Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Q4 2022 Earnings Presentation
41 slides from Geo Group Inc (the) Reit's earnings presentation, Mar 14, 2023
Slide 1: Investor Presentation 4Q22
- Confidential - Investor Presentation 4Q22 Exhibit 99.1
Slide 2: Highlights - Attractive Investment Characteristics
Highlights - Attractive Investment Characteristics Strong Financial Performance 4Q22 Revenues of $621 million, one of the highest quarterly revenues in company history. 4Q22 GAAP Net Income of $42 million. 4Q22 Adjusted EBITDA reached a new all-time high of $145 million. FY22 Adjusted EBITDA of $539
Slide 3: Strong Financial Growth
Strong Financial Growth Revenues ($ in millions) Net Income ($ in millions) Adjusted EBITDA ($ in millions)
Slide 4: Company Overview
Company Overview
Slide 5: 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 Company History
Slide 6: Diversified Government Service Provider
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 Services provided in US, Australia, UK
Slide 7: Corporate Structure
GC@. Corporate Structure GEO Prout @ 46,671 Beds + 17,557 Beds Secure * DS + 37 Fa + 12 Facilities Services Residential Non-Residential + 10,068 Beds + 90 Non-Residential 8, + 40 Facilities enters Supervised Individuals + 234 Beds on Electronic Monito +2 Facilities + 91 ISAP Offices gacm Ge@oamey +
Slide 8: Diversified U.S. Facility Footprint
Diversified U.S. Facility Footprint 50 GEO Secure Services Facilities 42 GEO Care Residential Facilities
Slide 9: International Services International Facilities
International Services 4 International Facilities
Slide 10: GEO is a Leading Diversified Services Provider
GEO is a Leading Diversified Services Provider 82,000 40% 27,000 14% 17,000 8% GEO is a leading provider of diversified secure and community reentry services with a 40% share of the market 70,200 57,500 1,000 * Based on total beds including idle and under development for U.S. headquartered companies
Slide 11: Difficult to Replace Real Estate
17.6 Million Sq. Ft. owned and/or managed 58,000 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 Requirements $2 billion in book long-term
Slide 12: Segment Trends
Segment Trends
Slide 13: Segment Trends
Available capacity at existing residential reentry centers Growth in Non-Residential Programs Demand for Diversified Government Services Segment Trends ICE USMS U.S. Southwest Border Crossings Alternatives To Detention Program Continued Capacity Needs Facilities strategically located to support USMS
Slide 14: Federal Segment: ICE, Reentry, Alternatives to Detention
U.S. Immigration and Customs Enforcement FEDERAL SEGMENT Reentry Services Alternatives To Detention Program U.S. Southwest Border Crossings Source: U.S. Customs and Border Protection FY Southwest Land Border Encounters by Month (https://www.cbp.gov/newsroom/stats/southwest-land-border-encounters) So
Slide 15: Title 42 - U.S. Southwest Border Restrictions
Title 42 – U.S. Southwest Border Restrictions Title 42 restrictions will likely be lifted on May 11, 2023, coinciding with the expiration of the COVID pandemic public health emergency declaration U.S. Supreme Court dropped Title 42 related case from its arguments calendar Migrant Parole+ Program On
Slide 16: U.S. Immigration and Customs Enforcement
U.S. Immigration and Customs Enforcement Private Sector 90% Public Sector 10% ICE Detention Beds Breakdown * GEO 42% * Approximations based on contract guarantee bed counts Source: ICE Integrated Decision Support (IIDS), 02/21/2023 https://www.ice.gov/detain/detention-management Other 58% Private Se
Slide 17: U.S. Marshals Service (USMS)
U.S. Marshals Service (USMS) Stable USMS Detention Populations (2014 –2022) Source: 2014-2021 figures are taken from the USMS FY 2023 Performance Budget (https://www.justice.gov/file/1493071/download#:~:text=The%20USMS%20requests%20a%20total,for%20FPD%20in%20FY%202023.) Source: YTD2022 Figures are b
Slide 18: Aging Public Prisons
Aging Public Prisons Source: Bureau of Justice Statistics; State DOC Websites 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 Si
Slide 19: Available Beds in Inventory
Available Beds in Inventory Secure Services Facilities 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 North Lake Correctional Facility MI Owned 1,800 Big Spring Correctio
Slide 20: Financial Overview
Financial Overview
Slide 21: Financial Highlights
Financial Highlights * Reconciliation of Non-GAAP measures included in GEO’s 4Q22 Earnings Release & Supplemental Q4 2022 Q4 2021 FY2022 FY2021 Revenue $620,682 $557,539 $2,376,727 $2,256,612 Net Income $41,529 ($49,822) $171,692 $77,233 Adjusted EBITDA* $145,481 $124,054 $539,185 $466,964 FY22 Reve
Slide 22: Revenues by Segment
Revenues by Segment GEO Care 32% GEO Secure Services 68% FY2022 Revenue = $2.38 Billion
Slide 23: Revenues by Customer (FY2022)
Federal Government 64% Revenues By Customer (FY2022) Long-term relationships with top customers – 30+ Years with Federal Gov’t * Includes ICE Alternatives to Detention-ISAP Contract Diversified Long-Term, High-Quality Customer Relationships
Slide 24: FY2023 Guidance
FY2023 Guidance Net Income Attributable to GEO $100 Million - $127 Million + Net Interest Expense $212 Million - $217 Million + Income Taxes (including income tax provision on equity in earnings of affiliates) $42 Million - $49 Million + Depreciation and Amortization $129.5 Million - 130.5 Million +
Slide 25: Debt Reduction
Debt Reduction Since the beginning of 2020, GEO reduced net recourse debt by more than $450 million (as of 4Q22). Over the next two years, GEO expects to reduce net recourse debt by $175 million - $200 million annually. Closed 2022 with net debt of $1.975 billion and net leverage of approximately 3.
Slide 26: Environmental, Social & Governance (ESG) Overview
Environmental, Social & Governance (ESG) Overview
Slide 27: 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 Contract Terms: Average Length of 7-10 Years Customer Retention: In Excess of 90% High Quality Government Contracts
Slide 28: 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 Excess of 99% National Commission on Correc
Slide 29: 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 environmental sustainability, with updated ESG metrics co
Slide 30: 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-winning GEO Continuum of Car
Slide 31: Board Oversight
Periodic review of GEO’s bylaws, Code of Business Conduct and Ethics, and corporate governance guidelines Annual review of GEO’s Political Activities and Contributions Policy and Report Annual review of GEO’s political contributions and lobbying expenditures Board Oversight Human Rights Committee An
Slide 32: 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 that included active engagement with all crit
Slide 33: Stakeholder Interviews
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 heads, subject matter experts, and frontline emplo
Slide 34: 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 We have a robust training pro
Slide 35: 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 to sustainable building practices
Slide 36: 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 state correctional facilities.
Slide 37: 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®: Rehabilitator of Lives GEO Continuum of Care 2022 Milestones: Completed approximately 3.5 million hours of rehabilitation programmin
Slide 38: Appendix
Appendix
Slide 39: Income Statement
Income Statement Revenues S$ 620,682 $ ~— 987,539 S 2,876,727 $ 2,256,612 penses 430, . 1,683,728 1,629,046 Depreciation and amortization 92,641 4.a71 132,925 136,17 1nd administrative expenses 49,094 50,664 196,972 204,308 Operating income 108,382 76,018 383,102 208,083 Interest Income 5,830 16,991
Slide 40: Balance Sheet
Balance Sheet Cash and cash equival $s 95,073 $s Reewtd cash end cath equate nts, - ‘Accounts receivable, less allowance for doubtful accounts 416,399 Contract receivable, current portion - Prope expences and ther cuent assets Total current as $s s snd hvertonnte oot Property and Equipment, Net 2,00
Slide 41: Debt Maturity Schedule
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