Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended September 30, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	171,553		$	464,140		$	69,698		$	(138,632	)	$	566,759
Operating expenses	139,165			364,834			57,767			(138,632		)	423,134
Depreciation and amortization	6,104			24,623			922			—			31,649
General and administrative expenses	14,699			28,066			6,309			—			49,074
Operating income	11,585			46,617			4,700			—			62,902
Interest income	2,688			1,629			14,871			(4,540		)	14,648
Interest expense	(18,148		)	(13,093		)	(12,018		)	4,540			(38,719		)
Income (loss) before income taxes and equity in earnings of affiliates	(3,875		)	35,153			7,553			—			38,831
Income tax provision	147			811			762			—			1,720
Equity in earnings of affiliates, net of income tax provision	—			—			1,342			—			1,342
Income (loss) before equity in income of consolidated subsidiaries	(4,022		)	34,342			8,133			—			38,453
Income from consolidated subsidiaries, net of income tax provision	42,475			—			—			(42,475		)	—
Net income	38,453			34,342			8,133			(42,475		)	38,453
Net loss attributable to noncontrolling interests	—			—			36			—			36
Net income attributable to The GEO Group, Inc.	$	38,453		$	34,342		$	8,169		$	(42,475	)	$	38,489
Net income	$	38,453		$	34,342		$	8,133		$	(42,475	)	$	38,453
Other comprehensive income, net of tax	—			64			1,561			—			1,625
Total comprehensive income	$	38,453		$	34,406		$	9,694		$	(42,475	)	$	40,078
Comprehensive loss attributable to noncontrolling interests	—			—			34			—			34
Comprehensive income attributable to The GEO Group, Inc.	$	38,453		$	34,406		$	9,728		$	(42,475	)	$	40,112

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	For the Three Months Ended September 30, 2016
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	173,920		$	410,329		$	112,708		$	(142,581	)	$	554,376
Operating expenses	144,748			314,009			99,483			(142,581		)	415,659
Depreciation and amortization	6,339			21,502			942			—			28,783
General and administrative expenses	11,727			18,180			7,576			—			37,483
Operating income	11,106			56,638			4,707			—			72,451
Interest income	4,765			422			8,029			(5,288		)	7,928
Interest expense	(16,324		)	(13,525		)	(8,867		)	5,288			(33,428		)
Income (loss) before income taxes and equity in earnings of affiliates	(453		)	43,535			3,869			—			46,951
Income tax provision (benefit)	(9		)	4,032			947			—			4,970
Equity in earnings of affiliates, net of income tax provision	—			—			1,693			—			1,693
Income (loss) before equity in income of consolidated subsidiaries	(444		)	39,503			4,615			—			43,674
Income from consolidated subsidiaries, net of income tax provision	44,118			—			—			(44,118		)	—
Net income	43,674			39,503			4,615			(44,118		)	43,674
Net loss attributable to noncontrolling interests	—			—			46			—			46
Net income attributable to The GEO Group, Inc.	$	43,674		$	39,503		$	4,661		$	(44,118	)	$	43,720
Net income	$	43,674		$	39,503		$	4,615		$	(44,118	)	$	43,674
Other comprehensive income, net of tax	—			33			450			—			483
Total comprehensive income	$	43,674		$	39,536		$	5,065		$	(44,118	)	$	44,157
Comprehensive loss attributable to noncontrolling interests	—			—			36			—			36
Comprehensive income attributable to The GEO Group, Inc.	$	43,674		$	39,536		$	5,101		$	(44,118	)	$	44,193

	For the Nine Months Ended September 30, 2017
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	520,986		$	1,342,620		$	250,618		$	(419,781	)	$	1,694,443
Operating expenses	406,576			1,076,232			213,259			(419,781		)	1,276,286
Depreciation and amortization	18,319			71,404			2,741			—			92,464
General and administrative expenses	43,939			78,479			21,448			—			143,866
Operating income	52,152			116,505			13,170			—			181,827
Interest income	12,793			2,858			39,175			(15,855		)	38,971
Interest expense	(51,391		)	(41,353		)	(32,813		)	15,855			(109,702		)
Income before income taxes and equity in earnings of affiliates	13,554			78,010			19,532			—			111,096
Income tax provision	441			3,058			2,091			—			5,590
Equity in earnings of affiliates, net of income tax provision	—			—			4,255			—			4,255
Income before equity in income of consolidated subsidiaries	13,113			74,952			21,696			—			109,761
Income from consolidated subsidiaries, net of income tax provision	96,648			—			—			(96,648		)	—
Net income	109,761			74,952			21,696			(96,648		)	109,761
Net loss attributable to noncontrolling interests	—			—			123			—			123
Net income attributable to The GEO Group, Inc.	$	109,761		$	74,952		$	21,819		$	(96,648	)	$	109,884
Net income	$	109,761		$	74,952		$	21,696		$	(96,648	)	$	109,761
Other comprehensive income, net of tax	—			175			4,586			—			4,761
Total comprehensive income	$	109,761		$	75,127		$	26,282		$	(96,648	)	$	114,522
Comprehensive loss attributable to noncontrolling interests	—			—			119			—			119
Comprehensive income attributable to The GEO Group, Inc.	$	109,761		$	75,127		$	26,401		$	(96,648	)	$	114,641

	For the Nine Months Ended September 30, 2016
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	515,971		$	1,215,469		$	306,484		$	(425,013	)	$	1,612,911
Operating expenses	418,261			957,704			270,050			(425,013		)	1,221,002
Depreciation and amortization	18,866			64,159			2,861			—			85,886
General and administrative expenses	34,548			53,396			20,504			—			108,448
Operating income	44,296			140,210			13,069			—			197,575
Interest income	15,646			1,440			18,699			(17,398		)	18,387
Interest expense	(49,031		)	(41,401		)	(20,830		)	17,398			(93,864		)
Loss on early extinguishment of debt	(15,885		)	—			—			—			(15,885		)
Income (loss) before income taxes and equity in earnings of affiliates	(4,974		)	100,249			10,938			—			106,213
Income tax provision (benefit)	(101		)	9,323			2,778			—			12,000
Equity in earnings of affiliates, net of income tax provision	—			—			4,943			—			4,943
Income (loss) before equity in income of consolidated subsidiaries	(4,873		)	90,926			13,103			—			99,156
Income from consolidated subsidiaries, net of income tax provision	104,029			—			—			(104,029		)	—
Net income	99,156			90,926			13,103			(104,029		)	99,156
Net loss attributable to noncontrolling interests	—			—			123			—			123
Net income attributable to The GEO Group, Inc.	$	99,156		$	90,926		$	13,226		$	(104,029	)	$	99,279
Net income	$	99,156		$	90,926		$	13,103		$	(104,029	)	$	99,156
Other comprehensive income (loss), net of tax	—			98			(3,081		)	—			(2,983		)
Total comprehensive income	99,156			91,024			10,022			(104,029		)	96,173
Comprehensive loss attributable to noncontrolling interests	—			—			104			—			104
Comprehensive income attributable to The GEO Group, Inc.	$	99,156		$	91,024		$	10,126		$	(104,029	)	$	96,277

CONDENSED CONSOLIDATING BALANCE SHEET

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)

	As of September 30, 2017
	The GEO Group, Inc.		Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	6,191	$	13,853	$	31,482		$	—		$	51,526
Restricted cash and investments	—		—		12,452			—			12,452
Accounts receivable, less allowance for doubtful accounts	129,730		241,031		16,137			—			386,898
Contract receivable, current portion	—		—		243,531			—			243,531
Prepaid expenses and other current assets	2,921		28,033		5,119			—			36,073
Total current assets	138,842		282,917		308,721			—			730,480
Restricted Cash and Investments	—		24,387		6,645			—			31,032
Property and Equipment, Net	751,374		1,213,614		90,994			—			2,055,982
Non-Current Contract Receivable	—		—		405,780			—			405,780
Intercompany Receivable	1,128,469		104,226		24,654			(1,257,349		)	—
Non-Current Deferred Income Tax Assets	763		19,254		11,814			—			31,831
Goodwill	79		781,444		449			—			781,972
Intangible Assets, Net	—		261,053		737			—			261,790
Investment in Subsidiaries	1,332,393		456,075		2,191			(1,790,659		)	—
Other Non-Current Assets	12,714		118,579		18,708			(79,527		)	70,474
Total Assets	$	3,364,634	$	3,261,549	$	870,693		$	(3,127,535	)	$	4,369,341
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	8,573	$	66,848	$	16,196		$	—		$	91,617
Accrued payroll and related taxes	—		30,190		18,590			—			48,780
Accrued expenses and other current liabilities	48,090		106,056		20,175			—			174,321
Current portion of capital lease obligations, long-term debt and non-recourse debt	8,000		1,815		250,231			—			260,046
Total current liabilities	64,663		204,909		305,192			—			574,764
Intercompany Payable	14,535		1,211,260		31,554			(1,257,349		)	—
Other Non-Current Liabilities	4,120		151,405		16,806			(79,527		)	92,804
Capital Lease Obligations	—		6,412		—			—			6,412
Long-Term Debt	2,067,008		—		90,874			—			2,157,882
Non-Recourse Debt	—		—		323,387			—			323,387
Commitments & Contingencies and Other
Shareholders' Equity:
The GEO Group, Inc. Shareholders' Equity	1,214,308		1,687,563		103,098			(1,790,659		)	1,214,310
Noncontrolling Interests	—		—		(218		)	—			(218		)
Total Shareholders’ Equity	1,214,308		1,687,563		102,880			(1,790,659		)	1,214,092
Total Liabilities and Shareholders' Equity	$	3,364,634	$	3,261,549	$	870,693		$	(3,127,535	)	$	4,369,341

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 STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Nine Months Ended September 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	$	15,473		$	79,088		$	(36,733	)	$	57,828
Cash Flow from Investing Activities:
Acquisition of CEC, net of cash acquired	(353,555		)	—			—			(353,555		)
Proceeds from sale of property and equipment	845			—			11			856
Insurance proceeds - damaged property	86			—			—			86
Change in restricted cash and investments	—			(4,645		)	(175		)	(4,820		)
Capital expenditures	(34,679		)	(61,432		)	(8,019		)	(104,130		)
Net cash used in investing activities	(387,303		)	(66,077		)	(8,183		)	(461,563		)
Cash Flow from Financing Activities:
Proceeds from long-term debt	1,324,865			—			—			1,324,865
Payments on long-term debt	(1,093,088		)	—			—			(1,093,088		)
Payments on non-recourse debt	—			—			(68,887		)	(68,887		)
Proceeds from non-recourse debt	—			—			123,785			123,785
Taxes paid related to net share settlements of equity awards	(4,122		)	—			—			(4,122		)
Proceeds from issuance of common stock in connection with ESPP	—			—			382			382
Proceeds from issuance of common stock under prospectus supplement	275,867			—						275,867
Debt issuance costs	(8,701		)	—			(769		)	(9,470		)
Proceeds from stock options exercised	6,786			—			—			6,786
Dividends paid	(169,152		)				—			(169,152		)
Net cash provided by financing activities	332,455			—			54,511			386,966
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			257			257
Net (Decrease) Increase in Cash and Cash Equivalents	(39,375		)	13,011			9,852			(16,512		)
Cash and Cash Equivalents, beginning of period	45,566			842			21,630			68,038
Cash and Cash Equivalents, end of period	$	6,191		$	13,853		$	31,482		$	51,526

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollars in thousands)

(unaudited)

	For the Nine Months Ended September 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	$	99,124		$	57,187		$	(168,069	)	$	(11,758	)
Cash Flow from Investing Activities:
Proceeds from sale of property and equipment	68			—			—			68
Insurance proceeds - damaged property	4,733			—			—			4,733
Change in restricted cash and investments	(24		)	(2,635		)	(95,057		)	(97,716		)
Capital expenditures	(9,879		)	(54,552		)	(3,584		)	(68,015		)
Net cash used in investing activities	(5,102		)	(57,187		)	(98,641		)	(160,930		)
Cash Flow from Financing Activities:
Taxes paid related to net share settlements of equity awards	(2,336		)	—			—			(2,336		)
Proceeds from long-term debt	813,077			—			—			813,077
Payments on long-term debt	(775,256		)				—			(775,256		)
Payments on non-recourse debt	—			—			(1,878		)	(1,878		)
Proceeds from non-recourse debt	—			—			273,087			273,087
Proceeds from issuance of common stock in connection with ESPP				—			338			338
Debt issuance costs	(16,980		)	—			(3,510		)	(20,490		)
Tax deficiency related to equity compensation	(844		)	—			—			(844		)
Proceeds from stock options exercised	2,367			—			—			2,367
Dividends paid	(145,991		)	—			—			(145,991		)
Net cash (used in) provided by financing activities	(125,963		)	—			268,037			142,074
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			1,099			1,099
Net Decrease in Cash and Cash Equivalents	(31,941		)	—			2,426			(29,515		)
Cash and Cash Equivalents, beginning of period	37,077			—			22,561			59,638
Cash and Cash Equivalents, end of period	$	5,136		$	—		$	24,987		$	30,123