Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Q4 2023 Earnings Presentation
41 slides from Geo Group Inc (the) Reit's earnings presentation, Mar 12, 2024
Slide 1: Investor Presentation 4Q23
Exhibit 99.1 Investor Presentation 4Q23
Slide 2: Highlights - Attractive Investment Characteristics
Highlights - Attractive Investment Characteristics Full Year Highlights - FY23 Revenue of $2.41 Billion - FY23 Net Income of $107.2 Million - FY23 Adjusted EBITDA of $507.2 Million - FY23 results reflect higher transportation revenues and higher international revenues Focus on Debt Reduction - Reduc
Slide 3: Financial Highlights
Financial Highlights Net Income ($ in millions) Revenues ($ in millions) $200 $3,000 $171.7 $2,376.7 $2,256.6 $2,413.2 $2,425 .0 $2,500 $150 $117.5 $2,000 $107.2 $100 $1,500 $77.2 $1,000 $50 $500 $- $- 2021 2022 2023 2024E 2021 2022 2023 2024E Adjusted EBITDA ($ in millions) $600 $539.2 $507.2 $500
Slide 4: Company Overview
Company Overview 4
Slide 5: Company History
Company History Ø Founded in 1984 Ø Initial Public Offering (IPO) in 1994 Listed on NYSE in 1996 Ø Ø Included in Major Indexes: Ø S&P 600 Ø Russell 2000 Ø 18,000+ Employees 5
Slide 6: Diversified Government Service Provider
Diversified Government Service Provider Ø Secure Residential Care § ICE Processing Centers § USMS Detention Facilities § State Correctional and Rehabilitation Facilities Ø Non-Secure Residential Care § Residential Reentry Centers/Halfway Houses Ø Non-Residential Services § Day Reporting Centers § El
Slide 7: Corporate Structure
GC@. Corporate Structure GEO Secure Services GEO International Leased/Not Managed Facilities Prout Residential +8. Is +38 Fas + 184 Beds +2 Facilities + 3,501 Bed +3 Fac @ + 44,731 Beds DS + 36 Facilities |Owned/Leased gy Mt Pe 12 Faclides Reentry Services | Owned/Leased | Managed Only Janaged Only
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 8
Slide 9: International Services International Facilities
International Services 4 International Facilities 9
Slide 10: 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 81,000 78,500 40% 38% 80,000 70,200 60,000 57,000 27,000 40,000 17,000 14% 8% 20,000 1,000 0 GEO CoreCivic MTC All Others
Slide 11: Difficult to Replace Real Estate
Difficult to Replace Real Estate § 17.3 Million Sq. Ft. owned and/or managed § 57,000 Owned/Leased Beds § Economic Useful Life: 75+ Years Karnes County Immigration Processing Center, TX § Newer Facility Assets = 20-Year Avg. Age § Difficult to Replace = High Barriers to Entry • Difficult permitting
Slide 12: Segment Trends
Segment Trends 12
Slide 13: Segment Trends
Segment Trends USMS ICE Ø Continued Capacity Needs Ø U.S. Southwest Border Crossings Ø Facilities strategically located Ø Alternatives To Detention Program to support USMS needs Demand for Diversified Government Services Reentry Services State Correctional Agencies Ø Available capacity at existing Ø
Slide 14: U.S. Immigration and Customs Enforcement
U.S. Immigration and Customs Enforcement FEDERAL SEGMENT U.S. Southwest Border Alternatives To Detention Reentry Crossings Program Services JAN23 - YTD2024 Southwest Land Border FEB2023 - YTD2024 Program Participants Encounters On Technology Monitoring 350,000 350,000 302K 288K 300,000 300,000 269K
Slide 15: Federal Appropriations Update
Federal Appropriations Update • We believe that ICE continues to face budgetary pressures, and the outcome and timing of ongoing federal budget discussions in Congress remain uncertain. • Since October 1, 2023, the U.S. Department of Homeland Security and ICE have been funded under a short-term Cont
Slide 16: ICE Processing Center Beds Breakdown
U.S. Immigration and Customs Enforcement ICE Processing Center Beds Breakdown * ICE Processing Center Beds Private Sector Beds Public Sector 10% GEO 42% Other Private 58% Sector 90% * Approximations based on contract guarantee bed counts 16 Source: ICE Data (ice.gov/detain/detention-management)
Slide 17: U.S. Marshals Service (USMS)
U.S. Marshals Service (USMS) Stable USMS Detention Populations (2014 –2023) 70,000 63,679 63,687 61,435 60,923 61,421 60,000 55,776 55,170 51,777 51,316 50,317 50,000 40,000 30,000 ~43% Contractor 20,000 Beds 10,000 - 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: 2014-2021 figures are ta
Slide 18: Aging Public Prisons
Aging Public Prisons Ø Aging Public Prison Facilities are Costly and Less Safe § Public Prison Facilities have Significant Deferred Maintenance Needs Ø 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 Ø GEO
Slide 19: Aging State and Federal Prison Infrastructure
Aging State and Federal Prison Infrastructure Ø 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 1 approximately 123 facilities requiring an estimated $2 billion in maintenance costs § In
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 Ø FY23 Revenue of $2.41 billion Ø FY23 Net Income of $107.2 Million FY23 Adjusted EBITDA of $507.2 Million Ø Q4 2023 Q4 2022 YTD 2023 YTD 2022 Revenue $608,283 $620,682 $2,413,167 $2,376,727 Net Income $25,162 $41,529 $107,183 $171,692 Adjusted EBITDA* $128,954 $145,481 $507,177
Slide 23: Revenues by Segment
Revenues by Segment FY2023 Revenue = $2.41 Billion GEO Secure GEO Care Services 28% 72% Reentry Services 10% Electronic Monitoring & Supervision Services Federal 18% 46% International 8% State 18% 23
Slide 24: Diversified Long-Term, High-Quality Customer Relationships
Diversified Long-Term, High-Quality Customer Relationships Revenues By Customer (FY2023) Other Non- South Africa Residential Various Others Texas 1% 9% 3% 1% Virginia 1% ICE* Georgia 43% 1% New Jersey 1% Federal New Mexico Government 1% Oklahoma 62% 2% Indiana 2% U.S. Marshals Florida 16% 4% Arizona
Slide 25: FY2024 Guidance
FY2024 Guidance Net Income Attributable to GEO $110 Million - $125 Million + Net Interest Expense $190 Million - $200 Million + Income Taxes $44 Million - $48 Million (including income tax provision on equity in earnings of affiliates) + Depreciation and Amortization $126 Million – $127 Million + No
Slide 26: Environmental, Social & Governance (ESG) Overview
Environmental, Social & Governance (ESG) Overview 26
Slide 27: High Quality Government Contracts
High Quality Government Contracts Ø All Investment Grade Customers Ø Required by Law to Pay on Time: 45-60 days Ø No Receivables Problems Ø Payment Schedule: Monthly Billing Ø Majority of Contracts Include Fixed Monthly Payments Ø Contract Terms: Average Length of 7-10 Years Ø Customer Retention: In
Slide 28: Highly Regulated / Professional Services
Highly Regulated / Professional Services Ø Lengthy Contracts Specifying all Service Requirements Ø On-Site, Full-Time Customer Contract Monitors at Facilities in the U.S. Ø Full-time GEO Compliance Monitors at Facilities in the U.S. Ø Independent Contract Compliance Division Reporting Directly to th
Slide 29: Board Oversight
Board Oversight Health Services Criminal Justice & Human Rights Committee Committee Rehabilitation Committee • Periodic review of GEO’s • Annual review of Human Rights • Periodic review of GEO health services operations, & ESG Report Continuum of Care in the U.S. and • Periodic review of ESG initiat
Slide 30: GEO's ESG Objectives
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 o
Slide 31: Fifth Annual Human Rights and ESG Report
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, a
Slide 32: Diversified Employer
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 69% of our U.S. workforce. Employee Training •
Slide 33: Environmentally Responsible
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 r
Slide 34: World Class Health Care
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 healt
Slide 35: 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 2023 Milestones: • Completed approximately 4.6 million hours of rehabilitation prog
Slide 36: Appendix
Appendix 36
Slide 37: Capital Structure (as of December 31, 2023)
Capital Structure (as of December 31, 2023) Interest Final ($ in millions) Amount Leverage Rate Maturity Date Cash & Equivalents 94 (1) $265M Revolving Line of Credit - SOFR + 3.25% March 2027 (1) Tranche 1 Term Loan 7 91 SOFR + 7.13% March 2027 (1) Tranche 2 Term Loan 1 15 SOFR + 6.13% March 2027 T
Slide 38: Asset Value (as of December 31, 2023)
Asset Value (as of December 31, 2023) ($ millions) Estimated Asset Value Debt (1) Cash $ 56.7 T1 and T2 Term Loans $ 9 06.7 AR 390.0 2L Notes 5 25.7 (2,3) (5) PP&E Total Secured Debt 3,867.4 $ 1 ,432.4 (4) Other Non-RE Assets 1,200.0 Senior Notes due 2026 110.9 Total Asset Value $ 5,514.1 Senior Exc
Slide 39: Income Statement
Income Statement Q4 2023 Q4 2022 FY 2023 FY 2022 (unaudited)(unaudited)(unaudited)(unaudited) Revenues $ 6 08,283 $ 620,682 $ 2,413,167 $ 2,376,727 441,942 430,565 1,744,228 1,662,885 Operating expenses Depreciation and amortization 30,996 32,641 125,784 132,925 General and administrative expenses 5
Slide 40: Balance Sheet
Balance Sheet As of As of December 31, 2023 December 31, 2022 (unaudited)(unaudited) ASSETS Cash and cash equivalents $ 93,971 $ 95,073 Accounts receivable, less allowance for doubtful accounts 3 90,023 416,399 Prepaid expenses and other current assets 44,511 43,536 Total current assets $ 5 28,505 $
Slide 41: Debt Maturity Schedule
Debt Maturity Schedule cher Browings de 2027 Cr Se “Tench Tor Ln 02027 same : tm ae ‘me = oS om = sa ser = ray ow = = Qo, 2, ® " ® ® a + Then amenets rn 008 and roresent re matin a 1231 ash yest