CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)



	For the Three Months Ended March 31, 2015
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	144,383		$	339,887		$	64,967		$	(121,868	)	$	427,369
Operating expenses	116,225			268,781			54,771			(121,868		)	317,909
Depreciation and amortization	6,203			17,697			1,040			—			24,940
General and administrative expenses	10,323			16,880			4,645			—			31,848
Operating income	11,632			36,529			4,511			—			52,672
Interest income	6,178			1,231			2,137			(7,473		)	2,073
Interest expense	(14,310		)	(14,636		)	(3,173		)	7,473			(24,646		)
Income before income taxes and equity in earnings of affiliates	3,500			23,124			3,475			—			30,099
Income tax provision	—			1,740			1,088			—			2,828
Equity in earnings of affiliates, net of income tax provision	—			—			1,485			—			1,485
Income before equity in income of consolidated subsidiaries	3,500			21,384			3,872			—			28,756
Income from consolidated subsidiaries, net of income tax provision	25,256			—			—			(25,256		)	—
Net income	28,756			21,384			3,872			(25,256		)	28,756
Net loss attributable to noncontrolling interests	—			—			21						21
Net income attributable to The GEO Group, Inc.	$	28,756		$	21,384		$	3,893		$	(25,256	)	$	28,777

Net income	$	28,756		$	21,384		$	3,872		$	(25,256	)	$	28,756
Other comprehensive income (loss), net of tax	—			40			(5,761		)	—			(5,721		)
Total comprehensive income (loss)	$	28,756		$	21,424		$	(1,889	)	$	(25,256	)	$	23,035
Comprehensive loss attributable to noncontrolling interests	—			—			37			—			37
Comprehensive income (loss) attributable to The GEO Group, Inc.	$	28,756		$	21,424		$	(1,852	)	$	(25,256	)	$	23,072

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)



	For the Three Months Ended March 31, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	134,754		$	314,985		$	52,331		$	(108,933	)	$	393,137
Operating expenses	107,222			250,680			42,954			(108,933		)	291,923
Depreciation and amortization	6,406			16,634			1,102			—			24,142
General and administrative expenses	9,339			15,536			3,627			—			28,502
Operating income	11,787			32,135			4,648			—			48,570
Interest income	5,536			436			679			(5,919		)	732
Interest expense	(11,074		)	(13,763		)	(1,734		)	5,919			(20,652		)
Income before income taxes and equity in earnings of affiliates	6,249			18,808			3,593			—			28,650
Income tax provision	—			1,294			844			—			2,138
Equity in earnings of affiliates, net of income tax provision	—			—			1,484			—			1,484
Income before equity in income of consolidated subsidiaries	6,249			17,514			4,233			—			27,996
Income from consolidated subsidiaries, net of income tax provision	21,747			—			—			(21,747		)	—
Net income	27,996			17,514			4,233			(21,747		)	27,996
Net income attributable to noncontrolling interests	—			—			(6		)	—			(6		)
Net income attributable to The GEO Group, Inc.	$	27,996		$	17,514		$	4,227		$	(21,747	)	$	27,990

Net income	$	27,996		$	17,514		$	4,233		$	(21,747	)	$	27,996
Other comprehensive income, net of tax	—			19			1,027			—			1,046
Total comprehensive income	$	27,996		$	17,533		$	5,260		$	(21,747	)	$	29,042
Comprehensive loss attributable to noncontrolling interests	—			—			(2		)	—			(2		)
Comprehensive income attributable to The GEO Group, Inc.	$	27,996		$	17,533		$	5,258		$	(21,747	)	$	29,040

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)



	As of March 31, 2015
	The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated

ASSETS
Cash and cash equivalents	$	12,962		$	12,433	$	43,586	$	—		$	68,981
Restricted cash and investments	—			—		8,489		—			8,489
Accounts receivable, less allowance for doubtful accounts	97,109			150,561		13,610		—			261,280
Current deferred income tax assets	—			21,657		4,227		—			25,884
Prepaid expenses and other current assets	5,545			21,853		18,176		(1,154		)	44,420
Total current assets	115,616			206,504		88,088		(1,154		)	409,054
Restricted Cash and Investments	126			15,175		7,916		—			23,217
Property and Equipment, Net	738,622			1,085,096		83,345		—			1,907,063
Contract Receivable	—			—		87,042		—			87,042
Direct Finance Lease Receivable	—			—		7,077		—			7,077
Intercompany Receivable	963,417			138,933		—		(1,102,350		)	—
Non-Current Deferred Income Tax Assets	—			—		5,873		—			5,873
Goodwill	34			600,731		440		—			601,205
Intangible Assets, Net	—			223,194		977		—			224,171
Investment in Subsidiaries	1,146,712			238,847		—		(1,385,559		)	—
Other Non-Current Assets	24,635			111,702		46,957		(80,075		)	103,219
Total Assets	$	2,989,162		$	2,620,182	$	327,715	$	(2,569,138	)	$	3,367,921

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	8,471		$	49,757	$	2,307	$	—		$	60,535
Accrued payroll and related taxes	—			42,159		13,692		—			55,851
Accrued expenses and other	41,609			67,228		28,138		(1,154		)	135,821
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,001			1,241		12,406		—			16,648
Total current liabilities	53,081			160,385		56,543		(1,154		)	268,855
Non-Current Deferred Income Tax Liabilities	(4,351		)	14,414		5		—			10,068
Intercompany Payable	114,710			971,134		16,506		(1,102,350		)	—
Other Non-Current Liabilities	4,301			142,741		32,699		(80,075		)	99,666
Capital Lease Obligations	—			9,574		—		—			9,574
Long-Term Debt	1,795,267			—		—		—			1,795,267
Non-Recourse Debt	—			—		158,060		—			158,060
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,026,154			1,321,934		63,625		(1,385,559		)	1,026,154
Noncontrolling Interests	—			—		277		—			277
Total Shareholders’ Equity	1,026,154			1,321,934		63,902		(1,385,559		)	1,026,431
Total Liabilities and Shareholders' Equity	$	2,989,162		$	2,620,182	$	327,715	$	(2,569,138	)	$	3,367,921

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)



	As of December 31, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated

ASSETS
Cash and cash equivalents	$	18,492		$	782	$	22,063		$	—		$	41,337
Restricted cash and investments	—			—		4,341			—			4,341
Accounts receivable, less allowance for doubtful accounts	92,456			159,505		17,077			—			269,038
Current deferred income tax assets	—			21,657		4,227			—			25,884
Prepaid expenses and other current assets	7,022			19,593		11,345			(1,154		)	36,806
Total current assets	117,970			201,537		59,053			(1,154		)	377,406
Restricted Cash and Investments	228			13,729		5,621			—			19,578
Property and Equipment, Net	726,238			961,896		84,032			—			1,772,166
Direct Finance Lease Receivable	—			—		9,256			—			9,256
Contract Receivable	—			—		66,229						66,229
Intercompany Receivable	962,314			119,414		—			(1,081,728		)	—
Non-Current Deferred Income Tax Assets	—			—		5,873			—			5,873
Goodwill	34			493,389		467			—			493,890
Intangible Assets, Net	—			154,237		1,038			—			155,275
Investment in Subsidiaries	855,870			438,243		—			(1,294,113		)	—
Other Non-Current Assets	25,635			110,105		46,838			(80,043		)	102,535
Total Assets	$	2,688,289		$	2,492,550	$	278,407		$	(2,457,038	)	$	3,002,208

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	7,549		$	47,130	$	3,476		$	—		$	58,155
Accrued payroll and related taxes	—			24,184		14,372			—			38,556
Accrued expenses and other	47,637			75,574		18,555			(1,154		)	140,612
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,001			1,170		12,581			—			16,752
Total current liabilities	58,187			148,058		48,984			(1,154		)	254,075
Non-Current Deferred Income Tax Liabilities	(4,095		)	14,170		(7		)	—			10,068
Intercompany Payable	121,327			942,071		18,330			(1,081,728		)	—
Other Non-Current Liabilities	4,372			143,584		19,507			(80,034		)	87,429
Capital Lease Obligations	—			9,856		—			—			9,856
Long-Term Debt	1,462,819			—		—			—			1,462,819
Non-Recourse Debt	—			—		131,968			—			131,968
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,045,679			1,234,811		59,311			(1,294,122		)	1,045,679
Noncontrolling Interests	—			—		314			—			314
Total Shareholders’ Equity	1,045,679			1,234,811		59,625			(1,294,122		)	1,045,993
Total Liabilities and Shareholders' Equity	$	2,688,289		$	2,492,550	$	278,407		$	(2,457,038	)	$	3,002,208

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)



	For the Three Months Ended March 31, 2015
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	35,300		$	30,416		$	(4,971	)	$	60,745
Cash Flow from Investing Activities:
Acquisition of LCS, net of cash acquired	(307,403		)	—			—			(307,403		)
Proceeds from sale of property and equipment	—			20			—			20
Insurance proceeds - damaged property	—			700			—			700
Change in restricted cash and investments	102			(6,443		)	(1,767		)	(8,108		)
Capital expenditures	(20,561		)	(13,042		)	(595		)	(34,198		)
Net cash used in investing activities	(327,862		)	(18,765		)	(2,362		)	(348,989		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	371,000			—			—			371,000
Payments on long-term debt	(38,750		)	—			—			(38,750		)
Payments on non-recourse debt	—			—			(1,645		)	(1,645		)
Proceeds from non-recourse debt	—			—			33,019			33,019
Taxes paid related to net share settlements of equity awards	(1,123		)	—			—			(1,123		)
Proceeds from reissuance of treasury stock in connection with ESPP	98			—			—			98
Debt issuance costs	—			—			(1,245		)	(1,245		)
Tax benefit related to equity compensation	569			—			—			569
Proceeds from stock options exercised	1,215			—			—			1,215
Cash dividends paid	(45,977		)	—			—			(45,977		)
Net cash provided by financing activities	287,032			—			30,129			317,161
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(1,273		)	(1,273		)
Net Increase (Decrease) in Cash and Cash Equivalents	(5,530		)	11,651			21,523			27,644
Cash and Cash Equivalents, beginning of period	18,492			782			22,063			41,337
Cash and Cash Equivalents, end of period	$	12,962		$	12,433		$	43,586		$	68,981

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)



	For the Three Months Ended March 31, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	28,511		$	25,116		$	9,525		$	63,152
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	—			165			—			165
Acquisition of Protocol, cash consideration	—			(13,000		)	—			(13,000		)
Change in restricted cash and investments	(185		)	(549		)	(2,539		)	(3,273		)
Capital expenditures	(8,586		)	(8,642		)	(303		)	(17,531		)
Net cash used in investing activities	(8,771		)	(22,026		)	(2,842		)	(33,639		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	103,000			—			—			103,000
Payments on long-term debt	(108,750		)	(240		)	—			(108,990		)
Payments on non-recourse debt	—			—			(1,403		)	(1,403		)
Proceeds from reissuance of treasury stock in connection with ESPP	84			—			—			84
Tax benefit related to equity compensation	558			—			—			558
Proceeds from stock options exercised	3,275			—			—			3,275
Cash dividends paid	(41,139		)	—			—			(41,139		)
Net cash used in financing activities	(42,972		)	(240		)	(1,403		)	(44,615		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			1,040			1,040
Net Increase (Decrease) in Cash and Cash Equivalents	(23,232		)	2,850			6,320			(14,062		)
Cash and Cash Equivalents, beginning of period	30,730			985			20,410			52,125
Cash and Cash Equivalents, end of period	$	7,498		$	3,835		$	26,730		$	38,063