Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Q3 2023 Earnings Presentation
41 slides from Geo Group Inc (the) Reit's earnings presentation, Nov 27, 2023
Slide 1: Investor Presentation 3Q23
Investor Presentation 3Q23 Exhibit 99.1
Slide 2: Quarterly Highlights
Quarterly Highlights 3Q23 Revenue of $602.8 Million 3Q23 Adjusted EBITDA of $118.7 Million 3Q23 results reflect higher transportation revenues and higher international revenues Focus on Debt Reduction Reduced net debt by approximately $109 million in 3Q23, bringing total net debt to $1.8 billion Goa
Slide 3: Financial Highlights
Financial Highlights Revenues ($ in millions) Net Income ($ in millions) Adjusted EBITDA ($ in millions) * 2023E Based on Mid-point of FY2023 Financial Guidance issued on November 7, 2023
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 @ ° 44,731 Beds Secure DS + 36 Facilities Services | Owned/Leasea a ce Ranets | Managed Only Reentry Services Electronic Residential Non-Residential Monitioring + 8,894 Beds + 88 Non-Residential + 298,000 + 38 Facilities | Owned/Leased Centers Supervised Individuals +184
Slide 8: Diversified U.S. Facility Footprint
Diversified U.S. Facility Footprint 48 GEO Secure Services Facilities 40 GEO Care Residential Facilities 8 Leased/Not Managed Facilities
Slide 9: International Services
International Services 4 International Facilities
Slide 10: 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 11: Difficult to Replace Real Estate
17.5 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 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: 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 15: ICE budget and appropriations outlook
We believe that ICE continues to face budgetary pressures, and the timing of the passage of appropriations bills in Congress remains uncertain. The federal government is currently funded under a short-term Continuing Resolution through early 2024 and Congress has yet to reach an agreement on the lon
Slide 16: ICE Processing Center Beds 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 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 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 19: 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 20: 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 21: Financial Overview
Financial Overview 21
Slide 22: Financial Highlights
Financial Highlights * Reconciliation of Non-GAAP measures included in GEO’s 3Q23 Earnings Release & Supplemental Q3 2023 Q3 2022 YTD 2023 YTD 2022 Revenue $602,785 $616,683 $1,804,885 $1,756,045 Net Income $24,503 $38,312 $82,022 $130,164 Adjusted EBITDA* $118,670 $136,199 $378,554 $393,706 3Q23 Re
Slide 23: Revenues by Segment
Revenues by Segment GEO Care 32% GEO Secure Services 68% FY2022 Revenue = $2.38 Billion
Slide 24: Revenues By Customer
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 25: FY2023 Guidance
FY2023 Guidance Net Income $100 Million - $105 Million + Net Interest Expense $217.0 Million - $217.0 Million + Income Taxes (including income tax provision on equity in earnings of affiliates) $40.0 Million - $45.0 Million + Depreciation and Amortization $127.0 Million – $127.0 Million + Non-Cash S
Slide 26: Appendix: Environmental, Social & Governance (ESG)
Appendix: Environmental, Social & Governance (ESG)
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 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 29: 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 30: 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 31: Fifth Annual Human Rights and ESG Report
At the end of September, GEO published our Fifth 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
Slide 32: 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 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 2022 Milestones: Completed approximately 3.5 million hours of rehabilitation programmin
Slide 36: Appendix: Financial Information
Appendix: Financial Information
Slide 37: Income Statement
Income Statement Revenues $602,785 616,683, S 1,804,885 $ 1,756,045 Operating expenses 440,667 436,210 1,302,287 1,293,162 Depreciation and amortization 31.173 92,330 94,787 100,204 General and administrative expenses 47,356 90,022 199,182 147,878 ‘Operating income 83,609 98,121 268,629 274,724 Inte
Slide 38: Balance Sheet
Balance Sheet ‘As of As of Soptomber 30, 2023 Docomber 31, 2022 cited (wousted Cash and cash equivalents s s 95,073 : 416,309 Prepaid expenses and other current assets 49,596 Total current assets s $ 555,008 Restricted Cash and Investments 190,729 111,691 Property and Equipment, Not 1,951,524 2,002,
Slide 39: Debt Maturity Schedule
Debt Maturity Schedule see on or hes oe 388 : ose : vos Seton meen se 3 : Bae Bue ‘ner owee™ 4 a0 sz sa 283 os sesh 2a eri ‘ota rng ace a ec TC Oc ‘Tete Pomanta a ee pens. re Rams, rosa re fase oo ‘eat ovetPoymnts 39
Slide 40: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income
Slide 41: Definitions
Definitions EBITDA: EBITDA is defined as net income, adjusted by ir isi income tax, it net of interest income, and depreciation and amortization. Adjusted EBITDA: Adjusted EBITDA i: is defined as coke uaa for gain on asset divesti pre-tax, net loss attrit trolling interests, stock- base related tax,