Business Segments and Geographic Information

12 Months Ended

Dec. 31, 2021

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 Electronic Monitoring and Supervision Services segment; the Reentry Services segment; and the International Services 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 Company determined that its previously reportable business segment, Facility Construction and Design, no longer qualifies as a reportable segment as it no longer meets certain quantitative thresholds and has been aggregated with the Company’s International Services reportable business segment below. In addition, the Company appointed a new Chief Executive Officer, the chief operating decision maker, during fiscal 2021. Based on changes to the way the Company’s chief operating decision maker views the business and financial results used to allocate resources to its electronic monitoring and supervision services operations, along with the growth of the business, the Company will report the electronic monitoring and supervision services operation as a separate reportable segment. This new segment will be presented as Electronic Monitoring and Supervision Services.  Previously, the electronic monitoring and supervision services operations were included in the GEO Care reportable segment. In addition, the GEO Care reportable segment was renamed Reentry Services and will include services provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs. Reentry Services also includes activities for our former youth division for half of 2021 and all historical periods. The youth division was divested on July 1, 2021.  Refer to Note 17 – Commitments, Contingencies and Other Matters. The Company has retroactively restated its segment presentation for the years ended December 31, 2021, 2020 and 2019 to reflect these changes.

The U.S. Secure Services segment primarily encompasses U.S.-based secure services business. The Electronic Monitoring and Supervision Services segment, which conducts its services in the United States, represents services provided to adults for monitoring services and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants. The Reentry Services segment, which conducts its services in the United States represents services provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs. The International Services segment

primarily consists of secure services operations in South Africa and Australia. Segment disclosures below (in thousands) reflect the results of continuing operations. All transactions between segments are eliminated.

Fiscal Year	2021			2020			2019
Revenues:
U.S. Secure Services	$	1,488,936		$	1,571,216		$	1,601,679
Electronic Monitoring and Supervision Services		278,934			241,944			256,954
Reentry Services		274,893			309,398			357,295
International Services		213,849			227,540			261,994
Total revenues	$	2,256,612		$	2,350,098		$	2,477,922
Capital Expenditures:
U.S. Secure Services	$	23,780		$	58,410		$	54,642
Electronic Monitoring and Supervision Services		29,504			32,972			32,467
Reentry Services		14,675			16,276			28,488
International Services		1,435			1,142			1,647
Total capital expenditures	$	69,394		$	108,800		$	117,244
Depreciation and amortization:
U.S. Secure Services	$	83,721		$	80,702		$	78,974
Electronic Monitoring and Supervision Services		30,422			31,678			29,828
Reentry Services		18,773			20,154			19,953
International Services		2,261			2,146			2,070
Total depreciation and amortization	$	135,177		$	134,680		$	130,825
Operating Income:
U.S. Secure Services	$	292,925		$	298,952		$	323,391
Electronic Monitoring and Supervision Services		127,070			97,421			104,538
Reentry Services [1]		50,128			6,740			44,306
International Services		22,266			19,664			16,797
Operating income from segments	$	492,389		$	422,777		$	489,032
General and Administrative Expenses		(204,306	)		(193,372	)		(185,926	)
Total operating income	$	288,083		$	229,405		$	303,106

[1] Operating income for Reentry Services for the year ended December 31, 2020 includes a goodwill impairment charge of $21.1

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, 2021, 2020 and 2019, respectively.

Fiscal Year Ended	2021			2020			2019
	(In thousands)
Operating income from segments	$	492,389		$	422,777		$	489,032
Unallocated amounts:
General and administrative expense		(204,306	)		(193,372	)		(185,926	)
Net interest expense		(105,453	)		(103,765	)		(122,090	)
Gain (loss) on extinguishment of debt		4,693			5,319			(4,795	)
Net gain (loss) on disposition of assets		5,499			(6,831	)		(2,693	)
Income before income taxes and equity in earnings of affiliates	$	192,822		$	124,128		$	173,528

	2021		2020
	(In thousands)
Segment assets:
U.S. Secure Services	$	2,433,023	$	2,529,375
Reentry Services		566,916		657,214
Electronic Monitoring and Supervision Services		483,112		401,291
International Services		451,547		488,040
Total segment assets	$	3,934,598	$	4,075,920

Asset Reconciliation

The following is a reconciliation of the Company’s reportable segment assets to the Company’s total assets as of December 31, 2021 and 2020, respectively.

	2021		2020
	(In thousands)
Reportable segment assets	$	3,934,598	$	4,075,920
Cash		506,491		283,524
Deferred income tax assets		—		36,604
Restricted cash and investments, current and non-current		96,319		64,078
Total assets	$	4,537,408	$	4,460,126

Geographic Information

During each of the years ended December 31, 2021, 2020 and 2019, 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 managed the Dungavel House Immigration Removal Centre (GEO transitioned the management contract for Dungavel to the government effective September 30, 2021).

Fiscal Year	2021		2020		2019
	(In thousands)
Revenues:
U.S. operations	$	2,043,157	$	2,123,045	$	2,216,401
Australia operations		186,980		201,932		235,462
South African operations		19,527		17,044		18,779
United Kingdom operations		6,948		8,077		7,280
Total revenues	$	2,256,612	$	2,350,098	$	2,477,922
Property and Equipment, net:
U.S. operations	$	2,026,252	$	2,109,070	$	2,131,877
Australia operations		11,491		12,908		12,215
South African operations		102		127		182
United Kingdom operations		—		90		448
Total Property and Equipment, net	$	2,037,845	$	2,122,195	$	2,144,722

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 reentry services and electronic 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	2021		2020
	(In thousands)
Revenues:
Secure Services	$	1,702,785	$	1,798,756
Electronic Monitoring and Supervision Services		278,934		241,944
Reentry Services		274,893		309,398
Total revenues	$	2,256,612	$	2,350,098

Equity in Earnings of Affiliates

Equity in earnings of affiliates for 2021, 2020 and 2019 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 $3.6 million, $3.7 million and $5.0 million in earnings, net of tax impact, for SACS operations during the years ended December 31, 2021, 2020 and 2019, 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, 2021 and 2020, the Company’s investment in SACS was $10.3 million and $11.1 million, respectively. The investment is included in other non-current assets in the accompanying Consolidated Balance Sheets. The Company received dividend distributions of $3.1 million and $5.9 million, in 2021 and 2020, respectively, from this unconsolidated joint venture.

The Company has recorded $3.6 million, $5.5 million and $4.6 million in earnings, net of tax impact, for GEOAmey’s operations during the years ended December 31, 2021, 2020 and 2019, 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, 2021 and 2020, the Company’s investment in GEOAmey was $10.1 million and $11.8 million, respectively, and represents its share of cumulative reported earnings. The Company received dividend distributions of $5.2 million in 2021 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	2021			2020			2019
Various agencies of the U.S Federal Government:		58	%		56	%		53	%

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.