(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the ~~registrant:~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~November 6, 2014,~~May 4, 2015, the registrant had ~~74,146,836~~74,655,873 shares of common stock outstanding.


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013			March 31, 2015			March 31, 2014
Revenues	$	457,900		$	379,842		$	1,263,880		$	1,138,526		$	427,369		$	393,137
Operating expenses		342,216			283,903			934,197			843,946			317,909			291,923
Depreciation and amortization		24,079			23,888			71,969			70,480			24,940			24,142
General and administrative expenses		28,287			27,222			84,937			86,625			31,848			28,502

Operating income		63,318			44,829			172,777			137,475			52,672			48,570
Interest income		1,048			1,084			2,604			3,433			2,073			732
Interest expense		(21,408	)		(21,569	)		(62,662	)		(62,013	)		(24,646	)		(20,652	)
Loss on extinguishment of debt		—			(1,451	)		—			(6,978	)

Income before income taxes and equity in earnings of affiliates		42,958			22,893			112,719			71,917			30,099			28,650
Provision for (benefit from) income taxes		5,537			(7,755	)		11,062			(14,142	)
Equity in earnings of affiliates, net of income tax provision of $711, $578, $1,914 and $1,472, respectively		1,544			1,526			4,202			3,772

Income from continuing operations		38,965			32,174			105,859			89,831
Loss from discontinued operations, net of income tax provision of $0, $0, $0 and $0, respectively		—			(2,265	)		—			(2,265	)
Provision for income taxes														2,828			2,138
Equity in earnings of affiliates, net of income tax provision of
$613 and $549, respectively														1,485			1,484

Net income		38,965			29,909			105,859			87,566			28,756			27,996
Net loss (income) attributable to noncontrolling interests		26			(12	)		20			(42	)		21			(6	)

Net income attributable to The GEO Group, Inc.	$	38,991		$	29,897		$	105,879		$	87,524		$	28,777		$	27,990


Weighted-average common shares outstanding:
Basic		72,380			71,201			71,862			71,046			73,549			71,449

Diluted		72,637			71,655			72,130			71,557			73,884			71,895

Income per common share attributable to The GEO Group, Inc.:
Basic:
Income from continuing operations	$	0.54		$	0.45		$	1.47		$	1.26
Loss from discontinued operations		—			(0.03	)		—			(0.03	)

Income per common share attributable to The GEO Group, Inc. - basic	$	0.54		$	0.42		$	1.47		$	1.23		$	0.39		$	0.39

Diluted:
Income from continuing operations	$	0.54		$	0.45		$	1.47		$	1.25
Loss from discontinued operations		—			(0.03	)		—			(0.03	)

Income per common share attributable to The GEO Group, Inc. - diluted	$	0.54		$	0.42		$	1.47		$	1.22		$	0.39		$	0.39


Dividends declared per share	$	0.57		$	0.50		$	1.71		$	1.50		$	0.62		$	0.57

The accompanying notes are an integral part of these unaudited consolidated financial statements.


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013			March 31, 2015			March 31, 2014
Net income	$	38,965		$	29,909		$	105,859		$	87,566		$	28,756		$	27,996
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(3,125	)		611			(1,501	)		(6,050	)		(1,681	)		1,000
Pension liability adjustment, net of tax benefit of $12, $25, $37 and $76, respectively		19			40			58			121
Unrealized gain (loss) on derivative instrument classified as cash flow hedge, net of tax (provision) benefit of ($2,139), ($2), ($2,148) and $75, respectively		(4,877	)		(3	)		(4,858	)		138
Pension liability adjustment, net of tax (provision) benefit of $21 and ($12), respectively														40			19
Unrealized gain (loss) on derivative instrument classified as cash flow hedge, net of tax (provision) benefit of $718 and ($12), respectively														(4,080	)		27

Total other comprehensive income (loss), net of tax		(7,983	)		648			(6,301	)		(5,791	)		(5,721	)		1,046

Total comprehensive income		30,982			30,557			99,558			81,775			23,035			29,042
Comprehensive loss (income) attributable to noncontrolling interests		49			(4	)		51			38			37			(2	)

Comprehensive income attributable to The GEO Group, Inc.	$	31,031		$	30,553		$	99,609		$	81,813		$	23,072		$	29,040

The accompanying notes are an integral part of these unaudited consolidated financial statements.


	September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014
	(Unaudited)						(Unaudited)
ASSETS
*Current Assets*
Cash and cash equivalents	$	52,680		$	52,125		$	68,981		$	41,337
Restricted cash and investments		14,448			11,518			8,489			4,341
Accounts receivable, less allowance for doubtful accounts of $3,258 and $2,549, respectively		266,768			250,530
Accounts receivable, less allowance for doubtful accounts of $3,676 and $3,315, respectively								261,280			269,038
Current deferred income tax assets		20,936			20,936			25,884			25,884
Prepaid expenses and other current assets		38,443			49,236			44,420			36,806

Total current assets		393,275			384,345			409,054			377,406

*Restricted Cash and Investments*		21,360			18,349			23,217			19,578
*Property and Equipment, Net*		1,757,062			1,727,798			1,907,063			1,772,166
*Contract Receivable*		51,998			—			87,042			66,229
*Direct Finance Lease Receivable*		11,584			16,944			7,077			9,256
*Non-Current Deferred Income Tax Assets*		4,821			4,821			5,873			5,873
*Goodwill*		494,075			490,196			601,205			493,890
*Intangible Assets, Net*		159,113			163,400			224,171			155,275
*Other Non-Current Assets*		104,679			83,511			103,219			102,535

Total Assets	$	2,997,967		$	2,889,364		$	3,367,921		$	3,002,208

LIABILITIES AND SHAREHOLDERS’ EQUITY
*Current Liabilities*
Accounts payable	$	61,568		$	47,286		$	60,535		$	58,155
Accrued payroll and related taxes		50,231			38,726			55,851			38,556
Accrued expenses and other		129,375			114,950
Accrued expenses and other current liabilities								135,821			140,612
Current portion of capital lease obligations, long-term debt and non-recourse debt		22,475			22,163			16,648			16,752

Total current liabilities		263,649			223,125			268,855			254,075

*Non-Current Deferred Income Tax Liabilities*		14,689			14,689			10,068			10,068
*Other Non-Current Liabilities*		74,119			64,961			99,666			87,429
*Capital Lease Obligations*		10,132			10,924			9,574			9,856
*Long-Term Debt*		1,433,279			1,485,536			1,795,267			1,462,819
Non-Recourse Debt		135,347			66,153			158,060			131,968
*Commitments, Contingencies and Other* (Note 10)
*Commitments, Contingencies and Other*(Note 11)
*Shareholders’ Equity*
Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued or outstanding		—			—			—			—
Common stock, $0.01 par value, 125,000,000 and 90,000,000 shares authorized, 74,144,870 and 86,662,676 issued and 74,144,870 and 72,082,071 outstanding, respectively		741			866
Common stock, $0.01 par value, 125,000,000 shares authorized, 74,614,681 and 74,190,688 issued and outstanding, respectively								746			742
Additional paid-in capital		861,866			848,018			869,432			866,056
Earnings in excess of distributions		214,441			232,646			189,142			206,342
Accumulated other comprehensive loss		(10,699	)		(4,429	)		(33,166	)		(27,461	)
Treasury stock, 0 and 14,580,605 shares, at cost, respectively		—			(53,579	)

Total shareholders’ equity attributable to The GEO Group, Inc.		1,066,349			1,023,522			1,026,154			1,045,679
Noncontrolling interests		403			454			277			314

Total shareholders’ equity		1,066,752			1,023,976			1,026,431			1,045,993

Total Liabilities and Shareholders’ Equity	$	2,997,967		$	2,889,364		$	3,367,921		$	3,002,208

The accompanying notes are an integral part of these unaudited consolidated financial statements.


	Nine Months Ended						Three Months Ended
	September 30, 2014			September 30, 2013			March 31, 2015			March 31, 2014
Cash Flow from Operating Activities:
Net income	$	105,859		$	87,566		$	28,756		$	27,996
Net loss (income) attributable to noncontrolling interests		20			(42	)		21			(6	)

Net income attributable to The GEO Group, Inc.		105,879			87,524			28,777			27,990
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities:
Depreciation and amortization expense								24,940			24,142
Stock-based compensation		6,263			5,768			2,621			2,466
Loss on extinguishment of debt		—			6,978
Depreciation and amortization expense		71,969			70,480
Amortization of debt issuance costs, discount and/or premium		3,921			4,609
Dividends received from unconsolidated joint venture		2,455			—
Amortization of debt issuance costs, discount and/or premium and other non-cash interest								1,695			1,224
Provision for doubtful accounts		—			321			323			535
Equity in earnings of affiliates, net of tax		(4,202	)		(3,772	)		(1,485	)		(1,484	)
Income tax benefit related to equity compensation		(1,498	)		(1,883	)		(569	)		(558	)
Release of reserve for uncertain tax positions		—			(6,356	)
Loss on sale/disposal of property and equipment		453			668
(Gain) loss on sale/disposal of property and equipment								(545	)		235
Changes in assets and liabilities:
Changes in accounts receivable, prepaid expenses and other assets		22,235			(16,258	)		12,972			(7,227	)
Changes in contract receivable		(54,731	)		—			(24,768	)		—
Changes in accounts payable, accrued expenses and other liabilities		11,881			7,476			16,784			15,829

Cash provided by operating activities - continuing operations		164,625			155,555
Cash provided by operating activities - discontinued operations		—			2,265

Net cash provided by operating activities		164,625			157,820			60,745			63,152

Cash Flow from Investing Activities:
Acquisition of LCS, net of cash acquired								(307,403	)		—
Acquisition of Protocol, cash consideration		(13,025	)		—			—			(13,000	)
Insurance proceeds - damaged property								700			—
Proceeds from sale of property and equipment		515			204			20			165
Proceeds from sale of assets held for sale		—			1,968
Net working capital adjustment from RTS divestiture		—			(996	)
Change in restricted cash and investments		(6,052	)		13,976			(8,108	)		(3,273	)
Capital expenditures		(77,713	)		(101,450	)		(34,198	)		(17,531	)

Net cash used in investing activities		(96,275	)		(86,298	)		(348,989	)		(33,639	)

Cash Flow from Financing Activities:
Proceeds from long-term debt		459,384			842,000			371,000			103,000
Payments on long-term debt		(509,132	)		(742,203	)		(38,750	)		(108,990	)
Payments on non-recourse debt		(4,511	)		(27,153	)		(1,645	)		(1,403	)
Proceeds from non-recourse debt		74,191			—			33,019			—
Taxes paid related to net share settlements of equity awards		(1,844	)		—			(1,123	)		—
Proceeds from issuance of common stock in connection with ESPP		277			228			98			84
Issuance of common stock under prospectus supplement		54,724			—
Debt issuance costs		(23,508	)		(19,317	)		(1,245	)		—
Income tax benefit related to equity compensation		1,498			1,883			569			558
Proceeds from the exercise of stock options		6,384			4,941			1,215			3,275
Cash dividends paid		(124,084	)		(107,526	)		(45,977	)		(41,139	)

Net cash used in financing activities		(66,621	)		(47,147	)
Net cash provided by (used in) financing activities								317,161			(44,615	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(1,174	)		(2,969	)		(1,273	)		1,040

Net increase Cash and Cash Equivalents		555			21,406
Net increase (decrease) in Cash and Cash Equivalents								27,644			(14,062	)
Cash and Cash Equivalents, beginning of period		52,125			31,755			41,337			52,125

Cash and Cash Equivalents, end of period	$	52,680		$	53,161		$	68,981		$	38,063

Supplemental Disclosures:
Non-cash Investing and Financing activities:
Capital expenditures in accounts payable and accrued expenses	$	11,895		$	529		$	1,346		$	1,772

The accompanying notes are an integral part of these unaudited consolidated financial statements.

The GEO Group, Inc., a Florida corporation, and subsidiaries (the “Company” or “GEO”) is a fully-integrated real estate investment trust (“REIT”) specializing in the ownership, leasing and management of correctional, detention and ~~re-entry~~reentry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa and the United ~~Kingdom and Canada.~~Kingdom. The Company owns, leases and operates a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, as well as community based ~~re-entry~~reentry facilities. The Company develops new facilities based on contract awards, using its project development expertise and experience to design, construct and finance what it believes are state-of-the-art facilities that maximize security and efficiency. The Company provides innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants. The Company also provides secure transportation services for offender and detainee populations as contracted domestically and in the United Kingdom through its joint venture GEO Amey PECS Ltd. (“GEOAmey”). The Company’s worldwide operations include the management and/or ownership of approximately ~~78,500~~86,000 beds at 98106 correctional and detention facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states.

As a part of the Company’s conversion to a REIT which became effective January 1, 2013, the Company merged into The GEO Group REIT, Inc. (“GEO REIT”), a newly formed wholly-owned subsidiary of GEO. The merger became effective June 27, 2014 and was approved by the Company’s shareholders on May 2, 2014. The purpose of the merger was to ensure the effective adoption of charter provisions that implement standard REIT share ownership and transfer restrictions. In the merger, shares of GEO’s common stock were converted into the same number of GEO REIT shares of common stock. In addition, each share of the Company’s common stock held in treasury at June 27, 2014 were retired, and a corresponding adjustment was recorded to common stock and additional paid-in capital. Effective at the time of the merger, GEO REIT was renamed The GEO Group, Inc. Also, in connection with the merger, the Company’s authorized common stock was increased from 90 million shares to 125 million shares.

The Company’s unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States and the instructions to Form 10-Q and consequently do not include all disclosures required by Form 10-K. The accounting policies followed for quarterly financial reporting are the same as those disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on ~~March 3, 2014~~February 26, 2015 for the year ended December 31, ~~2013.~~2014. The accompanying December 31, ~~2013~~2014 consolidated balance sheet has been derived from those audited financial statements. Additional information may be obtained by referring to the Company’s Form 10-K for the year ended December 31, ~~2013.~~2014. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the financial information for the interim periods reported in this Quarterly Report on Form 10-Q have been made. Results of operations for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 are not necessarily indicative of the results for the entire year ending December 31, ~~2014,~~2015, or for any other future interim or annual periods.

On February 17, 2015, the Company acquired eight correctional and detention facilities (the “LCS Facilities”) totaling more than 6,500 beds from LCS Corrections Services, Inc., a privately-held owner and operator of correctional and detention facilities in the United States, and its affiliates (collectively, “LCS”). Pursuant to the terms of the definitive asset purchase agreement signed on January 26, 2015, the Company acquired the LCS Facilities for approximately $307.4 million at closing in an all cash transaction, excluding transaction related expenses of approximately $2.1 million that were recorded as general and administrative expense during the three months ended March 31, 2015. The Company also acquired certain tangible and intangible assets and assumed certain accounts payable and accrued expenses pursuant to the asset purchase agreement. Additionally, LCS has the opportunity to receive an additional payment if the LCS Facilities exceed certain performance targets over an 18-month period ending August 31, 2016 (the “Earnout Payment”). The aggregate amount of the purchase price paid at closing and the Earnout Payment, if achieved, will not exceed $350 million. This contingent payment had zero fair value ascribed at the date of acquisition since management believes that it is remote that such payment will be made. Approximately $298 million of outstanding debt related to the facilities was repaid at closing using the cash consideration paid by the Company. The Company did not assume any debt as the result of the transaction. The Company financed the acquisition of the LCS Facilities with borrowings under its revolving credit facility.

The Company entered into three year consulting agreements, beginning as of the acquisition date, with three of the principal parties of LCS each for $0.3 million annually, payable ratably on a monthly basis. Payment under each such agreement is guaranteed for the full term unless the agreement is terminated by the Company for cause, as defined, or unless the LCS principal party terminates the agreement sooner.

The allocation of the purchase price for this transaction at February 17, 2015 has not been finalized. The primary areas of the preliminary purchase price allocations that are not yet finalized primarily relate to certain tangible assets and liabilities included

in working capital. The Company expects to continue to obtain information to assist it in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that the Company determines to be material will be applied retrospectively to the period of acquisition.

The purchase price of $307.4 million has been preliminarily allocated to the estimated fair values of the assets acquired and liabilities assumed as of February 17, 2015 as follows (in ‘000’s):

As shown above, the Company recorded $107.3 million of goodwill which is fully deductible for tax purposes. The Company believes its acquisition of the LCS Facilities provides synergies and strategic benefits which further position the Company to meet the demand for correctional and detention bed space in the United States. These factors contributed to the goodwill that was recorded upon consummation of the transaction. The goodwill and net assets acquired are included in the U.S. Corrections & Detention business segment. Revenues and earnings of LCS from the date of acquisition through March 31, 2015 were not significant.

Identifiable intangible assets purchased consist of facility management contracts and have an estimated useful life of 20 years.

The Company has recorded goodwill as a result of its business combinations. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the tangible assets and intangible assets acquired net of liabilities assumed, including noncontrolling interests. Changes in goodwill from December 31, ~~2013~~2014 to ~~September 30, 2014~~March 31, 2015 are related to fluctuations in foreign currency exchange rates and additions due to an acquisition completed in the first quarter of ~~2014~~2015 as discussed ~~further below.~~above in Note 2 - Business Combinations.

The Company has also recorded other finite and indefinite-lived intangible assets as a result of its various business combinations. An acquisition completed in the first quarter of ~~2014~~2015 as discussed ~~further below~~above in Note 2 - Business Combinations also led to additions to intangible assets. The Company’s intangible assets include facility management contracts, ~~the~~ trade ~~name~~names and technology, as follows (in thousands):


			March 31, 2015							December 31, 2014
	Weighted Average Useful Life (years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Facility management contracts		15.5	$	227,750	$	(59,802	)	$	167,948	$	154,591	$	(56,396	)	$	98,195
Technology		7.0		24,000		(12,977	)		11,023		24,000		(12,120	)		11,880
Trade name (Indefinite lived)		Indefinite		45,200		—			45,200		45,200		—			45,200

Total acquired intangible assets			$	296,950	$	(72,779	)	$	224,171	$	223,791	$	(68,516	)	$	155,275

Amortization expense was ~~$3.9~~$4.3 million and ~~$11.3~~$3.6 million for the three months ended March 31, 2015 and ~~nine months ended September 30, 2014. Amortization expense was $3.6 million and $11.0 million for the three months and nine months ended September 30, 2013.~~March 31, 2014, respectively. Amortization expense was primarily related to the U.S. Corrections & Detention and GEO ~~Community Services~~Care segments’ amortization of acquired facility management contracts. As of ~~September 30, 2014,~~March 31, 2015, the weighted average period before the next contract renewal or extension for the acquired facility management contracts was approximately ~~2.1~~1.8 years. Although the facility management contracts acquired have renewal and extension terms in the near term, the Company has historically maintained these relationships beyond the current contractual periods. The acquired contracts in the acquisition of the LCS Facilities do not have contract expiration dates and are perpetual in nature.

Estimated amortization expense related to the Company’s finite-lived intangible assets for the remainder of ~~2014~~2015 through ~~2018~~2019 and thereafter is as follows (in thousands):


Fiscal Year	Total Amortization Expense		Total Amortization Expense
Remainder of 2014	$	3,808
2015		15,228
Remainder of 2015			$	14,183
2016		15,228		18,882
2017		15,228		18,850
2018		12,528		15,991
2019				15,663
Thereafter		51,893		95,402

	$	113,913	$	178,971

On February 25, 2014, Protocol Criminal Justice, Inc. (“Protocol”), a recently created subsidiary of the Company’s B.I. Incorporated (“BI”) subsidiary, entered into an Asset Purchase Agreement (the “Agreement”) with an unrelated entity, APAC Customer Services, Inc., to acquire certain tangible and intangible assets for cash consideration of $13.0 million. The acquisition is expected to provide returns consistent with GEO’s targeted returns on invested capital. The final purchase price allocation, which was completed during the second quarter of 2014, resulted in the recognition of intangible assets of $7.1 million related to acquired facility management contracts, acquired technology and trade name, and goodwill of $3.9 million. In addition, the Company acquired accounts receivable, equipment and assumed certain liabilities, none of which were significant. During the measurement period, the Company made $0.1 million in aggregate retrospective adjustments to provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized at that date. These adjustments related primarily to the Company’s valuation of intangible assets which resulted in a reduction of intangible assets of $0.3 million and an increase in goodwill of $0.2 million from the amounts previously reported in the Company’s unaudited consolidated financial statements as of March 31, 2014.

The following tables provide a summary of the Company’s significant financial assets and liabilities carried at fair value and measured on a recurring basis as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 (in thousands):


			Fair Value Measurements at September 30, 2014								Fair Value Measurements at March 31, 2015
	Carrying Value at September 30, 2014		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Value at March 31, 2015		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investment:
Rabbi Trust	$	11,044		—	$	11,044		—	$	12,617	$	—	$	12,617	$	—
Fixed income securities		1,994		—		1,994		—		1,870		—		1,870		—
Interest rate cap derivatives		1,161		—	$	1,161		—		349		—	$	349		—
Liabilities:
Interest rate swap derivatives	$	7,048	$	—	$	7,048	$	—	$	24,050	$	—	$	24,050	$	—


			Fair Value Measurements at December 31, 2013								Fair Value Measurements at December 31, 2014
	Carrying Value at December 31, 2013		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Value at December 31, 2014		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investments:
Guaranteed Investment Contract	$	5,742		—	$	5,742		—
Rabbi Trust		9,534		—		9,534		—	$	11,281	$	—	$	11,281	$	—
Fixed income securities		1,993		—		1,993		—		1,966		—		1,966		—
Interest rate cap derivatives										570				570
Liabilities:
Interest rate swap derivative liabilities	$	390	$	—	$	390	$	—	$	19,248	$	—	$	19,248	$	—

The Company’s Level 2 financial instruments included in the tables above as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 consist of an interest rate swap ~~liability~~derivative liabilities and interest rate cap derivative assets held by the Company’s Australian subsidiary, the Company’s rabbi trust established for GEO employee and employer contributions to ~~the Company.~~The GEO Group, Inc. Non-qualified Deferred Compensation Plan and an investment in Canadian dollar denominated fixed income securities. At December 31, 2013, the Company’s Level 2 financial instruments included a guaranteed investment contract which was a restricted investment related to CSC of Tacoma LLC (“CSC”). During the nine months ended September 30, 2014, the balance in the guaranteed investment contract was liquidated as it was no longer required because it relates to a portion of the CSC bonds which matured in October 2014. Refer to Note 9 - Debt.

The Australian subsidiary’s interest rate swap derivative liabilities and interest rate cap derivative assets are valued using a discounted cash flow model based on projected Australian borrowing rates. The Company’s restricted investment in the rabbi trust is invested in Company owned life insurance policies which are recorded at their cash surrender values. These investments are valued based on the underlying investments held in the policies’ separate account. The underlying assets are equity and fixed income pooled funds that are comprised of Level 1 and Level 2 securities. The Canadian dollar denominated securities, not actively traded, are valued using quoted rates for these and similar securities. ~~The restricted investment in the guaranteed investment contract was valued using quoted rates for these and similar securities.~~

The Company’s consolidated balance sheets reflect certain financial assets and liabilities at carrying value. The carrying value of certain debt instruments, if applicable, is net of unamortized discount. The following tables present the carrying values of those financial instruments and the estimated corresponding fair values at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 (in thousands):


			Estimated Fair Value Measurements at September 30, 2014										Estimated Fair Value Measurements at March 31, 2015
	Carrying Value as of September 30, 2014		Total Fair Value		Level 1		Level 2		Level 3		Carrying Value as of March 31, 2015		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	52,680	$	52,680	$	52,680	$	—	$	—	$	68,981	$	68,981	$	68,981	$	—	$	—
Restricted cash		24,764		24,764		6,162		18,602		—		19,089		19,089		4,247		14,842		—
Liabilities:
Borrowings under senior credit facility	$	336,250	$	337,731	$	—	$	337,731	$	—	$	697,750	$	698,855	$	—	$	698,855	$	—
5⁷⁄₈% Senior Notes		250,000		250,625		—		250,625		—
5.875% Senior Notes		250,000		253,750				253,750				250,000		260,000		—		260,000		—
5.125% Senior Notes												300,000		315,375				315,375
5⁷⁄₈% Senior Notes.												250,000		255,000		—		255,000		—
6.625% Senior Notes		300,000		314,814		—		314,814		—		300,000		318,000		—		318,000		—
5.125% Senior Notes		300,000		290,439		—		290,439		—
Non-recourse debt, Australian subsidiary		93,271		93,517		—		93,517		—		156,442		159,484		—		159,484		—
Other non-recourse debt, including current portion		60,442		62,721		—		62,721		—		14,025		14,111		—		14,111		—


			Estimated Fair Value Measurements at December 31, 2013										Estimated Fair Value Measurements at December 31, 2014
	Carrying Value as of December 31, 2013		Total Fair Value		Level 1		Level 2		Level 3		Carrying Value as of December 31, 2014		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	52,125	$	52,125	$	52,125	$	—	$	—	$	41,337	$	41,337	$	41,337	$	—	$	—
Restricted cash		14,592		14,592		1,838		12,754		—		12,638		12,638		3,889		8,749		—
Liabilities:
Borrowings under senior credit facility	$	638,500	$	639,246	$	—	$	639,246	$	—	$	365,500	$	364,411	$	—	$	364,411	$	—
5.875% Senior Notes												250,000		256,720		—		256,720		—
5.125% Senior Notes												300,000		296,814		—		296,814		—
5⁷⁄₈% Senior Notes		250,000		265,938		—		265,938		—		250,000		256,720		—		256,720		—
6.625% Senior Notes		300,000		317,064		—		317,064		—		300,000		315,750		—		315,750		—
5.125% Senior Notes		300,000		279,000		—		279,000		—
Non-recourse debt, Australian subsidiary		23,896		24,439		—		24,439		—		95,714		95,871		—		95,871		—
Other non-recourse debt, including current portion		60,235		62,319		—		62,319		—		48,836		52,016		—		52,016		—

The fair values of the Company’s cash and cash equivalents, and restricted cash approximates the carrying values of these assets at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013.~~2014. Restricted cash consists of money market funds, commercial paper and time deposits used for payments on the Company’s non-recourse debt and asset replacement funds contractually required to be maintained at the Company’s Australian subsidiary. The fair value of the money market funds is based on quoted market prices (Level 1) and the fair value of commercial paper and time deposits is based on market prices for similar instruments (Level 2).

The fair values of the Company’s 5⁷⁄₈% senior unsecured notes due 2022 (“5⁷⁄₈% Senior Notes”), 5.875% senior unsecured notes due 2024 (“5.875% Senior Notes”), 6.625% senior unsecured notes due 2021 (“6.625% Senior Notes”), and the 5.125% senior unsecured notes due 2023 (“5.125% Senior Notes”), although not actively traded, are based on published financial data for these instruments. The fair values of the Company’s non-recourse debt related to the Washington Economic Development Finance Authority (“WEDFA”) is based on market prices for similar instruments. The fair value of the non-recourse debt related to the Company’s Australian subsidiary is estimated using a discounted cash flow model based on current Australian borrowing rates for similar instruments. The fair value of borrowings under the senior credit facility is based on an estimate of trading value considering the Company’s borrowing rate, the undrawn spread and similar instruments.

The following table presents the changes in shareholders’ equity that are attributable to the Company’s shareholders and to noncontrolling interests (in thousands):


	Common shares						Additional Paid-In			Earnings in Excess of			Accumulated Other Comprehensive			Treasury shares						Noncontrolling			Total Shareholders’			Common shares					Additional Paid-In			Earnings in Excess of			Accumulated Other Comprehensive			Noncontrolling			Total Shareholders’
	Shares			Amount			Capital			Distributions			Loss			Shares			Amount			Interests			Equity			Shares			Amount		Capital			Distributions			Loss			Interests			Equity

*Balance, December 31, 2013*		72,082		$	866		$	848,018		$	232,646		$	(4,429	)		14,581		$	(53,579	)	$	454		$	1,023,976
*Balance, December 31, 2014*																													74,191		$	742	$	866,056		$	206,342		$	(27,461	)	$	314		$	1,045,993
Proceeds from exercise of stock options		338			3			6,381			—			—			—			—			—			6,384			54			—		1,215			—			—			—			1,215
Tax benefit related to equity compensation		—			—			1,498			—			—			—			—			—			1,498			—			—		569			—			—			—			569
Stock-based compensation expense		—			—			885			—			—			—			—			—			885			—			—		432			—			—			—			432
Amortization of restricted stock		—			—			5,378			—			—			—			—			—			5,378			—			—		2,189			—			—			—			2,189

Restricted stock granted		310			3			(3	)		—			—						—			—			—			396			4		(4	)		—			—			—			—

Restricted stock canceled		(22	)		—			—			—			—			—			—			—			—			(3	)		—		—			—			—			—			—

Dividends paid		—			—			—			(124,084	)		—			—			—			—			(124,084	)		—			—		—			(45,977	)		—			—			(45,977	)
Issuance of common stock - prospectus supplement		1,483			15			54,709			—			—			—			—			—			54,724
Shares withheld for net settlements of share-based awards		(54	)		—			(428	)		—			—			43			(1,416	)		—			(1,844	)		(25	)		—		(1,123	)		—			—			—			(1,123	)
Re-issuance of treasury shares - ESPP		5			—			162						—			(6	)		23			—			185
Issuance of common stock - ESPP		3			—			92			—			—			—			—			—			92			2			—		98			—			—			—			98

Retirement of treasury shares		—			(146	)		(54,826	)					—			(14,618	)		54,972			—			—

Net income		—			—			—			105,879			—			—			—			(20	)		105,859

Net income (loss)																													—			—		—			28,777			—			(21	)		28,756
Other comprehensive loss		—			—			—			—			(6,270	)		—			—			(31	)		(6,301	)		—			—		—			—			(5,705	)		(16	)		(5,721	)

*Balance, March 31, 2015*																													74,615		$	746	$	869,432		$	189,142		$	(33,166	)	$	277		$	1,026,431

*Balance, September 30, 2014*		74,145		$	741		$	861,866		$	214,441		$	(10,699	)		—		$	—		$	403		$	1,066,752

During the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, the Company withheld shares through net share settlements to satisfy minimum statutory tax withholding requirements upon vesting of shares of restricted stock held by employees.

As a REIT, GEO is required to distribute annually at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and by excluding net capital gain) and began paying regular quarterly REIT dividends in 2013. The amount, timing and frequency of future dividends, however, will be at the sole discretion of GEO’s Board of Directors (the “Board”) and will be declared based upon various factors, many of which are beyond GEO’s control, including, GEO’s financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income taxes that GEO otherwise would be required to pay, limitations on distributions in GEO’s existing and future debt instruments, limitations on GEO’s ability to fund distributions using cash generated through GEO’s taxable REIT subsidiaries (“TRSs”) and other factors that GEO’s Board may deem relevant.

During the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and the year ended December 31, ~~2013,~~2014, respectively, GEO declared and paid the following regular cash distributions to its shareholders as follows:


Declaration Date	Payment Due	Record Date	Distribution Per Share		Aggregate Payment Amount (in millions)		Record Date	Payment Due	Distribution Per Share	Aggregate Payment Amount (in millions)

January 17, 2013	March 1, 2013	February 15, 2013	$	0.50	$	35.7

May 7, 2013	June 3, 2013	May 20, 2013	$	0.50	$	35.8

July 30, 2013	August 29, 2013	August 19, 2013	$	0.50	$	36.1

November 1, 2013	November 26, 2013	November 14, 2013	$	0.55	$	39.6

February 18, 2014	March 14, 2014	March 3, 2014	$	0.57	$	41.1	March 3, 2014	March 14, 2014	$0.57	$41.1

April 28, 2014	May 27, 2014	May 15, 2014	$	0.57	$	41.5	May 15, 2014	May 27, 2014	$0.57	$41.5

August 5, 2014	August 29, 2014	August 18, 2014	$	0.57	$	41.4	August 18, 2014	August 29, 2014	$0.57	$41.4
November 5, 2014							November 17, 2014	November 26, 2014	$0.62	$46.0
February 6, 2015							February 17, 2015	February 27, 2015	$0.62	$46.0

On May 8, 2013, the Company filed with the Securities and Exchange Commission a prospectus supplement related to the offer and sale from time to time of the Company’s common stock at an aggregate offering price of up to $100.0 million through sales agents. Sales of shares of the Company’s common stock under the prospectus supplement and equity distribution agreements entered into with the sales agents, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933. On July 18, 2014, the Company filed with the Securities and Exchange Commission a post-effective amendment to its shelf registration statement on Form S-3 (pursuant to which the prospectus supplement had been filed) as a result of the merger of the Company into GEO REIT effective June 27, 2014. During the ~~three months~~year ended ~~September 30,~~December 31, 2014, there were approximately 1.5 million shares of common stock sold under the prospectus supplement for net proceeds of $54.7 million. There were no shares of the Company’s common stock sold under the prospectus supplement during the three months ended March 31, 2015.

In September 2014, the Company filed with the Securities and Exchange Commission a new shelf registration statement on Form S-3. On November 10, 2014, in connection with the new shelf registration, the Company filed with the Securities and Exchange Commission a new prospectus supplement related to the offer and sale from time to time of the Company’s common stock at an aggregate offering price of up to $150.0 million through sales agents. Sales of shares of the Company’s common stock under the prospectus supplement and the equity distribution agreements entered into with the sales agents, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933. There were no shares of the Company’s stock issued under this prospectus supplement during the three months ended March 31, 2015.

Comprehensive income (loss) represents the change in shareholders’ equity from transactions and other events and circumstances arising from non-shareholder sources. The Company’s total comprehensive income is comprised of net income attributable to GEO, net income attributable to noncontrolling interests, foreign currency translation adjustments that arise from consolidating foreign operations that do not impact cash flows, net unrealized gains and/or losses on derivative instruments, and pension liability adjustments within shareholders’ equity and comprehensive income (loss).

The components of accumulated other comprehensive income (loss) attributable to GEO within shareholders’ equity are as follows:

The Board has adopted The GEO Group, Inc. 2014 Stock Incentive Plan (the “2014 Plan”), which was approved by the Company’s shareholders on May 2, 2014. The 2014 Plan ~~replaces~~replaced the 2006 Stock Incentive Plan (the “2006 Plan”). ~~The~~As of the date the 2014 Plan was adopted, it provides for a reserve of 3,083,353 shares, which ~~consists~~consisted of 2,000,000 new shares of common stock available for

issuance and 1,083,353 shares of common stock that were available for issuance under the 2006 Plan prior to the 2014 Plan replacing it. The Company filed a Form S-8 registration statement related to the 2014 Plan on June 3,4, 2014, which was amended on July 18, 2014.

The Company uses a Black-Scholes option valuation model to estimate the fair value of each option awarded. For options granted during the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, the fair value was estimated using the following assumptions: (i)

volatility of ~~28.92%~~24%; (ii) expected term of ~~4.82~~5.00 years; (iii) risk free interest rate of ~~1.44%~~1%; and (iv) expected dividend yield of 7%5.75%. A summary of the activity of stock option awards issued and outstanding under Company plans is as follows for the ~~nine~~three months ended ~~September 30, 2014:~~March 31, 2015:

During the three months ended March 31, 2015, the Company granted approximately 256,000 options to certain employees which had a weighted-average grant-date fair value of $4.26 per share. For the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and March 31, 2014, ~~and September 30, 2013,~~ the amount of stock-based compensation expense related to stock options was ~~$0.9~~$0.4 million and ~~$1.0~~$0.5 million, respectively. As of ~~September 30, 2014,~~March 31, 2015, the Company had ~~$1.0~~$1.3 million of unrecognized compensation costs related to non-vested stock option awards that are expected to be recognized over a weighted average period of ~~2.1~~1.7 years.

Compensation expense for nonvested stock awards is recorded over the vesting period based on the fair value at the date of grant. Generally, the restricted stock awards vest in equal increments over either a three or four-year period. The fair value of restricted stock awards, which do not contain a market-based vesting condition, is determined using the closing price of the Company’s common stock on the date of grant. The Company has issued share-based awards with service-based, ~~performance-based~~performance- based and market-based vesting criteria.

A summary of the activity of restricted stock outstanding is as follows for the ~~nine~~three months ended ~~September 30, 2014:~~March 31, 2015:


	Shares			Wtd. Avg. Grant Date Fair Value		Shares			Wtd. Avg. Grant Date Fair Value
	(in thousands)					(in thousands)
Restricted stock outstanding at December 31, 2013		734		$	26.87
Restricted stock outstanding at December 31, 2014							724		$	30.97
Granted		310			32.24		396			45.88
Vested		(291	)		22.03		(97	)		26.41
Forfeited/canceled		(22	)		32.58		(3	)		42.64

Restricted stock outstanding at September 30, 2014		731		$	30.95
Restricted stock outstanding at March 31, 2015							1,020		$	37.05

During the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, the Company granted approximately ~~310,000~~396,000 shares of restricted stock to certain employees and executive officers. Of these awards, ~~90,000~~123,500 are market and performance-based awards which will be forfeited if the Company does not achieve certain annual metrics during ~~2014,~~ 2015, 2016 and ~~2016.~~2017.

The vesting of these performance-based restricted stock grants are subject to the achievement by GEO of two annual performance metrics as follows: (i) up to 75% of the shares of restricted stock (“TSR Target Award”) can vest at the end of a three-year performance period if GEO meets certain total shareholder return (“TSR”) performance targets, as compared to the

total shareholder return of a peer group of companies, during ~~2014,~~ 2015, 2016 and ~~2016;~~2017 and (ii) up to 25% of the shares of restricted stock (“ROCE Target Award”) can vest at the end of a three-year period if GEO meets certain return on capital employed (“ROCE”) performance targets in ~~2014,~~ 2015, 2016 and ~~2016.~~2017. These market and performance awards can vest at between 0% and 200% of the target awards for both metrics. The number of shares shown for the performance-based awards is based on the target awards for both metrics.

The metric related to ROCE is considered to be a performance condition. For share-based awards that contain a performance condition, the achievement of the targets must be probable before any share-based compensation expense is recorded. The Company reviews the likelihood of which target in the range will be achieved and if deemed probable, compensation expense is recorded at that time. If subsequent to initial measurement there is a change in the estimate of the probability of meeting the performance condition, the effect of the change in the estimated quantity of awards expected to vest is recognized by cumulatively adjusting compensation expense. If ultimately the performance targets are not met, for any awards where vesting was previously deemed probable, previously recognized compensation expense will be reversed in the period in which vesting is no longer deemed probable. The fair value of these awards was determined based on the closing price of the Company’s common stock on the date of grant.

The metric related to TSR is considered to be a market condition. For share-based awards that contain a market condition, the probability of satisfying the market condition must be considered in the estimate of grant-date fair value and previously recorded compensation expense is not reversed if the market condition is never met. The fair value of these awards was determined based on a Monte Carlo simulation, which calculates a range of possible outcomes and the probabilities that they will occur, using the following key assumptions: (i) volatility of ~~25.6%~~21.4%; (ii) beta of 0.74; and (iii) risk free rate of ~~0.62%~~1.00%.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and March 31, 2014, ~~and September 30, 2013,~~ the Company recognized ~~$5.4~~$2.2 million and ~~$4.8~~$2.0 million, respectively, of compensation expense related to its restricted stock awards. As of ~~September 30, 2014,~~March 31, 2015, the Company had ~~$17.0~~$30.7 million of unrecognized compensation costs related to non-vested restricted stock awards, including non-vested restricted stock awards with performance-based and market-based vesting, that are expected to be recognized over a weighted average period of ~~2.7~~1.6 years.

The Company previously adopted The GEO Group Inc. 2011 Employee Stock Purchase Plan (the “Plan”) which was approved by the Company’s shareholders. The purpose of the Plan, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions by the employees of GEO and designated subsidiaries of GEO in order to increase their identification with the Company’s goals and secure a proprietary interest in the Company’s success. These deductions are used to purchase shares of the Company’s common stock at a 5% discount from the then current market price. The Company has made available up to 500,000 shares of its common stock, which were registered with the Securities and Exchange Commission on May 4, 2012, as amended on July 18, 2014, for sale to eligible employees under the Plan.

The Plan is considered to be non-compensatory. As such, there is no compensation expense required to be recognized. Share purchases under the Plan are made on the last day of each month. During the ~~nine~~three months ended ~~September 30, 2014, 8,348~~March 31, 2015, 2,338 shares of the Company’s common stock were issued in connection with the Plan.

Basic income per common share is computed by dividing the income from continuing operations attributable to The GEO Group, Inc. shareholders by the weighted average number of outstanding shares of common stock. The calculation of diluted income per common share is similar to that of basic income per common share except that the denominator includes dilutive common stock equivalents such as stock options and shares of restricted stock. Basic and diluted income from continuing operations per common share was calculated for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and March 31, 2014 ~~and September 30, 2013~~ as follows (in thousands, except per share data):


	Three Months Ended					Nine Months Ended					Three Months Ended
	September 30, 2014		September 30, 2013			September 30, 2014		September 30, 2013			March 31, 2015		March 31, 2014
Net income	$	38,965	$	32,174		$	105,859	$	89,831		$	28,756	$	27,996
Net income attributable to noncontrolling interests		26		(12	)		20		(42	)
Net income (loss) attributable to noncontrolling interests												21		(6	)

Net income attributable to The GEO Group, Inc.		38,991		32,162			105,879		89,789			28,777		27,990
Basic earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding		72,380		71,201			71,862		71,046			73,549		71,449

Per share amount - continuing operations	$	0.54	$	0.45		$	1.47	$	1.26
Per share amount											$	0.39	$	0.39

Diluted earnings per share attributable to The GEO Group, Inc.:
Weighted average shares outstanding		72,380		71,201			71,862		71,046			73,549		71,449
Effect of dilutive securities: Stock options and restricted stock		257		454			268		511
Dilutive effect of equity incentive plans												335		446

Weighted average shares assuming dilution		72,637		71,655			72,130		71,557			73,884		71,895

Per share amount - continuing operations	$	0.54	$	0.45		$	1.47	$	1.25
Per share amount											$	0.39	$	0.39

For the three months ended ~~September 30, 2014, no shares of common stock underlying options or restricted stock were anti-dilutive.~~

For the three months ended September 30, 2013, 1,589 weighted average common stock equivalents from restricted stock awards were excluded from the computation of diluted EPS because the effect would be anti-dilutive. There were no shares of common stock underlying options that were anti-dilutive.

~~For the nine months ended September 30, 2014, 165,965~~March 31, 2015, 83,790 weighted average shares of common stock underlying options were excluded from the computation of diluted EPS because the effect would be anti-dilutive. There were ~~288~~no common stock equivalents from restricted shares that were anti-dilutive.

For the ~~nine~~three months ended ~~September 30, 2013, no~~March 31, 2014, 17,070 weighted average shares of common stock underlying options orwere excluded from the computation of diluted EPS because the effect would be anti-dilutive There were no common stock equivalents from restricted ~~stock~~shares that were anti-dilutive.

The Company’s primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in interest rates. The Company measures its derivative financial instruments at fair value.

The Company’s Australian subsidiary is a party to an interest rate swap agreement to fix the interest rate on its variable rate non-recourse debt (related to its Fullham facility) to 9.7%. The Company has determined the swap, which has a notional amount of AUD 50.9 million, payment and expiration dates, and call provisions that coincide with the terms of the ~~non-recourse~~non- recourse debt, to be an effective cash flow hedge. Accordingly, the Company records the change in the fair value of the interest rate swap in accumulated other comprehensive income, net of applicable income taxes. Total unrealized gains recorded in other comprehensive income, net of tax, related to this cash flow hedge ~~was~~were not significant for the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014. The total fair value of the swap liability as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 was $0.3 million and ~~$0.4~~$0.2 million, respectively, and is recorded as a component of other non-current ~~assets~~liabities within the accompanying consolidated balance

sheets. There was no material ineffectiveness of this interest rate swap for the periods presented. The Company does not expect to enter into any transactions during the next twelve months which would result in the reclassification into earnings or losses associated with this swap currently reported in accumulated other comprehensive income (loss).

In September 2014, the Company’s Australian subsidiary entered into interest rate swap agreements to fix the interest rate on its variable rate non-recourse debt related to a prison project in Ravenhall, a locality near Melbourne, Australia to 3.3% during the

design and construction phase and 4.2% during the project’s operating phase. ~~Refer to Note 11 - Ravenhall Prison Project.~~ The swaps’ notional amounts coincide with construction draw fixed commitments throughout the project. At ~~September 30, 2014,~~March 31, 2015, the swaps had a notional value of approximately AUD ~~85.0~~140.0 million, or ~~$74.0~~$107.7 million, based on exchange rates at ~~September 30, 2014,~~March 31, 2015, related to the outstanding draws for the design and construction phase and approximately AUD ~~486.0~~466.3 million, or ~~$424.0~~$358.6 million, based on exchange rates at ~~September 30, 2014,~~March 31, 2015 related to future construction draws. The Company has determined that the swaps have payment, expiration dates, and provisions that coincide with the terms of the non-recourse debt and are therefore considered to be effective cash flow hedges. Accordingly, the Company records the change in the fair value of the interest rate swaps in accumulated other comprehensive income, net of applicable income taxes. Total unrealized losses recorded in other comprehensive income, net of tax, related to this cash flow hedge were approximately ~~$(4.9)~~$4.1 million during the three ~~and nine~~ months ended ~~September 30, 2014.~~March 31, 2015. The total fair value of the swap liability as of ~~September 30, 2014~~March 31, 2015 was ~~$(7.0)~~$23.8 million and is recorded as a component of Other Non-Current liabilities within the accompanying consolidated balance sheet. There was no material ineffectiveness for the periods presented. The Company does not expect to enter into any transactions during the next twelve months which would result in the reclassification into earnings or losses associated with these swaps currently reported in accumulated other comprehensive income (loss).

Additionally, upon completion and commercial acceptance of the prison project, the Department of Justice in the State of Victoria (the “State”) in accordance with the prison contract, will make a lump sum payment of AUD 310 million, or ~~$270.5~~$238.4 million, based on exchange rates at ~~September 30, 2014,~~March 31, 2015, towards a portion of the outstanding principal of the non-recourse debt. The Company’s Australian subsidiary also entered into interest rate cap agreements in September 2014 giving the Company the option to cap the interest rate on its variable non-recourse debt related to the project in the event that the completion of the prison project is delayed which could delay the State’s payment. The Company paid $1.7 million for the interest rate cap agreements. These instruments do not meet the requirements for hedge accounting, and therefore, changes in fair value of the interest rate caps are recorded in earnings. During the three ~~and nine~~ months ended ~~September 30, 2014,~~March 31, 2015, the Company recorded a loss of ~~$0.5~~$0.2 million related to a decline in the fair value of the interest rate cap assets. As of ~~September 30, 2014,~~March 31, 2015, the interest rate cap assets had a fair value of ~~$1.2~~$0.3 million which is included in Other Non-Current Assets in the accompanying consolidated balance sheet.

The Company has entered into foreign exchange forwards to mitigate the change in fair value of certain assets and liabilities related to intercompany loans with its foreign subsidiaries. These forwards are not designated as hedging instruments under the accounting standards for derivatives and hedging. Accordingly, these undesignated instruments are recorded at fair value as a derivative asset or liability with their corresponding change in fair value recognized in earnings. The fair value of these derivatives were not significant at March 31, 2015.

Debt outstanding as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 consisted of the following (in thousands):


	September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014
Senior Credit Facility:
Term loan	$	296,250		$	298,500		$	294,750		$	295,500
Revolver		40,000			340,000			403,000			70,000

Total Senior Credit Facility	$	336,250		$	638,500		$	697,750		$	365,500
5.875% Senior Notes
Notes Due in 2024		250,000			—			250,000			250,000
5.125% Senior Notes:
Notes due in 2023		300,000			300,000			300,000			300,000
5⁷⁄₈% Senior Notes
Notes Due in 2022		250,000			250,000			250,000			250,000
6.625% Senior Notes:
Notes due in 2021		300,000			300,000			300,000			300,000
Non-Recourse Debt :
Non-Recourse Debt		154,466			85,091			171,138			145,262
Unamortized discount on non-recourse debt		(753	)		(960	)		(671	)		(712	)

Total Non-Recourse Debt		153,713			84,131			170,467			144,550
Capital Lease Obligations		11,177			11,924			10,665			10,924
Other debt		93			221			667			421

Total debt		1,601,233			1,584,776			1,979,549			1,621,395
Current portion of capital lease obligations, long-term debt and non-recourse debt		(22,475	)		(22,163	)		(16,648	)		(16,752	)
Capital Lease Obligations, long-term portion		(10,132	)		(10,924	)		(9,574	)		(9,856	)
Non-Recourse Debt, long-term portion		(135,347	)		(66,153	)		(158,060	)		(131,968	)

Long-Term Debt	$	1,433,279		$	1,485,536		$	1,795,267		$	1,462,819

On August 27, 2014, the Company executed a second amended and restated credit agreement by and among the Company and GEO Corrections Holdings, Inc., as Borrowers, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”).

The Credit Agreement evidences a credit facility (the “Credit Facility”) consisting of a $296.3 million term loan (the “Term Loan”) bearing interest at LIBOR plus 2.50% (with a LIBOR floor of .75%), and a $700.0 million revolving credit facility (the “Revolver”) initially bearing interest at LIBOR plus 2.25% (with no LIBOR floor) together with AUD 225.0 million available solely for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars (the “Australian LC Facility”). At ~~September 30, 2014,~~March 31, 2015, the Company had approximately AUD 214.0 million in letters of credit outstanding under the Australian LC Facility in connection with certain performance and financing guarantees related to the Ravenhall ~~Prison Project - Refer to Note 11.~~prison project in Australia. Amounts to be borrowed by the Company under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing. The Revolver component is scheduled to mature on August 27, 2019 and the Term Loan component is scheduled to mature on April 3, 2020. In connection with the amendment, the Company wrote off approximately $0.4 million of deferred financing costs pertaining to the former credit facility. The Company capitalized $3.1 million of deferred finance costs in connection with the new Credit Facility.

The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict the Company’s ability to, among other things (i) create, incur or assume any indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make certain restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio to exceed 5.75 to 1.00, allow the senior secured leverage ratio to exceed 3.50 to 1.00 or allow the interest coverage ratio to be less than 3.00 to 1.00, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for

value any senior notes, except as permitted, (x) alter the business the Company conducts, and (xi) materially impair the

Company’s lenders’ security interests in the collateral for its loans. The restricted payments covenant remains consistent with the Company’s election to be treated as a real estate investment trust under the Internal Revenue Code of 1986, effective as of January 1, 2013.

Events of default under the Credit Agreement include, but are not limited to, (i) the Company’s failure to pay principal or interest when due, (ii) the Company’s material breach of any representation or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness,

(vi) unsatisfied final judgments over a specified threshold, (vii) certain material environmental liability claims which have been asserted against the Company, and (viii) a change in control. The Company was in compliance with ~~the~~ all of the covenants of the Credit Agreement as of ~~September 30, 2014.~~March 31, 2015.

All of the obligations under the Credit Agreement are unconditionally guaranteed by certain domestic subsidiaries of the Company and the Credit Agreement and the related guarantees are secured by a perfected first-priority pledge of substantially all of the Company’s present and future tangible and intangible domestic assets and all present and future tangible and intangible domestic assets of each guarantor, including but not limited to a first-priority pledge of all of the outstanding capital stock owned by the Company and each guarantor in their domestic subsidiaries.

As of ~~September 30, 2014,~~March 31, 2015, the Company had ~~$296.3~~$294.8 million in aggregate borrowings outstanding under the Term Loan, ~~$40.0~~$403.0 million in borrowings under the Revolver, and approximately ~~$61.0~~$59.0 million in letters of credit which left ~~$599.0~~$238.0 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Credit Agreement as of ~~September 30, 2014~~March 31, 2015 was ~~3.2%~~2.8%.

~~On September 25, 2014,~~Interest on the 5.875% Senior Notes accrues at the stated rate. The Company completed an offering of $250.0 million aggregate principal amount of senior unsecured notes. The notes will mature on October 15, 2024 and have a coupon rate and yield to maturity of 5.875%. Interest is payablepays interest semi-annually ~~in cash~~ in arrears on April 15 and October 15 beginning April 15, 2015. The 5.875% Senior Notes are guaranteed on a senior unsecured basis by all the Company’s restricted subsidiaries that guarantee obligations. The 5.875% Senior Notes rank equally in right of ~~payment with any unsecured, unsubordinated indebtedness of the Company and the guarantors, including the Company’s 6.625% senior notes due 2021, the 5~~⁷⁄₈% senior notes due 2022, the 5.125% senior notes due 2023, and the guarantors’ guarantees thereof, senior in right of payment to any future indebtedness of the Company and the guarantors that is expressly subordinated to the 5.875% Senior Notes and the guarantees, effectively junior to any secured indebtedness of the Company and the guarantors, including indebtedness under the Company’s senior credit facility, to the extent of the value of the assets securing such indebtedness, and structurally junior to all obligations of the Company’s subsidiaries that are not guarantors. The sale of the 5.875% Senior Notes was registered under the Company’s automatic shelf registration statement on Form S-3 filed on September 12, 2014. The Company capitalized $3.8 million of deferred financing costs in connection with the offering.

At any time prior to October 15, 2017, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of outstanding 5.875% Senior Notes issued under the indenture governing the 5.875% Senior Notes (including any additional notes) at a redemption price of 105.875% of their principal amount, plus accrued and unpaid interest, if any, to the redemption date. In addition, the Company may, at its option, redeem the 5.875% Senior Notes in whole or in part before October 15, 2019 at a redemption price equal to 100% of the principal amount of the 5.875% Senior Notes being redeemed plus a “make-whole” premium, together with accrued and unpaid interest, if any, to the redemption date.

each year. On or after October 15, 2019, the Company may, at its option, redeem all or part of the 5.875% Senior Notes ~~upon not less than 30 nor more than 60 days’ notice,~~ at the redemption prices ~~(expressed as percentages of principal amount)~~ set forth ~~below, plus accrued and unpaid interest, if any, on~~in the indenture governing the 5.875% Senior ~~Notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on October 15 of the years indicated below:~~

Notes. The indenture contains certain covenants, ~~which, among other things, limit the ability of~~including limitations and restrictions on the Company and its ~~restricted subsidiaries~~subsidiary guarantors (Refer to incur additional indebtedness or issue preferred stock, make dividend payments or other restricted payments (other than the payment of dividends or other distributions, or any other actions necessary to maintain the Company’s status as a real estate investment trust), create liens, sell assets, engage in sale and lease back transactions, create or permit restrictions on the ability of the restricted subsidiaries to pay dividends or make other distributions to the Company, enter into transactions with affiliates, and enter into mergers, consolidations or sales of all or substantially all of their assets. These covenants are subject to a number of limitations and exceptions as set forth in the indenture.

The indenture also contains events of default with respect to, among other things, the following: failure by the Company to pay interest on the 5.875% Senior Notes when due, which failure continues for 30 days; failure by the Company to pay the principal of, or premium, if any, on, the 5.875% Senior Notes when due; failure by the Company or any of its restricted subsidiaries to comply with their obligations to offer to repurchase the 5.875% Senior Notes at the option of the holders of the 5.875% Senior Notes upon a change of control, to offer to redeem the 5.875% Senior Notes under certain circumstances in connection with asset sales with excess proceeds in excess of $25.0 million or to observe certain restrictions on mergers, consolidations and sales of substantially all of their assets; the failure by the Company or any guarantor to comply with any of the other agreements in the indenture, which failure continues for 60 days after notice; and certain events of bankruptcy or insolvency of GEO or a restricted subsidiary that is a significant subsidiary or any group of restricted subsidiaries that together would constitute a significant subsidiary.Note 15- Condensed Consolidating Financial Information). The Company was in compliance with all of the covenants of the indenture governing the 5.875% Senior Notes as of ~~September 30, 2014.~~March 31, 2015.

Interest on the 5.125% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on April 1 and October 1 of each year. On or after April 1, 2018, the Company may, at its option, redeem all or part of the 5.125% Senior Notes at the redemption prices set forth in the indenture governing the 5.125% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note ~~16-Condensed~~15-Condensed Consolidating Financial Information). The Company was in compliance with all of the covenants of the indenture governing the 5.125% Senior Notes as of ~~September 30, 2014.~~March 31, 2015.

Interest on the 5⁷⁄₈% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on January 15 and July 15 of each year. On or after January 15, 2017, the Company may, at its option, redeem all or part of the 5⁷⁄₈% Senior Notes at the redemption prices set forth in the indenture governing the 5⁷⁄₈% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note ~~16-Condensed~~15-Condensed Consolidating Financial Information). The Company was in compliance with all of the covenants of the indenture governing the 5⁷⁄₈% Senior Notes as of ~~September 30, 2014.~~March 31, 2015.

Interest on the 6.625% Senior Notes accrues at the stated rate. The Company pays interest semi-annually in arrears on February 15 and August 15 of each year. On or after February 15, 2016, the Company may, at its option, redeem all or part of the 6.625% Senior Notes at the redemption prices set forth in the indenture governing the 6.625% Senior Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors (Refer to Note ~~16-Condensed~~15-Condensed Consolidating Financial Information). The Company was in compliance with all of the covenants of the indenture governing the 6.625% Senior Notes as of ~~September 30, 2014.~~March 31, 2015.

The remaining balance of the original debt service requirement under the ~~$57.0 million note payable (“2003 Revenue Bonds”) and the~~ $54.4 million note payable (“2011 Revenue Bonds”) to the Washington Economic Finance Authority (“WEDFA”) ~~matured in October 2014 and~~ will mature in October 2021 with fixed coupon rates ~~ranging from 4.10% to~~of 5.25%, ~~respectively,~~ is ~~$61.2~~

$49.4 million, of which ~~$11.8~~$6.3 million is classified as current in the accompanying consolidated balance sheet as of ~~September 30, 2014.~~March 31, 2015. The payment of principal and interest on the 2011 Revenue Bonds ~~and the 2003 Revenue Bonds~~ issued by WEDFA is non-recourse to GEO.

As of ~~September 30, 2014,~~March 31, 2015, included in current restricted cash and investments and non-current restricted cash and investments is ~~$17.1~~

$11.0 million of funds held in trust for debt service and other reserves with respect to the above mentioned ~~notes~~note payable to WEDFA.

The non-recourse obligation to the Company totaled ~~$19.1~~$14.0 million (AUD ~~21.9~~18.2 million) and ~~$23.9~~$16.4 million (AUD ~~26.9~~20.1 million), based on the exchange rates in effect at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013,~~2014, respectively. The term of the non-recourse debt is through 2017 and it bears interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary are matched by a similar or corresponding commitment from the government of the State of Victoria. As a condition of the loan, the Company is required to maintain a restricted cash balance of AUD 5.0 million, which, based on exchange rates as of ~~September 30, 2014,~~March 31, 2015, was ~~$4.4~~$3.8 million. This amount is included in non-current restricted cash and investments and the annual maturities of the future debt obligation are included in Non-Recourse Debt in the accompanying consolidated balance sheets.

In connection with a new design and build prison project agreement with the State, the Company entered into a syndicated facility agreement (the “Construction Facility”) with National Australia Bank Limited to provide debt financing for construction of the project. ~~Refer to Note 11 - Ravenhall Prison Project.~~ The Construction Facility provides for non-recourse funding up to AUD 791.0 million, or ~~$690.3~~$608.4 million, based on exchange rates as of ~~September 30, 2014.~~March 31, 2015. Construction draws will be funded throughout the project according to a fixed utilization schedule as defined in the syndicated facility agreement. The term of the Construction Facility is through October 2019 and bears interest at a variable rate quoted by certain Australian banks plus 200 basis points. After October 2019, the Construction Facility will be converted to a term loan with payments due quarterly beginning in 2018 through 2041. In accordance with the terms of the Construction Facility, upon completion and commercial acceptance of the prison, in accordance with prison contract, the State will make a lump sum payment of AUD 310 million, or ~~$270.5~~$238.4 million, based on exchange rates as of ~~September 30, 2014,~~March 31, 2015, towards a portion of the outstanding principal. The remaining outstanding principal balance will be repaid over the term of the operating agreement. As of ~~September 30, 2014, $74.2~~March 31, 2015, $107.7 million was outstanding under the Construction Facility. The Company also entered into interest rate swap and interest rate cap agreements related to its non-recourse debt in connection with the project. Refer to Note 89 - Derivative Financial Instruments.

The Company has entered into certain guarantees in connection with the financing and construction performance of a facility in ~~Australia (Refer to Note 11 - Ravenhall Prison Project).~~Australia. The obligations amounted to approximately AUD 214.0 million, or ~~$186.8~~$164.6 million, based on exchange rates as of ~~September 30, 2014.~~March 31, 2015. These guarantees are secured by outstanding letters of credit under the Company’s Revolver as of ~~September 30, 2014.~~March 31, 2015.

At ~~September 30, 2014,~~March 31, 2015, the Company also had nine other letters of credit outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling ~~$13.2~~$11.7 million.

In connection with the creation of South African Custodial Services Pty. Limited (“SACS”), the Company entered into certain guarantees related to the financing, construction and operation of the prison. As of ~~September 30, 2014,~~March 31, 2015, the Company guaranteed obligations amounting to ~~28.4~~22.0 million South African Rand, or ~~$2.5~~$1.8 million based on exchange rates as of ~~September 30, 2014.~~March 31, 2015. In the event SACS is unable to maintain the required funding in a rectification account maintained for the payment of certain costs in

the event of contract termination, a previously existing guarantee by the Company for the shortfall will need to be re-instated. The remaining guarantee of ~~28.4~~21.0 million South African Rand is secured by outstanding letters of credit under the Company’s Revolver as of ~~September 30, 2014.~~March 31, 2015.

In addition to the above, the Company has also agreed to provide a loan, if required, of up to 20 million South African Rand, or ~~$1.8~~$1.7 million based on exchange rates as of ~~September 30, 2014,~~March 31, 2015, referred to as the Shareholder’s Loan, to SACS for the purpose of financing SACS’ obligations under its contract with the South African government. No amounts have been funded under the standby facility, and the Company does not currently anticipate that such funding will be required by SACS in the future. The Company’s obligations under the Shareholder’s Loan expire upon the earlier of full funding or SACS’s release from its obligations under its debt agreements. The lenders’ ability to draw on the Shareholder’s Loan is limited to certain circumstances, including termination of the contract.

The Company has also guaranteed certain obligations of SACS to the security trustee for SACS’ lenders. The Company secured its guarantee to the security trustee by ceding its rights to claims against SACS in respect of any loans or other finance agreements, and by pledging the Company’s shares in SACS. The Company’s liability under the guarantee is limited to the cession and pledge of shares. The guarantee expires upon expiration of the cession and pledge agreements.

In connection with a design, build, finance and maintenance contract for a facility in Canada, the Company guaranteed certain potential tax obligations of a trust. The potential estimated exposure of these obligations is Canadian Dollar (“CAD”) 2.5 million, or ~~$2.2~~$2.0 million, based on exchange rates as of ~~September 30, 2014,~~March 31, 2015, commencing in 2017. The Company has a liability of $2.0 million related to this exposure included in Other Non-Current Liabilities as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013,~~2014, respectively. To secure this guarantee, the Company purchased Canadian dollar denominated securities with maturities matched to the estimated tax obligations in 2017 to 2021. The Company has recorded an asset equal to the current fair value of those securities included in Other Non-Current Assets as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 on its consolidated balance sheets. The Company does not currently operate or manage this facility.

In connection with the creation of GEOAmey, the Company and its joint venture partner guarantee the availability of working capital in equal proportion to ensure that GEOAmey can comply with current and future contractual commitments related to the performance of its operations. The Company and the 50% joint venture partner have each extended a £12 million line of credit of which ~~£12.0~~£10.5 million, or ~~$19.5~~$15.6 million, based on exchange rates as of ~~September 30, 2014,~~March 31, 2015, was outstanding as of ~~September 30, 2014.~~March 31, 2015. The Company’s maximum exposure relative to the joint venture is its note receivable of ~~$19.5~~$15.6 million, which is included in OtherNon-Current Assets in the accompanying consolidated balance sheets, and future financial support necessary to guarantee performance under the contract.

Except as discussed above, the Company does not have any off balance sheet arrangements.

The nature of the Company’s business exposes it to various types of third-party legal claims or litigation against the Company, including, but not limited to, civil rights claims relating to conditions of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, medical malpractice claims, product liability claims, intellectual property infringement claims, claims relating to employment matters (including, but not limited to, employment discrimination claims, union grievances and wage and hour claims), property loss claims, environmental claims, automobile liability claims, indemnification claims by its customers and other third parties, contractual claims and claims for personal injury or other damages resulting from contact with the Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company does not expect the outcome of any pending claims or legal proceedings to have a material adverse effect on its financial condition, results of operations or cash flows.

The Company currently has contractual commitments for a number of projects using Company financing. The Company’s management estimates that the cost of these existing capital projects will be ~~$224.0~~$252.1 million of which ~~$62.5~~$86.1 million was spent through the ~~third~~first quarter of ~~2014.~~2015. The Company estimates the remaining capital requirements related to these capital projects will be ~~$161.5~~$166.0 million which will be spent through ~~fiscal year 2015.~~2017. Included in these commitments is a contractual commitment to

provide a capital contribution towards the design and construction of a prison project in Ravenhall, a locality near Melbourne, Australia, in the amount of AUD ~~115.0~~115 million, or ~~$100.1~~$88.4 million, based on exchange rates as of ~~September 30, 2014. Refer to Note 11 - Ravenhall Prison Project.~~March 31, 2015. This capital contribution is expected to be made in January 2017.

Additionally, in connection with the Ravenhall Prison Project, the Company has a contractual commitment for construction of the facility and has entered into a syndicated facility agreement with National Australia Bank Limited to provide funding for the project up to AUD ~~791.0~~791 million, or ~~$690.3~~$608.4 million, based on exchange rates as of ~~September 30, 2014.~~March 31, 2015. Refer to Note 910 - Debt.

On ~~September 16, 2014,~~January 28, 2015, GEO announced that GEO ~~was awarded~~signed a contract ~~with the Department of Justice in the State of Victoria~~ for the ~~development and operation~~reactivation of ~~a new 1,300-bed capacity prison~~the company-owned, 400-bed Mesa Verde Detention Facility (the “Facility”) in ~~Ravenhall, a locality near Melbourne, Australia.~~California. The Facility will house immigration detainees under an intergovernmental service agreement between the City of McFarland and U.S. Immigration Customs and Enforcement (“ICE”).

On February 18, 2015, GEO announced the closing of its previously announced acquisition of the LCS Facilities totaling more than 6,500 beds from LCS. Refer to Note 112 - ~~Ravenhall Prison Project.~~

On September 10, 2014, GEO announced that the Company’s wholly-owned subsidiary, BI has been awarded a contract by U.S. Immigration and Customs Enforcement (“ICE”) for the continued provision of case management and supervision services under the Intensive Supervision and Appearance Program (“ISAP”). The contract has a term of five years, inclusive of option periods, effective September 8, 2014.Business Combinations.

The Company is currently marketing approximately ~~5,800~~4,386 vacant beds at five of its idle facilities to potential customers. The carrying values of these idle facilities, which are included in Property and Equipment, Net in the accompanying consolidated balance sheets, totaled ~~$185.0~~$103.9 million as of ~~September 30, 2014,~~March 31, 2015, excluding equipment and other assets that can be easily transferred for use at other facilities.

On September 16, 2014, GEO’s newly formed wholly-owned subsidiary, GEO Ravenhall Pty. Ltd. in its capacity as trustee of another newly formed wholly-owned subsidiary, GEO Ravenhall Trust (“Project Co”), signed the Ravenhall Prison Project Agreement (“Ravenhall Contract”) with the State for the development and operation of a new 1,000-bed Facility in Ravenhall, a locality near Melbourne, Australia under a Public-Private Partnership financing structure. The Facility will also have the capacity to house 1,300 inmates should the State have the need for additional beds in the future. The design and construction phase (“D&C Phase”) of the agreement began in September 2014 with completion expected towards the end of 2017. Project Co is the primary developer during the D&C Phase and has subcontracted with a bonded international design and build contractor to design and construct the Facility. Once constructed and commercially accepted, GEO’s wholly-owned subsidiary, the GEO Group Australasia Pty. Ltd. (“GEO Australia”) will operate the Facility under a 25-year management contract (“Operating Phase”). During the D&C Phase, GEO Australia will also provide construction management and consultant services to the State.

The cost of the project during the D&C Phase will be funded by debt financing along with a capital contribution by GEO expected to be contributed in January 2017. Another wholly-owned subsidiary of GEO, Ravenhall Finance Co Pty. Limited (“Finance Co”), has entered into a syndicated facility agreement with National Australia Bank Limited to provide the debt financing for the project. Refer to Note 9 - Debt. In order to fix the interest rate on this variable non-recourse debt, Finance Co has entered into interest rate swap and interest rate cap agreements. Refer to Note 8 - Derivative Financial Instruments. Upon completion and commercial acceptance of the Facility, in accordance with the Ravenhall Contract, the State will make a lump sum payment of AUD 310 million, or $270.5 million, based on exchange rates as of September 30, 2014, towards a portion of the outstanding principal.

~~The Company’s revenue recognition policy with respect to the Ravenhall Contract is as follows:~~

As the Ravenhall Contract contains multiple element arrangements where the Company is providing project development services during the D&C Phase along with facility management services during the Operating Phase, the Company follows the revenue recognition guidance under ASC 605-25,~~Multiple-Element Arrangements~~. This revenue recognition guidance related to multiple deliverables provides guidance on determining if separate contracts should be evaluated as a single arrangement and if an arrangement involves a single unit of accounting or separate units of accounting. If the arrangement is determined to have separate units, this guidance also provides guidance on how to allocate amounts received in the arrangement for revenue recognition purposes. In instances where the Company provides these project development services and subsequent facility management services, generally, the arrangement results in no delivered items at the onset of the agreement. The elements are delivered over the contract period as the project development and facility management services are performed.

The Company has determined that the significant deliverables in the arrangement during the D&C Phase (design and construction) and the Operating Phase (facility management contract) qualify as separate units of accounting. With respect to the deliverables during the Operating Phase under the management contract, the Company regularly negotiates such contracts and provides management services to customers outside of any arrangement for construction. The Company establishes per diem rates for all of its management contracts based on, amongst other factors, expected and guaranteed occupancy, costs of providing the services and desired margins. As such, the fair value of the consideration to each deliverable was determined

using the Company’s estimated selling price for the design and construction deliverable and vendor specific objective evidence for the facility management services deliverable. With regard to the general timing of revenue recognition during the Ravenhall Contract, revenue will be recognized during the D&C Phase using the percentage-of-completion method as construction and construction management services are incurred and revenue will be recognized during the Operating Phase as the services are provided over the twenty-five year term of the management agreement.

~~In accordance with ASC 605-35,~~~~Construction-Type and Production-Type Contracts~~, during the D&C Phase the Company will recognize revenue as earned on a percentage of completion basis measured by the percentage of costs incurred to date as compared to the estimated total costs for the design and construction of the Facility. Costs incurred and estimated earnings in excess of billings is classified as Contract Receivable in the accompanying consolidated balance sheets. Contract Receivable is recorded at net present value based on the timing of expected future settlement. As the primary contractor, Project Co is exposed to the various risks associated with the D&C Phase. Accordingly, the Company will record construction revenue on a gross basis and include the related cost of construction activities in Operating Expenses within the Facility Construction and Design segment. Reimbursable pass through costs are excluded from revenues and expenses. Refer to Note 1 to the consolidated financial statements included the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for the Company’s full revenue recognition policy as it relates to construction revenue.

During the Operating Phase, revenue will be recognized as services are performed under the management contract based on a fixed monthly rate. Refer to Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for the Company’s full revenue recognition policy as it relates to facility management revenue.

The Company conducts its business through four reportable business segments: the U.S. Corrections & Detention segment; the GEO ~~Community Services~~Care segment; the International Services segment; and the Facility Construction & Design segment. The Company’s segment revenues from external customers and a measure of segment profit are as follows (in thousands):


	Three Months Ended					Nine Months Ended				Three Months Ended
	September 30, 2014			September 30, 2013		September 30, 2014		September 30, 2013		March 31, 2015		March 31, 2014
Revenues:
U.S. Corrections & Detention	$	281,550		$	253,414	$	824,448	$	756,229	$	285,609	$	266,715
GEO Community Services		86,610			76,879		245,723		225,892
GEO Care											79,356		76,652
International Services		50,874			49,549		154,843		156,405		40,654		49,770
Facility Construction & Design (2)		38,866			—		38,866		—
Facility Construction & Design (1)											21,750		—

Total revenues	$	457,900		$	379,842	$	1,263,880	$	1,138,526	$	427,369	$	393,137

Operating income:
U.S. Corrections & Detention	$	67,450		$	50,826	$	190,983	$	161,550	$	63,597	$	58,810
GEO Community Services		23,504	��		17,128		61,164		53,387
International Services (1)		62			4,097		4,978		9,163
Facility Construction & Design (2)		589			—		589		—
GEO Care											18,506		15,701
International Services											1,815		2,561
Facility Construction & Design (1)											602		—

Operating income from segments	$	91,605		$	72,051	$	257,714	$	224,100	$	84,520	$	77,072

(1) In September 2014, the Company began the design and construction of a new prison contract located in Ravenhall, a locality near Melbourne, Australia. During the design and construction phase, the Company recognizes revenue as earned on a percentage of completion basis measured by the percentage of costs incurred to date as compared to estimated total costs for the design and construction of the facility. Costs incurred and estimated earnings in excess of billings is classified as Contract Receivable in the accompanying consolidated balance sheets and is recorded at the net present value based on the timing of expected future settlement.

The following is a reconciliation of the Company’s total operating income from its reportable segments to the Company’s income before income taxes and equity in earnings of affiliates (in thousands):


													Three Months Ended
	Three Months Ended						Nine Months Ended						March 31,			March 31,
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013			2015			2014
Total operating income from segments	$	91,605		$	72,051		$	257,714		$	224,100		$	84,520		$	77,072
Unallocated amounts:
General and Administrative Expenses		(28,287	)		(27,222	)		(84,937	)		(86,625	)		(31,848	)		(28,502	)
Net Interest Expense		(20,360	)		(20,485	)		(60,058	)		(58,580	)		(22,573	)		(19,920	)
Loss on Extinguishment of Debt		—			(1,451	)		—			(6,978	)

Income before income taxes and equity in earnings of affiliates	$	42,958		$	22,893		$	112,719		$	71,917		$	30,099		$	28,650

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in SACS, located in South Africa, and GEOAmey, located in the United Kingdom. Our investments in these entities are accounted for under the equity method of accounting. The Company’s investments in these entities are presented as a component of Other Non-Current Assets in the accompanying consolidated balance sheets.

The Company has recorded ~~$1.3~~$1.1 million and ~~$3.6~~$1.2 million in earnings, net of tax, for SACS operations during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and March 31, 2014, ~~respectively, and $1.3 million and $3.8 million during the three and nine months ended September 30, 2013,~~ respectively, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013,~~2014, the Company’s investment in SACS was ~~$9.2~~$8.8 million and ~~$8.1~~$8.0 million, respectively.

The Company has recorded ~~$0.3~~$0.4 million and ~~$0.6~~$0.3 million in earnings, net of tax, for GEOAmey’s operations during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and March 31, 2014, ~~respectively and $0.2 million and $0.1 million in losses during the three and nine months ended September 30, 2013, respectively,~~ which are included in equity in earnings of affiliates, net of income tax provision, in the accompanying consolidated statements of operations. As of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013,~~2014, the Company’s investment in GEOAmey was ~~$(2.4)~~$(1.7) million and ~~$(3.0)~~$(2.2) million, respectively, and represents its share of cumulative reported losses. Losses in excess of the Company’s investment have been recognized as the Company has provided certain loans and guarantees to provide financial support to GEOAmey. Refer to Note 910 - Debt.

The following table summarizes key information related to the Company’s pension plans and retirement agreements (in thousands):


							Three Months Ended			Year Ended
	Nine Months Ended September 30, 2014			Year Ended December 2013			March 31, 2015			December 2014
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period	$	20,032		$	19,761		$	25,826		$	20,032
Service cost		613			925			257			821
Interest cost		701			829			236			935
Actuarial gain		—			(1,229	)
Actuarial loss								72			4,324
Benefits paid		(219	)		(254	)		(189	)		(286	)

Projected benefit obligation, end of period	$	21,127		$	20,032		$	26,202		$	25,826

Change in Plan Assets
Plan assets at fair value, beginning of period	$	—		$	—		$	—		$	—
Company contributions		219			254			189			286
Benefits paid		(219	)		(254	)		(189	)		(286	)

Plan assets at fair value, end of period	$	—		$	—		$	—		$	—

Unfunded Status of the Plan	$	(21,127	)	$	(20,032	)	$	(26,202	)	$	(25,826	)


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013		March 31, 2015		March 31, 2014
Components of Net Periodic Benefit Cost
Service cost	$	307	$	232	$	613	$	694	$	257	$	694
Interest cost		351		207		701		622		236		622
Net loss		31		66		95		197		72		197

Net periodic pension cost	$	689	$	505	$	1,409	$	1,513	$	565	$	1,513

The long-term portion of the pension liability as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 was ~~$20.9~~$25.9 million and ~~$19.9~~$24.9 million, respectively, and is included in Other Non-Current Liabilities in the accompanying consolidated balance sheets.

In ~~June 2014,~~April 2015, the FASB issued ASU No. ~~2014-12,~~ 2015-03“~~Accounting for Share-Based Payments When~~Interest-Imputation of Interest,” which is intended to simplify the ~~Terms~~presentation of ~~an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,~~” which resolves the diverse accounting treatment of share-based payments on an award where the terms provide that the performance target could be achieved after an employee completes the requisite service period.debt issuance costs. The amendments require that debt issuance costs related to a ~~performance target that affects vesting and that could~~recognized debt liability be ~~achieved after~~presented in the ~~requisite service period be treated~~balance sheet as a ~~performance condition.~~direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in this update apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. This standard will becomeresulting from ASU No. 2015-03 are effective for ~~annual periods~~public business entities for fiscal years, and for interim periods within those ~~annual periods~~fiscal years, beginning ~~on or~~ after December 15, ~~2015.~~2015 with early adoption permitted for financial statements that have not previously been issued. The implementation of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In ~~May 2014,~~February 2015, the FASB issued ASU No. ~~2014-09,~~ 2015-02“~~Revenue~~Consolidation,” which modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and provides a scope exception from ~~Contracts~~consolidation guidance for reporting entities with ~~Customers,” which initiates a joint project between FASB and the International Accounting Standards Board (“IASB”)~~interests in legal entities that are required to ~~clarify the principles for recognizing revenue and develop a common revenue standard for U.S. GAAP and IFRS. The core principle~~comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the ~~guidance is that an entity should recognize revenue to depict the transfer~~Investment Company Act of ~~promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange~~1940 for ~~goods or services.~~registered money market funds. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contractsamendments resulting from ASU No. 2015-02 are ~~within the scope of other standards. This standard will become~~ effective for ~~annual~~public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, ~~2016, including those interim periods within that reporting period. Early~~2015 with early adoption ~~is not~~ permitted. An entity may apply the amendment in this update retrospectively to each reporting period presented, or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. The Company is in the process of evaluating whether this standard would have a material impact on the Company’s financial position, results of operations or cash flows.

~~In April 2014, the FASB issued ASU No. 2014-08, “~~~~Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,~~” which changes the requirements for reporting discontinued operations. A discontinued operation may include a component of an entity or group of components of an entity, or a business or nonprofit activity. Under the ASU, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. This standard will become effective for disposals or activities classified as held for sale that occur within annual periods beginning on or after December 15, 2014. The implementation of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

~~In January 2014, the FASB issued ASU No. 2014-05, “~~~~Service Concession Arrangements,~~” which specifies that an operating entity should not account for a service concession arrangement that falls within the scope of this update as a lease in accordance with Topic 840. An operating entity should refer to other Topics as applicable to account for various aspects of a service concession arrangement. The amendments also specify that the infrastructure used in a service concession arrangement should not be recognized as property, plant and equipment of the operating entity. A service concession arrangement is defined as an arrangement between a public-sector entity and an operating entity for which the terms provide that the operating entity will operate the public-sector entity’s infrastructure (for example, airports, roads, bridges, tunnels, prisons and hospitals) for a specified period of time. This standard will become effective for annual periods, and interim periods within those annual periods, beginning after December 31, 2014. The implementation of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

On November 5, 2014, the Board of Directors declared a quarterly cash dividend of $0.62 per share of common stock, which is to be paid on November 26, 2014 to shareholders of record as of the close of business on November 17, 2014.

As of ~~September 30, 2014,~~March 31, 2015, the Company’s 6.625% Senior Notes, 5.125% Senior Notes, 5 7/8% Senior Notes and 5.875% Senior Notes were fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company and certain of its wholly-owned domestic subsidiaries (the “Subsidiary Guarantors”). The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(d) of Regulation S-X promulgated under the Securities Act, presents the condensed consolidating financial information separately for:


	For the Three Months Ended September 30, 2014															For the Three Months Ended March 31, 2015
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated			The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	141,631		$	337,769		$	92,300		$	(113,800	)	$	457,900		$	144,383		$	339,887		$	64,967		$	(121,868	)	$	427,369
Operating expenses		115,580			257,645			82,791			(113,800	)		342,216			116,225			268,781			54,771			(121,868	)		317,909
Depreciation and amortization		6,395			16,554			1,130			—			24,079			6,203			17,697			1,040			—			24,940
General and administrative expenses		8,352			14,295			5,640			—			28,287			10,323			16,880			4,645			—			31,848

Operating income		11,304			49,275			2,739			—			63,318			11,632			36,529			4,511			—			52,672
Interest income		5,593			966			953			(6,464	)		1,048			6,178			1,231			2,137			(7,473	)		2,073
Interest expense		(11,716	)		(14,258	)		(1,898	)		6,464			(21,408	)		(14,310	)		(14,636	)		(3,173	)		7,473			(24,646	)

Income before income taxes and equity in earnings of affiliates		5,181			35,983			1,794			—			42,958			3,500			23,124			3,475			—			30,099
Income tax provision		—			4,528			1,009			—			5,537			—			1,740			1,088			—			2,828
Equity in earnings of affiliates, net of income tax provision		—			—			1,544			—			1,544			—			—			1,485			—			1,485

Income before equity in income of consolidated subsidiaries		5,181			31,455			2,329			—			38,965			3,500			21,384			3,872			—			28,756
Income from consolidated subsidiaries, net of income tax provision		33,784			—			—			(33,784	)		—			25,256			—			—			(25,256	)		—

Net income		38,965			31,455			2,329			(33,784	)		38,965			28,756			21,384			3,872			(25,256	)		28,756
Net loss attributable to noncontrolling interests		—			—			26			—			26			—			—			21						21

Net income attributable to The GEO Group, Inc.	$	38,965		$	31,455		$	2,355		$	(33,784	)	$	38,991		$	28,756		$	21,384		$	3,893		$	(25,256	)	$	28,777


Net income	$	38,965		$	31,455		$	2,329		$	(33,784	)	$	38,965		$	28,756		$	21,384		$	3,872		$	(25,256	)	$	28,756
Other comprehensive income (loss), net of tax		—			19			(8,002	)		—			(7,983	)		—			40			(5,761	)		—			(5,721	)

Total comprehensive income (loss)	$	38,965		$	31,474		$	(5,673	)	$	(33,784	)	$	30,982		$	28,756		$	21,424		$	(1,889	)	$	(25,256	)	$	23,035
Comprehensive loss attributable to noncontrolling interests		—			—			49			—			49			—			—			37			—			37

Comprehensive income (loss) attributable to The GEO Group, Inc.	$	38,965		$	31,474		$	(5,624	)	$	(33,784	)	$	31,031		$	28,756		$	21,424		$	(1,852	)	$	(25,256	)	$	23,072

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~


	��	For the Nine Months Ended September 30, 2013															For the Three Months Ended March 31, 2014
		The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated			The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues		$	363,508		$	927,893		$	165,553		$	(318,428	)	$	1,138,526		$	134,754		$	314,985		$	52,331		$	(108,933	)	$	393,137
Operating expenses			317,189			712,814			132,371			(318,428	)		843,946			107,222			250,680			42,954			(108,933	)		291,923
Depreciation and amortization			17,963			48,849			3,668			—			70,480			6,406			16,634			1,102			—			24,142
General and administrative expenses			26,589			47,926			12,110			—			86,625			9,339			15,536			3,627			—			28,502

Operating income			1,767			118,304			17,404			—			137,475			11,787			32,135			4,648			—			48,570
Interest income			19,347			1,291			3,199			(20,404	)		3,433			5,536			436			679			(5,919	)		732
Interest expense			(30,942	)		(44,467	)		(7,008	)		20,404			(62,013	)		(11,074	)		(13,763	)		(1,734	)		5,919			(20,652	)

Loss on early extinguishment of debt			(2,600	)		(4,378	)		—			—			(6,978	)

Income (loss) before income taxes and equity in earnings of affiliates			(12,428	)		70,750			13,595			—			71,917
Income tax (benefit) provision			(14,679	)		(2,668	)		3,205			—			(14,142	)
Income before income taxes and equity in earnings of affiliates																		6,249			18,808			3,593			—			28,650
Income tax provision																		—			1,294			844			—			2,138
Equity in earnings of affiliates, net of income tax provision			—			—			3,772			—			3,772			—			—			1,484			—			1,484

Income before equity in income of consolidated subsidiaries			2,251			73,418			14,162			—			89,831			6,249			17,514			4,233			—			27,996
Income from consolidated subsidiaries, net of income tax provision (benefit)			87,580			—			—			(87,580	)		—

Income from continuing operations			89,831			73,418			14,162			(87,580	)		89,831
Net income from discontinued operations			(2,265	)		—			—			—			(2,265	)


Income from consolidated subsidiaries, net of income tax provision																		21,747			—			—			(21,747	)		—

Net income			87,566			73,418			14,162			(87,580	)		87,566			27,996			17,514			4,233			(21,747	)		27,996
Net income attributable to noncontrolling interests			—			—			(42	)		—			(42	)		—			—			(6	)		—			(6	)

Net income attributable to The GEO Group, Inc.		$	87,566		$	73,418		$	14,120		$	(87,580	)	$	87,524		$	27,996		$	17,514		$	4,227		$	(21,747	)	$	27,990


Net income		$	87,566		$	73,418		$	14,162		$	(87,580	)	$	87,566		$	27,996		$	17,514		$	4,233		$	(21,747	)	$	27,996
Other comprehensive income, net of tax			—			121			(5,912	)		—			(5,791	)		—			19			1,027			—			1,046

Total comprehensive income			87,566			73,539			8,250			(87,580	)		81,775		$	27,996		$	17,533		$	5,260		$	(21,747	)	$	29,042
Comprehensive income attributable to noncontrolling interests			—			—			38			—			38
Comprehensive loss attributable to noncontrolling interests																		—			—			(2	)		—			(2	)

Comprehensive income attributable to The GEO Group, Inc.		$	87,566		$	73,539		$	8,288		$	(87,580	)	$	81,813		$	27,996		$	17,533		$	5,258		$	(21,747	)	$	29,040


		As of September 30, 2014
		The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated			As of March 31, 2015
																The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS	ASSETS														ASSETS
Cash and cash equivalents		$	19,095		$	4,744	$	28,841		$	—		$	52,680		$	12,962		$	12,433	$	43,586	$	—		$	68,981
Restricted cash and investments			—			—		14,448			—			14,448			—			—		8,489		—			8,489
Accounts receivable, less allowance for doubtful accounts			94,598			148,909		23,261			—			266,768			97,109			150,561		13,610		—			261,280
Current deferred income tax assets			—			19,236		1,700			—			20,936			—			21,657		4,227		—			25,884
Prepaid expenses and other current assets			9,396			13,496		16,705			(1,154	)		38,443			5,545			21,853		18,176		(1,154	)		44,420

Total current assets			123,089			186,385		84,955			(1,154	)		393,275			115,616			206,504		88,088		(1,154	)		409,054

Restricted Cash and Investments			212			13,231		7,917			—			21,360			126			15,175		7,916		—			23,217
Property and Equipment, Net			715,243			957,561		84,258			—			1,757,062			738,622			1,085,096		83,345		—			1,907,063
Contract Receivable			—			—		51,998			—			51,998			—			—		87,042		—			87,042
Direct Finance Lease Receivable			—			—		11,584			—			11,584			—			—		7,077		—			7,077
Intercompany Receivable			962,384			139,381		—			(1,101,765	)		—			963,417			138,933		—		(1,102,350	)		—
Non-Current Deferred Income Tax Assets			—			—		4,821			—			4,821			—			—		5,873		—			5,873
Goodwill			34			493,391		650			—			494,075			34			600,731		440		—			601,205
Intangible Assets, Net			—			158,022		1,091			—			159,113			—			223,194		977		—			224,171
Investment in Subsidiaries			853,693			438,141		(70	)		(1,291,764	)		—			1,146,712			238,847		—		(1,385,559	)		—
Other Non-Current Assets			25,987			106,666		51,986			(79,960	)		104,679			24,635			111,702		46,957		(80,075	)		103,219

Total Assets		$	2,680,642		$	2,492,778	$	299,190		$	(2,474,643	)	$	2,997,967		$	2,989,162		$	2,620,182	$	327,715	$	(2,569,138	)	$	3,367,921


LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY														LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		$	9,642		$	48,855	$	3,071		$	—		$	61,568		$	8,471		$	49,757	$	2,307	$	—		$	60,535
Accrued payroll and related taxes			—			34,649		15,582			—			50,231			—			42,159		13,692		—			55,851
Accrued expenses and other			36,541			77,763		16,225			(1,154	)		129,375			41,609			67,228		28,138		(1,154	)		135,821
Current portion of capital lease obligations, long-term debt and non-recourse debt			3,000			1,110		18,365			—			22,475			3,001			1,241		12,406		—			16,648

Total current liabilities			49,183			162,377		53,243			(1,154	)		263,649			53,081			160,385		56,543		(1,154	)		268,855

Non-Current Deferred Income Tax Liabilities			(2,675	)		17,347		17			—			14,689			(4,351	)		14,414		5		—			10,068
Intercompany Payable			129,832			957,569		14,364			(1,101,765	)		—			114,710			971,134		16,506		(1,102,350	)		—
Other Non-Current Liabilities			4,674			139,016		10,389			(79,960	)		74,119			4,301			142,741		32,699		(80,075	)		99,666
Capital Lease Obligations			—			10,132		—			—			10,132			—			9,574		—		—			9,574
Long-Term Debt			1,433,279			—		—			—			1,433,279			1,795,267			—		—		—			1,795,267
Non-Recourse Debt			—			—		135,347			—			135,347			—			—		158,060		—			158,060
Commitments & Contingencies and Other
Shareholders’ Equity:
The GEO Group, Inc. Shareholders’ Equity			1,066,349			1,206,337		85,427			(1,291,764	)		1,066,349			1,026,154			1,321,934		63,625		(1,385,559	)		1,026,154
Noncontrolling Interests			—			—		403			—			403			—			—		277		—			277

Total Shareholders’ Equity			1,066,349			1,206,337		85,830			(1,291,764	)		1,066,752			1,026,154			1,321,934		63,902		(1,385,559	)		1,026,431

Total Liabilities and Shareholders’ Equity		$	2,680,642		$	2,492,778	$	299,190		$	(2,474,643	)	$	2,997,967		$	2,989,162		$	2,620,182	$	327,715	$	(2,569,138	)	$	3,367,921


		As of December 31, 2013
		The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries		Eliminations			Consolidated			As of December 31, 2014
															The GEO Group, Inc.			Combined Subsidiary Guarantors		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS	ASSETS													ASSETS
Cash and cash equivalents		$	30,730		$	985	$	20,410	$	—		$	52,125		$	18,492		$	782	$	22,063		$	—		$	41,337
Restricted cash and investments			—			—		11,518		—			11,518			—			—		4,341			—			4,341
Accounts receivable, less allowance for doubtful accounts			84,087			149,239		17,204		—			250,530			92,456			159,505		17,077			—			269,038
Current deferred income tax assets			—			19,236		1,700		—			20,936			—			21,657		4,227			—			25,884
Prepaid expenses and other current assets			17,834			21,032		11,524		(1,154	)		49,236			7,022			19,593		11,345			(1,154	)		36,806

Total current assets			132,651			190,492		62,356		(1,154	)		384,345			117,970			201,537		59,053			(1,154	)		377,406

Restricted Cash and Investments			167			11,158		7,024		—			18,349			228			13,729		5,621			—			19,578
Property and Equipment, Net			686,005			956,724		85,069		—			1,727,798			726,238			961,896		84,032			—			1,772,166
Direct Finance Lease Receivable			—			—		16,944		—			16,944			—			—		9,256			—			9,256
Contract Receivable																—			—		66,229						66,229
Intercompany Receivable			947,916			123,237		—		(1,071,153	)		—			962,314			119,414		—			(1,081,728	)		—
Non-Current Deferred Income Tax Assets			—			—		4,821		—			4,821			—			—		5,873			—			5,873
Goodwill			34			489,501		661		—			490,196			34			493,389		467			—			493,890
Intangible Assets, Net			—			162,160		1,240		—			163,400			—			154,237		1,038			—			155,275
Investment in Subsidiaries			898,333			421,218		—		(1,319,551	)		—			855,870			438,243		—			(1,294,113	)		—
Other Non-Current Assets			23,346			104,241		35,615		(79,691	)		83,511			25,635			110,105		46,838			(80,043	)		102,535

Total Assets		$	2,688,452		$	2,458,731	$	213,730	$	(2,471,549	)	$	2,889,364		$	2,688,289		$	2,492,550	$	278,407		$	(2,457,038	)	$	3,002,208


LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY													LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		$	29,866		$	13,895	$	3,525	$	—		$	47,286		$	7,549		$	47,130	$	3,476		$	—		$	58,155
Accrued payroll and related taxes			207			23,470		15,049		—			38,726			—			24,184		14,372			—			38,556
Accrued expenses and other			26,963			74,645		14,496		(1,154	)		114,950			47,637			75,574		18,555			(1,154	)		140,612
Current portion of capital lease obligations, long-term debt and non-recourse debt			3,000			1,185		17,978		—			22,163			3,001			1,170		12,581			—			16,752

Total current liabilities			60,036			113,195		51,048		(1,154	)		223,125			58,187			148,058		48,984			(1,154	)		254,075

Non-Current Deferred Income Tax Liabilities			(120	)		14,792		17		—			14,689			(4,095	)		14,170		(7	)		—			10,068
Intercompany Payable			114,208			942,666		14,279		(1,071,153	)		—			121,327			942,071		18,330			(1,081,728	)		—
Other Non-Current Liabilities			5,270			138,743		639		(79,691	)		64,961			4,372			143,584		19,507			(80,034	)		87,429
Capital Lease Obligations			—			10,924		—		—			10,924			—			9,856		—			—			9,856
Long-Term Debt			1,485,536			—		—		—			1,485,536			1,462,819			—		—			—			1,462,819
Non-Recourse Debt			—			—		66,153		—			66,153			—			—		131,968			—			131,968
Commitments & Contingencies and Other
Shareholders’ Equity:
The GEO Group, Inc. Shareholders’ Equity			1,023,522			1,238,411		81,140		(1,319,551	)		1,023,522			1,045,679			1,234,811		59,311			(1,294,122	)		1,045,679
Noncontrolling Interests			—			—		454		—			454			—			—		314			—			314

Total Shareholders’ Equity			1,023,522			1,238,411		81,594		(1,319,551	)		1,023,976			1,045,679			1,234,811		59,625			(1,294,122	)		1,045,993

Total Liabilities and Shareholders’ Equity		$	2,688,452		$	2,458,731	$	213,730	$	(2,471,549	)	$	2,889,364		$	2,688,289		$	2,492,550	$	278,407		$	(2,457,038	)	$	3,002,208


	For the Nine Months Ended September 30, 2014												For the Three Months Ended March 31, 2015
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated			The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:

Net cash provided by operating activities	$	149,460		$	53,506		$	(38,341	)	$	164,625		$	35,300		$	30,416		$	(4,971	)	$	60,745

Cash Flow from Investing Activities:
Acquisition of Protocol, cash consideration		—			(13,025	)		—			(13,025	)
Acquisition of LCS, net of cash acquired														(307,403	)		—			—			(307,403	)
Proceeds from sale of property and equipment		—			515			—			515			—			20			—			20
Insurance proceeds - damaged property														—			700			—			700
Change in restricted cash and investments		(212	)		(2,073	)		(3,767	)		(6,052	)		102			(6,443	)		(1,767	)		(8,108	)
Capital expenditures		(41,020	)		(34,432	)		(2,261	)		(77,713	)		(20,561	)		(13,042	)		(595	)		(34,198	)

Net cash used in investing activities		(41,232	)		(49,015	)		(6,028	)		(96,275	)		(327,862	)		(18,765	)		(2,362	)		(348,989	)

Cash Flow from Financing Activities:
Proceeds from long-term debt		459,384			—			—			459,384			371,000			—			—			371,000
Payments on long-term debt		(508,400	)		(732	)		—			(509,132	)		(38,750	)		—			—			(38,750	)
Payments on non-recourse debt		—			—			(4,511	)		(4,511	)		—			—			(1,645	)		(1,645	)
Proceeds from non-recourse debt		—			—			74,191			74,191			—			—			33,019			33,019
Taxes paid related to net share settlements of equity awards		(1,844	)		—			—			(1,844	)		(1,123	)		—			—			(1,123	)
Proceeds from reissuance of treasury stock in connection with ESPP		277			—			—			277			98			—			—			98
Issuance of common stock under prospectus supplement		54,724			—			—			54,724
Debt issuance costs		(7,802	)		—			(15,706	)		(23,508	)		—			—			(1,245	)		(1,245	)
Tax benefit related to equity compensation		1,498			—			—			1,498			569			—			—			569
Proceeds from stock options exercised		6,384			—			—			6,384			1,215			—			—			1,215
Cash dividends paid		(124,084	)		—			—			(124,084	)		(45,977	)		—			—			(45,977	)

Net cash used in financing activities		(119,863	)		(732	)		53,974			(66,621	)
Net cash provided by financing activities														287,032			—			30,129			317,161

Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			(1,174	)		(1,174	)		—			—			(1,273	)		(1,273	)

Net Increase (Decrease) in Cash and Cash Equivalents		(11,635	)		3,759			8,431			555			(5,530	)		11,651			21,523			27,644
Cash and Cash Equivalents, beginning of period		30,730			985			20,410			52,125			18,492			782			22,063			41,337

Cash and Cash Equivalents, end of period	$	19,095		$	4,744		$	28,841		$	52,680		$	12,962		$	12,433		$	43,586		$	68,981


	For the Nine Months Ended September 30, 2013												For the Three Months Ended March 31, 2014
	The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated			The GEO Group, Inc.			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Cash provided by operating activities - continuing operations	$	110,143		$	30,302		$	15,110		$	155,555
Cash provided by operating activities - discontinued operations		2,265			—			—			2,265

Net cash provided by operating activities		112,408			30,302			15,110			157,820		$	28,511		$	25,116		$	9,525		$	63,152

Cash Flow from Investing Activities:
Proceeds from sale of property and equipment		—			204			—			204			—			165			—			165
Proceeds from sale of assets held for sale		—			1,968			—			1,968
Net working capital adjustment from RTS divestiture		(996	)		—			—			(996	)
Acquisition of Protocol, cash consideration														—			(13,000	)		—			(13,000	)
Change in restricted cash and investments		(149	)		(2,055	)		16,180			13,976			(185	)		(549	)		(2,539	)		(3,273	)
Capital expenditures		(71,848	)		(27,967	)		(1,635	)		(101,450	)		(8,586	)		(8,642	)		(303	)		(17,531	)

Net cash used in investing activities		(72,993	)		(27,850	)		14,545			(86,298	)		(8,771	)		(22,026	)		(2,842	)		(33,639	)

Cash Flow from Financing Activities:
Proceeds from long-term debt		842,000			—			—			842,000			103,000			—			—			103,000
Payments on long-term debt		(741,313	)		(890	)		—			(742,203	)		(108,750	)		(240	)		—			(108,990	)
Payments on non-recourse debt		—			—			(27,153	)		(27,153	)		—			—			(1,403	)		(1,403	)
Proceeds from non-recourse debt		—			—			—			—
Proceeds from reissuance of treasury stock in connection with ESPP		228			—			—			228			84			—			—			84
Debt issuance costs		(19,317	)		—			—			(19,317	)
Tax benefit related to equity compensation		1,883			—			—			1,883			558			—			—			558
Proceeds from stock options exercised		4,941			—			—			4,941			3,275			—			—			3,275
Cash dividends paid		(107,526	)		—			—			(107,526	)		(41,139	)		—			—			(41,139	)

Net cash provided by (used in) financing activities		(19,104	)		(890	)		(27,153	)		(47,147	)
Net cash used in financing activities														(42,972	)		(240	)		(1,403	)		(44,615	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			(2,969	)		(2,969	)		—			—			1,040			1,040

Net Increase in Cash and Cash Equivalents		20,311			1,562			(467	)		21,406
Net Increase (Decrease) in Cash and Cash Equivalents														(23,232	)		2,850			6,320			(14,062	)
Cash and Cash Equivalents, beginning of period		4,764			1,917			25,074			31,755			30,730			985			20,410			52,125

Cash and Cash Equivalents, end of period	$	25,075		$	3,479		$	24,607		$	53,161		$	7,498		$	3,835		$	26,730		$	38,063

On April 29, 2015, the Board of Directors declared a quarterly cash dividend of $0.62 per share of common stock, which is to be paid on May 21, 2015 to shareholders of record as of the close of business on May 11, 2015.

On April 28, 2015, the Company announced that it has begun to mobilize the company-owned 1,740-bed North Lake Correctional Facility (the “North Lake Facility”) located in Baldwin, Michigan. The decision to mobilize the North Lake Facility was made as a result of the current demand for out-of-state correctional bed space. The mobilization effort will entail hiring staff and purchasing supplies in order to prepare the previously idle North Lake Facility to receive inmates. The Company currently does not have a contract to house inmates at the North Lake Facility, but believes that it may secure one or more contracts in the near future and expects it may need to activate the North Lake Facility in the next sixty to ninety days.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking” statements are any statements that are not based on historical information. Statements other than statements of historical facts included in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are “forward-looking” statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and we can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or “cautionary statements,” include, but are not limited to:

We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q.

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these ~~forward-looking~~forward- looking statements as a result of numerous factors including, but not limited to, those described above under “Forward Looking Information”, those described below under “Part II - Item 1A. Risk Factors” and under “Part I - Item 1A. Risk Factors” in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2013.~~2014. The discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

We are a real estate investment trust (“REIT”) specializing in the ownership, leasing and management of correctional, detention and ~~re-entry~~reentry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, and the United ~~Kingdom and Canada.~~Kingdom. We own, lease and operate a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, and community based ~~re-entry~~reentry facilities. We offer counseling, education and/or treatment to inmates with alcohol and drug abuse problems at most of the domestic facilities we manage. We are also a provider of innovative compliance technologies, ~~industry-leading~~industry- leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants.

Our worldwide operations include the management and/or ownership of approximately ~~78,500~~86,000 beds at 98106 correctional, detention and ~~re-entry~~reentry facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and March 31, 2014, ~~and September 30, 2013,~~ we had consolidated revenues of ~~$1,263.9~~$427.4 million and ~~$1,138.5~~$393.1 million, respectively, and we maintained an average company wide facility occupancy rate of ~~96.1%~~93.0% including ~~72,682~~80,898 active beds and excluding ~~5,756~~4,680 beds marketed to potential customers for the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, and ~~94.8%~~95.5% including ~~67,178~~71,239 active beds and excluding ~~6,016~~5,756 idle beds marketed to potential customers for the ~~nine~~three months ended ~~September 30, 2013.~~March 31, 2014.

As a REIT, we are required to distribute annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and by excluding net capital gain) and we began paying regular quarterly REIT dividends in 2013. The amount, timing and frequency of future dividends, however, will be at the sole discretion of our Board of Directors (the “Board”) and will be declared based upon various factors, many of which are beyond our control, including, our financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, limitations on our ability to fund distributions using cash generated through our taxable REIT subsidiaries (“TRSs”) and other factors that our Board may deem relevant.

During the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and the year ended December 31, ~~2013,~~2014, respectively, we declared and paid the following regular cash distributions to our shareholders as follows:


Declaration Date	Payment Due	Record Date	Distribution Per Share		Aggregate Payment Amount (in millions)		Record Date	Payment Due	Distribution Per Share		Aggregate Payment Amount (in millions)

January 17, 2013	March 1, 2013	February 15, 2013	$	0.50	$	35.7

May 7, 2013	June 3, 2013	May 20, 2013	$	0.50	$	35.8

July 30, 2013	August 29, 2013	August 19, 2013	$	0.50	$	36.1

November 1, 2013	November 26, 2013	November 14, 2013	$	0.55	$	39.6

February 18, 2014	March 14, 2014	March 3, 2014	$	0.57	$	41.1	March 3, 2014	March 14, 2014	$	0.57	$	41.1

April 28, 2014	May 27, 2014	May 15, 2014	$	0.57	$	41.5	May 15, 2014	May 27, 2014	$	0.57	$	41.5

August 5, 2014	August 29, 2014	August 18, 2014	$	0.57	$	41.4	August 18, 2014	August 29, 2014	$	0.57	$	41.4
November 5, 2014							November 17, 2014	November 26, 2014	$	0.62	$	46.0
February 6, 2015							February 17, 2015	February 27, 2015	$	0.62	$	46.0

On ~~November 5, 2014, the~~April 29, 2015, our Board of Directors declared a quarterly cash dividend of $0.62 per share of common stock, which is to be paid on ~~November 26, 2014~~May 21, 2015 to shareholders of record as of the close of business on ~~November 17, 2014.~~May 11, 2015.

Reference is made to Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on ~~March 3, 2014,~~February 26, 2015, for further discussion and analysis of information pertaining to our financial condition and results of operations as of and for the fiscal year ended December 31, ~~2013.~~2014.

We are currently marketing approximately ~~5,800~~4,386 vacant beds at five of our idle facilities to potential customers. The carrying values of these idle facilities totaled approximately ~~$185~~$103.9 million as of ~~September 30, 2014,~~March 31, 2015, excluding equipment and other assets that can be easily transferred for use at other facilities.

On ~~February 3, 2014,~~January 28, 2015, we announced that we assumed management of the 985-bed Moore Haven Correctional Facility, the 985-bed Bay Correctional Facility, and the 1,884-bed Graceville Correctional Facility under contracts with the Florida Department of Management Services effective February 1, 2014. The facilities are expected to generate approximately $56 million in combined annualized revenues at full occupancy.

On February 3, 2014, we announced that we had increased the contracted capacity at the Company-owned Rio Grande Detention Center in Laredo, Texas from 1,500 to 1,900 beds under a contract with the U.S. Marshals Service. The 1,900-bed center is expected to generate approximately $38 million in total annualized revenues at full capacity.

~~On April 1, 2014, we announced that we had~~ signed a contract ~~with the California Department of Corrections and Rehabilitation~~ for the reactivation of our ~~Company-owned, 260-bed McFarland Female Community Reentry~~company-owned, 400-bed Mesa Verde Detention Facility ~~located~~(the “Mesa VerdeFacility”) in ~~McFarland,~~ California. The ~~facility is expected~~Mesa Verde Facility will house immigration detainees under an intergovernmental service agreement between the City of McFarland and U.S. Immigration Customs and Enforcement (“ICE”).

On February 18, 2015, we announced the closing of our previously announced acquisition of eight correctional and detention facilities (the “LCS Facilities”) totaling more than 6,500 beds from LCS Corrections Services, Inc. and its affiliates (collectively, “LCS”). Refer to ~~generate approximately $9 million~~Note 2 - Business Combinations included in ~~annualized revenues.~~Part I, Item 1 of this Quarterly Report on Form 10-Q.

On April ~~30, 2014,~~28, 2015, we announced that we ~~had signed an amendment~~have begun to mobilize our company-owned 1,740-bed North Lake Correctional Facility (the “North Lake Facility”) located in Baldwin, Michigan. The decision to mobilize the ~~existing contract with~~North Lake Facility was made as a result of the ~~City of Adelanto, California~~current demand for ~~a 640-bed expansion~~out-of-state correctional bed space. The mobilization effort will entail hiring staff and purchasing supplies in order to ~~our Company-owned, 1,300-bed Adelanto Detention Facility. The facility is expected~~prepare the previously idle North Lake Facility to ~~generate approximately $21 million in additional annualized revenues.~~

~~On September 10, 2014, we announced our wholly-owned subsidiary, BI Incorporated (“BI”) has been awarded~~receive inmates. We currently do not have a contract ~~by ICE for~~to house inmates at the ~~continued provision of case management and supervision services under ISAP. The contract is expected to generate approximately $47 million in annualized revenues.~~

On September 16, 2014, our newly formed wholly-owned subsidiary, GEO Ravenhall Pty. Ltd. in its capacity as trustee of another newly formed wholly-owned subsidiary, GEO Ravenhall Trust (“Project Co”), signed the Ravenhall Prison Project Agreement (“Ravenhall Contract”) with the Department of JusticeNorth Lake Facility, but we believe that we may secure one or more contracts in the ~~State of Victoria (the “State”) for~~near future and expect we may need to activate the ~~development and operation of a new 1,000-bed Prison (the “Facility”) in Ravenhall, a locality near Melbourne, Australia under a Public-Private~~

~~Partnership financing structure. The~~North Lake Facility ~~will also have the capacity to house 1,300 inmates should the State have the need for additional beds~~ in the future. We will provide an equity investment of approximately 20% of the project following the activation of the facility and we anticipate returns on investment consistent with the Company-owned facilities. The design and construction phase (“D&C Phase”) of the agreement began in September 2014 with expected completion towards the end of 2017. Once constructed and commercially accepted, our wholly-owned subsidiary, the GEO Group Australasia Pty. Ltd. (“GEO Australia”) will operate the Facility under a 25-year management contract (“Operating Phase”). We believe the Facility will provide unprecedented levels of in-prisons and post-release programs aimed at reducing reoffending rates and helping offenders reintegrate back into society.next sixty to ninety days.

The accompanying unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We routinely evaluate our estimates based on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, we did not experience any significant changes in estimates or judgments inherent in the preparation of our consolidated financial statements. A summary of our significant accounting policies is contained in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, 2013. There have been no changes to our significant accounting policies except as described in Note 11 - Ravenhall Prison Project of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.2014.

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the notes to our unaudited consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q. The terms Third Quarter 2014 and Third Quarter 2013 used herein refer to the quarter ended September 30, 2014 and September 30, 2013, respectively. The terms Nine Months 2014 and Nine Months 2013 used herein refer to the nine months ended September 30, 2014 and September 30, 2013, respectively.

Comparison of ~~the Third Quarter~~Three Months Ended March 31, 2015 and Three Months Ended March 31, 2014 ~~and the Third Quarter 2013~~


	2014		% of Revenue			2013		% of Revenue			$ Change		% Change			2015		% of Revenue			2014		% of Revenue			$ Change			% Change
	(Dollars in thousands)																				(Dollars in thousands)
U.S. Corrections & Detention	$	281,550		61.5	%	$	253,414		66.8	%	$	28,136		11.1	%	$	285,609		66.8	%	$	266,715		67.8	%	$	18,894			7.1	%
GEO Community Services		86,610		18.9	%		76,879		20.2	%		9,731		12.7	%
GEO Care																	79,356		18.6	%		76,652		19.5	%		2,704			3.5	%
International Services		50,874		11.1	%		49,549		13.0	%		1,325		2.7	%		40,654		9.5	%		49,770		12.7	%		(9,116	)		(18.3	)%
Facility Construction & Design		38,866		8.5	%		—		—	%		38,866		100.0	%		21,750		5.1	%		—		—	%		21,750			100.0	%

Total	$	457,900		100.0	%	$	379,842		100.0	%	$	78,058		20.6	%	$	427,369		100.0	%	$	393,137		100.0	%	$	34,232			8.7	%

Revenues increased in the ~~Third Quarter 2014~~Three Months Ended March 31, 2015 compared to the ~~Third Quarter 2013~~Three Months Ended March 31, 2014 primarily due to aggregate increases of ~~$22.0~~$10.7 million resulting from: (i) the activation and intake of detainees at our Alexandria Staging facility in November 2014; (ii) the activation and intake of inmates at our McFarland Female Community Reentry facility; and (iii) the ~~Central Valley, Desert View and McFarland correctional facilities, as well as our 100-bed expansion~~acquisition of the ~~Company-owned Golden State correctional facility,~~LCS Facilities in ~~the fourth quarter of 2013; and (ii) our assumption of the management of the Moore Haven, Bay and Graceville correctional facilities in the first quarter of 2014.~~February 2015. We also experienced aggregate increases in revenues of ~~$11.0~~$8.2 million at certain of our facilities primarily due to net increases in population, transportation services and/or rates. ~~These increases were partially offset by an aggregate decrease of $4.9 million primarily due to contract terminations.~~

The number of compensated mandays in U.S. Corrections & Detention facilities was approximately 4.8 million in the ~~Third Quarter 2014~~Three Months Ended March 31, 2015 and ~~4.3~~4.5 million in the ~~Third Quarter 2013.~~Three Months Ended March 31, 2014. We experienced an aggregate net increase of approximately ~~473,000~~245,000 mandays as a result of our new contracts discussed above. These increases were partially offset by decreases resulting from lower populations at certain facilities. We look at the average occupancy in our facilities to determine how we are managing our

~~available beds. The average occupancy is calculated by taking compensated mandays as a percentage of capacity. The average occupancy in our U.S. Corrections & Detention facilities was 97.0%~~ and ~~94.4% of capacity in the Third Quarter 2014 and the Third Quarter 2013 respectively, excluding idle facilities.~~

The increase in revenues for GEO Community Services in the Third Quarter 2014 compared to the Third Quarter 2013 is primarily attributable to net increases of $8.1 million due to increased counts in our electronic monitoring contracts and ISAP program at BI and BI’sbusiness acquisition of Protocol in the first quarter of 2014. In addition, we experienced a net increase of $1.9 million primarily due to new programs and program growth at our community based and re-entry centers. These increases were partially offset by decreases in revenues of $0.3 million related to contract terminations and census declines at certain facilities.

The slight increase in revenues for International Services in the Third Quarter 2014 compared to the Third Quarter 2013 is primarily due an aggregate net increase of $2.7 million primarily attributable to our Australian subsidiary related to population increases, contractual increases linked to the inflationary index and the provision of additional services under certain contracts. Revenues also increased by $0.3 million due to the impact of foreign currency exchange rate fluctuations. This increase was partially offset by a decrease in revenue of $1.7 million in our United Kingdom subsidiary due to the winding down of our Harmondworth management contract.

The increase in revenues for our Facility Construction & Design services is due to the commencement of design and construction activity for our new Ravenhall Prison Contract executed in September 2014 with the Department of Justice in the State of Victoria, Australia. Refer to Note 11 - Ravenhall Prison Project of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

~~Operating expenses consist of those expenses incurred in the operation and management of our correctional, detention and community based facilities.~~

The increase in operating expenses for U.S. Corrections & Detention reflects the following: (i) an increase of $18.0 million due to the activation and intake of inmates at the Central Valley, Desert View and McFarland correctional facilities, as well as our 100-bed expansion of the Company-owned Golden State correctional facility, in the fourth quarter of 2013; and (ii) our assumption of the management of the Moore Haven, Bay and Graceville correctional facilities in the first quarter of 2014. In addition, we experienced increases of $1.9 million at certain of our facilities primarily attributable to net population increases, increased transportation services and the variable costs associated with those increases. These increases were partially offset by a decrease of $4.8 million due to contract terminations. Additionally, there was a decrease of $3.8 million which represents the effect of an increase to our insurance reserves in Third Quarter 2013 based on our annual actuarial analysis. In Third Quarter 2014, we did not have as significant of an increase to our insurance reserves based on the same actuarial analysis.

Operating expenses for GEO Community Services increased by $3.5 million during the Third Quarter 2014 from the Third Quarter 2013 primarily due to net increases of $4.1 million due to the following: (i) variable costs associated with increases in counts in our electronic monitoring contracts and ISAP program at BI; (ii) new programs and program growth at our community based and re-entry centers; and (iii) BI’s acquisition of Protocol in the first quarter of 2014. These increases were partially offset by decreases that resulted from contract terminations and census declines of $0.7 million.

Operating expenses for our International Services segment during the Third Quarter 2014 increased $5.3 million over the Third Quarter 2013 which was primarily attributable to a net increase of $2.9 million related to our Australian subsidiary due to net population increases and contractual increases in labor and an increase of $0.5 million related to a mark-to-market adjustment on a derivative instrument. In addition, operating expenses increased by $3.1 million due to bid costs incurred at our United Kingdom subsidiary. These increases were partially offset by a decrease of $1.2 million relating to the winding down of our Harmondsworth contract in our United Kingdom subsidiary. The impact of foreign currency exchange rate fluctuations decreased operating expenses by $0.1 million.

The increase in expenses for our Facility Construction & Design services is due to the commencement of design and construction activity for our new Ravenhall Prison Contract executed in September 2014 with the Department of Justice in the State of Victoria, Australia. Refer to Note 11 - Ravenhall Prison Project of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

U.S. Corrections & Detention depreciation and amortization expense increased slightly in the Third Quarter 2014 compared to the Third Quarter 2013 primarily due to renovations made at several of our facilities.

GEO Community Services depreciation and amortization expense decreased slightly in the Third Quarter 2014 compared to the Third Quarter 2013. The decrease is primarily due to certain assets becoming fully depreciated in 2014.

Depreciation and amortization expense was fairly consistent in the Third Quarter 2014 compared to the Third Quarter 2013 as there were no significant additions during 2013 or 2014 at our international subsidiaries.

administrative expenses in the Third Quarter 2014 compared to the Third Quarter 2013 was primarily attributable to professional fees incurred in Third Quarter 2014 related to our registration statement for the 5.875% Senior Notes filed on September 12, 2014.

The majority of our interest income generated in the Third Quarter 2014 and the Third Quarter 2013 is from the cash balances at our foreign subsidiaries. Interest income decreased slightly in the quarter ended September 30, 2014 primarily due to lower cash balances at our foreign subsidiaries.

Interest expense during the Third Quarter 2014 decreased slightly compared to the Third Quarter 2013. The decrease is primarily due to the effect of our termination of our Fourth Amended and Restated Credit Agreement and entering into a new credit agreement with more favorable rates in the Second Quarter 2013. The decrease was partially offset by debt incurred for the purchase of the Joe Corley Detention Center in June 2013 and the issuance of our 5.875% Senior Notes during Third Quarter 2014. Refer to Note 9 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

The loss on extinguishment of debt in Third Quarter 2013 is the result of our defeasance of the non-recourse bonds related to South Texas Local Development Corporation (“STLDC”) on September 30, 2013. In connection with the defeasance, we incurred a $1.5 million loss on extinguishment of debt which represented the excess of the reacquisition price over the carrying value of the bonds and other defeasance related fees and expenses. Refer to Note 9 - Debt of the Notes to our Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

The provision for income taxes during the Third Quarter 2014 increased by $13.3 million compared to the Third Quarter 2013 and the effective tax rate increased from a benefit of (33.9)% to an expense of 12.9%. The increase is primarily attributable to certain one-time discrete items in the Third Quarter 2013 which did not recur in the Third Quarter 2014. As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn are allowed a deduction for the distribution at the REIT level. The Company’s wholly-owned taxable REIT subsidiaries continue to be fully subject to federal, state and foreign income taxes, as applicable. We estimate our annual effective tax rate to be approximately 10% exclusive of any non-recurring items. As a result of incremental business profitability in our taxable REIT subsidiary, or TRS, our composition of taxable income changed resulting in an increase in our estimated effective tax rate for the year.

Equity in earnings of affiliates, presented net of income taxes, represents the combined earnings of SACS and GEOAmey, respectively. Overall, we experienced a slight increase in equity in earnings of affiliates during the Third Quarter 2014 compared to the Third Quarter 2013, which is primarily due to increased favorable performance from the operations of GEOAmey during the Third Quarter 2014 compared to the Third Quarter 2013.

Revenues increased in Nine Months 2014 compared to Nine Months 2013 primarily due to aggregate increases of $58.9 million resulting from: (i) the activation and intake of inmates at the Central Valley, Desert View and McFarland correctional facilities, as well as our 100-bed expansion of the Company-owned Golden State correctional facility, in the fourth quarter of 2013; and (ii) our assumption of the management of the Moore Haven, Bay and Graceville correctional facilities in the first quarter of 2014. We also experienced aggregate increases in revenues of $29.1 million at certain of our facilities primarily due to net increases in population, transportation services and/or rates, including the increased revenues due to our purchase of the previously managed-only 1,287-bed Joe Corley Detention Center in June 2013. These increases were partially offset by an aggregate decrease of $19.8 million primarily due to contract terminations.

The number of compensated mandays in U.S. Corrections & Detention facilities was approximately 14.0 million in Nine Months 2014 and 12.8 million in Nine Months 2013. We experienced an aggregate net increase of approximately 1,221,000 mandays as a result of our new contracts discussed above and also as a result of increases in population at certain facilities. These increases were partially offset by decreases resulting from lower populations at certain facilities. We look at the average occupancy in our facilities to determine how we are managing our available beds. The average occupancy is calculated by taking compensated mandays as a percentage of capacity. The average occupancy in our U.S. Corrections & Detention facilities was ~~96.8%~~93.4% and ~~95.5%~~96.1% of capacity in ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 and ~~Nine~~the Three Months ~~2013~~Ended March 31, 2014 respectively, excluding idle facilities.

Average occupancy declined to 93.4% from 96.1% and was driven primarily by our acquisition and integration of eight correctional and detention LCS Facilities totaling more than 6,500 beds in February 2015. As we have previously disclosed, the LCS Facilities have been historically underutilized with current average occupancy rates of approximately 50%. Additionally, as we have previously discussed, federal populations tend to experience seasonal fluctuations primarily during the

first quarter and part of the second quarter of each year. We believe that the uncertainty related to the fiscal year 2015 budget for the Department of Homeland Security during the first few months of 2015 may have also contributed to additional softness in federal populations.

The increase in revenues for GEO ~~Community Services~~Care in ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 compared to ~~Nine~~the Three Months ~~2013~~Ended March 31, 2014 is primarily attributable to net increases of ~~$16.6~~$1.7 million due to increased counts in our electronic monitoring contracts and ISAP program at BI ~~and BI’s acquisition of Protocol in the first quarter of 2014.~~Incorporated (“BI”). In addition, we experienced ~~a net~~an increase of ~~$5.4~~$2.8 million primarily due to new programs and program growth at our community based and ~~re-entry~~reentry centers. These increases were partially offset by decreases in revenues of ~~$2.2~~$1.8 million related to contract terminations and census declines at certain facilities.

~~The slight decrease in revenues~~Revenues for International Services in ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 compared to ~~Nine~~the Three Months ~~2013 is primarily due~~Ended March 31, 2014 decreased by $9.1 million. Contributing to the decrease was the result of foreign exchange rate fluctuations of ~~$(8.4) million. Revenues~~($5.4) million resulting from the strengthening of the U.S. dollar against certain international currencies. Additionally, revenues also decreased by ~~$1.1~~$6.4 million in our United Kingdom subsidiary due to the winding down of our Harmondworth management contract. These decreases were partially offset by an aggregate net increase of ~~$8.0~~$2.7 million primarily attributable to our Australian subsidiary related to population increases, contractual increases linked to the inflationary index and the provision of additional services under certain contracts.

The increase in revenues for our Facility Construction & Design services is due to the commencement of design and construction activity for our new Ravenhall Prison Contract executed in September 2014 with the Department of Justice in the State of Victoria, Australia. ~~Refer to Note 11 - Ravenhall Prison Project of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.~~


	2014		% of Segment Revenues			2013		% of Segment Revenues			$ Change		% Change			2015		% of Segment Revenues			2014		% of Segment Revenues			$ Change			% Change
	(Dollars in thousands)																				(Dollars in thousands)
U.S. Corrections & Detention	$	585,454		71.0	%	$	548,313		72.5	%	$	37,141		6.8	%	$	205,509		72.0	%	$	191,777		71.9	%	$	13,732			7.2	%
GEO Community Services		162,640		66.2	%		150,281		66.5	%		12,359		8.2	%
GEO Care																	53,010		66.8	%		53,596		69.9	%		(586	)		(1.1	)%
International Services		147,826		95.5	%		145,352		92.9	%		2,474		1.7	%		38,242		94.1	%		46,550		93.5	%		(8,308	)		(17.8	)%
Facility Construction & Design		38,277		98.5	%		—		—	%		38,277		100.0	%		21,148		97.2	%		—		—	%		21,148			100.0	%

Total	$	934,197		73.9	%	$	843,946		74.1	%	$	90,251		10.7	%	$	317,909		74.4	%	$	291,923		74.3	%	$	25,986			8.9	%

Operating expenses consist of those expenses incurred in the operation and management of our correctional, detention and community based facilities.

The increase in operating expenses for U.S. Corrections & Detention reflects ~~the following: (i)~~ an increase of ~~$45.9~~$9.9 million due to (i) the activation and intake of detainees at our Alexandria Staging facility in November 2014; (ii) the activation and intake of inmates at our McFarland Female Community Reentry facility; and (iii) the ~~Central Valley, Desert View and McFarland correctional facilities, as well as our 100-bed expansion~~acquisition of the ~~Company-owned Golden State correctional facility,~~LCS Facilities in ~~the fourth quarter of 2013; and (ii) our assumption of the management of the Moore Haven, Bay and Graceville correctional facilities in the first quarter of 2014. In addition, we~~February 2015. We also experienced increases of ~~$9.5~~$5.4 million at certain of our facilities primarily attributable to net population increases, increased transportation services and the variable costs associated with those increases. ~~These increases were partially offset by~~Additionally, we recorded a decrease ~~of $14.5 million due to contract terminations. Additionally, there was a decrease of $3.8 million which represents the effect of an increase~~ to our insurance reserves ~~in Third Quarter 2013 based on our annual actuarial analysis. In Third Quarter 2014, we did not have as significant~~ of ~~an increase to our insurance reserves based on~~approximately $1.5 million during the ~~same actuarial analysis.~~three months ended March 31, 2015 which partially offset these increases.

Operating expenses for GEO ~~Community Services increased~~Care decreased by ~~$12.4~~$0.6 million during ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 from ~~Nine~~the Three Months ~~2013~~Ended March 31, 2014 primarily due to ~~net~~the following: (i) decreases that resulted from contract termination and census declines of $1.9 million; and (ii) the reversal of certain claim reserves in the amount of $1.8 million which also led to a decrease in operating expenses as a percentage of revenues. These decreases were partially offset by increases of ~~$14.1~~$3.1 million due to the following: (i) variable costs associated with increases in ~~counts in~~ our electronic monitoring contracts and ISAP program at BI; and (ii) new ~~programs~~contracts and program growth at our community based and re-entry centers; and (iii) BI’s acquisition of Protocol in the first quarter of 2014. These increases were partially offset by decreases that resulted from contract terminations and census declines of $1.8 million.reentry centers.

Operating expenses for ~~our~~ International Services ~~segment during Nine~~in the Three Months Ended March 31, 2015 compared to the Three Months Ended March 31, 2014 ~~increased $2.5~~decreased by $8.3 million. Contributing to the decrease was the result of foreign exchange rate fluctuations of ($4.9) million ~~over Nine Months 2013 which was primarily attributable to a net increase~~resulting from the strengthening of $8.9 million related to our Australian subsidiary due to net population increases and contractual increases in labor and an increase of $0.5 million related to a mark-to-market adjustment on a derivative instrument. In addition,the U.S. dollar against certain international currencies. Additionally, operating expenses ~~increased~~also decreased by ~~$2.1~~$5.6 million ~~primarily due to bid costs incurred at~~in our United Kingdom ~~subsidiary.These increases were partially offset by a decrease of $1.0 million relating~~subsidiary due to the winding down of our ~~Harmondsworth contract in~~Harmondworth management contract. These decreases were partially offset by an aggregate net increase of $2.2 million primarily attributable to our ~~United Kingdom subsidiary. The impact~~Australian subsidiary related to population increases, contractual increases linked to the inflationary index and the provision of ~~foreign currency exchange rate fluctuations decreased operating expenses by $8.0 million.~~additional services under certain contracts.

U.S. Corrections & Detention depreciation and amortization expense increased slightly in the Three Months Ended March 31, 2015 compared to the Three Months Ended March 31, 2014 primarily due to additional depreciation and amortization related to the acquisition of the LCS Facilities in February 2015. Refer to Note 112 - ~~Ravenhall Prison Project~~Business Combinations of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

~~U.S. Corrections & Detention~~GEO Care depreciation and amortization expense increased ~~by $1.6 million~~slightly in ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 compared to ~~Nine~~the Three Months ~~2013~~Ended March 31, 2014 primarily due to renovations made at several of our ~~facilities and also our purchase of the 1,287-bed Joe Corley Detention Center in June 2013.~~

GEO Community Services depreciation and amortization expense decreased slightly in Nine Months 2014 compared to Nine Months 2013. The decrease is primarily due to certain assets becoming fully depreciated in 2014.facilities.

Depreciation and amortization expense was fairly consistent in ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 compared to ~~Nine~~the Three Months ~~2013~~Ended March 31, 2014 as there were no significant additions during ~~2013~~2014 or ~~2014~~2015 at our international subsidiaries.

General and administrative expenses comprise substantially all of our other unallocated operating expenses primarily including corporate management salaries and benefits, professional fees and other administrative expenses. The ~~decrease~~increase in general and administrative expenses in ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 compared to ~~Nine~~the Three Months ~~2013~~Ended March 31, 2014 was primarily attributable to nonrecurring professional fees of $2.2 million incurred in ~~Nine Months 2013 associated~~connection with our ~~conversion to a REIT.~~acquisition of the LCS Facilities in February 2015.


	2014			% of Revenue			2013			% of Revenue			$ Change			% Change			2015		% of Revenue			2014		% of Revenue			$ Change		% Change
	(Dollars in thousands)																							(Dollars in thousands)
Interest Income	$	2,604			0.2	%	$	3,433			0.3	%	$	(829	)		(24.1	)%	$	2,073		0.5	%	$	732		0.2	%	$	1,341		183.2	%
Interest Expense	$	(62,662	)		(5.0	)%	$	(62,013	)		(5.4	)%	$	(649	)		1.0	%	$	24,646		5.8	%	$	20,652		5.3	%	$	3,994		19.3	%

~~The majority of our interest income generated in Nine Months 2014 and Nine Months 2013 is from the cash balances at our foreign subsidiaries.~~ Interest income ~~decreased~~increased in ~~Nine~~the Three Months Ended March 31, 2015 compared to the Three Months Ended March 31, 2014 primarily due to ~~lower cash balances at~~interest income earned on our ~~foreign subsidiaries.~~contract receivable related to our prison project in Ravenhall, Australia. Refer to Note 12 - Business Segments and Geographical Information of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Interest expense increased ~~slightly~~in the Three Months Ended March 31, 2015 compared to the Three Months Ended March 31, 2014 primarily due to ~~a $0.4 million write-off of deferred financing costs~~construction loan interest related to our prison project in Ravenhall, Australia as well as additional Revolver interest incurred in connection with our acquisition of the ~~amendment to our Credit Facility in Third Quarter 2014.~~LCS Facilities. Refer to Note 910 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~quarterly report on Form 10-Q.~~

The loss on extinguishment of debt in Nine Months 2013 is partially the result of our defeasance of the non-recourse bonds related to STLDC on September 30, 2013. In connection with the defeasance, we incurred a $1.5 million loss on extinguishment of debt which represented the excess of the reacquisition price over the carrying value of the bonds and other defeasance related fees and expenses. In addition, in the second quarter of 2013, we refinanced our prior credit facility and entered into a new amended and restated credit agreement. In connection with the termination, we wrote off $4.4 million of unamortized deferred financing costs and unamortized debt discount pertaining to the prior credit facility and expensed $1.1 million in fees related to the new amended and restated credit agreement. Refer to Note 9 - Debt of the Notes to our Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly reportQuarterly Report on Form 10-Q.

The provision for income taxes during ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 increased by ~~$25.2~~$0.7 million compared to ~~Nine~~the Three Months ~~2013~~Ended March 31, 2014 and the effective tax rate increased from ~~(19.7)%~~7.5% to ~~9.8%~~9.4%. ~~The increase is primarily attributable to certain one-time discrete items in Nine Months 2013 which did not recur in Nine Months 2014.~~ As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn are allowed a deduction for the distribution at the REIT level. ~~The Company’s~~Our wholly-owned taxable REIT subsidiaries continue to be fully subject to federal, state and foreign income taxes, as applicable. As a result of incremental business profitability in our taxable REIT subsidiaries, or TRS, our estimated composition of taxable income changed resulting in an increase in our estimated annual effective tax rate. We estimate our annual effective tax rate to be approximately 10% exclusive of any non-recurring items. As a result of incremental business profitability in our taxable REIT subsidiary, or TRS, our composition of taxable income changed resulting in an increase in our estimated effective tax rate for the year.

Equity in earnings of affiliates, presented net of income taxes, represents the earnings of SACS and GEOAmey, respectively. Overall, ~~we experienced an increase in~~ equity in earnings of affiliates during ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 compared to ~~Nine~~the Three Months ~~2013, which is primarily due to increased favorable~~Ended March 31, 2014 was relatively consistent as a result of consistent performance ~~from the operations of~~by SACS and GEOAmey during ~~Nine Months 2014 compared to Nine Months 2013.~~the periods.

Our current cash requirements consist of amounts needed for working capital, distributions of our REIT taxable income in order to maintain our REIT qualification, debt service, supply purchases, investments in joint ventures, and capital expenditures related to either the development of new correctional, detention and ~~re-entry~~reentry facilities, or the maintenance of existing facilities. In addition, some of our management contracts require us to make substantial initial expenditures of cash in connection with opening or renovating a facility. Generally, these initial expenditures are subsequently fully or partially recoverable as ~~pass-through~~pass- through costs or are billable as a component of the per diem rates or monthly fixed fees to the contracting agency over the original term of the contract. In connection with GEOAmey, our joint venture in the United Kingdom, we and our joint venture partner have each provided a line of credit of £12 million, or $20.5 million, based on exchange rates as of ~~September 30, 2014,~~March 31, 2015, for GEOAmey’s operations. As of ~~September 30, 2014, $19.5~~March 31, 2015, $15.6 million was outstanding.

We currently have contractual commitments for a number of projects using Company financing. We estimate that the cost of these existing capital projects will be ~~$224.0~~$252.1 million of which ~~$62.5~~$86.1 million was spent through ~~Third Quarter 2014.~~the Three Months Ended March 31, 2015 2015. We estimate that the remaining capital requirements related to these capital projects will be ~~$161.5~~$166.0 million which will be spent through ~~fiscal year 2015.~~2017. Included in these commitments is a contractual commitment to provide a capital contribution towards the design and construction of a prison project in Ravenhall, a locality near Melbourne, Australia, in the amount of AUD 115 million, or ~~$100.1~~$88.4 million, based on exchange rates as of September 30, 2014. Refer to Note 11 - Ravenhall Prison Project of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q for further discussion.ThisMarch 31, 2015. This capital contribution is expected to be made in January 2017. Additionally, in connection with the Ravenhall Prison Project, the Company has a contractual commitment for construction of the facility and has entered into a syndicated facility agreement with National Australia Bank Limited to provide funding for the project up to AUD 791.0 million, or ~~$690.3~~$608.4 million, based on exchange rates as of ~~September 30, 2014.~~March 31, 2015.

On August 27, 2014, we executed a second amended and restated credit agreement by and among us and GEO Corrections Holdings, Inc., as Borrowers, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”).

The Credit Agreement evidences a credit facility (the “Credit Facility”) consisting of a $296.3 million term loan (the “Term Loan”) bearing interest at LIBOR plus 2.50% (with a LIBOR floor of .75%), and a ~~$700~~$700.0 million revolving credit facility (the “Revolver”) initially bearing interest at LIBOR plus 2.25% (with no LIBOR floor) together with AUD 225 million available solely for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars (the “Australian LC Facility”). At ~~September 30, 2014,~~March 31, 2015, we had approximately AUD 214 million in letters of credit outstanding under the Australian LC Facility in connection with certain performance guarantees related to ~~the~~a prison project in Ravenhall, ~~Prison Project. Refer to Note 11 in the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q for further discussion.~~Australia. Amounts to be borrowed by us under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing. The Revolver component is scheduled to mature on August 27, 2019 and the Term Loan component is scheduled to mature on April 3, 2020.

The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict our ability to, among other things (i) create, incur or assume any indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make certain restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio to exceed 5.75 to 1.00, allow the senior secured leverage ratio to exceed 3.50 to 1.00 or allow the interest coverage ratio to be less than 3.00 to 1.00, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes, except as permitted, (x) alter the business we conduct, and (xi) materially impair our lenders’ security interests in the collateral for its loans. The restricted payments covenant remains consistent with our election to be treated as a real estate investment trust under the Internal Revenue Code of 1986, effective as of January 1, 2013.

Events of default under the Credit Agreement include, but are not limited to, (i) our failure to pay principal or interest when due, (ii) our material breach of any representation or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) certain material environmental liability claims which have been asserted against us, and (viii) a change in control. We were in compliance with all of the covenants of the Credit Agreement as of ~~September 30, 2014.~~March 31, 2015.

As of ~~September 30, 2014,~~March 31, 2015, we had ~~$296.3~~$294.8 million in aggregate borrowings outstanding, net of discount, under the Term Loan and ~~$40.0~~$403.0 million in borrowings under the Revolver, and approximately ~~$61.0~~$59.0 million in letters of credit which left ~~$599.0~~$238.0 million in additional borrowing capacity under the Revolver. Refer to Note 910 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~quarterly report~~Quarterly Report on Form 10-Q for further discussion.

On September 25, 2014, we completed an offering of $250.0 million aggregate principal amount of senior unsecured notes. The notes will mature on October 15, 2024 and have a coupon rate and yield to maturity of 5.875%. Interest is payable ~~semi-annually~~semi- annually in cash in arrears on April 15 and October 15, ~~beginning~~which commenced on April 15, 2015. The 5.875% Senior Notes are guaranteed on a senior unsecured basis by all our restricted subsidiaries that guarantee obligations. The 5.875% Senior Notes rank equally in right of payment with any unsecured, unsubordinated indebtedness of the Company and the guarantors, including our 6.625% senior notes due 2021, the 5 7/8% senior notes due 2022, the 5.125% senior notes due 2023, and the

guarantors’ guarantees thereof, senior in right of payment to any future indebtedness of ours and the guarantors that is expressly subordinated to the

5.875% Senior Notes and the guarantees, effectively junior to any secured indebtedness of ours and the guarantors, including indebtedness under our senior credit facility, to the extent of the value of the assets securing such indebtedness, and structurally junior to all obligations of our subsidiaries that are not guarantors. The sale of the 5.875% Senior Notes was registered under our automatic shelf registration statement on Form S-3 filed on September 12, 2014. Refer to Note 910 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~quarterly report~~Quarterly Report on Form 10-Q for further discussion.

In connection with a new design and build prison project agreement in Australia with the State of Victoria, in September 2014, we entered into a syndicated facility agreement (the “Construction Facility”) with National Australia Bank Limited to provide debt financing for construction of the project. ~~Refer to Note 11 - Ravenhall Prison Project of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q for further discussion.~~ The Construction Facility provides for non-recourse funding up to AUD 791.0 million, or ~~$690.3~~$608.4 million, based on exchange rates as of ~~September 30, 2014.~~March 31, 2015. Construction draws will be funded throughout the project according to a fixed utilization schedule as defined in the syndicated facility agreement. The term of the Construction Facility is through October 2019 and bears interest at a variable rate quoted by certain Australian banks plus 200 basis points. After October 2019, the Construction Facility will be converted to a term loan with payments due quarterly beginning in ~~2018~~2019 through 2041. In accordance with the terms of the Construction Facility, upon completion and commercial acceptance of the prison, in accordance with the prison contract, the State will make a lump sum payment of AUD 310 million, or ~~$270.5~~$238.4 million, based on exchange rates as of ~~September 30, 2014,~~March 31, 2015, towards a portion of the outstanding principal. The remaining outstanding principal balance will be repaid over the term of the operating agreement. As of ~~September 30, 2014, $74.2~~March 31, 2015, $107.7 million was outstanding under the Construction Facility. We also entered into interest rate swap and interest rate cap agreements related to our non-recourse debt in connection with the project. Refer to Note 89 - Derivative Financial Instruments of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~quarterly report~~Quarterly Report on Form 10-Q for further discussion.

On October 3, 2013, we completed an offering of $250.0 million aggregate principal amount of 5⁷⁄₈% Senior Notes. The 5⁷⁄₈% Senior Notes will mature on January 15, 2022 and have a coupon rate and yield to maturity of 5⁷⁄₈%. Interest is payable ~~semi-annually~~semi- annually on January 15 and July 15 each year, which commenced on January 15, 2014. The proceeds received from the 5⁷⁄₈% Senior Notes were used, together with cash on hand, to fund the repurchase, redemption or other discharge of our 7 3/4% Senior Notes and to pay related transaction fees and expenses. Refer to Note 910 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~quarterly report~~Quarterly Report on Form 10-Q for further discussion.

On March 19, 2013, we completed an offering of $300.0 million aggregate principal amount of 5.125% Senior Notes. The 5.125% Senior Notes will mature on April 1, 2023 and have a coupon rate and yield to maturity of 5.125%. Interest is payable semi-annually on April 1 and October 1 each year, which commenced on October 1, 2013. A portion of the proceeds received from the 5.125% Senior Notes were used on the date of the financing to repay the prior revolver credit draws outstanding under the prior senior credit facility. Refer to Note 910 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~quarterly report~~Quarterly Report on Form 10-Q for further discussion.

In February 2011, we completed an offering of $300.0 million in aggregate principal amount of our 6.625% Senior Notes. The 6.625% Senior Notes will mature on February 15, 2021 and have a coupon rate and yield to maturity of 6.625%. Interest is payable semi-annually in arrears on February 15 and August 15, which commenced on August 15, 2011. The proceeds received from the 6.625% Senior Notes were used together with $150.0 million of borrowing under our senior credit facility at the time to fund the acquisition of BI and pay related costs.

In addition to the debt outstanding under the ~~Senior~~ Credit Facility, the 6.625% Senior Notes, the 5.125% Senior Notes, the 5⁷⁄₈% Senior Notes and 5.875% Senior Notes discussed above, we also have significant debt obligations which, although these obligations are non-recourse to us, require cash expenditures for debt service. Our significant debt obligations could have material consequences. See “Risk Factors-Risks Related to Our High Level of Indebtedness” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2013.~~2014. We are exposed to various commitments and contingencies which may have a material adverse effect on our liquidity. We also have guaranteed certain obligations for certain of our international subsidiaries. These non-recourse obligations, commitments and contingencies and guarantees are further discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2013.~~2014.

We consider opportunities for future business and/or asset acquisitions as we deem appropriate when market conditions present opportunities. If we are successful in our pursuit of any new projects, our cash on hand, cash flows from operations and borrowings under the existing ~~Senior~~ Credit Facility may not provide sufficient liquidity to meet our capital needs and we could be forced to seek additional financing or refinance our existing indebtedness. There can be no assurance that any such financing or refinancing would be available to us on terms equal to or more favorable than our current financing terms, or at all. In the future, our access to capital and ability to compete for future capital intensive projects will also be dependent upon, among

other things, our ability to meet certain financial covenants in the indenture governing the 6.625% Senior Notes, the indenture governing the 5.125% Senior Notes, the indenture governing the 5⁷⁄₈%57/8% Senior Notes, the indenture governing the 5.875% Senior Notes and our Credit Agreement. A substantial decline in our financial performance could limit our access to capital pursuant to these covenants and have a material adverse affect on our liquidity and capital resources and, as a result, on our financial condition and results of operations. In addition to these foregoing potential constraints on our capital, a number of state government agencies have been suffering from budget deficits and liquidity issues. While we expect to be in compliance with our debt covenants, if these constraints were to intensify, our liquidity could be materially adversely impacted as could our ability to remain in compliance with these debt covenants.

On May 8, 2013, wethe Company filed with the Securities and Exchange Commission a prospectus supplement related to the offer and sale from time to time of ~~our~~the Company’s common stock at an aggregate offering price of up to ~~$100~~$100.0 million through sales agents. Sales of shares of ~~our~~the Company’s common stock under the prospectus supplement and equity distribution agreements entered into with the sales agents, ~~were permitted to~~if any, may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933. On July 18, 2014, the Company filed with the Securities and Exchange Commission a post-effective amendment to its ~~automatic~~ shelf registration statement on Form S-3 (pursuant to which the prospectus supplement had been filed) as a result of the merger of the Company into GEO REIT effective June 27, 2014. During the ~~three months~~year ended ~~September 30,~~December 31, 2014, there were approximately 1.5 million shares of common stock sold under the prospectus supplement for net proceeds of $54.7 million. There were no shares of the Company’s common stock sold under the prospectus supplement during the three months ended March 31, 2015.

As a REIT, we are subject to a number of organizational and operational requirements, including a requirement that we annually distribute to our shareholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for dividends paid and by excluding any net capital gain). Generally, we expect to distribute all or substantially all of our REIT taxable income so as not to be subject to the income or excise tax on undistributed REIT taxable income. The amount, timing and frequency of distributions will be at the sole discretion of our Board of Directors and will be based upon various factors.

We plan to fund all of our capital needs, including distributions of our REIT taxable income in order to maintain our REIT qualification, and capital expenditures, from cash on hand, cash from operations, borrowings under our ~~Senior~~ Credit Facility and any other financings which our management and Board of Directors, in their discretion, may consummate. Currently, our primary source of liquidity to meet these requirements is cash flow from operations and borrowings under the $700.0 million Revolver. Our management believes that cash on hand, cash flows from operations and availability under our ~~Senior~~ Credit Facility will be adequate to support our capital requirements for ~~2014 and~~ 2015 as disclosed under “Capital Requirements” above.

We have a non-qualified deferred compensation agreement with our Chief Executive Officer (“CEO”). The current agreement, as amended, provides for a lump sum payment upon retirement, no sooner than age 55. As of January 1, 2013, our CEO had reached age 55 and was eligible to receive the payment upon retirement. If our CEO had retired as of ~~September 30, 2014,~~March 31, 2015, we would have had to pay him $7.1 million. Based on our current capitalization, we do not believe that making this payment would materially adversely impact our liquidity.

Cash and cash equivalents as of ~~September 30, 2014~~March 31, 2015 was ~~$52.7~~$69.0 million, compared to ~~$52.1~~$41.3 million as of December 31, ~~2013.~~2014.

Cash provided by operating activities ~~from continuing operations~~ amounted to ~~$164.6~~$60.7 million in ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 versus cash provided by operating activities of ~~$155.6~~$63.2 million in the ~~Nine~~Three Months ~~2013.~~Ended March 31, 2014. Cash provided by operating activities during ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 was positively impacted by increases in net income attributable to GEO, non-cash expenses such as depreciation and amortization, amortization of debt issuance costs, and stock-based compensation expense. ~~Increases in equity~~Equity in earnings of affiliates negatively impacted cash. Changes in accounts receivable, prepaid expenses and other assets decreased in total by ~~a net of $22.2~~$13.0 million, representing a positive impact on cash. The decrease was primarily driven by a decrease of approximately $17.0 million related to federal and state tax over payments that were included in other current assets at December 31, 2013 which were applied in 2014. The remaining change is due to the timing of billings and collections. Changes in accounts payable, accrued expenses and other liabilities increased by ~~$11.9~~$16.8 million which positively impacted cash. The increase was primarily ~~due to a prepayment from the RTS divestiture of $6.5 million in connection with the termination of the services and license agreement~~driven by increased operations at several new facilities and/or contracts which were activated during 2015 as well as the timing of payments.

~~Cash~~Additionally, cash provided by operating activities ~~from continuing operations~~ in ~~Nine Months 2014~~the three months ended March 31, 2015 was negatively impacted by an increase in changes in contract receivable of ~~$54.7~~$24.8 million. This increase relates to costs incurred and estimated earnings in excess of billings related to the prison project in Ravenhall, ~~Project. Refer to Note 11 - Ravenhall Prison Project in the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this quarterly report on Form 10-Q.~~Australia. The ~~Contract Receivable~~contract receivable is expected to grow as construction services are performed and will continue to have a negative impact on cash from operating activities until the balance is ultimately settled with the State. In accordance with the contract, the project will not be billed out until completion and commercial acceptance of the ~~Facility.~~facility.

Cash provided by operating activities in the ~~Nine Months 2013~~three months ended March 31, 2014 was positively impacted by increases in net income attributable to GEO, non-cash expenses such as depreciation and amortization, ~~loss on extinguishment~~amortization of debt issuance costs and stock-based compensation expense. Equity in earnings of affiliates negatively impacted cash. Changes in accounts receivable, prepaid expenses and other assets increased by $7.2 million, representing a negative impact on cash. The increase was primarily driven by the timing of billings and collections. Changes in accounts payable, accrued expenses and other liabilities increased by ~~$7.5~~$15.8 million which ~~also~~ positively impacted cash. The increase ~~in accounts payable, accrued expenses and other liabilities~~ was primarily ~~driven by an increase in accrued interest related~~due to ~~our 5.125% Senior Notes which were issued at the end~~a prepayment from GEO Care LLC of First Quarter 2013, the initial semi-annual interest payment which was not due until October 1, 2013, an increase in accrued property taxes which are typically paid out in the fourth quarter and an increase in insurance reserves for insurance liability claims recorded$6.5 million in connection with ~~our annual actuarial analysis which occurs in~~ the ~~third quarter each year. These increases were partially offset by decreases in accounts payable, accrued expenses~~termination of its services and other current liabilities related to the payment of annual bonuses accrued at December 31, 2012 which were paid out in First Quarter 2013, litigation settlements in 2013 which were accrued at December 31, 2012 andlicense agreement as well as the timing of payments. Changes in accounts receivable, prepaid expenses and other assets decreased in total by a net $16.3 million, representing a negative impact on cash. The decrease was primarily driven by the timing of billings and collections. Increases in equity in earnings of affiliates, net of tax and a release of reserves for uncertain tax positions also negatively impacted cash collections.

Cash used in investing activities of ~~$96.3~~$349.0 million during ~~Nine~~the Three Months Ended March 31, 2015 was primarily the result of our business acquisition of the LCS Facilities in the amount of $307.4 million and capital expenditures of $34.2 million. Cash used in investing activities during the Three Months Ended March 31, 2014 of $33.6 million was primarily the result of capital expenditures of ~~$77.7~~$17.5 million and cash paid for a business acquisition in the amount of $13.0 million. ~~Cash used in investing activities during Nine Months 2013 of $86.3 million was primarily the result of capital expenditures of $101.5 million.~~

Cash ~~used in~~provided by financing activities during ~~Nine~~the Three Months ~~2014~~Ended March 31, 2015 amounted to ~~$66.6~~$317.2 million compared to cash used in financing activities of ~~$47.1~~$44.6 million during ~~Nine~~the Three Months ~~2013.~~Ended March 31, 2014. Cash provided by financing activities during the three months ended March 31, 2015 was primarily the result of proceeds from long-term debt of $371.0 million under our Revolver which was primarily used to fund the acquisition of the LCS Facilities. Additionally, we had proceeds from non-recourse debt of $33.0 million related to construction draws for our prison project in Ravenhall, Australia. These increases were partially offset by a decrease for dividends paid of $46.0 million and payments on long-term debt of $38.8 million. Cash used in financing activities during ~~Nine Months~~the three months ended March 31, 2014 was primarily the result of dividend payments of $124.1 million and debt issuance costs of $23.5 million. This decrease was primarily offset by an increase of $54.7 million for issuance of common stock under our prospectus supplement. Cash used in financing activities in the Nine Months 2013 reflects payments of $742.2 and $27.2 million on long-term debt and non-recourse debt, respectively, cash dividends paid of $107.5 million and debt issuance costs of $19.3 million. These decreases were offset by proceeds from ~~long~~long- term debt of ~~$842.0~~$103.0 million ~~including $300.0 million from the 5.125% Senior Notes as well as $542.0 million of borrowings~~ under our Revolver and proceeds from the exercise of stock options of ~~$4.9~~3.3 million. These increases were offset by payments of $110.4 million on indebtedness and dividends paid of $41.1 million.

Funds from Operations (“FFO”) is a widely accepted supplemental non-GAAP measure utilized to evaluate the operating performance of real estate companies. It is defined in accordance with the 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 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.

We also present Normalized Funds From Operations, or Normalized FFO, and Adjusted Funds from Operations, or AFFO, supplemental non-GAAP financial measures of real estate companies’ operating performances.

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 the Company’s actual operating performance, including for the periods presented ~~REIT conversion~~M&A related expenses, ~~net of tax, tax benefit related to IRS settlement and REIT conversion and loss on extinguishment of debt,~~ net of tax.

AFFO is defined as Normalized FFO adjusted by adding non-cash expenses such as non-real estate related depreciation and amortization, stock based compensation, the amortization of debt costs and other non-cash interest, and non-cash ~~mark-to-market~~mark-to- market adjustments for derivative instruments and by subtracting recurring consolidated maintenance capital expenditures.

Because of the unique design, structure and use of our correctional facilities, we believe that assessing the 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~~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.

Our reconciliation of net income attributable to The GEO Group, Inc. to FFO, Normalized FFO and AFFO for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013, respectively,~~ is as follows (in thousands):


	Three Months Ended						Nine Months Ended						Three Months Ended
	Sept 30, 2014			Sept 30, 2013			Sept 30, 2014			Sept 30, 2013			March 31, 2015			March 31, 2014
Funds From Operations

Net income attributable to The GEO Group, Inc.	$	38,991		$	29,897		$	105,879		$	87,524		$	28,777		$	27,990

Depreciation real estate assets		13,172			13,123			39,538			38,374			13,885			13,381
Loss from Disc Ops, net of income tax provision (benefit)		—			(2,265	)		—			(2,265	)


NAREIT Defined FFO		52,163			45,285			145,417			128,163			42,662			41,371

Expenses associated with REIT conversion, net of taxes		—			—			—			4,697
Tax benefit associated with IRS settlement & REIT conversion		—			(4,622	)		—			(13,038	)

Loss on extinguishment of debt, net of taxes		—			1,451			—			5,847

M&A related expenses, net of tax														1,559			—
Normalized Funds from Operations	$	52,163		$	42,114		$	145,417		$	125,669		$	44,221		$	41,371

Depreciation non-real estate assets		10,907			10,765			32,431			32,106

Non-real estate related depreciation and amortization														11,055			10,761
Consolidated maintenance capital expenditures		(6,025	)		(5,140	)		(15,406	)		(14,436	)		(6,661	)		(4,420	)

Stock-based compensation expenses		1,730			2,423			6,263			5,768

Stock-based compensation expense														2,621			2,466
Amortization of debt costs and other non-cash interest		1,522			1,594			3,921			4,609			1,506			1,224

Non-Cash Mark-to-Market Adjustment - Derivative Instruments		532			—			532			—			189			—

Adjusted Funds from Operations	$	60,829		$	51,756		$	173,158		$	153,716		$	52,931		$	51,402

The following discussion contains statements that are not historical statements and, therefore, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied in the ~~forward-looking~~forward- looking statements. Please refer to “Part I - Item 1A. Risk Factors” and the “Forward Looking Statements - Safe Harbor” sections in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2013,~~2014, as well as the “Forward-Looking Statements - Safe Harbor” section and other disclosures contained in this Form 10-Q for further discussion on forward-looking statements and the risks and other factors that could prevent us from achieving our goals and cause the assumptions underlying the forward-looking statements and the actual results to differ materially from those expressed in or implied by those ~~forward-looking~~forward- looking statements.

Domestically, we continue to pursue a number of opportunities for corrections and detention facilities. Continued need for corrections facilities in various states and the need for bed space at the federal ~~prisons and detention facilities~~level are two of the factors that have contributed to these opportunities. At

During 2015, we expect to reactivate two existing company-owned facilities. In March of 2015, we began the ~~state level,~~intake process at the company-owned, 400-bed Mesa Verde Detention Facility located in Bakersfield, California under an intergovernmental agreement between the City of MacFarland, California and ICE. During the second quarter of 2015, we ~~reactivated~~expect to begin the ~~Company-owned, 300-bed McFarland Community Reentry~~intake process at the company-owned, 1,940-bed Great Plains Correctional Facility ~~during Third Quarter 2014~~in Hinton, Oklahoma under a new 10-year contract with the ~~California Department~~Federal Bureau of ~~Corrections and Rehabilitation. The facility houses female inmates and provides enhanced rehabilitation and recidivism reduction programs.~~

Under the contract, the facility can be expanded by 260 beds at the department’s option within 12 months. Additionally during the fourth quarter of 2013, we reactivated the Company-owned, 700-bed Central Valley Modified Community Correctional Facility and the Company-owned, 700-bed Desert View Modified Community Correctional Facility. We also executed a new contract for the continued housing of California inmates at the Company-owned Golden State Modified Community Correctional Facility, which increased the facility’s contract capacity from 600 to 700 beds. In Florida, we assumed management of 3,854 contract prison beds at three facilities during the first quarter 2014 which were previously managed by a different private operator. These facilities included the 1,884-bed Graceville Correctional Facility and the 985-bed Moore Haven Correctional Facility, which were developed and had been previously operated by us, as well as the 985-bed Bay Correctional Facility. At the federal level, we expanded the contract capacity at the Company-owned Rio Grande Detention Center from 1,500 to 1,900 beds during the first quarter 2014 for use by the U.S. Marshals and ICE. We also recently completed the development of a new, Company-owned, 400-bed immigration transfer center in Alexandria, Louisiana,Prisons, which we ~~will manage under an amendment we entered into under our contract for the LaSalle Detention Facility also~~announced in ~~Louisiana.~~late December 2014. The reactivation of these company- owned assets is expected to generate more than $50 million in annualized revenues. Additionally, we ~~announced~~expect to complete a ~~640-bed~~640- bed expansion to the ~~Company-owned,~~company-owned, 1,300-bed Adelanto Detention Facility in California in the third quarter of 2015 under an amendment to the existing contract with the City of Adelanto which in turn contracts with ICE for the housing of immigration detainees at the facility. We will finance, develop, and manage the $45 million expansion, which will increase the facility’s total capacity to 1,940 beds and is expected to generate approximately $21 million in additional annualized ~~revenues. We~~revenues and returns on investment consistent with our company-owned facilities. Finally, we expect to complete the ~~640-bed~~ development of a 626-bed

expansion to the company-owned, 532-bed Karnes County Residential Center in Texas by the end of 2015 under an amendment to our existing contract with Karnes County, Texas and ~~begin intake by July 2015.~~ the existing intergovernmental service agreement between Karnes County and ICE. We will finance, develop, and manage the $36 million expansion, which will increase the facility’s total capacity to 1,158 beds. The expansion is expected to generate approximately $20 million in additional annualized revenues and returns on investment consistent with our company-owned facilities.

We continue to be encouraged by opportunities as discussed above; however any positive trends may, to some extent, be adversely impacted by government budgetary constraints in the future. While ~~the outlook for~~ state ~~budgets is~~finances overall are stable and revenue ~~performance is positive, and expenditure overruns~~collections are ~~relatively modest, state lawmakers continue to face numerous~~meeting expectations in a majority of states, at least 12 states expect a budget ~~challenges and state officials are concerned about sluggish revenue growth, rebuilding budget reserves and long-term spending trends,~~shortfall in fiscal year 2015, according to a survey conducted in the ~~Spring~~fall of 2014 by the National Conference of State Legislatures. As a result of budgetary pressures, state correctional agencies may pursue a number of cost savings initiatives which may include reductions in per diem rates and/or the scope of services provided by private operators. These potential cost savings initiatives could have a material adverse impact on our current operations and/or our ability to pursue new business opportunities. Additionally, if state budgetary constraints, as discussed above, persist or intensify, our state customers’ ability to pay us may be impaired and/or we may be forced to renegotiate our management contracts on less favorable terms and our financial condition, results of operations or cash flows could be materially adversely impacted. We plan to actively bid on any new projects that fit our target profile for profitability and operational risk. Although we are pleased with the overall industry outlook, positive trends in the industry may be offset by several factors, including budgetary constraints, unanticipated contract terminations, contract ~~non-renewals,~~non- renewals, and/or contract re-bids. Although we have historically had a relatively high contract renewal rate, there can be no assurance that we will be able to renew our expiring management contracts on favorable terms, or at all. Also, while we are pleased with our track record in re-bid situations, we cannot assure that we will prevail in any such future situations.

Internationally, we are exploring a number of opportunities in our current markets and will continue to actively bid on any opportunities that fit our target profile for profitability and operational risk. In September 2014, we announced that a consortium led by us and comprised of The GEO Group Australia Pty. Ltd., John Holland Construction and Honeywell ~~won~~signed a contract with the Department of Justice in the State of Victoria for the development and operation of a 1,300-bed capacity prison in Ravenhall, Australia. The Ravenhall facility will be developed under a public-private partnership financing structure with ~~an equity investment~~a capital contribution from us of approximately AUD 115 million and we anticipate returns on investment consistent with our company-owned facilities.

With respect to our ~~re-entry~~reentry services, electronic monitoring services, and youth services business conducted through our GEO ~~Community Services~~Care business segment, we are currently pursuing a number of business development opportunities. Relative to opportunities for community-based ~~re-entry centers,~~reentry services, we ~~expect to compete for several formal solicitations from the Bureau of Prisons (the “BOP”) for re-entry centers across the country and~~ are ~~also~~ working with our existing ~~local~~federal, state, and ~~state~~local correctional clients to leverage new opportunities for both residential reentry facilities as well as non-residential day reporting centers. We continue to expend resources on informing state and local governments about the benefits of public-private partnerships, and we anticipate that there will be new opportunities in the future as those efforts begin to yield results. We believe we are well positioned to capitalize on any suitable opportunities that become available in this area.

Operating expenses consist of those expenses incurred in the operation and management of our contracts to provide services to our governmental clients. Labor and related cost represented ~~54.9%~~57.0% of our operating expenses ~~in Nine Months 2014.~~during the three months ended March, 31, 2015. Additional significant operating expenses include food, utilities and inmate medical costs. ~~In Nine Months 2014,~~During the three months ended March 31, 2015, operating expenses totaled ~~73.9%~~74.4% of our consolidated revenues. Our operating expenses as a percentage of revenues in ~~2014~~2015 will be impacted by the opening of any new or existing idle facilities as a result of the cost of transitioning and/or start-up operations related to a facility opening. During ~~2014,~~2015, we will incur carrying costs for facilities that are currently vacant. As of ~~September 30, 2014,~~

March 31, 2015, our worldwide operations include the management and/or ownership of approximately ~~78,500~~86,000 beds at 98106 correctional, detention, ~~re-entry,~~reentry, youth services and community-based facilities including idle facilities, and also include the provision of monitoring of approximately 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states.

General and administrative expenses consist primarily of corporate management salaries and benefits, professional fees and other administrative expenses. ~~In Nine Months 2014,~~During the three months ended March 31, 2015, general and administrative expenses totaled ~~6.7%~~7.5% of our consolidated revenues. We expect general and administrative expenses as a percentage of revenues in ~~2014~~2015 to

remain consistent or decrease as a result of cost savings initiatives and decreases in nonrecurring costs related to our REIT conversion. We expect business development costs to remain consistent or increase slightly as we pursue additional business development opportunities in all of our business lines. We also plan to continue expending resources from time to time on the evaluation of potential acquisition targets.

We are currently marketing approximately ~~5,800~~4,386 vacant beds at five of our idle facilities to potential customers. The annual carrying cost of idle facilities in ~~2014~~2015 is estimated to be ~~$21.2~~$17.0 million, including depreciation expense of ~~$5.5~~$3.0 million. As of ~~September 30, 2014~~March 31, 2015, these facilities had a net book value of ~~$185.0~~$103.9 million. We currently do not have any firm commitment or agreement in place to activate these facilities. Historically, some facilities have been idle for multiple years before they received a new contract award. Currently, our North Lake Correctional Facility located in Baldwin, Michigan ~~and our Great Plains Correctional Facility located in Hinton, Oklahoma have~~has been idle the longest of our idle facility inventory. On April 28, 2015, we announced that we have begun to mobilize our North Lake Correctional facility. The decision to mobilize the facility was made as a result of the current demand for out-of-state correctional bed space. The mobilization effort will entail hiring staff and purchasing supplies in order to prepare the previously idle facility to receive inmates. We currently do not have a contract to house inmates at the facility, but we believe that we may secure one or more contracts in the near future and we expect we may need to activate the facility in the next sixty to ninety days. These idle facilities are included in the U.S. Corrections & Detention segment. The per diem rates that we charge our clients often vary by contract across our portfolio. However, if all of these idle facilities were to be activated using our U.S. Corrections & Detention average per diem rate in ~~2014,~~2015 (calculated as the U.S. Corrections & Detention revenue divided by the number of U.S. Corrections & Detention mandays) and based on the average occupancy rate in our U.S. Corrections & Detention facilities for ~~2014,~~2015, we would expect to receive incremental annualized revenue of approximately ~~$120~~$90 million and an annualized increase in earnings per share of approximately ~~$0.35~~$0.20 to ~~$0.40~~$0.25 per share based on our average U.S. Corrections and Detention operating margin.

We are exposed to market risks related to changes in interest rates with respect to our ~~Senior~~ Credit Facility. Payments under the ~~Senior~~ Credit Facility are indexed to a variable interest rate. Based on borrowings outstanding under the ~~Senior~~ Credit Facility of ~~$336.3~~$697.8 million and ~~$61.0~~$59.0 million in outstanding letters of credit, as of ~~September 30, 2014,~~March 31, 2015, for every one percent increase in the average interest rate applicable to the ~~Senior~~ Credit Facility, our total annual interest expense would increase by ~~$3.4~~$7.0 million.

We have entered into certain interest rate swap arrangements for hedging purposes, fixing the interest rate on our Australian non-recourse debt related to the Fullham facility to 9.7%. We have also entered into certain interest rate swap arrangements for hedging purposes, fixing the interest rates on our Australian non-recourse debt related to our Ravenhall Project to 3.3% during the design and construction phase and 4.2% during the operating phase. The difference between the floating rate and the swap rate on these instruments is recognized in interest expense within the respective entity. Because the interest rates with respect to these instruments are fixed, a hypothetical one percent change in the current interest rate would not have a material impact on our financial condition or results of operations.

Additionally, we invest our cash in a variety of short-term financial instruments to provide a return. The majority of our cash is invested internationally. These instruments generally consist of highly liquid investments with original maturities at the date of purchase of three months or less. While these instruments are subject to interest rate risk, a hypothetical 100 basis point increase or decrease in market interest rates would not have a material impact on our financial condition or results of operations.

We are also exposed to market risks related to fluctuations in foreign currency exchange rates between the U.S. dollar, and the Australian dollar, the Canadian dollar, the South African Rand and the British Pound currency exchange rates. Based upon our foreign currency exchange rate exposure at ~~September 30, 2014,~~March 31, 2015, every 10 percent change in historical currency rates would have approximately a ~~$5.1~~$2.7 million effect on our financial position and approximately a ~~$0.7~~$0.2 million impact on our results of operations during ~~Nine~~the Three Months ~~2014.~~Ended March 31, 2015.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act), as of the end of the period covered by this report. On the basis of this review, our management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed in our reports filed with the SEC, under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

It should be noted that the effectiveness of our system of disclosure controls and procedures is subject to certain limitations inherent in any system of disclosure controls and procedures, including the exercise of judgment in designing, implementing and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events, and the inability to eliminate misconduct completely. Accordingly, there can be no assurance that our disclosure controls and procedures will detect all errors or fraud. As a result, by its nature, our system of disclosure controls and procedures can provide only reasonable assurance regarding management’s control objectives.

Our management is responsible to report any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management believes that there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The information required herein is incorporated by reference from Note 1011 - Commitments, Contingencies and Other in the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future prospects.

ITEM 2. ~~UNREGISTERED SALES~~UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Florida		65-0043078
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		~~(IRS Employer~~ Identification No.)

One Park Place, 621 NW 53rd Street, Suite 700,
Boca Raton, Florida		33487
(Address of principal executive offices)		(Zip Code)


PART I - FINANCIAL INFORMATION	3

ITEM 1. FINANCIAL STATEMENTS	3

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2015 AND 2014 ~~AND 2013~~	3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2015 AND 2014 ~~AND 2013~~	4

CONSOLIDATED BALANCE SHEETS AS OF ~~SEPTEMBER 30, 2014~~MARCH 31, 2015 (UNAUDITED) AND DECEMBER 31, ~~2013~~2014	5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2015 AND 2014 ~~AND 2013~~	6

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3531

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5547

ITEM 4. CONTROLS AND PROCEDURES	5547

PART II - OTHER INFORMATION		5648

ITEM 1. LEGAL PROCEEDINGS	5648

ITEM 1A. RISK FACTORS	5648

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	5648

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	5648

ITEM 4. MINE SAFETY DISCLOSURES	5648

ITEM 5. OTHER INFORMATION	5648

ITEM 6. EXHIBITS	5748

SIGNATURES	5850


Accounts receivable	$	9,395
Prepaid expenses and other current assets		183
Property and equipment		119,726
Intangible assets		73,200

Total assets acquired		202,504
Accounts payable and accrued expenses		2,442

Total identifiable net assets		200,062
Goodwill		107,341

Total consideration paid	$	307,403


	Nine Months Ended September 30, 2014
	(In thousands)
	Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1)			Unrealized (loss)/gain on derivatives, net of tax			Pension adjustments, net of tax			Total
Balance, December 31, 2013	$	(2,441	)	$	(274	)	$	(1,714	)	$	(4,429	)
Current-period other comprehensive (loss) income		(1,471	)		(4,857	)		58			(6,270	)

Balance, September 30, 2014	$	(3,912	)	$	(5,131	)	$	(1,656	)	$	(10,699	)


	September 30, 2014									December 31, 2013
	Weighted Average Useful Life (years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Facility management contracts		13.4	$	154,623	$	(53,447	)	$	101,176	$	151,604	$	(44,646	)	$	106,958
Technology		7.0		24,000		(11,263	)		12,737		21,200		(8,758	)		12,442
Trade name (Indefinite lived)		Indefinite		45,200		—			45,200		44,000		—			44,000

Total acquired intangible assets			$	223,823	$	(64,710	)	$	159,113	$	216,804	$	(53,404	)	$	163,400


	Three Months Ended March 31, 2015 (In thousands)
	Foreign currency translation adjustments, net of tax attributable to The GEO Group, Inc. (1)			Unrealized (loss)/ gain on derivatives, net of tax			Pension adjustments, net of tax			Total
Balance, December 31, 2014	$	(6,903	)	$	(16,322	)	$	(4,236	)	$	(27,461	)
Current-period other comprehensive (loss) income		(1,665	)		(4,080	)		40			(5,705	)

Balance, March 31, 2015	$	(8,568	)	$	(20,402	)	$	(4,196	)	$	(33,166	)


	Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)		Aggregate Intrinsic Value
	(in thousands)							(in thousands)
Options outstanding at December 31, 2013		849		$	19.67		6.39	$	10,654
Options granted		227			32.41
Options exercised		(338	)		19.34
Options forfeited/canceled/expired		(24	)		26.27

Options outstanding at September 30, 2014		714		$	23.64		6.91	$	10,425

Options vested and expected to vest at September 30, 2014		683		$	23.36		6.82	$	10,146

Options exercisable at September 30, 2014		410		$	20.64		5.89	$	7,200


	Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)		Aggregate Intrinsic Value
	(in thousands)							(in thousands)
Options outstanding at December 31, 2014		664		$	23.89		6.77	$	10,935
Options granted		256			43.15
Options exercised		(53	)		23.98
Options forfeited/canceled/expired		(5	)		40.32

Options outstanding at March 31, 2015		862		$	29.53		7.51	$	8,732

Options vested and expected to vest at March 31, 2015		806		$	28.92		7.37	$	8,576

Options exercisable at March 31, 2015		490		$	23.84		6.20	$	7,297


Year	Percentage
2019		102.938	%
2020		101.958	%
2021		100.979	%
2022 and thereafter		100.000	%


	2014			% of Segment Revenue			2013		% of Segment Revenue			$ Change			% Change
	(Dollars in thousands)
U.S. Corrections & Detention	$	15,952			5.7	%	$	15,712		6.2	%	$	240			1.5	%
GEO Community Services		7,441			8.6	%		7,556		9.8	%		(115	)		(1.5	)%
International Services		686			1.3	%		620		1.3	%		66			10.6	%
Facility Construction & Design		—			—	%		—		—	%		—			—	%
			��
Total	$	24,079			5.3	%	$	23,888		6.3	%	$	191			0.8	%


	2014		Effective Rate			2013			Effective Rate			$ Change		% Change
	(Dollars in thousands)
Income Taxes	$	5,537		12.9	%	$	(7,755	)		(33.9	)%	$	13,292		(171.4	)%


	2014		% of Revenue		2013		% of Revenue			$ Change			% Change
	(Dollars in thousands)
Loss on Extinguishment of Debt	$	—		—	$	6,978		0.6	%	$	(6,978	)		(100.0	)%


Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

July 1, 2014 - July 31, 2014		—	$	—		—	$	—

August 1, 2014 - August 31, 2014		11,357	$	37.67		—	$	—

September 1, 2014 - September 30, 2014		—	$	—		—	$	—


Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2015 - January 31, 2015		—	$	—		—	$	—
February 1, 2015 - February 28, 2015		—	$	—		—	$	—
March 1, 2015 - March 31, 2015		25,012	$	44.05		—	$	—


~~3.1~~ 2.1		~~Amendment to the Amended and Restated Bylaws~~Asset Purchase Agreement, dated as of January 25, 2015, entered into among The GEO Group, Inc. (“GEO”), ~~effective as~~Correctional Properties, LLC, a Delaware limited liability company and subsidiary of ~~July 2, 2014. (1)~~GEO (“Correctional Properties,” and collectively with GEO, the “Purchaser”), LCS Corrections Services, Inc. (“LCS Corrections Services”), LCS-Hidalgo, LLC (“LCS-Hidalgo”), LCS-Caldwell, LLC (“LCS-Caldwell”), LCS-Basile, LLC (“LCS-Basile”), LCS-Pine Prairie, LLC (“LCS-Pine”), LCS-Brooks, LLC (“LCS-Brooks”), LCS-Nueces, LLC (“LCS- Nueces”), LCS-Tensas, LLC (“LCS-Tensas”), Perry Detention Services, LLC (“Perry” and collectively with LCS Corrections Services, LCS-Hidalgo, LCS- Caldwell, LCS-Basile, LCS Pine, LCS-Brooks, LCS-Nueces and LCS-Tensas, the “Companies”), and the equity holders of the Companies named in the Agreement (the “Company Equityholders,” and collectively with the “Companies,” the “Sellers”).*

~~10.1~~ 31.1		Second Amended and Restated Credit Agreement, dated as of August 27, 2014 by and among The GEO Group, Inc. and GEO Corrections Holdings, Inc, as Borrowers, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto (portionsSECTION 302 CEO Certification.

31.2		SECTION 302 CFO Certification.

32.1		SECTION 906 CEO Certification.

32.2		SECTION 906 CFO Certification.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

*	Portions of this exhibit have been omitted and filed separately ~~wih~~with the Securities and Exchange Commission pursuant to a request for confidential ~~treatment). (2)~~

~~4.1~~		~~Form of Indenture for Senior Debt Securities. (3)~~

~~4.2~~		~~Form of Indenture for Subordinated Debt Securities. (4)~~

~~4.3~~		~~Indenture, dated as of September 25, 2014, by~~treatment. Additionally, the exhibits and ~~between GEO and Wells Fargo Bank, National Association, as Trustee. (5)~~

~~4.4~~		~~First Supplemental Indenture, dated as of September 25, 2014, by and among GEO, certain subsidiary guarantors and Wells Fargo Bank, National Association, as Trustee. (6)~~

~~4.5~~		~~Form of 5.875% Senior Note due 2024 (included in Exhibit 4.4 above). (7)~~

~~31.1~~		~~SECTION 302 CEO Certification.~~

~~31.2~~		~~SECTION 302 CFO Certification.~~

~~32.1~~		~~SECTION 906 CEO Certification.~~

~~32.2~~		~~SECTION 906 CFO Certification.~~

~~101.INS~~		~~XBRL Instance Document~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase~~


		THE GEO GROUP, INC.

Date: ~~November 10, 2014~~	May 6, 2015		/s/ Brian R. Evans
		Brian R. Evans
	��	Senior Vice President & Chief Financial Officer
		(duly authorized officer and principal financial officer)

Large accelerated filer

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Smaller reporting company