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Debt | 3 Months Ended
--- | ---
Mar. 31, 2018
Debt Disclosure [Abstract] |
Debt | DEBT Debt outstanding as of March 31, 2018 and December 31, 2017 consisted of the following (in thousands):
| March 31, 2018 |  | December 31, 2017 |
Senior Credit Facility: |  |  |
Term loan | $ | 792,000 |  |  | $ | 794,000 |
Unamortized discount on term loan | (3,344 | ) |  | (3,499 | )
Unamortized debt issuance costs on term loan | (7,273 | ) |  | (7,612 | )
Revolver | 330,155 |  |  | 270,559 |
Total Senior Credit Facility | $ | 1,111,538 |  |  | $ | 1,053,448 |
6.00% Senior Notes: |  |  |
Notes Due in 2026 | 350,000 |  |  | 350,000 |
Unamortized debt issuance costs | (5,203 | ) |  | (5,325 | )
Total 6.00% Senior Notes Due in 2026 | 344,797 |  |  | 344,675 |
5.875% Senior Notes: |  |  |
Notes Due in 2024 | 250,000 |  |  | 250,000 |
Unamortized debt issuance costs | (3,285 | ) |  | (3,385 | )
Total 5.875% Senior Notes Due in 2024 | 246,715 |  |  | 246,615 |
5.125% Senior Notes: |  |  |
Notes Due in 2023 | 300,000 |  |  | 300,000 |
Unamortized debt issuance costs | (4,030 | ) |  | (4,184 | )
Total 5.125% Senior Notes Due in 2023 | 295,970 |  |  | 295,816 |
5.875% Senior Notes |  |  |
Notes Due in 2022 | 250,000 |  |  | 250,000 |
Unamortized debt issuance costs | (3,066 | ) |  | (3,241 | )
Total 5.875% Senior Notes Due in 2022 | 246,934 |  |  | 246,759 |
Non-Recourse Debt | 382,891 |  |  | 394,008 |
Unamortized debt issuance costs on non-recourse debt | (7,974 | ) |  | (9,322 | )
Unamortized discount on non-recourse debt | (244 | ) |  | (271 | )
Total Non-Recourse Debt | 374,673 |  |  | 384,415 |
Capital Lease Obligations | 7,098 |  |  | 7,431 |
Other debt | 2,606 |  |  | 2,728 |
Total debt | 2,630,331 |  |  | 2,581,887 |
Current portion of capital lease obligations, long-term debt and non-recourse debt | (25,189 | ) |  | (28,920 | )
Capital Lease Obligations, long-term portion | (5,698 | ) |  | (6,059 | )
Non-Recourse Debt, long-term portion | (359,387 | ) |  | (365,364 | )
Long-Term Debt | $ | 2,240,057 |  |  | $ | 2,181,544 |
Amended and Restated Credit Agreement On March 23, 2017, the Company executed a third amended and restated credit agreement by and among The GEO Group, Inc. and GEO Corrections Holdings, Inc., ("Corrections" and, together with The GEO Group, Inc., the "Borrowers"), the Australian Borrowers named therein, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the "Credit Agreement"). The Credit Agreement refinances GEO's prior $291.0 million term loan, reestablishes GEO's ability to implement at a later date an Australian Dollar Letter of Credit Facility (the "Australian LC Facility") providing for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars up to AUD 275 million, an increase from the prior AUD 225 million Australian Dollar letter of credit facility, and certain other modifications to the prior credit agreement. Loan costs of approximately $7.0 million were incurred and capitalized in connection with the transaction. The Credit Agreement evidences a credit facility (the "Credit Facility") consisting of an $800 million term loan (the "Term Loan") bearing interest at LIBOR plus 2.25% (with a LIBOR floor of 0.75%), and a $900 million revolving credit facility (the "Revolver") initially bearing interest at LIBOR plus 2.25% (with no LIBOR floor) together with AUD 275 million available solely for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars under the Australian LC Facility. As of March 31, 2018, there were no letters of credit issued under the Australian LC Facility. Amounts to be borrowed by GEO under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing. The Term Loan component is scheduled to mature on March 23, 2024. The revolving credit commitment component is scheduled to mature on May 19, 2021. The Credit Agreement also has an accordion feature of $450.0 million, subject to lender demand and prevailing market conditions and satisfying the relevant borrowing conditions. The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict GEO’s ability to, among other things (i) create, incur or assume any indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make certain restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio to exceed 6.25 to 1.00, allow the senior secured leverage ratio to exceed 3.50 to 1.00, or allow the interest coverage ratio to be less than 3.00 to 1.00, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes, except as permitted, (x) alter the business GEO conducts, and (xi) materially impair GEO’s lenders’ security interests in the collateral for its loans. Events of default under the Credit Agreement include, but are not limited to, (i) GEO’s failure to pay principal or interest when due, (ii) GEO’s material breach of any representation or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) certain material environmental liability claims asserted against GEO, and (viii) a change in control. All of the obligations under the Credit Agreement are unconditionally guaranteed by certain domestic subsidiaries of GEO and the Credit Agreement and the related guarantees are secured by a perfected first-priority pledge of substantially all of GEO’s present and future tangible and intangible domestic assets and all present and future tangible and intangible domestic assets of each guarantor, including but not limited to a first-priority pledge of all of the outstanding capital stock owned by GEO and each guarantor in their domestic subsidiaries. The Australian Borrowers are wholly owned foreign subsidiaries of GEO. GEO has designated each of the Australian Borrowers as restricted subsidiaries under the Credit Agreement. However, the Australian Borrowers are not obligated to pay or perform any obligations under the Credit Agreement other than their own obligations as Australian Borrowers under the Credit Agreement. The Australian Borrowers do not pledge any of their assets to secure any obligations under the Credit Agreement. On August 18, 2016, the Company executed a Letter of Offer by and among GEO and HSBC Bank Australia Limited (the “Letter of Offer”) providing for a bank guarantee line and bank guarantee/standby sub-facility in an aggregate amount of approximately AUD 100 million, or $77 million, based on exchange rates in effect as of March 31, 2018 (collectively, the “Bank Guarantee Facility”). The Bank Guarantee Facility allows GEO to provide letters of credit to assure performance of certain obligations of its wholly owned subsidiary relating to its prison project in Ravenhall, located near Melbourne, Australia. The Bank Guarantee Facility is unsecured. The issuance of letters of credit under the Bank Guarantee Facility is subject to the satisfaction of the conditions precedent specified in the Letter of Offer. Letters of credit issued under the bank guarantee lines are due on demand and letters of credit issued under the bank guarantee/standby sub-facility cannot have a duration exceeding twelve months. The Bank Guarantee Facility may be terminated by HSBC Bank Australia Limited on 90 days written notice. As of March 31, 2018, there was AUD 100 million in letters of credit issued under the Bank Guarantee Facility. As of March 31, 2018, the Company had approximately $792 million in aggregate borrowings outstanding under the Term Loan, approximately $330 million in borrowings under the Revolver, and approximately $70 million in letters of credit which left approximately $500 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Credit Agreement as of March 31, 2018 was 4.2%. 6.00% Senior Notes due 2026 Interest on the 6.00% Senior Notes due 2026 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 April 15, 2019, the Company may, at its option, redeem all or part of the 6.00% Senior Notes due 2026 at the redemption prices set forth in the indenture governing the 6.00% Senior Notes due 2026. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. Refer to Note 17- Condensed Consolidating Financial Information. 5.875% Senior Notes due 2024 Interest on the 5.875% Senior Notes due 2024 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, 2019, the Company may, at its option, redeem all or part of the 5.875% Senior Notes due 2024 at the redemption prices set forth in the indenture governing the 5.875% Senior Notes due 2024. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. Refer to Note 17- Condensed Consolidating Financial Information. 5.125% Senior Notes due 2023 Interest on the 5.125% Senior Notes due 2023 accrues at the stated rate. The Company pays interest semi-annually in arrears on April 1 and October 1 of each year. On or after April 1, 2018, the Company may, at its option, redeem all or part of the 5.125% Senior Notes at the redemption prices set forth in the indenture governing the 5.125% 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. 5.875% Senior Notes due 2022 Interest on the 5.875% Senior Notes due 2022 accrues at the stated rate. The Company pays interest semi-annually in arrears on January 15 and July 15 of each year. On or after January 15, 2017, the Company may, at its option, redeem all or part of the 5.875% Senior Notes due 2022 at the redemption prices set forth in the indenture governing the 5.875% Senior Notes due 2022. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. Refer to Note 17- Condensed Consolidating Financial Information. Non-Recourse Debt Northwest Detention Center The remaining balance of the original debt service requirement under the $54.4 million note payable ("2011 Revenue Bonds") to WEDFA will mature in October 2021 with fixed coupon rates of 5.25%, is $30.0 million, of which $7.0 million is classified as current in the accompanying consolidated balance sheet as of March 31, 2018. The payment of principal and interest on the 2011 Revenue Bonds issued by WEDFA is non-recourse to GEO. As of March 31, 2018, included in current restricted cash and cash equivalents is $7.9 million of funds held in trust for debt service and other reserves with respect to the above mentioned note payable to WEDFA. Australia - Ravenhall In connection with a design and build prison project agreement with the State, the Company entered into a syndicated facility agreement (the "Construction Facility") with National Australia Bank Limited to provide debt financing for construction of the project. The Construction Facility provided for non-recourse funding up to AUD 791.0 million, or approximately $607.9 million, based on exchange rates as of March 31, 2018. Construction draws were funded throughout the project according to a fixed utilization schedule as defined in the syndicated facility agreement. The term of the Construction Facility is through October 2019 and bears interest at a variable rate quoted by certain Australian banks plus 200 basis points. The project was developed under a public-private partnership financing structure with a capital contribution from the Company, which was made in January 2017, of approximately AUD 115 million, or $88.4 million, based on exchange rates as of March 31, 2018. After October 2019, the Construction Facility will be converted to a term loan with payments due quarterly beginning in 2019 through 2041. In accordance with the terms of the Construction Facility, upon completion and commercial acceptance of the prison in fourth quarter 2017, in accordance with the prison contract, the State made a lump sum payment of AUD 310 million, or approximately $238 million, based on exchange rates as of March 31, 2018, towards a portion of the outstanding principal. The remaining outstanding principal balance will be repaid over the term of the operating agreement. As of March 31, 2018, approximately $353 million was outstanding under the Construction Facility. The Company also entered into interest rate swap and interest rate cap agreements related to its non-recourse debt in connection with the project. Refer to Note 11 - Derivative Financial Instruments. Guarantees Australia The Company has entered into certain guarantees in connection with the financing and construction performance of a facility in Australia. The obligations amounted to approximately AUD 100.0 million, or approximately $77 million, based on exchange rates as of March 31, 2018. These guarantees are secured by outstanding letters of credit under the Company's Revolver as of March 31, 2018. At March 31, 2018, the Company also had ten other letters of credit outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling $15.6 million. South Africa In connection with the creation of South African Custodial Services Pty. Limited ("SACS"), the Company entered into certain guarantees related to the financing, construction and operation of the prison. As of March 31, 2018, the Company guaranteed obligations amounting to 2.4 million South African Rand, or $0.2 million based on exchange rates as of March 31, 2018. 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 2.4 million South African Rand is secured by outstanding letters of credit under the Company's Revolver as of March 31, 2018. 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 $1.7 million based on exchange rates as of March 31, 2018, 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. SACS' 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. United Kingdom 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, or $16.9 million, based on exchange rates as of March 31, 2018, of which £1.3 million, or $1.8 million, based on exchange rates as of March 31, 2018, was outstanding as of March 31, 2018 to each joint venture partner. The Company's maximum exposure relative to the joint venture is its note receivable of approximately $1.8 million, which is included in Other Non-Current Assets in the accompanying consolidated balance sheets, 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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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