Business Segments and Geographic Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Business Segments and Geographic Information

15. Business Segments and Geographic Information

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the U.S. Secure Services segment; the GEO Care segment; the International Services segment; and Facility Construction & Design segment. The Company has identified these four reportable segments to reflect the current view that the Company operates four distinct business lines, each of which constitutes a material part of its overall business. The U.S. Secure Services segment primarily encompasses U.S.-based secure services business. The Company’s community-based services, youth services and BI are operating segments aggregated under the GEO Care reporting segment. The GEO Care segment, which conducts its services in the United States, represents services provided to adults and juveniles for non-residential treatment, educational and community based programs, pre-release and half-way house programs, compliance technologies, monitoring services and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants. The International Services segment primarily consists of secure services operations in South Africa, Australia and the United Kingdom. The Facility Construction & Design segment primarily contracts with various state, local and federal agencies for the design and construction of facilities for which the Company has management contracts. Generally, the assets and revenues from the Facility Construction & Design segment are offset by a similar amount of liabilities and expenses. Segment disclosures below (in thousands) reflect the results of continuing operations. All transactions between segments are eliminated.

Fiscal Year	2020			2019			2018
Revenues:
U.S. Secure Services	$	1,571,216		$	1,601,679		$	1,492,973
GEO Care		551,342			614,249			580,313
International Services		211,621			232,016			253,874
Facility Construction and Design [1] [2]		15,919			29,978			4,226
Total revenues	$	2,350,098		$	2,477,922		$	2,331,386
Capital Expenditures:
U.S. Secure Services	$	58,410		$	69,074		$	163,208
GEO Care		44,913			45,000			30,136
International Services		1,142			1,468			2,322
Total capital expenditures [1]	$	104,465		$	115,542		$	195,666
Depreciation and amortization:
U.S. Secure Services	$	80,702		$	78,974		$	76,801
GEO Care		51,832			49,781			47,546
International Services		2,146			2,070			2,087
Total depreciation and amortization [1]	$	134,680		$	130,825		$	126,434
Operating Income:
U.S. Secure Services	$	298,952		$	322,506		$	297,453
GEO Care		97,330			147,036			138,911
International Services		19,610			16,723			12,816
Facility Construction & Design [1] [2]		54			74			—
Operating income from segments	$	415,946		$	486,339		$	449,180
General and Administrative Expenses		(193,372	)		(185,926	)		(184,515	)
Total operating income	$	222,574		$	300,413		$	264,665

[1] There were no capital expenditures or depreciation and amortization associated with the Facility Construction & Design segment in 2020,   

2019 or 2018.

[2] During 2020, 2019 and 2018, the Company had facility construction & design revenues related to an expansion project at its Fulham              Correctional Centre in Australia which was substantially 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 each case, during the years ended December 31, 2020, 2019 and 2018, respectively.

Fiscal Year Ended	2020			2019			2018
	(In thousands)
Operating income from segments	$	415,946		$	486,339		$	449,180
Unallocated amounts:
General and administrative expense		(193,372	)		(185,926	)		(184,515	)
Net interest expense		(103,765	)		(122,090	)		(115,348	)
Gain (loss) on extinguishment of debt		5,319			(4,795	)		—
Income before income taxes and equity in earnings of affiliates	$	124,128		$	173,528		$	149,317

	2020		2019		2018
	(In thousands)
Segment assets:
U.S. Secure Services	$	2,529,375	$	2,618,629	$	2,590,722
GEO Care		1,058,505		1,112,880		1,063,484
International Services		85,110		82,097		84,911
Facility Construction & Design		402,930		371,846		383,713
Total segment assets	$	4,075,920	$	4,185,452	$	4,122,830

Asset Reconciliation

The following is a reconciliation of the Company’s reportable segment assets to the Company’s total assets as of December 31, 2020 and 2019, respectively.

	2020		2019
	(In thousands)
Reportable segment assets	$	4,075,920	$	4,185,452
Cash		283,524		32,463
Deferred income tax assets		36,604		36,278
Restricted cash and investments, current and non-current		64,078		63,341
Total assets	$	4,460,126	$	4,317,534

Geographic Information

During each of the years ended December 31, 2020, 2019 and 2018, the Company’s international operations were conducted through (i) the Company’s wholly owned Australian subsidiary, The GEO Group Australia Pty. Ltd., through which the Company has management contracts for four correctional facilities, (ii) the Company's wholly owned subsidiaries, GEO Ravenhall Finance Holdings Pty. Ltd. and GEO Ravenhall Holdings Pty. Ltd. which, together, had a design and construction contract for a facility in Ravenhall, Australia which was completed in November 2017, (iii) the Company’s wholly-owned subsidiary in South Africa, SACM, through which the Company manages one correctional facility, and (iv) the Company’s wholly-owned subsidiary in the United Kingdom, The GEO Group UK Ltd., through which the Company manages the Dungavel House Immigration Removal Centre.

Fiscal Year	2020		2019		2018
	(In thousands)
Revenues:
U.S. operations	$	2,123,045	$	2,216,401	$	2,073,286
Australia operations		201,932		235,462		231,164
South African operations		17,044		18,779		19,806
United Kingdom operations		8,077		7,280		7,130
Total revenues	$	2,350,098	$	2,477,922	$	2,331,386
Property and Equipment, net:
U.S. operations	$	2,109,070	$	2,131,877	$	2,145,197
Australia operations		12,908		12,215		13,006
South African operations		127		182		88
United Kingdom operations		90		448		319
Total Property and Equipment, net	$	2,122,195	$	2,144,722	$	2,158,610

Sources of Revenue

The Company derives most of its revenue from the management of secure facilities through public-private partnerships. The Company also derives revenue from the provision of community based and youth services, monitoring and evidence-based supervision and treatment programs in the United States, and expansion of new and existing secure facilities, processing centers and reentry centers.

Fiscal Year	2020		2019		2018
	(In thousands)
Revenues:
Secure Services	$	1,782,837	$	1,833,695	$	1,746,847
GEO Care		551,342		614,249		580,313
Facility Construction and Design		15,919		29,978		4,226
Total revenues	$	2,350,098	$	2,477,922	$	2,331,386

Equity in Earnings of Affiliates

Equity in earnings of affiliates for 2020, 2019 and 2018 includes the operating results of the Company’s joint ventures in SACS and GEOAmey. These joint ventures are accounted for under the equity method and the Company’s investments in SACS and GEOAmey are presented as a component of other non-current assets in the accompanying Consolidated Balance Sheets.

The Company has recorded $3.7 million, $5.0 million and $7.4 million in earnings, net of tax impact, for SACS operations during the years ended December 31, 2020, 2019 and 2018, respectively, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying Consolidated Statements of Operations. As of December 31, 2020 and 2019, the Company’s investment in SACS was $11.1 million and $12.3 million, respectively. The investment is included in other non-current assets in the accompanying Consolidated Balance Sheets. The Company received dividend distributions of $5.9 million and $6.3 million, in 2020 and 2019, respectively, from this unconsolidated joint venture.

The Company has recorded $5.5 million, $4.6 million and $2.2 million in earnings, net of tax impact, for GEOAmey’s operations during the years ended December 31, 2020, 2019 and 2018, respectively, which are included in equity in earnings of affiliates, net of income tax provision, in the accompanying Consolidated Statements of Operations. As of December 31, 2020 and 2019, the Company’s investment in GEOAmey was $11.8 million and $5.7 million, respectively, and represents its share of cumulative reported earnings. The Company received dividend distributions of $4.0 million in 2020 and 2019, respectively, from this unconsolidated joint venture. There were no dividend distributions in 2020.

Business Concentration

Except for the major customer noted in the following table, no other single customer made up greater than 10% of the Company’s consolidated revenues for the following fiscal years:

Customer	2020			2019			2018
Various agencies of the U.S Federal Government:		56	%		53	%		50	%

The concentrations above relate entirely to the Company's U.S. Secure Services segment.

Credit risk related to accounts receivable is reflective of the related revenues.