Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Corporate Update (December 2012)
17 slides from Geo Group Inc (the) Reit's corporate update, Dec 12, 2012
Slide 1: Company Restructuring Toward January 1, 2013 REIT Conversion
Company Restructuring Toward January 1, 2013 REIT Conversion December 2012 Exhibit 99.2
Slide 2: REIT Requirements
REIT Requirements A REIT is an entity that: Distributes annually at least 90% of its taxable income to shareholders in the form of a dividend Invests at least 75% of its total assets (Asset Test) in qualifying real estate assets Derives at least 75% of its gross income from real estate related sourc
Slide 3: REIT Eligibility / Approval Process
REIT Eligibility / Approval Process July Filing with the IRS for Private Letter Ruling Receipt of Expert Legal and Financial Advice Regarding REIT Eligibility Requirements Restructuring of Company Subsidiaries into Qualified REIT Subsidiaries + Taxable REIT Subsidiaries Divestiture of Health Care Fa
Slide 4: REIT Announcement
REIT Announcement GEO Board has unanimously approved all necessary steps to position GEO to operate in compliance with REIT rules beginning January 1, 2013 2013E Adjusted EBITDA of $320 to $330 million; AFFO of $200-210 million; and FFO of $215-225 million Estimated annual dividend of $2.20-2.40 per
Slide 5: Significant Projected Benefits from REIT Structure for GEO and its Shareholders
Significant Projected Benefits from REIT Structure for GEO and its Shareholders Increases Shareholder Value Lowers Cost of Capital Attracts Larger Base of Potential Shareholders Provides Greater Flexibility to Pursue Growth Opportunities Creates More Efficient Operating Structure
Slide 6: REIT Structure Aligns with GEO's Diversified Business Segments
REIT Structure Aligns with GEO’s Diversified Business Segments Diversified Government Outsourcing Services Provider Diversified Business Units - U.S. Corrections & Detention - Community Reentry - International Services 3 Federal Clients 11 State DOC Clients 6 International Clients Presence in United
Slide 7: Foundation of our Business is Long-Term Corrections Assets
Foundation of our Business is Long-Term Corrections Assets Fundamentally, GEO is in a real estate intensive industry GEO has financed and developed dozens of facilities since the mid- 1980s GEO owns/leases significant portion of its correctional and detention facilities GEO has more than $1.7 billio
Slide 8: Significant Facility/Bed Ownership in U.S. Markets
Significant Facility/Bed Ownership in U.S. Markets Gov’t Controlled 34% Gov’t Controlled 18% Facility/Bed Ownership Facility Level EBITDA GEO Controlled 66% GEO Controlled 82% Facility/Bed Ownership Facility Level EBITDA * Charts exclude International Facilities, BI Electronic Monitoring and Reentry
Slide 9: Enhanced Shareholder Value Creation
Enhanced Shareholder Value Creation For Illustrative Purposes Only in Millions (except per share data) • Increased Dividends Special Dividend of $350 Million in 2012 (80% / 20% Stock / Cash Election) For 2013: Pre-Tax Income $130 - $140 Current Shares Outstanding * 61.6 Dividends per Share * $2.20 -
Slide 10: Potential to Expand Investor Base
Potential to Expand Investor Base GEO • REIT structure to draw a more diversified investor base including active and passive REIT investors • GEO has attractive real estate characteristics and business fundamentals Stable, sustainable income Diversified, investment grade government customer base Sol
Slide 11: GCe@. RF
GCe@. RF REIT Owned/Leased Facilities 5 Beds elites SES + 1,653 Beds = acllities aa TOTAL: 47,593 Beds GEO US Corrections & Detention GEO ‘Community- Based Services GEO Youth Services 73 Facilities TRS Managed Only Facilities GEO US Corrections & Detention, GEO Community: Based Services GEO Internat
Slide 12: E&P Distribution in 4Q12
E&P Distribution in 4Q12 • Special dividend of $350 million, $5.68 per share, to be paid on December 31, 2012 to shareholders of record as of December 12, 2012 80% / 20% Stock / Cash Election Eligible for maximum individual dividend tax rate of 15% • Shareholders who elect to receive all cash will b
Slide 13: Asset Divestiture
Asset Divestiture • Due to REIT provisions in the tax code, GEO will need to divest its health care facility operations by Dec. 31, 2012 Six managed-only hospitals (1,970 Beds) and two Correctional Healthcare contracts • GEO Board has entered into agreement for Management Buyout (MBO) of health care
Slide 14: Growing Cash Flows to Support Increased Dividends
Growing Cash Flows to Support Increased Dividends AFFO Bridge GEO 2012E GEO 2013E Status Quo GEO 2013E * REIT/TRS GEO AFFO has Grown at 17% CAGR since 2008 Cash Taxes $5-10 Million $55-60 Million $10-15 Million AFFO $210-220 Million $160-170 Million $200-210 Million * Reflects Healthcare Divestiture
Slide 15: 2013 REIT Guidance
2013 REIT Guidance Guidance 2013E REIT/TRS Adjusted EBITDA $320 Million - $330 Million FFO $215 Million - $225 Million AFFO $200 Million - $210 Million Pre-Tax Income $130 Million - $140 Million Dividend per Share * $2.20 - $2.40 • REIT structure to drive increased dividend distribution * Based on G
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Slide 17: Opportunity Pipeline
Opportunity Pipeline Faciliy Location Client Ownership Proposal Pipeline Beds New Hampshire - New Beds NH 1,700 BOP CAR 14 U.S. 1,300 Florida Prison Bid Fla. 3,854 Michigan Prison Beds Mich. 1,750 Southwest Border Transportation TX, AZ, NM, CA N/A TOTAL 8,604 Beds Annual Ops Revenues Dev. Capex Open