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Business Segments and Geographic Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Business Segments and Geographic Information

12. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the GEO Secure Services segment; the GEO Care segment; the International Services segment; and the Facility Construction & Design segment. The Company's segment revenues from external customers and a measure of segment profit are as follows (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

2020

 

 

September 30,

2019

 

 

September 30,

2020

 

 

September 30,

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GEO Secure Services

 

$

392,384

 

 

$

411,078

 

 

$

1,180,211

 

 

$

1,201,063

 

GEO Care

 

 

134,940

 

 

 

153,422

 

 

 

417,643

 

 

 

462,772

 

International Services

 

 

48,489

 

 

 

57,634

 

 

 

158,593

 

 

 

176,246

 

Facility Construction & Design [1]

 

 

3,323

 

 

 

9,445

 

 

 

15,535

 

 

 

16,131

 

Total revenues

 

$

579,136

 

 

$

631,579

 

 

$

1,771,982

 

 

$

1,856,212

 

Operating income from segments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GEO Secure Services

 

$

78,076

 

 

$

85,085

 

 

$

226,000

 

 

$

248,462

 

GEO Care

 

 

28,617

 

 

 

36,325

 

 

 

89,166

 

 

 

113,936

 

International Services

 

 

4,400

 

 

 

5,211

 

 

 

15,316

 

 

 

13,870

 

Facility Construction & Design [1]

 

 

13

 

 

 

26

 

 

 

48

 

 

 

26

 

Operating income from segments

 

$

111,106

 

 

$

126,647

 

 

$

330,530

 

 

$

376,294

 

General and Administrative Expenses

 

 

(46,644

)

 

 

(48,488

)

 

$

(145,969

)

 

 

(142,183

)

Total Operating Income

 

$

64,462

 

 

$

78,159

 

 

$

184,561

 

 

$

234,111

 

 

[1]

Facility Construction & Design revenues relate to an expansion project at the Company's managed-only Fulham Correctional Centre in Australia which was completed in the third quarter of 2020.

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 thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

2020

 

 

September 30,

2019

 

 

September 30,

2020

 

 

September 30,

2019

 

Operating income from segments

 

$

111,106

 

 

$

126,647

 

 

$

330,530

 

 

$

376,294

 

Unallocated amounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

(46,644

)

 

 

(48,488

)

 

 

(145,969

)

 

 

(142,183

)

Net interest expense

 

 

(24,389

)

 

 

(29,959

)

 

 

(78,493

)

 

 

(92,730

)

(Loss) gain on extinguishment of debt

 

 

1,472

 

 

 

594

 

 

 

3,035

 

 

 

(5,147

)

Income before income taxes and equity in earnings of

   affiliates

 

$

41,545

 

 

$

48,794

 

 

$

109,103

 

 

$

136,234

 

 

Equity in Earnings of Affiliates

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in South African Custodial Services Pty. Limited (“SACS”), located in South Africa, and GEOAmey PECS Limited (“GEOAmey”), located in the United Kingdom. The Company's investments in these entities are accounted for under the equity method of accounting. The Company’s investments in these entities are presented as a component of Other Non-Current Assets in the accompanying consolidated balance sheets. 

The Company has recorded $2.8 million in earnings, net of tax, for SACS operations during the nine months ended September 30, 2020, and $3.8 million in earnings, net of tax, for SACS operations during the nine months ended September 30, 2019, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of September 30, 2020 and December 31, 2019, the Company’s investment in SACS was $9.5 million and $12.3 million, respectively, and represents its share of cumulative reported earnings.

The Company has recorded $4.4 million in earnings, net of tax, for GEOAmey's operations during the nine months ended September 30, 2020, and $2.8 million in earnings, net of tax, for GEOAmey's operations during the nine months ended September 30, 2019, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of September 30, 2020 and December 31, 2019, the Company’s investment in GEOAmey was $10.1 million and $5.7 million, respectively, and represents its share of cumulative reported earnings.