Business Segments and Geographic Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Business Segments and Geographic Information

15.Business Segments and Geographic Information

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: the U.S. Secure Services segment; the Electronic Monitoring and Supervision Services segment; the Reentry Services segment; and the International Services segment. The Company has identified these four reportable segments to reflect the current view that the Company operates four distinct business lines, each of which constitutes a material part of its overall business. The Company determined that its previously reportable business segment, Facility Construction and Design, no longer qualifies as a reportable segment as it no longer meets certain quantitative thresholds and has been aggregated with the Company’s International Services reportable business segment below. In addition, the Company appointed a new Chief Executive Officer, the chief operating decision maker, during fiscal 2021. Based on changes to the way the Company’s chief operating decision maker views the business and financial results used to allocate resources to its electronic monitoring and supervision services operations, along with the growth of the business, the Company will report the electronic monitoring and supervision services operation as a separate reportable segment. This new segment will be presented as Electronic Monitoring and Supervision Services. Previously, the electronic monitoring and supervision services operations were included in the GEO Care reportable segment. In addition, the GEO Care reportable segment was renamed Reentry Services and will include services provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs. Reentry Services also includes activities for our former youth division for half of 2021 and all historical periods. The youth division was divested on July 1, 2021.

The U.S. Secure Services segment primarily encompasses U.S.-based secure services business. The Electronic Monitoring and Supervision Services segment, which conducts its services in the United States, represents services provided to adults for monitoring services and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants. The Reentry Services segment, which conducts its services in the United States represents services provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs. The International Services segment

primarily consists of secure services operations in South Africa and Australia. Segment disclosures below (in thousands) reflect the results of continuing operations. All transactions between segments are eliminated.

Fiscal Year	2022			2021			2020
Revenues:
U.S. Secure Services	$	1,437,831		$	1,488,936		$	1,571,216
Electronic Monitoring and Supervision Services		496,268			278,934			241,944
Reentry Services		255,428			274,893			309,398
International Services		187,200			213,849			227,540
Total revenues	$	2,376,727		$	2,256,612		$	2,350,098
Capital Expenditures:
U.S. Secure Services	$	52,613		$	23,780		$	58,410
Electronic Monitoring and Supervision Services		31,354			29,504			32,972
Reentry Services		3,181			14,675			16,276
International Services		2,878			1,435			1,142
Total capital expenditures	$	90,026		$	69,394		$	108,800
Depreciation and amortization:
U.S. Secure Services	$	80,600		$	83,721		$	80,702
Electronic Monitoring and Supervision Services		31,838			30,422			31,678
Reentry Services		18,416			18,773			20,154
International Services		2,071			2,261			2,146
Total depreciation and amortization	$	132,925		$	135,177		$	134,680
Operating Income:
U.S. Secure Services	$	279,975		$	292,925		$	298,952
Electronic Monitoring and Supervision Services		238,194			127,070			97,421
Reentry Services [1]		42,923			50,128			6,740
International Services		18,982			22,266			19,664
Operating income from segments	$	580,074		$	492,389		$	422,777
General and Administrative Expenses		(196,972	)		(204,306	)		(193,372	)
Total operating income	$	383,102		$	288,083		$	229,405

[1] Operating income for Reentry Services for the year ended December 31, 2020 includes a goodwill impairment charge of $21.1 million.

Pre-Tax Income Reconciliation of Segments

The following is a reconciliation of the Company’s total operating income from its reportable segments to the Company’s income before income taxes and equity in earnings of affiliates, in each case, during the years ended December 31, 2022, 2021 and 2020, respectively.

Fiscal Year Ended	2022			2021			2020
	(In thousands)
Operating income from segments	$	580,074		$	492,389		$	422,777
Unallocated amounts:
General and administrative expense		(196,972	)		(204,306	)		(193,372	)
Net interest expense		(147,719	)		(105,453	)		(103,765	)
Gain (loss) on extinguishment of debt		(37,895	)		4,693			5,319
Net gain (loss) on disposition of assets		32,332			5,499			(6,831	)
Income before income taxes and equity in earnings of affiliates	$	229,820		$	192,822		$	124,128

	2022		2021
	(In thousands)
Segment assets:
U.S. Secure Services	$	2,371,146	$	2,433,023
Reentry Services		572,154		566,916
Electronic Monitoring and Supervision Services		536,291		483,112
International Services		66,023		451,547
Total segment assets	$	3,545,614	$	3,934,598

Asset Reconciliation

The following is a reconciliation of the Company’s reportable segment assets to the Company’s total assets as of December 31, 2022 and 2021, respectively.

	2022		2021
	(In thousands)
Reportable segment assets	$	3,545,614	$	3,934,598
Cash		95,073		506,491
Deferred income tax assets		8,005		—
Restricted cash and investments, current and non-current		111,691		96,319
Total assets	$	3,760,383	$	4,537,408

Geographic Information

During each of the years ended December 31, 2022, 2021 and 2020, the Company’s international operations were conducted through (i) the Company’s wholly owned Australian subsidiary, The GEO Group Australia Pty. Ltd., through which the Company has management contracts for four correctional facilities, (ii) the Company's wholly owned subsidiaries, GEO Ravenhall Finance Holdings Pty. Ltd. and GEO Ravenhall Holdings Pty. Ltd. which, together, had a design and construction contract for a facility in Ravenhall, Australia which was completed in November 2017, (iii) the Company’s wholly-owned subsidiary in South Africa, SACM, through which the Company manages one correctional facility, and (iv) the Company’s wholly-owned subsidiary in the United Kingdom, The GEO Group UK Ltd., through which the Company managed the Dungavel House Immigration Removal Centre (GEO transitioned the management contract for Dungavel to the government effective September 30, 2021).

Fiscal Year	2022		2021		2020
	(In thousands)
Revenues:
U.S. operations	$	2,189,527	$	2,043,157	$	2,123,045
Australia operations		168,225		186,980		201,932
South African operations		18,975		19,527		17,044
United Kingdom operations		—		6,948		8,077
Total revenues	$	2,376,727	$	2,256,612	$	2,350,098
Property and Equipment, net:
U.S. operations	$	1,991,968	$	2,026,252	$	2,109,070
Australia operations		9,961		11,491		12,908
South African operations		92		102		127
United Kingdom operations		-		-		90
Total Property and Equipment, net	$	2,002,021	$	2,037,845	$	2,122,195

Sources of Revenue

The Company derives most of its revenue from the management of secure facilities through public-private partnerships. The Company also derives revenue from the provision of reentry services and electronic monitoring and evidence-based supervision and treatment programs in the United States, and expansion of new and existing secure facilities, processing centers and reentry centers.

Fiscal Year	2022		2021
	(In thousands)
Revenues:
Secure Services [1]	$	1,625,031	$	1,702,785
Electronic Monitoring and Supervision Services		496,268		278,934
Reentry Services		255,428		274,893
Total revenues	$	2,376,727	$	2,256,612

[1] Includes international secured services

Equity in Earnings of Affiliates

Equity in earnings of affiliates for 2022, 2021 and 2020 includes the operating results of the Company’s joint ventures in SACS and GEOAmey. These joint ventures are accounted for under the equity method and the Company’s investments in SACS and GEOAmey are presented as a component of other non-current assets in the accompanying Consolidated Balance Sheets.

The Company has recorded $2.5 million, $3.6 million and $3.7 million in earnings, net of tax impact, for SACS operations during the years ended December 31, 2022, 2021 and 2020, respectively, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying Consolidated Statements of Operations. As of December 31, 2022 and 2021, the Company’s investment in SACS was $10.2 million and $10.3 million, respectively. The investment is included in other non-current assets in the accompanying Consolidated Balance Sheets. The Company received dividend distributions of $1.9 million and $3.1 million, in 2022 and 2021, respectively, from this unconsolidated joint venture.

The Company has recorded $2.2 million, $3.6 million and $5.5 million in earnings, net of tax impact, for GEOAmey’s operations during the years ended December 31, 2022, 2021 and 2020, respectively, which are included in equity in earnings of affiliates, net of income tax provision, in the accompanying Consolidated Statements of Operations. As of December 31, 2022 and 2021, the Company’s investment in GEOAmey was $8.7 million and $10.1 million, respectively, and represents its share of cumulative reported earnings. The Company received dividend distributions of $2.6 million and $5.2 million in 2022 and 2021, respectively, from this unconsolidated joint venture. There were no dividend distributions in 2020.

Business Concentration

Except for the major customer noted in the following table, no other single customer made up greater than 10% of the Company’s consolidated revenues for the following fiscal years:

Customer	2022			2021			2020
Various agencies of the U.S Federal Government:		64	%		58	%		56	%

The concentrations above relate to the Company's U.S. Secure Services and its Electronic Monitoring and Supervision segments.

Credit risk related to accounts receivable is reflective of the related revenues.