obligations amounting to 34.8 million South African Rand, or $3.5 million based on exchange rates as of June 30, 2013. In the event SACS is unable to maintain the required funding in a rectification account maintained for the payment of certain costs in the event of contract termination, a previously existing guarantee by the Company for the shortfall will need to be re-instated. The remaining guarantee of 34.8 million South African Rand is secured by outstanding letters of credit under the Company's Revolver as of June 30, 2013.

In addition to the above, the Company has also agreed to provide a loan, if required, of up to 20 million South African Rand, or $2.0 million based on exchange rates as of June 30, 2013, referred to as the Shareholder's Loan, to SACS for the purpose of financing SACS’ obligations under its contract with the South African government. No amounts have been funded under the standby facility, and the Company does not currently anticipate that such funding will be required by SACS in the future. The Company’s obligations under the Shareholder's Loan expire upon the earlier of full funding or SACS’s release from its obligations under its debt agreements. The lenders’ ability to draw on the Shareholder's Loan is limited to certain circumstances, including termination of the contract.

The Company has also guaranteed certain obligations of SACS to the security trustee for SACS’ lenders. The Company secured its guarantee to the security trustee by ceding its rights to claims against SACS in respect of any loans or other finance agreements, and by pledging the Company’s shares in SACS. The Company’s liability under the guarantee is limited to the cession and pledge of shares. The guarantee expires upon expiration of the cession and pledge agreements.

In connection with a design, build, finance and maintenance contract for a facility in Canada, the Company guaranteed certain potential tax obligations of a trust. The potential estimated exposure of these obligations is Canadian Dollar (“CAD”) 2.5 million, or $2.4 million, based on exchange rates as of June 30, 2013, commencing in 2017. The Company has a liability of $2.2 million and $2.0 million related to this exposure included in Other Non-Current Liabilities as of June 30, 2013 and December 31, 2012, respectively. To secure this guarantee, the Company purchased Canadian dollar denominated securities with maturities matched to the estimated tax obligations in 2017 to 2021. The Company has recorded an asset equal to the current fair value of those securities included in Other Non-Current Assets as of June 30, 2013 and December 31, 2012, respectively, on its consolidated balance sheets. The Company does not currently operate or manage this facility.

At June 30, 2013, the Company also had eight letters of guarantee outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling $11.1 million.

In connection with the creation of GEOAmey, the Company and its joint venture partner guarantee the availability of working capital in equal proportion to ensure that GEOAmey can comply with current and future contractual commitments related to the performance of its operations. The Company and the 50% joint venture partner have each extended a £12 million line of credit of which £12.1 million, or $18.4 million based on exchange rates as of June 30, 2013, was outstanding as of June 30, 2013. The Company's maximum exposure relative to the joint venture is its note receivable of $18.4 million, including accrued interest of $0.2 million, and future financial support necessary to guarantee performance under the contract.

Except as discussed above, the Company does not have any off balance sheet arrangements.

XML

Earnings Per Share From Continuing Operations

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share From Continuing Operations

EARNINGS PER SHARE FROM CONTINUING OPERATIONS

Basic earnings per share is computed by dividing the income from continuing operations attributable to The GEO Group, Inc. shareholders by the weighted average number of outstanding shares of common stock. The calculation of diluted earnings per share is similar to that of basic earnings per share except that the denominator includes dilutive common stock equivalents such as stock options and shares of restricted stock. Basic and diluted earnings per share (“EPS”) from continuing operations were calculated for the three and six months ended June 30, 2013 and July 1, 2012 as follows (in thousands, except per share data):

	Three Months Ended					Six Months Ended
	June 30, 2013			July 1, 2012		June 30, 2013			July 1, 2012
Income from continuing operations	$	34,219		$	20,854	$	57,657		$	34,610
Net (income) loss attributable to noncontrolling interests	(12		)	25		(30		)	(9		)
Net income from continuing operations attributable to The GEO Group, Inc.	34,207			20,879		57,627			34,601
Basic earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding	71,083			60,839		70,967			60,803
Per share amount from continuing operations	$	0.48		$	0.34	$	0.81		$	0.57
Diluted earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding	71,083			60,839		70,967			60,803
Effect of dilutive securities: Stock options and restricted stock	524			227		543			181
Weighted average shares assuming dilution	71,607			61,066		71,510			60,984
Per share amount from continuing operations	$	0.48		$	0.34	$	0.81		$	0.57

Three Months

For the three months ended June 30, 2013no shares of common stock underlying options or shares of restricted stock were anti-dilutive.

For the three months ended July 1, 201257,937 weighted average shares of common stock underlying options and 1,642 shares of restricted stock were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

Six Months

For the six months ended June 30, 2013no shares of common stock underlying options or shares of restricted stock were anti-dilutive.

For the six months ended July 1, 2012112,428 weighted average shares of common stock underlying options and 1,584 shares of restricted stock were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

XML

Condensed Consolidating Financial Information (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Consolidated Statements of Income and Comprehensive Income [Abstract]
Revenues	$ 381,653	$ 371,173	$ 758,684	$ 731,215
Operating expenses	279,246	269,141	560,043	539,861
Depreciation and amortization	23,657	22,962	46,592	45,201
General and administrative expenses	27,363	26,129	59,403	52,715
Operating income	51,387	52,941	92,646	93,438
Interest income	1,165	1,761	2,349	3,568
Interest expense	(21,103)	(20,618)	(40,444)	(41,424)
Loss on extinguishment of debt	(5,527)	0	(5,527)	0
Income before income taxes, equity in earnings of affiliates and discontinued operations	25,922	34,084	49,024	55,582
Income Tax Expense (Benefit)	(7,268)	13,660	(6,387)	22,150
Equity in earnings of affiliates, net of income tax provision	1,029	430	2,246	1,178
Income from Continuing Operations before Equity in Income of Consolidated Subsidiaries	34,219	20,854	57,657	34,610
Equity in Income of Consolidated Subsidiaries	0	0	0	0
Income from continuing operations	34,219	20,854	57,657	34,610
Net income (loss) from discontinued operations	0	1,622	0	2,925
Net income attributable to noncontrolling interests	(12)	25	(30)	(9)
Net Income (Loss) Attributable to Parent	34,207	22,501	57,627	37,526
Net income	34,219	22,476	57,657	37,535
Other comprehensive income (loss)	(5,260)	(2,469)	(6,440)	(482)
Total comprehensive income	28,959	20,007	51,217	37,053
Comprehensive (income) loss attributable to noncontrolling interests	19	58	42	(4)
Comprehensive income attributable to The GEO Group, Inc.	28,978	20,065	51,259	37,049
The GEO Group Inc.
Consolidated Statements of Income and Comprehensive Income [Abstract]
Revenues	118,859	153,753	232,348	294,370
Operating expenses	102,108	130,454	201,518	261,460
Depreciation and amortization	5,875	7,389	11,697	14,244
General and administrative expenses	8,156	9,384	17,354	18,780
Operating income	2,720	6,526	1,779	(114)
Interest income	4,029	7,847	7,989	15,655
Interest expense	(10,373)	(16,837)	(20,292)	(33,754)
Loss on extinguishment of debt	(2,600)		(2,600)
Income before income taxes, equity in earnings of affiliates and discontinued operations	(6,224)	(2,464)	(13,124)	(18,213)
Income Tax Expense (Benefit)	(8,339)	(667)	(9,006)	(6,323)
Equity in earnings of affiliates, net of income tax provision	0	0	0	0
Income from Continuing Operations before Equity in Income of Consolidated Subsidiaries	2,115	(1,797)	(4,118)	(11,890)
Equity in Income of Consolidated Subsidiaries	32,104	22,651	61,775	46,500
Income from continuing operations	34,219	20,854	57,657	34,610
Net income (loss) from discontinued operations	0	1,622		2,925
Net income attributable to noncontrolling interests	0	0	0	0
Net Income (Loss) Attributable to Parent	34,219	22,476	57,657	37,535
Net income	34,219	22,476	57,657	37,535
Other comprehensive income (loss)	0	29	0	59
Total comprehensive income	34,219	22,505	57,657	37,594
Comprehensive (income) loss attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to The GEO Group, Inc.	34,219	22,505	57,657	37,594
Combined Subsidiary Guarantors [Member]
Consolidated Statements of Income and Comprehensive Income [Abstract]
Revenues	314,120	57,780	626,649	115,772
Operating expenses	239,194	46,009	479,671	90,811
Depreciation and amortization	16,556	2,140	32,438	4,272
General and administrative expenses	15,420	3,962	33,612	7,858
Operating income	42,950	5,669	80,928	12,831
Interest income	359	1,661	909	3,262
Interest expense	(12,708)	(3,996)	(24,139)	(8,068)
Loss on extinguishment of debt	(2,927)		(2,927)
Income before income taxes, equity in earnings of affiliates and discontinued operations	27,674	3,334	54,771	8,025
Income Tax Expense (Benefit)	226	1,467	632	3,301
Equity in earnings of affiliates, net of income tax provision	0	430	0	1,178
Income from Continuing Operations before Equity in Income of Consolidated Subsidiaries	27,448	2,297	54,139	5,902
Equity in Income of Consolidated Subsidiaries	0	0	0	0
Income from continuing operations	27,448	2,297	54,139	5,902
Net income (loss) from discontinued operations	0	233		553
Net income attributable to noncontrolling interests	0	25	0	(9)
Net Income (Loss) Attributable to Parent	27,448	2,555	54,139	6,446
Net income	27,448	2,530	54,139	6,455
Other comprehensive income (loss)	40	(2,498)	80	(541)
Total comprehensive income	27,488	32	54,219	5,914
Comprehensive (income) loss attributable to noncontrolling interests	0	58	0	(4)
Comprehensive income attributable to The GEO Group, Inc.	27,488	90	54,219	5,910
Combined Non-Guarantor Subsidiaries [Member]
Consolidated Statements of Income and Comprehensive Income [Abstract]
Revenues	55,585	177,301	112,970	361,488
Operating expenses	44,855	110,339	92,137	228,005
Depreciation and amortization	1,226	13,433	2,457	26,685
General and administrative expenses	3,787	12,783	8,437	26,077
Operating income	5,717	40,746	9,939	80,721
Interest income	1,123	394	2,219	886
Interest expense	(2,368)	(7,926)	(4,781)	(15,837)
Loss on extinguishment of debt	0		0
Income before income taxes, equity in earnings of affiliates and discontinued operations	4,472	33,214	7,377	65,770
Income Tax Expense (Benefit)	845	12,860	1,987	25,172
Equity in earnings of affiliates, net of income tax provision	1,029	0	2,246	0
Income from Continuing Operations before Equity in Income of Consolidated Subsidiaries	4,656	20,354	7,636	40,598
Equity in Income of Consolidated Subsidiaries	0	0	0	0
Income from continuing operations	4,656	20,354	7,636	40,598
Net income (loss) from discontinued operations	0	2,046		3,118
Net income attributable to noncontrolling interests	(12)	0	(30)	0
Net Income (Loss) Attributable to Parent	4,644	22,400	7,606	43,716
Net income	4,656	22,400	7,636	43,716
Other comprehensive income (loss)	(5,300)	0	(6,520)	0
Total comprehensive income	(644)	22,400	1,116	43,716
Comprehensive (income) loss attributable to noncontrolling interests	19	0	42	0
Comprehensive income attributable to The GEO Group, Inc.	(625)	22,400	1,158	43,716
Eliminations [Member]
Consolidated Statements of Income and Comprehensive Income [Abstract]
Revenues	(106,911)	(17,661)	(213,283)	(40,415)
Operating expenses	(106,911)	(17,661)	(213,283)	(40,415)
Depreciation and amortization	0	0	0	0
General and administrative expenses	0	0	0	0
Operating income	0	0	0	0
Interest income	(4,346)	(8,141)	(8,768)	(16,235)
Interest expense	4,346	8,141	8,768	16,235
Loss on extinguishment of debt	0		0
Income before income taxes, equity in earnings of affiliates and discontinued operations	0	0	0	0
Income Tax Expense (Benefit)	0	0	0	0
Equity in earnings of affiliates, net of income tax provision	0	0	0	0
Income from Continuing Operations before Equity in Income of Consolidated Subsidiaries	0	0	0	0
Equity in Income of Consolidated Subsidiaries	(32,104)	(22,651)	(61,775)	(46,500)
Income from continuing operations	(32,104)	(22,651)	(61,775)	(46,500)
Net income (loss) from discontinued operations	0	(2,279)		(3,671)
Net income attributable to noncontrolling interests	0	0		0
Net Income (Loss) Attributable to Parent	(32,104)	(24,930)	(61,775)	(50,171)
Net income	(32,104)	(24,930)	(61,775)	(50,171)
Other comprehensive income (loss)	0	0	0	0
Total comprehensive income	(32,104)	(24,930)	(61,775)	(50,171)
Comprehensive (income) loss attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to The GEO Group, Inc.	$ (32,104)	$ (24,930)	$ (61,775)	$ (50,171)

XML

Benefit Plans

6 Months Ended

Jun. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Benefit Plans

BENEFIT PLANS

The following table summarizes key information related to the Company’s pension plans and retirement agreements (in thousands):

	Six months ended June 30, 2013			Fiscal Year Ended December 31, 2012
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period	$	19,761		$	16,879
Service cost	462			774
Interest cost	415			787
Plan amendments	—			569
Actuarial loss	—			945
Benefits paid	(120		)	(193		)
Projected benefit obligation, end of period	$	20,518		$	19,761
Change in Plan Assets
Plan assets at fair value, beginning of period	$	—		$	—
Company contributions	120			193
Benefits paid	(120		)	(193		)
Plan assets at fair value, end of period	$	—		$	—
Unfunded Status of the Plan	$	(20,518	)	$	(19,761	)

	Three Months Ended				Six Months Ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Components of Net Periodic Benefit Cost
Service cost	$	231	$	193	$	462	$	387
Interest cost	207		197		415		393
Net loss	66		48		131		97
Net periodic pension cost	$	504	$	438	$	1,008	$	877

The long-term portion of the pension liability as of June 30, 2013 and December 31, 2012 was $20.3 million and $19.5 million, respectively, and is included in Other Non-Current Liabilities in the accompanying consolidated balance sheets.

XML

Commitments, Contingencies And Other Tax Matters

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Other Tax Matters

COMMITMENTS, CONTINGENCIES AND OTHER TAX MATTERS

Litigation, Claims and Assessments

In June 2004, the Company received notice of a third-party claim for property damage incurred during 2001 and 2002 at several detention facilities formerly operated by its Australian subsidiary. The claim relates to property damage caused by detainees at the detention facilities. The notice was given by the Australian government's insurance provider and did not specify the amount of damages being sought. In August 2007, a lawsuit (Commonwealth of Australia v. Australasian Correctional Services PTY, Limited No. SC 656) was filed against the Company in the Supreme Court of the Australian Capital Territory seeking damages of up to approximately AUD 18 million or $16.5 million based on exchange rates as of June 30, 2013, plus interest. The pre-judgment interest rate in Australia is currently 7.00%. The Company had established a reserve based on its estimate of the most probable loss based on the facts and circumstances known to date and the advice of legal counsel in connection with this matter. In May 2013, the case was settled. The settlement was within the Company's reserves and did not have a material impact on the Company's consolidated balance sheet or results of operations as of and for the three and six months ended June 30, 2013.

The nature of the Company's business exposes it to various types of third-party legal claims or litigation against the Company, including, but not limited to, civil rights claims relating to conditions of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, medical malpractice claims, product liability claims, intellectual property infringement claims, claims relating to employment matters (including, but not limited to, employment discrimination claims, union grievances and wage and hour claims), property loss claims, environmental claims, automobile liability claims, indemnification claims by its customers and other third parties, contractual claims and claims for personal injury or other damages resulting from contact with the Company's facilities, programs, electronic monitoring products, personnel or prisoners, including damages arising from a prisoner's escape or from a disturbance or riot at a facility. The Company does not expect the outcome of any pending claims or legal proceedings to have a material adverse effect on its financial condition, results of operations or cash flows.

Construction Commitments

The Company currently has contractual commitments for a number of projects using Company financing. The Company’s management estimates that the cost of these existing capital projects will range from $31.0 million to $35.0 million of which $24.0 million was spent through the second quarter of 2013. The Company estimates the remaining capital requirements related to these capital projects will range from $7.0 million to $11.0 million which will be spent through fiscal year 2013. Capital expenditures related to facility maintenance costs are expected to range between $30.0 million and $35.0 million for fiscal year 2013.

Facility Purchase

On May 7, 2013, the Company executed a definitive agreement for the purchase of the land, buildings and improvements, and tangible personal property and fixtures of the 1,287 bed Joe Corley Detention Center (the "Center") located in Montgomery County, Texas for a purchase price of approximately $65.0 million. The Center was previously managed by the Company under a managed-only contract with Montgomery County and will continue to house federal detainees for U.S. Immigration and Customs Enforcement and the U.S. Marshals Service under an Intergovernmental Services Agreement. The transaction closed on June 7, 2013.

Employment Agreement

On April 29, 2013, GEO and Mr. George C. Zoley, the Company's Chief Executive Officer, entered into the First Amendment to Third Amended and Restated Executive Employment Agreement (the “Amendment”). The Amendment modifies Mr. Zoley’s employment agreement by eliminating the automatic cost of living increase applicable to his annual base salary and instead provides that his annual base salary may be increased in the sole discretion of the Board for cost of living increases to be determined by the Board. Additionally, the Amendment modifies the termination payment Mr. Zoley would receive in the event of a termination of employment other than a termination by GEO for cause (as defined in the Third Amended and Restated Executive Employment Agreement) or a termination by Mr. Zoley without good reason (as defined in the Third Amended and Restated Executive Employment Agreement) from three times the amount of Mr. Zoley’s base salary plus annual bonus to two times the amount of Mr. Zoley’s base salary plus annual bonus.

On May 29, 2013, the Company and the Chief Executive Officer entered into the Second Amendment to Third Amended and Restated Executive Employment Agreement (the "Amendment"). The Amendment modifies the Chief Executive Officer's employment agreement by decreasing the maximum target annual performance award he may receive from 150% of his annual base salary to 100% of his annual base salary.

Idle Facilities

The Company is currently marketing approximately 6,000 vacant beds at seven of its idle facilities to potential customers. The carrying values of these idle facilities, which are included in Property and Equipment, Net and Assets Held for Sale in the consolidated balance sheets, totaled $237.3 million as of June 30, 2013, excluding equipment and other assets that can be easily transferred for use at other facilities.

Other Tax Matters

• As a result of the REIT conversion as more fully discussed in Note 1 - Basis of Presentation, the Company reorganized its operations and moved non-real estate components into TRS. The TRS structure requires the provisions of services between affiliated companies which are conducted at arm's length subject to applicable tax law and promulgated tax regulations. The Company has, with the assistance of its tax advisors, undertaken substantial analysis to determine and document the appropriateness of the arm's length compensation used in compliance with such tax rules which is reviewed on a periodic basis.

• During 2013 GEO had a tax benefit relating to its REIT conversion as well as a net release of tax reserves primarily due to the settlement of IRS audit years 2010 and 2011, partially offset by an initial reserve for uncertain tax positions relating to the REIT conversion.  Together these items had a favorable impact to the effective tax rate and resulted in a tax benefit of $7.3 million and $6.4 million for the three months and six months ended June 30, 2013, respectively.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 06, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	GEO GROUP INC
Entity Central Index Key	0000923796
Document Type	10-Q
Trading Symbol	GEO
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		72,000,856

XML

Business Segments and Geographic Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Business Segments and Geographic Information

BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the U.S. Corrections & Detention segment; the GEO Community Services segment; the International Services segment; and the Facility Construction & Design segment. The Facility Construction & Design segment did not have any operating activity during the 2013 and 2012 periods presented. The GEO Community Services segment was previously referred to as the GEO Care segment but was renamed concurrent with the divestiture of RTS. The U.S. Corrections and Detention and the GEO Community Services segments have been retroactively reclassified during the three and six months ended July 1, 2012 for the results of discontinued operations. Refer to Note 8 - Discontinued Operations. In addition, the Company has reclassified the results of it's operations in Canada to the International Services segment for all periods presented. Canada's results, which were previously included in the U.S. Corrections & Detention segment, were not significant during 2013 or 2012. 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, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Revenues:
U.S. Corrections & Detention	$	254,043	$	245,916	$	502,815	$	480,710
GEO Community Services	75,072		72,767		149,013		145,025
International Services	52,538		52,490		106,856		105,480
Total revenues	$	381,653	$	371,173	$	758,684	$	731,215
Operating income:
U.S. Corrections & Detention	$	56,631	$	59,762	$	110,723	$	106,861
GEO Community Services	18,854		17,093		36,259		33,342
International Services	3,265		2,215		5,067		5,950
Operating income from segments	$	78,750	$	79,070	$	152,049	$	146,153

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, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Total operating income from segments	$	78,750		$	79,070		$	152,049		$	146,153
Unallocated amounts:
General and Administrative Expenses	(27,363		)	(26,129		)	(59,403		)	(52,715		)
Net Interest Expense	(19,938		)	(18,857		)	(38,095		)	(37,856		)
Loss on Extinguishment of Debt	(5,527		)	—			(5,527		)	—
Income before income taxes and equity in earnings of affiliates, and discontinued operations	$	25,922		$	34,084		$	49,024		$	55,582

Equity in Earnings of Affiliates

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in SACS, located in South Africa, and GEOAmey, located in the United Kingdom. Our 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 $1.3 million and $2.5 million in earnings, net of tax, for SACS operations during the three months and six months ended June 30, 2013, respectively, and $1.3 million and $2.6 million in earnings, net of tax, during the three months and six months ended July 1, 2012, respectively. SACS earnings are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2013 and December 31, 2012, the Company’s investment in SACS was $8.3 million and $7.8 million, respectively.

The Company has recorded $0.2 million and $0.3 million in losses, net of tax, for GEOAmey’s operations during the three months and six months ended June 30, 2013, respectively, and $0.9 million and $1.4 million in losses, net of tax, during both the three months and six months ended July 1, 2012, respectively. GEOAmey's earnings are included in equity in earnings of affiliates, net of income tax provision, in the accompanying consolidated statements of operations. As of June 30, 2013 and December 31, 2012, the Company’s investment in GEOAmey was $(4.4) million and $(4.1) million, respectively, and represents its share of cumulative reported losses. Losses in excess of the Company's investment have been recognized as the Company has provided certain loans and guarantees to provide financial support to GEOAmey (Refer to Note 11-Debt.)

XML

Business Segments and Geographic Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jul. 01, 2012	Jun. 30, 2013	Jul. 01, 2012
Revenues:
Revenues	$ 381,653	$ 371,173	$ 758,684	$ 731,215
Operating Income:
Total operating income from segments	78,750	79,070	152,049	146,153
U.S. Corrections & Detention
Revenues:
Revenues	254,043	245,916	502,815	480,710
Operating Income:
Total operating income from segments	56,631	59,762	110,723	106,861
GEO Community Services
Revenues:
Revenues	75,072	72,767	149,013	145,025
Operating Income:
Total operating income from segments	18,854	17,093	36,259	33,342
International Services
Revenues:
Revenues	52,538	52,490	106,856	105,480
Operating Income:
Total operating income from segments	$ 3,265	$ 2,215	$ 5,067	$ 5,950

XML

Commitments, Contingencies And Other Tax Matters (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2013 USD ($) Bed facility	Jul. 01, 2012 USD ($)	Jun. 30, 2013 USD ($) Bed facility	Jun. 30, 2013 AUD	Jul. 01, 2012 USD ($)	Jun. 30, 2013 Minimum USD ($)	Jun. 30, 2013 Maximum USD ($)	May 07, 2013 Joe Corley Detention Center [Member] USD ($) bed	Jun. 30, 2013 Chief Executive Officer [Member]	May 29, 2013 Chief Executive Officer [Member]
Commitments and Contingencies (Textual) [Abstract]
Claims against the company related to property damages including interest			$ 16,500,000	18,000,000
Pre-judgment interest rate	7.00%		7.00%	7.00%
Estimated construction capital project cost						31,000,000	35,000,000
Cost already spent on existing capital projects			24,000,000
Remaining capital required for capital projects						7,000,000	11,000,000
Capital expenditure related to facility maintenance cost minimum range			30,000,000
Capital expenditure related to facility maintenance cost maximum range			35,000,000
Number of beds	72,000		72,000	72,000				1,287
Business Acquisition, Cost of Acquired Entity, Purchase Price								65,000,000
Maximum Performance Award as Percent of Annual Base Salary									100.00%	150.00%
Number of vacant beds at idle facilities marketed to potential customers	6,000		6,000	6,000
Number of marketed idle facilities	7		7	7
Carrying values of idle facilities marketed to potential customers	237,300,000		237,300,000
Income tax (benefit) provision	$ (7,268,000)	$ 13,660,000	$ (6,387,000)		$ 22,150,000