CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)



	For the Three Months Ended March 31, 2016
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	167,637		$	400,342		$	80,965		$	(138,759	)	$	510,185
Operating expenses	137,910			319,904			69,451			(138,759		)	388,506
Depreciation and amortization	6,262			21,233			956			—			28,451
General and administrative expenses	7,975			19,966			6,120			—			34,061
Operating income	15,490			39,239			4,438			—			59,167
Interest income	5,441			609			4,657			(6,150		)	4,557
Interest expense	(16,357		)	(13,944		)	(5,215		)	6,150			(29,366		)
Income before income taxes and equity in earnings of affiliates	4,574			25,904			3,880			—			34,358
Income tax provision	10			2,191			950			—			3,151
Equity in earnings of affiliates, net of income tax provision	—			—			1,119			—			1,119
Income before equity in income of consolidated subsidiaries	4,564			23,713			4,049			—			32,326
Income from consolidated subsidiaries, net of income tax provision	27,763			—			—			(27,763		)	—
Net income	32,327			23,713			4,049			(27,763		)	32,326
Net loss attributable to noncontrolling interests	—			—			24			—			24
Net income attributable to The GEO Group, Inc.	$	32,327		$	23,713		$	4,073		$	(27,763	)	$	32,350

Net income	$	32,327		$	23,713		$	4,049		$	(27,763	)	$	32,326
Other comprehensive income (loss), net of tax	—			33			(931		)	—			(898		)
Total comprehensive income	$	32,327		$	23,746		$	3,118		$	(27,763	)	$	31,428
Comprehensive income attributable to noncontrolling interests	—			—			16			—			16
Comprehensive income attributable to The GEO Group, Inc.	$	32,327		$	23,746		$	3,134		$	(27,763	)	$	31,444

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 income 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 income 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 BALANCE SHEET

(dollars in thousands)

(unaudited)



	As of March 31, 2016
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated

ASSETS
Cash and cash equivalents	$	11,558	$	—	$	11,667	$	—		$	23,225
Restricted cash and investments	—		—		48,306		—			48,306
Accounts receivable, less allowance for doubtful accounts	129,625		191,458		20,513		—			341,596
Current deferred income tax assets	—		—		—		—			—
Prepaid expenses and other current assets	1,518		22,380		9,713		(1,260		)	32,351
Total current assets	142,701		213,838		90,199		(1,260		)	445,478
Restricted Cash and Investments	138		17,342		3,976		—			21,456
Property and Equipment, Net	743,004		1,095,108		81,482		—			1,919,594
Contract Receivable	—		—		230,927		—			230,927
Intercompany Receivable	971,827		52,704		3,123		(1,027,654		)	—
Non-Current Deferred Income Tax Assets	713		11,898		11,543		—			24,154
Goodwill	79		614,941		439		—			615,459
Intangible Assets, Net	—		218,354		744		—			219,098
Investment in Subsidiaries	1,110,983		453,595		2,190		(1,566,768		)	—
Other Non-Current Assets	1,746		119,148		26,034		(80,067		)	66,861
Total Assets	$	2,971,191	$	2,796,928	$	450,657	$	(2,675,749	)	$	3,543,027

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	6,549	$	59,866	$	17,094	$	—		$	83,509
Accrued payroll and related taxes	—		32,311		14,936		—			47,247
Accrued expenses and other	38,226		77,020		12,274		(1,260		)	126,260
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000		1,507		13,079		—			17,586
Total current liabilities	47,775		170,704		57,383		(1,260		)	274,602
Non-Current Deferred Income Tax Liabilities	—		—		—		—			—
Intercompany Payable	42,792		972,513		12,349		(1,027,654		)	—
Other Non-Current Liabilities	4,335		143,048		23,473		(80,067		)	90,789
Capital Lease Obligations	—		8,387		—		—			8,387
Long-Term Debt	1,884,641		—		—		—			1,884,641
Non-Recourse Debt	—		—		292,879		—			292,879
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	991,648		1,502,276		64,490		(1,566,768		)	991,646
Noncontrolling Interests	—		—		83		—			83
Total Shareholders’ Equity	991,648		1,502,276		64,573		(1,566,768		)	991,729
Total Liabilities and Shareholders' Equity	$	2,971,191	$	2,796,928	$	450,657	$	(2,675,749	)	$	3,543,027

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)



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

ASSETS
Cash and cash equivalents	$	37,077	$	—		$	22,561	$	—		$	59,638
Restricted cash and investments	—		—			8,489		—			8,489
Accounts receivable, less allowance for doubtful accounts	131,747		162,538			19,812		—			314,097
Current deferred income tax assets	—		23,120			4,794		—			27,914
Prepaid expenses and other current assets	1,190		17,917			10,310		(1,209		)	28,208
Total current assets	170,014		203,575			65,966		(1,209		)	438,346
Restricted Cash and Investments	138		16,386			3,712		—			20,236
Property and Equipment, Net	746,478		1,088,417			81,491		—			1,916,386
Direct Finance Lease Receivable	—		—			1,826		—			1,826
Contract Receivable	—		—			174,141					174,141
Intercompany Receivable	971,291		86,519			—		(1,057,810		)	—
Non-Current Deferred Income Tax Assets	710		(102		)	6,791		—			7,399
Goodwill	79		614,941			418		—			615,438
Intangible Assets, Net	—		223,426			722		—			224,148
Investment in Subsidiaries	1,106,546		453,636			—		(1,560,182		)	—
Other Non-Current Assets	2,387		116,561			25,486		(80,127		)	64,307
Total Assets	$	2,997,643	$	2,803,359		$	360,553	$	(2,699,328	)	$	3,462,227

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	9,731	$	54,675		$	13,117	$	—		$	77,523
Accrued payroll and related taxes	—		35,516			12,961		—			48,477
Accrued expenses and other	43,043		78,510			15,139		(1,209		)	135,483
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000		1,477			12,664		—			17,141
Total current liabilities	55,774		170,178			53,881		(1,209		)	278,624
Non-Current Deferred Income Tax Liabilities			11,120			351		—			11,471
Intercompany Payable	76,427		967,048			14,335		(1,057,810		)	—
Other Non-Current Liabilities	2,894		143,887			21,040		(80,127		)	87,694
Capital Lease Obligations	—		8,693			—		—			8,693
Long-Term Debt	1,855,810		—			—		—			1,855,810
Non-Recourse Debt	—		—			213,098		—			213,098
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,006,738		1,502,433			57,749		(1,560,182		)	1,006,738
Noncontrolling Interests	—		—			99		—			99
Total Shareholders’ Equity	1,006,738		1,502,433			57,848		(1,560,182		)	1,006,837
Total Liabilities and Shareholders' Equity	$	2,997,643	$	2,803,359		$	360,553	$	(2,699,328	)	$	3,462,227

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)



	For the Three Months Ended March 31, 2016
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash (used in) provided by operating activities	$	(221	)	$	25,317		$	(42,623	)	$	(17,527	)
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	—			18			—			18
Change in restricted cash and investments	90			(956		)	(40,171		)	(41,037		)
Capital expenditures	(3,567		)	(24,379		)	(483		)	(28,429		)
Net cash used in investing activities	(3,477		)	(25,317		)	(40,654		)	(69,448		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	117,000			—			—			117,000
Payments on long-term debt	(88,756		)	—			—			(88,756		)
Payments on non-recourse debt	—			—			(1,613		)	(1,613		)
Proceeds from non-recourse debt	—			—			71,242			71,242
Taxes paid related to net share settlements of equity awards	(1,717		)	—			—			(1,717		)
Proceeds from issuance of common stock in connection with ESPP	—			—			2,357			2,357
Debt issuance costs	—			—			(1,505		)	(1,505		)
Tax deficiency related to equity compensation	(818		)	—			—			(818		)
Proceeds from stock options exercised	979			—			—			979
Cash dividends paid	(48,509		)	—			—			(48,509		)
Net cash (used in) provided by financing activities	(21,821		)	—			70,481			48,660
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			1,902			1,902
Net Decrease in Cash and Cash Equivalents	(25,519		)	—			(10,894		)	(36,413		)
Cash and Cash Equivalents, beginning of period	37,077			—			22,561			59,638
Cash and Cash Equivalents, end of period	$	11,558		$	—		$	11,667		$	23,225

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 (used in) operating activities	$	35,300		$	30,416		$	(4,971	)	$	60,745
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	—			20			—			20
Insurance proceeds - damages property	—			700			—			700
Acquisition of LCS, net of cash acquired	(307,403		)				—			(307,403		)
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:
Taxes paid related to net share settlements of equity awards	(1,123		)	—			—			(1,123		)
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
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