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.)