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Condensed Consolidating Financial Information | 3 Months Ended
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Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Condensed Consolidating Financial Information | CONDENSED CONSOLIDATING FINANCIAL INFORMATION As of March 31, 2017, the Company's 6.00% Senior Notes, 5.125% Senior Notes, the 5.875% Senior Notes due 2022 and the 5.875% Senior Notes due 2024 were fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company and certain of its wholly-owned domestic subsidiaries (the “Subsidiary Guarantors”). The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(d) of Regulation S-X promulgated under the Securities Act, presents the condensed consolidating financial information separately for:
(i) | The GEO Group, Inc., as the issuer of the notes;
(ii) | The Subsidiary Guarantors, on a combined basis, which are 100% owned by The GEO Group, Inc., and which are guarantors of the notes;
(iii) | The Company’s other subsidiaries, on a combined basis, which are not guarantors of the notes (the “Non-Guarantor Subsidiaries”);
(iv) | Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the Subsidiary Non-Guarantors and (b) eliminate the investments in the Company’s subsidiaries; and
(v) | The Company and its subsidiaries on a consolidated basis.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (dollars in thousands) (unaudited)
| For the Three Months Ended March 31, 2017
| The GEO Group, Inc. |  | Combined Subsidiary Guarantors |  | Combined Non-Guarantor Subsidiaries |  | Eliminations |  | Consolidated
Revenues | $ | 178,173 |  |  | $ | 413,194 |  |  | $ | 101,484 |  |  | $ | (142,237 | ) |  | $ | 550,614 |
Operating expenses | 132,167 |  |  | 337,999 |  |  | 86,778 |  |  | (142,237 | ) |  | 414,707 |
Depreciation and amortization | 6,150 |  |  | 21,875 |  |  | 924 |  |  | — |  |  | 28,949 |
General and administrative expenses | 13,667 |  |  | 20,981 |  |  | 7,938 |  |  | — |  |  | 42,586 |
Operating income | 26,189 |  |  | 32,339 |  |  | 5,844 |  |  | — |  |  | 64,372 |
Interest income | 3,354 |  |  | 820 |  |  | 11,828 |  |  | (4,025 | ) |  | 11,977 |
Interest expense | (15,792 | ) |  | (12,485 | ) |  | (10,748 | ) |  | 4,025 |  |  | (35,000 | )
Income before income taxes and equity in earnings of affiliates | 13,751 |  |  | 20,674 |  |  | 6,924 |  |  | — |  |  | 41,349 |
Income tax provision | 147 |  |  | 1,453 |  |  | 870 |  |  | — |  |  | 2,470 |
Equity in earnings of affiliates, net of income tax provision | — |  |  | — |  |  | 1,487 |  |  | — |  |  | 1,487 |
Income before equity in income of consolidated subsidiaries | 13,604 |  |  | 19,221 |  |  | 7,541 |  |  | — |  |  | 40,366 |
Income from consolidated subsidiaries, net of income tax provision | 26,762 |  |  | — |  |  | — |  |  | (26,762 | ) |  | — |
Net income | 40,366 |  |  | 19,221 |  |  | 7,541 |  |  | (26,762 | ) |  | 40,366 |
Net loss attributable to noncontrolling interests | — |  |  | — |  |  | 37 |  |  | — |  |  | 37 |
Net income attributable to The GEO Group, Inc. | $ | 40,366 |  |  | $ | 19,221 |  |  | $ | 7,578 |  |  | $ | (26,762 | ) |  | $ | 40,403 |
Net income | $ | 40,366 |  |  | $ | 19,221 |  |  | $ | 7,541 |  |  | $ | (26,762 | ) |  | $ | 40,366 |
Other comprehensive income, net of tax | — |  |  | 47 |  |  | 1,213 |  |  | — |  |  | 1,260 |
Total comprehensive income | $ | 40,366 |  |  | $ | 19,268 |  |  | $ | 8,754 |  |  | $ | (26,762 | ) |  | $ | 41,626 |
Comprehensive loss attributable to noncontrolling interests | — |  |  | — |  |  | 35 |  |  | — |  |  | 35 |
Comprehensive income attributable to The GEO Group, Inc. | $ | 40,366 |  |  | $ | 19,268 |  |  | $ | 8,789 |  |  | $ | (26,762 | ) |  | $ | 41,661 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (dollars in thousands) (unaudited)
| For the Three Months Ended March 31, 2016
| The GEO Group, Inc. |  | Combined Subsidiary Guarantors |  | Combined Non-Guarantor Subsidiaries |  | Eliminations |  | Consolidated
Revenues | $ | 167,637 |  |  | $ | 400,342 |  |  | $ | 80,965 |  |  | $ | (138,759 | ) |  | $ | 510,185 |
Operating expenses | 137,910 |  |  | 319,904 |  |  | 69,451 |  |  | (138,759 | ) |  | 388,506 |
Depreciation and amortization | 6,262 |  |  | 21,233 |  |  | 956 |  |  | — |  |  | 28,451 |
General and administrative expenses | 7,975 |  |  | 19,966 |  |  | 6,120 |  |  | — |  |  | 34,061 |
Operating income | 15,490 |  |  | 39,239 |  |  | 4,438 |  |  | — |  |  | 59,167 |
Interest income | 5,441 |  |  | 609 |  |  | 4,657 |  |  | (6,150 | ) |  | 4,557 |
Interest expense | (16,357 | ) |  | (13,944 | ) |  | (5,215 | ) |  | 6,150 |  |  | (29,366 | )
Income before income taxes and equity in earnings of affiliates | 4,574 |  |  | 25,904 |  |  | 3,880 |  |  | — |  |  | 34,358 |
Income tax provision | 10 |  |  | 2,191 |  |  | 950 |  |  | — |  |  | 3,151 |
Equity in earnings of affiliates, net of income tax provision | — |  |  | — |  |  | 1,119 |  |  | — |  |  | 1,119 |
Income before equity in income of consolidated subsidiaries | 4,564 |  |  | 23,713 |  |  | 4,049 |  |  | — |  |  | 32,326 |
Income from consolidated subsidiaries, net of income tax provision | 27,763 |  |  | — |  |  | — |  |  | (27,763 | ) |  | — |
Net income | 32,327 |  |  | 23,713 |  |  | 4,049 |  |  | (27,763 | ) |  | 32,326 |
Net loss attributable to noncontrolling interests | — |  |  | — |  |  | 24 |  |  | — |  |  | 24 |
Net income attributable to The GEO Group, Inc. | $ | 32,327 |  |  | $ | 23,713 |  |  | $ | 4,073 |  |  | $ | (27,763 | ) |  | $ | 32,350 |
Net income | $ | 32,327 |  |  | $ | 23,713 |  |  | $ | 4,049 |  |  | $ | (27,763 | ) |  | $ | 32,326 |
Other comprehensive income (loss), net of tax | — |  |  | 33 |  |  | (931 | ) |  | — |  |  | (898 | )
Total comprehensive income | $ | 32,327 |  |  | $ | 23,746 |  |  | $ | 3,118 |  |  | $ | (27,763 | ) |  | $ | 31,428 |
Comprehensive loss attributable to noncontrolling interests | — |  |  | — |  |  | 16 |  |  | — |  |  | 16 |
Comprehensive income attributable to The GEO Group, Inc. | $ | 32,327 |  |  | $ | 23,746 |  |  | $ | 3,134 |  |  | $ | (27,763 | ) |  | $ | 31,444 |
CONDENSED CONSOLIDATING BALANCE SHEET (dollars in thousands) (unaudited)
| As of March 31, 2017
| The GEO Group, Inc. |  | Combined Subsidiary Guarantors |  | Combined Non-Guarantor Subsidiaries |  | Eliminations |  | Consolidated
ASSETS
Cash and cash equivalents | $ | 399,480 |  |  | $ | 7,554 |  |  | $ | 27,525 |  |  | $ | — |  |  | $ | 434,559 |
Restricted cash and investments | 1,269 |  |  | — |  |  | 15,570 |  |  | — |  |  | 16,839 |
Accounts receivable, less allowance for doubtful accounts | 117,889 |  |  | 171,189 |  |  | 18,413 |  |  | — |  |  | 307,491 |
Contract receivable, current portion | — |  |  | — |  |  | 237,649 |  |  | — |  |  | 237,649 |
Prepaid expenses and other current assets | 508 |  |  | 23,978 |  |  | 4,506 |  |  | — |  |  | 28,992 |
Total current assets | 519,146 |  |  | 202,721 |  |  | 303,663 |  |  | — |  |  | 1,025,530 |
Restricted Cash and Investments | (1,079 | ) |  | 21,047 |  |  | 1,711 |  |  | — |  |  | 21,678 |
Property and Equipment, Net | 735,780 |  |  | 1,088,196 |  |  | 85,722 |  |  | — |  |  | 1,909,698 |
Non-Current Contract Receivable | — |  |  | — |  |  | 302,836 |  |  | — |  |  | 302,836 |
Intercompany Receivable | 922,070 |  |  | 118,807 |  |  | 28,252 |  |  | (1,069,129 | ) |  | — |
Non-Current Deferred Income Tax Assets | 764 |  |  | 17,461 |  |  | 11,814 |  |  | — |  |  | 30,039 |
Goodwill | 79 |  |  | 614,941 |  |  | 438 |  |  | — |  |  | 615,458 |
Intangible Assets, Net | — |  |  | 198,066 |  |  | 744 |  |  | — |  |  | 198,810 |
Investment in Subsidiaries | 1,224,749 |  |  | 453,583 |  |  | 2,190 |  |  | (1,680,522 | ) |  | — |
Other Non-Current Assets | 14,118 |  |  | 108,416 |  |  | 20,185 |  |  | (79,753 | ) |  | 62,966 |
Total Assets | $ | 3,415,626 |  |  | $ | 2,823,238 |  |  | $ | 757,555 |  |  | $ | (2,829,404 | ) |  | $ | 4,167,015 |
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable | $ | 12,896 |  |  | $ | 45,108 |  |  | $ | 26,854 |  |  | $ | — |  |  | $ | 84,858 |
Accrued payroll and related taxes | — |  |  | 35,468 |  |  | 15,814 |  |  | — |  |  | 51,282 |
Accrued expenses and other current liabilities | 40,514 |  |  | 65,159 |  |  | 14,235 |  |  | — |  |  | 119,908 |
Current portion of capital lease obligations, long-term debt and non-recourse debt | 8,000 |  |  | 1,742 |  |  | 245,381 |  |  | — |  |  | 255,123 |
Total current liabilities | 61,410 |  |  | 147,477 |  |  | 302,284 |  |  | — |  |  | 511,171 |
Intercompany Payable | 109,991 |  |  | 924,252 |  |  | 34,886 |  |  | (1,069,129 | ) |  | — |
Other Non-Current Liabilities | 4,746 |  |  | 145,585 |  |  | 18,730 |  |  | (79,753 | ) |  | 89,308 |
Capital Lease Obligations | — |  |  | 7,098 |  |  | — |  |  | — |  |  | 7,098 |
Long-Term Debt | 2,000,819 |  |  | — |  |  | 88,680 |  |  | — |  |  | 2,089,499 |
Non-Recourse Debt | — |  |  | — |  |  | 224,291 |  |  | — |  |  | 224,291 |
Commitments & Contingencies and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders' Equity: |  |  |  |  |  |  |  |  |
The GEO Group, Inc. Shareholders' Equity | 1,238,660 |  |  | 1,598,826 |  |  | 88,818 |  |  | (1,680,522 | ) |  | 1,245,782 |
Noncontrolling Interests | — |  |  | — |  |  | (134 | ) |  | — |  |  | (134 | )
Total Shareholders’ Equity | 1,238,660 |  |  | 1,598,826 |  |  | 88,684 |  |  | (1,680,522 | ) |  | 1,245,648 |
Total Liabilities and Shareholders' Equity | $ | 3,415,626 |  |  | $ | 2,823,238 |  |  | $ | 757,555 |  |  | $ | (2,829,404 | ) |  | $ | 4,167,015 |
CONDENSED CONSOLIDATING BALANCE SHEET (dollars in thousands)
| As of December 31, 2016
| The GEO Group, Inc. |  | Combined Subsidiary Guarantors |  | Combined Non-Guarantor Subsidiaries |  | Eliminations |  | Consolidated
ASSETS
Cash and cash equivalents | $ | 45,566 |  |  | $ | 842 |  |  | $ | 21,630 |  |  | $ | — |  |  | $ | 68,038 |
Restricted cash and investments | — |  |  | — |  |  | 17,133 |  |  | — |  |  | 17,133 |
Accounts receivable, less allowance for doubtful accounts | 139,571 |  |  | 200,239 |  |  | 16,445 |  |  | — |  |  | 356,255 |
Contract receivable, current portion | — |  |  | — |  |  | 224,033 |  |  | — |  |  | 224,033 |
Prepaid expenses and other current assets | 677 |  |  | 24,096 |  |  | 7,437 |  |  | — |  |  | 32,210 |
Total current assets | 185,814 |  |  | 225,177 |  |  | 286,678 |  |  | — |  |  | 697,669 |
Restricted Cash and Investments | 170 |  |  | 19,742 |  |  | 936 |  |  | — |  |  | 20,848 |
Property and Equipment, Net | 735,104 |  |  | 1,078,220 |  |  | 83,917 |  |  | — |  |  | 1,897,241 |
Non-Current Contract Receivable | — |  |  | — |  |  | 219,783 |  |  |  |  | 219,783 |
Intercompany Receivable | 918,527 |  |  | 141,987 |  |  | 27,290 |  |  | (1,087,804 | ) |  | — |
Non-Current Deferred Income Tax Assets | 764 |  |  | 17,918 |  |  | 11,357 |  |  | — |  |  | 30,039 |
Goodwill | 79 |  |  | 614,941 |  |  | 413 |  |  | — |  |  | 615,433 |
Intangible Assets, Net | — |  |  | 203,138 |  |  | 746 |  |  | — |  |  | 203,884 |
Investment in Subsidiaries | 1,238,772 |  |  | 453,635 |  |  | 2,190 |  |  | (1,694,597 | ) |  | — |
Other Non-Current Assets | 15,011 |  |  | 108,434 |  |  | 20,933 |  |  | (79,866 | ) |  | 64,512 |
Total Assets | $ | 3,094,241 |  |  | $ | 2,863,192 |  |  | $ | 654,243 |  |  | $ | (2,862,267 | ) |  | $ | 3,749,409 |
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable | $ | 8,402 |  |  | $ | 50,200 |  |  | $ | 21,035 |  |  | $ | — |  |  | $ | 79,637 |
Accrued payroll and related taxes | — |  |  | 41,230 |  |  | 14,030 |  |  | — |  |  | 55,260 |
Accrued expenses and other current liabilities | 36,792 |  |  | 83,906 |  |  | 10,398 |  |  | — |  |  | 131,096 |
Current portion of capital lease obligations, long-term debt and non-recourse debt | 3,000 |  |  | 1,700 |  |  | 233,365 |  |  | — |  |  | 238,065 |
Total current liabilities | 48,194 |  |  | 177,036 |  |  | 278,828 |  |  | — |  |  | 504,058 |
Intercompany Payable | 133,039 |  |  | 920,825 |  |  | 33,940 |  |  | (1,087,804 | ) |  | — |
Other Non-Current Liabilities | 2,487 |  |  | 144,383 |  |  | 21,652 |  |  | (79,866 | ) |  | 88,656 |
Capital Lease Obligations | — |  |  | 7,431 |  |  | — |  |  | — |  |  | 7,431 |
Long-Term Debt | 1,935,465 |  |  | — |  |  | — |  |  | — |  |  | 1,935,465 |
Non-Recourse Debt | — |  |  | — |  |  | 238,842 |  |  | — |  |  | 238,842 |
Commitments & Contingencies and Other |  |  |  |  |  |  |  |  |
Shareholders' Equity: | — |  |  | — |  |  | — |  |  |  |  |  |  |
The GEO Group, Inc. Shareholders' Equity | 975,056 |  |  | 1,613,517 |  |  | 81,080 |  |  | (1,694,597 | ) |  | 975,056 |
Noncontrolling Interests | — |  |  | — |  |  | (99 | ) |  | — |  |  | (99 | )
Total Shareholders’ Equity | 975,056 |  |  | 1,613,517 |  |  | 80,981 |  |  | (1,694,597 | ) |  | 974,957 |
Total Liabilities and Shareholders' Equity | $ | 3,094,241 |  |  | $ | 2,863,192 |  |  | $ | 654,243 |  |  | $ | (2,862,267 | ) |  | $ | 3,749,409 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited)
| For the Three Months Ended March 31, 2017
| The GEO Group, Inc. |  | Combined Subsidiary Guarantors |  | Combined Non-Guarantor Subsidiaries |  | Consolidated
Cash Flow from Operating Activities: |  |  |  |  |  |  |
Net cash provided by (used in) operating activities | $ | (22,988 | ) |  | $ | 35,079 |  |  | $ | 35,791 |  |  | $ | 47,882 |
Cash Flow from Investing Activities: |  |  |  |  |  |  |
Proceeds from sale of property and equipment | 689 |  |  | — |  |  | — |  |  | 689 |
Change in restricted cash and investments | (19 | ) |  | (1,305 | ) |  | 1,349 |  |  | 25 |
Capital expenditures | (5,404 | ) |  | (27,062 | ) |  | (1,955 | ) |  | (34,421 | )
Net cash used in investing activities | (4,734 | ) |  | (28,367 | ) |  | (606 | ) |  | (33,707 | )
Cash Flow from Financing Activities: |  |  |  |  |  |  |
Proceeds from long-term debt | 1,083,148 |  |  | — |  |  | — |  |  | 1,083,148 |
Payments on long-term debt | (918,500 | ) |  | — |  |  | — |  |  | (918,500 | )
Payments on non-recourse debt | — |  |  | — |  |  | (67,171 | ) |  | (67,171 | )
Proceeds from non-recourse debt | — |  |  | — |  |  | 36,020 |  |  | 36,020 |
Taxes paid related to net share settlements of equity awards | (3,434 | ) |  | — |  |  | — |  |  | (3,434 | )
Proceeds from issuance of common stock in connection with ESPP | — |  |  |  |  | 122 |  |  | 122 |
Proceeds from issuance of common stock under prospectus supplement | 276,036 |  |  | — |  |  | — |  |  | 276,036 |
Debt issuance costs | (6,992 | ) |  | — |  |  | (379 | ) |  | (7,371 | )
Proceeds from stock options exercised | 3,882 |  |  | — |  |  | — |  |  | 3,882 |
Dividends paid | (52,504 | ) |  |  |  |  | — |  |  | (52,504 | )
Net cash (used in) provided by financing activities | 381,636 |  |  | — |  |  | (31,408 | ) |  | 350,228 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | — |  |  | — |  |  | 2,118 |  |  | 2,118 |
Net Increase in Cash and Cash Equivalents | 353,914 |  |  | 6,712 |  |  | 5,895 |  |  | 366,521 |
Cash and Cash Equivalents, beginning of period | 45,566 |  |  | 842 |  |  | 21,630 |  |  | 68,038 |
Cash and Cash Equivalents, end of period | $ | 399,480 |  |  | $ | 7,554 |  |  | $ | 27,525 |  |  | $ | 434,559 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited)
| For the Three Months Ended March 31, 2016
| The GEO Group, Inc. |  | Combined Subsidiary Guarantors |  | Combined Non-Guarantor Subsidiaries |  | Consolidated
Cash Flow from Operating Activities: |  |  |  |  |  |  |
Net cash (used in) provided by operating activities | $ | (221 | ) |  | $ | 25,317 |  |  | $ | (42,623 | ) |  | $ | (17,527 | )
Cash Flow from Investing Activities: |  |  |  |  |  |  |
Proceeds from sale of property and equipment | — |  |  | 18 |  |  | — |  |  | 18 |
Change in restricted cash and investments | 90 |  |  | (956 | ) |  | (40,171 | ) |  | (41,037 | )
Capital expenditures | (3,567 | ) |  | (24,379 | ) |  | (483 | ) |  | (28,429 | )
Net cash used in investing activities | (3,477 | ) |  | (25,317 | ) |  | (40,654 | ) |  | (69,448 | )
Cash Flow from Financing Activities: |  |  |  |  |  |  |
Taxes paid related to net share settlements of equity awards | (1,717 | ) |  | — |  |  | — |  |  | (1,717 | )
Proceeds from long-term debt | 117,000 |  |  | — |  |  | — |  |  | 117,000 |
Payments on long-term debt | (88,756 | ) |  |  |  |  | — |  |  | (88,756 | )
Payments on non-recourse debt | — |  |  | — |  |  | (1,613 | ) |  | (1,613 | )
Proceeds from non-recourse debt | — |  |  | — |  |  | 71,242 |  |  | 71,242 |
Proceeds from issuance of common stock in connection with ESPP | — |  |  | — |  |  | 2,357 |  |  | 2,357 |
Debt issuance costs | — |  |  | — |  |  | (1,505 | ) |  | (1,505 | )
Tax benefit related to equity compensation | (818 | ) |  | — |  |  | — |  |  | (818 | )
Proceeds from stock options exercised | 979 |  |  | — |  |  | — |  |  | 979 |
Dividends paid | (48,509 | ) |  | — |  |  | — |  |  | (48,509 | )
Net cash (used in) provided by financing activities | (21,821 | ) |  | — |  |  | 70,481 |  |  | 48,660 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | — |  |  | — |  |  | 1,902 |  |  | 1,902 |
Net Decrease in Cash and Cash Equivalents | (25,519 | ) |  | — |  |  | (10,894 | ) |  | (36,413 | )
Cash and Cash Equivalents, beginning of period | 37,077 |  |  | — |  |  | 22,561 |  |  | 59,638 |
Cash and Cash Equivalents, end of period | $ | 11,558 |  |  | $ | — |  |  | $ | 11,667 |  |  | $ | 23,225 |

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