CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)



	For the Three Months Ended June 30, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	171,260		$	465,286		$	79,436		$	(138,912	)	$	577,070
Operating expenses	135,244			373,399			68,714			(138,912		)	438,445
Depreciation and amortization	6,065			24,906			895			—			31,866
General and administrative expenses	15,573			29,432			7,201			—			52,206
Operating income	14,378			37,549			2,626			—			54,553
Interest income	6,751			409			12,476			(7,290		)	12,346
Interest expense	(17,451		)	(15,775		)	(10,047		)	7,290			(35,983		)
Income before income taxes and equity in earnings of affiliates	3,678			22,183			5,055			—			30,916
Income tax provision	147			793			460			—			1,400
Equity in earnings of affiliates, net of income tax provision	—			—			1,426			—			1,426
Income before equity in income of consolidated subsidiaries	3,531			21,390			6,021			—			30,942
Income from consolidated subsidiaries, net of income tax provision	27,411			—			—			(27,411		)	—
Net income	30,942			21,390			6,021			(27,411		)	30,942
Net loss attributable to noncontrolling interests	—			—			50			—			50
Net income attributable to The GEO Group, Inc.	$	30,942		$	21,390		$	6,071		$	(27,411	)	$	30,992

Net income	$	30,942		$	21,390		$	6,021		$	(27,411	)	$	30,942
Other comprehensive income, net of tax	—			64			1,808			—			1,872
Total comprehensive income	$	30,942		$	21,454		$	7,829		$	(27,411	)	$	32,814
Comprehensive loss attributable to noncontrolling interests	—			—			51			—			51
Comprehensive income attributable to The GEO Group, Inc.	$	30,942		$	21,454		$	7,880		$	(27,411	)	$	32,865

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)



	For the Three Months Ended June 30, 2016
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	174,414		$	404,798		$	112,811		$	(143,673	)	$	548,350
Operating expenses	135,603			323,791			101,116			(143,673		)	416,837
Depreciation and amortization	6,265			21,424			963			—			28,652
General and administrative expenses	14,846			15,250			6,808			—			36,904
Operating income	17,700			44,333			3,924			—			65,957
Interest income	5,440			409			6,013			(5,960		)	5,902
Interest expense	(16,369		)	(13,932		)	(6,748		)	5,960			(31,089		)
Loss on early extinguishment of debt	(15,866		)	—			—			—			(15,866		)
Income (loss) before income taxes and equity in earnings of affiliates	(9,095		)	30,810			3,189			—			24,904
Income tax provision (benefit)	(101		)	3,099			881			—			3,879
Equity in earnings of affiliates, net of income tax provision	—			—			2,131			—			2,131
Income (loss) before equity in income of consolidated subsidiaries	(8,994		)	27,711			4,439			—			23,156
Income from consolidated subsidiaries, net of income tax provision	32,150			—			—			(32,150		)	—
Net income	23,156			27,711			4,439			(32,150		)	23,156
Net loss attributable to noncontrolling interests	—			—			53			—			53
Net income attributable to The GEO Group, Inc.	$	23,156		$	27,711		$	4,492		$	(32,150	)	$	23,209

Net income	$	23,156		$	27,711		$	4,439		$	(32,150	)	$	23,156
Other comprehensive income (loss), net of tax	—			33			(2,611		)	—			(2,578		)
Total comprehensive income	$	23,156		$	27,744		$	1,828		$	(32,150	)	$	20,578
Comprehensive loss attributable to noncontrolling interests	—			—			52			—			52
Comprehensive income attributable to The GEO Group, Inc.	$	23,156		$	27,744		$	1,880		$	(32,150	)	$	20,630



	For the Six Months Ended June 30, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	349,433		$	878,480		$	180,920		$	(281,149	)	$	1,127,684
Operating expenses	267,411			711,398			155,492			(281,149		)	853,152
Depreciation and amortization	12,215			46,781			1,819			—			60,815
General and administrative expenses	29,240			50,413			15,139			—			94,792
Operating income	40,567			69,888			8,470			—			118,925
Interest income	10,105			1,229			24,304			(11,315		)	24,323
Interest expense	(33,243		)	(28,260		)	(20,795		)	11,315			(70,983		)
Income before income taxes and equity in earnings of affiliates	17,429			42,857			11,979			—			72,265
Income tax provision (benefit)	294			2,247			1,329			—			3,870
Equity in earnings of affiliates, net of income tax provision	—			—			2,913			—			2,913
Income before equity in income of consolidated subsidiaries	17,135			40,610			13,563			—			71,308
Income from consolidated subsidiaries, net of income tax provision	57,749			—			—			(57,749		)	—
Net income	74,884			40,610			13,563			(57,749		)	71,308
Net loss attributable to noncontrolling interests	—			—			87			—			87
Net income attributable to The GEO Group, Inc.	$	74,884		$	40,610		$	13,650		$	(57,749	)	$	71,395

Net income	$	74,884		$	40,610		$	13,563		$	(57,749	)	$	71,308
Other comprehensive income, net of tax	—			111			3,022			—			3,133
Total comprehensive income	$	74,884		$	40,721		$	16,585		$	(57,749	)	$	74,441
Comprehensive loss attributable to noncontrolling interests	—			—			85			—			85
Comprehensive income attributable to The GEO Group, Inc.	$	74,884		$	40,721		$	16,670		$	(57,749	)	$	74,526



	For the Six Months Ended June 30, 2016
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	342,051		$	805,140		$	193,776		$	(282,432	)	$	1,058,535
Operating expenses	273,513			643,695			170,567			(282,432		)	805,343
Depreciation and amortization	12,527			42,657			1,919			—			57,103
General and administrative expenses	22,821			35,216			12,928			—			70,965
Operating income	33,190			83,572			8,362			—			125,124
Interest income	10,881			1,018			10,670			(12,110		)	10,459
Interest expense	(32,726		)	(27,876		)	(11,963		)	12,110			(60,455		)
Loss on early extinguishment of debt	(15,866		)	—			—			—			(15,866		)
Income (loss) before income taxes and equity in earnings of affiliates	(4,521		)	56,714			7,069			—			59,262
Income tax provision (benefit)	(91		)	5,290			1,831			—			7,030
Equity in earnings of affiliates, net of income tax provision	—			—			3,250			—			3,250
Income (loss) before equity in income of consolidated subsidiaries	(4,430		)	51,424			8,488			—			55,482
Income from consolidated subsidiaries, net of income tax provision	59,912			—			—			(59,912		)	—
Net income	55,482			51,424			8,488			(59,912		)	55,482
Net loss attributable to noncontrolling interests	—			—			77			—			77
Net income attributable to The GEO Group, Inc.	$	55,482		$	51,424		$	8,565		$	(59,912	)	$	55,559

Net income	$	55,482		$	51,424		$	8,488		$	(59,912	)	$	55,482
Other comprehensive income (loss), net of tax	—			65			(3,541		)	—			(3,476		)
Total comprehensive income	55,482			51,489			4,947			(59,912		)	52,006
Comprehensive loss attributable to noncontrolling interests	—			—			68			—			68
Comprehensive income attributable to The GEO Group, Inc.	$	55,482		$	51,489		$	5,015		$	(59,912	)	$	52,074

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)



	As of June 30, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated

ASSETS
Cash and cash equivalents	$	30,576		$	6,882	$	28,443		$	—		$	65,901
Restricted cash and investments	1,849			—		15,529			—			17,378
Accounts receivable, less allowance for doubtful accounts	112,978			213,596		15,787			—			342,361
Contract receivable, current portion	—			—		238,958			—			238,958
Prepaid expenses and other current assets	2,249			34,588		5,630			—			42,467
Total current assets	147,652			255,066		304,347			—			707,065
Restricted Cash and Investments	(1,659		)	22,632		2,047			—			23,020
Property and Equipment, Net	744,674			1,217,685		87,254			—			2,049,613
Non-Current Contract Receivable	—			—		358,727			—			358,727
Intercompany Receivable	1,122,898			93,918		28,658			(1,245,474		)	—
Non-Current Deferred Income Tax Assets	763			19,685		11,814			—			32,262
Goodwill	79			787,284		440			—			787,803
Intangible Assets, Net	—			267,580		765			—			268,345
Investment in Subsidiaries	1,315,016			457,591		2,190			(1,774,797		)	—
Other Non-Current Assets	13,417			112,567		20,589			(79,640		)	66,933
Total Assets	$	3,342,840		$	3,234,008	$	816,831		$	(3,099,911	)	$	4,293,768

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	20,438		$	60,099	$	17,490		$	—		$	98,027
Accrued payroll and related taxes	—			47,674		15,518			—			63,192
Accrued expenses and other current liabilities	37,066			100,691		16,173			—			153,930
Current portion of capital lease obligations, long-term debt and non-recourse debt	8,000			1,746		245,658			—			255,404
Total current liabilities	65,504			210,210		294,839			—			570,553
Intercompany Payable	35,092			1,174,881		35,501			(1,245,474		)	—
Other Non-Current Liabilities	4,725			155,895		17,761			(79,640		)	98,741
Capital Lease Obligations	—			6,787		—			—			6,787
Long-Term Debt	2,018,040			—		89,168			—			2,107,208
Non-Recourse Debt	—			—		283,780			—			283,780
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,219,479			1,686,235		95,966			(1,774,797		)	1,226,883
Noncontrolling Interests	—			—		(184		)	—			(184		)
Total Shareholders’ Equity	1,219,479			1,686,235		95,782			(1,774,797		)	1,226,699
Total Liabilities and Shareholders' Equity	$	3,342,840		$	3,234,008	$	816,831		$	(3,099,911	)	$	4,293,768

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)



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

ASSETS
Cash and cash equivalents	$	45,566	$	842	$	21,630		$	—		$	68,038
Restricted cash and investments	—		—		17,133			—			17,133
Accounts receivable, less allowance for doubtful accounts	139,571		200,239		16,445			—			356,255
Contract receivable, current portion	—		—		224,033			—			224,033
Prepaid expenses and other current assets	677		24,096		7,437			—			32,210
Total current assets	185,814		225,177		286,678			—			697,669
Restricted Cash and Investments	170		19,742		936			—			20,848
Property and Equipment, Net	735,104		1,078,220		83,917			—			1,897,241
Non-Current Contract Receivable	—		—		219,783						219,783
Intercompany Receivable	918,527		141,987		27,290			(1,087,804		)	—
Non-Current Deferred Income Tax Assets	764		17,918		11,357			—			30,039
Goodwill	79		614,941		413			—			615,433
Intangible Assets, Net	—		203,138		746			—			203,884
Investment in Subsidiaries	1,238,772		453,635		2,190			(1,694,597		)	—
Other Non-Current Assets	15,011		108,434		20,933			(79,866		)	64,512
Total Assets	$	3,094,241	$	2,863,192	$	654,243		$	(2,862,267	)	$	3,749,409

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	8,402	$	50,200	$	21,035		$	—		$	79,637
Accrued payroll and related taxes	—		41,230		14,030			—			55,260
Accrued expenses and other current liabilities	36,792		83,906		10,398			—			131,096
Current portion of capital lease obligations, long-term debt and non-recourse debt	3,000		1,700		233,365			—			238,065
Total current liabilities	48,194		177,036		278,828			—			504,058
Intercompany Payable	133,039		920,825		33,940			(1,087,804		)	—
Other Non-Current Liabilities	2,487		144,383		21,652			(79,866		)	88,656
Capital Lease Obligations	—		7,431		—			—			7,431
Long-Term Debt	1,935,465		—		—			—			1,935,465
Non-Recourse Debt	—		—		238,842			—			238,842
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	975,056		1,613,517		81,080			(1,694,597		)	975,056
Noncontrolling Interests	—		—		(99		)	—			(99		)
Total Shareholders’ Equity	975,056		1,613,517		80,981			(1,694,597		)	974,957
Total Liabilities and Shareholders' Equity	$	3,094,241	$	2,863,192	$	654,243		$	(2,862,267	)	$	3,749,409

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)



	For the Six Months Ended June 30, 2017
	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	$	2,389		$	62,559		$	(14,234	)	$	50,714
Cash Flow from Investing Activities:
Acquisition of CEC, net of cash acquired	(354,466		)	—			—			(354,466		)
Proceeds from sale of property and equipment	648			—			—			648
Change in restricted cash and investments	—			(2,890		)	1,055			(1,835		)
Capital expenditures	(9,709		)	(53,629		)	(4,170		)	(67,508		)
Net (cash used) provided by in investing activities	(363,527		)	(56,519		)	(3,115		)	(423,161		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	1,158,574			—			—			1,158,574
Payments on long-term debt	(972,500		)	—			—			(972,500		)
Payments on non-recourse debt	—			—			(67,885		)	(67,885		)
Proceeds from non-recourse debt	—			—			91,076			91,076
Taxes paid related to net share settlements of equity awards	(4,092		)	—			—			(4,092		)
Proceeds from issuance of common stock in connection with ESPP	—						242			242
Proceeds from issuance of common stock under prospectus supplement	275,867			—			—			275,867
Debt issuance costs	(6,992		)	—			(595		)	(7,587		)
Proceeds from stock options exercised	6,150			—			—			6,150
Dividends paid	(110,859		)				—			(110,859		)
Net cash (used in) provided by financing activities	346,148			—			22,838			368,986
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			1,324			1,324
Net (Decrease) Increase in Cash and Cash Equivalents	(14,990		)	6,040			6,813			(2,137		)
Cash and Cash Equivalents, beginning of period	45,566			842			21,630			68,038
Cash and Cash Equivalents, end of period	$	30,576		$	6,882		$	28,443		$	65,901

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)



	For the Six Months Ended June 30, 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	$	84,523		$	40,602		$	(86,873	)	$	38,252
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	—			41			2			43
Insurance proceeds - damaged property	—			—			548			548
Change in restricted cash and investments	(12		)	(1,565		)	(64,276		)	(65,853		)
Capital expenditures	(5,137		)	(39,078		)	(1,799		)	(46,014		)
Net cash used in investing activities	(5,149		)	(40,602		)	(65,525		)	(111,276		)
Cash Flow from Financing Activities:
Taxes paid related to net share settlements of equity awards	(2,257		)	—			—			(2,257		)
Proceeds from long-term debt	641,000			—			—			641,000
Payments on long-term debt	(627,506		)				—			(627,506		)
Payments on non-recourse debt	—			—			(3,044		)	(3,044		)
Proceeds from non-recourse debt	—			—			159,068			159,068
Proceeds from issuance of common stock in connection with ESPP	—			—			224			224
Debt issuance costs	(16,980		)	—			(2,517		)	(19,497		)
Tax benefit related to equity compensation	(791		)	—			—			(791		)
Proceeds from stock options exercised	2,057			—			—			2,057
Dividends paid	(97,247		)	—			—			(97,247		)
Net cash (used in) provided by financing activities	(101,724		)	—			153,731			52,007
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			244			244
Net Decrease in Cash and Cash Equivalents	(22,350		)	—			1,577			(20,773		)
Cash and Cash Equivalents, beginning of period	37,077			—			22,561			59,638
Cash and Cash Equivalents, end of period	$	14,727		$	—		$	24,138		$	38,865