- 3Q20 Net Income Attributable to GEO of $0.33 per diluted
share
- 3Q20 AFFO of $0.67 per diluted share
- Updated FY20 guidance for Net Income Attributable to GEO of
$1.07-$1.09 per diluted share and Adjusted Net Income of
$1.21-$1.23 per diluted share
- Updated FY20 AFFO guidance of $2.43-$2.45 per diluted
share
The GEO Group, Inc. (NYSE: GEO) (“GEO”), a fully integrated equity real estate
investment trust (“REIT”) and a leading provider of evidence-based
offender rehabilitation and community reentry services around the
globe, reported today its financial results for the third
quarter 2020, provided an update on the impact of the COVID-19
pandemic on GEO, and issued updated financial guidance.
Third Quarter 2020 Highlights
- Total revenues of $579.1 million
- Net Income Attributable to GEO of $39.2 million or $0.33 per
diluted share
- Adjusted Net Income of $0.37 per diluted share
- Net Operating Income of $151.4 million
- Normalized FFO of $0.52 per diluted share
- AFFO of $0.67 per diluted share
We reported third quarter 2020 net income attributable to GEO of
$39.2 million, or $0.33 per diluted share, compared to $45.9
million, or $0.39 per diluted share, for the third quarter 2019. We
reported total revenues for the third quarter 2020 of $579.1
million compared to $631.6 million for the third quarter 2019.
Third quarter 2020 results reflect a $0.3 million loss on real
estate assets, pre-tax, a $1.5 million gain on the extinguishment
of debt, pre-tax, $1.9 million in start-up expenses, pre-tax, $1.7
million in close-out expenses, pre-tax, $2.6 million in COVID-19
related expenses, 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 third quarter 2020 Adjusted Net Income of
$44.4 million, or $0.37 per diluted share, compared to $52.9
million, or $0.44 per diluted share, for the third quarter
2019.
We reported third quarter 2020 Normalized Funds From Operations
(“Normalized FFO”) of $62.8 million, or $0.52 per diluted share,
compared to $70.3 million, or $0.59 per diluted share, for the
third quarter 2019. We reported third quarter 2020 Adjusted Funds
From Operations (“AFFO”) of $80.6 million, or $0.67 per diluted
share, compared to $85.6 million, or $0.72 per diluted share, for
the third quarter 2019.
George C. Zoley, Chairman and Chief Executive Officer of GEO,
said, “During the third quarter, we experienced a continuation of
favorable cost trends that resulted in better than expected
financial performance. While we are encouraged by these favorable
trends over the last two quarters, our company continues to face
operational and financial challenges associated with the COVID-19
pandemic. Our frontline employees have continued to show incredible
commitment and resilience to help our company manage through these
unprecedented times. We are thankful for their dedication and daily
sacrifice.
Despite these challenges, we believe that our earnings and cash
flows remain strong and our business is supported by long-term real
estate assets and high-quality contracts entailing essential
government services. We recognize that political rhetoric based on
the mischaracterization of our role as a government services
provider has created concerns regarding our future access to
capital. Our Board has taken steps to reduce our quarterly dividend
payments in order to preserve capital and apply our excess cash
flows toward debt repayment. We believe these steps will allow us
to balance providing continued value for our shareholders, while
also focusing on paying down debt.”
First Nine Months 2020 Highlights
- Total revenues of $1.77 billion
- Net Income Attributable to GEO of $101.1 million or $0.84
per diluted share
- Adjusted Net Income of $0.97 per diluted share
- Net Operating Income of $450.7 million
- Normalized FFO of $1.43 per diluted share
- AFFO of $1.88 per diluted share
For the first nine months of 2020, we reported net income
attributable to GEO of $101.1 million, or $0.84 per diluted share,
compared to $128.6 million, or $1.08 per diluted share, for the
first nine months of 2019. We reported total revenues for the first
nine months of 2020 of $1.77 billion compared to $1.86 billion for
the first nine months of 2019.
Results for the first nine months of 2020 reflect a $1.2 million
loss on real estate assets, pre-tax, a $3.0 million gain on the
extinguishment of debt, pre-tax, $4.4 million in start-up expenses,
pre-tax, $5.9 million in close-out expenses, pre-tax, $7.4 million
in COVID-19 related expenses, pre-tax, and $0.6 million in the tax
effect of adjustments to net income attributable to GEO. Excluding
these items, we reported Adjusted Net Income of $116.3 million, or
$0.97 per diluted share, for the first nine months of 2020,
compared to $144.5 million, or $1.21 per diluted share, for the
first nine months of 2019.
We reported Normalized FFO of $171.5 million, or $1.43 per
diluted share, for the first nine months of 2020, compared to
$197.2 million, or $1.65 per diluted share, for the first nine
months of 2019. We reported AFFO of $226.0 million, or $1.88 per
diluted share, for the first nine months of 2020, compared to
$249.3 million, or $2.09 per diluted share, for the first nine
months of 2019.
Updated Financial Guidance
- 4Q20 Net Income Attributable to GEO expected to be
$0.23-$0.25 per diluted share
- 4Q20 Adjusted Net Income expected to be $0.24-$0.26 per
diluted share
- 4Q20 AFFO expected to be $0.55-$0.57 per diluted
share
- FY20 Net Income Attributable to GEO expected to be
$1.07-$1.09 per diluted share
- FY20 Adjusted Net Income expected to be $1.21 to $1.23 per
diluted share
- FY20 AFFO expected to be $2.43-$2.45 per diluted
share
- Updated financial guidance reflects a four-month contract
extension with Federal Bureau of Prisons for D. Ray James
Correctional Facility in Georgia
We have updated our financial guidance for the fourth quarter
and full year of 2020. The COVID-19 pandemic continues to have a
negative impact on several segments of our company and has resulted
in lower occupancy levels at several of our facilities and programs
beginning in late March 2020 and continuing through the second and
third quarters of 2020.
Our U.S. Immigration and Customs Enforcement (“ICE”) Processing
Centers and U.S. Marshals Service facilities have continued to
experience lower overall occupancy levels. Our GEO Care business
unit has also continued to experience lower occupancy levels in our
residential reentry centers, day reporting programs, and youth
services facilities.
We continue to incur increased spending on personal protective
equipment, diagnostic testing, medical expenses, non-contact
infrared thermometers, and increased sanitation as a result of the
COVID-19 pandemic.
Additionally, the Federal Bureau of Prisons (“BOP”) has
experienced a decline in overall federal prison populations in part
as a result of the COVID-19 pandemic. Due to this decline in
federal prison populations, the BOP had previously decided to not
rebid the contract for our company-owned, 1,900-bed D. Ray James
Correctional Facility in Georgia, which was set to expire on
September 30, 2020.
During the third quarter 2020, we entered into a four-month
contract extension with the BOP, through the end of January 2021,
for the D. Ray James Correctional Facility. Our updated guidance
reflects this four-month contract extension. Our updated guidance
also reflects the recent activation of our company-owned, 700-bed
Golden State ICE Annex in California during the third quarter
2020.
For the fourth quarter 2020, we expect Net Income Attributable
to GEO to be in a range of $0.23 to $0.25 per diluted share;
Adjusted Net Income to be in a range of $0.24 to $0.26 per diluted
share; and AFFO to be in a range of $0.55 to $0.57 per diluted
share.
For the full year 2020, we expect Net Income Attributable to GEO
to be in a range of $1.07 to $1.09 per diluted share; Adjusted Net
Income to be in a range of $1.21 to $1.23 per diluted share; and
AFFO to be in a range of $2.43 to $2.45 per diluted share. We
expect full year 2020 revenues to be approximately $2.35
billion.
Quarterly Dividend
On October 6, 2020, GEO’s Board of Directors declared a
quarterly cash dividend of $0.34 per share. The quarterly cash
dividend was paid on October 23, 2020 to shareholders of record as
of the close of business on October 16, 2020. The declaration of
future quarterly cash dividends is subject to approval by GEO’s
Board of Directors and to meeting the requirements of all
applicable laws and regulations. GEO’s Board of Directors retains
the power to modify its dividend policy as it may deem necessary or
appropriate in the future.
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 global
pandemic, we implemented steps to mitigate the risks of COVID-19 to
all those in our care and our employees, consistent with the
guidance issued for correctional and detention facilities by the
Centers for Disease Control and Prevention (“CDC”). We have
distributed facemasks to all employees, inmates, detainees, and
residents across our residential facilities. We have focused on
increasing our testing capacity across our facilities.
We will continue to coordinate
closely with our government agency partners and local health
agencies to ensure the health and safety of all those in our care
and our employees. 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 are making sacrifices daily to provide care
for all those in our facilities during this unprecedented global
pandemic. Information on the steps we have taken to mitigate
the risks of COVID-19 can be found at www.geogroup.com/COVID19.
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 AFFO, 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.
Conference Call Information
GEO has scheduled a conference call and simultaneous webcast for
today at 11:00 AM (Eastern Time) to discuss GEO’s third quarter
2020 financial results as well as its 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 Events and 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 November 12, 2020 at
1-877-344-7529 (U.S.) and 1-412-317-0088 (International). The
participant passcode for the telephonic replay is 10148939.
About The GEO Group
The GEO Group (NYSE: GEO) is
the first 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 123 facilities totaling
approximately 93,000 beds, including projects under development,
with a workforce of approximately 23,000 professionals.
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 Net Income, 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 2020, 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/loss 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/loss 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, and close-out
expenses, 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/loss 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.
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 loss on
real estate assets, pre-tax, gain/loss 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 financial guidance for the full year
and fourth quarter of 2020, the assumptions underlying such
guidance, and statements regarding the impact of COVID-19, our
available borrowing capacity and liquidity, and the allocation of
capital to enhance long-term value for our shareholders. Factors
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 2020 given the various risks to which its
business is exposed, including the magnitude, severity, and
duration of the current COVID-19 global pandemic and its impact on
GEO; (2) GEO’s ability to declare future quarterly cash dividends
and the timing and amount of such future cash dividends; (3) GEO’s
ability to successfully pursue further growth and continue to
create shareholder value; (4) GEO’s ability to obtain future
financing on acceptable terms or at all; (5) GEO’s ability to
access the capital markets in the future on satisfactory terms or
at all; (6) risks associated with GEO’s ability to control
operating costs associated with contract start-ups; (7) 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; (8) GEO’s ability to
win management contracts for which it has submitted proposals and
to retain existing management contracts; (9) GEO’s ability to
sustain or improve company-wide occupancy rates at its facilities
in light of the COVID-19 global pandemic; (10) the impact of any
future regulations or guidance on the Tax Cuts and Jobs Act; (11)
GEO’s ability to remain qualified as a REIT; (12) the incurrence of
REIT related expenses; and (13) other factors contained in GEO’s
Securities and Exchange Commission periodic filings, including its
Form 10-K, 10-Q and 8-K reports.
Third quarter and first nine months 2020 financial tables to
follow:
Condensed
Consolidated Balance Sheets*
(Unaudited)
As of As of September 30, 2020
December 31, 2019 (unaudited) (unaudited)
ASSETS
Cash and cash equivalents $
53,676
$
32,463
Restricted cash and cash equivalents
27,229
32,418
Accounts receivable, less allowance for doubtful accounts
380,072
430,982
Contract receivable, current portion
5,703
11,199
Prepaid expenses and other current assets
33,393
40,716
Total current assets $
500,073
$
547,778
Restricted Cash and Investments
40,970
30,923
Property and Equipment, Net
2,126,438
2,144,722
Contract Receivable
368,887
360,647
Operating Lease Right-of-Use Assets, Net
121,805
121,527
Assets Held for Sale
9,521
6,059
Deferred Income Tax Assets
36,278
36,278
Intangible Assets, Net (including goodwill)
969,629
986,426
Other Non-Current Assets
74,234
83,174
Total Assets $
4,247,835
$
4,317,534
LIABILITIES AND SHAREHOLDERS' EQUITY Accounts
payable $
91,955
$
99,232
Accrued payroll and related taxes
64,812
54,672
Accrued expenses and other current liabilities
212,127
191,608
Operating lease liabilities, current portion
27,910
26,208
Current portion of finance lease obligations, long-term debt, and
non-recourse debt
25,073
24,208
Total current liabilities $
421,877
$
395,928
Deferred Income Tax Liabilities
19,254
19,254
Other Non-Current Liabilities
121,525
88,526
Operating Lease Liabilities
96,675
97,291
Finance Lease Liabilities
2,979
2,954
Long-Term Debt
2,343,342
2,408,297
Non-Recourse Debt
309,899
309,236
Total Shareholders' Equity
932,284
996,048
Total Liabilities and Shareholders' Equity $
4,247,835
$
4,317,534
* all figures in '000s
Condensed
Consolidated Statements of Operations*
(Unaudited)
Q3 2020 Q3 2019 YTD 2020 YTD
2019 (unaudited) (unaudited) (unaudited) (unaudited)
Revenues $
579,136
$
631,579
$
1,771,982
$
1,856,212
Operating expenses
434,402
472,513
1,341,063
1,382,678
Depreciation and amortization
33,628
32,419
100,389
97,240
General and administrative expenses
46,644
48,488
145,969
142,183
Operating income
64,462
78,159
184,561
234,111
Interest income
6,360
6,686
17,046
23,127
Interest expense
(30,749
)
(36,645
)
(95,539
)
(115,857
)
Gain/(Loss) 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
Provision for income taxes
4,616
5,137
15,358
14,509
Equity in earnings of affiliates, net of income tax
provision
2,243
2,228
7,202
6,645
Net income
39,172
45,885
100,947
128,370
Less: Net loss attributable to noncontrolling
interests
48
47
174
181
Net income attributable to The GEO Group, Inc. $
39,220
$
45,932
$
101,121
$
128,551
Weighted Average Common Shares Outstanding:
Basic
119,826
119,209
119,677
119,052
Diluted
120,032
119,282
119,964
119,314
Net income per Common Share Attributable to The GEO
Group, Inc. : Basic: Net income per share — basic
$
0.33
$
0.39
$
0.84
$
1.08
Diluted: Net income per share — diluted $
0.33
$
0.39
$
0.84
$
1.08
Regular Dividends Declared per Common Share $
0.48
$
0.48
$
1.44
$
1.44
* 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)
Q3 2020 Q3 2019 YTD 2020 YTD
2019 Net Income attributable to GEO
$ 39,220
$ 45,932
$ 101,121
$ 128,551
Add: Loss on real estate assets, pre-tax
271
1,196
1,151
2,693
(Gain)/Loss on extinguishment of debt, pre-tax
(1,472
)
(594
)
(3,035
)
5,147
Start-up expenses, pre-tax
1,907
6,077
4,413
8,718
COVID-19 expenses, pre-tax
2,635
-
7,404
-
Close-out expenses, pre-tax
1,674
-
5,895
-
Tax effect of adjustments to Net Income attributable to GEO
142
248
(620
)
(650
)
Adjusted Net Income
$ 44,377
$ 52,859
$ 116,329
$ 144,459
Weighted average common shares outstanding - Diluted
120,032
119,282
119,964
119,314
Adjusted Net Income Per Diluted Share
$ 0.37
$ 0.44
$ 0.97
$ 1.21
Reconciliation of
Net Income Attributable to GEO to FFO, Normalized FFO, and
AFFO*
(Unaudited)
Q3 2020 Q3 2019 YTD 2020 YTD
2019 (unaudited) (unaudited) (unaudited) (unaudited)
Net Income attributable to GEO $
39,220
$
45,932
$
101,121
$
128,551
Add (Subtract): Real Estate Related Depreciation and Amortization
18,359
17,931
55,139
53,970
Loss on real estate assets
271
1,196
1,151
2,693
Equals: NAREIT defined FFO $
57,850
$
65,059
$
157,411
$
185,214
Add (Subtract): (Gain)/loss on extinguishment of
debt, pre-tax
(1,472
)
(594
)
(3,035
)
5,147
Start-up expenses, pre-tax
1,895
5,593
4,401
7,467
COVID-19 expenses, pre-tax
2,635
-
7,404
-
Close-out expenses, pre-tax
1,715
-
5,935
-
Tax Effect of adjustments to Funds From Operations **
142
248
(620
)
(650
)
Equals: FFO, normalized $
62,765
$
70,306
$
171,496
$
197,178
Add (Subtract): Non-Real Estate Related Depreciation &
Amortization
15,269
14,488
45,250
43,270
Consolidated Maintenance Capital Expenditures
(3,878
)
(5,744
)
(15,045
)
(14,893
)
Stock Based Compensation Expenses
4,689
4,739
19,163
16,919
Amortization of debt issuance costs, discount and/or premium and
other non-cash interest
1,776
1,838
5,153
6,861
Equals: AFFO $
80,621
$
85,627
$
226,017
$
249,335
Weighted average common shares outstanding - Diluted
120,032
119,282
119,964
119,314
FFO/AFFO per Share - Diluted Normalized FFO
Per Diluted Share $
0.52
$
0.59
$
1.43
$
1.65
AFFO Per Diluted Share $
0.67
$
0.72
$
1.88
$
2.09
Regular Common Stock Dividends per common
share $
0.48
$
0.48
$
1.44
$
1.44
* all figures in '000s, except per share data ** tax
adjustments related to Loss on real estate assets, (Gain)/loss on
extinguishment of debt, Start-up expenses, COVID-19 expenses and
Close-out expenses.
Reconciliation of
Net Income Attributable to GEO to
Net Operating
Income, EBITDAre and Adjusted EBITDAre*
(Unaudited)
Q3 2020 Q3 2019 YTD 2020 YTD
2019 (unaudited) (unaudited) (unaudited) (unaudited)
Net
Income attributable to GEO $
39,220
$
45,932
$
101,121
$
128,551
Less Net loss attributable to noncontrolling interests
48
47
174
181
Net Income $
39,172
$
45,885
$
100,947
$
128,370
Add (Subtract): Equity in earnings of affiliates, net of
income tax provision
(2,243
)
(2,228
)
(7,202
)
(6,645
)
Income tax provision
4,616
5,137
15,358
14,509
Interest expense, net of interest income
24,389
29,959
78,493
92,730
(Gain)/Loss on extinguishment of debt
(1,472
)
(594
)
(3,035
)
5,147
Depreciation and amortization
33,628
32,419
100,389
97,240
General and administrative expenses
46,644
48,488
145,969
142,183
Net Operating Income, net of operating lease obligations
$
144,734
$
159,066
$
430,919
$
473,534
Add: Operating lease expense, real estate
4,510
6,391
14,254
19,514
Loss on real estate assets, pre-tax
271
1,196
1,151
2,693
Start-up expenses, pre-tax
1,895
5,593
4,401
7,467
Net Operating Income (NOI) $
151,410
$
172,246
$
450,725
$
503,208
Q3 2020 Q3 2019 YTD 2020 YTD
2019 (unaudited) (unaudited) (unaudited) (unaudited)
Net
Income $
39,172
$
45,885
$
100,947
$
128,370
Add (Subtract): Income tax provision **
5,122
5,593
16,792
15,681
Interest expense, net of interest income ***
22,917
29,365
75,458
97,878
Depreciation and amortization
33,628
32,419
100,389
97,240
Loss on real estate assets, pre-tax
271
1,196
1,151
2,693
EBITDAre $
101,110
$
114,458
$
294,737
$
341,862
Add (Subtract): Net loss attributable to noncontrolling interests
48
47
174
181
Stock based compensation expenses, pre-tax
4,689
4,739
19,163
16,919
Start-up expenses, pre-tax
1,895
5,593
4,401
7,467
COVID-19 expenses, pre-tax
2,635
-
7,404
-
Close-out expenses, pre-tax
1,715
-
5,935
-
Adjusted EBITDAre $
112,092
$
124,837
$
331,814
$
366,429
* all figures in '000s ** including income tax provision on
equity in earnings of affiliates *** includes (gain)/loss on
extinguishment of debt
2020
Outlook/Reconciliation
(In thousands, except per share data)
(Unaudited)
FY 2020 Net Income Attributable to GEO
$ 128,000
to
$ 130,500
Real Estate Related Depreciation and Amortization
74,000
74,000
Funds from Operations (FFO)
$ 202,000
to
$ 204,500
Net Adjustments (Gain on Extinguishment of Debt, Start-up
expenses, Close-out expenses, COVID-19 expenses)
17,000
17,000
Normalized Funds from Operations
$ 219,000
to
$ 221,500
Non-Real Estate Related Depreciation and Amortization
62,000
62,000
Consolidated Maintenance Capex
(20,000
)
(20,000
)
Non-Cash Stock Based Compensation
24,000
24,000
Non-Cash Interest Expense
7,000
7,000
Adjusted Funds From Operations (AFFO)
$ 292,000
to
$ 294,500
Net Interest Expense
103,000
103,000
Non-Cash Interest Expense
(7,000
)
(7,000
)
Consolidated Maintenance Capex
20,000
20,000
Income Taxes (including income tax provision on equity in
earnings of affiliates)
20,000
20,000
Adjusted EBITDAre
$ 428,000
to
$ 430,500
G&A Expenses
192,500
192,500
Non-Cash Stock Based Compensation
(24,000
)
(24,000
)
Equity in Earnings of Affiliates
(7,000
)
(7,000
)
Real Estate Related Operating Lease Expense
18,000
18,000
Net Operating Income
$ 607,500
to
$ 610,000
Net Income Attributable to GEO Per Diluted Share
$ 1.07
to
$ 1.09
Adjusted Net Income Per Diluted Share
$ 1.21
to
$ 1.23
AFFO Per Diluted Share
$ 2.43
to
$ 2.45
Weighted Average Common Shares Outstanding-Diluted
120,000
to
120,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029005267/en/
Pablo E. Paez (866) 301 4436 Executive Vice President, Corporate
Relations
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