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Debt | 3 Months Ended
--- | ---
Mar. 31, 2013
Debt Disclosure [Abstract] |
Debt | DEBT Debt outstanding as of March 31, 2013 and December 31, 2012 consisted of the following (in thousands):
| March 31, 2013 |  | December 31, 2012 |
Senior Credit Facility: |  |  |
Term loans | $ | 557,500 |  |  | $ | 563,625 |
Unamortized discount on term loan | (1,108 | ) |  | (1,195 | )
Revolver | — |  |  | 235,000 |
Total Senior Credit Facility | 556,392 |  |  | 797,430 |
5.125% Senior Notes: |  |  |
Notes due in 2023 | 300,000 |  |  | — |
6.625% Senior Notes: |  |  |
Notes due in 2021 | 300,000 |  |  | 300,000 |
7 3/4% Senior Notes: |  |  |
Notes due in 2017 | 250,000 |  |  | 250,000 |
Unamortized discount on Notes | (2,352 | ) |  | (2,457 | )
Swap on Notes | 5,456 |  |  | 6,212 |
Total 7 3/4% Senior Notes | 253,104 |  |  | 253,755 |
Non-Recourse Debt : |  |  |
Non-Recourse Debt | 118,198 |  |  | 124,947 |
Unamortized discount on Non-Recourse Debt | (1,359 | ) |  | (1,465 | )
Total Non-Recourse Debt | 116,839 |  |  | 123,482 |
Capital Lease Obligations | 12,678 |  |  | 12,994 |
Other debt | 423 |  |  | 512 |
Total debt | 1,539,436 |  |  | 1,488,173 |
Current portion of capital lease obligations, long-term debt and non-recourse debt | (59,627 | ) |  | (53,882 | )
Capital Lease Obligations, long-term portion | (11,678 | ) |  | (11,926 | )
Non-Recourse Debt | (97,964 | ) |  | (104,836 | )
Long-Term Debt | $ | 1,370,167 |  |  | $ | 1,317,529 |
Senior Credit Facility As of March 31, 2013, the Senior Credit Facility, as amended, was comprised of: (i) a $150.0 million Term Loan A (“Term Loan A”), bearing interest at LIBOR plus 2.75% and maturing August 4, 2015, (ii) a $150.0 million Term Loan A-2 (“Term Loan A-2”), bearing interest at LIBOR plus 2.75% and maturing August 4, 2015, (iii) a $100.0 million Term Loan A-3 ("Term Loan A-3"), bearing interest at LIBOR plus 2.75% and maturing August 4, 2015, (iv) a $200.0 million Term Loan B (“Term Loan B”) bearing interest at LIBOR plus 2.75% with a LIBOR floor of 1.00% and maturing August 4, 2016 and (v) a $500.0 million Revolving Credit Facility (“Revolver”) bearing interest at LIBOR plus 2.75% and maturing August 4, 2015. As of March 31, 2013, the Company had $556.4 million in aggregate borrowings outstanding, net of discount, under the Term Loan A, Term Loan A-2, Term Loan A-3 and Term Loan B, $0.0 million in borrowings under the Revolver (total credit draws outstanding under the Revolver were repaid on March 19, 2013 primarily from proceeds received from the 5.125% Senior Notes issuance discussed below), and approximately $61.0 million in letters of credit which left $439.0 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Senior Credit Facility as of March 31, 2013 was 3.2%. Indebtedness under the Revolver, the Term Loan A, Term Loan A-2 and Term Loan A-3 bears interest based on the Total Leverage Ratio, as defined in the Senior Credit Facility, as of the most recent determination date, as defined, in each of the instances below at the stated rate:
| Interest Rate under the Revolver, Term Loan A, Term Loan A-2 and Term Loan A-3
LIBOR borrowings | LIBOR plus 2.00% to 3.00%.
Base rate borrowings | Prime Rate plus 1.00% to 2.00%.
Letters of credit | 2.00% to 3.00%.
Unused Revolver | 0.375% to 0.50%.
The Senior Credit Facility requires the Company to meet certain financial covenants, including a maximum Total Leverage Ratio, a maximum Senior Secured Leverage Ratio and a minimum Interest Coverage Ratio, as these terms are defined in the Senior Credit Facility. The Company believes it was in compliance with all of the covenants of the Senior Credit Facility as of March 31, 2013. On April 3, 2013, the Company executed an amended and restated credit agreement providing for a Senior Secured Credit Facility consisting of a $300 million term loan and a $700 million revolving credit facility. Pursuant to the amended and restated credit agreement, all amounts outstanding under the Senior Credit Facility, including the Term Loan A, Term Loan A-2, Term Loan A-3, Term Loan B, and the Revolver were refinanced. Refer to Note 16 - Subsequent Events for further discussion. 5.125% Senior Notes On March 19, 2013, the Company completed an offering of $300.0 million aggregate principal amount of senior unsecured notes. The notes will mature on April 1, 2023 and have a coupon rate and yield to maturity of 5.125%. Interest is payable semi-annually on April 1 and October 1 each year, beginning October 1, 2013. The 5.125% Senior Notes are guaranteed on a senior unsecured basis by all of the Company's restricted subsidiaries that guarantee obligations under the amended and restated Senior Credit Facility, the Company's 6.625% Senior Notes, and the Company's 7¾% Senior Notes. The 5.125% Senior Notes and the guarantees are the Company's general unsecured senior obligations and rank equally in right of payment with all of the Company's and the guarantors' existing and future unsecured senior debt, including the Company's 7¾% Senior Notes and 6.625% Senior Notes. The 5.125% Senior Notes and the guarantees are effectively subordinated to any of the Company's and the guarantors' existing and future secured debt to the extent of the value of the assets securing such debt, including all anticipated borrowings under the amended and restated Senior Credit Facility. The 5.125% Senior Notes are structurally subordinated to all existing and future liabilities (including trade payables) of the Company's subsidiaries that do not guarantee the 5.125% Senior Notes. At any time on or prior to April 1, 2016, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of outstanding 5.125% Senior Notes issued under the indenture governing the 5.125% Senior Notes (including any additional notes) at a redemption price of 105.125% of their principal amount, plus accrued and unpaid interest and Liquidated Damages (as defined in the indenture), if any, to the redemption date, with the net cash proceeds of one or more equity offerings (as defined in the indenture); provided, that: (1) at least 65% of the aggregate principal amount of notes issued under the indenture (including any additional notes) remains outstanding immediately after the occurrence of such redemption (excluding notes held by us and our Subsidiaries); and (2) the redemption occurs within 90 days of the date of the closing of such equity offering. At any time prior to April 1, 2018, the Company may, at its option, redeem all or a part of the 5.125% Senior Notes upon not less than 30 days nor more than 60 days' prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) the Applicable Premium (as defined in the indenture) as of the date of redemption, plus (iii) accrued and unpaid interest and Liquidated Damages, if any, to the date of redemption. On or after April 1, 2018, the Company may, at its option, redeem all or a part of the 5.125% Senior Notes upon not less than 30 days nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Liquidated Damages, if any, on the 5.125% Senior Notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below:
Year |  | Percentage
2018 |  | 102.563
2019 |  | 101.708
2020 |  | 100.854
2021 and thereafter |  | 100.000
The Company incurred $5.7 million of loan costs in connection with the 5.125% Senior Notes financing transaction. The loan costs have been capitalized as deferred financing fees and are included in Other Non-Current Assets in the accompanying consolidated balance sheet as of March 31, 2013, and will be amortized to interest expense using an effective interest method through April 1, 2023. The indenture contains certain covenants, including limitations and restrictions on the Company and its restricted subsidiaries' ability to: incur additional indebtedness or issue preferred stock; make dividend payments or other restricted payments; create liens; sell assets; enter into transactions with affiliates; and enter into mergers, consolidations or sales of all or substantially all of the Company's assets. As of the date of the indenture, all of the Company's subsidiaries, other than certain dormant domestic and other subsidiaries and all foreign subsidiaries in existence on the date of the indenture, were restricted subsidiaries. The Company's failure to comply with certain of the covenants under the indenture could cause an event of default of any indebtedness and result in an acceleration of such indebtedness. In addition, there is a cross-default provision which becomes enforceable upon failure of payment of indebtedness at final maturity. The Company's unrestricted subsidiaries are not subject to any of the restrictive covenants in the indenture and are the same as the non-guarantor subsidiaries discussed in Note 17 - Condensed Consolidating Financial Information. The Company believes it was in compliance with all of the covenants of the Indenture governing the 5.125% Senior Notes as of March 31, 2013. Under the terms of a Registration Rights Agreement, dated as of March 19, 2013, among GEO, the Guarantors and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the representative of the initial purchasers of the Notes (the “Registration Rights Agreement”), GEO has agreed to register under the Securities Act notes having terms identical in all material respects to the Notes (the “Exchange Notes”) and to make an offer to exchange the Exchange Notes for the Notes. Pursuant to the terms of the Registration Rights Agreement, GEO has agreed to file a registration statement with respect to an offer to exchange the Exchange Notes for the Notes on or prior to 75 days after the closing of the offering of the Notes and to use its reasonable best efforts to have the registration statement declared effective on or prior to 180 days after the closing of the offering of the Notes. If GEO fails to satisfy certain filing and other obligations described in the Registration Rights Agreement, GEO will be obligated to pay additional interest of 0.25% per annum for the first 90-day period and an additional 0.25% per annum with respect to each subsequent 90-day period thereafter, until GEO's registration obligations are fulfilled, up to a maximum of 1.00% per annum. A portion of the proceeds received from the 5.125% Senior Notes were used on the date of financing to repay the Revolver loans outstanding under the Senior Credit Facility. On April 3, 2013, the Company's Senior Credit Facility was refinanced, and a portion of the proceeds of the 5.125% Senior Notes were used to pay a portion of the outstanding term loans and a portion of the Revolver credit draws outstanding under the Senior Credit Facility. Refer to Note 16-Subsequent Events for further discussion. 7¾% Senior Notes Interest on the 7¾% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on April 15 and October 15 of each year. On or after October 15, 2013, the Company may, at its option, redeem all or a part of the 7¾% Senior Notes at the redemption prices set forth in the indenture governing the 7¾% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information.) The Company believes it was in compliance with all of the covenants of the indenture as of March 31, 2013. 6.625% Senior Notes Interest on the 6.625% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on February 15 and August 15 of each year. On or after February 15, 2016, the Company may, at its option, redeem all or part of the 6.625% Senior Notes at the redemption prices set forth in the indenture governing the 6.625% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note 17-Condensed Consolidating Financial Information.) The Company believes it was in compliance with all of the covenants of the indenture governing the 6.625% Senior Notes as of March 31, 2013. Non-Recourse Debt South Texas Detention Complex As of March 31, 2013, the remaining balance of the debt service requirement under the STLDC financing agreement for the $49.5 million taxable revenue bonds maturing in February 2016 and having fixed coupon rates between 4.63% and 5.07% is $17.2 million, of which $5.5 million is due within the next twelve months. Also, as of March 31, 2013, included in current restricted cash and non-current restricted cash is $6.3 million and $8.9 million, respectively, of funds held in trust with respect to the STLDC for debt service and other reserves. Northwest Detention Center As of March 31, 2013, the remaining balance of the debt service requirement under the $57.0 million note payable to the Washington Economic Finance Authority ("WEDFA") maturing in October 2014 with a fixed coupon rate of 4.10% is $67.7 million, of which $6.5 million is classified as current in the accompanying consolidated balance sheet. The payment of principal and interest on 2011 Revenue Bonds issued by WEDFA is non-recourse to GEO. None of the bonds nor CSC's obligations under the loan are obligations of GEO nor are they guaranteed by GEO. As of March 31, 2013, included in current restricted cash and non-current restricted cash is $9.5 million and $4.2 million, respectively, of funds held in trust with respect to the Northwest Detention Center for debt service and other reserves. Australia The non-recourse obligations to the Company total $33.3 million (AUD 31.9 million) and $34.8 million (AUD 33.6 million), based on the exchange rates in effect at March 31, 2013 and December 31, 2012, respectively. The term of the non-recourse debt is through 2017 and it bears interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary are matched by a similar or corresponding commitment from the government of the State of Victoria. As a condition of the loan, the Company is required to maintain a restricted cash balance of AUD 5.0 million, which, based on exchange rates as of March 31, 2013, was $5.2 million. This amount is included in restricted cash and the annual maturities of the future debt obligation are included in Non-Recourse Debt. Guarantees In connection with the creation of SACS, the Company entered into certain guarantees related to the financing, construction and operation of the prison. As of March 31, 2013, the Company guaranteed obligations amounting to 34.8 million South African Rand, or $3.8 million based on exchange rates as of March 31, 2013. In the event SACS is unable to maintain the required funding in a Rectification Account maintained for the payment of certain costs in the event of contract termination, a previously existing guarantee by the Company for the shortfall will need to be re-instated. The remaining guarantee of 34.8 million South African Rand is secured by outstanding letters of credit under the Company's Revolver as of March 31, 2013. In addition to the above, the Company has also agreed to provide a loan, if required, of up to 20 million South African Rand, or $2.2 million based on exchange rates as of March 31, 2013, referred to as the Shareholder's Loan, to SACS for the purpose of financing SACS’ obligations under its contract with the South African government. No amounts have been funded under the Standby Facility, and the Company does not currently anticipate that such funding will be required by SACS in the future. The Company’s obligations under the Shareholder's Loan expire upon the earlier of full funding or SACS’s release from its obligations under its debt agreements. The lenders’ ability to draw on the Shareholder's Loan is limited to certain circumstances, including termination of the contract. The Company has also guaranteed certain obligations of SACS to the security trustee for SACS’ lenders. The Company secured its guarantee to the security trustee by ceding its rights to claims against SACS in respect of any loans or other finance agreements, and by pledging the Company’s shares in SACS. The Company’s liability under the guarantee is limited to the cession and pledge of shares. The guarantee expires upon expiration of the cession and pledge agreements. In connection with a design, build, finance and maintenance contract for a facility in Canada, the Company guaranteed certain potential tax obligations of a trust. The potential estimated exposure of these obligations is Canadian Dollar (“CAD”) 2.5 million, or $2.5 million, based on exchange rates as of March 31, 2013, commencing in 2017. The Company has a liability of $2.2 million and $2.0 million related to this exposure included in Other Non-Current Liabilities as of March 31, 2013 and December 31, 2012, respectively. To secure this guarantee, the Company purchased Canadian dollar denominated securities with maturities matched to the estimated tax obligations in 2017 to 2021. The Company has recorded an asset equal to the current fair value of those securities included in Other Non-Current Assets as of March 31, 2013 and December 31, 2012, respectively, on its consolidated balance sheets. The Company does not currently operate or manage this facility. At March 31, 2013, the Company also had eight letters of guarantee outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling $12.7 million. In connection with the creation of GEOAmey, the Company and its joint venture partner guarantee the availability of working capital in equal proportion to ensure that GEOAmey can comply with current and future contractual commitments related to the performance of its operations. The Company and the 50% joint venture partner have each extended a £12 million line of credit of which £12.2 million, or $18.6 million based on exchange rates as of March 31, 2013, was outstanding as of March 31, 2013. The Company's maximum exposure relative to the joint venture is its note receivable of $18.6 million, including accrued interest of $0.4 million, and future financial support necessary to guarantee performance under the contract. Except as discussed above, the Company does not have any off balance sheet arrangements.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -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. + Details
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