The GEO Group, Inc. (NYSE: GEO) (“GEO”), a fully
integrated equity real estate investment trust (“REIT”) and a
leading provider of enhanced in-custody rehabilitation,
post-release support, and community-based programs, reported today
its financial results for the first quarter 2021 and updated its
financial guidance for the full-year 2021.
First Quarter 2021 Highlights
- Total revenues of $576.4 million
- Net Income Attributable to GEO of $50.5 million or $0.41 per
diluted share
- 1Q21 results reflect $13.3 million pre-tax gain on real
estate assets and $3.0 million pre-tax gain on the extinguishment
of debt
- Adjusted Net Income of $0.28 per diluted share
- Net Operating Income of $152.3 million
- Normalized FFO of $0.44 per diluted share
- AFFO of $0.60 per diluted share
We reported first quarter 2021 net income attributable to GEO of
$50.5 million, or $0.41 per diluted share, compared to $25.2
million, or $0.21 per diluted share, for the first quarter 2020. We
reported total revenues for the first quarter 2021 of $576.4
million compared to $605.0 million for the first quarter 2020.
First quarter 2021 results reflect a $13.3 million gain on real
estate assets, pre-tax, a $3.0 million gain on the extinguishment
of debt, pre-tax, and a $0.1 million benefit in the tax effect of
adjustments to net income attributable to GEO. Excluding these
items, we reported first quarter 2021 Adjusted Net Income of $34.1
million, or $0.28 per diluted share, compared to $28.8 million, or
$0.24 per diluted share, for the first quarter 2020.
We reported first quarter 2021 Normalized Funds From Operations
(“Normalized FFO”) of $53.1 million, or $0.44 per diluted share,
compared to $47.2 million, or $0.39 per diluted share, for the
first quarter 2020. We reported first quarter 2021 Adjusted Funds
From Operations (“AFFO”) of $72.2 million, or $0.60 per diluted
share, compared to $66.6 million, or $0.55 per diluted share, for
the first quarter 2020.
George C. Zoley, Chairman and Chief Executive Officer of GEO,
said, “While we continue to face operational and financial
challenges associated with COVID-19, we remain pleased with the
performance of our diversified business units. We believe that our
company remains resilient and is supported by long-term real estate
assets and contracts entailing essential government services. We
recognize that heightened political rhetoric has created concerns
regarding our future access to financing, and recent federal policy
actions have resulted in the non-renewal of some of our contracts.
To address these challenges, we are focused on debt reduction,
deleveraging, and internally funding growth, which we believe is in
the best interests of our shareholders as we focus on addressing
our debt maturities and enhancing long-term shareholder value.”
Recent Developments
On January 26, 2021, President Biden signed an executive order
directing the United States Attorney General not to renew U.S.
Department of Justice (“DOJ”) contracts with privately operated
criminal detention facilities, as consistent with applicable law
(the “Executive Order”). Two agencies of the DOJ, the Federal
Bureau of Prisons (“BOP”) and U.S. Marshals Service (“USMS”),
utilize our services. The BOP houses inmates who have been
convicted of federal crimes, and the USMS is generally responsible
for detainees who are awaiting trial or sentencing in U.S. federal
courts.
As we have previously disclosed, prior to the signing of the
Executive Order, the BOP had already decided to not renew contracts
for three of our secure services facilities, one of which expired
at the end of January 2021 and two of which expired at the end of
March 2021. During the first quarter 2021, we were notified by the
BOP that the contract for our company-owned Great Plains
Correctional Facility in Oklahoma will not be renewed when the
current contract period expires on May 31, 2021. We were also
notified that the BOP has decided to end its contract with the
county-owned and managed Reeves County Detention Center I & II
effective May 10, 2021, and as a result, our management consulting
contract with Reeves County, Texas for this facility has also
ended. We expect that our remaining secure services contracts with
the BOP will not be renewed when the current contract periods
expire between the end of November 2021 and the end of September
2022. For the three months ended March 31, 2021, our secure
services contracts with the BOP accounted for approximately 12% of
our total revenues.
Unlike the BOP, the USMS does
not own and operate its detention facilities. The USMS contracts
for the use of facilities, which are generally located in areas
near federal courthouses, primarily through intergovernmental
service agreements, and to a lesser extent, direct contracts. We
are cooperating with the USMS in assessing various alternatives on
how to comply with the Executive Order. During the first quarter
2021, we were notified by the USMS that it would not renew the
contract for our company-owned Queens Detention Facility in New
York, which ended on March 31, 2021. We currently operate four
additional detention facilities that are under direct contracts and
eight detention facilities that are under intergovernmental
agreements with the USMS. The four direct contracts are up for
renewal at various times over the next few years, including two in
late 2021. For the three months ended March 31, 2021, the direct
contracts and intergovernmental agreements with the USMS accounted
for approximately 15% of our total revenues.
President Biden’s Administration may implement additional
executive orders or directives relating to federal criminal justice
policies and immigration policies which may impact the federal
government’s use of public-private partnerships with respect to
correctional and detention needs, including with respect to our
contracts, and/or may impact the budget and spending priorities of
federal agencies, including the BOP, USMS, and U.S. Immigration and
Customs Enforcement.
Updated 2021 Financial Guidance
- FY21 Revenues of $2.23-$2.25 Billion
- FY21 Net Income Attributable to GEO of $141-$150
Million
- FY21 Adjusted EBITDAre of $395-$406 Million
- FY21 AFFO of $2.23-$2.31 per diluted share
We have updated our financial guidance for the full year 2021
and have issued our financial guidance for the second quarter 2021.
Our updated guidance continues to assume a slow recovery from the
COVID-19 pandemic throughout 2021. Our updated guidance reflects
the previously announced expiration of three of our secure services
contracts with the BOP during the first quarter 2021 and the
discontinuation of our management consulting contract with Reeves
County, Texas. Our guidance also reflects our previously announced
expectation that three additional secure services contracts with
the BOP will not be renewed when their current contract option
periods expire during 2021.
With respect to the USMS, our
2021 guidance reflects only the previously announced non-renewal of
the contract for our Queens Detention Facility in New York, which
expired on March 31, 2021, and we will continue to monitor the
scope and implementation timeline of President Biden’s Executive
Order. These contract non-renewals are offset in part by the
activation in late 2020 of our three ICE Annex facilities in
California and our Eagle Pass Detention Facility in Texas, which we
expect to achieve normalized operations over the course of
2021.
For the full year 2021, we expect Net Income Attributable to GEO
to be in a range of $141 million to $150 million. We expect full
year 2021 revenues to be in a range of approximately $2.23 billion
to $2.25 billion. We expect full year 2021 Adjusted EBITDAre to be
in a range of approximately $395 million to $406 million. We expect
full year 2021 Adjusted Net Income per diluted share to be in a
range of $1.02 to $1.10 and full year 2021 AFFO per diluted share
to be in a range of $2.23 to $2.31.
For the second quarter 2021, we expect Net Income Attributable
to GEO to be in a range of $35 million to $38 million. We expect
second quarter 2021 revenues to be in a range of $558 million to
$563 million. We expect second quarter 2021 AFFO to be in a range
of $0.57 to $0.59 per diluted share.
Balance Sheet and Liquidity
During the fourth quarter 2020, we drew down $250 million under
our revolving credit facility. At the end of the first quarter
2021, we had approximately $290 million in cash on hand. During the
second quarter 2021, to preserve liquidity, maintain financial
flexibility, and for general corporate purposes, we drew down an
additional $170 million under our revolving credit facility,
increasing our cash on hand to approximately $460 million and
leaving approximately $14 million in additional borrowing capacity
under our revolving credit facility, subject to the satisfaction of
the applicable conditions precedent to any such borrowings.
During the first quarter 2021, we reduced our total net debt by
approximately $57 million, which represents substantial progress
toward our previously articulated objective of reducing net debt by
$125 million to $150 million in 2021. Based on our progress to
date, we continue to target net debt reductions of no less than
$125 million to $150 million. In the first quarter 2021, we also
sold our interest in the Talbot Hall reentry center in New Jersey,
resulting in net proceeds to GEO of $13.2 million. We are
evaluating the potential sale of additional company-owned
assets.
Dividend Suspension
On April 7, 2021, we announced that GEO’s Board of Directors
(the “Board”) immediately suspended our quarterly dividend payments
with the goal of maximizing the use of cash flows to repay debt,
deleverage, and internally fund growth. GEO currently intends to
maintain its corporate tax structure as a Real Estate Investment
Trust (“REIT”), but the Board has determined to undertake an
evaluation of GEO’s structure as a REIT.
The Board’s evaluation of our current corporate tax structure
and our REIT status is expected to take into consideration, among
other factors, potential changes to our financial operating
performance, as well as, potential changes to the Internal Revenue
Code of 1986, as amended (the "Code") applicable to U.S.
corporations and REITs. The Board expects to conclude its
evaluation in the fourth quarter 2021, and should the Board
determine not to change its current intent to maintain GEO’s REIT
status, an additional dividend payment may be required before
year-end in order to meet the minimum REIT distribution
requirements under the Code.
COVID-19 Information
As the COVID-19 pandemic has impacted communities across the
United States and around the world, our employees and facilities
have also been impacted by the spread of COVID-19. Ensuring the
health and safety of our employees and all those in our care has
always been our number one priority. From the start of the
pandemic, we implemented mitigation initiatives to address the
risks of COVID-19, consistent with the guidance issued for
correctional and detention facilities by the Centers for Disease
Control and Prevention (“CDC”). We will continue to evaluate and
refine the steps we have taken as appropriate and necessary based
on updated guidance by the CDC and best practices, including the
efficacy and distribution of COVID-19 vaccines. We are grateful for
our frontline employees who continue to make daily sacrifices to
care for all those in our facilities. Information on the COVID-19
mitigation initiatives implemented by GEO can be found at
www.geogroup.com/COVID19.
Conference Call Information
We have scheduled a conference call and simultaneous webcast for
today at 11:00 AM (Eastern Time) to discuss our first quarter 2021
financial results as well as our outlook. The call-in number for
the U.S. is 1-877-250-1553 and the international call-in number is
1-412-542-4145. In addition, a live audio webcast of the conference
call may be accessed on the Webcasts section under the News, Events
and Reports tab of GEO’s investor relations webpage at
investors.geogroup.com. A replay of the webcast will be available
on the website for one year. A telephonic replay of the conference
call will be available until May 24, 2021 at 1-877-344-7529 (U.S.)
and 1-412-317-0088 (International). The participant passcode for
the telephonic replay is 10155375.
About The GEO Group
The GEO Group (NYSE: GEO) is a fully integrated equity real
estate investment trust specializing in the design, financing,
development, and operation of secure facilities, processing
centers, and community reentry centers in the United States,
Australia, South Africa, and the United Kingdom. GEO is a leading
provider of enhanced in-custody rehabilitation, post-release
support, electronic monitoring, and community-based programs. GEO’s
worldwide operations include the ownership and/or management of 116
facilities totaling approximately 92,000 beds, including idle
facilities and projects under development, with a workforce of up
to approximately 21,000 professionals.
Reconciliation Tables and Supplemental Information
GEO has made available Supplemental Information which contains
reconciliation tables of Net Income Attributable to GEO to Net
Operating Income, Net Income to EBITDAre (EBITDA for real estate)
and Adjusted EBITDAre (Adjusted EBITDA for real estate), and Net
Income Attributable to GEO to FFO, Normalized FFO and Adjusted FFO,
along with supplemental financial and operational information on
GEO’s business and other important operating metrics, and in this
press release, Net Income Attributable to GEO to Adjusted Net
Income. The reconciliation tables are also presented herein. Please
see the section below titled “Note to Reconciliation Tables and
Supplemental Disclosure - Important Information on GEO’s Non-GAAP
Financial Measures” for information on how GEO defines these
supplemental Non-GAAP financial measures and reconciles them to the
most directly comparable GAAP measures. GEO’s Reconciliation Tables
can be found herein and in GEO’s Supplemental Information available
on GEO’s investor webpage at investors.geogroup.com.
Note to Reconciliation Tables and Supplemental Disclosure
– Important Information on GEO’s Non-GAAP Financial
Measures
Net Operating Income, EBITDAre, Adjusted EBITDAre, Funds from
Operations, Normalized Funds from Operations, Adjusted Funds from
Operations, and Adjusted Net Income are non-GAAP financial measures
that are presented as supplemental disclosures. GEO has presented
herein certain forward-looking statements about GEO's future
financial performance that include non-GAAP financial measures,
including Adjusted EBITDAre, Net Operating Income, FFO, Normalized
FFO, and AFFO. The determination of the amounts that are included
or excluded from these non-GAAP financial measures is a matter of
management judgment and depends upon, among other factors, the
nature of the underlying expense or income amounts recognized in a
given period. While we have provided a high level reconciliation
for the guidance ranges for full year 2021, we are unable to
present a more detailed quantitative reconciliation of the
forward-looking non-GAAP financial measures to their most directly
comparable forward-looking GAAP financial measures because
management cannot reliably predict all of the necessary components
of such GAAP measures. The quantitative reconciliation of the
forward-looking non-GAAP financial measures will be provided for
completed annual and quarterly periods, as applicable, calculated
in a consistent manner with the quantitative reconciliation of
non-GAAP financial measures previously reported for completed
annual and quarterly periods.
Net Operating Income is defined as revenues less operating
expenses, excluding depreciation and amortization expense, general
and administrative expenses, real estate related operating lease
expense, and start-up expenses, pre-tax. Net Operating Income is
calculated as net income adjusted by subtracting equity in earnings
of affiliates, net of income tax provision, and by adding income
tax provision, interest expense, net of interest income, gain/loss
on extinguishment of debt, depreciation and amortization expense,
general and administrative expenses, real estate related operating
lease expense, gain on real estate assets, pre-tax, and start-up
expenses, pre-tax.
EBITDAre (EBITDA for real estate) is defined as net income
adjusted by adding provisions for income tax, interest expense, net
of interest income, depreciation and amortization, and gain on real
estate assets, pre-tax. Adjusted EBITDAre (Adjusted EBITDA for real
estate) is defined as EBITDAre adjusted for net loss attributable
to non-controlling interests, stock-based compensation expenses,
pre-tax, and certain other adjustments as defined from time to
time, including for the periods presented start-up expenses,
pre-tax, COVID-19 expenses, pre-tax, close-out expenses, pre-tax,
and other non-cash revenue and expense, pre-tax.
Given the nature of our business as a real estate owner and
operator, we believe that EBITDAre and Adjusted EBITDAre are
helpful to investors as measures of our operational performance
because they provide an indication of our ability to incur and
service debt, to satisfy general operating expenses, to make
capital expenditures and to fund other cash needs or reinvest cash
into our business. We believe that by removing the impact of our
asset base (primarily depreciation and amortization) and excluding
certain non-cash charges, amounts spent on interest and taxes, and
certain other charges that are highly variable from year to year,
EBITDAre and Adjusted EBITDAre provide our investors with
performance measures that reflect the impact to operations from
trends in occupancy rates, per diem rates and operating costs,
providing a perspective not immediately apparent from net income
attributable to GEO. The adjustments we make to derive the non-GAAP
measures of EBITDAre and Adjusted EBITDAre exclude items which may
cause short-term fluctuations in income from continuing operations
and which we do not consider to be the fundamental attributes or
primary drivers of our business plan and they do not affect our
overall long-term operating performance. EBITDAre and Adjusted
EBITDAre provide disclosure on the same basis as that used by our
management and provide consistency in our financial reporting,
facilitate internal and external comparisons of our historical
operating performance and our business units and provide continuity
to investors for comparability purposes.
Funds From Operations, or FFO, is defined in accordance with
standards established by the National Association of Real Estate
Investment Trusts, or NAREIT, which defines FFO as net income/loss
attributable to common shareholders (computed in accordance with
United States Generally Accepted Accounting Principles), excluding
real estate related depreciation and amortization, excluding gains
and losses from the cumulative effects of accounting changes,
extraordinary items and sales of properties, and including
adjustments for unconsolidated partnerships and joint ventures.
Normalized Funds from Operations, or Normalized FFO, is defined as
FFO adjusted for certain items which by their nature are not
comparable from period to period or that tend to obscure GEO’s
actual operating performance, including for the periods presented
gain on the extinguishment of debt, pre-tax, start-up expenses,
pre-tax, COVID-19 expenses, pre-tax, close-out expenses, pre-tax,
and tax effect of adjustments to FFO. Adjusted Funds From
Operations, or AFFO, is defined as Normalized FFO adjusted by
adding non-cash expenses such as non-real estate related
depreciation and amortization, stock based compensation expense,
the amortization of debt issuance costs, discount and/or premium
and other non-cash interest, and by subtracting recurring
consolidated maintenance capital expenditures and other non-cash
revenue and expenses.
Adjusted Net Income is defined as Net Income Attributable to GEO
adjusted for certain items which by their nature are not comparable
from period to period or that tend to obscure GEO’s actual
operating performance, including for the periods presented gain on
real estate assets, pre-tax, gain on the extinguishment of debt,
pre-tax, start-up expenses, pre-tax, COVID-19 expenses, pre-tax,
close-out expenses, pre-tax, and tax effect of adjustments to Net
Income Attributable to GEO.
Because of the unique design, structure and use of our GEO
Secure Services and GEO Care facilities, we believe that assessing
the performance of our secure facilities, processing centers, and
reentry centers without the impact of depreciation or amortization
is useful and meaningful to investors. Although NAREIT has
published its definition of FFO, companies often modify this
definition as they seek to provide financial measures that
meaningfully reflect their distinctive operations. We have modified
FFO to derive Normalized FFO and AFFO that meaningfully reflect our
operations. Our assessment of our operations is focused on
long-term sustainability. The adjustments we make to derive the
non-GAAP measures of Normalized FFO and AFFO exclude items which
may cause short-term fluctuations in net income attributable to GEO
but have no impact on our cash flows, or we do not consider them to
be fundamental attributes or the primary drivers of our business
plan and they do not affect our overall long-term operating
performance. We may make adjustments to FFO from time to time for
certain other income and expenses that do not reflect a necessary
component of our operational performance on the basis discussed
above, even though such items may require cash settlement.
Because FFO, Normalized FFO and AFFO exclude depreciation and
amortization unique to real estate as well as non-operational items
and certain other charges that are highly variable from year to
year, they provide our investors with performance measures that
reflect the impact to operations from trends in occupancy rates,
per diem rates, operating costs and interest costs, providing a
perspective not immediately apparent from Net Income Attributable
to GEO. We believe the presentation of FFO, Normalized FFO and AFFO
provide useful information to investors as they provide an
indication of our ability to fund capital expenditures and expand
our business. FFO, Normalized FFO and AFFO provide disclosure on
the same basis as that used by our management and provide
consistency in our financial reporting, facilitate internal and
external comparisons of our historical operating performance and
our business units and provide continuity to investors for
comparability purposes. Additionally, FFO, Normalized FFO and AFFO
are widely recognized measures in our industry as a real estate
investment trust.
Safe-Harbor Statement
This press release contains forward-looking statements regarding
future events and future performance of GEO that involve risks and
uncertainties that could materially affect actual results,
including statements regarding GEO’s financial guidance for the
full-year and second quarter 2021, the Board’s decision to suspend
GEO’s quarterly dividend payments with the goal of maximizing the
use of cash flows to repay debt, deleverage, and internally fund
growth, and the Board’s evaluation of GEO’s current corporate tax
structure and REIT status. Risks and uncertainties that could cause
actual results to vary from current expectations and
forward-looking statements contained in this press release include,
but are not limited to: (1) GEO’s ability to meet its financial
guidance for 2021 given the various risks to which its business is
exposed; (2) the Board’s ability to evaluate and conclude its
evaluation regarding GEO’s corporate tax structure and REIT status
by the fourth quarter 2021; (3) GEO’s ability to cancel capital
expenditures previously planned for 2021 and its ability to
deleverage and repay, refinance or otherwise address its debt
maturities in an amount or on the timeline it expects, or at all;
(4) the timing and scope of potential changes to the Code
applicable to U.S. corporations and REITs; (5) changes in federal
and state government policy, orders, directives, legislation and
regulations that affect public-private partnerships with respect to
secure, correctional and detention facilities, processing centers
and reentry centers, including the timing and scope of
implementation of President Biden's Executive Order directing the
U.S. Attorney General not to renew the U.S. Department of Justice
contracts with privately operated criminal detention facilities;
(6) changes in federal immigration policy; (7) public and political
opposition to the use of public-private partnerships with respect
to secure correctional and detention facilities, processing centers
and reentry centers; (8) the magnitude, severity, and duration of
the current COVID-19 global pandemic, its impact on GEO, GEO's
ability to mitigate the risks associated with COVID-19, and the
efficacy and distribution of COVID-19 vaccines; (9) GEO’s ability
to sustain or improve company-wide occupancy rates at its
facilities in light of the COVID-19 global pandemic and policy and
contract announcements impacting GEO’s federal facilities in the
United States; (10) fluctuations in our operating results,
including as a result of contract terminations, contract
renegotiations, changes in occupancy levels and increases in our
operating costs, (11) general economic and market conditions,
including changes to governmental budgets and its impact on new
contract terms, contract renewals, renegotiations, per diem rates,
fixed payment provisions, and occupancy levels (12) GEO’s ability
to timely open facilities as planned, profitably manage such
facilities and successfully integrate such facilities into GEO’s
operations without substantial costs; (13) GEO’s ability to win
management contracts for which it has submitted proposals and to
retain existing management contracts; (14) risks associated with
GEO’s ability to control operating costs associated with contract
start-ups; (15) GEO’s ability to successfully pursue growth and
continue to create shareholder value; (16) GEO’s ability to obtain
financing or access the capital markets in the future on acceptable
terms or at all; (17) GEO’s ability to remain qualified as a REIT,
including its ability to declare future dividend payments, should
the Board determine not to change its current intent to maintain
GEO’s REIT status; and (18) other factors contained in GEO’s
Securities and Exchange Commission periodic filings, including its
Form 10-K, 10-Q and 8-K reports.
First quarter 2021 financial tables to follow:
Condensed
Consolidated Balance Sheets*
(Unaudited)
As of
As of
March 31, 2021
December 31, 2020
(unaudited)
(unaudited)
ASSETS
Cash and cash equivalents
$
289,391
$
283,524
Restricted cash and cash equivalents
29,317
26,740
Accounts receivable, less allowance for doubtful accounts
346,817
362,668
Contract receivable, current portion
6,357
6,283
Prepaid expenses and other current assets
29,081
32,108
Total current assets $
700,963
$
711,323
Restricted Cash and Investments
39,924
37,338
Property and Equipment, Net
2,114,058
2,122,195
Contract Receivable
389,713
396,647
Operating Lease Right-of-Use Assets, Net
125,269
124,727
Assets Held for Sale
6,926
9,108
Deferred Income Tax Assets
36,604
36,604
Intangible Assets, Net (including goodwill)
937,725
942,997
Other Non-Current Assets
76,265
79,187
Total Assets
$
4,427,447
$
4,460,126
LIABILITIES AND SHAREHOLDERS'
EQUITY
Accounts payable $
84,469
$
85,861
Accrued payroll and related taxes
87,466
67,797
Accrued expenses and other current liabilities
195,763
202,378
Operating lease liabilities, current portion
28,223
29,080
Current portion of finance lease obligations, long-term debt, and
non-recourse debt
27,135
26,180
Total current liabilities $
423,056
$
411,296
Deferred Income Tax Liabilities
30,726
30,726
Other Non-Current Liabilities
114,521
115,555
Operating Lease Liabilities
103,491
101,375
Finance Lease Liabilities
2,890
2,988
Long-Term Debt
2,494,987
2,561,881
Non-Recourse Debt
317,603
324,223
Total Shareholders' Equity
940,173
912,082
Total Liabilities and
Shareholders' Equity
$
4,427,447
$
4,460,126
* all figures in '000s
Condensed
Consolidated Statements of Operations*
(Unaudited)
Q1 2021
Q1 2020
(unaudited)
(unaudited)
Revenues
$
576,377
$
605,017
Operating expenses
428,151
461,746
Depreciation and amortization
34,117
33,327
General and administrative expenses
48,479
53,782
Operating income
65,630
56,162
Interest income
6,202
5,438
Interest expense
(31,844
)
(34,180
)
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
Provision for income taxes
7,936
6,546
Equity in earnings of affiliates, net of income tax
provision
2,064
2,260
Net income
50,483
25,121
Less: Net loss attributable to noncontrolling
interests
61
60
Net income attributable to The GEO Group, Inc.
$
50,544
$
25,181
Weighted Average Common Shares
Outstanding: Basic
120,022
119,394
Diluted
120,417
119,933
Net income per Common Share Attributable to The
GEO Group, Inc.: Basic:
Net income per share — basic
$
0.41
$
0.21
Diluted: Net income per share — diluted
$
0.41
$
0.21
Regular Dividends Declared per Common Share
$
0.25
$
0.48
* all figures in '000s, except per share data
Reconciliation of
Net Income Attributable to GEO to Adjusted Net
Income
(In thousands, except per share
data)(Unaudited)
Q1 2021
Q1 2020
Net Income attributable to GEO
$
50,544
$
25,181
Add: (Gain)/Loss on real estate assets, pre-tax
(13,329
)
(424
)
(Gain)/Loss on extinguishment of debt, pre-tax
(3,038
)
(1,563
)
Start-up expenses, pre-tax
-
1,953
COVID-19 expenses, pre-tax
-
892
Close-out expenses, pre-tax
-
1,936
Tax effect of adjustments to Net Income attributable to GEO
(92
)
837
Adjusted Net Income
$
34,085
$
28,812
Weighted average common shares outstanding - Diluted
120,417
119,933
Adjusted Net Income Per Diluted Share (1)
$
0.28
$
0.24
(1)
Diluted earnings per share attributable to
GEO available to common stockholders was calculated and presented
in GEO’s unaudited financial statements under the two-class method
for the three months ended March 31, 2021 due to the issuance of
GEO’s 6.50% exchangeable senior notes due 2026 as the exchangeable
senior notes are considered to be participating securities.
Reconciliation of
Net Income Attributable to GEO to FFO, Normalized FFO, and
AFFO*
(Unaudited)
Q1 2021
Q1 2020
(unaudited)
(unaudited)
Net Income attributable to GEO
$
50,544
$
25,181
Add (Subtract): Real Estate Related Depreciation and
Amortization
18,972
18,395
(Gain) on real estate assets, pre-tax
(13,329
)
(424
)
Equals: NAREIT defined FFO
$
56,187
$
43,152
Add (Subtract): (Gain)/loss on
extinguishment of debt, pre-tax
(3,038
)
(1,563
)
Start-up expenses, pre-tax
-
1,953
COVID-19 expenses, pre-tax
-
892
Close-out expenses, pre-tax
-
1,936
Tax effect of adjustments to funds from operations **
(92
)
837
Equals: FFO, normalized
$
53,057
$
47,207
Add (Subtract): Non-Real Estate
Related Depreciation & Amortization
15,145
14,932
Consolidated Maintenance Capital Expenditures
(3,939
)
(7,027
)
Stock Based Compensation Expenses
7,402
9,768
Other non-cash revenue & expenses
(1,102
)
-
Amortization of debt issuance costs, discount and/or premium and
other non-cash interest
1,683
1,670
Equals: AFFO
$
72,246
$
66,550
Weighted average common shares outstanding -
Diluted
120,417
119,933
FFO/AFFO per Share - Diluted
Normalized FFO Per Diluted Share
$
0.44
$
0.39
AFFO Per Diluted Share
$
0.60
$
0.55
Regular Common Stock
Dividends per common share
$
0.25
$
0.48
*
all figures in '000s, except per
share data
**
tax adjustments related to gain
on real estate assets, Gain on extinguishment of debt, Start-up
expenses, COVID-19 expenses, Close-out expenses and Other non-cash
revenue & expenses.
Reconciliation of
Net Income Attributable to GEO to
Net Operating
Income, EBITDAre and Adjusted EBITDAre*
(Unaudited)
Q1 2021
Q1 2020
(unaudited)
(unaudited)
Net Income attributable to GEO $
50,544
$
25,181
Less Net loss attributable to noncontrolling
interests
61
60
Net Income $
50,483
$
25,121
Add (Subtract): Equity in
earnings of affiliates, net of income tax provision
(2,064
)
(2,260
)
Income tax provision
7,936
6,546
Interest expense, net of interest income
25,641
28,742
Gain on extinguishment of debt
(3,037
)
(1,563
)
Depreciation and amortization
34,117
33,327
General and administrative expenses
48,479
53,782
Net Operating Income, net of operating lease obligations
$
161,555
$
143,695
Add: Operating lease expense,
real estate
4,084
4,953
Gain on real estate assets, pre-tax
(13,329
)
(424
)
Start-up expenses, pre-tax
-
1,953
Net Operating Income (NOI) $
152,310
$
150,177
Q1 2021
Q1 2020
(unaudited)
(unaudited)
Net Income $
50,483
$
25,121
Add (Subtract): Income tax provision **
8,276
6,989
Interest expense, net of interest income ***
22,603
27,179
Depreciation and amortization
34,117
33,327
Gain on real estate assets, pre-tax
(13,329
)
(424
)
EBITDAre $
102,150
$
92,192
Add (Subtract): Net loss attributable to
noncontrolling interests
61
60
Stock based compensation expenses, pre-tax
7,402
9,768
Start-up expenses, pre-tax
-
1,953
COVID-19 expenses, pre-tax
-
892
Close-out expenses, pre-tax
-
1,936
Other non-cash revenue & expenses, pre-tax
(1,102
)
-
Adjusted EBITDAre $
108,511
$
106,801
*
all figures in '000s
**
including income tax provision on
equity in earnings of affiliates
***
includes (gain)/loss on
extinguishment of debt
2021
Outlook/Reconciliation
(In thousands, except per share data)
(Unaudited)
FY 2021 Net Income
Attributable to GEO
$
140,500
to
$
150,000
Real Estate Related Depreciation and Amortization
76,000
76,000
Gain/Loss on Real Estate
(13,500
)
(13,500
)
Funds from Operations (FFO)
$
203,000
to
$
212,500
Loss on Extinguishment of Debt
(3,000
)
(3,000
)
Normalized Funds from Operations
$
200,000
to
$
209,500
Non-Real Estate Related Depreciation and
Amortization
61,000
61,000
Consolidated Maintenance Capex
(14,000
)
(14,000
)
Non-Cash Stock Based Compensation
19,000
19,000
Non-Cash Interest Expense
7,500
7,500
Other Non-Cash Revenue & Expenses
(4,000
)
(4,000
)
Adjusted Funds From Operations (AFFO)
$
269,500
to
$
279,000
Net Interest Expense
99,000
100,000
Non-Cash Interest Expense
(7,500
)
(7,500
)
Consolidated Maintenance Capex
14,000
14,000
Income Taxes (including income tax provision on equity in
earnings of affiliates)
20,000
20,000
Adjusted EBITDAre
$
395,000
to
$
405,500
G&A Expenses
182,000
182,000
Non-Cash Stock Based Compensation
(19,000
)
(19,000
)
Equity in Earnings of Affiliates
(8,000
)
(8,000
)
Real Estate Related Operating Lease Expense
19,000
19,000
Net Operating Income
$
569,000
to
$
579,500
Adjusted Net Income Per Diluted Share
(2)
$
1.02
$
1.10
AFFO Per Diluted Share
$
2.23
to
$
2.31
Weighted Average Common Shares Outstanding-Diluted
121,000
to
121,000
(2)
In accordance with GAAP, diluted
earnings per share attributable to GEO available to common
stockholders is calculated under the if-converted method or the
two-class method, whichever calculation results in the lowest
diluted earnings per share amount, which may be lower than Adjusted
Net Income Attributable to GEO Per Diluted Share.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210510005245/en/
Pablo E. Paez (866) 301 4436 Executive Vice President, Corporate
Relations
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