Geo Group Inc (the) Reit · NYSE:GEO
Geo Group Inc (the) Reit — GEO Group — Debt Investor Presentation (January 2022)
46 slides from Geo Group Inc (the) Reit's debt investor presentation, Jan 6, 2022
Slide 1: Company Overview
Company Overview 29 November 2021 CONFIDENTIAL G:\Restructuring\Co-Active\Geo Group\Presentations\2021.11.xx - Creditor Presentation Blowout\Project Palm - Cleansing Materials_v30.pptx Time Stamp : 9 March 2017 10:42:26 Discuss amongst advisors; intent would be to share with holders under NDA but wi
Slide 2: Disclaimer
Disclaimer Company Overview CONFIDENTIAL Confidentiality This confidential presentation (together with the information set forth herein and any oral statements made in connection herewith, the “Presentation”) is being delivered to you by The GEO Group, Inc. and certain of its subsidiaries (collectiv
Slide 3: Defined Terms
Defined Terms Company Overview BOP: Federal Bureau of Prisons USMS: United States Marshall Service ICE: U.S. Immigration Customs and Enforcement DOC: Department of Corrections ISAP: The Intensive Supervision and Appearance Program under ICE DRC: Day Reporting Center 2
Slide 4: Table of Contents
Table of Contents Company Overview CONFIDENTIAL ICOMPANY OVERVIEW 3 IISEGMENT OVERVIEW 11 IIIRECENT BUSINESS UPDATES 15 IVSECTOR TRENDS 20 VFINANCIAL OVERVIEW 23 APPENDIX
Slide 5: Company Overview
Confidential Company Overview ICompany Overview
Slide 6: Long-Standing History as Trusted Service Provider
2019 Commences publication of annual ESG report Sep. 30, 2021 Owns, leases and/or manages 107 facilities totaling over 86,000 beds Long-Standing History as Trusted Service Provider I Company Overview Company Overview 1984 Founded in 1984 by Executive Chairman George Zoley 2011 Acquires BI in $415 mi
Slide 7: Reputation as a Partner with Government Entities
GEO works with government clients to provide customized solutions for correctional facilities, immigration centers and rehabilitation programs. Reputation as a Partner with Government Entities I Company Overview Company Overview Manage any shelters or facilities housing unaccompanied migrant minors
Slide 8: Provides Comprehensive Services through Diversified Business Segments
Provides Comprehensive Services through Diversified Business Segments I Company Overview Company Overview GEO specializes in the ownership, leasing and management of secure facilities, processing centers and reentry facilities and the provision of community-based services and youth services in the U
Slide 9: Attractive Global Real Estate Portfolio is the Foundation of our Business
Attractive Global Real Estate Portfolio is the Foundation of our Business I Company Overview Company Overview GEO maintains a geographically diverse portfolio with 1071 facilities across 27 U.S. states, South Africa and Australia. 17.6 million square feet Real estate owned or operated Extensive Real
Slide 10: Diversified Long-Term, High-Quality Customer Relationships
Diversified Long-Term, High-Quality Customer Relationships I Company Overview Company Overview Non-Residential includes various other federal, state and local contracts. Based on contract retention rate over five-year period from FY’17 – FY’21. GEO maintains long term relationships with top customer
Slide 11: Sustained Focus on Human Rights, ESG and Adherence to Regulations
Sustained Focus on Human Rights, ESG and Adherence to Regulations I Company Overview Company Overview Commitment to providing a safe and humane environment for all individuals entrusted in the Company’s care All facilities are maintained to be compliant with safety codes and fire protections GEO has
Slide 12: Award Winning GEO Continuum of Care
Award Winning GEO Continuum of Care® I Company Overview Company Overview Focus on integrating in-custody evidence-based rehabilitation with post-release services aimed at reducing recidivism GEO Continuum of Care® received the ‘Innovation in Corrections’ award from American Correctional Association
Slide 13: Highly Qualified and Experienced Management Team
Highly Qualified and Experienced Management Team I Company Overview Company Overview The management team has combined over 160 years of corrections industry experience (average of 20 years of experience per person) and an average tenure with the Company of over 16 years. Jennifer White Vice Presiden
Slide 14: Segment Overview
Confidential Company Overview IISegment Overview
Slide 15: Segment Overview – U.S. Secure Services
Segment Overview – U.S. Secure Services II Segment Overview Company Overview GEO’s Secure Services division provides turnkey solutions including the intake and housing of offenders, industry leading in-custody evidence-based programs, as well as secure offender transportation services to government
Slide 16: Segment Overview – GEO Care
GEO Care LTM Q3’21 Revenue by Segment1 ($M) Segment Overview – GEO Care II Segment Overview Company Overview GEO Care provides flexible solutions that increase accountability, enhance public safety, contain costs, and reduce recidivism; GEO Care delivers a comprehensive approach to manage, rehabilit
Slide 17: Segment Overview – GEO Care (cont'd)
Segment Overview – GEO Care (cont’d) II Segment Overview Company Overview BI Company Highlights Historical Revenue2 BI pioneered the use of electronic monitoring products and services for alternatives to detention and has led the industry for over 35 years GEO is the only company to offer a full sui
Slide 18: Segment Overview – International
Located in London, England, The GEO Group U.K. manages the 249-bed Dungavel House Immigration Removal Centre in Scotland1 Additionally, GEO’s U.K. joint venture, GEOAmey, provides prison escort and custody services in England, Wales, and Scotland Re-established in 2004 Located in Johannesburg, South
Slide 19: Recent Business Updates
Confidential Company Overview IIIRecent Business Updates
Slide 20: Covid-19 Update / Response
Covid-19 Update / Response III Recent Business Updates Company Overview GEO has taken a series of steps to mitigate the risks of COVID-19 and has worked with government agency partners to implement best practices consistent with the guidance issued by the Centers for Disease Control and Prevention (
Slide 21: Updates Post-Issuance of Executive Order
Updates Post-Issuance of Executive Order III Recent Business Updates Company Overview On January 26, 2021, President Biden signed an executive order directing the United States Attorney General not to renew DOJ contracts with privately operated criminal detention facilities, as consistent with appli
Slide 22: GEO is Marketing Available Beds in Inventory to Other Agencies
GEO is Marketing Available Beds in Inventory to Other Agencies III Recent Business Updates Company Overview GEO currently has seven idle facilities with ~7,400 beds. GEO is currently marketing these facilities to various government agencies and/or exploring asset sales. Available Beds in Inventory (
Slide 23: Status of Upcoming Contract Renewals and Recent Wins
Status of Upcoming Contract Renewals and Recent Wins III Recent Business Updates Company Overview Although the Biden Executive Order will likely result in the eventual phase-out of BOP facilities and direct USMS contracts, GEO has continued to win new business as it markets facilities to other feder
Slide 24: Ongoing REIT Structure Evaluation
Ongoing REIT Structure Evaluation III Recent Business Updates Company Overview The Company is currently assessing its REIT status and plans to make a decision on maintaining a REIT structure in Q4’21. The Company suspended its dividend in April 2021, preserving ~$60 - $80 million of annual cash flow
Slide 25: Sector Trends
Confidential Company Overview IVSector Trends
Slide 26: Sector Trends Drive Continued Demand for GEO's Facilities and Services
Sector Trends Drive Continued Demand for GEO’s Facilities and Services IV Sector Trends Company Overview Aging Public Prisons: Public prisons are on average significantly older than GEO facilities; the Company believes there will be continued demand from government agencies for GEO facilities since
Slide 27: Aging Infrastructure of Public Prisons Creates Opportunity for Private Sector
Aging Infrastructure of Public Prisons Creates Opportunity for Private Sector IV Sector Trends Company Overview Aging public prison facilities are costly and less safe More than 200,000 public prison beds in the US are older than economic useful life of 75 years Close to 100,000 public prison beds a
Slide 28: Border Inflow Increase is a Tailwind for GEO Facilities and BI
Border Inflow Increase is a Tailwind for GEO Facilities and BI IV Sector Trends Company Overview Record increases in migrant flows come at a time when U.S. immigration courts are experiencing record backlogs and average wait times. The lifting of Title 421 public health restrictions will further inc
Slide 29: Financial Overview
Confidential Company Overview VFinancial Overview
Slide 30: Recurring Revenue with Strong Cash Flow Despite Challenges of Pandemic
Recurring Revenue with Strong Cash Flow Despite Challenges of Pandemic V Financial Overview Company Overview Commentary Revenues have remained stable but fallen slightly over the past two years Secure Services revenues decreased due to the COVID-19 pandemic as well as the ramp-down of certain compan
Slide 31: Performance Update Since COVID-19
Performance Update Since COVID-19 V Financial Overview Company Overview Starting in late March and early April 2020, the pandemic began to negatively impact performance in the secure services business, specifically with ICE Processing Centers and USMS Facilities, as a result of a decrease in court s
Slide 32: General Assumptions
General Assumptions Actuals through September 30, 2021 and projected thereafter For illustrative purposes, assumes GEO becomes a taxable C-Corp in Q4’21 Former REIT entities pay a ~25% effective tax rate upon conversion Projections do not assume a sale of any business division Revenue Secured Servic
Slide 33: Long-Term Financial Forecast – Key Metrics
Long-Term Financial Forecast – Key Metrics V Financial Overview Company Overview Consolidated EBITDA + SBC – cash taxes + dividends from unconsolidated joint ventures + changes in net working capital – capex + other non-cash items including provisions for doubtful accounts, gains/losses on asset sal
Slide 34: Long-Term Financial Forecast – Key Metrics (cont'd)
Long-Term Financial Forecast – Key Metrics (cont’d) V Financial Overview Company Overview Projected Financials Includes net gain/loss attributable to noncontrolling interests, provision for doubtful accounts, gains/losses on sale/disposals of property & equipment and goodwill impairment. Includes st
Slide 35: Appendix
Confidential Company Overview Appendix
Slide 36: Capital Structure
Capital Structure Appendix Company Overview Margin range based on total net leverage ratio; currently at L+225. 75 bps LIBOR floor. Consolidated balance sheet cash excluding restricted cash; includes ~$160mm of cash in unrestricted subsidiaries. As calculated under covenant compliance certificates (
Slide 37: Facilities Overview
Facilities Overview Appendix Company Overview The following provides an overview of the facilities owned, leased or managed by GEO across all business segments as of September 30, 2021. Excludes 81 non-residential reentry centers. Includes 4 idle facilities (750-bed Cheyenne Mountain Reentry Center,
Slide 38: Liability Management Transaction Proposals
Liability Management Transaction Proposals December 2021 CONFIDENTIAL F:\Restructuring\Co-Active\Geo Group\Presentations\2021.12.xx - Term Sheet Cleansing\Palm_-_Liability_Management_Term_Sheet_(Cleansing)_LAZ.pptx Time Stamp : 9 March 2017 10:42:26
Slide 39: Disclaimer
Disclaimer Liability Management Transaction proposals CONFIDENTIAL Confidentiality This confidential presentation (together with the information set forth herein and any oral statements made in connection herewith, the “Presentation”) is being delivered to you by The GEO Group, Inc. and certain of i
Slide 40: Summary of Term Sheets: Amend & Extend of Secured Debt
Summary of Term Sheets: Amend & Extend of Secured Debt Liability Management Transaction proposals Term Lender Group Proposal (12/3/21)1 GEO Counter (12/16/21) Treatment of Existing Debt $762mm participating Existing TL lenders exchange at par for (i) $191mm cash and (ii) $572mm Exchange TL Exchange
Slide 41: Summary of Term Sheets: Amend & Extend of Secured Debt (cont'd)
Summary of Term Sheets: Amend & Extend of Secured Debt (cont’d) Liability Management transaction proposals Term Lender Group Proposal (12/3/21)1 GEO Counter (12/16/21) Exchange RCF & TL Terms (cont’d) Maturity September 23, 2026, with: Springing maturity within 91 days of the ’26 Exchangeable Notes
Slide 42: Summary of Term Sheets: Amend & Extend of Secured Debt (cont'd)
Summary of Term Sheets: Amend & Extend of Secured Debt (cont’d) Liability Management transaction proposals Term Lender Group Proposal (12/3/21)1 GEO Counter (12/16/21) Exchange RCF & TL Terms (cont’d) Negative Covenants Substantially similar to Existing TL, including: Debt / Lien Incurrence: No incr
Slide 43: Summary of Term Sheets: Exchange of Senior Notes
Summary of Term Sheets: Exchange of Senior Notes Liability Management transaction proposals Noteholder Group Proposal (12/13/21)1 GEO Counter (12/16/21) Treatment of Existing Securities Participating 2023, 2024 and 2026 Senior Notes exchange at par and receive (i) cash and (ii) new 2L secured notes2
Slide 44: Amend & Extend of Secured Debt & Senior Notes Exchange (GEO's 12/16/21 Proposal)
Amend & Extend of Secured Debt & Senior Notes Exchange (GEO’s 12/16/21 Proposal) ( $ in millions) Liability Management Transaction proposals The following illustrates the sources and uses and capital structure impact of the liability management transaction. Existing RCF is exchanged for $200mm Excha
Slide 45: Amend & Extend of Secured Debt & Senior Notes Exchange (cont'd)
Liability Management transaction proposals Pro forma for the transactions, GEO is expected to generate meaningful cash flow and achieve further deleveraging over forecast period. Amend & Extend of Secured Debt & Senior Notes Exchange (cont’d) (GEO’s 12/16/21 Proposal) ($ in millions) Includes provis
Slide 46: Term Loan Lender Deal vs. No Deal Comparison
Liability Management transaction proposals For illustrative purposes, the following compares what the Term Loan lenders would receive between now and their upcoming maturity1 under a Deal vs. No Deal scenario and demonstrates the illustrative impact to collateral coverage if the Company were to util
GEO Group — Debt Investor Presentation (January 2022) on 6ix