CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)



	For the Three Months Ended June 30, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	139,083		$	327,427		$	56,760		$	(110,427	)	$	412,843
Operating expenses	111,191			251,833			47,461			(110,427		)	300,058
Depreciation and amortization	6,441			16,169			1,138			—			23,748
General and administrative expenses	9,082			15,355			3,711			—			28,148
Operating income	12,369			44,070			4,450			—			60,889
Interest income	5,079			615			750			(5,620		)	824
Interest expense	(11,123		)	(13,357		)	(1,742		)	5,620			(20,602		)
Income before income taxes and equity in earnings of affiliates	6,325			31,328			3,458			—			41,111
Income tax provision	—			2,671			716			—			3,387
Equity in earnings of affiliates, net of income tax provision	—			—			1,174			—			1,174
Income before equity in income of consolidated subsidiaries	6,325			28,657			3,916			—			38,898
Income from consolidated subsidiaries, net of income tax provision	32,573			—			—			(32,573		)	—
Net income attributable to The GEO Group, Inc.	$	38,898		$	28,657		$	3,916		$	(32,573	)	$	38,898

Net income	$	38,898		$	28,657		$	3,916		$	(32,573	)	$	38,898
Other comprehensive income, net of tax	—			20			621			—			641
Total comprehensive income	$	38,898		$	28,677		$	4,537		$	(32,573	)	$	39,539
Comprehensive loss attributable to noncontrolling interests	—			—			5			—			5
Comprehensive income attributable to The GEO Group, Inc.	$	38,898		$	28,677		$	4,542		$	(32,573	)	$	39,544

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	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 early 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 before equity in income of consolidated subsidiaries	2,115			27,448			4,656			—			34,219
Income from consolidated subsidiaries, net of income tax provision (benefit)	32,104			—			—			(32,104		)	—
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 Six Months Ended June 30, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations				Consolidated
Revenues	$	273,837		$	642,412		$	109,091		$	(219,360	)		$	805,980
Operating expenses	218,413			502,513			90,415			(219,360		)		591,981
Depreciation and amortization	12,847			32,803			2,240			—				47,890
General and administrative expenses	18,421			30,891			7,338			—				56,650
Operating income	24,156			76,205			9,098			—				109,459
Interest income	10,615			1,051			1,429			(11,539		)		1,556
Interest expense	(22,197		)	(27,121		)	(3,475		)	11,539				(41,254		)
Income before income taxes and equity in earnings of affiliates	12,574			50,135			7,052			—				69,761
Income tax provision	—			3,965			1,560			—				5,525
Equity in earnings of affiliates, net of income tax provision	—			—			2,658			—			2,246	2,658
Income before equity in income of consolidated subsidiaries	12,574			46,170			8,150			—				66,894
Income from consolidated subsidiaries, net of income tax provision	54,320			—			—			(54,320		)		—
Net income	66,894			46,170			8,150			(54,320		)		66,894
Net income attributable to noncontrolling interests	—			—			(6		)	—				(6		)
Net income attributable to The GEO Group, Inc.	$	66,894		$	46,170		$	8,144		$	(54,320	)		$	66,888

Net income	$	66,894		$	46,170		$	8,150		$	(54,320	)		$	66,894
Other comprehensive income, net of tax	—			39			1,644			—				1,683
Total comprehensive income	$	66,894		$	46,209		$	9,794		$	(54,320	)		$	68,577
Comprehensive loss attributable to noncontrolling interests	—			—			2			—				2
Comprehensive income attributable to The GEO Group, Inc.	$	66,894		$	46,209		$	9,796		$	(54,320	)		$	68,579

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	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 early 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 before equity in income of consolidated subsidiaries	(4,118		)	54,139			7,636			—			57,657
Income from consolidated subsidiaries, net of income tax provision (benefit)	61,775			—			—			(61,775		)	—
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 BALANCE SHEET

(dollars in thousands)

(unaudited)



	As of June 30, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated

ASSETS
Cash and cash equivalents	$	1,184		$	2,919	$	33,257	$	—		$	37,360
Restricted cash and investments	—			—		14,448		—			14,448
Accounts receivable, less allowance for doubtful accounts	96,897			156,652		17,416		—			270,965
Current deferred income tax assets	—			19,236		1,700		—			20,936
Prepaid expenses and other current assets	8,941			16,419		15,791		(1,153		)	39,998
Total current assets	107,022			195,226		82,612		(1,153		)	383,707
Restricted Cash and Investments	207			13,242		11,331		—			24,780
Property and Equipment, Net	697,383			955,715		84,259		—			1,737,357
Direct Finance Lease Receivable	—			—		14,361		—			14,361
Intercompany Receivable	936,036			123,557		—		(1,059,593		)	—
Non-Current Deferred Income Tax Assets	—			—		4,821		—			4,821
Goodwill	34			493,368		693		—			494,095
Intangible Assets, Net	—			161,807		1,184		—			162,991
Investment in Subsidiaries	904,438			413,223		4		(1,317,665		)	—
Other Non-Current Assets	20,250			104,920		37,881		(79,780		)	83,271
Total Assets	$	2,665,370		$	2,461,058	$	237,146	$	(2,458,191	)	$	2,905,383

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	6,298		$	47,180	$	2,989	$	—		$	56,467
Accrued payroll and related taxes	208			21,874		17,725		—			39,807
Accrued expenses and other	40,785			70,188		18,020		(1,154		)	127,839
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000			1,138		18,699		—			22,837
Total current liabilities	50,291			140,380		57,433		(1,154		)	246,950
Non-Current Deferred Income Tax Liabilities	(2,451		)	17,123		17		—			14,689
Intercompany Payable	113,918			931,296		14,379		(1,059,593		)	—
Other Non-Current Liabilities	4,960			139,649		5,603		(79,870		)	70,342
Capital Lease Obligations	—			10,401		—		—			10,401
Long-Term Debt	1,479,027			—		—		—			1,479,027
Non-Recourse Debt	—			—		63,894		—			63,894
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,019,625			1,222,209		95,364		(1,317,574		)	1,019,624
Noncontrolling Interests	—			—		456		—			456
Total Shareholders’ Equity	1,019,625			1,222,209		95,820		(1,317,574		)	1,020,080
Total Liabilities and Shareholders' Equity	$	2,665,370		$	2,461,058	$	237,146	$	(2,458,191	)	$	2,905,383

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)



	As of December 31, 2013
	The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated

ASSETS
Cash and cash equivalents	$	30,730		$	985	$	20,410	$	—		$	52,125
Restricted cash and investments	—			—		11,518		—			11,518
Accounts receivable, less allowance for doubtful accounts	84,087			149,239		17,204		—			250,530
Current deferred income tax assets	—			19,236		1,700		—			20,936
Prepaid expenses and other current assets	17,834			21,032		11,524		(1,154		)	49,236
Total current assets	132,651			190,492		62,356		(1,154		)	384,345
Restricted Cash and Investments	167			11,158		7,024		—			18,349
Property and Equipment, Net	686,005			956,724		85,069		—			1,727,798
Direct Finance Lease Receivable	—			—		16,944		—			16,944
Intercompany Receivable	947,916			123,237		—		(1,071,153		)	—
Non-Current Deferred Income Tax Assets	—			—		4,821		—			4,821
Goodwill	34			489,501		661		—			490,196
Intangible Assets, Net	—			162,160		1,240		—			163,400
Investment in Subsidiaries	898,333			421,218		—		(1,319,551		)	—
Other Non-Current Assets	23,346			104,241		35,615		(79,691		)	83,511
Total Assets	$	2,688,452		$	2,458,731	$	213,730	$	(2,471,549	)	$	2,889,364

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	29,866		$	13,895	$	3,525	$	—		$	47,286
Accrued payroll and related taxes	207			23,470		15,049		—			38,726
Accrued expenses and other	26,963			74,645		14,496		(1,154		)	114,950
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000			1,185		17,978		—			22,163
Total current liabilities	60,036			113,195		51,048		(1,154		)	223,125
Non-Current Deferred Income Tax Liabilities	(120		)	14,792		17		—			14,689
Intercompany Payable	114,208			942,666		14,279		(1,071,153		)	—
Other Non-Current Liabilities	5,270			138,743		639		(79,691		)	64,961
Capital Lease Obligations	—			10,924		—		—			10,924
Long-Term Debt	1,485,536			—		—		—			1,485,536
Non-Recourse Debt	—			—		66,153		—			66,153
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,023,522			1,238,411		81,140		(1,319,551		)	1,023,522
Noncontrolling Interests	—			—		454		—			454
Total Shareholders’ Equity	1,023,522			1,238,411		81,594		(1,319,551		)	1,023,976
Total Liabilities and Shareholders' Equity	$	2,688,452		$	2,458,731	$	213,730	$	(2,471,549	)	$	2,889,364

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)



	For the Six Months Ended June 30, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	76,863		$	33,090		$	22,191		$	132,144
Cash Flow from Investing Activities:
Acquisition of Protocol, cash consideration	—			(13,000		)	—			(13,000		)
Proceeds from sale of property and equipment	—			514			—			514
Change in restricted cash and investments	(207		)	(1,917		)	(6,812		)	(8,936		)
Capital expenditures	(24,197		)	(16,671		)	(254		)	(41,122		)
Net cash used in investing activities	(24,404		)	(31,074		)	(7,066		)	(62,544		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	9,000			—			—			9,000
Payments on long-term debt	(14,000		)	(82		)	(3,097		)	(17,179		)
Indirect repurchases of treasury shares	(1,416		)	—			—			(1,416		)
Proceeds from reissuance of treasury stock in connection with ESPP	185			—			—			185
Tax benefit related to equity compensation	1,351			—			—			1,351
Proceeds from stock options exercised	5,531			—			—			5,531
Cash dividends paid	(82,656		)	—			—			(82,656		)
Net cash used in financing activities	(82,005		)	(82		)	(3,097		)	(85,184		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			819			819
Net Increase (Decrease) in Cash and Cash Equivalents	(29,546		)	1,934			12,847			(14,765		)
Cash and Cash Equivalents, beginning of period	30,730			985			20,410			52,125
Cash and Cash Equivalents, end of period	$	1,184		$	2,919		$	33,257		$	37,360

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
Tax benefit related to 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 stock options exercised	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 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