GEO Geo Group Inc New

• 4Q19 Net Income Attributable to GEO of $0.32 per diluted share
• 4Q19 Adjusted Net Income of $0.38 per diluted share
• 4Q19 AFFO of $0.66 per diluted share
• Initial FY20 guidance for Net Income Attributable to GEO of $1.27-$1.37 per diluted share and Adjusted Net Income of $1.37 to $1.47 per diluted share
• Initial FY20 AFFO guidance of $2.57-$2.67 per diluted share
• FY20 guidance reflects increase of approximately $4 million in GEO’s annual expense commitment for GEO Continuum of Care rehabilitation and post release programs
• FY20 guidance assumes no contribution from California facilities transitioning from California state corrections contracts to new ICE contracts during 2020

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 fourth quarter and full-year 2019.

Fourth Quarter 2019 Highlights

• Net Income Attributable to GEO of $38.1 million or $0.32 per diluted share
• Adjusted Net Income of $0.38 per diluted share
• Net Operating Income of $151.5 million
• Normalized FFO of $0.53 per diluted share
• AFFO of $0.66 per diluted share

GEO reported fourth quarter 2019 net income attributable to GEO of $38.1 million, or $0.32 per diluted share, compared to $33.4 million, or $0.28 per diluted share, for the fourth quarter 2018. GEO reported total revenues for the fourth quarter 2019 of $621.7 million up from $599.4 million for the fourth quarter 2018. Fourth quarter 2019 results reflect a $0.4 million gain on the extinguishment of debt, pre-tax, $2.2 million in start-up expenses, pre-tax, $2.0 million in legal related expenses, pre-tax, and $4.6 million in close-out expenses, pre-tax. Excluding these items, GEO reported fourth quarter 2019 Adjusted Net Income of $46.0 million, or $0.38 per diluted share.

GEO reported fourth quarter 2019 Normalized Funds From Operations (“Normalized FFO”) of $63.6 million, or $0.53 per diluted share, compared to $61.1 million, or $0.51 per diluted share, for the fourth quarter 2018. GEO reported fourth quarter 2019 Adjusted Funds From Operations (“AFFO”) of $79.1 million, or $0.66 per diluted share, compared to $78.0 million, or $0.65 per diluted share, for the fourth quarter 2018.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said, “We are pleased with our quarterly financial and operational performance. During the fourth quarter of 2019, we completed the ramp-up of 3,600 previously idle beds and entered into several new contracts at the federal level, which are expected to drive future earnings and cash flow growth. We are proud of the continued success of our GEO Continuum of Care enhanced rehabilitation and post-release program and have increased our annual expenditure commitment from $10 million to approximately $14 million to support the expansion of the program during 2020. We remain focused on the effective allocation of capital to continue to enhance shareholder value, and we believe that our current dividend payment is supported by stable and predictable cash flows.”

Full-Year 2019 Highlights

• Net Income Attributable to GEO of $166.6 million or $1.40 per diluted share
• Adjusted Net Income of $1.60 per diluted share
• Net Operating Income of $654.7 million
• Normalized FFO of $2.19 per diluted share
• AFFO of $2.75 per diluted share

For the full-year 2019, GEO reported net income attributable to GEO of $166.6 million, or $1.40 per diluted share, compared to $145.1 million, or $1.20 per diluted share, for the full-year 2018. GEO reported total revenues for the full-year 2019 of $2.48 billion up from $2.33 billion for the full-year 2018. Results for the full-year 2019 reflect $10.9 million in start-up expenses, pre-tax, $2.0 million in legal related expenses, pre-tax, $4.6 million in close-out expenses, pre-tax, a $4.8 million loss on the extinguishment of debt, pre-tax, and a $2.7 million loss on real estate assets, pre-tax. Excluding these items, GEO reported Adjusted Net Income of $190.5 million, or $1.60 per diluted share, for the full-year 2019.

GEO reported Normalized FFO for the full-year 2019 of $260.7 million, or $2.19 per diluted share, compared to $234.3 million, or $1.94 per diluted share, for the full-year 2018. GEO reported AFFO for the full-year 2019 of $328.4 million, or $2.75 per diluted share, compared to $297.8 million, or $2.47 per diluted share, for the full-year 2018.

GEO Continuum of Care Highlights

To strengthen its commitment to be a leading provider of enhanced in-custody rehabilitation and post-release services, GEO announced today that it has increased its annual expenditure commitment to expand the delivery of its GEO Continuum of Care programs from approximately $10 million to approximately $14 million in 2020. The GEO Continuum of Care integrates enhanced in-custody rehabilitation programming, including cognitive behavioral treatment, with post-release support services.

During 2019, GEO Continuum of Care programs achieved several important milestones:

• Completed more than 6.8 million hours of rehabilitation programming
• Averaged more than 13,000 daily participants in academic programs
• Awarded 2,882 GEDs and high school equivalency degrees
• Averaged more than 33,000 daily participants in vocational training programs
• Awarded 9,413 vocational training certifications
• Averaged more than 18,000 daily participants in substance abuse treatment programs
• Awarded 8,767 substance abuse treatment program completions

2020 Financial Guidance

GEO issued its initial financial guidance for the full-year and first quarter 2020. GEO expects full-year 2020 total revenue to be approximately $2.48 billion. GEO expects full-year 2020 Net Income Attributable to GEO to be in a range of $1.27 to $1.37 per diluted share and Adjusted Net Income to be in a range of $1.37 to $1.47 per diluted share. GEO expects full-year 2020 AFFO to be in a range of $2.57 to $2.67 per diluted share.

GEO’s full-year 2020 guidance assumes no contribution from GEO’s 700-bed Central Valley, 750-bed Desert View, and 700-bed Golden State facilities in California, which will be transitioning during 2020 from California state corrections contracts to the previously announced new 15-year contracts, inclusive of option periods, which GEO entered into with U.S. Immigration and Customs Enforcement (“ICE”) on December 20, 2019.

As GEO previously announced, the State of California completed the ramp-down of the Central Valley facility at the end of September 2019, and the Desert View and Golden State facilities are in the process of ramping down during the first half of 2020. The discontinuation of the California corrections contracts for the three company-owned facilities represents an annualized revenue loss of approximately $47 million.

While GEO expects that the three facilities will transition as facility annexes under the new ICE contracts during the second half of 2020, GEO has not assumed any contribution from these facilities in its initial financial guidance.

GEO’s full-year 2020 guidance also reflects an increase of approximately $4 million in its annual expenditure commitment for the GEO Continuum of Care, which will allow for the expansion of the program to all state correctional facilities managed by GEO.

For the first quarter 2020, GEO expects total revenues to be in a range of $610 million to $615 million. GEO expects first quarter 2020 Net Income Attributable to GEO to be in a range of $0.16 to $0.18 per diluted share and Adjusted Net Income to be in range of $0.21 to $0.23 per diluted share. GEO expects first quarter 2020 AFFO to be in a range of $0.52 to $0.54 per diluted share.

In addition to the items impacting full-year 2020 guidance, compared to fourth quarter 2019 results, first quarter 2020 guidance reflects approximately $0.03 per diluted share in additional employment tax expense as a result of the seasonality in unemployment taxes, which are front-loaded in the first quarter of the year.

Debt Repurchases and Borrowing Capacity

During the fourth quarter of 2019, GEO repurchased approximately $22 million of senior unsecured notes due 2022, bringing the total debt repurchases during 2019 to $56 million at year-end. GEO has approximately $340 million in available borrowing capacity under its $900 million revolving credit facility, which matures in May 2024.

Quarterly Dividend

On February 3, 2020, GEO’s Board of Directors declared a quarterly cash dividend of $0.48 per share. The quarterly cash dividend will be paid on February 21, 2020 to shareholders of record as of the close of business on February 14, 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.

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 fourth quarter and full-year 2019 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 February 26, 2020 at 1-877-344-7529 (U.S.) and 1-412-317-0088 (International). The participant passcode for the telephonic replay is 10139081.

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 129 facilities totaling approximately 95,000 beds, including projects under development, with a growing 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, legal related expenses, pre-tax, escrow releases, 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 net Tax Cuts and Jobs Act (“TCJA”) impact, gain/loss on the extinguishment of debt, pre-tax, start-up expenses, pre-tax, legal related expenses, pre-tax, escrow releases, 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 net TCJA impact, gain/loss on real estate assets, pre-tax, gain/loss on the extinguishment of debt, pre-tax, start-up expenses, pre-tax, legal related expenses, pre-tax, escrow releases, 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 correctional facilities, processing centers, and reentry centers, we believe that assessing the performance of our correctional 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 first quarter of 2020, the assumptions underlying such guidance, the continued expansion and success of our GEO Continuum of Care, and statements regarding growth opportunities and 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; (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; (5) GEO’s ability to access the capital markets in the future on satisfactory terms or at all; (6) the impact from debt repurchases and GEO’s ability to repurchase additional debt; (7) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (8) 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; (9) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (10) GEO’s ability to sustain company-wide occupancy rates at its facilities; (11) the impact of any future regulations or guidance on the Tax Cuts and Jobs Act; (12) GEO’s ability to remain qualified as a REIT; (13) the incurrence of REIT related expenses; and (14) other factors contained in GEO’s Securities and Exchange Commission periodic filings, including its Form 10-K, 10-Q and 8-K reports.

Fourth quarter and full-year 2019 financial tables to follow:

 

Condensed Consolidated Balance Sheets*

(Unaudited)

  As of As of December 31, 2019 December 31, 2018 (unaudited) (unaudited) ASSETS   Cash and cash equivalents

$

32,463

$

31,255

Restricted cash and cash equivalents

32,418

51,678

Accounts receivable, less allowance for doubtful accounts

430,982

445,526

Contract receivable, current portion

11,199

15,535

Prepaid expenses and other current assets

40,716

57,768

Total current assets

$

547,778

$

601,762

  Restricted Cash and Investments

30,923

22,431

Property and Equipment, Net

2,144,722

2,158,610

Contract Receivable

360,647

368,178

Operating Lease Right-of-Use Assets, Net

121,527

-

Assets Held for Sale

6,059

2,634

Deferred Income Tax Assets

36,278

29,924

Intangible Assets, Net (including goodwill)

986,426

1,008,719

Other Non-Current Assets

83,174

65,860

  Total Assets

$

4,317,534

$

4,258,118

  LIABILITIES AND SHAREHOLDERS' EQUITY   Accounts payable

$

99,232

$

93,032

Accrued payroll and related taxes

54,672

76,009

Accrued expenses and other current liabilities

191,608

204,170

Operating lease liabilities, current portion

26,208

-

Current portion of finance lease obligations, long-term debt, and non-recourse debt

24,208

332,027

Total current liabilities

$

395,928

$

705,238

  Deferred Income Tax Liabilities

19,254

13,681

Other Non-Current Liabilities

88,526

82,481

Operating Lease Liabilities

97,291

-

Finance Lease Liabilities

2,954

4,570

Long-Term Debt

2,408,297

2,397,227

Non-Recourse Debt

309,236

15,017

Total Shareholders' Equity

996,048

1,039,904

  Total Liabilities and Shareholders' Equity

$

4,317,534

$

4,258,118

    * all figures in '000s  

Condensed Consolidated Statements of Operations*

(Unaudited)

 

Q4 2019

Q4 2018

FY 2019

FY 2018

(unaudited) (unaudited) (unaudited) (unaudited)   Revenues

$

621,710

 

$

599,430

 

$

2,477,922

 

$

2,331,386

 

Operating expenses

478,080

 

456,460

 

1,860,758

 

1,755,772

 

Depreciation and amortization

33,585

 

31,898

 

130,825

 

126,434

 

General and administrative expenses

43,743

 

47,588

 

185,926

 

184,515

 

  Operating income

66,302

 

63,484

 

300,413

 

264,665

 

  Interest income

5,807

 

8,560

 

28,934

 

34,755

 

Interest expense

(35,167

)

(39,324

)

(151,024

)

(149,529

)

Gain/(Loss) on extinguishment of debt, pre-tax

352

 

-

 

(4,795

)

(574

)

  Income before income taxes and equity in earnings of affiliates

37,294

 

32,720

 

173,528

 

149,317

 

  Provision for income taxes

2,139

 

1,924

 

16,648

 

14,117

 

Equity in earnings of affiliates, net of income tax provision

2,887

 

2,557

 

9,532

 

9,627

 

  Net income

38,042

 

33,353

 

166,412

 

144,827

 

  Less: Net loss attributable to noncontrolling interests

10

 

39

 

191

 

262

 

  Net income attributable to The GEO Group, Inc.

$

38,052

 

$

33,392

 

$

166,603

 

$

145,089

 

    Weighted Average Common Shares Outstanding: Basic

119,231

 

119,273

 

119,097

 

120,241

 

Diluted

119,621

 

119,861

 

119,311

 

120,747

 

  Net income per Common Share Attributable to The GEO Group, Inc.:   Basic: Net income per share — basic

$

0.32

 

$

0.28

 

$

1.40

 

$

1.21

 

  Diluted: Net income per share — diluted

$

0.32

 

$

0.28

 

$

1.40

 

$

1.20

 

  Regular Dividends Declared per Common Share

$

0.48

 

$

0.47

 

$

1.92

 

$

1.88

 

  * 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)

    Q4 2019 Q4 2018 FY 2019 FY 2018   Net Income attributable to GEO

$

38,052

 

$

33,392

 

$

166,603

 

$

145,089

 

  Add (Subtract): Net Tax Cuts and Jobs Act Impact

 

-

 

 

-

 

 

-

 

 

304

 

(Gain)/Loss on extinguishment of debt, pre-tax

 

(353

)

 

-

 

 

4,795

 

 

574

 

Start-up expenses, pre-tax

 

2,154

 

 

2,473

 

 

10,872

 

 

6,299

 

Legal related expenses, pre-tax

 

2,000

 

 

2,647

 

 

2,000

 

 

7,147

 

Escrow releases, pre-tax

 

-

 

 

-

 

 

-

 

 

(2,273

)

Close-out expenses, pre-tax

 

4,595

 

 

4,245

 

 

4,595

 

 

4,245

 

(Gain)/Loss on real estate assets, pre-tax

 

-

 

 

1,646

 

 

2,693

 

 

4,347

 

Tax effect of adjustments to Net Income attributable to GEO

 

(433

)

 

(1,392

)

 

(1,083

)

 

(2,031

)

  Adjusted Net Income

$

46,015

 

$

43,011

 

$

190,475

 

$

163,701

 

  Weighted average common shares outstanding - Diluted

 

119,621

 

 

119,861

 

 

119,311

 

 

120,747

 

  Adjusted Net Income Per Diluted Share

$

0.38

 

$

0.36

 

$

1.60

 

$

1.36

 

 

Reconciliation of Net Income Attributable to GEO to FFO, Normalized FFO, and AFFO*

(Unaudited)

 

Q4 2019

Q4 2018

FY 2019

FY 2018

(unaudited) (unaudited) (unaudited) (unaudited)   Net Income attributable to GEO

$

38,052

 

$

33,392

 

$

166,603

 

$

145,089

 

Add (Subtract): Real Estate Related Depreciation and Amortization

18,221

 

18,061

 

72,191

 

70,592

 

(Gain)/Loss on real estate assets

-

 

1,646

 

2,693

 

4,347

 

  Equals: NAREIT defined FFO

$

56,273

 

$

53,099

 

$

241,487

 

$

220,028

 

  Add (Subtract):   Net Tax Cuts and Jobs Act Impact

-

 

-

 

-

 

304

 

(Gain)/Loss on extinguishment of debt, pre-tax

(353

)

-

 

4,795

 

574

 

Start-up expenses, pre-tax

1,492

 

2,473

 

8,959

 

6,299

 

Legal related expenses, pre-tax

2,000

 

2,647

 

2,000

 

7,147

 

Escrow releases, pre-tax

-

 

-

 

-

 

(2,273

)

Close-out expenses, pre-tax

4,578

 

4,245

 

4,578

 

4,245

 

Tax Effect of adjustments to Funds From Operations **

(427

)

(1,392

)

(1,078

)

(2,031

)

  Equals: FFO, normalized

$

63,563

 

$

61,072

 

$

260,741

 

$

234,293

 

  Add (Subtract): Non-Real Estate Related Depreciation & Amortization

15,364

 

13,837

 

58,634

 

55,842

 

Consolidated Maintenance Capital Expenditures

(7,006

)

(5,077

)

(21,899

)

(22,638

)

Stock Based Compensation Expenses

5,425

 

5,699

 

22,344

 

22,050

 

Amortization of debt issuance costs, discount and/or premium and other non-cash interest

1,748

 

2,422

 

8,609

 

8,282

 

    Equals: AFFO

$

79,094

 

$

77,953

 

$

328,429

 

$

297,829

 

  Weighted average common shares outstanding - Diluted

119,621

 

119,861

 

119,311

 

120,747

 

  FFO/AFFO per Share - Diluted   Normalized FFO Per Diluted Share

$

0.53

 

$

0.51

 

$

2.19

 

$

1.94

 

  AFFO Per Diluted Share

$

0.66

 

$

0.65

 

$

2.75

 

$

2.47

 

    Regular Common Stock Dividends per common share

$

0.48

 

$

0.47

 

$

1.92

 

$

1.88

 

  * all figures in '000s, except per share data ** tax adjustments related to (Gain)/Loss on real estate assets, (Gain)/Loss on extinguishment of debt, Start-up expenses, Legal related expenses, Escrow releases and Close-out expenses  

Reconciliation of Net Income Attributable to GEO to

Net Operating Income, EBITDAre and Adjusted EBITDAre*

(Unaudited)

 

Q4 2019

Q4 2018

FY 2019

FY 2018

(unaudited) (unaudited) (unaudited) (unaudited) Net Income attributable to GEO

$

38,052

 

$

33,392

 

$

166,603

 

$

145,089

 

Less Net loss attributable to noncontrolling interests

10

 

39

 

191

 

262

 

  Net Income

$

38,042

 

$

33,353

 

$

166,412

 

$

144,827

 

  Add (Subtract): Equity in earnings of affiliates, net of income tax provision

(2,887

)

(2,557

)

(9,532

)

(9,627

)

Income tax provision

2,139

 

1,924

 

16,648

 

14,117

 

Interest expense, net of interest income

29,361

 

30,763

 

122,090

 

114,774

 

(Gain)/Loss on extinguishment of debt

(353

)

-

 

4,795

 

574

 

Depreciation and amortization

33,585

 

31,898

 

130,825

 

126,434

 

General and administrative expenses

43,743

 

47,588

 

185,926

 

184,515

 

Net Operating Income, net of operating lease obligations

$

143,630

 

$

142,969

 

$

617,164

 

$

575,614

 

  Add: Operating lease expense, real estate

6,340

 

8,485

 

25,854

 

32,290

 

(Gain)/Loss on real estate assets, pre-tax

-

 

1,646

 

2,693

 

4,347

 

Start-up expenses, pre-tax

1,492

 

2,213

 

8,959

 

6,039

 

Net Operating Income (NOI)

$

151,462

 

$

155,313

 

$

654,670

 

$

618,290

 

  Q4 2019 Q4 2018 FY 2019 FY 2018 (unaudited) (unaudited) (unaudited) (unaudited) Net Income

$

38,042

 

$

33,353

 

$

166,412

 

$

144,827

 

Add (Subtract): Income tax provision **

2,737

 

2,176

 

18,417

 

15,005

 

Interest expense, net of interest income ***

29,008

 

30,763

 

126,885

 

115,348

 

Depreciation and amortization

33,585

 

31,898

 

130,825

 

126,434

 

(Gain)/Loss on real estate assets, pre-tax

-

 

1,646

 

2,693

 

4,347

 

  EBITDAre

$

103,372

 

$

99,836

 

$

445,232

 

$

405,961

 

Add (Subtract): Net loss attributable to noncontrolling interests

10

 

39

 

191

 

262

 

Stock based compensation expenses, pre-tax

5,425

 

5,699

 

22,344

 

22,049

 

Start-up expenses, pre-tax

1,492

 

2,473

 

8,959

 

6,299

 

Legal related expenses, pre-tax

2,000

 

2,647

 

2,000

 

7,147

 

Escrow Releases, pre-tax

-

 

-

 

-

 

(2,273

)

Close-out expenses, pre-tax

4,578

 

4,245

 

4,578

 

4,245

 

  Adjusted EBITDAre

$

116,877

 

$

114,939

 

$

483,304

 

$

443,690

 

  * 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

$

152,500

 

to

$

164,500

 

Real Estate Related Depreciation and Amortization

 

76,000

 

 

 

76,000

 

Funds from Operations (FFO)

$

228,500

 

to

$

240,500

 

    Start-Up and Close-Out Expenses

 

11,500

 

 

 

11,500

 

Normalized Funds from Operations

$

240,000

 

to

$

252,000

 

    Non-Real Estate Related Depreciation and Amortization

 

65,000

 

 

 

65,000

 

Consolidated Maintenance Capex

 

(24,000

)

 

 

(24,000

)

Non-Cash Stock Based Compensation

 

21,500

 

 

 

21,500

 

Non-Cash Interest Expense

 

6,000

 

 

 

6,000

 

Adjusted Funds From Operations (AFFO)

$

308,500

 

to

$

320,500

 

    Net Interest Expense

 

113,000

 

 

 

113,000

 

Non-Cash Interest Expense

 

(6,000

)

 

 

(6,000

)

Consolidated Maintenance Capex

 

24,000

 

 

 

24,000

 

Income Taxes (including income tax provision on equity in earnings of affiliates)

 

21,000

 

 

 

21,000

 

Adjusted EBITDAre

$

460,500

 

to

$

472,500

 

    G&A Expenses

 

196,500

 

 

 

196,500

 

Non-Cash Stock Based Compensation

 

(21,500

)

 

 

(21,500

)

Equity in Earnings of Affiliates

 

(7,000

)

 

 

(7,000

)

Real Estate Related Operating Lease Expense

 

18,000

 

 

 

18,000

 

Net Operating Income

$

646,500

 

to

$

658,500

 

    Adjusted Net Income Per Diluted Share

$

1.37

 

to

$

1.47

 

AFFO Per Diluted Share

$

2.57

 

to

$

2.67

 

Weighted Average Common Shares Outstanding-Diluted

 

120,000

 

to

 

120,000

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200212005197/en/

Pablo E. Paez (866) 301 4436 Executive Vice President, Corporate Relations