The GEO Group Reports Third Quarter 2012 Results and Provides Update on Potential REIT Conversion

  The GEO Group Reports Third Quarter 2012 Results and Provides Update on
  Potential REIT Conversion

  *3Q12 Income from Continuing Operations of $16.5 Million - $0.27 EPS
  *3Q12 Pro Forma Income from Continuing Operations of $25.7 Million - $0.42
    Pro Forma EPS
  *4Q12 Pro Forma EPS Guidance of $0.41 to $0.42
  *2012 Pro Forma EPS Guidance of $1.55 to $1.56 and Increased 2012 Adjusted
    Funds from Operations Guidance of $3.44 to $3.60 per Share

Business Wire

BOCA RATON, Fla. -- November 05, 2012

The GEO Group, Inc. (NYSE: GEO) (“GEO”) today reported its financial results
for the third quarter and first nine months of 2012 and provided an update on
its ongoing review of a potential conversion into a Real Estate Investment
Trust (“REIT”).

Financial Results - Third Quarter 2012 Compared with Third Quarter 2011

GEO reported total revenues for the third quarter 2012 of $411.5 million
compared to total revenues of $395.7 million for the third quarter 2011. GEO’s
revenues and other financial data are presented throughout as retrospectively
revised for discontinued operations. GEO reported income from continuing
operations for the third quarter 2012 of $16.5 million, or $0.27 per diluted
share, compared to income from continuing operations of $20.7 million, or
$0.33 per diluted share for the third quarter of 2011. GEO’s third quarter
2012 income from continuing operations includes a $0.9 million after-tax loss
attributable to non-controlling interests; $1.3 million, after-tax, in
start-up/transition expenses; $1.1 million, after-tax, in international bid
and proposal expenses; $1.0 million, after-tax, in non-recurring expenses
including M&A related expenses in connection with GEO’s previously announced
acquisition of the partnership interests in Municipal Corrections Finance,
L.P. (“MCF”), and a $5.0 million after-tax loss related to the early
extinguishment of debt in connection with the previously-announced redemption
of the MCF bonds.

Excluding these items, GEO reported Pro Forma income from continuing
operations of $25.7 million, or $0.42 per diluted share, for the third quarter
2012 compared to Pro Forma income from continuing operations of $25.5 million,
or $0.40 per diluted share for the third quarter 2011. Third quarter 2012
Adjusted EBITDA increased to $86.7 million from $81.1 million in the third
quarter 2011. GEO reported Adjusted Funds from Operations for the third
quarter 2012 of $57.9 million, or $0.94 per diluted share, compared to $53.6
million, or $0.84 per diluted share, for the third quarter 2011.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said: “We are
very pleased with our third quarter results and confirmed our outlook for the
remainder of the year, which continue to reflect strong operational and
financial performance from our diversified business units. During the quarter,
we declared our first ever quarterly cash dividend of $0.20 per share, and we
made significant progress on our ongoing REIT conversion review. These
initiatives are indicative of our long-term view that we can meaningfully
return value to our shareholders while continuing to deleverage and pursue
quality earnings growth.”

Financial Results – First Nine Months of 2012 Compared with First Nine Months
of 2011

For the first nine months of 2012, GEO reported total revenues of $1.23
billion compared to total revenues of $1.17 billion for the first nine months
of 2011. GEO reported income from continuing operations of $54.5 million, or
$0.89 per diluted share for the first nine months of 2012, compared to income
from continuing operations of $56.6 million, or $0.88 per diluted share for
the first nine months of 2011. GEO’s income from continuing operations for the
first nine months of 2012 includes a $0.9 million after-tax loss attributable
to non-controlling interests; $5.4 million in start-up/transition expenses,
net of tax; $2.3 million in international bid and proposal expenses, net of
tax; $1.5 million, after-tax, in non-recurring expenses including M&A related
expenses in connection with GEO’s previously announced acquisition of the
partnership interests in MCF, and a $5.0 million after-tax loss related to the
early extinguishment of debt in connection with the previously-announced
redemption of the MCF bonds.

Excluding these items, GEO reported Pro Forma income from continuing
operations of $69.6 million, or $1.14 per diluted share, for the first nine
months of 2012 compared to Pro Forma income from continuing operations of
$72.4 million, or $1.12 per diluted share for the first nine months of 2011.
Adjusted EBITDA for the first nine months of 2012 increased to $246.7 million
from $233.1 million in the first nine months of 2011. Adjusted Funds from
Operations for the first nine months of 2012 increased to $170.4 million, or
$2.79 per diluted share, compared to $147.0 million, or $2.28 per diluted
share, for the first nine months of 2011.

REIT Review Update

As previously disclosed, GEO has retained the law firm of Skadden Arps as
legal advisors and Bank of America Merrill Lynch and Barclays Capital as
financial co-advisors to assist the company with a comprehensive review of a
potential REIT conversion.

GEO’s analysis has focused on a potential conversion to a REIT with a Taxable
REIT Subsidiary (“TRS”) structure, in which a small portion of GEO’s
businesses, which are non-real estate related, such as GEO’s managed-only
contracts, international operations, electronic monitoring services, and other
non-residential facilities, are part of wholly-owned taxable subsidiaries of
the REIT, while most of GEO’s business segments, which are real estate related
and entail company-owned and company-leased facilities, are part of the REIT.

The TRS structure will allow GEO to maintain the strategic alignment of almost
all of its diversified business segments under one entity without separating
the company into an independent REIT and an independent operating company.

As previously disclosed, GEO submitted a request to the Internal Revenue
Service (“IRS”) for a private letter ruling (“PLR”) in mid-July in order to
better inform GEO’s Board of Directors (“GEO’s Board”) as to the potential
benefits and limitations of a REIT conversion and to determine whether GEO
would qualify to convert to a REIT under a proposed TRS structure.

Prior to and after GEO’s PLR request submission, GEO’s legal advisors engaged
in a number of discussions with the IRS, which is a customary part of the
process. GEO believes that its PLR request has a sound legal basis and looks
forward to continuing to work with the IRS on this process; however GEO can
make no prediction with certainty if or when the IRS will issue a favorable
ruling.

Fundamentally, GEO is in a real estate intensive industry. GEO’s present
company profile has evolved over several years, during which time, GEO has
developed and financed dozens of new detention and correctional facilities for
federal and state government clients. Further, GEO provides real estate
related operational services along with ancillary services that are ordinarily
provided in our facilities, which GEO predominantly owns or leases.

In addition to its PLR request, GEO has been working on a number of
administrative steps, including the internal reorganization of the Company
into separate legal operating business units. GEO has also conducted the TRS
transfer pricing and the earnings and profits distribution analysis which must
be completed in connection with a potential REIT conversion.

Following a decision to convert into a REIT by GEO’s Board, certain ownership
limitations to ensure compliance with the REIT provisions in the tax code
would require the approval of GEO's shareholders. This shareholder vote would
take place after the decision to convert had been made by GEO’s Board.

While additional work remains to be completed, based on its current review,
GEO believes that a conversion to a REIT using a TRS structure could
potentially provide numerous benefits to GEO and its shareholders. These
benefits include enhancing its ability to return value to shareholders,
lowering its cost of capital, drawing a larger base of potential shareholders,
providing greater flexibility to pursue growth opportunities, and creating a
more efficient operating structure.

GEO’s Board recently met and received detailed presentations from GEO’s legal
and financial advisors on a possible conversion of the Company into a REIT. If
GEO’s Board decides to move forward with the REIT conversion, GEO will strive
to complete the conversion by the earliest conversion date which is January
2013. However, as GEO has previously disclosed, given the short timeframe, the
conversion could be delayed until the next available conversion date which is
January 2014.

Business Segments Revenue

U.S. Corrections & Detention

For the third quarter 2012, U.S. Corrections & Detention revenue increased to
$244.1 million from $232.8 million in the third quarter 2011. Third quarter
2012 revenues for U.S. Corrections & Detention reflect the activation of an
expansion of the Adelanto Detention Facility in California in August 2012, the
opening of the Riverbend Correctional Facility in Georgia in December 2011,
and the activation of the Karnes Civil Detention Center in Texas and an
expansion to the New Castle Correctional Facility in Indiana in the first
quarter 2012. These facility activations were offset by the deactivation of
the Leo Chesney Community Correctional Facility in California in the third
quarter 2011 and the Desert View and Central Valley Community Correctional
Facilities in California in the fourth quarter 2011.

GEO Care

For the third quarter 2012, GEO Care reported revenue of $110.2 million
compared to $109.7 million for the third quarter 2011. GEO Care’s third
quarter 2012 revenue reflects continued growth in GEO Care’s electronic
monitoring services and day reporting centers.

International Services

For the third quarter 2012, International Services revenue increased to $57.2
million from $53.2 million in the third quarter 2011.

Reconciliation Tables and Supplemental Disclosure

GEO has made available a Supplemental Disclosure which contains reconciliation
tables of pro forma income from continuing operations to income from
continuing operations, Adjusted EBITDA to income from continuing operations,
Adjusted Funds from Operations to income from continuing operations along with
supplemental financial and operational information on GEO’s business segments.
Please see the section of this press release below entitled “Note to
Reconciliation Tables and Supplemental Disclosure - Important Information on
GEO’s Non-GAAP Financial Measures” for information on how GEO defines pro
forma income from continuing operations, Adjusted EBITDA, and Adjusted Funds
from Operations. GEO’s Reconciliation Tables can be found herein and in GEO’s
Supplemental Disclosure which is available on GEO’s Investor Relations webpage
at www.geogroup.com.

2012 Financial Guidance

GEO provided its financial guidance for the balance of 2012. GEO expects its
full year 2012 revenues to be in a range of $1.64 billion to $1.65 billion and
its 2012 pro forma earnings per share to be in a range of $1.55 to $1.56 per
share, excluding $0.17 per share in after-tax start-up/transition expenses and
international bid and proposal expenses, and also exclusive of transaction and
financing expenses associated with GEO’s previously announced acquisition of
the partnership interests in MCF along with the extinguishment of debt in
connection with the redemption of the MCF bonds. GEO expects its 2012 Adjusted
EBITDA to be in a range of $330 million to $340 million and its 2012 Adjusted
Funds from Operations to be in a range of $210 million to $220 million, or
$3.44 to $3.60 per share.

GEO expects its fourth quarter 2012 revenues to be in a range of $413 million
to $418 million and its pro forma earnings per share to be in a range of $0.41
to $0.42 per share, excluding $0.04 per share in after-tax international bid
and proposal expenses. GEO’s fourth quarter guidance reflects some variability
in GEO’s U.S. Marshals Service populations at facilities which typically
experience seasonal fluctuations.

GEO’s earnings guidance reflects the activation of the expansion of the
Adelanto Detention Facility in California in August 2012 and the previously
announced continuation of the Golden State Community Correctional Facility
contract in California, which has been extended by the State of California
through June 30, 2016 partially offset by the previously announced
deactivation/transition of GEO’s managed-only contracts for the East
Mississippi and Walnut Grove Correctional Facilities in July 2012 and the
Marshall County Correctional Facility in August 2012.

GEO’s 2012 financial guidance does not assume the potential reactivation of
approximately 6,000 current beds in inventory which GEO is actively marketing
to local, state, and federal customers. The after-tax carrying costs
associated with keeping the facilities idle represent approximately $0.14 per
share, of which more than half are non-cash expenses. GEO’s guidance also
reflects approximately $0.18 per share in after-tax intangibles amortization
expense primarily related to the acquisitions of Cornell Companies and BI
Incorporated.

Stock Repurchase Program

On July 14, 2011, GEO’s Board approved a stock repurchase program of up to
$100.0 million of GEO’s common stock effective through December 31, 2012.
Through the end of the third quarter 2012, GEO had repurchased approximately
3.9 million shares of its common stock for approximately $75.0 million.

Conference Call Information

GEO has scheduled a conference call and simultaneous webcast for today at
11:00 AM (Eastern Time) to discuss GEO’s third quarter 2012 financial results
as well as its progress and outlook. The call-in number for the U.S. is
1-888-680-0894 and the international call-in number is 1-617-213-4860. The
conference call participant passcode is 84889725. In addition, a live audio
webcast of the conference call may be accessed on the Conference
Calls/Webcasts section of GEO’s investor relations home page at
www.geogroup.com. A replay of the audio webcast will be available on the
website for one year. A telephonic replay of the conference call will be
available until December 5, 2012 at 1-888-286-8010 (U.S.) and 1-617-801-6888
(International). The conference call ID number for the telephonic replay is
66993049.

About The GEO Group, Inc.

The GEO Group, Inc. is the world’s leading diversified provider of
correctional, detention, and residential treatment services to federal, state,
and local government agencies around the globe. GEO offers a turnkey approach
that includes design, construction, financing, and operations. GEO represents
government clients in the United States, Australia, South Africa, and the
United Kingdom. GEO’s worldwide operations include 20,000 employees, 108
correctional, detention and residential treatment facilities, including
projects under development, and 75,000 owned and/or managed beds.

Note to Reconciliation Tables and Supplemental Disclosure –

Important Information on GEO’s Non-GAAP Financial Measures

Pro Forma Income from Continuing Operations, Adjusted EBITDA and Adjusted
Funds From Operations are non-GAAP financial measures that are presented as
supplemental disclosures. Pro Forma Income from Continuing Operations is
defined as income from continuing operations adjusted for net income/loss
attributable to non-controlling interests, start-up/transition expenses, net
of tax, international bid and proposal expenses, net of tax, M&A-related and
other non-recurring expenses, net of tax, and early extinguishment of debt,
net of tax. GEO believes that Pro Forma Income from Continuing Operations is
useful to investors as it provides information about the performance of GEO’s
overall business because such measure eliminates the effects of certain
unusual or non-recurring charges that are not directly attributable to GEO’s
underlying operating performance, it provides disclosure on the same basis as
that used by GEO’s management and it provides consistency in GEO’s financial
reporting and therefore continuity to investors for comparability purposes.
GEO’s management uses Pro Forma Income from Continuing Operations to monitor
and evaluate its operating performance and to facilitate internal and external
comparisons of the historical operating performance of GEO and its business
units.

Adjusted EBITDA is defined as income from continuing operations before net
interest expense, income tax provision, depreciation and amortization, and tax
provision on equity in earnings of affiliates, adjusted for net income/loss
attributable to non-controlling interests, stock-based compensation expenses,
pre-tax, start-up/transition expenses, pre-tax, international bid and proposal
expenses, pre-tax, and M&A-related and other non-recurring expenses, pre-tax,
and early extinguishment of debt, pre-tax. GEO believes that Adjusted EBITDA
is useful to investors as it provides information about the performance of
GEO’s overall business because such measure eliminates the effects of certain
unusual or non-recurring charges that are not directly attributable to GEO’s
underlying operating performance, it provides disclosure on the same basis as
that used by GEO’s management and it provides consistency in GEO’s financial
reporting and therefore continuity to investors for comparability purposes.
GEO uses Adjusted EBITDA to monitor and evaluate its operating performance and
to facilitate internal and external comparisons of the historical operating
performance of GEO and its business units.

Adjusted Funds From Operations is defined as income from continuing operations
excluding depreciation and amortization, income tax provision, income taxes
refunded/paid, stock-based compensation expenses, maintenance capital
expenditures, equity in earnings of affiliates, net of income tax, tax
provision on equity in earnings of affiliates, amortization of debt costs and
other non-cash interest, net income/loss attributable to non-controlling
interests, start-up/transition expenses, M&A-related and other non-recurring
expenses, early extinguishment of debt, and international bid and proposal
expenses. GEO believes that Adjusted Funds From Operations is useful to
investors as it provides information regarding cash that GEO’s operating
business generates before taking into account certain cash and non-cash items
that are non-operational or infrequent in nature, it provides disclosure on
the same basis as that used by GEO’s management and it provides consistency in
GEO’s financial reporting and therefore continuity to investors for
comparability purposes. GEO’s management uses Adjusted Funds From Operations
to monitor and evaluate its operating performance and to facilitate internal
and external comparisons of the historical operating performance of GEO and
its business units.

GEO has made available a Supplemental Disclosure which contains reconciliation
tables of pro forma income from continuing operations to income from
continuing operations, Adjusted EBITDA to income from continuing operations,
Adjusted Funds from Operations to income from continuing operations along with
supplemental financial and operational information on GEO’s business segments.
GEO’s Reconciliation Tables can be found herein and in GEO’s Supplemental
Disclosure which is available on GEO’s Investor Relations webpage at
www.geogroup.com.

Safe-Harbor Statement

This press release contains forward-looking statements regarding future events
and future performance of GEO that involve risks and uncertainties that could
materially affect actual results, including statements regarding financial
guidance for fourth quarter 2012 and full year 2012. Factors that could cause
actual results to vary from current expectations and forward-looking
statements contained in this press release include, but are not limited to:
(1) GEO’s ability to meet its financial guidance for 2012 given the various
risks to which its business is exposed; (2) GEO’s ability to declare future
quarterly cash dividends; (3) GEO’s ability to successfully pursue further
growth and continue to create shareholder value; (4) risks associated with
GEO’s ability to control operating costs associated with contract start-ups;
(5) GEO’s ability to timely open facilities as planned, profitably manage such
facilities and successfully integrate such facilities into GEO’s operations
without substantial costs; (6) GEO’s ability to win management contracts for
which it has submitted proposals and to retain existing management contracts;
(7) GEO’s ability to obtain future financing on acceptable terms; (8) GEO’s
ability to sustain company-wide occupancy rates at its facilities; (9) GEO’s
ability to access the capital markets in the future on satisfactory terms or
at all; and (10) other factors contained in GEO’s Securities and Exchange
Commission filings, including the Form 10-K, 10-Q and 8-K reports.

Third quarter and first nine months 2012 financial tables to follow:

                                                 
THE GEO GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THIRTEEN AND THIRTY-NINE WEEKS ENDED

SEPTEMBER30, 2012 AND OCTOBER2, 2011

(In thousands, except per share data)

(Unaudited)
                                                       
                       Thirteen Weeks Ended            Thirty-nine Weeks Ended
                       September       October 2,      September         October 2,
                                                                    
                       30, 2012        2011            30, 2012          2011
Revenues               $ 411,524       $ 395,683       $ 1,225,129       $ 1,172,831
Operating              305,832         297,700         919,127           885,957
expenses
Depreciation and       23,761          21,850          70,643            61,496
amortization
General and
administrative         27,228         25,922         81,712           86,420      
expenses
Operating income       54,703          50,211          153,647           138,958
Interest income        1,651           1,767           5,219             4,965
Interest expense       (20,606   )     (19,327   )     (62,030     )     (55,700     )
Loss on early
extinguishment         (8,462    )     —              (8,462      )     —           
of debt
Income before
income taxes,
equity in
earnings of            27,286          32,651          88,374            88,223
affiliates and
discontinued
operations
Provision for          11,304          12,255          35,512            33,929
income taxes
Equity in
earnings of
affiliates, net
of income tax          474            272            1,652            2,352       
provision of
$234, $118, $858
and $1,705,
respectively
Income from
continuing             16,456          20,668          54,514            56,646
operations
Income (loss)
from
discontinued
operations, net
of income tax
provision              (1,729    )     625            (2,252      )     2,190       
(benefit) of
$(1,088), $394,
$(1,418) and
$1,379,
respectively
Net income             14,727          21,293          52,262            58,836
Net loss
attributable to        890            225            881              1,050       
noncontrolling
interests
Net income
attributable to        $ 15,617       $ 21,518       $ 53,143         $ 59,886    
The GEO Group,
Inc.
Weighted-average
common shares
outstanding:
Basic                  60,906          63,340          60,838            64,028
Diluted                61,302          63,555          61,083            64,388
Income per
Common Share
Attributable to
The GEO Group,
Inc.(1):
Basic:
Income from
continuing             $ 0.28          $ 0.33          $ 0.91            $ 0.90
operations
Income (loss)
from                   (0.03     )     0.01           (0.04       )     0.04        
discontinued
operations
Income per
common share
attributable to        $ 0.26         $ 0.34         $ 0.87           $ 0.94      
The GEO Group,
Inc. – basic
Diluted:
Income from
continuing             $ 0.28          $ 0.33          $ 0.91            $ 0.90
operations
Income (loss)
from                   (0.03     )     0.01           (0.04       )     0.03        
discontinued
operations
Income per
common share
attributable to        $ 0.25         $ 0.34         $ 0.87           $ 0.93      
The GEO Group,
Inc. – diluted
                                                                                     
^(1) Note that earnings per share tables may contain slight summation differences due
to rounding.
                                                                                     

                                                          
CONDENSED CONSOLIDATED BALANCE SHEETS

SEPTEMBER30, 2012 AND JANUARY1, 2012

(In thousands, except share data)
                                                               
                                        September 30, 2012     January 1, 2012
                                        (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents               $   69,085             $   44,753
Restricted cash and investments
(including VIEs^1 of $6,182 and         15,530                 42,535
$35,435, respectively)
Accounts receivable, less allowance
for doubtful accounts of $2,294 and     251,459                285,810
$2,453, respectively
Deferred income tax assets, net         31,199                 28,726
Prepaid expenses and other current      25,046                 50,346
assets
Current assets of discontinued          6,328                 7,159
operations
Total current assets                    398,467               459,329
Restricted Cash and Investments
(including VIEs of $20,765 and          44,284                 57,912
$38,930, respectively)
Property and Equipment, Net
(including VIEs of $25,988 and          1,709,628              1,705,306
$162,665, respectively)
Assets Held for Sale                    6,590                  4,363
Direct Finance Lease Receivable         28,128                 32,146
Deferred Income Tax Assets, Net         1,711                  1,711
Goodwill                                508,078                508,066
Intangible Assets, Net                  186,229                200,342
Other Non-Current Assets                84,274                 79,576
Non-Current Assets of Discontinued      —                     865
Operations
Total Assets                            $   2,967,569         $   3,049,616
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current Liabilities
Accounts payable                        $   53,643             $   69,632
Accrued payroll and related taxes       50,416                 38,130
Accrued expenses                        134,606                126,682
Current portion of capital lease
obligations, long-term debt and
non-recourse debt (including VIEs       47,840                 53,666
of $5,200 and $20,770,
respectively)
Current liabilities of discontinued     319                   708
operations
Total current liabilities               286,824               288,818
Deferred Income Tax Liabilities         119,470                125,209
Other Non-Current Liabilities           59,206                 56,381
Capital Lease Obligations               12,192                 13,087
Long-Term Debt                          1,324,902              1,319,068
Non-Recourse Debt (including VIEs
of $16,972 and $108,335,                113,136               208,532
respectively)
Total Shareholders’Equity               1,051,839             1,038,521
Total Liabilities and Shareholders’     $   2,967,569         $   3,049,616
Equity
                                                                   
^1 Variable interest entities or “VIEs”
                                                                   

Reconciliation Tables for Third Quarter and First Nine Months 2012


  Reconciliation of Pro Forma Income from Continuing Operations to Income from
  Continuing Operations
  (In thousands except                                       
  per share data)
  (Unaudited)                13 Weeks      13 Weeks     39 Weeks      39 Weeks
                            Ended         Ended        Ended         Ended
                             30-Sep-12     2-Oct-11     30-Sep-12     2-Oct-11
  Income from continuing     $  16,456     $ 20,668     $  54,514     $ 56,646
  operations
     Start-up/transition
     expenses, net of           1,250        4,330         5,389        9,867
     tax
     International bid
     and proposal               1,140        287           2,311        703
     expenses, net of
     tax
     Net loss
     attributable to            890          225           881          1,050
     non-controlling
     interests
     M&A related and
     other non-recurring        998          -             1,480        4,129
     expenses, net of
     tax
     Early
     extinguishment of         4,977       -            4,977       -
     debt, net of tax
  Pro forma income from      $  25,711     $ 25,510     $  69,552     $ 72,395
  continuing operations
                                                                      
  Diluted earnings per
  share from continuing      $  0.27       $ 0.33       $  0.89       $ 0.88
  operations (1)
     Start-up/transition
     expenses, net of           0.02         0.07          0.09         0.15
     tax
     International bid
     and proposal               0.02         -             0.04         0.01
     expenses, net of
     tax
     Net loss
     attributable to            0.01         -             0.01         0.02
     non-controlling
     interests
     M&A related and
     other non-recurring        0.02         -             0.02         0.06
     expenses, net of
     tax
     Early
     extinguishment of         0.08        -            0.08        -
     debt, net of tax
  Diluted pro forma
  earnings per share         $  0.42       $ 0.40       $  1.14       $ 1.12
  from continuing
  operations
                                                                      
  Weighted average
  common shares                 61,302       63,555        61,083       64,388
  outstanding-diluted
                                                                      
     (1) Note that earnings per share tables may contain slight summation
     differences due to rounding


  Reconciliation from Adjusted EBITDA to Income from Continuing Operations
  (In thousands)                                            
  (Unaudited)               13 Weeks      13 Weeks     39 Weeks      39 Weeks
                           Ended         Ended        Ended         Ended
                            30-Sep-12     2-Oct-11     30-Sep-12     2-Oct-11
  Income from               $  16,456     $ 20,668     $ 54,514      $ 56,646
  continuing operations
    Interest expense,          18,955       17,560       56,811        50,735
    net
    Income tax                 11,304       12,255       35,512        33,929
    provision
    Depreciation and           23,761       21,850       70,643        61,496
    amortization
    Tax provision on
    equity in earnings        234         118         858          1,705
    of affiliates
  EBITDA                    $  70,710     $ 72,451     $ 218,338     $ 204,511
                                                                     
  Adjustments
    Net loss
    attributable to         $  890        $ 225        $ 881         $ 1,050
    non-controlling
    interests
    Stock based
    compensation               1,619        1,245        5,113         4,843
    expenses, pre-tax
    Start-up/transition        1,803        6,717        8,227         15,280
    expenses, pre-tax
    International bid
    and proposal               1,538        446          3,153         1,091
    expenses, pre-tax
    M&A related and
    other non-recurring        1,696        -            2,500         6,308
    expenses, pre-tax
    Early
    extinguishment of         8,462       -           8,462        -
    debt
  Adjusted EBITDA           $  86,718     $ 81,084     $ 246,674     $ 233,083


  Reconciliation of Adjusted Funds from Operations to Income from Continuing
  Operations
  (In thousands)                                                 
  (Unaudited)               13 Weeks       13 Weeks       39 Weeks        39 Weeks
                           Ended          Ended          Ended           Ended
                            30-Sep-12      2-Oct-11       30-Sep-12       2-Oct-11
  Income from               $ 16,456       $ 20,668       $ 54,514        $ 56,646
  continuing operations
    Net loss
    attributable to           890            225            881             1,050
    non-controlling
    interests
    Depreciation and          23,761         21,850         70,643          61,496
    Amortization
    Income Tax                11,304         12,255         35,512          33,929
    Provision
    Income Taxes (Paid)       (2,144 )       (1,282 )       2,253           (10,016 )
    Refunded
    Stock Based
    Compensation              1,619          1,245          5,113           4,843
    Expenses
    Maintenance Capital       (8,194 )       (8,906 )       (22,406 )       (24,100 )
    Expenditures
    Equity in Earnings
    of Affiliates, Net        (474   )       (272   )       (1,652  )       (2,352  )
    of Income Tax
    Tax provision on
    equity in earnings        234            118            858             1,705
    of affiliates
    Amortization of
    Debt Costs and            971            507            2,340           1,148
    Other Non-Cash
    Interest
    Start-up/transition       1,803          6,717          8,227           15,280
    expenses
    M&A related and
    other non-recurring       1,696          -              2,500           6,308
    expenses
    International bid
    and proposal              1,538          446            3,153           1,091
    expenses
    Early
    extinguishment of        8,462       -            8,462         -       
    debt
    Adjusted Funds from     $ 57,922     $ 53,571      $ 170,398      $ 147,028 
    Operations
                                                                       
  Adjusted Funds from       $ 0.94        $ 0.84        $ 2.79         $ 2.28    
  Operations Per Share
                                                                          
  Weighted average
  common shares               61,302         63,555         61,083          64,388
  outstanding-diluted

Contact:

The GEO Group, Inc.
Pablo E. Paez, 866-301-4436
Vice President, Corporate Relations