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Business Segments and Geographic Information
 3 Months Ended
Mar. 31, 2021
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 U.S. 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

 

 

 

 

March 31,

2021

 

 

March 31,

2020

 

 

Revenues:

 

 

 

 

 

 

 

 

 

U.S. Secure Services

 

$

387,011

 

 

$

398,109

 

 

GEO Care

 

 

135,482

 

 

 

144,463

 

 

International Services

 

 

53,484

 

 

 

56,850

 

 

Facility Construction & Design [1]

 

 

400

 

 

 

5,595

 

 

Total revenues

 

$

576,377

 

 

$

605,017

 

 

Operating income from segments:

 

 

 

 

 

 

 

 

 

U.S. Secure Services

 

$

71,465

 

 

$

74,009

 

 

GEO Care

 

 

35,459

 

 

 

30,275

 

 

International Services

 

 

7,172

 

 

 

5,650

 

 

Facility Construction & Design [1]

 

 

13

 

 

 

10

 

 

Operating income from segments

 

$

114,109

 

 

$

109,944

 

 

General and Administrative Expenses

 

 

(48,479

)

 

 

(53,782

)

 

Total Operating Income

 

$

65,630

 

 

$

56,162

 

 

 

[1]

Facility Construction & Design revenues relate to an expansion project at the Company's managed-only Fulham Correctional Centre in Australia which has been substantially completed.

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

 

 

 

 

March 31,

2021

 

 

March 31,

2020

 

 

Operating income from segments

 

$

114,109

 

 

$

109,944

 

 

Unallocated amounts:

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

(48,479

)

 

 

(53,782

)

 

Net interest expense

 

 

(25,642

)

 

 

(28,742

)

 

Gain on extinguishment of debt

 

 

3,038

 

 

 

1,563

 

 

Gain on sales of real estate

 

 

13,329

 

 

 

424

 

 

Income before income taxes and equity in earnings of

   affiliates

 

$

56,355

 

 

$

29,407

 

 

 

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 $0.9 million in earnings, net of tax, for SACS operations during the three months ended March 31, 2021, and $1.0 million in earnings, net of tax, for SACS operations during the three months ended March 31, 2020, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of March 31, 2021 and December 31, 2020, the Company’s investment in SACS was $10.5 million and $11.1 million, respectively, and represents its share of cumulative reported earnings.

The Company has recorded $1.1 million in earnings, net of tax, for GEOAmey's operations during the three months ended March 31, 2021, and $1.2 million in earnings, net of tax, for GEOAmey's operations during the three months ended March 31, 2020, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of March 31, 2021 and December 31, 2020, the Company’s investment in GEOAmey was $10.6 million and $11.8 million, respectively, and represents its share of cumulative reported earnings.