Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Q1 2023 Earnings Presentation
41 slides from Geo Group Inc (the) Reit's earnings presentation, May 16, 2023
Slide 1: Investor Presentation 1Q23
Exhibit 99.1 Investor Presentation 1Q23 - Confidential -
Slide 2: Highlights - Attractive Investment Characteristics
Highlights - Attractive Investment Characteristics Quarterly Highlights - 1Q23 Revenues Grew 10% to $608.2 Million - 1Q23 Adjusted EBITDA Grew 5% to $130.9 Million - New 5.5-year lease agreement with Oklahoma DOC for 1,900-bed Great Plains Facility = $8.5 million in annualized straight-line lease re
Slide 3: Financial Highlights
Financial Highlights Revenues ($ in millions) Net Income ($ in millions) Adjusted EBITDA ($ in millions) 3
Slide 4: Company Overview
Company Overview 4
Slide 5: Company History
Company History Ø Founded in 1984 Ø Initial Public Offering (IPO) in 1994 Ø Listed on NYSE in 1996 Ø Included in Major Indexes: Ø S&P 600 Ø Russell 2000 Ø 18,000+ Employees 5
Slide 6: Diversified Government Service Provider
Diversified Government Service Provider Ø Secure Residential Care § ICE Processing Centers § USMS Detention Facilities § State Correctional and Rehabilitation Facilities Ø Non-Secure Residential Care § Residential Reentry Centers/Halfway Houses Ø Non-Residential Services § Day Reporting Centers § El
Slide 7: Corporate Structure
GCe@. Corporate Structure GEO Secure Managed Only Services Reentry Services Electronic pene Non-Residential +90 Non-Residential $ [OwnediLeased Centers Superv i eeaiiealvideee _ Oak on Electronic Monitoring i anaged Only + 96 ISAP Offices +40 Facies 4B sac Geoamey + 3,024 Beds +1 Facility Internatio
Slide 8: Diversified U.S. Facility Footprint
Diversified U.S. Facility Footprint 50 GEO Secure Services Facilities 42 GEO Care Residential Facilities 8
Slide 9: International Services International Facilities
International Services 4 International Facilities 9
Slide 10: GEO is a Leading Diversified Services Provider
GEO is a Leading Diversified Services Provider GEO is a leading provider of diversified secure and community reentry services with a 40% share of the market Bed Capacity 100,000 82,000 78,500 40% 38% 80,000 70,200 60,000 57,500 27,000 40,000 17,000 14% 8% 20,000 1,000 0 GEO CoreCivic MTC All Others
Slide 11: Difficult to Replace Real Estate
Difficult to Replace Real Estate § 17.6 Million Sq. Ft. owned and/or managed § 58,000 Owned/Leased Beds § Economic Useful Life: 75+ Years Karnes County Immigration Processing Center, TX § Newer Facility Assets = 20-Year Avg. Age § Difficult to Replace = High Barriers to Entry • Difficult permitting
Slide 12: Segment Trends
Segment Trends 12
Slide 13: Segment Trends
Segment Trends USMS ICE Ø Continued Capacity Needs Ø U.S. Southwest Border Crossings Ø Facilities strategically located Ø Alternatives To Detention Program to support USMS needs Demand for Diversified Government Services Reentry Services State Correctional Agencies Ø Available capacity at existing Ø
Slide 14: U.S. Immigration and Customs Enforcement
U.S. Immigration and Customs Enforcement FEDERAL SEGMENT U.S. Southwest Border Alternatives To Detention Reentry Crossings Program Services MAR2022 - YTD2023 Southwest Land Border APR2022 - YTD2023 Program Participants Encounters On Technology Monitoring 350,000 300,000 318K 301K 294K 293K 288K 300,
Slide 15: Immigration Policies Update
Immigration Policies Update Title 42 – U.S. Southwest Border Restrictions • Title 42 restrictions lifted on May 11, 2023, coinciding with the expiration of the COVID pandemic public health emergency declaration Migrant Parole Program • On Jan. 5, 2023, Biden Administration rolled out an expansion of
Slide 16: ICE Processing Center Beds Breakdown
U.S. Immigration and Customs Enforcement ICE Processing Center Beds Breakdown * ICE Processing Center Beds Private Sector Beds Public Sector 10% GEO 42% Other Private 58% Sector 90% * Approximations based on contract guarantee bed counts Source: ICE Integrated Decision Support (IIDS), 04/11/2023 16
Slide 17: U.S. Marshals Service (USMS)
U.S. Marshals Service (USMS) Stable USMS Detention Populations (2014 –2022) 70,000 63,687 63,679 61,435 61,421 60,000 55,776 55,170 51,777 51,316 50,317 50,000 40,000 30,000 ~41% Contractor 20,000 Beds 10,000 - 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: 2014-2021 figures are taken from the
Slide 18: Aging Public Prisons
Aging Public Prisons Ø Aging Public Prison Facilities are Costly and Less Safe § Public Prison Facilities have Significant Deferred Maintenance Needs Ø More than 200,000 Public Prison Beds are Older than Economic Useful Life of 75 years § Close to 100,000 Public Prison Beds are 100+ Years Old Ø GEO
Slide 19: Available Beds in Inventory
Available Beds in Inventory Secure Services Facilities Location Ownership Bed Count D. Ray James Correctional Facility GA Owned 1,900 Flightline Correctional Facility TX Owned 1,800 North Lake Correctional Facility MI Owned 1,800 Big Spring Correctional Facility TX Owned 1,732 Rivers Correctional Fa
Slide 20: Financial Overview
Financial Overview 20
Slide 21: Financial Highlights
Financial Highlights Ø 1Q23 Revenue of $608.2 Million Ø 1Y23 Net Income of $28 Million Ø 1Y23 Adjusted EBITDA of $130.9 Million Q1 2023 Q1 2022 Revenue $608,209 $551,185 Net Income $27,994 $38,179 Adjusted EBITDA* $130,916 $125,164 21 * Reconciliation of Non-GAAP measures included in GEO’s 1Q23 Earn
Slide 22: Revenues by Segment
Revenues by Segment FY2022 Revenue = $2.38 Billion GEO Secure GEO Care Services 32% 68% Reentry Services 11% Electronic Monitoring Federal & Supervision Services 21% 44% International State 8% 16% 22
Slide 23: Diversified Long-Term, High-Quality Customer Relationships
Diversified Long-Term, High-Quality Customer Relationships Revenues By Customer (FY2022) Other Non- South Africa Residential Various Others Texas 1% 7% 4% 1% Virginia 1% Georgia ICE* 1% 44% New Jersey 1% Federal New Mexico 1% Government Oklahoma 64% 2% Indiana 2% Arizona U.S. Marshals 4% 16% Florida
Slide 24: FY2023 Guidance
FY2023 Guidance Net Income Attributable to GEO $105 Million - $125 Million + Net Interest Expense $214 Million - $217 Million + Income Taxes $43 Million - $49 Million (including income tax provision on equity in earnings of affiliates) + Depreciation and Amortization $128.5 Million - 129.5 Million +
Slide 25: Debt Reduction
Debt Reduction Debt Reduction Ø During the first quarter of 2023, GEO reduced net recourse debt by approximately $70 million. Ø Debt reduction expected to naturally reduce interest expense by approximately $25 million every year. Ø Ended 1Q23 with net debt of $1.9 billion and net leverage of approxi
Slide 26: Environmental, Social & Governance (ESG) Overview
Environmental, Social & Governance (ESG) Overview 26
Slide 27: High Quality Government Contracts
High Quality Government Contracts Ø All Investment Grade Customers Ø Required by Law to Pay on Time: 45-60 days Ø No Receivables Problems Ø Payment Schedule: Monthly Billing Ø Majority of Contracts Include Fixed Monthly Payments Ø Contract Terms: Average Length of 7-10 Years Ø Customer Retention: In
Slide 28: Highly Regulated / Professional Services
Highly Regulated / Professional Services Ø Lengthy Contracts Specifying all Service Requirements Ø On-Site, Full-Time Customer Contract Monitors at Facilities in the U.S. Ø Full-time GEO Compliance Monitors at Facilities in the U.S. Ø Independent Contract Compliance Division Reporting Directly to th
Slide 29: Fourth Annual Human Rights and ESG Report
Fourth Annual Human Rights and ESG Report • In 2022, GEO published our Fourth Annual Human Rights and ESG Report. • The report includes enhanced disclosures related to our Board oversight of human rights and ESG matters, employee diversity and training programs, corporate governance, and environment
Slide 30: GEO's ESG Objectives
GEO’s ESG Objectives • To implement best practices that follow recognized global Human Rights standards and respect the basic human rights of all individuals in our care. • To be a leading provider of enhanced in-custody rehabilitation programs and post-release support services through our award-win
Slide 31: Board Oversight
Board Oversight Criminal Justice Rehabilitation Human Rights Committee Committee • Periodic review of GEO Continuum of Care • Annual review of Human Rights & ESG Report • Periodic review of in-custody rehabilitation • Periodic review of ESG initiatives programs • Periodic review of reentry services
Slide 32: Human Rights Due Diligence Process (2022)
Human Rights Due Diligence Process (2022) • With the assistance of a third-party ESG firm, GEO conducted a human rights due diligence process in 2022, focusing on identifying salient human rights based on the nature of GEO’s services. • GEO’s human rights risk assessment involved a four-step process
Slide 33: Human Rights Due Diligence Process (2022)
Human Rights Due Diligence Process (2022) Stakeholder Interviews • GEO conducted 26 interviews with internal and external stakeholders to gain a wide view on potentially salient human rights. • Internal stakeholders included members of GEO’s Board of Directors, executive leadership and division head
Slide 34: Diversified Employer
Diversified Employer Diversity • We are proud to be a diversified employer. • Women comprise an equal portion of our domestic workforce and play a significant role in our leadership and management. • Across GEO, under-represented minorities account for 68% of our U.S. workforce. Employee Training •
Slide 35: Environmentally Responsible
Environmentally Responsible • GEO’s Environmental Sustainability Policy Statement is disclosed in Annual ESG Report. • GEO also provides disclosures on energy consumption statistics, water usage metrics, and Greenhouse Gas (GHG) Scope 1 and Scope 2 Emissions and Intensity Ratios. • GEO’s commitment
Slide 36: World Class Health Care
World Class Health Care • Disclosures in our Human Rights and ESG Report demonstrate the high quality of medical services provided across GEO’s Secure Services facilities in the U.S. • GEO’s ICE Processing Centers typically have approximately double the number of healthcare staff, as compared to sta
Slide 37: GEO Continuum of Care: Rehabilitator of Lives
GEO Continuum of Care®: Rehabilitator of Lives • GEO Continuum of Care® focuses on integrating in-custody evidence-based rehabilitation with post-release services aimed at reducing recidivism. • GEO Continuum of Care 2022 Milestones: • Completed approximately 3.5 million hours of rehabilitation prog
Slide 38: Appendix
Appendix 38
Slide 39: Income Statement
Income Statement Q1 2023 Q1 2022 (unaudited) (unaudited) Revenues $ 6 08,209 $ 551,185 Operating expenses 4 33,492 385,161 Depreciation and amortization 31,923 35,938 General and administrative expenses 50,134 48,560 Operating income 92,660 81,526 1,168 5,628 Interest income Interest expense (54,258
Slide 40: Balance Sheet
Balance Sheet As of As of March 31, 2023 December 31, 2022 (unaudited) (unaudited) ASSETS Cash and cash equivalents $ 110,916 $ 95,073 Accounts receivable, less allowance for doubtful accounts 349,337 416,399 Prepaid expenses and other current assets 40,995 43,536 Total current assets $ 501,248 $ 55
Slide 41: Debt Maturity Schedule
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