The GEO Group Reports Fourth Quarter and Full-Year 2013 Results

  The GEO Group Reports Fourth Quarter and Full-Year 2013 Results

  *2013 Earnings per Diluted Share of $1.61
  *2013 Normalized FFO up 26.9%; 2013 AFFO up 34.8% to $2.87 per Diluted
    Share
  *2014 AFFO Guidance of $213-$219 million or $2.96 to $3.04 per Diluted
    Share
  *Quarterly Dividend of $0.57 per Share, In-line with Approximately 75%
    Payout of AFFO

Business Wire

BOCA RATON, Fla. -- February 19, 2014

The GEO Group, Inc. (NYSE: GEO) (“GEO”), 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, reported today its financial results for the
fourth quarter and full-year 2013.

Fourth Quarter 2013 Highlights

  *Earnings per Diluted Share of $0.38
  *Net Operating Income of $108.7 million, before real estate related
    operating lease expenses
  *Normalized FFO of $0.59 per Diluted Share
  *AFFO of $0.72 per Diluted Share

For the fourth quarter 2013, GEO reported Normalized Funds From Operations
(“Normalized FFO”) of $42.0 million, or $0.59 per diluted share, an increase
of 8.7% from $38.6 million, or $0.63 per diluted share, for the fourth quarter
2012. GEO reported fourth quarter 2013 Adjusted Funds From Operations (“AFFO”)
of $51.6 million, or $0.72 per diluted share, an increase of 24.6% from $41.4
million, or $0.67 per diluted share, for the fourth quarter 2012.

For the fourth quarter 2013, GEO reported Net Operating Income of $108.7
million, before real estate related operating lease expenses of $6.1 million,
compared to fourth quarter 2012 net operating income of $103.6 million, before
real estate related operating lease expense of $6.1 million.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said: “We are
pleased with our fourth quarter and year-end results as well as our outlook
for 2014, which continue to reflect strong operational and financial
performance from our diversified business units. During the fourth quarter
2013 and the early part of the first quarter 2014, we achieved several
important milestones with the activation of several projects totaling
approximately 5,700 beds which are expected to generate close to $100 million
in annualized revenue. We have also increased our quarterly dividend to $0.57
per share driven by the continued growth in our Adjusted Funds From
Operations. 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 fourth quarter 2013 of $383.5 million up
from total revenues of $378.7 million for the fourth quarter 2012. GEO
reported fourth quarter 2013 net income of $0.38 per diluted share, compared
to $1.32 per diluted share for the fourth quarter 2012.

GEO’s fourth quarter 2013 earnings reflect a non-recurring tax benefit of $8.1
million related to GEO’s REIT conversion offset by $1.2 million in after-tax
start-up expenses associated with the reactivation of GEO’s Central Valley and
Desert View Modified Community Correctional Facilities in California, $0.7
million, after-tax, in REIT conversion related expenses and $8.4 million,
after-tax, related to the write-off of deferred financing fees in connection
with GEO’s recent tender offer and redemption of its $250 million 7^3/[4]%
senior unsecured notes originally due 2017. GEO’s fourth quarter 2012 earnings
reflect a positive adjustment of $79.0 million related to the elimination of
certain net deferred tax liabilities associated with GEO’s REIT conversion
partially offset by $9.0 million, after-tax, in REIT conversion related
expenses.

Full-Year 2013 Highlights

  *Earnings per Diluted Share of $1.61
  *Net Operating Income of $421.5 million, before real estate related
    operating lease expenses
  *Normalized FFO of $2.34 per Diluted Share
  *AFFO of $2.87 per Diluted Share

For the full-year 2013, GEO reported Normalized FFO of $167.7 million, or
$2.34 per diluted share, an increase of 26.9% from $132.1 million, or $2.16
per diluted share, for the full-year 2012. GEO reported AFFO of $205.3
million, or $2.87 per diluted share, for the full-year 2013, an increase of
34.8% from $152.3 million, or $2.49 per diluted share, for the full-year 2012.

For the full-year 2013, GEO reported net operating income of $421.5 million,
before real estate related operating lease expenses of $24.3 million, compared
to full-year 2012 net operating income of $413.8 million, before real estate
related operating lease expense of $23.9 million.

GEO reported total revenues for the full-year 2013 of $1.52 billion up from
total revenues of $1.48 billion for the full-year 2012. GEO reported full-year
2013 net income of $1.61 per diluted share, compared to $2.20 per diluted
share for the full-year 2012.

GEO’s full-year 2013 earnings reflect a non-recurring tax benefit of $21.1
million related to GEO’s REIT conversion and the settlement of Internal
Revenue Service audit years 2010 and 2011 offset by $1.2 million in after-tax
start-up expenses associated with the reactivation of GEO’s Central Valley and
Desert View Modified Community Correctional Facilities in California, $5.4
million, after-tax, in REIT conversion related expenses and $14.2 million,
after-tax, related to the write-off of deferred financing fees. GEO’s
full-year 2012 earnings reflect a positive adjustment of $79.0 million related
to the elimination of certain net deferred tax liabilities associated with
GEO’s REIT conversion offset by $9.6 million, after-tax, in REIT conversion
related expenses and $5.0 million, after-tax, related to the write-off of
deferred financing fees.

Net Operating Income, Funds From Operations (“FFO”), Normalized FFO, and AFFO
are widely used non-GAAP supplemental financial measures of REIT performance.
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.

2014 Financial Guidance

GEO issued financial guidance for the full-year 2014 and first quarter 2014.
GEO expects its full-year 2014 AFFO to be in a range of $2.96 to $3.04 per
diluted share, or $213 million to $219 million. On a GAAP basis, GEO expects
its net income for the full year 2014 to be in a range of $1.78 to $1.86 per
diluted share.

GEO expects full-year 2014 revenues to be in a range of $1.60 billion to $1.62
billion. GEO’s full-year 2014 Net Operating Income is expected to be in a
range of $448 million to $454 million, before real estate related operating
lease expense of approximately $25 million. GEO expects full-year 2014
Adjusted EBITDA to be in a range of $320 million to $326 million.

For the first quarter 2014, GEO expects AFFO to be in a range of $0.63 to
$0.65 per diluted share, or $45 million to $47 million. On a GAAP basis, GEO
expects first quarter 2014 earnings per diluted share to be in a range of
$0.32 to $0.34 and first quarter 2014 revenues to be in a range of $387
million to $392 million. Compared to fourth quarter 2013 results, first
quarter 2014 AFFO guidance reflects normal seasonal fluctuations in federal
populations as well as approximately $0.05 to $0.06 per diluted share in
additional employment tax expense as a result of the seasonality in
unemployment taxes, which are front-loaded in the first quarter of the year.

Quarterly Dividend

On February 18, 2014, GEO’s Board of Directors declared a quarterly cash
dividend of $0.57 per share, which is an increase from GEO’s prior quarterly
cash dividend of $0.55 per share. The quarterly cash dividend will be paid on
March 14, 2014 to shareholders of record as of the close of business on March
3, 2014. The declaration of future quarterly cash dividends is 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 net income to net operating income, EBITDA, and Adjusted EBITDA, and
net income 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 business
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
10:00 AM (Eastern Time) to discuss GEO’s fourth quarter and full-year 2013
financial results as well as its progress and outlook. The call-in number for
the U.S. is 1-888-680-0869 and the international call-in number is
1-617-213-4854. The conference call participant passcode is 94725232. 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 March 19, 2014 at 1-888-286-8010 (U.S.) and 1-617-801-6888
(International). The conference call participant passcode for the telephonic
replay is 27948243.

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, community reentry, and electronic monitoring 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 98 facilities totaling
approximately 77,000 beds, including projects under development, 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, 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, EBITDA, Adjusted EBITDA, FFO, Normalized FFO, and AFFO. 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 2014, 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 is defined as revenues less operating expenses, excluding
depreciation and amortization expense, general and administrative expenses,
and real estate related operating lease expense. Net Operating Income is
calculated as net income adjusted by adding loss from discontinued operations,
net of tax, subtracting equity in earnings of affiliates, net of tax, and by
adding income tax provision, interest expense, net of interest income, loss on
extinguishment of debt, depreciation and amortization expense, general and
administrative expenses, and real estate related operating lease expense.

EBITDA is defined as net operating income adjusted by subtracting general and
administrative expenses, real estate related operating lease expense, and loss
on extinguishment of debt, and by adding equity in earnings of affiliates,
pre-tax. 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,
including for the periods presented REIT conversion related expenses, pre-tax,
and loss on extinguishment of debt, pre-tax. 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
because they provide an indication of our ability to incur and service debt,
to satisfy general operating expenses, to make capital expenditures and to
fund other cash needs or reinvest cash into our business. We believe that by
removing the impact of our asset base (primarily depreciation and
amortization) and excluding certain non-cash charges, amounts spent on
interest and taxes, and certain other charges that are highly variable from
year to year, EBITDA and Adjusted EBITDA provide our investors with
performance measures that reflect the impact to operations from trends in
occupancy rates, per diem rates and operating costs, providing a perspective
not immediately apparent from income from continuing operations. The
adjustments we make to derive the non-GAAP measures of EBITDA and Adjusted
EBITDA exclude items which may cause short-term fluctuations in income from
continuing operations and which we do not consider to be the fundamental
attributes or primary drivers of our business plan and they do not affect our
overall long-term operating performance. EBITDA and Adjusted EBITDA provide
disclosure on the same basis as that used by our management and provide
consistency in our financial reporting, facilitate internal and external
comparisons of our historical operating performance and our business units and
provide continuity to investors for comparability purposes.

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, including for the
periods presented REIT conversion related expenses, net of tax, tax benefit
related to IRS settlement and REIT conversion, and loss on extinguishment of
debt, net of tax.

Adjusted Funds from Operations, or AFFO, is defined as Normalized FFO adjusted
by adding non-cash expenses such as non-real estate related depreciation and
amortization, stock based compensation and the amortization of debt costs and
other non-cash interest and by subtracting recurring maintenance capital
expenditures.

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 and
meaningful to investors. Although NAREIT has published its definition of FFO,
companies often modify this definition as they seek to provide financial
measures that meaningfully reflect their distinctive operations. We have
modified FFO to derive Normalized FFO and AFFO that meaningfully reflect our
operations. Our assessment of our operations is focused on long-term
sustainability. The adjustments we make to derive the non-GAAP measures of
Normalized FFO and AFFO exclude items which may cause short-term fluctuations
in income from continuing operations but have no impact on our cash flows, or
we do not consider them to be fundamental attributes or the primary drivers of
our business plan and they do not affect our overall long-term 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 on the basis discussed above, even though such items may require
cash settlement. Because FFO, Normalized FFO and AFFO exclude depreciation and
amortization unique to real estate as well as non-operational items and
certain other charges that are highly variable from year to year, they provide
our investors with performance measures that reflect the impact to operations
from trends in occupancy rates, per diem rates, operating costs and interest
costs, providing a perspective not immediately apparent from income from
continuing operations. We believe the presentation of FFO, Normalized FFO and
AFFO provide useful information to investors as they provide an indication of
our ability to fund capital expenditures and expand our business. FFO,
Normalized FFO and AFFO provide disclosure on the same basis as that used by
our management and provide consistency in our financial reporting, facilitate
internal and external comparisons of our historical operating performance and
our business units and provide continuity to investors for comparability
purposes. Additionally, FFO, Normalized FFO and AFFO are widely recognized
measures in our industry as a real estate investment trust.

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 the first quarter 2014 and full year 2014, estimates of
annualized revenue from the activation of several projects, and growth
opportunities. 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 2014 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.

Fourth quarter and full-year 2013 financial tables to follow:

Consolidated
Statements of
Income

(In thousands   
except per
share data)

(Unaudited)
                                                              
                                                                  
                   Q4 2013         Q4 2012         FY 2013           FY 2012
                                                                     
Revenues           $ 383,548       $ 378,731       $ 1,522,074       $ 1,479,062
Operating            280,919         281,229         1,124,865         1,089,232
Expenses
Depreciation
and                  24,184          23,540          94,664            91,685
Amortization
General and
Administrative      30,436        34,649        117,061         113,792   
Expenses
Operating            48,009          39,313          185,484           184,353
Income
Interest
Income and           (109    )       1,497           3,324             6,716
other
Interest             (20,991 )       (20,160 )       (83,004   )       (82,189   )
Expense
Loss on
Extinguishment      (13,679 )      -             (20,657   )      (8,462    )
of Debt
Income Before
Income Taxes,
Equity in
Earnings of          13,230          20,650          85,147            100,418
Affiliates,
and
Discontinued
Operations
Income Tax           (11,908 )       (72,837 )       (26,050   )       (40,562   )
Benefit
Equity in
Earnings of
Affiliates,         2,493         1,926         6,265           3,578     
net of income
tax provision
Income from
Continuing           27,631          95,413          117,462           144,558
Operations
Loss from
Discontinued
Operations,         -             (13,777 )      (2,265    )      (10,660   )
net of income
tax benefit
Net Income           27,631          81,636          115,197           133,898
Less:
(Income)/Loss
Attributable        (20     )      (28     )      (62       )      852       
to
Noncontrolling
Interests
Net Income
Attributable       $ 27,611       $ 81,608       $ 115,135        $ 134,750   
to The GEO
Group, Inc.
Weighted
Average Common
Shares
Outstanding:
Basic                71,324          61,218          71,116            60,934
Diluted              71,751          61,663          71,605            61,265
Income per
Common Share
Attributable
to The GEO
Group, Inc.
^(1):
Basic:
Income from
continuing         $ 0.39          $ 1.56          $ 1.65            $ 2.39
operations
Loss from
discontinued        0.00          (0.23   )      (0.03     )      (0.17     )
operations
Net income per     $ 0.39         $ 1.33         $ 1.62           $ 2.21      
share — basic
                                                                     
Diluted:
Income from
continuing         $ 0.38          $ 1.55          $ 1.64            $ 2.37
operations
Loss from
discontinued        0.00          (0.22   )      (0.03     )      (0.17     )
operations
Net income per
share —            $ 0.38         $ 1.32         $ 1.61           $ 2.20      
diluted
                                                                     
^(1) Note that earnings per share may contain summation differences due to
rounding.


Consolidated Balance Sheets

(In thousands)                                  

(Unaudited)
                                                                
                                                                  
ASSETS                                             FY 2013         FY 2012
Current Assets
Cash and cash equivalents                          $ 52,125        $ 31,755
Restricted cash and investments                      11,518          15,654
Accounts receivable, less allowance for              250,530         246,635
doubtful accounts
Current deferred income tax assets                   20,936          18,290
Prepaid expenses and other current assets           49,236         24,849
Total current assets                                384,345        337,183
Restricted Cash and Investments                      18,349          32,756
Property and Equipment, Net                          1,727,798       1,687,159
Assets Held for Sale                                 -               3,243
Direct Finance Lease Receivable                      16,944          26,757
Non-Current Deferred Income Tax Assets               4,821           2,532
Goodwill                                             490,196         490,308
Intangible Assets, Net                               163,400         178,318
Other Non-Current Assets                            83,511         80,938
Total Assets                                       $ 2,889,364     $ 2,839,194
                                                                   
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                                   
Current Liabilities
Accounts payable                                   $ 47,286        $ 50,110
Accrued payroll and related taxes                    38,726          39,322
Accrued expenses                                     114,950         116,557
Current portion of capital lease obligation,        22,163         53,882
long-term debt, and non-recourse debt
Total current liabilities                           223,125        259,871
                                                                   
Non-Current Deferred Income Tax Liabilities          14,689          15,703
Other Non-Current Liabilities                        64,961          82,025
Capital Lease Obligations                            10,924          11,926
Long-Term Debt                                       1,485,536       1,317,529
Non-Recourse Debt                                    66,153          104,836
Shareholders Equity                                 1,023,976      1,047,304
Total Liabilities and Shareholders’ Equity         $ 2,889,364     $ 2,839,194
                                                                     

                                                          
Reconciliation
of Net Income
to FFO,
Normalized FFO,
and AFFO

(In thousands
except per
share data)

(Unaudited)
                                                                   
                                                                
                    Q4 2013        Q4 2012         FY 2013         FY 2012
                                                                   
Net Income
attributable to     $ 27,611       $ 81,608        $ 115,135       $ 134,750
GEO Group
Add:
Real Estate
Related
Depreciation          13,306         13,267          51,680          51,182
and
Amortization
Loss from Disc
Ops, net of           -              (13,777 )       (2,265  )       (10,660 )
income tax
benefit
                                                                
Equals: NAREIT      $ 40,917      $ 108,652      $ 169,080      $ 196,592 
defined FFO
                                                                   
Add:
REIT conversion
related               743            9,001           5,440           9,606
expenses, net
of tax
Tax benefit
related to IRS        (8,065 )       (79,033 )       (21,103 )       (79,033 )
settlement &
REIT conversion
Loss on
extinguishment        8,393          -               14,240          4,977
of debt, net of
tax
                                                                
Equals: FFO,        $ 41,988      $ 38,620       $ 167,657      $ 132,142 
normalized
                                                                   
Add:
Non-Real Estate
Related               10,878         10,273          42,984          40,503
Depreciation &
Amortization
Consolidated
Maintenance           (4,723 )       (10,551 )       (19,159 )       (30,737 )
Capital
Expenditures
Stock Based
Compensation          2,121          1,531           7,889           6,543
Expenses
Amortization of
Debt Costs and        1,307          1,523           5,916           3,864
Other Non-Cash
Interest
                                                                
Equals: AFFO        $ 51,571      $ 41,396       $ 205,287      $ 152,315 
                                                                   
Weighted
average common
shares                71,751         61,663          71,605          61,265
outstanding -
Diluted
                                                                   
FFO/AFFO per
Share - Diluted
                                                                
Normalized FFO
Per Diluted         $ 0.59        $ 0.63         $ 2.34         $ 2.16    
Share
                                                                
AFFO Per            $ 0.72        $ 0.67         $ 2.87         $ 2.49    
Diluted Share
                                                                             

                                                           
Reconciliation of Net Income to Net Operating Income and Adjusted EBITDA

(In thousands)

(Unaudited)
                                                                    
                                                                 
                    Q4 2013         Q4 2012         FY 2013         FY 2012
                                                                    
Net income
attributable to     $ 27,611        $ 81,608        $ 115,135       $ 134,750
GEO Group
Less
Net
(income)/loss
attributable to      (20     )      (28     )      (62     )      852     
noncontrolling
interests
Net Income          $ 27,631        $ 81,636        $ 115,197       $ 133,898
                                                                    
Add
Loss from
discontinued
operations, net       -               13,777          2,265           10,660
of income tax
provision
(benefit)
Equity in
earnings of
affiliates, net       (2,493  )       (1,926  )       (6,265  )       (3,578  )
of income tax
provision
Income tax            (11,908 )       (72,837 )       (26,050 )       (40,562 )
benefit
Interest
expense, net of       21,100          18,663          79,680          75,473
interest income
Loss on
extinguishment        13,679          -               20,657          8,462
of debt
Depreciation
and                   24,184          23,540          94,664          91,685
amortization
General and
administrative       30,436        34,649        117,061       113,792 
expenses
Net Operating
Income, net of      $ 102,629      $ 97,502       $ 397,209      $ 389,830 
operating lease
obligations
                                                                    
Add: Operating
lease expense,       6,117         6,054         24,259        23,947  
real estate
Net Operating       $ 108,746      $ 103,556      $ 421,468      $ 413,777 
Income (NOI)
                                                                    
Less:
General and
administrative        30,436          34,649          117,061         113,792
expenses
Operating lease
expense, real         6,117           6,054           24,259          23,947
estate
Loss on
extinguishment        13,679          -               20,657          8,462
of debt
Equity in
earnings of          (3,410  )      (2,728  )      (8,654  )      (5,238  )
affiliates,
pre-tax
EBITDA              $ 61,924       $ 65,581       $ 268,145      $ 272,814 
                                                                    
Adjustments
Net (income)
loss
attributable to       (20     )       (28     )       (62     )       852
non-controlling
interests
Stock based
compensation          2,121           1,531           7,889           6,543
expenses,
pre-tax
REIT conversion
related               743             14,670          8,181           15,670
expenses,
pre-tax
Loss on
extinguishment       13,679        -             20,657        8,462   
of debt,
pre-tax
Adjusted EBITDA     $ 78,447       $ 81,754       $ 304,810      $ 304,341 
                                                                              

                                                              
2014 Outlook/Reconciliation

(In thousands except per share data)

(Unaudited)
                                                                   
                                                Full-Year 2014
                                                                   
Net Income                                      $ 128,000     to   $ 134,000
Real Estate Related Depreciation and             52,000           52,000  
Amortization
Funds from Operations (FFO)                     $ 180,000    to   $ 186,000 
                                                                   
Adjustments                                      -                -       
Normalized Funds from Operations                $ 180,000    to   $ 186,000 
                                                                   
Non-Real Estate Related Depreciation and          43,000             43,000
Amortization
Consolidated Maintenance Capex                    (23,000 )          (23,000 )
Non-Cash Stock Based Compensation and            13,000           13,000  
Non-Cash Interest Expense
Adjusted Funds From Operations (AFFO)           $ 213,000    to   $ 219,000 
                                                                   
Net Cash Interest Expense                         74,000             74,000
Consolidated Maintenance Capex                    23,000             23,000
Income Taxes                                     10,000           10,000  
Adjusted EBITDA                                 $ 320,000    to   $ 326,000 
                                                                   
G&A Expenses                                      110,000            110,000
Non-Cash Stock Based Compensation                (7,000  )         (7,000  )
Net Operating Income, Net of Real Estate        $ 423,000    to   $ 429,000 
Related Operating Lease Expense
                                                                   
Real Estate Related Operating Lease Expense      25,000           25,000  
Net Operating Income                            $ 448,000    to   $ 454,000 
                                                                   
FFO Per Share (Normalized)                      $ 2.50        to   $ 2.58
AFFO Per Share                                  $ 2.96        to   $ 3.04
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
 
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