Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Investor Presentation (June 2024)
40 slides from Geo Group Inc (the) Reit's investor presentation, Jun 10, 2024
Slide 1: Investor Presentation 1Q24
- Confidential - Investor Presentation 1Q24 Exhibit 99.1
Slide 2: Important Notices and Disclaimers
Important Notices and Disclaimers Forward-Looking Statements This presentation contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially and adversely affect actual results, including statements regarding GEO’
Slide 3: Highlights - Attractive Investment Characteristics
Highlights - Attractive Investment Characteristics First Quarter Highlights 1Q24 Revenue of $605.7 Million 1Q24 Net Income of $22.7 Million 1Q24 Adjusted EBITDA of $117.6 Million 1Q24 results reflect higher revenues driven by higher occupancy levels at our USMS and ICE facilities, as well as higher
Slide 4: Financial Highlights
Financial Highlights Revenues ($ in millions) Net Income ($ in millions) Adjusted EBITDA ($ in millions) * 2024E Based on Mid-point of FY2024 Financial Guidance issued on May 7, 2024 *Reflects $86 million pre-tax Loss on Extinguishment of Debt in 2Q2024 as a result of GEO’s April 2024 debt refinanci
Slide 5: Company Overview
Company Overview
Slide 6: Founded in 1984, listed on NYSE in 1996
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 7: 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 8: Corporate Structure
GC@. Corporate Structure GEO Secure Services GEO International Services Leased/Not Managed Facilities sR HSE | owned/Leased Reentry Services Residential Non-Residential + 7,244 Beds + 89 Non-Residential +37 Facilities [Owned/Leased Cen +184 B s Sees |Managea Only + 3,501 Beds +3 Facilities + 3,024 B
Slide 9: Diversified U.S. Facility Footprint
Diversified U.S. Facility Footprint 49 GEO Secure Services Facilities 39 GEO Care Residential Facilities 8 Leased/Not Managed Facilities
Slide 10: International Services
International Services 4 International Facilities
Slide 11: GEO is a Leading Diversified Services Provider
GEO is a Leading Diversified Services Provider 81,000 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 57,000 1,000 * Based on total beds including idle and under development for U.S. headquartered companies
Slide 12: Difficult to Replace Real Estate
17.3 Million Sq. Ft. owned and/or managed 57,000 Owned/Leased Beds Economic Useful Life: 75+ Years Newer Facility Assets = 20-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 13: Segment Trends
Segment Trends
Slide 14: 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 15: U.S. Immigration and Customs Enforcement
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 (cbp.gov/newsroom/stats/southwest-land-border-encounters) Source: TRAC A
Slide 16: Federal Appropriations Update
In March 2024, Congress passed an appropriations bill for fiscal year 2024, which increased funding for ICE detention to 41,500 beds from the previously funded level of 34,000 beds. The appropriations bill also increased funding for Alternatives to Detention programs to approximately $470 million, a
Slide 17: ICE Private Sector Bed Breakdown
U.S. Immigration and Customs Enforcement Private Sector 90% Public Sector 10% ICE Processing Center Beds Breakdown * GEO 42% * Approximations based on contract guarantee bed counts Source: ICE Data (ice.gov/detain/detention-management) Other 58% Private Sector Beds ICE Processing Center Beds
Slide 18: U.S. Marshals Service (USMS)
U.S. Marshals Service (USMS) Stable USMS Detention Populations (2014 –2023) Source: 2014-2021 figures are taken from the USMS FY2023 Performance Budget (https://www.justice.gov/file/1493071/download#:~:text=The%20USMS%20requests%20a%20total,for%20FPD%20in%20FY%202023.) Source: 2022 & 2023 Figures ar
Slide 19: Aging Public Prisons
Aging Public Prisons Source: Bureau of Justice Statistics; State DOC Websites Aging Public Prison Facilities are Costly and Less Safe Public Prison Facilities have Significant Deferred Maintenance Needs More than 200,000 Public Prison Beds are Older than Economic Useful Life of 75 years Close to 100
Slide 20: Public Prison Facilities Deferred Maintenance Needs
The majority of Public Prison Facilities have Significant Deferred Maintenance Needs According to a May 2023 DOJ OIG Report, the Federal Bureau of Prisons has approximately 123 facilities requiring an estimated $2 billion in maintenance costs1 In late 2018, it was estimated by CGL, a criminal justic
Slide 21: Available Beds in Inventory
Available Beds in Inventory *This facility is under a contract that has not yet been activated 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
Slide 22: Financial Overview
Financial Overview 22
Slide 23: Financial Highlights
Financial Highlights * Reconciliation of Non-GAAP measures included in GEO’s 1Q24 Earnings Release & Supplemental Q1 2024 Q1 2023 Revenue $605,672 $608,209 Net Income $22,659 $27,994 Adjusted EBITDA* $117,643 $130,916 1Q24 Revenue of $605.7 Million 1Q24 Net Income of $22.7Million 1Q24 Adjusted EBITD
Slide 24: Revenues by Segment
Revenues by Segment GEO Care 28% GEO Secure Services 72% FY2023 Revenue = $2.41 Billion
Slide 25: Revenues by Customer (FY2023)
Federal Government 62% Revenues By Customer (FY2023) 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 26: FY2024 Guidance
FY2024 Guidance Net Income Attributable to GEO $55 Million - $75 Million + Net Interest Expense $185 Million - $190 Million + Loss on Extinguishment of Debt, pre-tax $86 Million + Income Taxes (including income tax provision on equity in earnings of affiliates) $15 Million - $19 Million + Depreciati
Slide 27: Environmental, Social & Governance (ESG) Overview
Environmental, Social & Governance (ESG) Overview
Slide 28: 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 29: Highly Regulated / Professional Services
Lengthy 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. Independent Contract Compliance Division Reporting Directly to the CEO, which Conducts Ongoing Comprehensive Facil
Slide 30: Board Oversight and Committees
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 31: GEO's ESG Objectives
To implement best practices that follow recognized global Human Rights standards and respect the dignity and 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 Cont
Slide 32: Diversified Employer
Diversity We are proud to be a diversified employer. Women comprise a majority of our domestic workforce and play a significant role in our leadership and management. Across GEO, under-represented minorities account for 69% of our U.S. workforce. Employee Training We have a robust training program f
Slide 33: 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. New disclosures related to Sustainability Audits an
Slide 34: 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. In 2022, our Secure Services Health Care Division oversaw nearly 575,000 medical encounters, including intake health screenings, physical exams
Slide 35: 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 2023 Milestones: Completed approximately 4.6 million hours of rehabilitation programmin
Slide 36: Appendix
Appendix 36
Slide 37: Capital Structure (as of June 2024)
Capital Structure (as of June 2024)
Slide 38: Asset Value (as of June 2024)
Asset Value (as of June 2024) Note: Pro forma for refinancing activity that occurred in Q2-24 Based on internal valuation of replacement cost for facilities. Secure services and youth facilities valued at $75,000 per bed ; Re-entry facilities valued at $50,000 per bed Cost basis for real property is
Slide 39: Income Statement
Income Statement Revenues S 605672 $608,209 441875 433,402 31,985 31,923 General and administrative expenses 53,070 50,194 Operating income 79,662 92,660 Interest income 2ar4 1,168 Interest expense (61,295) (64,258) Loss on extinguishment of debt 9) (136) ‘Income before income taxes and equity in ea
Slide 40: Balance Sheet
Balance Sheet ASSETS ‘Cash and cash equivalents s 128,497 8 ‘Accounts receivable, ess allowance for doubtful accounts 356,717 ‘Prepaid expenses and other curent assets 40.276 ‘Total current assets s 531,490 s ‘Restricted Cash and nvestments 141378 Property and Equipment, Not 1.929.012 Lease Assets,