The GEO Group Reports Second Quarter 2013 Results

  The GEO Group Reports Second Quarter 2013 Results

  *2Q13 Income from Continuing Operations per Share up 41.2%
  *2Q13 Normalized FFO up 30.5%; 2Q13 AFFO up 34.2%
  *2013 AFFO Guidance of $203-$208 million or $2.82 to $2.89 per Diluted
    Share
  *Expects to Increase Quarterly Dividend Payout to Approximately 75% of
    AFFO, or $0.53 to $0.55 per share, in 4Q13

Business Wire

BOCA RATON, Fla. -- August 7, 2013

The GEO Group, Inc. (NYSE: GEO) (“GEO”), the world’s leading provider of
diversified correctional, detention, and community reentry services, reported
today its financial results for the second quarter 2013.

Second Quarter 2013 Highlights

  *Income from Continuing Operations of $0.48 per Diluted Share
  *Pro Forma Income from Continuing Operations of $0.44 per Diluted Share
  *Net Operating Income of $102.4 million
  *Normalized FFO of $0.61 per Diluted Share
  *AFFO of $0.73 per Diluted Share

For the second quarter 2013, GEO reported Normalized FFO of $43.9 million, or
$0.61 per diluted share, an increase of 30.5% from $33.7 million, or $0.55 per
diluted share, for the second quarter 2012. GEO reported second quarter 2013
AFFO of $52.3 million, or $0.73 per diluted share, an increase of 34.2% from
$39.0 million, or $0.64 per diluted share, for the second quarter 2012.

Net operating income for the second quarter 2013 increased to $102.4 million
from $102.0 million for the second quarter of 2012. Net operating income, or
gross profit, is defined as revenues less operating expenses, excluding
depreciation and amortization expense and general and administrative expenses.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said: “We are
pleased with our second quarter results, which continue to reflect strong
operational and financial performance from our diversified business units.
During the second quarter, we achieved several important milestones with the
purchase of the Joe Corley Detention Center in Montgomery County, Texas and
the amendment of our senior credit facility. We continue to be optimistic
regarding the growth opportunities in our industry which we expect will
continue to create value for our shareholders.”

GEO reported total revenues for the second quarter 2013 of $381.7 million
compared to total revenues of $371.2 million for the second quarter 2012. GEO
reported second quarter 2013 income from continuing operations of $0.48 per
diluted share, compared to $0.34 per diluted share for the second quarter
2012.

GEO’s second quarter 2013 earnings reflect a one-time, net tax benefit of $2.0
million related to GEO’s recent conversion to a Real Estate Investment Trust
(“REIT”) and miscellaneous nonrecurring items as well as a release of $6.4
million of tax reserves primarily due to the settlement of Internal Revenue
Service audit years 2010 and 2011.

This net tax benefit was offset by $1.0 million, after-tax, in one-time
expenses associated with GEO’s REIT conversion and by $4.4 million, after-tax,
related to the write-off of deferred financing fees in connection with GEO’s
recently completed amendment to its senior credit facility.

Excluding these one-time expenses and the write-off of deferred financing
fees, GEO reported Pro Forma income from continuing operations of $0.44 per
diluted share for the second quarter 2013, compared to $0.38 per diluted share
for the second quarter 2012.

First Six Months 2013 Highlights

  *Income from Continuing Operations of $0.81 per Diluted Share
  *Pro Forma Income from Continuing Operations of $0.82 per Diluted Share
  *Net Operating Income of $198.6 million
  *Normalized FFO of $1.17 per Diluted Share
  *AFFO of $1.43 per Diluted Share

For the first six months of 2013, GEO reported Normalized FFO of $83.6
million, or $1.17 per diluted share, an increase of 39.9% from $59.7 million,
or $0.98 per diluted share, for the first six months of 2012. GEO reported
AFFO of $102.0 million, or $1.43 per diluted share, for the first six months
of 2013, an increase of 42.0% from $71.8 million, or $1.18 per diluted share,
for the first six months of 2012.

Net operating income for the first six months of 2013 increased to $198.6
million from $191.4 million for the first six months of 2012. Net operating
income, or gross profit, is defined as revenues less operating expenses,
excluding depreciation and amortization expense and general and administrative
expenses.

For the first six months of 2013, GEO reported total revenues of $758.7
million compared to total revenues of $731.2 million for the first six months
of 2012. GEO reported income from continuing operations of $0.81 per diluted
share for the first six months of 2013, compared to $0.57 per diluted share
for the first six months of 2012.

GEO’s earnings for the first six months of 2013 reflect a one-time, net tax
benefit of $2.0 million related to GEO’s recent conversion to a REIT and
miscellaneous nonrecurring items as well as a release of $6.4 million of tax
reserves primarily due to the settlement of Internal Revenue Service audit
years 2010 and 2011.

This net tax benefit was offset by $4.7 million, after-tax, in one-time
expenses associated with GEO’s REIT conversion and by $4.4 million, after-tax,
related to the write-off of deferred financing fees in connection with GEO’s
recently completed amendment to its senior credit facility.

Excluding these one-time expenses, GEO reported Pro Forma income from
continuing operations of $0.82 per diluted share for the first six months of
2013, compared to $0.66 per diluted share for the first six months of 2012.

Net Operating Income, Funds from Operations (“FFO”), Normalized Funds from
Operations (“Normalized FFO”), and Adjusted Funds from Operations (“AFFO”) are
widely used non-GAAP supplemental financial measures of REIT performance. GEO
also uses Pro Forma Income from Continuing Operations and Adjusted EBITDA as
Non-GAAP supplemental financial measures. 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 these supplemental Non-GAAP financial measures.

2013 Financial Guidance

GEO updated its previously issued financial guidance for 2013 and issued
additional financial guidance for the third quarter 2013 and fourth quarter
2013. GEO expects full year 2013 AFFO to be in a range of $2.82 to $2.89 per
diluted share, or $203 million to $208 million. On a GAAP basis, GEO expects
its income from continuing operations for the full year 2013 to be in a range
of $1.65 to $1.70 per diluted share, including the second quarter one-time,
net tax benefit; one-time expenses related to GEO’s REIT conversion; and the
write-off of deferred financing fees in connection with GEO’s recently
completed amendment to its senior credit facility.

GEO expects full year 2013 revenues to be in a range of $1.51 billion to $1.53
billion. GEO’s full year 2013 Net Operating Income is expected to be in a
range of $411 million to $419 million, and full year 2013 Adjusted EBITDA is
expected to be in a range of $316 million to $324 million.

GEO’s 2013 guidance reflects the purchase of the Joe Corley Detention Center
during the second quarter 2013 as well as the offering of $300 million in
senior unsecured notes completed on March 19, 2013 and the amendment to GEO’s
senior credit facility completed on April 3, 2013.

Further, GEO’s 2013 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.

With respect to the third quarter 2013, GEO expects AFFO to be in a range of
$0.70 to $0.73 per diluted share, or $50 million to $53 million. On a GAAP
basis, GEO expects its third quarter 2013 income from continuing operations to
be in a range of $0.42 to $0.44 per diluted share. GEO expects third quarter
2013 revenues to be in a range of $378 million to $383 million.

With respect to the fourth quarter 2013, GEO expects AFFO to be in a range of
$0.70 to $0.73 per diluted share, or $50 million to $53 million. On a GAAP
basis, GEO expects its fourth quarter 2013 income from continuing operations
to be in a range of $0.42 to $0.45 per diluted share. GEO expects fourth
quarter 2013 revenues to be in a range of $378 million to $383 million.

Dividend Update

GEO announced today that it expects to increase its quarterly dividend payout
ratio to approximately 75% of AFFO, or $0.53 to $0.55 per share, in the fourth
quarter of 2013. The declaration of future quarterly cash dividends will be
subject to approval by GEO’s Board of Directors and to meeting the
requirements of all applicable laws and regulations. GEO’s Board of Directors
retains the power to modify its dividend policy as it may deem necessary or
appropriate in the future.

Reconciliation Tables and Supplemental Disclosure

GEO has made available a Supplemental Disclosure which contains reconciliation
tables of operating income to net operating income, income from continuing
operations to pro forma income from continuing operations, income from
continuing operations to EBITDA and Adjusted EBITDA, and income from
continuing operations to FFO, Normalized FFO and AFFO along with supplemental
financial and operational information on GEO’s business segments and other
important operating metrics. 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 these supplemental financial measures and reconciles them to
the most directly comparable GAAP measures. 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.

GEO’s 2012 financial results are presented throughout as retrospectively
revised for discontinued operations resulting from the discontinuation of
three managed-only contracts with the State of Mississippi during the third
quarter of 2012 and the divestiture of the healthcare facility contracts
previously held by GEO’s former wholly-owned subsidiary, GEO Care, Inc., which
was completed on December 31, 2012.

Conference Call Information

GEO has scheduled a conference call and simultaneous webcast for today at
11:00 AM (Eastern Time) to discuss GEO’s second quarter 2013 financial results
as well as its progress and outlook. The call-in number for the U.S. is
1-888-713-4218 and the international call-in number is 1-617-213-4870. The
conference call participant passcode is 83857648. In addition, a live audio
webcast of the conference call may be accessed on the Conference
Calls/Webcasts section of GEO’s investor relations webpage 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 September 7, 2013 at 1-888-286-8010 (U.S.) and 1-617-801-6888
(International). The conference call participant passcode for the telephonic
replay is 67061279.

About The GEO Group

The GEO Group, Inc. (NYSE: GEO) is the first fully integrated equity real
estate investment trust specializing in the design, financing, development,
and operation of correctional, detention, and community reentry facilities
around the globe. GEO is the world's leading provider of diversified
correctional, detention, and community reentry services to government agencies
worldwide with operations in the United States, Australia, South Africa, and
the United Kingdom. GEO's worldwide operations include the ownership and/or
management of 95 facilities totaling approximately 72,000 beds with a growing
workforce of approximately 18,000 professionals.

Note to Reconciliation Tables and Supplemental Disclosure –
Important Information on GEO’s Non-GAAP Financial Measures

Net Operating Income, Pro Forma Income from Continuing Operations, EBITDA,
Adjusted EBITDA, Funds from Operations, Normalized Funds from Operations and
Adjusted Funds from Operations are non-GAAP financial measures that are
presented as supplemental disclosures.

GEO has presented herein certain forward-looking statements about GEO's future
financial performance that include non-GAAP financial measures, including, Net
Operating Income, Adjusted EBITDA and Adjusted Funds from Operations. The
determination of the amounts that are excluded from these non-GAAP financial
measures is a matter of management judgment and depends upon, among other
factors, the nature of the underlying expense or income amounts recognized in
a given period. While we have provided a high level reconciliation for the
guidance ranges for full year 2013, we are unable to present a more detailed
quantitative reconciliation of the forward-looking non-GAAP financial measures
to their most directly comparable forward-looking GAAP financial measures
because management cannot reliably predict all of the necessary components of
such GAAP measures. The quantitative reconciliation of the forward-looking
GAAP financial measures will be provided for completed annual and quarterly
periods, as applicable, calculated in a consistent manner with the
quantitative reconciliation of non-GAAP financial measures previously reported
for completed annual and quarterly periods.

Net Operating Income, or gross profit, is defined as revenues less operating
expenses, excluding depreciation and amortization expense and general and
administrative expenses.

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 related costs, net of tax, and certain other adjustments as
defined from time to time. 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 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.

EBITDA is defined as income from continuing operations before net interest
expense, income tax provision/benefit, depreciation and amortization, and tax
provision on equity in earnings of affiliates. Adjusted EBITDA is defined as
EBITDA adjusted for net income/loss attributable to non-controlling interests,
non-cash stock-based compensation expenses, and certain other adjustments as
defined from time to time. Given the nature of our business as a real estate
owner and operator, we believe that EBITDA and Adjusted EBITDA are helpful to
investors as measures of our operational performance, providing disclosure on
the same basis as that used by GEO’s management and providing 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.

Funds from Operations, or FFO, is defined in accordance with standards
established by the National Association of Real Estate Investment Trusts, or
NAREIT, which defines FFO as net income/loss attributable to common
shareholders (computed in accordance with United States Generally Accepted
Accounting Principles), excluding real estate related depreciation and
amortization, excluding gains and losses from the cumulative effects of
accounting changes, extraordinary items and sales of properties, and including
adjustments for unconsolidated partnerships and joint ventures. Normalized
Funds from Operations, or Normalized FFO, is defined as FFO adjusted for
certain items which by their nature are not comparable from period to period
or that tend to obscure GEO’s actual operating performance. We may make
adjustments to FFO from time to time for certain other income and expenses
that do not reflect a necessary component of our operational performance even
though such items may require cash settlement.

Adjusted Funds from Operations, or AFFO, is defined as Normalized FFO adjusted
by adding non-cash expenses such as stock based compensation and the
amortization of deferred financing costs and by subtracting recurring real
estate expenditures that are capitalized and then amortized, but which are
necessary to maintain REIT properties and their revenue stream. Given the
nature of our business as a real estate owner and operator, we believe that
FFO, Normalized FFO and AFFO are helpful to investors as measures of our
operational performance. FFO is a widely recognized measure in our industry as
a real estate investment trust. Because of the unique design, structure and
use of our correctional facilities, we believe that assessing performance of
our correctional facilities without the impact of depreciation or amortization
is useful. We believe Normalized FFO and AFFO provide investors and analysts
additional measures in comparing our performance across reporting periods on a
consistent basis by excluding items that we do not believe are indicative of
our core operating performance. GEO’s management uses these measures to
monitor and evaluate its operational performance and to facilitate internal
and external comparisons of the historical operating performance of GEO and
its business units.

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 third quarter 2013, fourth quarter 2013, and full year 2013.
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 2013
given the various risks to which its business is exposed; (2) GEO’s ability to
declare future quarterly cash dividends and the timing and amount of such
future 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; (10) GEO’s ability to remain qualified as a REIT; (11) the incurrence
of REIT related expenses; and (12) other factors contained in GEO’s Securities
and Exchange Commission periodic filings, including its form 10-K, 10-Q and
8-K reports.

Second quarter and first six months 2013 financial tables to follow:

                                                                
Condensed Consolidated Statements of Income
                                                                      
(In thousands
except per
share data)
(Unaudited)                 Three         Three         Six Months    Six Months
                            Months        Months
                            Ended         Ended         Ended         Ended
                            30-Jun-13     1-Jul-12      30-Jun-13     1-Jul-12
Revenues                    $ 381,653     $ 371,173     $ 758,684     $ 731,215
Operating                     279,246       269,141       560,043       539,861
expenses
Depreciation
and                           23,657        22,962        46,592        45,201
amortization
General and
administrative               27,363      26,129      59,403      52,715  
expenses
Operating                   $ 51,387      $ 52,941      $ 92,646      $ 93,438
income
Interest income               1,165         1,761         2,349         3,568
Interest                      (21,103 )     (20,618 )     (40,444 )     (41,424 )
expense
Loss on
extinguishment               (5,527  )    -           (5,527  )    -       
of debt
Income before
income taxes,
equity in
earnings of                 $ 25,922      $ 34,084      $ 49,024      $ 55,582
affiliates and
discontinued
operations
Income tax
(benefit)                     (7,268  )     13,660        (6,387  )     22,150
provision
Equity in
earnings of
affiliates, net              1,029       430         2,246       1,178   
of income tax
provision
Income from
continuing                  $ 34,219      $ 20,854      $ 57,657      $ 34,610
operations
Income from
discontinued
operations, net              -           1,622       -           2,925   
of income tax
provision
Net income                  $ 34,219      $ 22,476      $ 57,657      $ 37,535
Net (income)
loss
attributable to              (12     )    25          (30     )    (9      )
non-controlling
interests
Net income
attributable to             $ 34,207     $ 22,501     $ 57,627     $ 37,526  
The GEO Group,
Inc.
                                                                      
Weighted
average shares
outstanding
                Basic         71,083        60,839        70,967        60,803
                Diluted       71,607        61,066        71,510        60,984
                                                                      
Income per
share from
continuing
operations
                Basic       $ 0.48        $ 0.34        $ 0.81        $ 0.57
                Diluted     $ 0.48        $ 0.34        $ 0.81        $ 0.57
                                                                      
                                                                      
Income per
share
attributable to
The GEO Group,
Inc.
                Basic       $ 0.48        $ 0.37        $ 0.81        $ 0.62
                Diluted     $ 0.48        $ 0.37        $ 0.81        $ 0.62
                                                                      

                                                                
Condensed Consolidated Balance Sheets
                                                                   
(In thousands)
(Unaudited)
                                                                   
ASSETS                                               30-Jun-13     31-Dec-12
Current Assets
Cash and cash equivalents                            $ 38,511      $ 31,755
Restricted cash and investments                        15,646        15,654
Accounts receivable, less allowance for doubtful       239,001       246,635
accounts
Current deferred income tax assets                     18,290        18,290
Prepaid expenses and other current assets             25,142       24,849
Total current assets                                  336,590      337,183
Restricted Cash and Investments                        37,748        32,756
Property and Equipment, Net                            1,739,986     1,687,159
Assets Held for Sale                                   1,200         3,243
Direct Finance Lease Receivable                        20,445        26,757
Non-Current Deferred Income Tax Assets                 2,532         2,532
Goodwill                                               490,216       490,308
Intangible Assets, Net                                 170,743       178,318
Other Non-Current Assets                              88,742       80,938
Total Assets                                         $ 2,888,202   $ 2,839,194
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable                                       47,391        50,110
Accrued payroll and related taxes                      34,314        39,322
Accrued expenses                                       109,179       116,557
Current portion of capital lease obligation,          22,341       53,882
long-term debt, and non-recourse debt
Total current liabilities                             213,225      259,871
                                                                   
Non-Current Deferred Income Tax Liabilities            15,703        15,703
Other Non-Current Liabilities                          74,137        82,025
Capital Lease Obligations                              11,426        11,926
Long-Term Debt                                         1,444,475     1,317,529
Non-Recourse Debt                                      93,352        104,836
Total Shareholders' Equity                            1,035,884    1,047,304
Total Liabilities and Shareholders' Equity           $ 2,888,202   $ 2,839,194
                                                                   


Reconciliation of Income from Continuing Operations to Funds from Operations,
Normalized FFO, and Adjusted Funds from Operations
                                                  
(In thousands)
(Unaudited)             Three Months     Three        Six Months   Six Months
                                         Months
                        Ended            Ended        Ended        Ended
                        30-Jun-13        1-Jul-12     30-Jun-13    1-Jul-12
Income from
Continuing              $  34,219        $ 20,854     $ 57,657     $ 34,610
Operations
Net (Income) Loss
Attributable to            (12     )       25           (30     )    (9      )
Non-controlling
Interests
Real Estate Related
Depreciation and          12,727        12,804     25,251     25,119  
Amortization
Funds from              $  46,934       $ 33,683    $ 82,878    $ 59,720  
Operations
                                                                   
Funds from              $  46,934        $ 33,683     $ 82,878     $ 59,720
Operations
REIT Conversion
Related Expenses,          1,030           -            4,697        -
net of tax
Tax Benefit Related
to IRS Settlement &        (8,416  )       -            (8,416  )    -
REIT Conversion
Loss on
Extinguishment of         4,396         -          4,396      -       
Debt, net of tax
Normalized Funds        $  43,944       $ 33,683    $ 83,555    $ 59,720  
from Operations
                                                                   
Normalized Funds        $  43,944        $ 33,683     $ 83,555     $ 59,720
from Operations
Non-Real Estate
Related Depreciation       10,930          10,158       21,341       20,082
& Amortization
Consolidated
Maintenance Capital        (5,679  )       (7,496 )     (9,296  )    (12,798 )
Expenditures
Stock Based
Compensation               1,660           1,961        3,345        3,433
Expenses
Amortization of Debt
Costs and Other           1,478         679        3,015      1,369   
Non-Cash Interest
Adjusted Funds from     $  52,333       $ 38,985    $ 101,960   $ 71,806  
Operations (AFFO)
                                                                
Normalized FFO Per      $  0.61         $ 0.55      $ 1.17      $ 0.98    
Diluted Share
                                                                
AFFO Per Diluted        $  0.73         $ 0.64      $ 1.43      $ 1.18    
Share
                                                                   
Weighted Average
Common Shares              71,607          61,066       71,510       60,984
Outstanding-Diluted
                                                                   

                                                               
Reconciliation of Operating Income to Net Operating Income
                                                                    
(In thousands)
(Unaudited)              Three Months   Three Months   Six Months   Six Months
                         Ended          Ended          Ended        Ended
                         30-Jun-13      1-Jul-12       30-Jun-13    1-Jul-12
Operating Income         $   51,387     $   52,941     $  92,646    $  93,438
Depreciation and             23,657         22,962        46,592       45,201
amortization
General and
administrative              27,363        26,129       59,403      52,715
expenses
Net Operating Income     $   102,407    $   102,032    $  198,641   $  191,354
                                                                    

                                                               
Reconciliation of Income from Continuing Operations to Adjusted EBITDA
                       
(In thousands)
(Unaudited)              Three Months   Three        Six Months    Six Months
                                        Months
                         Ended          Ended        Ended         Ended
                         30-Jun-13      1-Jul-12     30-Jun-13     1-Jul-12
Income from continuing   $  34,219      $  20,854    $ 57,657      $ 34,610
operations
Interest expense, net       19,938         18,857      38,095        37,856
Income tax (benefit)        (7,268  )      13,660      (6,387  )     22,150
provision
Depreciation and            23,657         22,962      46,592        45,201
amortization
Tax provision on
equity in earnings of      417          303        894         624     
affiliates
EBITDA                   $  70,963      $  76,636    $ 136,851     $ 140,441
                                                                   
Adjustments
Net (income) loss
attributable to             (12     )      25          (30     )     (9      )
non-controlling
interests
Stock based
compensation expenses,      1,660          1,961       3,345         3,433
pre-tax
Start-up/transition         -              1,535       -             6,424
expenses, pre-tax
International bid           -              1,050       -             1,615
related costs, pre-tax
REIT conversion
related expenses,           1,466          -           7,438         -
pre-tax
M&A related expenses,       -              351         -             804
pre-tax
Loss on extinguishment     5,527        -          5,527       -       
of debt, pre-tax
Adjusted EBITDA          $  79,604     $  81,558    $ 153,131    $ 152,708 
                                                                             


Reconciliation of Income from Continuing Operations to Pro Forma Income from
Continuing Operations^(1)
                                                               
(In thousands except per
share data)
(Unaudited)                Three Months   Three        Six Months   Six Months
                                          Months
                           Ended          Ended        Ended        Ended
                           30-Jun-13      1-Jul-12     30-Jun-13    1-Jul-12
Income from continuing     $  34,219      $  20,854    $ 57,657     $ 34,610
operations
Net (income) loss
attributable to               (12     )      25          (30    )     (9     )
non-controlling
interests
Start-up/transition           -              1,084       -            4,139
expenses, net of tax
International bid
related costs, net of         -              753         -            1,171
tax
REIT conversion related       1,030          -           4,697        -
expenses, net of tax
M&A related expenses,         -              209         -            482
net of tax
Loss on extinguishment        4,396          -           4,396        -
of debt, net of tax
Tax benefit related to
IRS settlement & REIT        (8,416  )     -          (8,416 )    -      
conversion
Pro forma income from      $  31,217     $  22,925    $ 58,304    $ 40,393 
continuing operations
                                                                    
Income from continuing
operations per diluted     $  0.48        $  0.34      $ 0.81       $ 0.57
share
Net (income) loss
attributable to               -              -           -            -
non-controlling
interests
Start-up/transition           -              0.02        -            0.07
expenses, net of tax
International bid
related costs, net of         -              0.01        -            0.02
tax
REIT conversion related       0.01           -           0.07         -
expenses, net of tax
M&A related expenses,         -              -           -            0.01
net of tax
Loss on extinguishment        0.06           -           0.06         -
of debt, net of tax
Tax benefit related to
IRS settlement & REIT        (0.12   )     -          (0.12  )    -      
conversion
Diluted Pro forma income
from continuing            $  0.44       $  0.38      $ 0.82      $ 0.66   
operations per diluted
share
                                                                    
Weighted average common
shares                        71,607         61,066      71,510       60,984
outstanding-diluted
                                                                    
                                                                    
(1) Note that earnings per share tables may contain slight summation
differences due to rounding.
                                                                    


2013 Outlook/Reconciliation
                                                               
(Unaudited)
(In thousands except per share data)
                                                                   
                                                Full Year 2013
                                                                   
Net Income                                      $ 118,000     to   $ 123,000
Real Estate Related Depreciation and             52,000           52,000  
Amortization
Funds from Operations (FFO)                     $ 170,000    to   $ 175,000 
                                                                   
REIT Conversion Related Expenses & Write-Off      10,000             10,000
of Deferred Financing Fees
Tax Benefit                                      (8,000  )         (8,000  )
Normalized Funds from Operations                $ 172,000    to   $ 177,000 
                                                                   
Non-Real Estate Related Depreciation and          43,000             43,000
Amortization
Consolidated Maintenance Capex                    (26,000 )          (26,000 )
Non-Cash Stock Based Compensation and            14,000           14,000  
Non-Cash Interest Expense
Adjusted Funds From Operations (AFFO)           $ 203,000    to   $ 208,000 
                                                                   
Net Cash Interest Expense                         80,000             80,000
Consolidated Maintenance Capex                    26,000             26,000
Income Taxes                                     7,000            10,000  
Adjusted EBITDA                                 $ 316,000    to   $ 324,000 
                                                                   
G&A Expenses                                      103,000            103,000
Non-Cash Stock Based Compensation                (8,000  )         (8,000  )
Net Operating Income                            $ 411,000    to   $ 419,000 
                                                                   
FFO Per Share                                   $ 2.36        to   $ 2.43
AFFO Per Share                                  $ 2.82        to   $ 2.89
Weighted Average Common Shares                    72,000             72,000
Outstanding-Diluted

Contact:

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