Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Investor Presentation (September 2022)
37 slides from Geo Group Inc (the) Reit's investor presentation, Sep 13, 2022
Slide 1: The GEO Group, Inc. Investor Presentation 2Q22
GEO The GEO Group, Inc.® Investor Presentation 2Q22 - Confidential -
Slide 2: Highlights - Attractive Investment Characteristics
Highlights - Attractive Investment Characteristics Strong Financial Performance - 2Q22 Adjusted EBITDA increased 12 percent year-over-year to more than $132 million, the highest quarterly run rate in company history. - Adjusted EBITDA for trailing 12 months totaled almost $500 million for the first
Slide 3: Company Overview
Company Overview 3
Slide 4: Company History
Company History Founded in 1984 Initial Public Offering (IPO) in 1994 Listed on NYSE in 1996 Included in Major Indexes: S&P 600 Russell 2000 18,000 Employees 4
Slide 5: Diversified Government Service Provider
Diversified Government Service Provide Secure Residential Care ICE Processing Centers USMS Detention Facilities State Correctional and Rehabilitation Facilities Non-Secure Residential Care Residential Reentry Centers/Halfway Houses Non-Residential Services Day Reporting Centers Electronic Monitoring
Slide 6: GEO Corporate Structure
GEO Corporate Structure GEO® Corporate Structure GEO Secure Services GEO Care GEO International Services WFH- Night Shift G... Leased/Not Managed Facilities GEO Corporate Structure Geo. Corporate Structure BREE Residential 9,318 Beds 39 Facilities • 234 Beds • 2 Facilities + QTA- Google Sheets 6 / 3
Slide 7: Diversified U.S. Facility Footprint
Diversified U.S. Facility Footprint 51 GEO Secure Services Facilities 41 GEO Care Residential Facilities Headquarters/Regional Offices Secure Services Facilities Reentry Centers Leased/Not Managed
Slide 8: International Services
International Services 4 International Facilities United Kingdom South Africa GEO Australia Head Office Sydney, Australia South African Custodial Management Head Office Johannesburg, South Africa Headquartere/Regional Offices Secure Services Facilities Transportation Depots
Slide 9: 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 80,000 82,000 40% 80,500 39% 60,000 40,000 20,000 57,500 72,200 26,000 12% 18,000 9% 1,000 0 GEO CoreCivic MTCAll Others O
Slide 10: Difficult to Replace Real Estate
Difficult to Replace Real Estate 17.6 Million Sq. Ft. owned and/or managed 57,500 Owned/Leased Beds Economic Useful Life: 75+ Years Newer Facility Assets = 19-Year Avg. Age Difficult to Replace = High Barriers to Entry Difficult permitting and zoning Long development lead times High Capital Intensit
Slide 11: Segment Trends
Segment Trends
Slide 12: Demand for Diversified Government Services
ICE USMS U.S. Southwest Border Crossings Increased use of Alternatives To Detention Program Continued Capacity Needs Lack of alternatives Demand for Diversified Government Services State Correctional Agencies Aging State prison infrastructure Correctional Staffing challenges Reentry Services Availab
Slide 13: U.S. Immigration and Customs Enforcement
U.S. Immigration and Customs Enforcement U.S. Southwest Border Crossings Increased use of Alternatives To Detention Program 300,000 250,000 200,000 FY2021 - YTD 2022 Southwest Land Border [GRAPHIC APPEARS HERE]Encounters 235,706 240,991 222,340 207,416 199,976 350,000 300,000 250,000 FY2021 - YTD202
Slide 14: U.S. Marshals Services (USMS)
U.S. Marshals Services (USMS) Stable USMS Detention Populations (2014 – YTD2022) 70,000 60,000 50,000 55,170 51,777 51,316 50,317 55,776 61,435 61,421 [GRAPHIC APPEARS HERE]63,687 63,413 40,000 30,000 20,000 ~41% Contractor Beds 10,000 - 2014 2015 2016 2017 2018 2019 2020 2021 YTD2022 Source: 2014-2
Slide 15: Aging Public Prisons
Aging Public Prisons Aging Public Prison Facilities are Costly and Less Safe 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 GEO Prison Portfolio is Significantly Younger than States where we operate Avg. Age
Slide 16: Available Beds in Inventory
[GRAPHIC APPEARS HERE][GRAPHIC APPEARS HERE]Available Beds in Inventory Facility Location Ownership Bed Count Great Plains Correctional Facility OK Owned 1,940 D. Ray James Correctional Facility GA Owned 1,900 Flightline Correctional Facility TX Owned 1,800 Big Spring Correctional Facility TX Owned
Slide 17: Financial Overview
[GRAPHIC APPEARS HERE]Financial Overview
Slide 18: Financial Highlights
Financial Highlights ➣ 2022E Revenue of $2.35 Billion ➣ 2022E Adjusted EBITDA of $515 Million - $530 Million➣ 2022E AFFO Per Share of $2.40 - $2.46 ➣ 2022E Net Income Attributable to GEO of $158 Million - $166 Million Q2 2022 Q2 2021 YTD 2022 YTD 2021 Net Operating Income (NOI) $180,575 $164,650 $35
Slide 19: Revenues by Segment
Revenues by Segment GEO Care 24% 66%U.S. Secure Services 10% International * Based on FY 2021 results 19
Slide 20: Diversified Long-Term, High-Quality Customer Relationships
Diversified Long-Term, High-Quality Customer Relationships Revenues By Customer (FY2021) Various Others 8% Federal South Africa Non-Residential 14% Government 1% ICE 25% 50% Tex as 1% Virginia 1% Bureau of Prisons Georgia 9% 1% New Jersey U.S. Marshals 1% 16% Oklahoma 2% New Mexico Australia 2% Indi
Slide 21: FY2022 Guidance
FY2022 Guidance Net Income Attributable to GEO $158 Million - $166 Million Depreciation and Amortization $136 Million - (Gain)/Loss on Real Estate ($2.8 Million) - Facility Maintenance Capex ($24 Million) Non-Cash Stock Based Compensation $16.5 Million Non-Cash Interest Expense $8.5 Million AFFO $29
Slide 22: Capital Allocation
Capital Allocation Debt Reduction Since the beginning of 2020, GEO reduced net recourse debt by ~$375 million Over the next two years, GEO expects to reduce net recourse debt by at least $200 million to $250 million annually. Based on this level of debt reduction, GEO’s goal would be to decrease net
Slide 23: Debt Maturity Overview
Debt Maturity Overview Debt Maturity Schedule (Pre - Transaction) 2000 $1,718 $225 1500 $758 1000 735 500 $580 0 $259 2022 2023 2024 2025 2026 2027 2028 Unsecured Notes Revolver Term Loan Debt Maturity Schedule (Post - Transaction) $2,000 $1,500 $1,000 $500 $1,094 $75 $246 $526 $147 $23 $341 $-2022
Slide 24: Debt Maturity Overview
Debt Maturity Overview $2,000 $1,800 $1,718 $1,600 $1,400 $1,200 $1,094 $1,000 $800 $580 $600 $526 $400 $341 $259 $246 $200 $- 2023 2024 2025 2026 2027 2028 Pre - Transaction Post - Transaction Note: Excludes finance leases and scheduled amortization Note: Redemption of 2023 unsecured notes will occ
Slide 25: Environmental, Social & Governance (ESG) Overview
Environmental, Social & Governance (ESG) Overview 25
Slide 26: High Quality Government Contracts
High Quality Government Contracts All Investment Grade Customers Required by Law to Pay on Time: 45-60 days No Receivables Problems Payment Schedule: Monthly Billing Majority of Contracts Include Fixed Monthly Payments Company-Wide Occupancy Averages in the mid-90s Contract Terms: Average Length of
Slide 27: Commitment to ESG and Corporate Social Responsibility
Commitment to ESG and Corporate Social Responsibility GEO’s ESG Aspirations 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
Slide 28: Commitment to ESG: Human Rights Focused
Commitment to ESG and Corporate Social Responsibility Human Rights Focused We recognize the significant role that respect for human rights plays in our operations in the United States and around the world. In 2013, GEO adopted a Global Human Rights Policy Consistent with the United Nations Declarati
Slide 29: Commitment to ESG: World Class Healthcare
Commitment to ESG and Corporate Social Responsibility World Class Healthcare 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. Our facilities are highly rated by leading Correctional and Health
Slide 30: Commitment to ESG: Environmentally Responsible
Commitment to ESG and Corporate Social Responsibility Environmentally Responsible Environmental Sustainability Policy Statement disclosed in ESG Report. GEO provides disclosures on energy consumption statistics, water usage metrics, and Greenhouse Gas (GHG) Scope 1 and Scope 2 Emissions and Intensit
Slide 31: Commitment to ESG: Employee Diversity and Development
Commitment to ESG and Corporate Social Responsibility Employee Diversity and Development 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 our organization, under-represented minor
Slide 32: 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 2021 Milestones: Completed approximately 2.8 million hours of rehabilitation programmin
Slide 33: COVID-19 Sensitive/Responsive
COVID-19 Sensitive/Responsive As the COVID-19 pandemic has impacted communities across the United States, ensuring the health and safety of our employees and all those in our care has always been our number one priority. GEO’s COVID-19 mitigation initiatives have included: Testing We invested $2M to
Slide 34: Highly Regulated / Professional Services
Highly Regulated / Professional Services Lengthy Written Contracts Specifying all Service Requirements On-Site, Full-Time Customer Contract Monitors at Facilities in the U.S. Full-time GEO Compliance Monitors at Facilities in the U.S. American Correctional Association Accreditation with Scores in Ex
Slide 35: Appendix
Appendix 35
Slide 36: Income Statement
Income Statement Q2 2022 Q2 2021 YTD 2022 YTD 2021 (unaudited) (unaudited) (unaudited) (unaudited) Revenues $588,177 $ 565,419 $ 1,139,362 $ 1,141,796 Operating expenses 411,791 405,009 796,952 833,160 Depreciation and amortization 32,016 33,306 67,954 67,423 General and administrative expenses 49,2
Slide 37: Balance Sheet
Balance Sheet As of As of June 30, 2022 December 31, 2021 (unaudited) (unaudited) ASSETS Cash and cash equivalents $587,861 $506,491 Restricted cash and cash equivalents 21,13420,161 Accounts receivable, less allowance for doubtful accounts 371,851365,573 Contract receivable, current portion 7,2466,