XML 48 R9.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Discontinued Operations | 12 Months Ended
--- | ---
Dec. 31, 2012
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations Divestiture of RTS On December 31, 2012, as a part of the Company's restructuring steps allowing it to begin operating as a REIT beginning January 1, 2013, GEO completed the divestiture of all of its health care facility assets and related management contracts in the United States and Australia (RTS) to certain members of GEO's management team and RTS executives (the "MBO Group") for a gross purchase price of $36.0 million, inclusive of a working capital adjustment as defined in the purchase agreement between the MBO Group and the Company (the "Purchase Agreement"). As a result of the working capital adjustment, the net proceeds from the sale were approximately $33.253 million. Certain members of the MBO Group sold 295,959 shares of common stock back to the Company for a total price of $8.6 million which was used to fund a portion of the purchase price. Prior to the divestiture, RTS, excluding the correctional health care services business operating in the State of Victoria, Australia which was part of the International Services reporting segment, was an operating segment of the Company's GEO Care reporting segment. In accordance with the Purchase Agreement, the MBO Group will also be obligated to pay up to an additional $5.0 million in purchase price on a contingent earn-out basis if certain potential future contract awards are received by RTS. In addition, the Purchase Agreement provides for (i) a purchase price adjustment in favor of the MBO Group in the event certain client consents are not obtained within one year following the divestiture, and (ii) a purchase price adjustment in favor of the MBO Group if certain key contracts (as defined) are terminated up to one year following the divestiture. On December 12, 2012, the MBO Group formed a new entity, GEO Care Holdings LLC, for the sole purpose of acquiring RTS. In connection with the RTS divestiture, the Company and GEO Care Holdings LLC entered into a Services Agreement pursuant to which the Company will provide business management services, information systems services, legal support services, risk management services, property management and design services and office space for a five-year term in return for an initial annual fee of $1.8 million, payable in equal monthly installments (the “Services Agreement”). GEO Care Holdings LLC may terminate the Services Agreement at any time by paying a lump sum amount in cash equal to all remaining payments that would be required to be made to the Company during the five-year term, discounted to present value using a discount rate of 10%. The Company and GEO Care Holdings LLC also executed a license agreement pursuant to which the Company will grant to GEO Care Holdings LLC an exclusive license for a five-year term to use the GEO Care service mark and domain name in connection with the RTS business in return for an annual fee of $0.4 million, payable in equal monthly installments (the “License Agreement”). GEO Care Holdings LLC may terminate the License Agreement at any time by paying a lump sum amount in cash equal to all remaining payments of the license fee during the five-year term, discounted to present value using a 10% discount rate. Also, the Company and GEO Care Holdings LLC entered into employment agreements with certain executive officers in order to allocate the services to be provided by the executive officers and related compensation and benefits between the Company and GEO Care Holdings LLC. The disposal of RTS resulted in a loss in the overall customer relationship as no future significant cash flows will be generated for the Company by RTS and the Company will have no continuing involvement with RTS. The operating results of RTS and the loss on disposal have been classified in discontinued operations. During the fourth quarter of 2012, the Company recorded $14.6 million, net of tax, related to the loss on divestiture of RTS. Included in the loss on divestitu re is $2.1 million of direct expenses of the sale. Revenues related to the discontinued operations of RTS through its respective disposition date were $167.2 million for the fiscal year ended December 31, 2012, and $160.8 million and $148.8 million for the fiscal years ended, January 1, 2012, and January 2, 2011, respectively. The following is a summary of the assets and liabilities of the discontinued operations of RTS as included in the accompanying consolidated balance sheet as of January 1, 2012 (in thousands):
Assets: |
Accounts Receivable | $ | 20,560 |
Property and equipment, net | 16,950 |
Goodwill | 17,770 |
Intangible Assets, Net | 4,626 |
Other assets | 4,410 |
Assets of discontinued operations | $ | 64,316 |
Liabilities: |
Accounts payable and accrued expenses | $ | 2,443 |
Accrued Payroll | 3,324 |
Other liabilities | 2,312 |
Liabilities of discontinued operations | $ | 8,079 |
U.S. Corrections & Detention During the second fiscal quarter of 2012, the Company discontinued operations at certain of its domestic facilities further described below. The results of operations, net of taxes, and the assets and liabilities of these operations have been retrospectively reflected in the accompanying consolidated financial statements as discontinued operations for all prior periods presented. On April 19, 2012, the Company announced its discontinuation of its managed-only contract with the State of Mississippi, Department of Corrections for the 1,500-bed East Mississippi Correctional Facility ("East Mississippi") effective July 19, 2012. In connection with the discontinuation of East Mississippi, the Company has also discontinued all other management contracts with the State of Mississippi Department of Corrections ("MDOC") including its managed-only contracts for the 1,000-bed Marshall County Correctional Facility effective August 13, 2012, and the 1,450-bed Walnut Grove Youth Correctional Facility effective July 1, 2012. Revenues related to the discontinued operations of MDOC through their respective disposition dates were $24.5 million for the fiscal year ended December 31, 2012, and $44.9 million and $36.6 million for the fiscal years ended, January 1, 2012, and January 2, 2011, respectively. The loss of all management contracts with MDOC resulted in a loss in the overall customer relationship with MDOC as no future significant cash flows will be generated and the Company will have no continuing involvement with MDOC. As such, the results are classified in discontinued operations in accordance with our critical accounting policy Discontinued Operations. Summarized financial information for discontinued operations included in the accompanying consolidated statements of comprehensive income is as follows:
|  | Fiscal Year Ended |  |  |
|  |  |  | (in thousands) |  |  |
|  | 2012 |  | 2011 |  | 2010
Discontinued Operations: |  |  |  |  |  |
Income from discontinued operations - RTS |  | $ | 10,117 |  |  | $ | 9,416 |  |  | $ | 8,027 |
Income (loss) from discontinued operations - Mississippi |  | (3,881 | ) |  | 3,156 |  |  | 5,560 |
Loss on disposition of RTS |  | (24,701 | ) |  | — |  |  | — |
Income tax (benefit) provision |  | (7,805 | ) |  | 4,753 |  |  | 5,168 |
Net income (loss) from discontinued operations, net of taxes |  | $ | (10,660 | ) |  | $ | 7,819 |  |  | $ | 8,419 |
All income (loss) from the above noted discontinued operations included in the consolidated statements of comprehensive income is attributable to GEO.

X
- Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 144 -Paragraph 43-48 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration