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Business Segments and Geographic Information
 6 Months Ended
Jun. 30, 2024
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 Electronic Monitoring and Supervision Services segment; the Reentry Services segment; and the International Services segment. The Company has identified these four reportable segments to reflect the current view that the Company operates four distinct business lines, each of which constitutes a material part of its overall business.

 

The U.S. Secure Services segment primarily encompasses U.S.-based secure services business. The Electronic Monitoring and Supervision Services segment, which conducts its services in the United States, represents technology and services provided to adults for monitoring services for community-based parolees, probationers, and pretrial defendants. The Reentry Services segment, which conducts its services in the United States, represents evidence-based supervision and treatment programs provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs. The International Services segment primarily consists of secure services operations in South Africa and Australia. Segment disclosures below (in thousands) reflect the results of continuing operations. All transactions between segments are eliminated.

 

The Company's segment revenues from external customers and a measure of segment profit are as follows (in thousands):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Secure Services

 

$

402,097

 

 

$

372,543

 

 

$

803,037

 

 

$

738,500

 

Electronic Monitoring and Supervision Services

 

 

84,745

 

 

 

108,029

 

 

 

171,529

 

 

 

240,669

 

Reentry Services

 

 

68,960

 

 

 

67,594

 

 

 

136,790

 

 

 

131,817

 

International Services

 

 

51,383

 

 

 

45,725

 

 

 

101,501

 

 

 

91,114

 

Total revenues

 

$

607,185

 

 

$

593,891

 

 

$

1,212,857

 

 

$

1,202,100

 

Operating income from segments:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Secure Services

 

$

79,769

 

 

$

67,058

 

 

$

159,010

 

 

$

131,402

 

Electronic Monitoring and Supervision Services

 

 

38,277

 

 

 

55,121

 

 

 

76,457

 

 

 

119,809

 

Reentry Services

 

 

12,155

 

 

 

10,186

 

 

 

24,897

 

 

 

20,372

 

International Services

 

 

2,142

 

 

 

1,707

 

 

 

4,611

 

 

 

5,283

 

Operating income from segments

 

$

132,343

 

 

$

134,072

 

 

$

264,975

 

 

$

276,866

 

General and Administrative Expenses

 

 

(52,198

)

 

 

(41,692

)

 

 

(105,268

)

 

 

(91,826

)

Total Operating Income

 

$

80,145

 

 

$

92,380

 

 

$

159,707

 

 

$

185,040

 

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

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

Operating income from segments

 

$

132,343

 

 

$

134,072

 

 

$

264,975

 

 

$

276,866

 

Unallocated amounts:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

(52,198

)

 

 

(41,692

)

 

 

(105,268

)

 

 

(91,826

)

Net interest expense

 

 

(48,652

)

 

 

(53,749

)

 

 

(97,473

)

 

 

(106,839

)

Loss on extinguishment of debt

 

 

(82,339

)

 

 

(1,618

)

 

 

(82,378

)

 

 

(1,754

)

(Loss) gain on disposition on asset divestitures/impairment

 

 

(2,907

)

 

 

2,175

 

 

 

(2,907

)

 

 

2,175

 

Income (loss) before income taxes and equity in earnings of
   affiliates

 

$

(53,753

)

 

$

39,188

 

 

$

(23,051

)

 

$

78,622

 

 

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 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 $0.1 million in losses, net of tax, for SACS operations during the six months ended June 30, 2024, and $1.0 million in earnings, net of tax, for SACS operations during the six months ended June 30, 2023, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2024, and December 31, 2023, the Company’s investment in SACS was $8.1 million and $9.1 million, respectively, and represents its share of cumulative reported earnings.

The Company has recorded $0.9 million in earnings, net of tax, for GEOAmey's operations during the six months ended June 30, 2024, and $1.4 million in earnings, net of tax, for GEOAmey's operations during the six months ended June 30, 2023, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of June 30, 2024, and December 31, 2023, the Company’s investment in GEOAmey was $9.0 million and $11.2 million, respectively, and represents its share of cumulative reported earnings.