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 second quarter and the first six months of 2021 and
increased its financial guidance for the full-year 2021.
Second Quarter 2021 Highlights
- Total revenues of $565.4 million
- Net Income Attributable to GEO of $42.0 million
- Adjusted Net Income of $50.8 million
- Normalized FFO of $0.58 per diluted share
- AFFO of $0.70 per diluted share
We reported second quarter 2021 net income attributable to GEO
of $42.0 million compared to $36.7 million for the second quarter
2020. We reported total revenues for the second quarter 2021 of
$565.4 million compared to $587.8 million for the second quarter
2020. Second quarter 2021 results reflect $7.5 million in one-time
employee restructuring expenses, pre-tax, a $3.0 million loss on
real estate assets, pre-tax, a $1.7 million gain on the
extinguishment of debt, pre-tax, and $0.1 million in the tax effect
of adjustments to net income attributable to GEO. Excluding these
items, we reported second quarter 2021 Adjusted Net Income of $50.8
million compared to $43.1 million for the second quarter 2020.
We reported second quarter 2021 Normalized Funds From Operations
(“Normalized FFO”) of $69.7 million, or $0.58 per diluted share,
compared to $61.5 million, or $0.51 per diluted share, for the
second quarter 2020. We reported second quarter 2021 Adjusted Funds
From Operations (“AFFO”) of $84.4 million, or $0.70 per diluted
share, compared to $78.8 million, or $0.66 per diluted share, for
the second quarter 2020.
Our better-than-expected financial performance during the second
quarter 2021 was driven by continued favorable cost trends; higher
occupancies at our facilities for the U.S. Marshals Service and
U.S. Immigration and Customs Enforcement; and increased revenue and
earnings from our electronic monitoring segment.
George C. Zoley, Executive Chairman of GEO, said, “We are
pleased with our strong second quarter results and our increased
financial guidance for the full year. We believe our robust
financial performance is representative of the strength of our
diversified business segments. We recognize that there have been
concerns regarding our future access to financing, and we believe
that our continued focus on debt reduction, the ongoing review of
potential asset sales, and the evaluation of our corporate tax
structure are all prudent steps as we work towards addressing these
concerns.”
First Six Months 2021 Highlights
- Total revenues of $1.14 billion
- Net Income Attributable to GEO of $92.5 million
- Adjusted Net Income of $84.9 million
- Normalized FFO of $1.02 per diluted share
- AFFO of $1.30 per diluted share
For the first six months of 2021, we reported net income
attributable to GEO of $92.5 million compared to $61.9 million for
the first six months of 2020. We reported total revenues for the
first six months of 2021 of $1.14 billion compared to $1.19 billion
for the first six months of 2020. Results for the first six months
of 2021 reflect $7.5 million in one-time employee restructuring
expenses, pre-tax, a $10.4 million gain on real estate assets,
pre-tax, and a $4.7 million gain on the extinguishment of debt,
pre-tax. Excluding these items, we reported Adjusted Net Income of
$84.9 million for the first six months of 2021 compared to $72.0
million for the first six months of 2020.
For the first six months of 2021, we reported Normalized FFO of
$122.7 million, or $1.02 per diluted share, compared to $108.7
million, or $0.91 per diluted share, for the first six months of
2020. For the first six months of 2021, we reported AFFO of $156.6
million, or $1.30 per diluted share, compared to $145.4 million, or
$1.21 per diluted share, for the first six months of 2020.
Updated 2021 Financial Guidance
- FY21 Net Income Attributable to GEO of $167.5-$174.5
Million
- FY21 Adjusted EBITDAre of $441.5-$448.5 Million
- FY21 AFFO of $2.51-$2.57 per diluted share
We have increased our financial guidance for the full year 2021
and have issued our financial guidance for the third and fourth
quarters of 2021. For the full year 2021, we expect Net Income
Attributable to GEO to be in a range of $167.5 million to $174.5
million on annual revenues of approximately $2.23 billion. We
expect full year 2021 Adjusted EBITDAre to be in a range of
approximately $441.5 million to $448.5 million. We expect full year
2021 Adjusted Net Income per diluted share to be in a range of
$1.34 to $1.40 and full year 2021 AFFO per diluted share to be in a
range of $2.51 to $2.57.
For the third quarter 2021, we expect Net Income Attributable to
GEO to be in a range of $39 million to $42 million on quarterly
revenues of $548 million to $553 million. We expect third quarter
2021 AFFO to be in a range of $0.62 to $0.64 per diluted share. For
the fourth quarter 2021, we expect Net Income Attributable to GEO
to be in a range of $36 million to $40 million on quarterly
revenues of $538 million to $543 million. We expect fourth quarter
2021 AFFO to be in a range of $0.59 to $0.63 per diluted share.
Our guidance reflects our previously announced expectation that
our contracts with the Federal Bureau of Prisons at the Big Spring
Correctional Facility and Flightline Correctional Facility in Texas
will not be renewed when the current contract option periods expire
on November 30, 2021.
Balance Sheet and Liquidity
At the end of the second quarter 2021, we had approximately $483
million in cash on hand, resulting from the previously announced
drawdown of our Revolving Credit Facility. Our decision to draw on
our Revolving Credit Facility was a conservative precautionary step
to preserve liquidity, maintain financial flexibility, and obtain
additional funds for general corporate purposes.
During the first six months of 2021, we reduced our net recourse
debt by approximately $105 million, which represents substantial
progress toward our previously articulated objective of reducing
net recourse debt by $125 million to $150 million in 2021. Based on
our progress to date and our better-than-expected earnings and cash
flows, we have increased our target for net debt reductions in 2021
to no less than $150 million to $175 million.
During the first six months of 2021, we also completed the sale
of three real estate assets in our Reentry Services,
Community-Based segment, totaling approximately 700 beds.
Additionally, on July 1, 2021, we completed the sale of certain
non-real estate assets in our Youth services segment. On a combined
basis, these sales generated net proceeds of approximately $27
million. We are evaluating the potential sale of additional
company-owned assets.
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.
During the pandemic, we have 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. 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 second 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 August 18, 2021 at 1-877-344-7529
(U.S.) and 1-412-317-0088 (International). The participant passcode
for the telephonic replay is 10159108.
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 114 facilities totaling approximately 90,000 beds,
including idle facilities and projects under development, with a
workforce of up to approximately 20,000 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, one-time employee restructuring 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, one-time employee restructuring 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/loss on real estate assets, pre-tax, gain on the
extinguishment of debt, pre-tax, start-up expenses, pre-tax,
one-time employee restructuring 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, third quarter, and fourth quarter of 2021. 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) GEO’s ability to deleverage and repay,
refinance or otherwise address its debt maturities in an amount or
on the timeline it expects, or at all; (3) 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;
(4) changes in federal immigration policy; (5) public and political
opposition to the use of public-private partnerships with respect
to secure correctional and detention facilities, processing centers
and reentry centers; (6) 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; (7) 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; (8) fluctuations in our operating results, including
as a result of contract terminations, contract renegotiations,
changes in occupancy levels and increases in our operating costs;
(9) 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; (10) 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; (11) GEO’s ability to win management contracts for which it
has submitted proposals and to retain existing management
contracts; (12) risks associated with GEO’s ability to control
operating costs associated with contract start-ups; (13) GEO’s
ability to successfully pursue growth and continue to create
shareholder value; (14) GEO’s ability to obtain financing or access
the capital markets in the future on acceptable terms or at all;
(15) other factors contained in GEO’s Securities and Exchange
Commission periodic filings, including its Form 10-K, 10-Q and 8-K
reports.
Second quarter and first six months of 2021 financial tables
to follow:
Condensed Consolidated Balance
Sheets* (Unaudited)
As of As of June 30, 2021 December 31,
2020 (unaudited) (unaudited)
ASSETS Cash and cash
equivalents $
483,048
$
283,524
Restricted cash and cash equivalents
29,892
26,740
Accounts receivable, less allowance for doubtful accounts
313,831
362,668
Contract receivable, current portion
6,420
6,283
Prepaid expenses and other current assets
35,449
32,108
Total current assets $
868,640
$
711,323
Restricted Cash and Investments
45,465
37,338
Property and Equipment, Net
2,074,350
2,122,195
Contract Receivable
382,829
396,647
Operating Lease Right-of-Use Assets, Net
120,208
124,727
Assets Held for Sale
28,197
9,108
Deferred Income Tax Assets
36,604
36,604
Intangible Assets, Net (including goodwill)
932,753
942,997
Other Non-Current Assets
74,563
79,187
Total Assets $
4,563,609
$
4,460,126
LIABILITIES AND SHAREHOLDERS' EQUITY Accounts
payable $
75,329
$
85,861
Accrued payroll and related taxes
65,298
67,797
Accrued expenses and other current liabilities
189,770
202,378
Operating lease liabilities, current portion
28,095
29,080
Current portion of finance lease obligations, long-term debt, and
non-recourse debt
27,240
26,180
Total current liabilities $
385,732
$
411,296
Deferred Income Tax Liabilities
30,726
30,726
Other Non-Current Liabilities
117,273
115,555
Operating Lease Liabilities
98,474
101,375
Finance Lease Liabilities
2,614
2,988
Long-Term Debt
2,632,332
2,561,881
Non-Recourse Debt
311,390
324,223
Total Shareholders' Equity
985,068
912,082
Total Liabilities and Shareholders' Equity $
4,563,609
$
4,460,126
* all figures in '000s
Condensed Consolidated Statements of
Operations* (Unaudited)
Q2 2021 Q2 2020 YTD 2021 YTD 2020
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $
565,419
$
587,829
$
1,141,796
$
1,192,846
Operating expenses
405,009
444,035
833,160
905,781
Depreciation and amortization
33,306
33,434
67,423
66,761
General and administrative expenses
54,688
45,543
103,167
99,325
Operating income
72,416
64,817
138,046
120,979
Interest income
5,985
5,248
12,187
10,686
Interest expense
(32,053)
(30,610)
(63,897)
(64,790)
Gain on extinguishment of debt
1,654
-
4,693
1,563
Gain/(Loss) on dispositions of real estate
(2,950)
(1,304)
10,379
(880)
Income before income taxes and equity in earnings of
affiliates
45,052
38,151
101,408
67,558
Provision for income taxes
5,063
4,196
12,999
10,742
Equity in earnings of affiliates, net of income tax
provision
1,942
2,699
4,007
4,959
Net income
41,931
36,654
92,416
61,775
Less: Net loss attributable to noncontrolling
interests
28
66
88
126
Net income attributable to The GEO Group, Inc. $
41,959
$
36,720
$
92,504
$
61,901
Weighted Average Common Shares Outstanding:
Basic
120,426
119,810
120,225
119,602
Diluted
120,470
119,964
120,431
119,937
Net income per Common Share Attributable to The GEO
Group, Inc. **: Basic: Net income per share —
basic $
0.29
$
0.31
$
0.71
$
0.52
Diluted: Net income per share — diluted $
0.29
$
0.31
$
0.70
$
0.52
Regular Dividends Declared per Common Share $
-
$
0.48
$
0.25
$
0.96
* All figures in '000s, except per share data ** 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 six months
ended June 30, 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 Adjusted Net Income (In
thousands, except per share data)(Unaudited)
Q2 2021
Q2 2020
YTD 2021
YTD 2020
Net Income attributable to GEO
$
41,959
$
36,720
$
92,504
$
61,901
Add: (Gain)/Loss on real estate assets, pre-tax
2,950
1,304
(10,379
)
880
Gain on extinguishment of debt, pre-tax
(1,654
)
-
(4,693
)
(1,563
)
Start-up expenses, pre-tax
-
553
-
2,506
One-time employee restructuring expenses, pre-tax
7,459
-
7,459
-
COVID-19 expenses, pre-tax
-
3,877
-
4,769
Close-out expenses, pre-tax
-
2,284
-
4,220
Tax effect of adjustments to Net Income attributable to GEO
105
(1,599
)
13
(762
)
Adjusted Net Income
$
50,819
$
43,139
$
84,904
$
71,951
Weighted average common shares outstanding - Diluted
120,470
119,964
120,431
119,937
Adjusted Net Income Per Diluted Share *
$
0.42
$
0.36
$
0.71
$
0.60
* 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 Per Diluted
Share.
Reconciliation of Net Income
Attributable to GEO to FFO, Normalized FFO, and AFFO*
(Unaudited)
Q2 2021 Q2 2020 YTD 2021 YTD 2020
(unaudited) (unaudited) (unaudited) (unaudited)
Net
Income attributable to GEO $
41,959
$
36,720
$
92,504
$
61,901
Add (Subtract): Real Estate Related Depreciation and Amortization
18,846
18,384
37,818
36,780
(Gain)/Loss on real estate assets, pre-tax
2,950
1,304
(10,379)
880
Equals: NAREIT defined FFO $
63,755
$
56,408
$
119,943
$
99,561
Add (Subtract): Gain on extinguishment of debt,
pre-tax
(1,654)
-
(4,693)
(1,563)
Start-up expenses, pre-tax
-
553
-
2,506
One-time employee restructuring expenses, pre-tax
7,459
-
7,459
-
COVID-19 expenses, pre-tax
-
3,877
-
4,769
Close-out expenses, pre-tax
-
2,284
-
4,220
Tax effect of adjustments to funds from operations **
105
(1,599)
13
(762)
Equals: FFO, normalized $
69,665
$
61,523
$
122,722
$
108,731
Add (Subtract): Non-Real Estate Related Depreciation &
Amortization
14,460
15,050
29,605
29,981
Consolidated Maintenance Capital Expenditures
(4,572)
(4,139)
(8,511)
(11,166)
Stock Based Compensation Expenses
4,023
4,706
11,426
14,474
Other non-cash revenue & expenses
(1,102)
-
(2,204)
-
Amortization of debt issuance costs, discount and/or premium and
other non-cash interest
1,903
1,708
3,586
3,378
Equals: AFFO $
84,377
$
78,848
$
156,624
$
145,398
Weighted average common shares outstanding - Diluted
120,470
119,964
120,431
119,937
FFO/AFFO per Share - Diluted Normalized FFO
Per Diluted Share $
0.58
$
0.51
$
1.02
$
0.91
AFFO Per Diluted Share $
0.70
$
0.66
$
1.30
$
1.21
Regular Common Stock Dividends per common
share $
-
$
0.48
$
0.25
$
0.96
* all figures in '000s, except per share data ** tax
adjustments related to gain/loss on real estate assets, Gain on
extinguishment of debt, Start-up expenses, One-time employee
restructuring expenses, COVID-19 expenses, and Close-out expenses.
Reconciliation of Net Income
Attributable to GEO to Net Operating Income, EBITDAre and Adjusted
EBITDAre* (Unaudited)
Q2 2021 Q2 2020 YTD 2021 YTD 2020
(unaudited) (unaudited) (unaudited) (unaudited)
Net Income
attributable to GEO $
41,959
$
36,720
$
92,504
$
61,901
Less Net loss attributable to noncontrolling interests
28
66
88
126
Net Income $
41,931
$
36,654
$
92,416
$
61,775
Add (Subtract): Equity in earnings of affiliates, net of
income tax provision
(1,942)
(2,699)
(4,007)
(4,959)
Income tax provision
5,063
4,196
12,999
10,742
Interest expense, net of interest income
26,068
25,362
51,710
54,104
Gain on extinguishment of debt
(1,654)
-
(4,693)
(1,563)
Depreciation and amortization
33,306
33,434
67,423
66,761
General and administrative expenses
54,688
45,543
103,167
99,325
Net Operating Income, net of operating lease obligations
$
157,460
$
142,490
$
319,015
$
286,185
Add: Operating lease expense, real estate
4,240
4,792
8,325
9,744
(Gain)/Loss on real estate assets, pre-tax
2,950
1,304
(10,379)
880
Start-up expenses, pre-tax
-
553
-
2,506
Net Operating Income (NOI) $
164,650
$
149,139
$
316,961
$
299,315
Q2 2021 Q2 2020 YTD 2021 YTD
2020 (unaudited) (unaudited) (unaudited) (unaudited)
Net
Income $
41,931
$
36,654
$
92,416
$
61,775
Add (Subtract): Income tax provision **
5,354
4,681
13,630
11,670
Interest expense, net of interest income ***
24,414
25,362
47,017
52,541
Depreciation and amortization
33,306
33,434
67,423
66,761
(Gain)/Loss on real estate assets, pre-tax
2,950
1,304
(10,379)
880
EBITDAre $
107,955
$
101,435
$
210,107
$
193,627
Add (Subtract): Net loss attributable to noncontrolling interests
28
66
88
126
Stock based compensation expenses, pre-tax
4,023
4,706
11,426
14,474
Start-up expenses, pre-tax
-
553
-
2,506
One-time employee restructuring expenses, pre-tax
7,459
-
7,459
-
COVID-19 expenses, pre-tax
-
3,877
-
4,769
Close-out expenses, pre-tax
-
2,284
-
4,220
Other non-cash revenue & expenses, pre-tax
(1,102)
-
(2,204)
-
Adjusted EBITDAre $
118,363
$
112,921
$
226,876
$
219,722
* 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
$
167,500
to
$
174,500
Real Estate Related Depreciation and Amortization
76,000
76,000
Gain/Loss on Real Estate
(10,000
)
(10,000
)
Funds from Operations (FFO)
$
233,500
to
$
240,500
(Gain)/Loss on Extinguishment of Debt
(5,000
)
(5,000
)
Non-recurring Expenses
10,000
10,000
Normalized Funds from Operations
$
238,500
to
$
245,500
Non-Real Estate Related Depreciation and Amortization
60,000
60,000
Consolidated Maintenance Capex
(17,000
)
(17,000
)
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)
$
304,000
to
$
311,000
Net Interest Expense
103,000
103,000
Non-Cash Interest Expense
(7,500
)
(7,500
)
Consolidated Maintenance Capex
17,000
17,000
Income Taxes (including income tax provision on equity in
earnings of affiliates)
25,000
25,000
Adjusted EBITDAre
$
441,500
to
$
448,500
G&A Expenses
193,000
193,000
Non-recurring Expenses
(10,000
)
(10,000
)
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
$
616,500
to
$
623,500
Adjusted Net Income Per Diluted Share *
$
1.34
$
1.40
AFFO Per Diluted Share
$
2.51
to
$
2.57
Weighted Average Common Shares Outstanding-Diluted
121,000
to
121,000
* 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 Per Diluted
Share.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804005317/en/
Pablo E. Paez, (866) 301 4436 Executive Vice President,
Corporate Relations
Geo (NYSE:GEO)
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From Oct 2023 to Nov 2023
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