Business Segments and Geographic Information

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Business Segments and Geographic Information

12. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the GEO Secure Services segment; the GEO Care segment; the International Services segment; and the Facility Construction & Design segment. The Company's segment revenues from external customers and a measure of segment profit are as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Revenues:
GEO Secure Services	$	389,718		$	399,475		$	787,827		$	789,985
GEO Care		138,240			155,507			282,703			309,350
International Services		53,254			54,388			110,104			118,612
Facility Construction & Design [1]		6,617			4,596			12,212			6,686
Total revenues	$	587,829		$	613,966		$	1,192,846		$	1,224,633
Operating income from segments:
GEO Secure Services	$	73,915		$	83,865		$	147,924		$	160,789
GEO Care		29,850			41,661			60,549			80,199
International Services		5,266			2,920			10,916			8,659
Facility Construction & Design [1]		25			—			35			—
Operating income from segments	$	109,056		$	128,446		$	219,424		$	249,647
General and Administrative Expenses		(45,543	)		(47,271	)	$	(99,325	)		(93,695	)
Total Operating Income	$	63,513		$	81,175		$	120,099		$	155,952

[1] Facility Construction & Design revenues relate to an expansion project at the Company's managed-only Fulham Correctional Centre in Australia which is expected to be completed in the third quarter of 2020.

Pre-Tax Income Reconciliation of Segments

The following is a reconciliation of the Company’s total operating income from its reportable segments to the Company’s income before income taxes and equity in earnings of affiliates (in thousands):

	Three Months Ended						Six Months Ended
	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Operating income from segments	$	109,056		$	128,446		$	219,424		$	249,647
Unallocated amounts:
General and administrative expenses		(45,543	)		(47,271	)		(99,325	)		(93,695	)
Net interest expense		(25,362	)		(30,887	)		(54,104	)		(62,771	)
(Loss) gain on extinguishment of debt		-			(5,741	)		1,563			(5,741	)
Income before income taxes and equity in earnings of    affiliates	$	38,151		$	44,547		$	67,558		$	87,440

Equity in Earnings of Affiliates

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in South African Custodial Services Pty. Limited (“SACS”), located in South Africa, and GEOAmey PECS Limited (“GEOAmey”), located in the United Kingdom. The Company's investments in these entities are accounted for under the equity method of accounting. The Company’s investments in these entities are presented as a component of Other Non-Current Assets in the accompanying consolidated balance sheets. 

The Company has recorded $1.9 million in earnings, net of tax, for SACS operations during the six months ended June 30, 2020, and $2.6 million in earnings, net of tax, for SACS operations during the six months ended June 30, 2019, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2020 and December 31, 2019, the Company’s investment in SACS was $9.5 million and $12.3 million, respectively, and represents its share of cumulative reported earnings.

The Company has recorded $3.1 million in earnings, net of tax, for GEOAmey's operations during the six months ended June 30, 2020, and $1.8 million in earnings, net of tax, for GEOAmey's operations during the six months ended June 30, 2019, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2020 and December 31, 2019, the Company’s investment in GEOAmey was $8.3 million and $5.7 million, respectively, and represents its share of cumulative reported earnings.