Florida


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

~~One Park Place, 621 NW 53rd Street, Suite 700,~~4955 Technology Way Boca Raton, Florida		~~33487~~ 33431
(Address of principal executive offices)		(Zip Code)

(561)893-0101

(Registrant’s telephone number, including area code)

N/A

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value per share		GEO		New York Stock Exchange

Indicate by check mark whether the 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 ☒☑ 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 RegulationS-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 ☒☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~“emerging~~"emerging growth ~~company”~~company" in Rule12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ☐ No ☒☑

As of ~~November 1, 2017,~~August 3, 2021, the registrant had ~~124,070,516~~122,553,727 shares of common stock outstanding.

Table of Contents

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION		3

ITEM 1. FINANCIAL STATEMENTS		3

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2021 AND ~~2016~~2020		3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~ (UNAUDITED) FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2021 AND ~~2016~~2020		4

CONSOLIDATED BALANCE SHEETS AS OF ~~SEPTEMBER~~JUNE 30, ~~2017~~2021 (UNAUDITED) AND DECEMBER 31, ~~2016~~2020		5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2021 AND ~~2016~~2020		6

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS		7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		43
	32
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		66
	57
ITEM 4. CONTROLS AND PROCEDURES		66
	57
PART II - OTHER INFORMATION		67
	58
ITEM 1. LEGAL PROCEEDINGS		67
	58
ITEM 1A. RISK FACTORS		67
	58
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		67
	58
ITEM 3. DEFAULTS UPON SENIOR SECURITIES		67
	58
ITEM 4. MINE SAFETY DISCLOSURES		67
	58
ITEM 5. OTHER INFORMATION		67
	58
ITEM 6. EXHIBITS		68
	59
SIGNATURES		69	60

Table of Contents

PART I - FINANCIAL INFORMATION

~~ITEM 1.~~

~~FINANCIAL STATEMENTS~~

ITEM 1. FINANCIAL STATEMENTS

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED

~~SEPTEMBER~~JUNE 30, ~~2017~~ 2021AND ~~2016~~2020

(In thousands, except per share data)


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Revenues	$	566,759		$	554,376		$	1,694,443		$	1,612,911		$	565,419		$	587,829		$	1,141,796		$	1,192,846
Operating expenses		423,134			415,659			1,276,286			1,221,002			405,009			444,035			833,160			905,781
Depreciation and amortization		31,649			28,783			92,464			85,886			33,306			33,434			67,423			66,761
General and administrative expenses		49,074			37,483			143,866			108,448			54,688			45,543			103,167			99,325

Operating income		62,902			72,451			181,827			197,575			72,416			64,817			138,046			120,979
Interest income		14,648			7,928			38,971			18,387			5,985			5,248			12,187			10,686
Interest expense		(38,719	)		(33,428	)		(109,702	)		(93,864	)		(32,053	)		(30,610	)		(63,897	)		(64,790	)
Loss on extinguishment of debt		—			—			—			(15,885	)

Gain on extinguishment of debt														1,654			0			4,693			1,563
Gain (loss) on dispositions of real estate														(2,950	)		(1,304	)		10,379			(880	)
Income before income taxes and equity in earnings of affiliates		38,831			46,951			111,096			106,213			45,052			38,151			101,408			67,558
Provision for income taxes		1,720			4,970			5,590			12,000			5,063			4,196			12,999			10,742
Equity in earnings of affiliates, net of income tax provision of $577, $650, $1,785 and $1,850, respectively		1,342			1,693			4,255			4,943

Equity in earnings of affiliates, net of income tax provision of $291, $484, $631 and $928 respectively														1,942			2,699			4,007			4,959
Net income		38,453			43,674			109,761			99,156			41,931			36,654			92,416			61,775
Net loss attributable to noncontrolling interests		36			46			123			123			28			66			88			126

Net income attributable to The GEO Group, Inc.	$	38,489		$	43,720		$	109,884		$	99,279		$	41,959		$	36,720		$	92,504		$	61,901

Weighted-average common shares outstanding:
Basic		122,251			111,162			119,356			111,015			120,426			119,810			120,225			119,602
Diluted		122,887			111,504			120,114			111,425			120,470			119,964			120,431			119,937
Net income per common share attributable to The GEO Group, Inc.:
Basic:
Net income per common share attributable to The GEO Group, Inc. - basic	$	0.31		$	0.39		$	0.92		$	0.89		$	0.29		$	0.31		$	0.71		$	0.52

Diluted:
Net income per common share attributable to The GEO Group, Inc. - diluted	$	0.31		$	0.39		$	0.91		$	0.89		$	0.29		$	0.31		$	0.70		$	0.52

Dividends declared per share	$	0.47		$	0.43		$	1.41		$	1.30		$	0		$	0.48		$	0.25		$	0.96

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

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THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(Unaudited)

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED

~~SEPTEMBER~~JUNE 30, ~~2017~~ 2021AND ~~2016~~2020

(In thousands)


	Three Months Ended						Nine Months Ended					Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017		September 30, 2016			June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Net income	$	38,453		$	43,674		$	109,761	$	99,156		$	41,931		$	36,654		$	92,416		$	61,775

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments		(179	)		970			2,030		2,081			(14	)		4,003			(641	)		(4,804	)
Pension liability adjustment, net of tax provision of $25, $21, $76 and $63, respectively		64			33			175		98
Unrealized gain (loss) on derivative instrument classified as cash flow hedge, net of tax (provision) benefit of $(307), $81, $(451) and $893, respectively		1,740			(520	)		2,556		(5,162	)

Pension liability adjustment, net of tax provision of $42, $28, $83 and $57, respectively													155			106			311			213
Change in fair value of derivative instrument classified as cash flow hedge, net of tax (benefit) provision of $(310), $(51), $474 and $(1,258), respectively													(1,165	)		(163	)		1,782			(4,675	)
Total other comprehensive income (loss), net of tax		1,625			483			4,761		(2,983	)		(1,024	)		3,946			1,452			(9,266	)

Total comprehensive income		40,078			44,157			114,522		96,173			40,907			40,600			93,868			52,509

Comprehensive loss attributable to noncontrolling interests		34			36			119		104			30			65			93			173

Comprehensive income attributable to The GEO Group, Inc.	$	40,112		$	44,193		$	114,641	$	96,277		$	40,937		$	40,665		$	93,961		$	52,682

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

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THE GEO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

~~SEPTEMBER~~JUNE 30, ~~2017~~ 2021ANDDECEMBER 31, ~~2016~~2020

(In thousands, except share data)


	September 30, 2017			December 31, 2016			June 30, 2021			December 31, 2020
	(Unaudited)						(Unaudited)
ASSETS
*Current Assets*
Cash and cash equivalents	$	51,526		$	68,038		$	483,048		$	283,524
Restricted cash and investments		12,452			17,133
Accounts receivable, less allowance for doubtful accounts of $4,199 and $3,664, respectively		386,898			356,255
Restricted cash and cash equivalents								29,892			26,740
Accounts receivable, less allowance for doubtful accounts of $2,708 and $4,183, respectively								313,831			362,668
Contract receivable, current portion		243,531			224,033			6,420			6,283
Prepaid expenses and other current assets		36,073			32,210			35,449			32,108

Total current assets		730,480			697,669			868,640			711,323

*Restricted Cash and Investments*		31,032			20,848			45,465			37,338
*Property and Equipment, Net*		2,055,982			1,897,241			2,074,350			2,122,195
*Non-Current Contract Receivable*		405,780			219,783
Assets Held for Sale								28,197			9,108
Contract Receivable								382,829			396,647
Operating Lease Right-of-Use Assets, Net								120,208			124,727
*Deferred Income Tax Assets*		31,831			30,039			36,604			36,604
*Goodwill*		781,972			615,433			755,239			755,250
*Intangible Assets, Net*		261,790			203,884			177,514			187,747
*OtherNon-Current Assets*		70,474			64,512			74,563			79,187

Total Assets	$	4,369,341		$	3,749,409		$	4,563,609		$	4,460,126

LIABILITIES AND SHAREHOLDERS’ EQUITY
*Current Liabilities*
Accounts payable	$	91,617		$	79,637		$	75,329		$	85,861
Accrued payroll and related taxes		48,780			55,260			65,298			67,797
Accrued expenses and other current liabilities		174,321			131,096			189,770			202,378
Current portion of capital lease obligations, long-term debt andnon-recourse debt		260,046			238,065

Operating lease liabilities, current portion								28,095			29,080
Current portion of finance lease liabilities, long-term debt and non-recourse debt								27,240			26,180
Total current liabilities		574,764			504,058			385,732			411,296

Deferred Income Tax Liabilities								30,726			30,726
*OtherNon-Current Liabilities*		92,804			88,656			117,273			115,555
*Capital Lease Obligations*		6,412			7,431
Operating Lease Liabilities								98,474			101,375
Finance Lease Liabilities								2,614			2,988
*Long-Term Debt*		2,157,882			1,935,465			2,632,332			2,561,881
*Non-Recourse Debt*		323,387			238,842			311,390			324,223
*Commitments, Contingencies and Other* (Note 11)
Commitments and Contingencies (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, 187,500,000 shares authorized, 123,990,529 and 112,547,544 issued and outstanding, respectively		1,240			1,125
Preferred stock, $0.01 par value, 30,000,000 shares authorized, NaN issued or outstanding								0			0
Common stock, $0.01 par value, 187,500,000 shares authorized, 127,261,310 and 126,153,173 issued and 122,408,938 and 121,318,175 outstanding, respectively								1,273			1,262
Additionalpaid-in capital		1,185,643			891,993			1,272,014			1,262,267
Earnings in excess of distributions		53,495			112,763
Distributions in excess of earnings								(160,875	)		(222,892	)
Accumulated other comprehensive loss		(26,068	)		(30,825	)		(21,132	)		(22,589	)

Treasury stock, 4,852,372 and 4,834,998 shares, at cost, respectively								(105,099	)		(104,946	)
Total shareholders’ equity attributable to The GEO Group, Inc.		1,214,310			975,056			986,181			913,102
Noncontrolling interests		(218	)		(99	)		(1,113	)		(1,020	)

Total shareholders’ equity		1,214,092			974,957			985,068			912,082

Total Liabilities and Shareholders’ Equity	$	4,369,341		$	3,749,409		$	4,563,609		$	4,460,126

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

Table of Contents

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

FOR THE ~~NINE~~SIX MONTHS ENDED

~~SEPTEMBER~~JUNE 30, ~~2017~~ 2021AND ~~2016~~2020

(In thousands)


	Nine Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			June 30, 2021			June 30, 2020
Cash Flow from Operating Activities:
Net income	$	109,761		$	99,156		$	92,416			61,775
Net loss attributable to noncontrolling interests		123			123			88			126

Net income attributable to The GEO Group, Inc.		109,884			99,279			92,504			61,901
Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash provided by operating activities:
Depreciation and amortization expense		92,464			85,886			67,423			66,761
Stock-based compensation		14,852			9,675			11,426			14,474

Loss on extinguishment of debt		—			15,885

Gain on extinguishment of debt								(4,693	)		(1,563	)
Amortization of debt issuance costs, discount and/or premium and othernon-cash interest		11,922			8,330			3,586			3,378
Provision for doubtful accounts		1,597			1,783			—			184
Equity in earnings of affiliates, net of tax		(4,255	)		(4,943	)		(4,007	)		(4,959	)
Dividends received from unconsolidated joint venture		5,052			1,611
Income tax deficiency related to equity compensation		—			844
Dividends received from unconsolidated joint ventures								4,185			2,892
Loss on sale/disposal of property and equipment, net		2,194			764			4,329			2,781
Loss on assets held for sale								—			774
(Gain) loss on disposition of real estate								(10,379	)		880
Changes in assets and liabilities, net of effects of acquisitions:
Changes in accounts receivable, prepaid expenses and other assets		5,527			(33,953	)		53,025			68,767
Changes in contract receivable		(163,083	)		(205,135	)		3,236			2,457
Changes in accounts payable, accrued expenses and other liabilities		(18,326	)		8,216			(15,074	)		38,049

Net cash provided by (used in) operating activities		57,828			(11,758	)

Net cash provided by operating activities								205,561			256,776
Cash Flow from Investing Activities:
Acquisition of CEC, net of cash acquired		(353,555	)		—
Insurance proceeds - damaged property		86			4,733			1,027			4,597
Proceeds from sale of property and equipment		856			68			3,295			137
Change in restricted cash and investments		(4,820	)		(97,716	)
Proceeds from sales of real estate								13,240			—
Proceeds from sale of assets held for sale								—			1,300
Change in restricted investments								(5,552	)		(1,749	)
Capital expenditures		(104,130	)		(68,015	)		(44,347	)		(53,470	)

Net cash used in investing activities		(461,563	)		(160,930	)		(32,337	)		(49,185	)

Cash Flow from Financing Activities:
Proceeds from long-term debt		1,324,865			813,077			435,000			225,579
Payments on long-term debt		(1,093,088	)		(775,256	)		(356,831	)		(262,411	)
Payments onnon-recourse debt		(68,887	)		(1,878	)		(3,797	)		(2,908	)
Proceeds fromnon-recourse debt		123,785			273,087
Taxes paid related to net share settlements of equity awards		(4,122	)		(2,336	)		(2,002	)		(2,789	)
Proceeds from issuance of common stock under prospectus supplement		275,867			—

Proceeds from issuance of common stock in connection with ESPP		382			338			180			296
Payment for repurchases of common stock								—			(9,009	)
Debt issuance costs		(9,470	)		(20,490	)		(9,587	)		—
Income tax deficiency related to equity compensation		—			(844	)
Proceeds from the exercise of stock options		6,786			2,367
Cash dividends paid		(169,152	)		(145,991	)		(30,487	)		(116,160	)

Net cash provided by financing activities		386,966			142,074
Effect of Exchange Rate Changes on Cash and Cash Equivalents		257			1,099

Net Decrease in Cash and Cash Equivalents		(16,512	)		(29,515	)
Cash and Cash Equivalents, beginning of period		68,038			59,638

Cash and Cash Equivalents, end of period	$	51,526		$	30,123

Net cash provided by (used in) financing activities								32,476			(167,402	)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash and Cash Equivalents								(449	)		(960	)
Net Increase in Cash, Cash Equivalents and Restricted Cash and Cash Equivalents								205,251			39,229
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period								311,853			67,472
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period							$	517,104		$	106,701
Supplemental Disclosures:
Non-cash Investing and Financing activities:
Right-of-use assets obtained from operating lease liabilities							$	4,230		$	6,384
Equipment obtained from finance lease liabilities							$	1,198		$	579
Dividends paid in treasury shares							$	153		$	—
Conversion of pension liability to shares of common stock							$	—		$	8,925
Capital expenditures in accounts payable and accrued expenses	$	7,526		$	2,410		$	6,163		$	6,083

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

Table of Contents

THE GEO GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

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~~secure facilities, processing centers and community reentry ~~facilities and the provision of community-based services and youth services~~centers in the United States, Australia, South Africa and the United 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~~facilities, processing centers, as well as community-based reentry facilities and offers an expanded delivery of ~~offender~~ rehabilitation services under its ~~‘GEO~~'GEO Continuum of ~~Care’~~Care' platform. The ~~‘GEO~~'GEO Continuum of ~~Care’~~Care' program integrates enhanced~~in-prison~~ rehabilitative programs, which are evidence-based and include cognitive behavioral treatment and post-release services, and provides academic and vocational classes toin life skills and treatment programs while helping individuals reintegrate into their communities. The Company develops new facilities based on contract awards, using its project development expertise and experience to design, construct and finance what it believes arestate-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~~individuals as contracted domestically and in the United Kingdom through its joint venture GEO Amey PECS Ltd. (“GEOAmey”). At ~~September~~June 30, ~~2017, after its acquisition of Community Education Centers (“CEC”) (Refer to Note 2 - Business Combinations),~~2021, the Company’s worldwide operations include the management and/or ownership of approximately ~~96,000~~90,000 beds at ~~140 correctional and detention~~114 facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of community supervision services for more than ~~185,000 offenders and pretrial defendants,~~200,000 individuals, including ~~approximately~~over 100,000 ~~individuals~~ through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

~~In March 2017, the Company’s Board of Directors declared a3-for-2~~ ~~stock split of its common stock. The stock split was completed on April 24, 2017 with respect to shareholders of record on April 10, 2017. Outstanding share andper-share~~ amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split. On April 24, 2017, the Company amended its articles of incorporation to increase the number of authorized shares of common stock to take into effect the stock split.

The ~~Company’s~~Company's unaudited consolidated financial statements included in this Quarterly Report on Form10-Q have been prepared in accordance with accounting principles generally accepted in the United States and the instructions to Form10-Q and consequently do not include all disclosures required by Form10-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 Form10-K filed with the Securities and Exchange Commission on February ~~27, 2017~~16, 2021 for the year ended December 31, ~~2016.~~2020. The accompanying December 31, ~~2016~~2020 consolidated balance sheet has been derived from those audited financial statements. Additional information may be obtained by referring to the Company’s Form10-K for the year ended December 31, ~~2016.~~2020. 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 Form10-Q have been made. Results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 are not necessarily indicative of the results for the entire year ending December 31, ~~2017,~~2021, or for any other future interim or annual periods.

~~2. BUSINESS COMBINATIONS~~Risks and uncertainties

~~Community Education Centers Acquisition~~

Executive Order

On January 26, 2021, President Biden signed an executive order directing the United States Attorney General not to renew Department of Justice (“DOJ”) contracts with privately operated criminal detention facilities, as consistent with applicable law (the “Executive Order”). Two agencies of the DOJ, the Bureau of Prisons (“BOP”) and U.S. Marshals Service (“USMS”), utilize GEO’s services. The BOP houses inmates who have been convicted of federal crimes, and the USMS is generally responsible for detainees who are awaiting trial or sentencing in U.S. federal courts. GEO’s contracts with the BOP for its company-owned 1,940-bed Great Plains Correctional Facility, company-owned 1,732-bed Big Spring Correctional Facility, company-owned 1,800-bed Flightline Correctional Facility, and company-owned 1,800-bed North Lake Correctional Facility have renewal option periods that expire on May 31, 2021, November 30, 2021, November 30, 2021, and September 30, 2022, respectively. Additionally, the contracts with the BOP for the county owned and managed 1,800-bed Reeves County Detention Center I & II and the 1,376-bed Reeves County Detention Center III have renewal option periods that expire September 30, 2022 and June 30, 2022, respectively. The Company has a management agreement with Reeves County, Texas for the management oversight of these two county-owned facilities. In total, the Great Plains, Big Spring, Flightline, North Lake Correctional Facilities, Reeves County Detention Center I & II and Reeves County Detention Center III generated approximately $145 million in revenues during the year ended December 31, 2020. The BOP has experienced a decline in federal prison populations over the last several years, a trend that has more recently been accelerated by the COVID-19 global pandemic. As a result of the Executive Order and the decline in federal prison populations, the above-described contracts with the BOP may not be renewed over the coming years. On March 5, 2021, the Company was notified by the BOP that it has decided to not exercise its contract renewal option for the company-owned, 1,940-bed Great Plains Correctional Facility in Oklahoma, when the contract base period expires on May 31, 2021. On March 25, 2021 the Company was notified that the BOP had decided to terminate its contract with the county-owned and managed Reeves County Detention Center I & II effective May 10, 2021. On March 15, 2021, the Company announced that the USMS had decided to not exercise the contract renewal option for its company-owned, 222-bed Queens Detention Facility in New York, when the contract base period ended on March 31, 2021.

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Quarterly Dividends

On April ~~5, 2017,~~7, 2021, GEO announced that its Board of Directors (the “Board”) had immediately suspended GEO’s quarterly dividend payments with the ~~Company completed~~goal of maximizing the use of cash flows to repay debt, deleverage and internally fund growth. While GEO currently intends to maintain its ~~acquisition~~corporate tax structure as a REIT, the Board is evaluating GEO’s corporate tax structure as a REIT. The Board’s evaluation of ~~CEC, pursuant~~the current corporate tax structure and GEO’s REIT status is expected to ~~a definitive merger agreement entered~~take into ~~on February 12, 2017 between the Company, GEO/DE/MC/01 LLC, and CEC Parent Holdings LLC. CEC is a private provider of rehabilitation services for offenders in reentry andin-prison~~ ~~treatment facilities~~consideration, among other factors, potential changes to GEO’s financial operating performance, as well as ~~management services for county, state~~potential changes to the Internal Revenue Code of 1986, as amended (the “Code”) applicable to U.S. corporations and ~~federal correctional~~REITs. As a part of this evaluation, GEO has engaged financial advisors and ~~detention facilities. CEC’s operations encompass over 12,000 beds nationwide. Under~~legal advisors to assist in evaluating various capital structure alternatives. The Board expects to conclude its evaluation in the ~~terms~~fourth quarter of 2021, and should the Board determine to maintain GEO’s REIT status, an additional dividend payment may be required before year-end in order to meet the minimum REIT distribution requirements under the Code.

COVID-19

In December 2019, a novel strain of coronavirus, now known as COVID-19 (“COVID-19”), was reported in Wuhan, China and has since extensively impacted the global health and economic environment. In January 2020, the World Health Organization (“WHO”) declared it a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment of the ~~merger agreement,~~COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

The Company has been closely monitoring the impact of the COVID-19 pandemic on all aspects of its business and geographies, including how it will impact those entrusted to its care and governmental partners. During the year ended December 31, 2020, the Company ~~acquired 100%~~did incur disruptions from the COVID-19 pandemic but, it is unable to predict the overall future impact that the COVID-19 pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties related to the ~~voting interests~~pandemic. The COVID-19 pandemic and related government-imposed mandatory closures, the efficacy and distribution of COVID-19 vaccines, shelter in-place restrictions and social distancing protocols and increased expenditures on engineering controls, personal protective equipment, diagnostic testing, medical expenses, temperature scanners, protective plexiglass barriers and increased sanitation have had, and will continue to have, a severe impact on global economic conditions and the environment in CEC for $353.6 million, net of cash acquired of $3.0 million, in an all cash transaction, excluding transaction related expenses paid at closing of $4.1 million. At the time of the acquisition, approximately $115 million of CEC indebtedness, including accrued interest, was outstanding. All indebtedness of CEC was repaid bywhich the Company operates. Starting in early 2020, the Company began to observe negative impacts from the pandemic on its performance in its secure services business, specifically with ~~a portion of the $353.6 million merger consideration. The purchase price was reduced by $2.6 million~~its U.S. Immigration and Customs Enforcement (“ICE”) Processing Centers and U.S. Marshals Facilities, as a result of a decrease in court sentencing at the ~~final working capital target settlement received~~federal level and reduced operational capacity to promote social distancing protocols. Additionally, the Company’s reentry services business conducted through its GEO Care business segment has also been negatively impacted, specifically its residential reentry centers and non-residential day reporting programs were impacted by declines in programs due to lower levels of referrals by federal, state and local agencies. Additionally, the Company has experienced the transmission of COVID-19 among detainees and staff at most of its facilities during ~~the third quarter ended September 30, 2017. Additionally, for tax periods ending on or prior to December 31, 2018, the purchase price may be adjusted for any tax benefits realized by~~2020 and continuing into 2021. If the Company ~~attributable~~is unable to ~~certain transactional tax deductions if such deductions are able to be taken by~~mitigate the ~~Company and will result in an incremental tax benefit. The Company has estimated~~transmission of COVID-19 at its facilities it could experience a maximum potential adjustment of approximately $1.9 million but has preliminarily estimated the fair value of this contingency at zero at the acquisition date. The Company is still reviewing the various tax implications of the acquisition which may impact the ultimate fair value of this contingency.

~~Purchase price allocation~~

GEO is identified as the acquiring company for US GAAP accounting purposes. Under the acquisition method of accounting, the purchase price for CEC was allocated to CEC’s net tangible and intangible assets basedmaterial adverse effect on their estimated fair values as of April 5, 2017, the date of closing and the date that the Company obtained control of CEC. In order to determine the fair values of certain tangible and intangible assets acquired, the Company engaged a third party independent valuation specialist. For all other assets acquired and liabilities assumed, the recorded fair value was determined by the Company’s management and represents an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

The allocation of the purchase price for this transaction as of April 5, 2017 has not been finalized. The primary areas of the preliminary purchase price allocations that are not finalized relate to the fair values of certain tangible and intangible assets and liabilities acquired and income taxes. The Company expects to continue to obtain information to assist 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 recorded in the reporting period in which the adjustment amounts are determined. During the three months ended September 30, 2017, the Company made measurement period adjustments of approximately $6.0 million to provisional amounts with respect to the CEC acquisition that were 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 as of that date. These adjustments related to the Company’s valuation of accounts receivable, prepaid expenses and other current assets, accounts payable, other noncurrent liabilities and deferred income tax assets. Of the total measurement period adjustment, approximately $4.6 million related to the valuation of an unfavorable contract liability which had the effect of reducing goodwill and the unfavorable contract liability. The remaining measurement period adjustments were not individually significant. The adjusted purchase price of $353.6 million has been preliminarily allocated to the estimated fair values of the assets acquired and liabilities assumed as of April 5, 2017 as follows (in ‘000’s):

Preliminary Purchase Price Allocation
Accounts Receivable
   $ 29,916
Prepaid and other current assets
   4,407
Property and equipment
   126,510
Intangible assets
   76,000
Favorable lease assets
   3,110
Deferred income tax assets
   1,792
Othernon-current assets
   4,327


Total assets acquired
   $ 246,062


Accounts payable and accrued expenses
   52,341
Unfavorable lease liabilities
   1,299
Othernon-current liabilities
   5,360


Total liabilities assumed
   $ 59,000


Total identifiable net assets
   187,062
Goodwill
   166,493


Total consideration paid, net of cash acquired
   $ 353,555

~~As shown above, the Company recorded $166.5 million of goodwill related to the purchase of CEC. The strategic benefits of the merger include the Company’s ability to further~~its financial position, itself to meet the demand for increasingly diversified correctional, detention and community reentry facilities and services and the Company’s ability to expand the delivery of enhanced in- prison rehabilitation including evidence-based treatment, integrated with post-release support services through GEO’s Continuum of Care platform. These factors contributed to the goodwill that was recorded upon consummation of the transaction. The Company does not believe that any of the goodwill recorded as a result of the CEC acquisition will be deductible for federal income tax purposes. Identifiable intangible assets purchased in the acquisition and their weighted average amortization periods in total and by major intangible asset class, as applicable, are included in the table below:

   Weighted
Average Useful
Life (years)    Fair Value as of April 5, 2017
Facility management contracts
   18.3    $ 75,300
Covenants not to compete
   1    700


Total acquired intangible assets
      $ 76,000

~~Pro forma financial information~~

~~The~~ results of operations ~~of CEC are included in~~and cash flows. Although the ~~Company’s results of operations from April 5, 2017. The following unaudited pro forma information combines~~Company is unable to predict the ~~consolidated results of operations~~duration or scope of the ~~Company and CEC as if~~COVID-19 pandemic or estimate the ~~acquisition had occurred at January 1, 2016, which is the beginning~~extent of the ~~earliest~~negative financial impact to its operating results, an extended period ~~presented. The pro forma amounts are included for comparative purposes~~of depressed economic activity necessitated to combating the disease, and ~~may not necessarily reflect~~ the ~~results of operations that would have resulted had the acquisition been completed at the beginning~~severity and duration of the ~~applicable period and~~related global economic crisis may ~~not be indicative of the results that will be attained in the~~adversely impact its future ~~(in thousands):~~financial performance.

   Three Months Ended    Nine Months Ended
   September 30,
2017    September 30,
2016    September 30,
2017    September 30,
2016
Pro forma revenues
   $ 566,759    $ 621,565    $ 1,756,320    $ 1,805,064
Pro forma net income attributable to the GEO Group, Inc.
   $ 42,033    $ 44,525    $ 122,832    $ 100,372

The unaudited pro forma combined financial information presented above is compiled from the financial statements of the combined companies and includes pro forma adjustments for: (i) estimated changes in depreciation expense, interest expense and amortization expense; (ii) adjustments to eliminate intercompany transactions; (iii) adjustments to remove $14.0 million, for the nine months ended September 30, 2017, respectively, of~~non-recurring~~ transaction and merger related costs directly related to the CEC acquisition that are included in the combined companies’ financial results; and (iv) the income tax impact of the adjustments. The unaudited pro forma financial information does not include any adjustments to reflect the impact of cost savings or other synergies that may result from this acquisition. As noted above, the unaudited pro forma financial information does not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined companies in the future.

~~The Company has included revenue and earnings of approximately $114 million and $14 million, respectively, in its~~

~~consolidated statements of operations for the nine months ended September 30, 2017 for CEC activity since April 5, 2017, the~~

~~date of acquisition.~~

3.2. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has recorded goodwill as a result of its various business combinations. ~~On April 5, 2017, the Company completed its acquisition of CEC. Refer to Note 2 - 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 the ~~Company’s~~Company's goodwill balances from ~~December 31, 2016~~January 1, 2021 to ~~September~~June 30, ~~2017~~2021 are as follows (in thousands):

									January 1, 2021		Foreign Currency Translation			June 30, 2021
	December 31, 2016		Acquisitions		Foreign Currency Translation		September 30, 2017
U.S. Corrections & Detention	$	277,774	$	41,604	$	—	$	319,378
GEO Care		337,257		124,889		—		462,146
U.S. Secure Services									$	316,366	$	0		$	316,366
GEO Care [1]										438,443		0			438,443
International Services		402		—		46		448		441		(11	)		430

Total Goodwill	$	615,433		166,493	$	46	$	781,972	$	755,250	$	(11	)	$	755,239

[1] Net of accumulated loss on impairment of $21.1 million related to the Community Based reporting unit for an impairment charge incurred during the fourth quarter of 2020.

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As previously discussed in Note 1 – Basis of Presentation, on January 26, 2021, President Biden signed an Executive Order directing the United States Attorney General not to renew DOJ contracts with privately operated criminal detention facilities, as consistent with applicable law. The exact details regarding the timing, scope and impacts of this plan is unknown, and uncertainties exist about the capacity of other DOJ facilities to absorb the populations which are currently housed in public-private partnerships. The Company considered the issuance of the Executive Order to be a “triggering event” that requires certain quantitative testing for potential impairment of goodwill for its U.S. Secure Services reporting unit.

The quantitative testing performed during first quarter 2021 resulted in 0 impairment in the goodwill of the U.S. Secure Services reporting unit. The carrying value of the U.S. Secure Services reporting unit is all of the goodwill in the U.S. Secure Services segment in the table above. The calculated fair value of the U.S. Secure Services reporting unit exceeded its carrying value. The percentage that the fair value exceeded the carrying value was approximately 6%. The Company used a third-party valuation firm to determine the estimated fair value of the reporting unit using a discounted cash flow model which is dependent on several significant estimates and assumptions related to forecasts of future cash flows and the weighted average cost of capital, among other factors. A discount rate of 10% was utilized to adjust the cash flow forecasts based on the Company’s estimate of a market participant’s weighted-average cost of capital. Growth rates for sales, profits and other assumptions were determined using inputs from the Company’s long-term planning process. The Company also makes estimates for discount rates and other factors based on market conditions, historical experience and other economic factors. Additionally, management made certain assumptions relating to future re-activations and sales of certain idle facilities, including those where the BOP and USMS have recently notified the Company of its intention not to exercise upcoming renewal options and/or not to rebid contracts with upcoming contract expirations. A change in one or a combination of these assumptions could significantly impact the fair value of the reporting unit. For example, a 1% increase in the discount rate would cause the carrying value to exceed the fair value and trigger an impairment of approximately $76 million or 24% of the goodwill balance in the U.S. Secure Services reporting unit. Conversely, a 1% decrease in the discount rate would increase the percentage that the fair value exceeded the carrying value to 22%.

Future impairment charges may be required on the Company’s goodwill, as the discounted cash flow model is subject to change based upon the Company’s performance, overall market conditions, the state of the credit markets and political environment. The Company will continue to monitor these relevant factors to determine if an additional interim impairment assessment is warranted.If there were to be a deterioration in management’s forecasted financial performance, an increase in discount rates or a reduction in long-term growth rates, these factors could all be potential indicators of an impairment charge to our remaining goodwill, which could be material, in future periods.

The Company has also recorded other finite and indefinite-lived intangible assets as a result of its various business combinations. ~~Refer to Note 2 - Business Combinations for a discussion of the Company’s recent acquisition of CEC.~~ The ~~Company’s~~Company's intangible assets include facility management contracts, covenants not to compete, trade names and technology, as follows (in thousands):


	September 30, 2017									December 31, 2016							June 30, 2021									December 31, 2020
	Weighted Average Useful Life (years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Useful Life (years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Facility management contracts		16.3	$	308,446	$	(101,537	)	$	206,909	$	233,136	$	(87,256	)	$	145,880		16.3	$	308,407	$	(179,090	)	$	129,317	$	308,398	$	(168,848	)	$	139,550
Covenants not to compete		1		700		(342	)		358		—		—			—
Technology		7.3		33,700		(24,377	)		9,323		33,700		(20,896	)		12,804		7.3		33,700		(30,703	)		2,997		33,700		(30,703	)		2,997
Trade name (Indefinite lived)		Indefinite		45,200		—			45,200		45,200		—			45,200

Trade names																	Indefinite			45,200		—			45,200		45,200		—			45,200
Total acquired intangible assets			$	388,046	$	(126,256	)	$	261,790	$	312,036	$	(108,152	)	$	203,884			$	387,307	$	(209,793	)	$	177,514	$	387,298	$	(199,551	)	$	187,747

Amortization expense was ~~$6.5~~$10.2 million and ~~$18.1~~$11.2 million for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017, respectively. Amortization expense was $5.1 million~~2021 and ~~$15.3 million for the three and nine months ended September 30, 2016,~~2020, respectively. Amortization expense was primarily related to the ~~U.S. Corrections & Detention~~U.S Secure Services and GEO Care ~~segments’~~segments' amortization of acquired facility management contracts. As of ~~September~~June 30, ~~2017,~~2021, the weighted average period before the next contract renewal or extension for the acquired facility management contracts was approximately ~~1.6~~2.3 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.

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Estimated amortization expense related to the ~~Company’s~~Company's finite-lived intangible assets for the remainder of ~~2017~~2021 through ~~2021~~2025 and thereafter is as follows (in thousands):

Fiscal Year
   Total Amortization
Expense
Remainder of 2017
   $ 6,525
2018
   22,821
2019
   22,310
2020
   22,310
2021
   20,090
Thereafter
   122,534


   $ 216,590

Fiscal Year	Total Amortization Expense
Remainder of 2021	$	9,119
2022		18,135
2023		13,491
2024		9,758
2025		9,706
Thereafter		72,105
	$	132,314

3. FINANCIAL INSTRUMENTS

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~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 (in thousands):


			Fair Value Measurements at September 30, 2017								Fair Value Measurements at June 30, 2021
	Carrying Value at September 30, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Value at June 30, 2021		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investment:
Rabbi Trust	$	19,472	$	—	$	19,472	$	—	$	41,301	$	—	$	41,301	$	—
Fixed income securities		1,917		—		1,917		—		1,950		—		1,950		—
Liabilities:
Interest rate swap derivatives	$	15,673	$	—	$	15,673	$	—	$	3,759	$	—	$	3,759	$	—

			Fair Value Measurements at December 31, 2016
	Carrying Value at December 31, 2016		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investments:
Rabbi Trust	$	15,662	$	—	$	15,662	$	—
Fixed income securities		1,782		—		1,782		—
Interest rate cap derivatives		15		—		15		—
Liabilities:
Interest rate swap derivatives	$	18,679	$	—	$	18,679	$	—

			Fair Value Measurements at December 31, 2020
	Carrying Value at December 31, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Restricted investments:
Rabbi Trust	$	35,749	$	—	$	35,749	$	—
Fixed income securities		1,932		—		1,932		—
Liabilities:
Interest rate swap derivatives	$	6,015	$	—	$	6,015	$	—

The Company’s Level 2 financial instruments included in the tables above as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 consist of interest rate swap derivative liabilities ~~and interest rate cap derivative assets~~ held by GEO, the ~~Company’s Australian subsidiary, the Company’s~~Company's rabbi trust established for a GEO employee and employer contributions to The GEO Group, Inc.Non-qualified Deferred Compensation Plan and an investment in Canadian dollar denominated fixed income securities. ~~The balance of the interest rate cap derivative assets at September 30, 2017 was not significant.~~

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~~Company's restricted investment in the rabbi trust is invested in ~~Company owned~~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’~~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, which are not actively traded, are valued using quoted rates for these and similar securities.

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4. FAIR VALUE OF ASSETS AND LIABILITIES

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~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 (in thousands):


			Estimated Fair Value Measurements at September 30, 2017
	Carrying Value as of September 30, 2017		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	51,526	$	51,526	$	51,526	$	—	$	—
Restricted cash and investments		24,012		24,012		20,592		3,420		—
Liabilities:

Borrowings under senior credit facility	$	1,041,874	$	1,047,844	$	—	$	1,047,844	$	—
5.875% Senior Notes due 2024		250,000		260,943		—		260,943		—
5.125% Senior Notes		300,000		305,418		—		305,418		—
5.875% Senior Notes due 2022		250,000		260,985		—		260,985		—
6.00% Senior Notes		350,000		368,571		—		368,571		—
Non-recourse debt, Australian subsidiary		549,926		549,926		—		549,926		—
Othernon-recourse debt, including current portion		36,381		37,465		—		37,465		—

			Estimated Fair Value Measurements at December 31, 2016										Estimated Fair Value Measurements at June 30, 2021
	Carrying Value as of December 31, 2016		Total Fair Value		Level 1		Level 2		Level 3		Carrying Value as of June 30, 2021		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	68,038	$	68,038	$	68,038	$	—	$	—	$	483,048	$	483,048	$	483,048	$	—	$	—
Restricted cash and investments		22,319		22,319		19,614		2,705		—		34,056		34,056		34,056		—		—
Liabilities:
Borrowings under senior credit facility	$	804,500	$	795,008	$	—	$	795,008	$	—	$	1,555,355	$	1,405,565	$	—	$	1,405,565	$	—
5.125% Senior Notes due 2023												259,275		247,475		—		247,475		—
5.875% Senior Notes due 2024		250,000		247,813		—		247,813		—		225,293		203,365		—		203,365		—
5.125% Senior Notes		300,000		292,125		—		292,125		—
5.875% Senior Notes due 2022		250,000		254,688		—		254,688		—
6.00% Senior Notes		350,000		346,938		—		346,938		—
Non-recourse debt, Australian subsidiary		454,222		454,185		—		454,185		—
Othernon-recourse debt, including current portion		36,280		37,550		—		37,550		—
6.00% Senior Notes due 2026												350,000		286,321		—		286,321		—
6.50% Exchangeable Senior Notes due 2026												230,000		220,952		—		220,952		—
Non-recourse debt												332,122		322,122		—		322,122		—

			Estimated Fair Value Measurements at December 31, 2020
	Carrying Value as of December 31, 2020		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	283,524	$	283,524	$	283,524	$	—	$	—
Restricted cash and investments		28,329		28,329		28,329		—		—
Liabilities:
Borrowings under senior credit facility	$	1,474,437	$	1,342,066	$	—	$	1,342,066	$	—
5.875% Senior Notes due 2022		193,958		192,736		—		192,736		—
5.125% Senior Notes due 2023		281,783		256,096		—		256,096		—
5.875% Senior Notes due 2024		242,500		202,458		—		202,458		—
6.00% Senior Notes due 2026		350,000		279,493		—		279,493		—
Non-recourse debt		344,614		344,632		—		344,632		—

The fair values of the Company’s cash and cash equivalents, and restricted cash and investments approximates the carrying values of these assets at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016.~~2020. Restricted cash consists of money market funds, bank deposits, commercial paper and time deposits used for asset replacement funds and other funds contractually required to be maintained at the ~~Company’s~~Company's Australian ~~subsidiary and contractual commitments related to the design and construction of a new facility in Ravenhall Australia.~~subsidiary. The fair value of the money market funds and bank deposits 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~~Company's 5.875% senior unsecured notes due 2022 (“("5.875% Senior Notes due ~~2022”~~2022"), 5.875% senior unsecured notes due 2024 (“("5.875% Senior Notes due ~~2024”~~2024"), 6.00% senior unsecured notes due 2026 (“6.00% Senior Notes”), ~~and~~ the 5.125% senior unsecured notes due 2023 (“("5.125% Senior Notes") and the 6.50% exchangeable senior unsecured notes due 2026 (“Convertible Notes” or “6.50% Exchangeable Notes due 2026”), although not actively traded, are based on published financial data for these instruments. On February 25, 2021, the Company completed a private offering of $230 million aggregate principal amount of 6.50% exchangeable senior unsecured notes due 2026. The Company used the net proceeds from this offering to fund the redemption of the then outstanding amount of the Company’s 5.875% Senior Notes due 2022. Refer to Note 10 – Debt for further information. The fair values of the ~~Company’s~~Company's non-recourse debt related to the Washington Economic Development Finance Authority ~~(“WEDFA”~~("WEDFA") ~~is based on market prices for similar instruments. The fair value of thenon-recourse~~ ~~debt related to~~and the Company’s Australian subsidiary isare estimated based on market prices of 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.

Table of Contents

5. RESTRICTED CASH AND CASH EQUIVALENTS

The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported on the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

	June 30, 2021			June 30, 2020
Cash and cash equivalents	$	483,048		$	75,734
Restricted cash and cash equivalents - current		29,892			28,345
Restricted cash and investments - non-current		45,465			32,703
Less Restricted investments - non-current		(41,301	)		(30,081	)
Total cash, cash equivalents and restricted cash and cash equivalents shown in the statement of cash flows	$	517,104		$	106,701

Amounts included in restricted cash and cash equivalents are attributable to certain contractual cash restriction requirements at the Company's wholly owned Australian subsidiary related to non-recourse debt and asset replacement funds contractually required to be maintained and other guarantees. Restricted investments - non-current (included in Restricted Cash and Investments in the accompanying consolidated balance sheets) consists of the Company's rabbi trust established for an employee and employer contributions to The GEO Group, Inc. Non-qualified Deferred Compensation Plan and is not considered to be a restricted cash equivalent. Refer to Note 3 - Financial Instruments.

6. SHAREHOLDERS’ EQUITY

The following ~~table presents~~tables present the changes in shareholders’ equity that are attributable to the Company’s shareholders and to noncontrolling interests for the three and six months ended June 30, 2021 and 2020 (in thousands):

   Common shares
Additional
Paid-In

Earnings in
Excess of

Accumulated
Other
Comprehensive
Noncontrolling
Total
Shareholders’

   Shares Amount Capital Distributions Loss Interests Equity
Balance, January 1, 2017
   112,548 $ 1,125 $ 891,993 $ 112,763 $ (30,825 ) $ (99 ) $ 974,957
Proceeds from exercise of stock options
   348 3 6,783 —   —   —   6,786
Stock-based compensation expense
   —   —   14,852 —   —   —   14,852
Restricted stock granted
   927 9 (9 ) —   —   —   —
Restricted stock canceled
   (60 ) —   —   —   —   —   —
Dividends paid
   —   —   —   (169,152 ) —   —   (169,152 )
Issuance of common stock - prospectus supplement
   10,350 104 275,763 —   —   —   275,867
Shares withheld for net settlements of share-based awards
   (135 ) (1 ) (4,121 ) —   —   —   (4,122 )
Issuance of common stock - ESPP
   13 —   382 —   —   —   382
Net income (loss)
   —   —   —   109,884 —   (123 ) 109,761
Other comprehensive income
   —   —   —   —   4,757 4 4,761


Balance, September 30, 2017
   123,991 $ 1,240 $ 1,185,643 $ 53,495 $ (26,068 ) $ (218 ) $ 1,214,092

	Common shares						Additional Paid-In			Distributions in Excess of			Accumulated Other Comprehensive			Treasury shares					Noncontrolling			Total Shareholders'
	Shares			Amount			Capital			Earnings			Loss			Shares		Amount			Interests			Equity
For the Three Months Ended June 30, 2021
Balance, March 31, 2021		122,303		$	1,272		$	1,268,027		$	(202,834	)	$	(20,110	)		4,852	$	(105,099	)	$	(1,083	)	$	940,173
Stock-based compensation expense		—			—			4,023			—			—			—		—			—			4,023
Restricted stock granted		200			2			(2	)		—			—			—		—			—			—
Restricted stock canceled		(93	)		(1	)		1			—			—			—		—			—			—
Dividends paid [1]		—			—			—			—			—			—		—			—			—
Shares withheld for net settlements of share- based awards [3]		(12	)		—			(100	)		—			—			—		—			—			(100	)
Issuance of common stock - ESPP		11			—			65			—			—			—		—			—			65
Net income (loss)		—			—			—			41,959			—			—		—			(28	)		41,931
Other comprehensive income (loss)		—			—			—			—			(1,022	)		—		—			(2	)		(1,024	)
Balance, June 30, 2021		122,409		$	1,273		$	1,272,014		$	(160,875	)	$	(21,132	)		4,852	$	(105,099	)	$	(1,113	)	$	985,068

~~During the nine months ended September 30, 2017,~~

	Common shares					Additional Paid-In			Distributions in Excess of			Accumulated Other Comprehensive			Treasury shares					Noncontrolling			Total Shareholders'
	Shares			Amount		Capital			Earnings			Loss			Shares		Amount			Interests			Equity
For the Three Months Ended June 30, 2020
Balance, March 31, 2020		121,386		$	1,262	$	1,247,068		$	(152,301	)	$	(33,499	)		4,764	$	(104,184	)	$	(890	)	$	957,456
Proceeds from exercise of stock options		—			—		—			—			—			—		—			—			-
Stock-based compensation expense		—			—		4,706			—			—			—		—			—			4,706
Restricted stock canceled		(5	)		—		—			—			—			—		—			—			-
Dividends paid [1]		—			—		—			(58,457	)		—			—		—			—			(58,457	)
Other adjustment to paid-in capital [2]							273																	273
Purchase of treasury shares [2]		(23	)		—		—			—			—			23		(273	)					(273	)
Shares withheld for net settlements of share- based awards [3]		—			—		(156	)		—			—			—		—			—			(156	)
Issuance of common stock - ESPP		13			—		146			—			—			—		—			—			146
Net income (loss)		—			—		—			36,720			—			—		—			(66	)		36,654
Other comprehensive income (loss)		—			—		—			—			3,945			—		—			1			3,946
Balance, June 30, 2020		121,371		$	1,262	$	1,252,037		$	(174,038	)	$	(29,554	)		4,787	$	(104,457	)	$	(955	)	$	944,295

Table of Contents

	Common shares						Additional Paid-In			Distributions in Excess of			Accumulated Other Comprehensive			Treasury shares					Noncontrolling			Total Shareholders'
	Shares			Amount			Capital			Earnings			Loss			Shares		Amount			Interests			Equity
For the Six Months Ended June 30, 2021
Balance January 1, 2021		121,318		$	1,262		$	1,262,267		$	(222,892	)	$	(22,589	)		4,835	$	(104,946	)	$	(1,020	)	$	912,082
Proceeds from exercise of stock options		—			—			1			—			—			—		—			—			1
Stock-based compensation expense		—			—			11,426			—			—			—		—			—			11,426
Restricted stock granted		1,448			14			(14	)		—			—			—		—			—			—
Restricted stock canceled		(111	)		—			—			—			—			—		—			—			—
Dividends paid [1]		—			—			—			(30,487	)		—			—		—			—			(30,487	)
Other adjustment to additional paid-in capital [2]		—			—			153			—			—			—		—			—			153
Shares withheld for net settlements of share- based awards [3]		(256	)		(3	)		(1,999	)		—			—			—		—			—			(2,002	)
Issuance of common stock - ESPP		27			—			180			—			—			—		—			—			180
Purchase of treasury shares [2]		(17	)		—			—			—			—			17		(153	)		—			(153	)
Net income (loss)		—			—			—			92,504			—			—		—			(88	)		92,416
Other comprehensive income (loss)		—			—			—			—			1,457			—		—			(5	)		1,452
Balance, June 30, 2021		122,409		$	1,273		$	1,272,014		$	(160,875	)	$	(21,132	)		4,852	$	(105,099	)	$	(1,113	)	$	985,068

	Common shares						Additional Paid-In			Earnings in Excess of			Accumulated Other Comprehensive			Treasury shares					Noncontrolling			Total Shareholders'
	Shares			Amount			Capital			Distributions			Loss			Shares		Amount			Interests			Equity
For the Six Months Ended June 30, 2020
Balance, January 1, 2020		121,225		$	1,254		$	1,230,865		$	(119,779	)	$	(20,335	)		4,210		(95,175	)	$	(782	)	$	996,048
Proceeds from exercise of stock options		—			—			1			—			—			—		—			—			1
Stock-based compensation expense		—			—			14,474			—			—			—		—			—			14,474
Restricted stock granted		900			9			(9	)		—			—			—		—			—			-
Restricted stock canceled		(27	)		—			—			—			—			—		—			—			-
Dividends paid [1]		—			—			—			(116,160	)		—			—		—			—			(116,160	)
Shares withheld for net settlements of share- based awards [3]		(173	)		(1	)		(2,788	)		—			—			—		—			—			(2,789	)
Issuance of common stock - ESPP		23			—			296			—			—			—		—			—			296
Purchase of treasury shares [2]		(577	)		—			—			—			—			577		(9,282	)		—			(9,282	)
Other adjustment to additional paid-in capital [2]		—			—			9,198			—			—			—		—			—			9,198
Net income (loss)		—			—			—			61,901			—			—		—			(126	)		61,775
Other comprehensive income (loss)		—			—			—			—			(9,219	)		—		—			(47	)		(9,266	)
Balance, June 30, 2020		121,371		$	1,262		$	1,252,037		$	(174,038	)	$	(29,554	)		4,787	$	(104,457	)	$	(955	)	$	944,295

[1]	Dividends paid are net of dividends forfeited on unvested shares of restricted stock.

[2] On February 26, 2020 (the "Effective Date"), the Company ~~withheld shares through net share settlements~~and its Chief Executive Officer (“CEO”) entered into an amended and restated executive retirement agreement that amends the CEO’s executive retirement agreement. The amended and restated executive retirement agreement provides that upon the CEO’s retirement from the Company, the Company will pay a lump sum amount initially equal to ~~satisfy statutory tax withholding requirements upon vesting~~$8,925,065 (the “Grandfathered Payment”) which will be paid in the form of a fixed number of shares of ~~restricted stock held by employees.~~

~~Outstanding share andper-share~~ ~~amounts disclosed for all periods presented have been retroactively adjusted to reflect~~ the ~~effects~~Company’s common stock. The fair value of the Grandfathered Payment was reclassified to stockholders’ equity. Additional shares of the Company’s common stock ~~split.~~are credited with a value equal to any dividends declared and paid on the Company’s shares of common stock, calculated by reference to the closing price of the Company’s common stock on the payment date for such dividends (rounded up to the nearest whole number of shares). Refer to Note 13 – Benefit Plans for further information.

On the Effective Date, an amount equal to the Grandfathered Payment was invested in the Company’s common stock (“GEO Shares”). The number of the Company’s shares of common stock as of the Effective Date was equal to the Grandfathered Payment divided by the closing price of the Company’s common stock on the Effective Date (rounded up to the nearest whole number of shares), which equals 553,665 shares of the Company’s common stock. Additional shares of the Company’s common stock are credited with a value equal to any dividends declared and paid on the Company’s shares of common stock, calculated by reference to the closing price of the Company’s common stock on the payment date for such dividends (rounded up to the nearest whole number of shares).

The Company and its CEO entered into on May 27, 2021, and effective as of July 1, ~~- Basis~~2021, an Amended and Restated Executive Retirement Agreement which replaces the February 26, 2020 agreement. Refer to Note 15 – Subsequent Events for further information.

Table of ~~Presentation.~~Contents

[3]	During the six months ended June 30, 2021 and 2020, the Company withheld shares through net share settlements to satisfy statutory tax withholding requirements upon vesting of shares of restricted stock held by employees.

REIT Distributions

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~~GEO's Board ~~of Directors (the “Board”)~~ and will be declared based upon various factors, many of which are beyond ~~GEO’s~~GEO's control, including, ~~GEO’s~~GEO's financial condition and operating cash flows, the amount required to maintain REIT status, limitations on distributions in ~~GEO’s~~GEO's existing and future debt instruments, limitations on ~~GEO’s~~GEO's ability to fund distributions using cash generated through ~~GEO’s~~GEO's taxable REIT subsidiaries ~~(“TRSs”~~("TRSs") and other factors that ~~GEO’s~~GEO's Board may deem relevant. On April 7, 2021, GEO’s Board immediately suspended GEO’s quarterly dividend payments. Refer to Note 1 – Basis of Presentation for further information.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and the year ended December 31, ~~2016, respectively,~~2020, GEO declared and paid the following regular cash distributions to its shareholders as follows:

Declaration Date
   Record Date    Payment Date    Distribution Per Share    Aggregate
Payment Amount
(in millions)
February 3, 2016
   February 16, 2016    February 26, 2016    $ 0.43    $ 48.5
April 20, 2016
   May 2, 2016    May 12, 2016    $ 0.43    $ 48.7
July 20, 2016
   August 1, 2016    August 12, 2016    $ 0.43    $ 48.7
October 18, 2016
   October 31, 2016    November 10, 2016    $ 0.43    $ 48.8
February 6, 2017
   February 17, 2017    February 27, 2017    $ 0.47    $ 52.5
April 25, 2017
   May 9, 2017    May 19, 2017    $ 0.47    $ 58.4
July 10, 2017
   July 21, 2017    July 28, 2017    $ 0.47    $ 58.3

Declaration Date	Record Date	Payment Date	Distribution Per Share		Aggregate Payment Amount (in millions)
February 3, 2020	February 14, 2020	February 21, 2020	$	0.48	$	58.2
April 6, 2020	April 17, 2020	April 24, 2020	$	0.48	$	58.5
July 7, 2020	July 17, 2020	July 24, 2020	$	0.48	$	58.5
October 6, 2020	October 16, 2020	October 23, 2020	$	0.34	$	41.5
January 15, 2021	January 25, 2021	February 1, 2021	$	0.25	$	30.5

~~Distributions per share above have been adjusted to reflect the effects of the stock split.~~

~~Common~~ Stock ~~Offering~~Buyback Program

On ~~March 7, 2017,~~February 14, 2018, the Company ~~entered into an underwriting agreement related to the issuance and sale of 9,000,000 shares of common~~announced that its Board authorized a stock ~~par value $.01 per share, of the Company. The offering price to the public was $27.80 per share and the underwriters agreed to purchase the shares from~~buyback program authorizing the Company ~~pursuant~~ to the underwriting agreement at a price of $26.70 per share. In addition, under the terms of the underwriting agreement, the Company granted the underwriters an option, exercisable for 30 days, to purchaserepurchase up to ~~an additional 1,350,000~~a maximum of $200.0 million of its shares of common stock. ~~On March 8, 2017,~~The stock buyback program was to be funded primarily with cash on hand, free cash flow and borrowings under the underwriters exercised in full their option to purchase the additional 1,350,000 shares of common stock. On March 13, 2017, the Company announced that it had completed the sale of 10,350,000 shares of common stock with its previously announced underwritten public offering. GEO received gross proceeds (before underwriting discounts and estimated offering expenses) of approximately $288.1Company's $900.0 million from the offering, including approximately $37.6 million in connection with the sale of the additional shares. Fees paid in connection with the offering were not significant and have been netted against additional~~paid-in~~ ~~capital.~~revolving credit facility (the "Revolver"). The ~~10,350,000 shares of common stock were issued under GEO’s previously~~program was effective ~~shelf registration filed with the Securities and Exchange Commission. The previously effective registration statement on FormS-3~~ ~~expired September 12, 2017. On~~through October 20, ~~2017, GEO filed a new registration statement on FormS-3~~ ~~that automatically became effective. Refer~~2020. The stock buyback program was intended to ~~Note 16 - Subsequent Events. The net proceeds of this offering were used~~be implemented through purchases made from time to ~~repay amounts outstanding under~~time in the ~~revolver portion of the Company’s senior credit facility and for general corporate purposes. The number of shares andper-share~~ ~~amounts herein have been adjusted to reflect the effects of the stock split. Refer to Note 1 - Basis of Presentation~~

~~Prospectus Supplement~~

~~In September 2014, the Company filed~~open market or in privately negotiated transactions, in accordance with ~~the~~applicable Securities and Exchange Commission ~~(“SEC��~~("SEC") requirements. The stock buyback program did not obligate the Company to purchase any specific amount of the Company's common stock and could have been suspended or extended at any time at the discretion of the Company's Board.

Automatic Shelf Registration on Form S-3

On October 30, 2020, the Company filed an automatic shelf registration ~~statement~~ on Form~~S-3.~~ ~~On November 10, 2014, in connection~~ S-3 with the ~~shelf registration,~~SEC that enables the Company ~~filed with the Securities and Exchange Commission a prospectus supplement related~~ to ~~the~~ offer ~~and~~for sale, from time to time ofand as the ~~Company’s common stock at~~capital markets permit, 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 sharesunspecified amount of common stock, sold under this prospectus supplement during the nine months ended September 30, 2017 or during the year ended December 31, 2016. On September 12, 2017, the shelf registration expired. On October 20, 2017,preferred stock, debt securities, guarantees of debt securities, warrants and units. Each time the Company ~~filed with the SEC a new automatic shelf registration on FormS-3.~~ ~~Under this new shelf registration, the Company may, from time~~offers to ~~time, sell any combination of securities described in the prospectus in one or more offerings. Each time that the Company may~~ sell securities, the Company will provide a prospectus supplement that will contain specific information about the terms of that offering and the securities being offered.

The shelf registration statement became automatically effective upon filing and is valid for three years.

Comprehensive Income (Loss)

Comprehensive income (loss) represents the change in ~~shareholders’~~shareholders' equity from transactions and other events and circumstances arising fromnon-shareholder sources. The ~~Company’s~~Company's total comprehensive income (loss) 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’~~shareholders' equity and comprehensive income (loss).

Table of Contents

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

   Nine Months Ended September 30, 2017
(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, January 1, 2017
   $ (11,284 )    $ (15,877 )    $ (3,664 )    $ (30,825 )
Current-period other comprehensive income
   2,026    2,556    175    4,757








Balance, September 30, 2017
   $ (9,258 )    $ (13,321 )    $ (3,489 )    $ (26,068 )

	Six Months Ended June 30, 2021
	(In thousands)
	Foreign currency translation adjustments, net of tax (1)			Change in fair value of derivatives, net of tax			Pension adjustments, net of tax			Total
Balance, January 1, 2021	$	(9,207	)	$	(4,752	)	$	(8,630	)	$	(22,589	)
Current-period other comprehensive income (loss)		(636	)		311			1,782			1,457
Balance, June 30, 2021	$	(9,843	)	$	(4,441	)	$	(6,848	)	$	(21,132	)

	Six Months Ended June 30, 2020
	(In thousands)
	Foreign currency translation adjustments, net of tax (1)			Change in fair value of derivatives, net of tax			Pension adjustments, net of tax			Total
Balance, January 1, 2020	$	(12,314	)	$	(1,476	)	$	(6,545	)	$	(20,335	)
Current-period other comprehensive income (loss)		(4,757	)		(4,675	)		213			(9,219	)
Balance, June 30, 2020	$	(17,071	)	$	(6,151	)	$	(6,332	)	$	(29,554	)

⁽¹⁾

(1)

The foreign currency translation related to noncontrolling interests was not significant at ~~September~~June 30, ~~2017~~2021 or ~~December 31, 2016.~~2020.

7. EQUITY INCENTIVE PLANS

The Board ~~has~~ adopted The GEO Group, Inc. ~~2014~~Amended and Restated 2018 Stock Incentive Plan (the ~~“2014 Plan”~~"2018 Amended and Restated Plan"), which was approved by the ~~Company’s~~Company's shareholders on ~~May 2, 2014.~~April 28, 2021. The ~~2014~~2018 Amended and Restated Plan ~~replaced~~supersedes the ~~2006~~previous 2018 Stock Incentive ~~Plan (the “2006 Plan”).~~Plan. As of the date the ~~2014~~2018 Amended and Restated Plan was ~~adopted,~~approved by the Company’s shareholders’, it provided for a reserve of ~~4,625,030 shares, which consisted of 3,000,000 new shares of common stock available for issuance and 1,625,030~~an additional 16,800,000 shares of common stock that ~~were available for issuance~~may be issued pursuant to awards granted under the ~~2006 Plan prior to the 2014 Plan replacing it adjusted to reflect the effects of the stock split.~~2018 Amended and Restated Plan. The Company filed a FormS-8 registration statement related to the ~~2014~~2018 Amended and Restated Plan on June ~~4, 2014, which was amended on July 18, 2014.~~15, 2021.

~~Outstanding share andper-share~~ ~~amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split. Refer to Note 1 - Basis of Presentation.~~

Stock Options

The Company uses a Black-Scholes option valuation model to estimate the fair value of each ~~time based~~time-based or ~~performance based~~performance-based option awarded. For options granted during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, the fair value was estimated using the following assumptions: (i) volatility of ~~35.72%~~43.28%; (ii) expected term of ~~5.00~~5 years; (iii) risk free interest rate of ~~1.53%~~0.24%; and (iv) the then expected dividend yield of ~~5.79%~~13.30% (subsequent to the grant date the Board suspended the Company’s quarterly dividend payments). A summary of the activity of stock option awards issued and outstanding under Company plans iswas as follows for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2021:

   Shares    Wtd. Avg.
Exercise
Price    Wtd. Avg.
Remaining
Contractual
Term
(years)    Aggregate
Intrinsic
Value
   (in thousands)          (in thousands)
Options outstanding at January 1, 2017
   1,211    $ 20.65    7.14    $ 5,466
Options granted
   462    32.30
Options exercised
   (348 )    19.22
Options forfeited/canceled/expired
   (59 )    27.35



Options outstanding at September 30, 2017
   1,266    $ 24.98    7.61    $ 5,200



Options vested and expected to vest at September 30, 2017
   1,186    $ 24.77    7.53    $ 5,025



Options exercisable at September 30, 2017
   538    $ 21.96    6.27    $ 3,352

	Shares			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)		Aggregate Intrinsic Value
	(in thousands)							(in thousands)
Options outstanding at January 1, 2021		1,951		$	22.07		6.62	$	—
Options granted		478			7.52
Options exercised		—			—
Options forfeited/canceled/expired		(256	)		14.03
Options outstanding at June 30, 2021		2,173		$	19.83		6.81	$	—
Options vested and expected to vest at June 30, 2021		2,065		$	20.24		6.68	$	—
Options exercisable at June 30, 2021		1,276		$	24.30		5.42	$	—

~~During the nine months ended September 30, 2017,~~

On March 1, 2021, the Company granted approximately ~~462,000~~478,000 options to certain employees which had a ~~weighted-average grant-date~~per share grant date fair value of ~~$5.91 per share.~~$0.79. For the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, the amount of stock-based compensation expense related to stock options was ~~$1.1~~$0.4 million and ~~$0.4~~$0.6 million, respectively. As of ~~September~~June 30, ~~2017,~~2021, the Company had ~~$1.9~~$1.4 million of unrecognized compensation costs related tonon-vested stock option awards that are expected to be recognized over a weighted average period of ~~3.1~~2.6 years.

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Restricted Stock

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 generally 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~~Company's common stock on the date of grant. The Company has historically issued share-based awards with service-based, performance-based and market-based vesting criteria.

A summary of the activity of restricted stock outstanding is as follows for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2021:

						Shares			Wtd. Avg. Grant Date Fair Value
	Shares			Wtd. Avg. Grant Date Fair Value		(in thousands)
	(in thousands)
Restricted stock outstanding at January 1, 2017		1,346		$	24.37
Restricted stock outstanding at January 1, 2021							2,154		$	20.61
Granted		927			35.33		1,448			6.95
Vested		(439	)		23.20		(824	)		21.75
Forfeited/canceled		(60	)		26.76		(111	)		9.46

Restricted stock outstanding at September 30, 2017		1,774		$	30.45

Restricted stock outstanding at June 30, 2021							2,667		$	12.72

~~During the nine months ended September 30, 2017,~~

On March 1, 2021, the Company granted approximately ~~927,000~~1,448,000 shares of restricted stock to certain employees and executive officers. Of these awards, ~~295,000~~844,000 are market and performance-based awards which will be forfeited if the Company does not achieve certain annual metrics during ~~2018, 2019~~2021, 2022 and ~~2020.~~2023.

The vesting of these performance-based restricted stock grants are subject to the achievement by GEO of ~~two~~2 annual performance metrics as follows: (i) up to 50% of the shares of restricted stock (“("TSR Target ~~Award”~~Award") can vest at the end of a three year performance period if GEO meets certain total shareholder return ~~(“TSR”~~("TSR") performance targets, as compared to the total shareholder return of a peer group of companies, over a three year period from January 1, ~~2017~~2021 to December 31, ~~2019~~2023 and (ii) up to 50% of the shares of restricted stock (“("ROCE Target ~~Award”~~Award") can vest at the end of a three year period if GEO meets certain return on capital employed ~~(“ROCE”~~("ROCE") performance targets over a three year period from January 1, ~~2017~~2021 to December 31, ~~2019.~~2023. Certain of these performance-based restricted stock grants can vest over a one-year period if GEO meets certain performance targets, as mentioned above, over three one-year periods from January 1, 2021 to December 31, 2021, January 1, 2022 to December 31, 2022 and January 1, 2023 to December 31, 2023. 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 ~~the~~ 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~~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 weighted average key assumptions: (i) volatility of ~~42.2%~~47.6%; (ii) beta of ~~1.11;~~0.79; and (iii) risk free ~~rates~~rate of ~~1.46%~~0.21%.

For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, the Company recognized ~~$13.8~~$11.4 million and ~~$9.2~~$13.9 million, respectively, of compensation expense related to its restricted stock awards. As of ~~September~~June 30, ~~2017,~~2021, the Company had ~~$36.4~~$23.4 million of unrecognized compensation costs related tonon-vested restricted stock awards, includingnon-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~~2.4 years.

Employee Stock Purchase Plan

The Company previously adopted The GEO Group Inc. 2011 Employee Stock Purchase Plan (the “Plan or ~~“ESPP”~~"ESPP”) effective July 9, 2011. The Company has since amended and restated the Plan (the “Amended ESPP”) which was approved by the Company’s ~~shareholders.~~shareholders on April 28, 2021 and became effective on July 9, 2021. The purpose of the ~~Plan,~~Amended ESPP, 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 750,000, as split adjusted,~~maximum number of shares of ~~its~~ common stock ~~which were registered with~~reserved for issuance over the ~~Securities and Exchange Commission~~term of the Amended ESPP on ~~May 4, 2012, as~~the amended ~~on July 18, 2014, for sale to eligible employees under the Plan.~~effective date shall not exceed 506,023 shares.

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The ~~Plan~~Amended ESPP is considered to benon-compensatory. As such, there is no compensation expense required to be recognized. Share purchases under the ~~Plan~~Amended ESPP are made on the last day of each month. During the ~~nine~~six months ended ~~September~~June 30, ~~2017, 13,360~~2021, 26,525 shares of the ~~Company’s~~Company's common stock were issued in connection with the ~~Plan.~~Amended ESPP.

8. EARNINGS PER SHARE

Basic earnings per share of common ~~share~~stock is computed by dividing the net income ~~from continuing operations~~ attributable to The GEO Group, Inc. available to common stockholders by the weighted-average number of common shares outstanding for the period. Net income attributable to The GEO Group, Inc. available to common stockholders represents net income attributable to The GEO Group reduced by an allocation of earnings to participating securities. The 6.50% Exchangeable Notes due 2026, which contain non-forfeitable rights to dividends declared and paid on the shares of common stock, are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Diluted EPS is calculated under the if-converted method and the two-class method for each class of shareholders using the weighted average number of ~~outstanding~~ shares ~~of common stock.~~attributable to each class. The calculation ofthat results in the lowest diluted earnings per share ~~is similar to that of basic earnings per share except that the denominator includes dilutive~~amount for common stock ~~equivalents such as stock options and~~is reported in the Company’s financial statements. The if-converted method includes the dilutive effect of potential common shares ~~of restricted stock.~~related to the 6.50% Exchangeable Notes due 2026, if any. Basic and diluted earnings per share were calculated for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 as follows (in thousands, except per share data):


	Three Months Ended				Nine Months Ended				Three Months Ended					Six Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		June 30, 2021			June 30, 2020		June 30, 2021			June 30, 2020
Net income	$	38,453	$	43,674	$	109,761	$	99,156	$	41,931		$	36,654	$	92,416		$	61,775
Net loss attributable to noncontrolling interests		36		46		123		123		28			66		88			126

Net income attributable to The GEO Group, Inc.		38,489		43,720		109,884		99,279

Basic earnings per share attributable to The GEO Group, Inc.:
Less: Undistributed income allocable to participating securities										(7,197	)		-		(7,715	)		-
Net income attributable to The GEO Group, Inc. available to common stockholders										34,762			36,720		84,789			61,901
Basic earnings per share attributable to The GEO Group, Inc. available to common stockholders:
Weighted average shares outstanding		122,251		111,162		119,356		111,015		120,426			119,810		120,225			119,602

Per share amount	$	0.31	$	0.39	$	0.92	$	0.89	$	0.29		$	0.31	$	0.71		$	0.52

Diluted earnings per share attributable to The GEO Group, Inc.:
Diluted earnings per share attributable to The GEO Group, Inc. available to common stockholders:
Weighted average shares outstanding		122,251		111,162		119,356		111,015		120,426			119,810		120,225			119,602
Dilutive effect of equity incentive plans		636		342		758		410		44			154		206			335

Weighted average shares assuming dilution		122,887		111,504		120,114		111,425		120,470			119,964		120,431			119,937

Per share amount	$	0.31	$	0.39	$	0.91	$	0.89	$	0.29		$	0.31	$	0.70		$	0.52

~~Outstanding share andper-share~~ ~~amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split.~~

~~Three Months~~

For the three months ended ~~September~~June 30, ~~2017, 681,007~~2021, 2,236,507 weighted average shares of common stock underlying options were excluded from the computation of diluted earnings per share ~~(“EPS”~~("EPS") because the effect would be anti-dilutive. There were ~~814,800~~2,364,217 common stock equivalents from restricted shares that were ~~anti-dilutive.~~anti-dilutive for the period.

For the three months ended ~~September~~June 30, ~~2016, 921,192~~2020, 2,035,236 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 ~~357,842~~1,834,228 common stock equivalents from restricted shares that were ~~anti-dilutive.~~anti-dilutive for the period.

~~Nine Months~~

For the ~~nine~~six months ended ~~September~~June 30, ~~2017, 601,453~~2021, 2,236,507 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 ~~662,126~~2,364,217 common stock equivalents from restricted shares that were ~~anti-dilutive.~~anti-dilutive for the period.

For the ~~nine~~six months ended ~~September~~June 30, ~~2016, 849,915~~2020, 2,035,236 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 ~~333,782~~1,834,228 common stock equivalents from restricted shares that were ~~anti-dilutive.~~

anti-dilutive for the period.

On February 24, 2021, the Company’s wholly-owned subsidiary, GEO Corrections Holdings, Inc. (“GEOCH”), completed a private offering of $230 million aggregate principal amount of 6.50% Exchangeable Senior Unsecured Notes due 2026. Refer to Note 10 – Debt for additional information. As of June 30, 2021, conditions had not been met to exchange the 6.50% Exchangeable Notes due 2026 into shares of the Company’s common stock. Approximately 24.9 million and 17.1 million shares of potential common shares associated with the conversion option embedded in the convertible notes were excluded from the computation for the three and six months ended June 30, 2021, respectively, as the Company’s average stock price during the period was lower than the exchange price.

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9. DERIVATIVE FINANCIAL INSTRUMENTS

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.

~~Australia - Fulham~~

~~The Company’s Australian subsidiary is a party to an~~In August 2019, the Company entered into2 interest rate swap ~~agreement~~agreements in the aggregate notional amount of $44.3 million to fix the interest rate on certain of its variable rate~~non-recourse~~ debt ~~(related~~ to ~~its Fulham facility) to 9.7%~~4.22%. The Company ~~had determined the swap’s payment and expiration dates, and call provisions that coincided with the terms of thenon-recourse~~ ~~debt, to be an effective cash flow hedge. Accordingly, the Company recorded the change~~has designated these interest rate swaps as hedges against changes in the ~~fair value~~cash flows 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 were not significant for the nine months ended September 30, 2017two identical promissory notes (the "Notes") which are secured by loan agreements and ~~2016.~~mortgage and security agreements on certain real property and improvements. The ~~associatednon-recourse~~ ~~debt was paid off during the nine months ended September 30, 2017 and the interest rate swap is no longer in existence as of September 30, 2017.~~

~~Australia - Ravenhall~~

~~The Company’s Australian subsidiary~~Company has ~~entered into interest rate swap agreements to fix the interest rate on its variable ratenon-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. The swaps’ notional amounts coincide with construction draw fixed commitments throughout the project. At September 30, 2017, the swaps had a notional amount of approximately AUD 703 million, or $551 million, based on exchange rates at September 30, 2017, related to the outstanding draws for the design and construction phase and approximately AUD 466 million, or $365 million, based on exchange rates at September 30, 2017 related to future construction draws. At the onset, the Company had determined that the swaps have payment, expiration dates, and provisions that coincide with the terms of the~~non-recourse~~ ~~debt scheduled construction draw commitments~~ Notes and ~~were~~are therefore considered to be effective cash flow hedges. During 2017, certain of the critical terms of the swap agreements no longer coincided with the scheduled construction draw commitments. However, the swaps are still considered to be highly effective and the measurement of any ineffectiveness was not significant during the nine months ended September 30, 2017. Accordingly, the Company records the change in ~~the~~ fair value of the interest rate swaps inas accumulated other comprehensive income, net of applicable ~~income~~ taxes. Total unrealized ~~gain~~gains recorded in other comprehensive income, net of tax, related to ~~this~~these cash flow ~~hedge~~hedges was ~~$2.6~~$1.8 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2021. The total fair value of the swap ~~liability~~liabilities as of ~~September~~June 30, ~~2017~~2021 was ~~$15.7~~$3.8 million and is recorded as a component of OtherNon-Current liabilities within the accompanying consolidated balance sheet. There was no material ineffectiveness for the ~~periods~~period 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). Refer to Note 10 - Debt for additional information.

~~Additionally, upon completion and commercial acceptance~~.

Table 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 approximately $243 million, based on exchange rates at September 30, 2017, towards a portion of the outstanding principal of the~~non-recourse~~ ~~debt. The Company’s Australian subsidiary also entered into interest rate cap agreements giving the Company the option to cap the interest rate on its variablenon-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. 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. Total losses related to a decrease in the fair value of the interest rate cap assets were not significant during the nine months ended September 30, 2017 or 2016. The total fair value of the interest rate cap assets was not significant as of September 30, 2017 and December 31, 2016, respectively, and is recorded as a component of other~~non-current~~ ~~assets within the accompanying consolidated balance sheets.~~

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10. DEBT

Debt outstanding as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 consisted of the following (in thousands):


	September 30, 2017			December 31, 2016			June 30, 2021			December 31, 2020
Senior Credit Facility:
Term loan	$	796,000		$	289,500		$	766,000		$	770,000
Unamortized discount on term loan		(3,660	)		(375	)		(1,428	)		(1,705	)
Unamortized debt issuance costs on term loan		(7,961	)		—			(3,387	)		(4,043	)
Revolver		245,874			515,000			789,355			704,437

Total Senior Credit Facility	$	1,030,253		$	804,125			1,550,540			1,468,689
6.50% Exchangeable Senior Notes:
Notes Due in 2026								230,000			—
Unamortized debt issuance costs								(9,060	)		—
Total 6.50% Exchangeable Senior Notes Due in 2026								220,940			—
6.00% Senior Notes:
Notes Due in 2026		350,000			350,000			350,000			350,000
Unamortized debt issuance costs		(5,447	)		(5,770	)		(3,411	)		(3,709	)

Total 6.00% Senior Notes Due in 2026		344,553			344,230			346,589			346,291
5.875% Senior Notes:
Notes Due in 2024		250,000			250,000			225,293			242,500
Unamortized debt issuance costs		(3,485	)		(3,773	)		(1,639	)		(2,000	)

Total 5.875% Senior Notes Due in 2024		246,515			246,227			223,654			240,500
5.125% Senior Notes:
Notes Due in 2023		300,000			300,000			259,275			281,783
Unamortized debt issuance costs		(4,339	)		(4,786	)		(1,552	)		(2,033	)

Total 5.125% Senior Notes Due in 2023		295,661			295,214			257,723			279,750
5.875% Senior Notes
5.875% Senior Notes:
Notes Due in 2022		250,000			250,000			—			193,958
Unamortized debt issuance costs		(3,417	)		(3,923	)		—			(710	)

Total 5.875% Senior Notes Due in 2022		246,583			246,077			—			193,248

Non-Recourse Debt		586,606			490,902			332,122			344,614
Unamortized debt issuance costs onnon-recourse debt		(12,689	)		(18,295	)		(4,945	)		(5,237	)
Unamortized discount onnon-recourse debt		(299	)		(400	)		(9	)		(25	)

TotalNon-Recourse Debt		573,618			472,207			327,168			339,352
Capital Lease Obligations		7,757			8,693
Finance Lease Liabilities								5,066			5,029
Other debt		2,787			3,030			41,896			42,413

Total debt		2,747,727			2,419,803			2,973,576			2,915,272
Current portion of capital lease obligations, long-term debt andnon-recourse debt		(260,046	)		(238,065	)
Capital Lease Obligations, long-term portion		(6,412	)		(7,431	)
Current portion of finance lease liabilities, long-term debt and non-recourse debt								(27,240	)		(26,180	)
Finance Lease Liabilities, long-term portion								(2,614	)		(2,988	)
Non-Recourse Debt, long-term portion		(323,387	)		(238,842	)		(311,390	)		(324,223	)

Long-Term Debt	$	2,157,882		$	1,935,465		$	2,632,332		$	2,561,881

Amended Credit Agreement

On June 12, 2019, GEO entered into Amendment No. 2 to Third Amended and Restated Credit Agreement

~~On March 23, 2017, the Company executed a third amended and restated credit agreement~~ (the "Credit Agreement") by and among ~~The~~the refinancing lenders party thereto, the other lenders party thereto, GEO ~~Group, Inc.~~ and GEO Corrections Holdings, Inc.~~, (“Corrections” and, together with The GEO Group, Inc., the “Borrowers”), the Australian Borrowers named therein, BNP Paribas, as Administrative Agent,~~ and the ~~lenders who are, or may from time to time become, a party thereto (the “Credit Agreement”). The~~administrative agent. Under the amendment, the maturity date of the revolver component of the Credit Agreement ~~refinances GEO’s prior $291.0~~was extended to May 17, 2024. The borrowing capacity under the amended revolver remains at $900.0 million, ~~term~~and its pricing remains unchanged currently bearing interest at LIBOR plus 2.25%. As a result of the transaction, the Company incurred a loss on extinguishment of debt of $1.2 million during 2019 related to certain unamortized deferred loan reestablishes GEO’s ability to implement at a later date an Australian Dollar Letter of Credit Facility (the “Australian LC Facility”) providing for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars up to AUD275 million, an increase from the prior AUD225 million Australian Dollar letter of credit facility, and certain other modifications to the prior credit agreement. Loancosts. Additionally, loan costs of ~~approximately $7.0~~$4.7 million were incurred and capitalized in connection with the transaction.

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The Credit Agreement evidences a credit facility (the ~~“Credit Facility”~~"Credit Facility") consisting of ~~an $800~~a $792.0 million term loan ~~(the “Term Loan”)~~ bearing interest at LIBOR plus ~~2.25%~~2.00% (with a LIBOR floor of 0.75%), and a ~~$900~~$900.0 million ~~revolving credit facility (the “Revolver”)~~revolver initially bearing interest at LIBOR plus 2.25% (with no0 LIBOR floor) together with AUD275 million, or $206.5 million, based on exchange rates as of June 30, 2021, available solely for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars under the Australian Dollar Letter of Credit Facility (the "Australian LC ~~Facility.~~Facility"). As of ~~September~~June 30, ~~2017,~~2021, there were no0 letters of credit issued under the Australian LC Facility. Amounts to be borrowed by GEO under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing. The ~~Term Loan~~term loan component is scheduled to mature on March 23, 2024. The revolving credit commitment component is scheduled to mature on May ~~19, 2021; provided, that if on October 3, 2019 both the maturity dates of all term loans and incremental term loans have not been extended to a date that is 5~~¹⁄₂ ~~years after March 23, 2017 or a later date, and the senior secured leverage ratio exceeds 2.50 to 1.00, then the termination date will be October 3, 2019.~~17, 2024. The Credit Agreement also has an accordion feature of $450.0 million, subject to lender demand and prevailing market conditions and satisfying the relevant borrowing conditions.

The Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict GEO’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 6.25 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 GEO conducts, and (xi) materially impair GEO’s lenders’ security interests in the collateral for its loans.

Events of default under the Credit Agreement include, but are not limited to, (i) GEO’s failure to pay principal or interest when due, (ii) GEO’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 asserted against GEO, and (viii) a change in control.

All of the obligations under the Credit Agreement are unconditionally guaranteed by certain domestic subsidiaries of GEO and the Credit Agreement and the related guarantees are secured by a perfected first-priority pledge of substantially all of GEO’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 GEO and each guarantor in their domestic subsidiaries.

~~The Australian Borrowers~~GEO Australasia Holdings Pty Ltd, GEO Australasia Finance Holdings Pty Ltd as trustee for the GEO Australasia Finance Holding Trust, and together with GEO Australasia Holdings, collectively (the “Australian Borrowers") are wholly owned foreign subsidiaries of GEO. GEO has designated each of the Australian Borrowers as restricted subsidiaries under the Credit Agreement. However, the Australian Borrowers are not obligated to pay or perform any obligations under the Credit Agreement other than their own obligations as Australian Borrowers under the Credit Agreement. The Australian Borrowers do not pledge any of their assets to secure any obligations under the Credit Agreement.

On August 18, 2016, the Company executed a ~~Letter~~letter of ~~Offer by and among GEO and HSBC Bank Australia Limited (the “Letter of Offer”)~~offer providing for a bank guarantee line and bank guarantee/standbysub-facility in an aggregate amount of ~~AUD100~~approximately AUD59 million, or ~~$78.3~~$44.3 million, based on exchange rates in effect as of ~~September~~June 30, ~~2017~~2021 (collectively, the “Bank Guarantee Facility”). The Bank Guarantee Facility allows GEO to provide letters of credit to assure performance of certain obligations of its wholly owned subsidiary relating to its ~~prison project~~correctional facility in Ravenhall, located near Melbourne, Australia. The Bank Guarantee Facility is unsecured. The issuance of letters of credit under the Bank Guarantee Facility is subject to the satisfaction of the conditions precedent specified in the ~~Letter~~letter of ~~Offer.~~offer. Letters of credit issued under the bank guarantee lines are due on demand and letters of credit issued under the bank guarantee/standbysub-facility cannot have a duration exceeding twelve months. The Bank Guarantee Facility may be terminated by ~~HSBC Bank Australia Limited~~the lender on 90 days written notice. As of ~~September~~June 30, ~~2017,~~2021, there was ~~AUD100~~AUD59 million in letters of credit issued under the Bank Guarantee Facility.

As of ~~September~~June 30, ~~2017,~~2021, the Company had approximately ~~$796~~$766.0 million in aggregate borrowings outstanding under ~~the Term Loan,~~its term loan, approximately ~~$246~~$789.4 million in borrowings under ~~the Revolver,~~its revolver, and approximately ~~$65~~$68.3 million in letters of credit which left approximately ~~$589~~$42.3 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Credit Agreement as of ~~September~~June 30, ~~2017~~2021 was ~~3.5%~~2.54%.

6.50% Exchangeable Senior Notes due 2026

On February 24, 2021, the Company’s wholly-owned subsidiary, GEOCH, completed a private offering of $230 million aggregate principal amount of 6.50% exchangeable senior unsecured notes due 2026 which included the full exercise of the initial purchasers’ over-allotment option to purchase an additional $30 million aggregate principal amount of Convertible Notes. The Convertible Notes will mature on February 23, 2026, unless earlier repurchased or exchanged. The Convertible Notes bear interest at the rate of 6.50% per year plus an additional amount based on the dividends paid by the Company on its common stock, $0.01 par value per share. Interest on the notes is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021.

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five consecutive business day period after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the exchange rate for the notes on each such trading day; or (2) upon the occurrence of certain specified corporate events. On or after November 25, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the notes, holders may exchange their notes at any time, regardless of the foregoing circumstances. Upon exchange of a note, GEO will pay or deliver, as the case may be, cash or a combination of cash and shares of the Company’s common stock. As of June 30, 2021, conditions had not been met to convert.
Upon conversion, the Company will pay or deliver, as the case may be, cash or a combination of cash and shares of common stock. The initial conversion rate is 108.4011 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $9.225 per share of common stock). The conversion rate will be subject to adjustment in certain events. If the Company or GEOCH undergoes a fundamental change, holders may require GEOCH to purchase the notes in whole or in part for cash at a fundamental change purchase price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date.
The Company used the net proceeds from this offering, including the exercise in full of the initial purchasers' over-allotment option to fund the redemption of the then outstanding amount of approximately $194.0 million of the Company’s 5.875% senior notes due 2022, to re-purchase additional senior notes and used remaining net proceeds to pay related transaction fees and expenses, and for general corporate purposes of the Company. As a result of the redemption, deferred loan costs in the amount of approximately $0.7 million were written off to loss on extinguishment of debt during the six months ended June 30, 2021.
The notes were offered in the United States only to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act, and outside of the United States to non-U.S. persons in compliance with Regulation S under the Securities Act. Neither the notes nor any of the shares of the Company’s common stock issuable upon exchange of the notes, if any, have been, or will be, registered under the Securities Act and, unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from the registration requirements under the Securities Act.
The Company elected to early adopt ASU 2020-06, Debt – Debt with Conversion and Other Options and Derivatives and Hedging – Contracts in Entity’s Own Equity, on January 1, 2021. The new standard simplifies the accounting for convertible debt by removing the requirements to separately present certain conversion features in equity. In addition, the new standard also simplifies the guidance in ASC 815-40, Derivatives and Hedging – Contract in Entity’s Own Equity, by removing certain criteria that must be satisfied to classify a contract as equity. Finally, the new standard revises the guidance on calculating earnings per share. The Company determined under the guidance of the new standard that the embedded conversion option does not require bifurcation and all proceeds were allocated to the Convertible Notes as a single instrument and is included in Long-Term Debt in the accompanying consolidated balance sheets. The costs incurred in the issuance, including the initial purchasers discount, totaling approximately $9.6 million, are classified as a cash outflow within the financing activities section in the consolidated statement of cash flows, and are also being amortized to expense over the term of the Convertible Notes. The Company did 0t have any convertible instruments outstanding during 2020.
Because the Company currently intends to settle conversions by paying cash up to the principal amount of the Convertible Notes, with any excess conversion value settled in shares of common stock, the Convertible Notes are being accounted for using the net settlement method (or treasury stock-type method) for the purposes of calculating diluted earnings per share. Using this method, the denominator will be affected when the average share price of the Company's common stock for a given period is greater than the conversion price of approximately $9.225 per share. There was no dilutive impact for the three and six months ended June 30, 2021.

6.00% Senior Notes due 2026

Interest on the 6.00% Senior Notes ~~due 2026~~ accrues at the stated rate. The Company pays interest semi-annually in arrears on April 15 and October 15 of each year. On or after April 15, 2019, the Company may, at its option, redeem all or part of the 6.00% Senior Notes ~~due 2026~~ at the redemption prices set forth in the indenture governing the 6.00% Senior ~~Notes due 2026.~~Notes. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. ~~Refer to Note15-Condensed~~ ~~Consolidating Financial Information.~~

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5.875% Senior Notes due 2024

Interest on the 5.875% Senior Notes due 2024 accrues at the stated rate. The Company pays interest semi-annually in arrears on April 15 and October 15 of each year. On or after October 15, 2019, the Company may, at its option, redeem all or part of the 5.875% Senior Notes due 2024 at the redemption prices set forth in the indenture governing the 5.875% Senior Notes due 2024. The indenture contains certain covenants, including limitations and restrictions on the Company and its subsidiary guarantors. ~~Refer to Note15-Condensed~~ ~~Consolidating Financial Information.~~

5.125% Senior Notes due 2023

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 Note15-Condensed~~ ~~Consolidating Financial Information.~~

5.875% Senior Notes due 2022

Interest on the 5.875% Senior Notes due 2022 ~~accrues~~accrued at the stated rate. The Company ~~pays~~paid interest semi-annually in arrears on January 15 and July 15 of each year. On or after January 15, 2017, the Company ~~may,~~had a right, at its option, to redeem all or part of the 5.875% Senior Notes due 2022 at the redemption prices set forth in the indenture governing the 5.875% Senior Notes due 2022. The ~~indenture contains certain covenants, including limitations and restrictions on~~Company redeemed the outstanding amount of 5.875% Senior Notes due 2022 in March 2021.

Debt Repurchases

On August 16, 2019, the Company's Board of Directors authorized the Company to repurchase and/or retire a portion of the 6.00% Senior Notes due 2026, the 5.875% Senior Notes due 2024, the 5.125% Senior Notes due 2023, the 5.875% Senior Notes due 2022 (collectively the "GEO Senior Notes") and the Company's term loan under its ~~subsidiary guarantors. Refer~~Amended Credit Agreement through cash purchases, in open market purchases, privately negotiated transactions, or otherwise, up to ~~Note15-Condensed~~ ~~Consolidating Financial Information.~~

an aggregate maximum of $100.0 million, subject to certain limitations through December 31, 2020. During the first quarter of 2021, the 5.875% Senior Notes due 2022 were redeemed in connection with the offering of the Convertible Notes discussed above. On February 11, 2021, the Board authorized a new repurchase program for repurchases/retirements of the above referenced GEO Senior Notes and term loan, subject to certain limitations up to an aggregate maximum of $100.0 million through December 31, 2022.

~~Non-Recourse~~ ~~Debt~~During the six months ended June 30, 2021, the Company repurchased $22.5 million in aggregate principal amount of its 5.125% Senior Notes due 2023 at a weighted average price of 90.68% for a total cost of $20.4 million. Additionally, the Company repurchased $17.2 million in aggregate principal amount of its 5.875% Senior Notes due 2024 at a weighted average price of 79.51% for a total cost of $13.7 million. As a result of these repurchases, the Company recognized a gain on extinguishment of debt of $5.6 million.

During the six months ended June 30, 2020, the Company repurchased $5.5 million in aggregate principal amount of its 5.125% Senior Notes due 2023 at a weighted average price of 70.68% for a total cost of $3.9 million. As a result of these repurchases, the Company recognized a net gain on extinguishment of debt of $1.6 million.

Non-Recourse Debt

Northwest ~~Detention~~ICE Processing Center

The remaining balance of the original debt service requirement under the $54.4 million note payable (“("2011 Revenue ~~Bonds”~~Bonds") to WEDFA ~~will mature in October 2021 with fixed coupon rates~~is $8.1 million, all of ~~5.25%, is $36.7 million, of~~ which ~~$6.7 million~~ is classified as current in the accompanying consolidated balance sheet as of ~~September��~~June 30, ~~2017.~~2021. The payment of principal and interest on the 2011 Revenue Bonds issued by WEDFA isnon-recourse to GEO. The 2011 Revenue Bonds will mature in October 2021 with a fixed coupon rate of 5.25%.

As of ~~September~~June 30, ~~2017,~~2021, included in current restricted cash and ~~investments~~cash equivalents is ~~$8.4~~$8.6 million of funds held in trust for debt service and other reserves with respect to the ~~above mentioned~~above-mentioned note payable to WEDFA.

~~Australia - Fulham~~

~~At December 31, 2016, thenon-recourse~~ ~~obligation of the Company totaled $2.6 million (AUD 3.6 million), based on the exchange rates in effect at December 31, 2016. The term of thenon-recourse~~ debt was through 2017 and it bore interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary were matched by a similar or corresponding commitment from the government of the State of Victoria. During the nine months ended September 30, 2017, the remaining balance was paid in full.

Australia - Ravenhall

In connection with a ~~new~~ design and build ~~prison~~ project agreement with the State of Victoria, in September 2014, the Company entered into a syndicated facility agreement (the ~~“Construction Facility”~~"Construction Facility") ~~with National Australia Bank Limited~~ to provide debt financing for construction of the project. The Construction Facility ~~provides~~provided fornon-recourse funding up to ~~AUD 791.0~~AUD791 million, or approximately ~~$619.7~~$593.9 million, based on exchange rates as of ~~September~~June 30, ~~2017. Construction draws are funded throughout~~2021. In accordance with the terms of the contract, upon completion and commercial acceptance of the project ~~according to~~in late 2017, the State of Victoria made a ~~fixed utilization schedule~~lump sum payment of AUD310 million, or approximately $232.7 million, based on exchange rates as ~~defined in the syndicated facility agreement.~~of June 30, 2021. The term of the Construction Facility iswas through ~~October 2019~~September 2020 and ~~bears~~bore interest at a variable rate quoted by certain Australian banks plus 200 basis points. ~~The project is being developed under a public-private partnership financing structure with a capital contribution from~~On May 22, 2019, the Company ~~which was made in January 2017,~~completed an offering of ~~approximately AUD115~~AUD461.6 million, or ~~$90.1~~$346.6 million, based on exchange rates as of ~~September~~June 30, ~~2017. After October~~2021, aggregate principal amount of non-recourse senior secured notes due 2042 (the "Non-Recourse Notes"). The amortizing Non-Recourse Notes were issued by Ravenhall Finance Co Pty Limited in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The Non-Recourse Notes were issued with a coupon and yield to maturity of 4.23% with a maturity date of March 31, 2042. The net proceeds from this offering were used to refinance the outstanding Construction Facility and to pay all related fees, costs and expenses associated with the transaction. As a result of the transaction, the Company incurred a $4.5 million loss on extinguishment of debt related to swap termination fees and unamortized deferred costs associated with the Construction Facility. Additionally, loan costs of approximately $7.5 million were incurred and capitalized in connection with the offering.

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Other

In August 2019, the ~~Construction Facility will be converted to a term~~Company entered into two identical Notes in the aggregate amount of $44.3 million which are secured by loan ~~with payments due quarterly beginning in 2019 through 2041. In accordance with the~~agreements and mortgage and security agreements on certain real property and improvements. The terms of the ~~Construction Facility, upon completion~~Notes are through September 1, 2034 and ~~commercial acceptance~~bear interest at LIBOR plus 200 basis points and are payable in monthly installments plus interest. The Company has entered into interest rate swap agreements to fix the interest rate to 4.22%. Included in the balance at June 30, 2021 is $0.7 million of deferred loan costs incurred in the ~~prison,~~transaction. Refer to Note 9 - Derivative Financial Instruments for further information.

Guarantees

Australia

The Company has entered into a guarantee in ~~accordance~~connection with the ~~prison contract, the State will make~~operating performance of a ~~lump sum payment of AUD310~~facility in Australia. The obligation amounted to approximately AUD59 million, or ~~approximately $243~~$44.3 million, based on exchange rates as of ~~September~~June 30, ~~2017, towards a portion of the outstanding principal.~~2021. The remaining outstanding principal balance will be repaid over the term of the operating agreement. As of September 30, 2017, approximately $550 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 9 - Derivative Financial Instruments.~~

~~Guarantees~~

~~Australia~~

The Company has entered into certain guarantees in connection with the financing and construction performance of a facility in Australia. The obligations amounted to approximately AUD 100.0 million, or $78.3 million, based on exchange rates as of September 30, 2017. These guarantees areguarantee is secured by outstanding letters of credit under the ~~Company’s Revolver as~~Company's Revolver.

As of ~~September~~June 30, ~~2017.~~

~~At September 30, 2017,~~2021, the Company also had ~~ten~~7 other letters of credit outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling ~~$15.9~~$10.0 million.

~~South Africa~~

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, 2017, the Company guaranteed obligations amounting to 2.4 million South African Rand, or $0.2 million based on exchange rates as of September 30, 2017. 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 2.4 million South African Rand is secured by outstanding letters of credit under the Company’s Revolver as of September 30, 2017.~~

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 $1.5 million based on exchange rates as of September 30, 2017, 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. SACS’ 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.

~~Canada~~

In connection with a design, build, finance and maintenance contract for a facility in Canada, the Company as trustee guaranteed certain potential tax obligations of an unrelated trust that owns the faciltiy. The potential estimated exposure of these obligations was Canadian Dollar 1.4 million as of June 30, 2017. During the third quarter of 2017, the Company, with the assistance of Canadian tax counsel, completed an analysis and determined that any future tax exposure would be remote and therefore, the liability was derecognized as of September 30, 2017. The Company maintains the facility but does not currently operate or manage it.

~~United Kingdom~~

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, or $16.1 million, based on exchange rates as of September 30, 2017, of which £2.5 million, or $3.4 million, based on exchange rates as of September 30, 2017, was outstanding as of September 30, 2017 to each joint venture partner. The Company’s maximum exposure relative to the joint venture is its note receivable of approximately $3.4 million, which is included in Other~~Non-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~~off-balance sheet arrangements.

11. COMMITMENTS ~~CONTINGENCIES~~ AND ~~OTHER~~CONTINGENCIES

Litigation, Claims and Assessments

On ~~August 25, 2016,~~July 7, 2020, a purported shareholder class action lawsuit was filed against the Company, its Chief Executive Officer, George C. Zoley (“Mr. Zoley”), and its Chief Financial Officer, Brian R. Evans (“Mr. Evans”), in the ~~United States~~U.S. District Court for the Southern District of Florida. On October 1, 2020, the court entered an unopposed order appointing lead plaintiffs, approving the selection of counsel, dismissing the initial complaint, and setting a deadline for the filing of an amended complaint. On November 18, 2020, the lead plaintiffs filed a consolidated class action amended complaint. The amended complaint ~~alleged~~alleges that the Company and Messrs. Zoley and ~~Evans~~ Evans––as well as J. David Donahue (“Mr. Donahue”), the Company’s former Senior Vice President and President of the U.S. Secure Services division, and Ann M. Schlarb (“Ms. Schlarb”), the Company’s Senior Vice President and President of the GEO Care division––made materially false and misleading statements ~~regarding the Company’s~~and/or omissions related to GEO’s business––including quality of operations, corporate social responsibility, competitive strengths, business ~~operational~~strategies, health and ~~compliance policies.~~safety, sources of financing, dividend expectations, and COVID-19 procedures. The ~~lawsuit alleged that it was~~amended complaint is brought by ~~John J. Mulvaney~~lead plaintiffs James Michael DeLoach and Edward Oketola, individually and on behalf of a class consisting of all persons and entities––other than the defendants, the officers and directors of the Company, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which the defendants have or had a controlling interest––who purchased or otherwise acquired the Company’s securities during the alleged class period ~~between March 1, 2012 through and including~~from November 7, 2018 to August ~~17, 2016.~~5, 2020, inclusive. The amended complaint ~~alleged~~alleges that the ~~Company~~defendants violated Sections 10(b) and ~~Messrs. Zoley and Evans violated Section 10(b)~~20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule10b-5 promulgated thereunder, and ~~alleged~~alleges that Messrs. Zoley, Evans, and ~~Evans~~Donahue and Ms. Schlarb violated Section 20(a) of the Exchange Act. On December 21, 2016, the appointed lead plaintiffs filed an Amended Class Action Complaint, which reasserted the claims against the Company and Messrs. Zoley and Evans, and asserted new claims for alleged false and misleading statements in violation of Section 20(a) of the Exchange Act against the Company’s former Senior Vice President, GEO Detention & Corrections Services, John Hurley (“Mr. Hurley”) and the Company’s Senior Vice President and President, GEO Corrections & Detention, David Donahue (“Mr. Donahue”). The amended complaint ~~sought~~seeks damages, interest, attorneys’ fees, expert fees, other costs, and such other relief as the court may deem proper. On ~~February 23, 2017,~~December 18, 2020, the ~~Court entered an order granting the Company’s~~defendants filed a motion to dismiss the ~~Amended Class Action Complaint. On March 17, 2017, the case was dismissed with prejudice and resulted in no liability~~amended complaint. Lead plaintiffs filed their opposition to the ~~Company.~~motion to dismiss on January 19, 2021, and defendants’ reply was filed on February 2, 2021. The motion to dismiss is now fully briefed.

On ~~February 8, 2017, the Attorney General of the State of Mississippi~~July 1, 2021, a putative shareholder derivative complaint was filed ~~a lawsuit~~ in ~~the~~Palm Beach County, Florida’s Circuit Court ~~for the First Judicial District of Hinds County, Mississippi~~ against the Company, ~~Cornell Companies, Inc., a subsidiary~~its Chief Executive Officer, Mr. Zoley, its Chief Financial Officer, Mr. Evans, Ms. Schlarb, its Senior Vice President and President of ~~the~~GEO Care, and Company directors Richard H. Glanton, Anne N. Foreman, Christopher ~~B. Epps, the former Commissioner of the Mississippi Department of Corrections,~~C. Wheeler, Julie M. Wood, Guido van Hauwermeiren, Scott M. Kernan, Jose Gordo, and ~~Cecil McCrory, a former consultant of the Company.~~Duane Helkowski (collectively, “Defendants”). The complaint alleges ~~several statutory~~breach of fiduciary duty and ~~common law claims, including violations of various public servant statutes, racketeering activity, antitrust law, civil conspiracy,~~ unjust enrichment ~~and fraud. The complaint seeks compensatory damages, punitive damages, exemplary damages, forfeiture of all money received by~~claims against the defendants, restitution, interest, attorneys’ fees, other costs, and such other expenses or damages as the court may deem proper. The complaint claims that between 2007 and 2014, the Company and Cornell Companies, Inc. received approximately $256 million in proceeds from public contracts paid for by the State of Mississippi. The Company intends to take all necessary steps to vigorously defend itself and Cornell Companies, Inc. The Company has not recorded an accrualindividual Defendants relating to ~~this matter at this time, as a~~purported healthcare deficiencies, an allegedly inadequate response to the COVID-19 pandemic, and alleged forced labor by detainees, which purportedly led to the loss ~~is not considered probable nor reasonably estimable at this preliminary stage~~ of lenders due to public pressure on the ~~lawsuit.~~private detention industry. Defendants have accepted service of process; no further action has yet occurred in the case.

~~On October 22, 2014, nine current~~As previously reported and described in the Company's periodic reports, including most recently in its Form 10-Q for the quarter ended March 31, 2021, former civil immigration detainees ~~who were detained~~ at the Aurora ~~Immigration Detention~~ICE Processing Center filed a ~~purported~~ class action lawsuit on October 22, 2014, against the Company in the ~~United States~~U.S. District Court for the District of ~~Colorado (the “Court”).~~Colorado. The complaint ~~alleged~~alleges that the Company was in violation of the Colorado Minimum Wages of Workers Act and the Federal Trafficking Victims Protection Act ~~and claimed~~(“TVPA”). The plaintiff class claims that the Company was unjustly enriched ~~as a result~~because of the level of payment ~~that~~ the detainees received for work performed at the facility, even though the voluntary work program as well as the wage rates and standards associated with the program that are at issue in ~~this~~the case are authorized by the Federal government under guidelines approved by the United States

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Congress. On July 6, 2015, the ~~Court granted the Company’s motion to dismiss the claim against the Company~~court found that detainees were not employees under the Colorado Minimum ~~Wages of Workers Act but otherwise denied the Company’s motion to dismiss. On~~Wage Order and dismissed this claim. In February ~~27,~~ 2017, the ~~Court~~court granted the ~~plaintiffs’~~plaintiff-class’ motion for class ~~certification.~~certification on the TVPA and unjust enrichment claims. The ~~Court ordered the parties to file a revised Proposed Stipulated Scheduling and Discovery Order by March 27, 2017 to proceed with the case. On March 13, 2017, GEO filed for permission to appeal this~~plaintiff class certification order directly to the 10th Circuit Court of Appeal. On April 11, 2017, the 10th Circuit Court of Appeal granted GEO’s petition to hear the case. As a result, GEO has filed a motion to stay the proceedings in the trial court. Fact discovery in the case has not yet begun. The plaintiffs seekseeks actual damages, compensatory damages, exemplary damages, punitive damages, restitution, attorneys’ fees and costs, and such other relief as the ~~Court~~court may deem proper. In the time since the Colorado suit was initially filed, 3 similar lawsuits have been filed - 2 in Washington and 1 in California. The first of the 2 Washington lawsuits was filed on September 9, 2017 by immigration detainees against the Company in the U.S. District Court for the Western District of Washington. The second lawsuit was filed on September 20, 2017 by the State Attorney General against the Company in the Superior Court of the State of Washington for Pierce County, which the Company removed to the U.S. District Court for the Western District of Washington on October 9, 2017. In California, a class-action lawsuit was filed on December 19, 2017 by immigration detainees against the Company in the U.S. District Court Eastern Division of the Central District of California. All three lawsuits allege violations of the respective state’s minimum wage laws. However, the California lawsuit, like the Colorado suit, also includes claims that the Company violated the TVPA and California's equivalent state statute. The California court certified a nationwide class which would allow the plaintiffs to primarily seek injunctive relief or policy changes at a number of facilities if they are successful on the merits of their claims. On August 9, 2021, the California court will conduct a hearing on Defendant’s Motion for Summary Judgment and Motion to Decertify Class, as well as Plaintiffs’ Motion for Partial Summary Judgment. On July 2, 2019, the Company filed a Motion for Summary Judgment in the Washington Attorney General’s Tacoma lawsuit based on the Company’s position that its legal defenses prevent the case from proceeding to trial. The federal court in Washington denied the Company's Motion for Summary Judgment on August 6, 2019. However, on August 20, 2019, the United States Department of Justice filed a Statement of Interest, which asked the Washington court to revisit its prior denial of the Company's intergovernmental immunity defense in the case. While the Washington court ultimately elected not to dismiss the case at the time, its order importantly declared that the Company's intergovernmental immunity defense was legally viable, to be ultimately determined at trial. After putting them on “standby” for most of 2020 due to the COVID-19 pandemic, the trial court entered an order setting both suits for an estimated three-week trial beginning June 1, 2021. The court ordered a remote trial, but with the possibility of in-person proceedings. The order notes the Company’s exception to the remote trial setting. The Company filed a motion for reconsideration of the judge’s order setting a remote trial on April 8, 2021, requesting that the trial date be moved from June 1, 2021 to the earliest possible date after July 1, 2021, when the State of Washington plans to allow in-person trials to resume. On April 9, 2021, the Washington court denied the motion for reconsideration for an in-person trial, ruling that a “hybrid” trial, with some parts being conducted in-person with COVID-19 precautions, will begin on June 1, 2021. On June 1, 2021, the remote Zoom trial began. On June 17, 2021, the trial judge declared a mistrial when the jury was unable to reach a unanimous verdict. The in-person jury re-trial is set to begin on October 12, 2021. The Company intends to take all necessary steps to vigorously defend itself and has consistently refuted the allegations and claims in ~~the lawsuit.~~these lawsuits. The Company has not recorded an accrual relating to ~~this matter~~these matters at this time, as a loss is not considered probable nor reasonably estimable at this stage of the ~~lawsuit. If~~lawsuits.

On December 30, 2019, the Company ~~had~~filed a lawsuit for declaratory and injunctive relief challenging California’s newly enacted law - Assembly Bill 32 (AB-32) - which bars the federal government from engaging the Company or any other government contractors to ~~change~~provide detention services for illegal immigrants. The Company’s claims, as described in the ~~level of compensation~~lawsuit, are grounded in authoritative legal doctrine that under the ~~voluntary work program,~~Constitution’s Supremacy Clause, the federal government is free from regulation by any state. By prohibiting federal detention facilities in California, the suit argues AB-32 substantially interferes with the ability of USMS and ICE to carry out detention responsibilities for the federal government. Secondly, because AB-32 creates exceptions to the State of California when using the Company or any government contractors (to alleviate overcrowding), California’s statute unlawfully discriminates against the federal government. On December 31, 2019, GEO filed its motion for a preliminary injunction restraining California’s Governor and Attorney General from enforcing AB-32 against the Company’s detention facilities on behalf of USMS and ICE. On January 24, 2020, the United States filed a lawsuit challenging AB-32. The court heard motions for preliminary injunction from the Company and the United States on July 16, 2020. The court ordered the parties to ~~substitute employee work~~submit supplemental briefing and indicated it would render an opinion sometime after the filing deadline of August 18, 2020. On July 20, 2020 the court consolidated both lawsuits. On October 8, 2020, the court issued an order granting, in part, and denying in part, the Company and the Untied State’s motions and California’s motion to dismiss. Among other findings, the court (1) dismissed the Company’s intergovernmental immunity claims as well as the United States’ preemption claims as applied to ICE facilities; (2) found that the Company and the United States were likely to succeed on the preemption claims as applied to U.S. Marshals’ facilities and enjoined enforcing AB-32 against those facilities; and (3) refused to enjoin California from enforcing AB-32 against ICE contracts with the Company and the United States. The Company and the United States have appealed to the Ninth Circuit Court of Appeals. Oral argument was held on June 7, 2021 and the case has been submitted for ~~voluntary work, this~~decision.

On April 29, 2021, the Company filed a lawsuit for declaratory and injunctive relief challenging the State of Washington’s newly enacted law – House Bill 1090 (EHB 1090) – that purports to prohibit the United States from using detention facilities operated by private contractors to house detainees in the custody of U.S. Immigration and Customs Enforcement (ICE).

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The Company establishes accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, the results of these claims or proceedings cannot be predicted with certainty, and an unfavorable resolution of one or more of these claims or proceedings could ~~increase~~have a material adverse effect on the Company's financial condition, results of operations or cash flows. The Company's accruals for loss contingencies are reviewed quarterly and adjusted as additional information becomes available. The Company does not accrue for anticipated legal fees and costs ~~of operating these facilities.~~but expenses those items as incurred.

The nature of the ~~Company’s~~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~~Company's facilities, programs, electronic monitoring products, personnel or prisoners, including damages arising from a ~~prisoner’s~~prisoner's escape or from a disturbance or riot at a facility. The Company accrues for legal costs associated with loss contingencies when those costs are probable and reasonably estimable. 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.

Other Assessment

A statenon-income tax audit completed in 2016 included tax periods for which the state tax authority had ~~a number of years ago~~previously processed a substantial tax refund. At the completion of the audit fieldwork, the Company received a notice of audit findings disallowing deductions that were previously claimed by the Company, approved by the state tax authority and served as the basis for the approved refund claim. In early January 2017, the Company received a formal Notice of Assessment of Taxes and Demand for Payment from the taxing authority disallowing the deductions. The total tax, penalty and interest ~~assessed~~related to the assessment is approximately ~~$19.6~~$19.5 million. The Company ~~has filed~~is appealing an administrative ~~protest~~ruling and disagrees with the assessment and intends to take all necessary steps to vigorously defend its position. The Company has established a reserve based on its estimate of the most probable loss based on the facts and circumstances known to date and the advice of outside counsel in connection with this matter.

CARES Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, allows employers to defer the deposit and payment of the employer's share of Social Security taxes. The deferral applies to deposits and payments of the employer’s share of Social Security tax that would otherwise be required to be made during the period beginning on March 27, 2020 and ending on December 31, 2020. The deferred amounts are due to be paid in 2 equal installments on December 31, 2021 and December 31, 2022. As a result of the CARES Act, the Company has deferred the payment of approximately $40.0 million related to these payroll taxes as of June 30, 2021.

Commitments

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 active capital projects will be approximately ~~$243.9~~$39.7 million of which ~~$82.6~~$30.6 million was spent through the first ~~nine~~six months of ~~2017.~~2021. The Company estimates the remaining capital requirements related to these capital projects will be ~~$161.3~~$9.1 million which will be spent through ~~2018.~~the remainder of 2021.

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Idle Facilities

As of ~~September~~June 30, ~~2017,~~2021, the Company iswas marketing ~~approximately 5,400 vacant beds at five~~9 of its idle facilities to potential customers. The carrying values of these idle facilities ~~which~~ are included in Property and Equipment, Net and Assets for Sale in the accompanying consolidated balance ~~sheets, totaled $137.3 million as~~sheets. The following table summarizes each of ~~September 30, 2017,~~the idled facilities and their respective carrying values, excluding equipment and other assets that can be easily transferred for use at other facilities. There was no indication of impairment related to the ~~Company’s~~Company's idle facilities ~~at September~~as of June 30, ~~2017.~~

2021.

		Design			Net Carrying Value
Facility	Segment	Capacity		Date Idled	6/30/2021
D. Ray James Correctional Facility	Secure Services		1,900	2021	$	53,470
Moshannon Valley Correctional Facility	Secure Services		1,878	2021		55,979
Rivers Correctional Facility	Secure Services		1,450	2021		40,292
Queens Detention Facility [1]	Secure Services		222	2021		16,470
McFarland Female Community Reentry Facility	Secure Services		300	2020		11,798
Perry County Correctional Facility	Secure Services		690	2015		11,356
Great Plains Correctional Facility	Secure Services		1,940	2021		10,457
Cheyenne Mountain Recovery Center	GEO Care		750	2020		17,390
Coleman Hall	GEO Care		350	2017		8,326
Total			9,480		$	225,538

[1] Included in Assets Held for Sale.

12. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

Operating and Reporting Segments

The Company conducts its business through ~~four~~4 reportable business segments: the U.S. ~~Corrections & Detention~~Secure Services segment; the GEO Care segment; the International Services segment; and the Facility Construction & Design segment. The ~~Company’s~~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						Six Months Ended
	September 30, 2017			September 30, 2016		September 30, 2017			September 30, 2016		June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Revenues:
U.S. Corrections & Detention	$	365,071		$	344,452	$	1,073,840		$	1,024,395
U.S. Secure Services											$	368,394		$	389,718		$	755,405		$	787,827
GEO Care		134,610			99,779		377,740			289,722		141,905			138,240			277,387			282,703
International Services		45,641			40,416		130,261			116,468		54,921			53,254			108,405			110,104
Facility Construction & Design (1)		21,437			69,729		112,602			182,326

Facility Construction & Design [1]												199			6,617			599			12,212
Total revenues	$	566,759		$	554,376	$	1,694,443		$	1,612,911	$	565,419		$	587,829		$	1,141,796		$	1,192,846

Operating income (loss) from segments:
U.S. Corrections & Detention	$	77,551		$	77,865	$	224,838		$	220,292
Operating income from segments:
U.S. Secure Services											$	78,902		$	75,219		$	147,416		$	148,804
GEO Care		31,293			30,007		94,062			80,558		42,398			29,850			80,807			60,549
International Services		3,410			1,866		8,413			4,702		5,719			5,266			12,892			10,916
Facility Construction & Design (1)		(278	)		196		(1,620	)		471

Facility Construction & Design [1]												85			25			98			35
Operating income from segments	$	111,976		$	109,934	$	325,693		$	306,023	$	127,104		$	110,360		$	241,213		$	220,304

General and Administrative Expenses												(54,688	)		(45,543	)	$	(103,167	)		(99,325	)
Total Operating Income											$	72,416		$	64,817		$	138,046		$	120,979

~~(1)~~

[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

Facility Construction & Design revenues relate 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 recordedan expansion project at the net present value based on the timing of expected future settlement. A portion of the Contract Receivable will be paid by the State upon commercial acceptance of the prison and the remainder will be paid quarterly over the life of the contract. During the nine months ended September 30, 2017, the Company became aware of certain claims by its construction subcontractor for unanticipated additional costsCompany's managed-only Fulham Correctional Centre in Australia which ~~are in excess of the agreed contract price. The Company~~ has agreed in principle with the subcontractor to pay approximately $1.9 million related to these overruns and has recorded a provision for loss related to these claims during the nine months ended September 30, 2017.been substantially completed.

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Pre-Tax Income Reconciliation of Segments

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

   Three Months Ended    Nine Months Ended
   September 30,
2017    September 30,
2016    September 30,
2017    September 30,
2016
Total operating income from segments
   $ 111,976    $ 109,934    $ 325,693    $ 306,023
Unallocated amounts:

General and Administrative Expenses
   (49,074 )    (37,483 )    (143,866 )    (108,448 )
Net Interest Expense
   (24,071 )    (25,500 )    (70,731 )    (75,477 )
Loss on Extinguishment of Debt
   —      —      —      (15,885 )








Income before income taxes and equity in earnings of affiliates
   $ 38,831    $ 46,951    $ 111,096    $ 106,213

	Three Months Ended						Six Months Ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Operating income from segments	$	127,104		$	110,360		$	241,213		$	220,304
Unallocated amounts:
General and administrative expenses		(54,688	)		(45,543	)		(103,167	)		(99,325	)
Net interest expense		(26,068	)		(25,362	)		(51,710	)		(54,104	)
Gain on extinguishment of debt		1,654			-			4,693			1,563
(Loss) gain on disposition of real estate		(2,950	)		(1,304	)		10,379			(880	)
Income before income taxes and equity in earnings of affiliates	$	45,052		$	38,151		$	101,408		$	67,558

Equity in Earnings of Affiliates

Equity in earnings of affiliates includes the Company’s 50% owned joint ventures in ~~SACS,~~South African Custodial Services Pty. Limited (“SACS”), located in South Africa, and GEOAmey PECS Limited (“GEOAmey”), located in the United Kingdom. The ~~Company’s~~Company's 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 OtherNon-Current Assets in the accompanying consolidated balance sheets.

The Company has recorded ~~$1.1 million and $3.4~~$1.8 million in earnings, net of tax, for SACS operations during the ~~three and nine~~six months ended ~~September~~June 30, ~~2017,~~2021, and ~~$1.1 million and $2.9~~$1.9 million in earnings, net of tax, for SACS operations during the ~~three and nine~~six months ended ~~September~~June 30, ~~2016, respectively,~~2020, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of ~~September~~June 30, ~~2017~~2021, and December 31, ~~2016,~~2020, the Company’s investment in SACS was ~~$10.4~~$11.1 million and ~~$11.8~~$11.1 million, ~~respectively.~~respectively, and represents its share of cumulative reported earnings.

The Company has recorded ~~$0.2 million and $0.8~~$2.2 million in earnings, net of tax, for ~~GEO Amey’s operation~~GEOAmey's operations during the ~~the three and nine~~six months ended ~~September~~June 30, ~~2017,~~2021, and ~~$0.7 million and $2.1~~$3.1 million in earnings, net of tax, for GEOAmey's operations during the ~~three and nine~~six months ended ~~September~~June 30, ~~2016, respectively,~~2020, which are included in equity in earnings of affiliates, net of income tax provision in the accompanying consolidated statements of operations. As of ~~September~~June 30, ~~2017~~2021, and December 31, ~~2016,~~2020, the Company’s investment in GEOAmey was ~~$2.3~~$8.9 million and ~~$1.3~~$11.8 million, respectively, and represents its share of cumulative reported earnings.

13. BENEFIT PLANS

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


	Nine Months Ended September 30, 2017			Year Ended December 31, 2016			Six Months Ended June 30, 2021			Year Ended December 31, 2020
Change in Projected Benefit Obligation
Projected benefit obligation, beginning of period	$	28,624		$	25,935		$	33,530		$	37,551
Service cost		751			995			702			1,254
Interest cost		921			1,155			637			1,306
Actuarial loss		—			1,031
Actuarial gain								0			3,180
Other reclassification [1]								0			(8,925	)
Benefits paid		(426	)		(492	)		(434	)		(836	)

Projected benefit obligation, end of period	$	29,870		$	28,624		$	34,435		$	33,530

Change in Plan Assets
Plan assets at fair value, beginning of period	$	—		$	—		$	0		$	0
Company contributions		426			492			434			836
Benefits paid		(426	)		(492	)		(434	)		(836	)

Plan assets at fair value, end of period	$	—		$	—		$	0		$	0

Unfunded Status of the Plan	$	(29,870	)	$	(28,624	)	$	34,435		$	33,530

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   Three Months Ended    Nine Months Ended
   September 30,
2017    September 30,
2016    September 30,
2017    September 30,
2016
Components of Net Periodic Benefit Cost

Service cost
   $ 250    $ 249    $ 751    746
Interest cost
   307    289    $ 921    $ 866
Net loss
   73    53    218    160








Net periodic pension cost
   $ 630    $ 591    $ 1,890    $ 1,772

	Three Months Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Components of Net Periodic Benefit Cost
Service cost	$	351	$	313	$	702	$	627
Interest cost		319		326		637		653
Net loss		197		135		394		270
Net periodic pension cost	$	867	$	774	$	1,733	$	1,550

[1] The Company has a non-qualified deferred compensation agreement with its CEO. The agreement provided for a lump sum cash payment upon retirement, no sooner than age 55. As of June 30, 2021, the CEO had reached age 55 and was eligible to receive the payment upon retirement.

On February 26, 2020, the Company and its CEO entered into an amended and restated executive retirement agreement that amends the CEO’s executive retirement agreement.

The amended and restated executive retirement agreement provides that upon the CEO’s retirement from the Company, the Company will pay a lump sum amount initially equal to $8,925,065 (determined as of February 26, 2020) which will be paid in the form of a fixed number of shares of the Company’s common stock. The Grandfathered Payment will be delayed for six months and a day following the effective date of the CEO’s termination of employment in compliance with Section 409A of the Code.

On the Effective Date, an amount equal to the Grandfathered Payment was invested in the Company’s common stock. The number of the Company’s shares of common stock as of the Effective Date was equal to the Grandfathered Payment divided by the closing price of the Company’s common stock on the Effective Date (rounded up to the nearest whole number of shares), which equals 553,665 shares of the Company’s common stock. Additional shares of the Company’s common stock are credited with a value equal to any dividends declared and paid on the Company’s shares of common stock, calculated by reference to the closing price of the Company’s common stock on the payment date for such dividends (rounded up to the nearest whole number of shares).

The Company has established several trusts for the purpose of paying the retirement benefit pursuant to the amended and restated executive retirement agreement. The trusts are revocable “rabbi trusts” and the assets of the trusts are subject to the claims of the Company’s creditors in the event of the Company’s insolvency.

The Company repurchased shares of its outstanding common stock under its stock buyback program and contributed such shares to the trusts in order to fund the retirement benefit under the amended and restated executive retirement agreement. In accordance with Accounting Standards Codification (“ASC”) 710 – Compensation-General, the shares of common stock held in the rabbi trusts are classified as treasury stock. In addition, the amended and restated executive retirement agreement qualifies for equity accounting under ASC 710 and therefore, the fair value of the Grandfathered Payment has been reclassified to stockholders’ equity.

The Company and its CEO entered into on May 27, 2021, and effective as of July 1, 2021, an Amended and Restated Executive Retirement Agreement which replaces the February 26, 2020 agreement. Refer to Note 15 – Subsequent Events for further information.

The long-term portion of the pension liability as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 was ~~$29.6~~$34.1 million and ~~$28.3~~$33.2 million, respectively, and is included in OtherNon-Current Liabilities in the accompanying consolidated balance sheets.

14. RECENT ACCOUNTING PRONOUNCEMENTS

The Company implemented the following accounting standards during the ~~nine~~three months ended ~~September~~June 30, ~~2017:~~2021:

In ~~March 2016,~~August 2020, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued ~~Accounting Standard Update (“ASU”)No. 2016-09,~~ ~~“Compensation - Stock Compensation (Topic 718)~~,ASU 2020-06, “Debt – Debt with Conversion and Other Options” ~~as a part of its simplification initiative.~~. The ~~Company adopted~~guidance in this ~~ASU during~~update simplifies the ~~nine months ended September 30, 2017. Key areas of~~accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in ~~this standard are (i) all excess tax benefits (deficiencies) from stock plan transactions should~~the ASU also simplify the guidance in ASC 815-40, “Derivatives and Hedging: Contracts in an Entity’s Own Equity” by removing certain criteria that must be ~~recognized~~satisfied in ~~the income statement~~order to classify a contract as ~~opposed~~equity, which is expected to ~~being recognized in additionalpaid-in~~ capital; (ii) the tax withholding threshold for triggering liability accounting on a net settlement transaction has been increased from the minimum statutory rate to the maximum statutory rate; and (iii) an entity can make an entity-wide accounting policy election to either estimatedecrease the number of ~~awards that are expected to vest~~freestanding instruments and embedded derivatives accounted for as assets or ~~account for forfeitures as they occur. The~~liabilities. Finally, the amendments revise the guidance also provides clarification of the presentation of certain components of share-based awards in the statement of cash flows. The Company has elected to continue estimating forfeitures expected to occur in order to determine the amount of compensation cost to be recognized each period and to apply the cash flow classification guidance prospectively. As a result, excess tax benefits are now classified as an operating activity rather than a financing activity and the Company has recorded $1.5 million of excess tax benefits from stock plan transactions as a component of income tax expense in the consolidated statement of operations for the nine months ended September 30, 2017. The Company has excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of its dilutedon calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the ~~nine months ended September 30, 2017.~~

~~In March 2016, the FASB issued ASU2016-05,~~ “~~Derivatives and Hedging,~~~~” which clarifies~~presumption of share settlement for instruments that ~~a change~~may be settled in the counter party to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met.cash or shares. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company ~~adopted this ASU during the nine months ended September 30, 2017 and~~ elected to ~~apply the amendments in~~early adopt this standard ~~on a prospective basis.~~effective January 1, 2021. The ~~implementation~~adoption of this standard did not have a material impact on the ~~Company’s~~Company's financial position, results of operations or cash flows.

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In March ~~2016,~~2020, the FASB issued ASU~~2016-07,~~ 2020-04, “~~Investments - Equity Method~~Reference Reform Rate (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” to provide temporary optional expedients and ~~Joint Ventures~~,”exceptions to the contract modifications, hedge relationships and other transactions affected by reference rate reform if certain criteria are met. This ASU, which was effective upon issuance and may be applied through December 31, 2022, is applicable to all contracts and hedging relationships that reference the London Interbank Offered Rate or any other reference rate expected to be discontinued. The Company is currently evaluating the impact of reference rate reform and the potential application of this guidance.

In August 2018, the FASB issued ASU No. 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715.20)" as a part of its ~~simplification initiative.~~disclosure framework project. The amendments in this standard eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations,update remove, modify and ~~retained earnings retroactively on astep-by~~ ~~step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor~~ add ~~the cost of acquiring the additional interest in the investee~~certain disclosures primarily related to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in ASU~~2016-07~~ ~~also require that an entity that has anavailable-for-sale~~ ~~equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss~~amounts in accumulated other comprehensive income atexpected to be recognized as components of net periodic benefit cost over the ~~date~~next fiscal year, explanations for reasons for significant gains and losses related to changes in the ~~investment becomes qualified~~benefit obligation for ~~use of~~ the ~~equity method.~~period, and projected and accumulated benefit obligations. The new standard became effective for the Company ~~adopted this ASU during the nine months ended September 30, 2017 and elected to apply the amendments in this standard~~ on ~~a prospective basis.~~January 1, 2021. The ~~implementation~~adoption of this standard did not have a material impact on the ~~Company’s~~Company's financial position, results of operations or cash flows.

~~In October 2016,~~Other recent accounting pronouncements issued by the FASB ~~issued ASUNo. 2016-17,~~ “~~Consolidation - Interest Held through Related Parties that are Under Common Control~~(including its Emerging Issues Task Force),~~” which amends~~ the ~~current consolidation guidance on how a reporting entity that is~~American Institute of Certified Public Accountants and the single decision maker of a variable interest entity (“VIE”) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE, and therefore consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE. The Company adopted this ASU during the nine months ended September 30, 2017. The implementation of this standardSEC did not, ~~have a material impact on the Company’s financial position, results of operations~~ or ~~cash flows.~~

~~The following accounting standards will be adopted in future periods:~~

~~In August 2017, the FASB issued ASUNo. 2017-11~~ “~~Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities~~”. The objective of this guidance is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Certain of the amendments in this update as they relate to cash flow hedges, eliminate the requirement to separately record hedge ineffectiveness currently in earnings. Instead, the entire change in the fair value of the hedging instrument is recorded in other comprehensive income. Those amounts are reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings. The new standard is effective for the Company beginning January 1, 2019. The adoption of this standard is not expected to, have a material ~~impact~~effect on the ~~Company’s financial position,~~Company's results of operations or ~~cash flows.~~financial position.

15. SUBSEQUENT EVENTS

CEO Succession Plan

On June 1, 2021, the Company announced that its Board has determined that it is in the best interests of the Company to implement a succession plan for the Chief Executive Officer position given that the Company’s Founder, Chairman and Chief Executive Officer, George C. Zoley, is 71 years old and has served with the Company for approximately forty years. The primary objectives of the Board in initiating a succession plan were to secure Mr. Zoley’s services on a long-term basis to ensure a proper senior management transition, and to retain a new Chief Executive Officer that would succeed Mr. Zoley in that role. This change will allow Mr. Zoley the ability to focus on planning of the Company’s future.

On May 27, 2021, the Board terminated without cause Mr. Zoley’s existing employment agreement, effective as of June 30, 2021, and entered into a new five-year employment agreement with Mr. Zoley as Executive Chairman, in a modified role and at reduced compensation effective July 1, 2021. The new employment agreement with Mr. Zoley will secure Mr. Zoley’s continuous employment, enabling the Company to continue to benefit from Mr. Zoley’s extensive knowledge and experience, and providing for an orderly transition of senior management.

In connection with Mr. Zoley’s termination, the Company and Mr. Zoley entered into a Separation and General Release Agreement as of May ~~2017,~~27, 2021 (the “Separation Agreement”). Pursuant to the ~~FASB issued ASUNo. 2017-10~~ “~~Service Concession Arrangements - Determining the Customer~~terms of the ~~Operation Services~~~~”. The objective of this guidance is~~Separation Agreement, Mr. Zoley will continue to ~~reduce diversity in practice and provide clarification on how an operating entity determines the customer~~serve as Chief Executive Officer of the ~~operation services for transactions within~~Company through June 30, 2021 (the “Separation Date”) and will receive all accrued wages through the ~~scope~~Separation Date. Additionally, pursuant to the terms of ~~Topic 853, Service Concessions Arrangements.~~Mr. Zoley’s prior employment agreement, Mr. Zoley will receive payments in the amount of $5,851,555, less any applicable taxes and withholdings, which represents the sum of two (2) years of Mr. Zoley’s base annualized salary and two (2) times Mr. Zoley’s current target bonus under GEO’s Senior Management Performance Award Plan. The ~~amendments in this update clarify that the grantor is the customer~~Company shall also vest any unvested stock options and restricted stock as of the ~~operation~~Separation Date; provided that any restricted stock subject to performance-based vesting at the Separation Date shall vest at such time as the performance goals are met if Mr. Zoley is still providing services to GEO under the Executive Chairman Agreement described below. Mr. Zoley will also be paid all accrued dividends on his unvested shares of restricted stock. Lastly, Mr. Zoley is entitled to receive certain fringe benefits for a ten (10) year period as set forth in ~~all cases~~the Separation Agreement, including payment of health insurance premiums under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for eighteen (18) months and reimbursement of the cost of health insurance coverage for eight and a half (8¹⁄₂) years following the first eighteen (18) months, life insurance, the use of an executive automobile, and personal use of the Company leased aircraft for thirty (30) hours per year. In the event of Mr. Zoley’s death within such ~~arrangements. The~~ten (10) year period, the Company will continue to provide the Fringe Benefits to Mr. Zoley’s covered dependents, and, if applicable to Mr. Zoley’s estate.

In order to transition the role of Chief Executive Officer to a successor in an orderly manner, the Board determined it was in the best interests of GEO to create a new ~~standard is effective~~officer position for the role of Executive Chairman and appoint Mr. Zoley as Executive Chairman, effective as of July 1, 2021. As a result, the Company ~~beginning~~and Mr. Zoley entered into on ~~January~~May 27, 2021 an Executive Chairman Employment Agreement effective as of July 1, ~~2018. The adoption of this standard is not expected~~2021 (the “Executive Chairman Agreement”). Pursuant to ~~have a material impact on the Company’s financial position, results of operations or cash flows.~~

~~In May 2017, the FASB issued ASUNo. 2017-09~~ “~~Compensation - Stock Compensation~~~~”. The objective of this guidance is to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying modification accounting for changes in~~ the terms ~~or conditions of share-based payment awards. An entity should account for the effects of a modification unless all~~ of the ~~following factors are met: (i)~~Executive Chairman Agreement, Mr. Zoley will serve as Executive Chairman assisting the ~~fair value~~new Chief Executive Officer in his transition, among other duties and responsibilities, and report directly to the Board of Directors for a term of five years ending on June 30, 2026 and subject to automatic renewals for

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one-year periods unless either the Company or Mr. Zoley gives written notice at least 1 year prior to the expiration of the ~~modified award is~~term. Under the ~~same as the fair value~~terms of the original award immediately before the award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The new standardExecutive Chairman Agreement, Mr. Zoley will be effective for all entities for fiscal years beginning after December 15, 2017 with early adoption permitted for public companies for reporting periods for which financial statements have not yet been issued. The amendments in this update should be applied prospectively topaid an ~~award modified on or after the adoption date. The adoption~~annual base salary of ~~this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.~~

~~In March 2017, the FASB issued ASUNo. 2017-07~~ “~~Compensation - Retirement Benefits (Topic 715)-Improving the Presentation of Net Periodic Pension Cost~~$1.0 million and ~~Net Periodic Postretirement Benefit Cost~~”. This guidance revises how employers that sponsor defined benefit pension and other postretirement plans present the net periodic benefit cost in their income statement and requires that the service cost component of net periodic benefit cost be presented in the same income statement line items as other employee compensation costs from services rendered during the period. Of the components of net periodic benefit cost, only the service cost component will be eligible ~~for asset capitalization. The other components~~to receive target annual performance awards equal to 100% of base salary in accordance with the ~~net periodic benefit cost must~~terms of any plan governing senior management performance awards. Mr. Zoley will also be ~~presented separately~~entitled to receive an annual equity incentive award with a grant date fair value equal to 100% of base salary and subject to a time-based vesting schedule of one (1) year from the ~~line items that include the service cost and outside~~date of any subtotal of operating income on the income statement. The new standard will be effective for public companies for fiscal years beginning after December 15, 2017 on a retroactive basis. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

~~In October 2016, the FASB issued ASUNo. 2016-16,~~ “~~Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory~~,” as a part of its simplification initiative. The amendments in this standard require entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Under prior generally accepted accounting principles, the recognition of current and deferred income taxes for an intra-entity asset transfer was prohibited until the asset has been sold to an outside party. The new standard will be effective for public companies for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods with early adoption permitted under certain circumstances. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the adoption period. The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

~~In February 2016, FASB issued ASU2016-02,~~ “~~Leases~~,” which requires entities to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. For finance leases and operating leases, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a~~right-of-use~~ ~~asset representing its right to use the underlying asset for the lease term with each initially measured at the present value of the lease payments. The amendments in ASU2016-02~~ are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company has implemented a lease management software application tool and is currently assessing the impact that the adoption of ASU~~2016-02~~ will have on its consolidated financial position or results of operations, but expects that it will result in a significant increase in its long-term assets and liabilities given the significant number of leasesgrant. Additionally, the Company ~~is a party to.~~

~~In May 2014,~~will credit Mr. Zoley’s account balance under the ~~FASB issued a new standard related to revenue recognition (ASU2014-09,~~ “~~Revenue from Contracts with Customers”~~~~.) Under the new standard, revenue is recognized when a customer obtains control of promised goods or services~~Amended and ~~is recognized~~Restated Executive Retirement Agreement on an annual basis in an amount equal to 100% of his base salary. Lastly, Mr. Zoley is entitled to participate in all benefits and perquisites available to executive officers of GEO.

The Executive Chairman Agreement provides that ~~reflects~~upon the ~~consideration which~~termination of the ~~entity expects~~Executive Chairman Agreement by the Company without cause, by Mr. Zoley for good reason or upon Mr. Zoley’s death or disability, Mr. Zoley will be entitled to receive ~~in exchange for those goods or services.~~a termination payment equal to two times the sum of his annual base salary and the target bonus. In addition, the ~~standard requires disclosure~~unvested portion of any equity award will fully vest and the ~~nature, amount, timing,~~Company will provide Mr. Zoley and ~~uncertainty~~any of ~~revenue and cash flows arising from contracts~~his covered dependents with ~~customers. The FASB has recently issued several amendments~~the executive benefits beginning on the date that they are no longer entitled to the ~~standard, including clarification on accounting for licenses~~Fringe Benefits under the Separation Agreement until the ten (10) year anniversary of intellectual property and identifying performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of termination of the Executive Chairman Agreement.

Upon the termination of the Executive Chairman Agreement by GEO for cause or by Mr. Zoley without good reason, Mr. Zoley will be entitled to only the amount of compensation that is due through the effective date of the termination, including the retirement benefit due to him under his executive retirement agreement. The Executive Chairman Agreement contains restrictive covenants, including a non-competition covenant that runs through the three (3) year period following the termination of the executive’s employment, and customary confidentiality and work product provisions.

Appointment of Jose Gordo as Successor Chief Executive Officer

Jose Gordo, 48, has over 20 years of experience in business management, private equity, corporate finance and business law. Since June 2017, Mr. Gordo has served as the Managing Partner of a general partnership that invests in and actively oversees small and medium-sized privately held companies, with a focus on the healthcare, consumer products and technology industries. From 2013 to early 2017, Mr. Gordo served as the Chief Financial Officer of magicJack Vocaltec Ltd., a publicly-traded company in the telecommunications industry. Prior to that position, Mr. Gordo served as a Managing Director at The Comvest Group, a Florida-based private equity firm. Mr. Gordo was also previously a partner at the national law firm of Akerman LLP, where he specialized in corporate law matters, advising public and private companies and private equity firms on mergers and acquisitions and capital markets transactions. He received a J.D. degree from Georgetown University Law Center and a B.A. degree from the University of Miami.

In connection with his appointment, Mr. Gordo and the Company entered into an Executive Employment Agreement (the “Employment Agreement”) on May 27, 2021 to provide that Mr. Gordo will be employed by the Company for a three-year term beginning July 1, 2021. Unless the Employment Agreement is sooner terminated, or not renewed, it will automatically extend upon the end of its initial ~~application (the modified retrospective transition method).~~ term for a rolling three-year term. Pursuant to the terms of the Employment Agreement, Mr. Gordo will serve as Chief Executive Officer and report directly to the Executive Chairman. Either Mr. Gordo or the Company may terminate Mr. Gordo’s employment under the Employment Agreement for any reason upon not less than thirty (30) days written notice.

Under the terms of the Employment Agreement, Mr. Gordo will be paid an annual base salary of $900,000, subject to the review and potential increase within the sole discretion of the Compensation Committee. Mr. Gordo will also be entitled to receive a target annual performance award of 85% of Mr. Gordo’s base salary and will also be entitled to participate in the Company’s stock incentive plan and upon the Effective Date, the Company will grant Mr. Gordo an award of 50,000 performance-shares that will vest ratably over a three-year period.

The ~~new standard is effective~~Employment Agreement provides that upon the termination of the agreement by Mr. Gordo for good reason, by the Company without cause or upon the death or disability of Mr. Gordo, he will be entitled to receive a termination payment equal to two (2) times the sum of his annual base salary plus target bonus for the ~~Company beginning on January 1, 2018.~~fiscal year in which his employment is terminated or, if greater, the target bonus for the fiscal year immediately prior to such termination. The Company ~~is currently~~will also continue to provide Mr. Gordo and any covered dependents with the Executive Benefits as defined in the ~~final stages~~Employment Agreement for a period of ~~evaluating whether these standards would have a material impact on~~five (5) years after the ~~Company’s financial position, results~~date of ~~operations or cash flows. However, upon its preliminary assessment,~~termination. In the event of Mr. Gordo’s death within such five (5) year period, the Company ~~believes~~will continue to provide the Executive Benefits to Mr. Gordo’s covered dependents, and, if applicable to Mr. Gordo’s estate. In addition, the Employment Agreement provides that upon such termination, GEO will transfer all of its interest in any automobile used by the executive pursuant to its employee automobile policy and pay the balance of any outstanding loans or leases on such automobile so that the ~~timing~~executive owns the automobile outright. In the event such automobile is leased, the Employment Agreement provides that GEO will pay the residual cost of revenue recognition could potentially be affected as it relates to certain variable consideration arrangements with certain of its customers and also certain identified performance obligations related to construction activities. Additionally, certain reclassifications may be necessary with respect to payments made to certain of its customers. However, at this time,the lease. In the event the Company does not ~~believe~~pay the termination payment by the due date, then any unpaid amount shall bear interest at the rate of eighteen percent (18%) per annum, compounded monthly, until paid. Lastly, all of the outstanding and unvested stock options and restricted stock granted to Mr. Gordo prior to termination will fully vest immediately upon termination; provided, however that any ~~such potential adjustments~~restricted stock that is subject to performance-based vesting shall only vest when and to the extent the Compensation Committee certifies that the performance goals are actually met.

Upon the termination of the Employment Agreement by GEO for cause or ~~however,~~by Mr. Gordo without good reason, Mr. Gordo will be entitled to only the amount of compensation that ~~election, as well as its analysis~~is due through the effective date of ~~any impacts related to variable consideration arrangements, construction performance obligations~~the termination. The Employment Agreement

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includes a non-competition covenant that runs through the three-year period following the termination of the executive’s employment, and ~~payments made to customers, may change once the Company’s final assessment is completed during the fourth quarter of 2017.~~ customary confidentiality and work product provisions.

Amended and Restated Executive Retirement Agreement

The Company ~~has determined~~and Mr. Zoley entered into on May 27, 2021, and effective as of July 1, 2021, an Amended and Restated Executive Retirement Agreement (the “Amended and Restated Executive Retirement Agreement”). Pursuant to the terms of the Amended and Restated Executive Retirement Agreement, upon the date that ~~it will use the modified retrospective transition method~~Mr. Zoley ceases to ~~implement this standard.~~

~~15. CONDENSED CONSOLIDATING FINANCIAL INFORMATION~~

As of September 30, 2017, the Company’s 6.00% Senior Notes, 5.125% Senior Notes, the 5.875% Senior Notes due 2022 and the 5.875% Senior Notes due 2024 were fully and unconditionally guaranteed on a joint and several senior unsecured basis byprovide services to the Company, ~~and certain~~the Company will pay to Mr. Zoley an amount equal to $3,600,000 which shall be paid in cash. The Grandfathered Payment shall be credited with interest at a rate of ~~its wholly-owned domestic subsidiaries~~5% compounded quarterly (the ~~“Subsidiary Guarantors”~~“Grandfathered Earnings Account”). Additionally, at the end of each calendar year provided that Mr. Zoley is still providing services to the Company pursuant to the Executive Chairman Agreement, the Company will credit an amount equal to $1,000,000 at the end of each calendar year (the “Employment Contributions Account”). The ~~following condensed consolidating financial information,~~Employment Contributions Account will be credited with interest at the rate of 5% compounded quarterly. Upon the date that Mr. Zoley ceases to provide services to the Company, the Company will pay Mr. Zoley in one lump sum cash payment each of the Grandfathered Payment, the Grandfathered Earnings Account and the Employment Contributions Account subject to the six-month delay provided in the Amended and Restated Executive Retirement Agreement.

Asset Divestiture

On July 1, 2021, the Company completed a divestiture of its youth division, which has been ~~prepared in accordance with the requirements for presentation of Rule3-10(d)~~ ~~of RegulationS-X~~ ~~promulgated under the Securities Act, presents the condensed consolidating financial information separately for:~~

~~(i)~~

~~The GEO Group, Inc.,~~organized as ~~the issuer of the notes;~~

~~(ii)~~

~~The Subsidiary Guarantors, on a combined basis, which are 100% owned by The GEO Group, Inc., and which are guarantors of the notes;~~

~~(iii)~~

~~The Company’s other subsidiaries, on a combined basis, which are not guarantors of the notes (the“Non-Guarantor~~ ~~Subsidiaries”);~~

~~(iv)~~

~~Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the SubsidiaryNon-Guarantors~~ ~~and (b) eliminate the investments in the Company’s subsidiaries; and~~

~~(v)~~

~~The Company and its subsidiaries on a consolidated basis.~~

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

~~(dollars in thousands)~~

~~(unaudited)~~

�� For the Three Months Ended September 30, 2017
   The GEO Group, Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
Revenues
   $ 171,553 $ 464,140 $ 69,698 $ (138,632 ) $ 566,759
Operating expenses
   139,165 364,834 57,767 (138,632 ) 423,134
Depreciation and amortization
   6,104 24,623 922 —   31,649
General and administrative expenses
   14,699 28,066 6,309 —   49,074


Operating income
   11,585 46,617 4,700 —   62,902
Interest income
   2,688 1,629 14,871 (4,540 ) 14,648
Interest expense
   (18,148 ) (13,093 ) (12,018 ) 4,540 (38,719 )


Income (loss) before income taxes and equity in earnings of affiliates
   (3,875 ) 35,153 7,553 —   38,831
Income tax provision
   147 811 762 —   1,720
Equity in earnings of affiliates, net of income tax provision
   —   —   1,342 —   1,342


Income (loss) before equity in income of consolidated subsidiaries
   (4,022 ) 34,342 8,133 —   38,453
Income from consolidated subsidiaries, net of income tax provision
   42,475 —   —   (42,475 ) —


Net income
   38,453 34,342 8,133 (42,475 ) 38,453
Net loss attributable to noncontrolling interests
   —   —   36 —   36


Net income attributable to The GEO Group, Inc.
   $ 38,453 $ 34,342 $ 8,169 $ (42,475 ) $ 38,489


Net income
   $ 38,453 $ 34,342 $ 8,133 $ (42,475 ) $ 38,453
Other comprehensive income, net of tax
   —   64 1,561 —   1,625


Total comprehensive income
   $ 38,453 $ 34,406 $ 9,694 $ (42,475 ) $ 40,078
Comprehensive loss attributable to noncontrolling interests
   —   —   34 —   34


Comprehensive income attributable to The GEO Group, Inc.
   $ 38,453 $ 34,406 $ 9,728 $ (42,475 ) $ 40,112

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

~~(dollars in thousands)~~

~~(unaudited)~~

   For the Three Months Ended September 30, 2016
   The GEO Group, Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
Revenues
   $ 173,920 $ 410,329 $ 112,708 $ (142,581 ) $ 554,376
Operating expenses
   144,748 314,009 99,483 (142,581 ) 415,659
Depreciation and amortization
   6,339 21,502 942 —   28,783
General and administrative expenses
   11,727 18,180 7,576 —   37,483


Operating income
   11,106 56,638 4,707 —   72,451
Interest income
   4,765 422 8,029 (5,288 ) 7,928
Interest expense
   (16,324 ) (13,525 ) (8,867 ) 5,288 (33,428 )


Income (loss) before income taxes and equity in earnings of affiliates
   (453 ) 43,535 3,869 —   46,951
Income tax provision (benefit)
   (9 ) 4,032 947 —   4,970
Equity in earnings of affiliates, net of income tax provision
   —   —   1,693 —   1,693


Income (loss) before equity in income of consolidated subsidiaries
   (444 ) 39,503 4,615 —   43,674
Income from consolidated subsidiaries, net of income tax provision
   44,118 —   —   (44,118 ) —


Net income
   43,674 39,503 4,615 (44,118 ) 43,674
Net loss attributable to noncontrolling interests
   —   —   46 —   46


Net income attributable to The GEO Group, Inc.
   $ 43,674 $ 39,503 $ 4,661 $ (44,118 ) $ 43,720


Net income
   $ 43,674 $ 39,503 $ 4,615 $ (44,118 ) $ 43,674
Other comprehensive income, net of tax
   —   33 450 —   483


Total comprehensive income
   $ 43,674 $ 39,536 $ 5,065 $ (44,118 ) $ 44,157
Comprehensive loss attributable to noncontrolling interests
   —   —   36 —   36


Comprehensive income attributable to The GEO Group, Inc.
   $ 43,674 $ 39,536 $ 5,101 $ (44,118 ) $ 44,193

   For the Nine Months Ended September 30, 2017
   The GEO Group, Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
Revenues
   $ 520,986 $ 1,342,620 $ 250,618 $ (419,781 ) $ 1,694,443
Operating expenses
   406,576 1,076,232 213,259 (419,781 ) 1,276,286
Depreciation and amortization
   18,319 71,404 2,741 —   92,464
General and administrative expenses
   43,939 78,479 21,448 —   143,866


Operating income
   52,152 116,505 13,170 —   181,827
Interest income
   12,793 2,858 39,175 (15,855 ) 38,971
Interest expense
   (51,391 ) (41,353 ) (32,813 ) 15,855 (109,702 )
Income before income taxes and equity in earnings of affiliates
   13,554 78,010 19,532 —   111,096
Income tax provision
   441 3,058 2,091 —   5,590
Equity in earnings of affiliates, net of income tax provision
   —   —   4,255 —   4,255


Income before equity in income of consolidated subsidiaries
   13,113 74,952 21,696 —   109,761
Income from consolidated subsidiaries, net of income tax provision
   96,648 —   —   (96,648 ) —


Net income
   109,761 74,952 21,696 (96,648 ) 109,761
Net loss attributable to noncontrolling interests
   —   —   123 —   123


Net income attributable to The GEO Group, Inc.
   $ 109,761 $ 74,952 $ 21,819 $ (96,648 ) $ 109,884


Net income
   $ 109,761 $ 74,952 $ 21,696 $ (96,648 ) $ 109,761
Other comprehensive income, net of tax
   —   175 4,586 —   4,761


Total comprehensive income
   $ 109,761 $ 75,127 $ 26,282 $ (96,648 ) $ 114,522
Comprehensive loss attributable to noncontrolling interests
   —   —   119 —   119


Comprehensive income attributable to The GEO Group, Inc.
   $ 109,761 $ 75,127 $ 26,401 $ (96,648 ) $ 114,641

   For the Nine Months Ended September 30, 2016
   The GEO Group, Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
Revenues
   $ 515,971 $ 1,215,469 $ 306,484 $ (425,013 ) $ 1,612,911
Operating expenses
   418,261 957,704 270,050 (425,013 ) 1,221,002
Depreciation and amortization
   18,866 64,159 2,861 —   85,886
General and administrative expenses
   34,548 53,396 20,504 —   108,448


Operating income
   44,296 140,210 13,069 —   197,575
Interest income
   15,646 1,440 18,699 (17,398 ) 18,387
Interest expense
   (49,031 ) (41,401 ) (20,830 ) 17,398 (93,864 )
Loss on early extinguishment of debt
   (15,885 ) —   —   —   (15,885 )


Income (loss) before income taxes and equity in earnings of affiliates
   (4,974 ) 100,249 10,938 —   106,213
Income tax provision (benefit)
   (101 ) 9,323 2,778 —   12,000
Equity in earnings of affiliates, net of income tax provision
   —   —   4,943 —   4,943


Income (loss) before equity in income of consolidated subsidiaries
   (4,873 ) 90,926 13,103 —   99,156
Income from consolidated subsidiaries, net of income tax provision
   104,029 —   —   (104,029 ) —


Net income
   99,156 90,926 13,103 (104,029 ) 99,156
Net loss attributable to noncontrolling interests
   —   —   123 —   123
Net income attributable to The GEO Group, Inc.
   $ 99,156 $ 90,926 $ 13,226 $ (104,029 ) $ 99,279


Net income
   $ 99,156 $ 90,926 $ 13,103 $ (104,029 ) $ 99,156
Other comprehensive income (loss), net of tax
   —   98 (3,081 ) —   (2,983 )


Total comprehensive income
   99,156 91,024 10,022 (104,029 ) 96,173
Comprehensive loss attributable to noncontrolling interests
   —   —   104 —   104


Comprehensive income attributable to The GEO Group, Inc.
   $ 99,156 $ 91,024 $ 10,126 $ (104,029 ) $ 96,277

~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~(dollars in thousands)~~

~~(unaudited)~~

   As of September 30, 2017
   The GEO Group, Inc.    Combined
Subsidiary
Guarantors    Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
ASSETS
Cash and cash equivalents
   $ 6,191    $ 13,853    $ 31,482 $ —   $ 51,526
Restricted cash and investments
   —      —      12,452 —   12,452
Accounts receivable, less allowance for doubtful accounts
   129,730    241,031    16,137 —   386,898
Contract receivable, current portion
   —      —      243,531 —   243,531
Prepaid expenses and other current assets
   2,921    28,033    5,119 —   36,073






Total current assets
   138,842    282,917    308,721 —   730,480






Restricted Cash and Investments
   —      24,387    6,645 —   31,032
Property and Equipment, Net
   751,374    1,213,614    90,994 —   2,055,982
Non-Current Contract Receivable
   —      —      405,780 —   405,780
Intercompany Receivable
   1,128,469    104,226    24,654 (1,257,349 ) —
Non-Current Deferred Income Tax Assets
   763    19,254    11,814 —   31,831
Goodwill
   79    781,444    449 —   781,972
Intangible Assets, Net
   —      261,053    737 —   261,790
Investment in Subsidiaries
   1,332,393    456,075    2,191 (1,790,659 ) —
OtherNon-Current Assets
   12,714    118,579    18,708 (79,527 ) 70,474






Total Assets
   $ 3,364,634    $ 3,261,549    $ 870,693 $ (3,127,535 ) $ 4,369,341






LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable
   $ 8,573    $ 66,848    $ 16,196 $ —   $ 91,617
Accrued payroll and related taxes
   —      30,190    18,590 —   48,780
Accrued expenses and other current liabilities
   48,090    106,056    20,175 —   174,321
Current portion of capital lease obligations, long-term debt andnon-recourse debt
   8,000    1,815    250,231 —   260,046






Total current liabilities
   64,663    204,909    305,192 —   574,764






Intercompany Payable
   14,535    1,211,260    31,554 (1,257,349 ) —
OtherNon-Current Liabilities
   4,120    151,405    16,806 (79,527 ) 92,804
Capital Lease Obligations
   —      6,412    —   —   6,412
Long-Term Debt
   2,067,008    —      90,874 —   2,157,882
Non-Recourse Debt
   —      —      323,387 —   323,387
Commitments & Contingencies and Other

Shareholders’ Equity:

The GEO Group, Inc. Shareholders’ Equity
   1,214,308    1,687,563    103,098 (1,790,659 ) 1,214,310
Noncontrolling Interests
   —      —      (218 ) —   (218 )






Total Shareholders’ Equity
   1,214,308    1,687,563    102,880 (1,790,659 ) 1,214,092






Total Liabilities and Shareholders’ Equity
   $ 3,364,634    $ 3,261,549    $ 870,693 $ (3,127,535 ) $ 4,369,341

~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~(dollars in thousands)~~

   As of December 31, 2016
   The GEO Group, Inc.    Combined
Subsidiary
Guarantors    Combined
Non-Guarantor
Subsidiaries Eliminations Consolidated
ASSETS
Cash and cash equivalents
   $ 45,566    $ 842    $ 21,630 $ —   $ 68,038
Restricted cash and investments
   —      —      17,133 —   17,133
Accounts receivable, less allowance for doubtful accounts
   139,571    200,239    16,445 —   356,255
Contract receivable, current portion
   —      —      224,033 —   224,033
Prepaid expenses and other current assets
   677    24,096    7,437 —   32,210






Total current assets
   185,814    225,177    286,678 —   697,669






Restricted Cash and Investments
   170    19,742    936 —   20,848
Property and Equipment, Net
   735,104    1,078,220    83,917 —   1,897,241
Non-Current Contract Receivable
   —      —      219,783 219,783
Intercompany Receivable
   918,527    141,987    27,290 (1,087,804 ) —
Non-Current Deferred Income Tax Assets
   764    17,918    11,357 —   30,039
Goodwill
   79    614,941    413 —   615,433
Intangible Assets, Net
   —      203,138    746 —   203,884
Investment in Subsidiaries
   1,238,772    453,635    2,190 (1,694,597 ) —
OtherNon-Current Assets
   15,011    108,434    20,933 (79,866 ) 64,512






Total Assets
   $ 3,094,241    $ 2,863,192    $ 654,243 $ (2,862,267 ) $ 3,749,409






LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable
   $ 8,402    $ 50,200    $ 21,035 $ —   $ 79,637
Accrued payroll and related taxes
   —      41,230    14,030 —   55,260
Accrued expenses and other current liabilities
   36,792    83,906    10,398 —   131,096
Current portion of capital lease obligations, long-term debt andnon-recourse debt
   3,000    1,700    233,365 —   238,065






Total current liabilities
   48,194    177,036    278,828 —   504,058






Intercompany Payable
   133,039    920,825    33,940 (1,087,804 ) —
OtherNon-Current Liabilities
   2,487    144,383    21,652 (79,866 ) 88,656
Capital Lease Obligations
   —      7,431    —   —   7,431
Long-Term Debt
   1,935,465    —      —   —   1,935,465
Non-Recourse Debt
   —      —      238,842 —   238,842
Commitments & Contingencies and Other

Shareholders’ Equity:

The GEO Group, Inc. Shareholders’ Equity
   975,056    1,613,517    81,080 (1,694,597 ) 975,056
Noncontrolling Interests
   —      —      (99 ) —   (99 )






Total Shareholders’ Equity
   975,056    1,613,517    80,981 (1,694,597 ) 974,957






Total Liabilities and Shareholders’ Equity
   $ 3,094,241    $ 2,863,192    $ 654,243 $ (2,862,267 ) $ 3,749,409

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~(dollars in thousands)~~

~~(unaudited)~~

   For the Nine Months Ended September 30, 2017
   The GEO Group, Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Consolidated
Cash Flow from Operating Activities:



Net cash provided by (used in) operating activities
   $ 15,473 $ 79,088 $ (36,733 ) $ 57,828


Cash Flow from Investing Activities:

Acquisition of CEC, net of cash acquired
   (353,555 ) —   —   (353,555 )
Proceeds from sale of property and equipment
   845 —   11 856
Insurance proceeds-damaged property
   86 —   —   86
Change in restricted cash and investments
   —   (4,645 ) (175 ) (4,820 )
Capital expenditures
   (34,679 ) (61,432 ) (8,019 ) (104,130 )


Net cash used in investing activities
   (387,303 ) (66,077 ) (8,183 ) (461,563 )


Cash Flow from Financing Activities:

Proceeds from long-term debt
   1,324,865 —   —   1,324,865
Payments on long-term debt
   (1,093,088 ) —   —   (1,093,088 )
Payments onnon-recourse debt
   —   —   (68,887 ) (68,887 )
Proceeds fromnon-recourse debt
   —   —   123,785 123,785
Taxes paid related to net share settlements of equity awards
   (4,122 ) —   —   (4,122 )
Proceeds from issuance of common stock in connection with ESPP
   —   —   382 382
Proceeds from issuance of common stock under prospectus supplement
   275,867 —   —   275,867
Debt issuance costs
   (8,701 ) —   (769 ) (9,470 )
Proceeds from stock options exercised
   6,786 —   —   6,786
Dividends paid
   (169,152 ) —   (169,152 )


Net cash provided by financing activities
   332,455 —   54,511 386,966


Effect of Exchange Rate Changes on Cash and Cash Equivalents
   —   —   257 257


Net (Decrease) Increase in Cash and Cash Equivalents
   (39,375 ) 13,011 9,852 (16,512 )
Cash and Cash Equivalents, beginning of period
   45,566 842 21,630 68,038


Cash and Cash Equivalents, end of period
   $ 6,191 $ 13,853 $ 31,482 $ 51,526

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~(dollars in thousands)~~

~~(unaudited)~~

   For the Nine Months Ended September 30, 2016
   The GEO Group,
Inc. Combined
Subsidiary
Guarantors Combined
Non-Guarantor
Subsidiaries Consolidated
Cash Flow from Operating Activities:



Net cash (used in) provided by operating activities
   $ 99,124 $ 57,187 $ (168,069 ) $ (11,758 )


Cash Flow from Investing Activities:

Proceeds from sale of property and equipment
   68 —   —   68
Insurance proceeds - damaged property
   4,733 —   —   4,733
Change in restricted cash and investments
   (24 ) (2,635 ) (95,057 ) (97,716 )
Capital expenditures
   (9,879 ) (54,552 ) (3,584 ) (68,015 )


Net cash used in investing activities
   (5,102 ) (57,187 ) (98,641 ) (160,930 )


Cash Flow from Financing Activities:

Taxes paid related to net share settlements of equity awards
   (2,336 ) —   —   (2,336 )
Proceeds from long-term debt
   813,077 —   —   813,077
Payments on long-term debt
   (775,256 ) —   (775,256 )
Payments onnon-recourse debt
   —   —   (1,878 ) (1,878 )
Proceeds fromnon-recourse debt
   —   —   273,087 273,087
Proceeds from issuance of common stock in connection with ESPP
   —   —   338 338
Debt issuance costs
   (16,980 ) —   (3,510 ) (20,490 )
Tax deficiency related to equity compensation
   (844 ) —   —   (844 )
Proceeds from stock options exercised
   2,367 —   —   2,367
Dividends paid
   (145,991 ) —   —   (145,991 )


Net cash (used in) provided by financing activities
   (125,963 ) —   268,037 142,074


Effect of Exchange Rate Changes on Cash and Cash Equivalents
   —   —   1,099 1,099


Net Decrease in Cash and Cash Equivalents
   (31,941 ) —   2,426 (29,515 )
Cash and Cash Equivalents, beginning of period
   37,077 —   22,561 59,638


Cash and Cash Equivalents, end of period
   $ 5,136 $ —   $ 24,987 $ 30,123

~~16. SUBSEQUENT EVENTS~~

~~Dividend~~

~~On October 12, 2017, the Board of Directors declared~~ a ~~quarterly cash dividend of $0.47 per share of common stock which was paid on October 30, 2017 to shareholders of record as of the close of business on October 23, 2017.~~

~~Automatic Shelf Registration on FormS-3~~

~~On October 20, 2017, the Company filed an automatic shelf registration statement on FormS-3~~ ~~with the Securities and Exchange Commission.~~separate independent not-for-profit 501(c)(3) organization. The shelf registration statement is automatically effective and is valid for three years. Pursuant to the shelf registration statement, the Company may offer common stock, preferred stock, debt securities, guarantees of debt securities, warrants and units from time to time in amounts, at prices and on terms that will be determined at the time of any such offering.

~~Asset Sale~~

~~On November 1, 2017, the Company signed and closed on an Asset Purchase Agreement (the “Agreement”) with an unrelated entity for~~divestiture included the sale of ~~substantially all~~certain non-real estate assets in its Youth division for total consideration of $10 million. This sale resulted in the assignment of the ~~assets of one~~Company’s youth services management contracts to the independent not-for-profit entity. The Company retained the ownership of the ~~acquired CEC entities~~youth services real estate assets and has entered into lease agreements for ~~approximately $5 million. The operations~~the six company-owned youth facilities.

Table of ~~this entity were not significant to the Company.~~Contents

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

Forward-Looking Information

This Quarterly Report on Form10-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, the impact of COVID-19 on our business, the efficacy and distribution of COVID-19 vaccines, 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:

~~our ability to timely build and/or open facilities as planned, profitably manage such facilities and successfully integrate such facilities into our operations without substantial additional costs;~~

•

our ability to mitigate the transmission of the current pandemic of the novel coronavirus, or COVID-19, at our secure facilities, processing centers and reentry centers and the efficacy and distribution of COVID-19 vaccines;

•

the magnitude, severity and duration of the COVID-19 pandemic and its impact on our business, financial condition, results of operations and cash flows;

•

our ability to timely build and/or open facilities as planned, successfully manage such facilities and successfully integrate such facilities into our operations without substantial additional costs;

•

our ability to estimate the government’s level of utilization of public-private partnerships for secure services and the impact of any modifications or reductions by our government customers of their utilization of public-private partnerships;

•

our ability to accurately project the size and growth of public-private partnerships for secure services in the U.S. and internationally and our ability to capitalize on opportunities for public-private partnerships;

•

our ability to successfully respond to any challenges or concerns that our government customers may raise regarding their use of public-private partnerships for secure services, including finding other government customers or alternative uses for facilities where a government customer has discontinued or announced that a contract with us will be discontinued;

•

the impact of adopted or proposed executive action or legislation aimed at limiting public-private partnerships for secure facilities, processing centers and community reentry centers or limiting or restricting the business and operations of financial institutions or others who do business with us;

•

our ability to successfully respond to delays encountered by states pursuing public-private partnerships for secure services and cost savings initiatives implemented by a number of states;

•

our ability to activate the inactive beds at our idle facilities;

•

our ability to maintain or increase occupancy rates at our facilities;

•

the impact of our suspension of quarterly dividend payments and our ability to maximize the use of cash flows to repay debt, deleverage and internally fund growth;

•

the timing and impact of our Board’s evaluation of our corporate tax structure and capital structure alternatives;

•

our ability to expand, diversify and grow our secure services, reentry, community-based services, monitoring services, evidence-based supervision and treatment programs and secure transportation services businesses;

•

our ability to win management contracts for which we have submitted proposals, retain existing management contracts, prevail in any challenge or protest involving the award of a management contract and meet any performance standards required by such management contracts;

•

our ability to raise new project development capital given the often short-term nature of the customers’ commitment to use newly developed facilities;

•

our ability to develop long-term earnings visibility;

•

our ability to successfully conduct our operations in the United Kingdom, South Africa and Australia through joint ventures or a consortium;

•

the impact of the anticipated LIBOR transition in 2021;

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~~our exposure to potential penalties and/or liquidated damages if our prison project in Ravenhall, a locality near Melbourne, Australia, is not completed on time;~~

•

the instability of foreign exchange rates, exposing us to currency risks in Australia, the United Kingdom, and South Africa, or other countries in which we may choose to conduct our business;

•

an increase in unreimbursed labor rates;

•

our exposure to rising medical costs;

•

our ability to manage costs and expenses relating to ongoing litigation arising from our operations;

•

our ability to accurately estimate on an annual basis, loss reserves related to general liability, workers’ compensation and automobile liability claims;

•

if we fail to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our shareholders;

•

qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”);

•

complying with the REIT requirements may cause us to liquidate or forgo otherwise attractive opportunities;

•

dividends payable by REITs do not qualify for the reduced tax rates available for some dividends;

•

REIT distribution requirements could adversely affect our ability to execute our business plan;

•

our cash distributions are not guaranteed and may fluctuate;

•

certain of our business activities may be subject to corporate level income tax and foreign taxes, which would reduce our cash flows, and may have potential deferred and contingent tax liabilities;

•

REIT ownership limitations may restrict or prevent you from engaging in certain transfers of our common stock;

•

our use of taxable REIT subsidiaries (“TRSs”) may cause us to fail to qualify as a REIT;

•

new legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to maintain our qualification as a REIT;

•

our ability to fulfill our debt service obligations and its impact on our liquidity;

•

our ability to refinance our indebtedness;

•

we are incurring significant indebtedness in connection with substantial ongoing capital expenditures. Capital expenditures for existing and future projects may materially strain our liquidity;

•

despite current indebtedness levels, we may still incur more indebtedness, which could further exacerbate the risks relating to our indebtedness;

•

the covenants in the indentures governing the 6.50% Convertible Notes, the 6.00% Senior Notes, the 5.125% Senior Notes and the 5.875% Senior Notes and the covenants in our senior credit facility impose significant operating and financial restrictions which may adversely affect our ability to operate our business;

•

servicing our indebtedness will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and we may not be able to generate the cash required to service our indebtedness;

•

because portions of our senior indebtedness have floating interest rates, a general increase in interest rates would adversely affect cash flows;

•

we depend on distributions from our subsidiaries to make payments on our indebtedness. These distributions may not be made;

•

we may not be able to satisfy our repurchase obligations in the event of a change of control because the terms of our indebtedness or lack of funds may prevent us from doing so;

•

from time to time, we may not have a management contract with a client to operate existing beds at a facility or new beds at a facility that we are expanding, and we cannot assure you that such a contract will be obtained. Failure to obtain a management contract for these beds will subject us to carrying costs with no corresponding management revenue;

•

negative conditions in the capital markets could prevent us from obtaining financing on desirable terms, which could materially harm our business;

•

we are subject to the loss of our facility management contracts, due to executive orders, terminations, non-renewals or competitive re-bids, which could adversely affect our results of operations and liquidity, including our ability to secure new facility management contracts from other government customers;

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~~our ability to fulfill our debt service obligations and its impact on our liquidity;~~

•

our growth depends on our ability to secure contracts to develop and manage new secure facilities, processing centers and community based facilities and to secure contracts to provide electronic monitoring services, community-based reentry services and monitoring and supervision services, the demand for which is outside our control;

•

we may not be able to meet state requirements for capital investment or locate land for the development of new facilities, which could adversely affect our results of operations and future growth;

•

we partner with a limited number of governmental customers who account for a significant portion of our revenues. The loss of, or a significant decrease in revenues from, these customers could seriously harm our financial condition and results of operations;

•

State budgetary constraints may have a material adverse impact on us;

•

competition for contracts may adversely affect the profitability of our business;

•

we are dependent on government appropriations, which may not be made on a timely basis or at all and may be adversely impacted by budgetary constraints at the federal, state, local and foreign government levels;

•

public resistance to the use of public-private partnerships for secure facilities, processing centers and community reentry centers could result in our inability to obtain new contracts or the loss of existing contracts, impact our ability to obtain or refinance debt financing or enter into commercial arrangements, which could have a material adverse effect on our business, financial condition, results of operations and the market price of our securities;

•

adverse publicity may negatively impact our ability to retain existing contracts and obtain new contracts;

•

we may incur significant start-up and operating costs on new contracts before receiving related revenues, which may impact our cash flows and not be recouped;

•

failure to comply with extensive government regulation and applicable contractual requirements could have a material adverse effect on our business, financial condition or results of operations;

•

we may face community opposition to facility locations, which may adversely affect our ability to obtain new contracts;

•

our business operations expose us to various liabilities for which we may not have adequate insurance and may have a material adverse effect on our business, financial condition or results of operations;

•

we may not be able to obtain or maintain the insurance levels required by our government contracts;

•

our exposure to rising general insurance costs;

•

natural disasters, pandemic outbreaks, global political events and other serious catastrophic events could disrupt operations and otherwise materially adversely affect our business and financial condition;

•

our international operations expose us to risks that could materially adversely affect our financial condition and results of operations;

•

we conduct certain of our operations through joint ventures or consortiums, which may lead to disagreements with our joint venture partners or business partners and adversely affect our interest in the joint ventures or consortiums;

•

we are dependent upon our senior management and our ability to attract and retain sufficient qualified personnel;

•

our profitability may be materially adversely affected by inflation;

•

various risks associated with the ownership of real estate may increase costs, expose us to uninsured losses and adversely affect our financial condition and results of operations;

•

risks related to facility construction and development activities may increase our costs related to such activities;

•

the rising cost and increasing difficulty of obtaining adequate levels of surety credit on favorable terms could adversely affect our operating results;

•

adverse developments in our relationship with our employees could adversely affect our business, financial condition or results of operations;

•

technological changes could cause our electronic monitoring products and technology to become obsolete or require the redesign of our electronic monitoring products, which could have a material adverse effect on our business;

•

any negative changes in the level of acceptance of or resistance to the use of electronic monitoring products and services by governmental customers could have a material adverse effect on our business, financial condition and results of operations;

•

we depend on a limited number of third parties to manufacture and supply quality infrastructure components for our electronic monitoring products. If our suppliers cannot provide the components or services we require and with such quality as we expect, our ability to market and sell our electronic monitoring products and services could be harmed;

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our ability to estimate the government’s level of utilization of public-private partnerships for correctional services and the impact of any modifications or reductions by our government customers of their utilization of public-private partnerships;

•

the interruption, delay or failure of the provision of our services or information systems could adversely affect our business;

our ability to accurately project the size and growth of public-private partnerships for correctional services in the U.S. and internationally and our ability to capitalize on opportunities for public-private partnerships;

•

an inability to acquire, protect or maintain our intellectual property and patents in the electronic monitoring space could harm our ability to compete or grow;

~~our ability to successfully respond to any challenges or concerns that our government customers may raise regarding their use of public-private partnerships for correctional services;~~

•

our electronic monitoring products could infringe on the intellectual property rights of others, which may lead to litigation that could itself be costly, could result in the payment of substantial damages or royalties, and/or prevent us from using technology that is essential to our products;

~~our ability to successfully respond to delays encountered by states pursuing public-private partnerships for correctional services and cost savings initiatives implemented by a number of states;~~

•

we license intellectual property rights in the electronic monitoring space, including patents, from third party owners. If such owners do not properly maintain or enforce the intellectual property underlying such licenses, our competitive position and business prospects could be harmed. Our licensors may also seek to terminate our license;

~~our ability to activate the inactive beds at our idle facilities;~~

•

we may be subject to costly product liability claims from the use of our electronic monitoring products, which could damage our reputation, impair the marketability of our products and services and force us to pay costs and damages that may not be covered by adequate insurance;

~~our ability to maintain or increase occupancy rates at our facilities;~~

•

our ability to identify suitable acquisitions, and to successfully complete and integrate such acquisitions on satisfactory terms, to enhance occupancy levels and the financial performance of assets acquired and estimate the synergies to be achieved as a result of such acquisitions;

our ability to expand, diversify and grow our correctional, detention, reentry, community-based services, youth services, monitoring services, evidence-based supervision and treatment programs and secure transportation services businesses;

•

as a result of our acquisitions, we have recorded and will continue to record a significant amount of goodwill and other intangible assets. In the future, our goodwill or other intangible assets may become impaired, which could result in material non-cash charges to our results of operations;

~~our ability to win management contracts for which we have submitted proposals, retain existing management contracts and meet any performance standards required by such management contracts;~~

•

we are subject to risks related to corporate social responsibility;

~~our ability to control operating costs associated with contractstart-ups;~~

•

the market price of our common stock may vary substantially;

~~our ability to raise new project development capital given the often short-term nature of the customers’ commitment to use newly developed facilities;~~

•

future sales of shares of our common stock or securities convertible into common stock could adversely affect the market price of our common stock and may be dilutive to current shareholders;

~~our ability to develop long-term earnings visibility;~~

•

various anti-takeover protections applicable to us may make an acquisition of us more difficult and reduce the market value of our common stock;

our ability to identify suitable acquisitions, and to successfully complete and integrate such acquisitions on satisfactory terms, and estimate the synergies to be achieved as a result of such acquisitions;

•

failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have an adverse effect on our business and the trading price of our common stock;

the risks related to the integration of the CEC acquisition, that expected increased revenue and Adjusted EBITDA from CEC may not be fully realized or may take longer than expected to realize and that synergies from the CEC transaction may not be fully realized or may take longer than expected to realize;

•

we may issue additional debt securities that could limit our operating flexibility and negatively affect the value of our common stock; and

~~our exposure to the impairment of goodwill and other intangible assets as a result of our acquisitions;~~

~~our ability to successfully conduct our operations in the United Kingdom, South Africa and Australia through joint ventures or a consortium;~~

~~our ability to obtain future financing on satisfactory terms or at all, including our ability to secure the funding we need to complete ongoing capital projects;~~

~~our exposure to political and economic instability and other risks impacting our international operations;~~

~~the instability of foreign exchange rates, exposing us to currency risks in Australia, the United Kingdom, and South Africa, or other countries in which we may choose to conduct our business;~~

~~our exposure to risks impacting our information systems, including those that may cause an interruption, delay or failure in the provision of our services;~~

~~our exposure to rising general insurance costs;~~

~~an increase in unreimbursed labor rates;~~

our exposure to state, federal and foreign income tax law changes, including changes to the REIT provisions and our exposure as a result of federal and international examinations of our tax returns or tax positions;

~~our exposure to claims for which we are uninsured;~~

~~our exposure to rising employee and inmate medical costs;~~

~~our ability to manage costs and expenses relating to ongoing litigation arising from our operations;~~

~~our ability to accurately estimate on an annual basis, loss reserves related to general liability, workers compensation and automobile liability claims;~~

the ability of our government customers to secure budgetary appropriations to fund their payment obligations to us and continue to operate under our existing agreements and/or renew our existing agreements;

~~our ability to pay quarterly dividends consistent with our requirements as a REIT, and expectations as to timing and amounts;~~

~~our ability to remain qualified for taxation as a real estate investment trust, or REIT;~~

~~our ability to comply with government regulations and applicable contractual requirements;~~

~~our ability to acquire, protect or maintain our intellectual property;~~

~~the risk that a number of factors could adversely affect the market price of our common stock; and~~

~~other factors contained in our filings with the Securities and Exchange Commission, or the SEC, including, but not limited to, those detailed in this Quarterly Report on Form10-Q,~~ ~~our Annual Report on Form10-K~~ ~~for the year ended December 31, 2016 and our Current Reports on Form~~

•

other factors contained in our filings with the Securities and Exchange Commission, or the SEC, including, but not limited to, those detailed in the Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K filed with the SEC.

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 Form10-Q.

Introduction

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 statements as a result of numerous factors including, but not limited to, those described above under “Forward-Looking Information”, those described below under ~~“Part~~"Part II - Item 1A. Risk ~~Factors” and~~Factors" under “Part I - Item 1A. Risk Factors” in our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2020 and under “Part II – Item 1A Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. The discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form10-Q.

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We are a fully-integrated real estate investment trust (“REIT”) specializing in the ownership, leasing and management of ~~correctional, detention~~secure facilities, processing centers and reentry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa and the United Kingdom. We own, lease and operate a broad range of ~~correctional and detention~~secure facilities including maximum, medium and ~~minimum security prisons, immigration detention~~minimum-security facilities, processing centers, ~~minimum security detention centers, and~~as well as community-based reentry facilities. We develop new facilities based on contract awards, using our project development expertise and experience to design, construct and finance what we ~~offer an expanded delivery of offender rehabilitation services under our ‘GEO Continuum of Care’ platform.~~believe are state-of-the-art 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~~provide innovative ~~compliance~~ technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for ~~community-based parolees, probationers~~community based programs. We also provide secure transportation services domestically and ~~pretrial defendants.~~in the United Kingdom through our joint venture GEOAmey PECS Ltd. (“GEOAmey”).

At ~~September~~June 30, ~~2017, after our acquisition of CEC,~~2021, our worldwide operations include the management and/or ownership of approximately ~~96,000~~90,000 beds at ~~140 correctional, detention~~114 secure services and ~~reentry~~community based facilities, including idle facilities, ~~projects under development and recently awarded contracts,~~ and also include the provision of community supervision services for more than ~~185,000 offenders andpre-trial~~ ~~defendants,~~200,000 individuals, including ~~approximately~~over 100,000 ~~individuals~~ through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

We provide a diversified scope of services on behalf of our government ~~clients:~~

agency partners:

~~our correctional and detention~~

•

our secure facility management services involve the provision of security, administrative, rehabilitation, education, and food services at secure services ~~involve the provision of security, administrative, rehabilitation, education and food services, primarily at adult male correctional and detention~~ facilities;

•

our community based services involve supervision of individuals in community-based programs and re-entry centers and the provision of temporary housing, programming, employment assistance and other services with the intention of the successful reintegration of residents into the community;

•

we provide comprehensive electronic monitoring and supervision services;

•

we develop new facilities, using our project development experience to design, construct and finance what we believe are state-of-the-art facilities;

•

we provide secure transportation services; and

•

our services are provided at facilities which we either own, lease or are owned by the government.

our community-based services involve supervision of adult parolees and probationers and the provision of temporary housing, programming, employment assistance and other services with the intention of the successful reintegration of residents into the community;

~~our youth services include residential, detention and shelter care and community-based services along with rehabilitative and educational programs;~~

our monitoring services provide our governmental clients with innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants; including services provided under the Intensive Supervision Appearance Program, which we refer to as ISAP, to the U.S. Immigration and Customs Enforcement, which we refer to as ICE, for the provision of services designed to improve the participation of~~non-detained~~ ~~aliens in the immigration court system;~~

~~we develop new facilities using our project development experience to design, construct and finance what we believe arestate-of-the-art~~ ~~facilities that maximize security and efficiency;~~

we provide secure transportation services for offender and detainee populations as contracted domestically and internationally - our joint venture GEOAmey is responsible for providing prisoner escort and custody services in the United Kingdom, including all of Wales and England except London and the East of England; and

~~our services are provided at facilities which we either own, lease or are owned by our customers.~~

For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, we had consolidated revenues of ~~$1,694.4~~$1,141.8 million and ~~$1,612.9~~$1,192.8 million, respectively. We maintained an average ~~company wide~~company-wide facility occupancy rate of ~~91.0%~~87.0% including ~~87,823~~79,726 active beds and excluding ~~8,272~~10,104 idle beds ~~(including~~which includes those being marketed to potential ~~customers)~~customers for the six months ended June 30, 2021, and 88.4% including 90,190 active beds and excluding 3,105 idle beds which includes those being marketed to potential customers and beds under development for the ~~nine~~six months ended ~~September~~June 30, ~~2017, and 92.8% including 82,531 active beds and excluding 4,838 idle beds (including those being marketed~~2020. The decrease in occupancy is primarily due to ~~potential customers) and beds under development for~~ the ~~nine months ended September 30, 2016.~~impact of the COVID-19 pandemic as well as the impacts of the Executive Order (as defined below).

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”~~"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, 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”~~("TRSs") and other factors that our Board may deem relevant.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and the year ended December 31, ~~2016,~~2020, respectively, we declared and paid the following regular cash distributions to our shareholders as follows:

Declaration Date

Record Date

Payment Date
   Distribution Per Share    Aggregate
Payment Amount
(in millions)
February 3, 2016

February 16, 2016

February 26, 2016
   $ 0.43    $ 48.5
April 20, 2016

May 2, 2016

May 12, 2016
   $ 0.43    $ 48.7
July 20, 2016

August 1, 2016

August 12, 2016
   $ 0.43    $ 48.7
October 18, 2016

October 31, 2016

November 10, 2016
   $ 0.43    $ 48.8
February 6, 2017

February 17, 2017

February 27, 2017
   $ 0.47    $ 52.5
April 25, 2017

May 9, 2017

May 19, 2017
   $ 0.47    $ 58.4
July 10, 2017

July 21, 2017

July 28, 2017
   $ 0.47    $ 58.3

Declaration Date	Record Date	Payment Date	Distribution Per Share		Aggregate Payment Amount (in millions)
February 3, 2020	February 14, 2020	February 21, 2020	$	0.48	$	58.2
April 6, 2020	April 17, 2020	April 24, 2020	$	0.48	$	58.5
July 7, 2020	July 17, 2020	July 24, 2020	$	0.48	$	58.5
October 6, 2020	October 16, 2020	October 23, 2020	$	0.34	$	41.5
January 15, 2021	January 25, 2021	February 1, 2021	$	0.25	$	30.5

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On ~~October 12, 2017,~~April 7, 2021, we announced that our Board had immediately suspended GEO’s quarterly dividend payments with the goal of maximizing the use of cash flows to repay debt, deleverage and internally fund growth. While we currently intend to maintain our corporate tax structure as a REIT, the Board ~~declared~~is evaluating GEO’s corporate tax structure as a ~~quarterly cash dividend of $0.47 per share of common stock which was paid on October 30, 2017 to shareholders of record as~~REIT. The Board’s evaluation of the ~~close~~current corporate tax structure and GEO’s REIT status is expected to take into consideration, among other factors, potential changes to GEO’s financial operating performance, as well as potential changes to the Code applicable to U.S. corporations and REITs. As a result of ~~business on October 23, 2017.~~this evaluation, we have engaged financial advisors and legal advisors to assist in evaluating various corporate structure alternatives. The Board expects to conclude its evaluation in the fourth quarter of 2021, and should the Board determine to maintain GEO’s REIT status, an additional dividend payment may be required before year-end in order to meet the minimum REIT distribution requirements under the Code.

Reference is made to Part II, Item 7 of our Annual Report on Form10-K filed with the SEC on February ~~27, 2017,~~16, 2021, 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, ~~2016.~~2020.

~~Fiscal 2017~~

2021 and Recent Developments

~~Stock Split~~

CEO Succession Plan

On June 1, 2021, we announced that our Board has determined that it is in the best interests of GEO to implement a succession plan for the Chief Executive Officer position given that GEO’s Founder, Chairman and Chief Executive Officer, George C. Zoley, is 71 years old and has served with GEO for approximately forty years. The primary objectives of the Board in initiating a succession plan were to secure Mr. Zoley’s services on a long-term basis to ensure a proper senior management transition, and to retain a new Chief Executive Officer that would succeed Mr. Zoley in that role. This change will allow Mr. Zoley the ability to focus on planning of GEO’s future.

On May 27, 2021, the Board terminated without cause Mr. Zoley’s existing employment agreement, effective as of June 30, 2021, and entered into a new five-year employment agreement with Mr. Zoley as Executive Chairman, in a modified role and at reduced compensation effective July 1, 2021. The new employment agreement with Mr. Zoley will secure Mr. Zoley’s continuous employment, enabling GEO to continue to benefit from Mr. Zoley’s extensive knowledge and experience, and providing for an orderly transition of senior management.

In ~~March 2017,~~order to transition the role of Chief Executive Officer to a successor in an orderly manner, our Board ~~declared~~determined it was in the best interests of GEO to create a~~3-for-2~~ ~~stock split~~ new officer position for the role of ~~our common stock. The stock split was~~Executive Chairman and appoint Mr. Zoley as Executive Chairman, effective ~~on April 24, 2017 with respect to shareholders~~as of ~~record on April 10, 2017. Outstanding share andper-share~~ ~~amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the stock split. On April 24, 2017,~~July 1, 2021. As a result, the Company ~~amended its articles of incorporation to increase the number of authorized shares of common stock to take into effect the stock split.~~

~~Offering of Common Stock~~

~~On March 7, 2017, we~~and Mr. Zoley entered into on May 27, 2021 an ~~underwriting agreement related~~Executive Chairman Employment Agreement effective as of July 1, 2021 (the “Executive Chairman Agreement”). Pursuant to the issuance and sale of 9,000,000 shares of our common stock, par value $.01 per share. The offering price to the public was $27.80 per share and the underwriters agreed to purchase the shares from us pursuant to the underwriting agreement at a price of $26.70 per share. In addition, under the terms of the ~~underwriting agreement, we granted~~Executive Chairman Agreement, Mr. Zoley will serve as Executive Chairman assisting the ~~underwriters~~new Chief Executive Officer in his transition, among other duties and responsibilities, and report directly to the Board of Directors for a term of five years ending on June 30, 2026 and subject to automatic renewals for one-year periods unless either the Company or Mr. Zoley gives written notice at least 1 year prior to the expiration of the term. Under the terms of the Executive Chairman Agreement, Mr. Zoley will be paid an ~~option, exercisable for thirty days,~~annual base salary of $1.0 million and will be eligible to ~~purchase up~~receive target annual performance awards equal to 100% of base salary in accordance with the terms of any plan governing senior management performance awards. Mr. Zoley will also be entitled to receive an ~~additional 1,350,000 shares~~annual equity incentive award with a grant date fair value equal to 100% of ~~common stock. On March 8, 2017, the underwriters exercised in full their option~~base salary and subject to ~~purchase the additional 1,350,000 shares~~a time-based vesting schedule of common stock. On March 13, 2017, we completed the sale of 10,350,000 shares of common stock pursuant to our underwritten public offering. We received gross proceeds (before underwriting discounts and estimated offering expenses) of approximately $288.1 millionone (1) year from the ~~offering, including approximately $37.6 million~~date of grant. Additionally, the Company will credit Mr. Zoley’s account balance under the Amended and Restated Executive Retirement Agreement on an annual basis in an amount equal to 100% of his base salary. Lastly, Mr. Zoley is entitled to participate in all benefits and perquisites available to executive officers of GEO.

Also on May 27, 2021, our Board determined that it was in the best interests of GEO to appoint Jose Gordo as the successor Chief Executive Officer of the Company, effective as of July 1, 2021, in light of Mr. Gordo’s business experience and background, his long history of working with GEO, his intimate understanding of the Company’s business and his service on the Board of Directors. Jose Gordo, 48, has over 20 years of experience in business management, private equity, corporate finance and business law. Since June 2017, Mr. Gordo has served as the Managing Partner of a general partnership that invests in and actively oversees small and medium-sized privately held companies, with a focus on the healthcare, consumer products and technology industries. From 2013 to early 2017, Mr. Gordo served as the Chief Financial Officer of magicJack Vocaltec Ltd., a publicly traded company in the telecommunications industry. Prior to that position, Mr. Gordo served as a Managing Director at The Comvest Group, a Florida-based private equity firm. Mr. Gordo was also previously a partner at the national law firm of Akerman LLP, where he specialized in corporate law matters, advising public and private companies and private equity firms on mergers and acquisitions and capital markets transactions. He received a J.D. degree from Georgetown University Law Center and a B.A. degree from the University of Miami.

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In connection with his appointment, Mr. Gordo and the ~~sale~~Company entered into an Executive Employment Agreement (the “Employment Agreement”) on May 27, 2021 to provide that Mr. Gordo will be employed by the Company for a three-year term beginning July 1, 2021. Unless the Employment Agreement is sooner terminated, or not renewed, it will automatically extend upon the end of its initial term for a rolling three-year term. Pursuant to the terms of the ~~additional shares. The 10,350,000 shares of common stock were issued~~Employment Agreement, Mr. Gordo will serve as Chief Executive Officer and report directly to the Executive Chairman. Either Mr. Gordo or the Company may terminate Mr. Gordo’s employment under ~~our previously effective shelf registration filed with~~ the ~~Securities and Exchange Commission. The net proceeds of this offering were used to repay amounts outstanding under our revolver portion of our senior credit facility and~~Employment Agreement for ~~general corporate purposes. The number of shares andper-share~~ ~~amounts herein have been adjusted to reflect~~any reason upon not less than thirty (30) days written notice.

Under the ~~effects~~terms of the Employment Agreement, Mr. Gordo will be paid an annual base salary of $900,000, subject to the review and potential increase within the sole discretion of the Compensation Committee. Mr. Gordo will also be entitled to receive a target annual performance award of 85% of Mr. Gordo’s base salary and will also be entitled to participate in the Company’s stock ~~split.~~incentive plan and upon the effective date, the Company will grant Mr. Gordo an award of 50,000 performance-shares that will vest ratably over a three-year period.

~~Community Education Centers Acquisition~~

~~On April 5, 2017, we closed on our previously announced acquisition of Community Education Centers (“CEC”), a leading private provider of rehabilitation services for offenders in reentry andin-prison~~ treatment facilities as well as management services for county, state and federal correctional and detention facilities. We acquired CEC for $360 million in an all cash transaction, excluding transaction related expenses. CEC’s operations encompass over 12,000 beds nationwide. Refer to Note ~~2 -Business Combinations in~~15 – Subsequent Events of the Notes to ~~the~~ Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form~~10-Q.~~ 10-Q for further information.

~~Contract Awards~~

Executive Order

On ~~April 13, 2017, we announced that we~~January 26, 2021, President Biden signed an executive order directing the United States Attorney General not to renew U.S. Department of Justice (“DOJ”) contracts with privately operated criminal detention facilities, as consistent with applicable law (the “Executive Order”). Two agencies of the DOJ, the Federal Bureau of Prisons (“BOP”) and U.S. Marshals Service (“USMS”), utilize our services. The BOP houses inmates who have been ~~awarded~~convicted of federal crimes, and the USMS is generally responsible for detainees who are awaiting trial or sentencing in U.S. federal courts. Our contracts with the BOP for our company-owned 1,940-bed Great Plains Correctional Facility, our company-owned 1,732-bed Big Spring Correctional Facility, our company-owned 1,800-bed Flightline Correctional Facility, and our company-owned 1,800-bed North Lake Correctional Facility have renewal option periods that expire on May 31, 2021, November 30, 2021, November 30, 2021, and September 30, 2022, respectively. Additionally, the contracts with the BOP for the county owned and managed 1,800-bed Reeves County Detention Center I & II and the 1,376-bed Reeves County Detention Center III have renewal option periods that expire September 30, 2022 and June 30, 2022, respectively. We have a management agreement with Reeves County, Texas for the management oversight of these two county-owned facilities. The Great Plains, Big Spring, Flightline, North Lake Correctional Facilities, Reeves County Detention Center I & II and Reeves County Detention Center III generated approximately $145 million in revenues during the year ended December 31, 2020. The BOP has experienced a decline in federal prison populations over the last several years, a trend that has more recently been accelerated by the COVID-19 global pandemic. As a result of the Executive Order and the decline in federal prison populations, our above-described contracts with the BOP may not be renewed over the coming years. On March 5, 2021, we were notified by the BOP that it had decided to not exercise its contract renewal option for the company-owned, 1,940-bed Great Plains Correctional Facility in Oklahoma, when the contract base period expired on May 31, 2021. On March 25, 2021, we were notified that the BOP had decided to terminate its contract with the county-owned and managed Reeves County Detention Center I & II effective May 10, 2021. For the six months ended June 30, 2021, our secure services contracts with the BOP accounted for approximately 10% of our total revenues.

Unlike the BOP, the USMS does not own and operate its detention facilities. The USMS contracts for the use of facilities, which are generally located in areas near federal courthouses, primarily through intergovernmental service agreements, and to a lesser extent, direct contracts. We are cooperating with the USMS in assessing various alternatives on how to comply with the Executive Order. During the first quarter of 2021, we were notified by the USMS that it would not renew its contract for the company-owned Queens Detention Facility in New York, when the contract base period ended on March 31, 2021. We currently operate four additional detention facilities that are under direct contracts and eight detention facilities that are under intergovernmental agreements with the USMS. The four direct contracts are up for renewal at various times over the next few years, including two in late 2021. For the six months ended June 30, 2021, the direct contracts and intergovernmental agreements with the USMS accounted for approximately 16% of our total revenues.

The Executive Order only applies to agencies that are part of the DOJ, which includes the BOP and USMS. U.S. Immigration and Customs Enforcement (“ICE”) facilities are not covered by the Executive Order as ICE is an agency of the Department of Homeland Security, not the DOJ. However, it is possible that the federal government could choose to take similar action on ICE facilities in the future. For the six months ended June 30, 2021, contracts for ICE Processing Centers, not including the alternatives to detention contract under ISAP accounted for approximately 24% of our total revenues.

President Biden’s administration may implement additional executive orders or directives relating to federal criminal justice policies and immigration policies which may impact the federal government’s use of public-private partnerships with respect to correctional and detention needs, including with respect to our contracts, and/or may impact the budget and spending priorities of federal agencies, including the BOP, USMS, and ICE.

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COVID-19

We have been and are currently closely monitoring the impact of the COVID-19 pandemic and the efficacy and distribution of COVID-19 vaccines on all aspects of our business and geographies, including how it will impact those entrusted in our care and governmental partners. We did incur disruptions during the six months ended June 30, 2021 from the COVID-19 pandemic and are unable to predict the overall future impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows due to numerous uncertainties. Refer to further discussion regarding the economic impacts of COVID-19 to our operations in the Outlook section below.

Contract Terminations/Expirations

On March 5, 2021, we were notified by the BOP that it has decided to not exercise the contract renewal option for the ~~development and operation of a new~~ company-owned,~~1,000-bed~~ ~~detention facility to be located~~ 1,940-bed Great Plains Correctional Facility in ~~Conroe, Texas. We expect to design, finance, build and operate~~Oklahoma, when the contract base period expired on May 31, 2021. The contract for the facility ~~under aten-year~~ ~~contract with ICE, inclusive of renewal option periods. The facility is scheduled for completion in the fourth quarter of 2018 and is expected to generate~~generated approximately ~~$44~~$35 million in ~~annual revenues and returns on investment consistent with our company-owned facilities.~~annualized revenues.

On ~~May 26, 2017,~~March 15, 2021, we announced that the USMS has decided to not exercise the contract renewal option for our company-owned, 222-bed Queens Detention Facility in New York, when the contract base period ended on March 31, 2021. The contract for the facility generated approximately $19 million in annualized revenues.

On March 25, 2021, we were ~~awarded twoten-year~~ ~~contracts, inclusive of renewal option periods, by the Federal Bureau of Prisons (“BOP”) for the continued housing of criminal aliens under the custody of the BOP at the company- owned1,800-bed~~ ~~Big Spring Facility and the company-owned1,732-bed~~ ~~Flight Line Facility, which on a combined basis were previously referred to as the Big Spring Correctional Center in Texas. The twoten-year~~ ~~contracts were awarded to GEO under a long-standing procurement commonly referred to as Criminal Alien Requirement (CAR) 16, which was issued~~notified by the BOP that it has decided to terminate the contract for the county-owned and managed, 1,800-bed Reeves County Detention Center I & II in ~~2015.~~Texas effective May 10, 2021, which was earlier than the contract base period was to scheduled to expire on September 30, 2022. The contract for the facility generated approximately $4 million in annualized revenues.

We were also not awarded the managed-only contracts for the Bay, Graceville and Moore Haven Correctional and Rehabilitation Facilities in Florida during the recent re-bid solicitation process by the State of Florida.We subsequently filed a protest challenging the award of the contracts, and as a result of the protest, we were able to retain the management contract for the Moore Haven Correctional and Rehabilitation Facility. Our contracts for the Bay and Graceville Correctional and Rehabilitation Facilities have been extended through July 31, 2021 and August 31, 2021, after which these contracts will transition to a different operator. The contracts ~~are expected to generate total combined~~for these two facilities generated approximately $15 million and $25 million in annualized revenues ~~of approximately $664 million over their fullten-year~~ ~~terms. Additionally, only one of the two contracts held by Reeves County, Texas was extended by the BOP for one year.~~respectively.

Idle Facilities

~~As of September 30, 2017, we~~We are currently marketing approximately ~~5,400~~9,500 vacant beds at ~~five~~nine of our idle facilities to potential customers. The carrying values of these idle facilities totaled ~~approximately $137.3~~$225.5 million as of ~~September~~June 30, ~~2017,~~2021, excluding equipment and other assets that can be easily transferred for use at other facilities.

~~Asset Purchase~~

~~On March 6, 2017, we acquired the688-bed~~ ~~Maverick County Detention Center~~ Refer to Note 11 – Commitments and Contingencies included in ~~Texas~~Part I, Item 1, of this Quarterly Report on Form 10-Q for ~~approximately $15 million. The center, which is currently idle, was originally built by Maverick County and previously provided services for the U.S. Marshals Service.~~

~~Automatic Shelf Registration on FormS-3~~

~~On October 20, 2017, we filed an automatic shelf registration statement on FormS-3~~ with the Securities and Exchange Commission. The shelf registration statement is automatically effective and is valid for three years. Pursuant to the shelf registration statement, we may offer common stock, preferred stock, debt securities, guarantees of debt securities, warrants and units from time to time in amounts, at prices and on terms that will be determined at the time of any such offering.additional information.

Critical Accounting Policies

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~~six months ended ~~September~~June 30, ~~2017,~~2021, 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 Form10-K for the year endedDecember 31, ~~2016.~~2020.

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RESULTS OF OPERATIONS

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 Form10-Q.

Comparison of ~~Third~~Second Quarter ~~2017~~2021 and ~~Third~~Second Quarter ~~2016~~2020

Revenues

																	2021		% of Revenue			2020		% of Revenue			$ Change			% Change
	2017		% of Revenue			2016		% of Revenue			$ Change			% Change			(Dollars in thousands)
	(Dollars in thousands)
U.S. Corrections & Detention	$	365,071		64.4	%	$	344,452		62.1	%	$	20,619			6.0	%
U.S. Secure Services																	$	368,394		65.2	%	$	389,718		66.3	%	$	(21,324	)		(5.5	)%
GEO Care		134,610		23.8	%		99,779		18.0	%		34,831			34.9	%		141,905		25.1	%		138,240		23.5	%		3,665			2.7	%
International Services		45,641		8.1	%		40,416		7.3	%		5,225			12.9	%		54,921		9.7	%		53,254		9.1	%		1,667			3.1	%
Facility Construction & Design		21,437		3.8	%		69,729		12.6	%		(48,292	)		(69.3	)%		199		0.0	%		6,617		1.1	%		(6,418	)		(97.0	)%

Total	$	566,759		100.0	%	$	554,376		100.0	%	$	12,383			2.2	%	$	565,419		100.0	%	$	587,829		100.0	%	$	(22,410	)		(3.8	)%

U.S. ~~Corrections & Detention~~Secure Services

Revenues ~~increased~~decreased by $21.3 million in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016~~2020 primarily due to aggregate ~~increases~~decreases of ~~$25.1~~$53.3 million ~~as a result~~due to the ramp-down/deactivations of our ~~acquisition of CEC on April 5, 2017~~company-owned D. Ray James, Rivers, Moshannon Valley and Great Plains Correctional Facilities as well as ~~the activation~~our Queens Detention Facility which expired on January 31, 2021, March 31, 2021, March 31, 2021, May 31, 2021 and ~~intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center in January 2017. Refer to Note~~2- ~~Business Combinations of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q~~ ~~for further discussion on our acquisition of CEC.~~March 31, 2021, respectively. These ~~increases~~decreases were partially offset by aggregate net ~~decreases~~increases of ~~$4.5~~$22.2 million ~~at certain~~resulting from the activations in late 2020 and early 2021 of our ~~facilities due to~~company-owned Golden State, Desert View and Central Valley Annexes as well as our company-owned Eagle Pass Detention Center. In addition, we experienced aggregate net ~~decreases~~increases in ~~population,~~populations, transportation services and/or ~~rates.~~

rates of $9.8 million primarily due to increased occupancies at our USMS facilities mainly due to the large increase in the number of crossings at the Southern border during 2021.

The number of compensated mandays in U.S. ~~Corrections & Detention~~Secure Services facilities was approximately ~~5.7~~4.9 million in ~~Third~~Second Quarter ~~2017~~2021 and ~~5.6~~5.4 million in ~~Third~~Second Quarter ~~2016.~~2020. We experienced an aggregate net ~~increase~~decrease of approximately ~~103,000~~500,000 mandays as a result of ~~our acquisition of CEC~~contract terminations, partially offset by contract activations and ~~contract activation~~increases in occupancies discussed above. 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~~Secure Services facilities was ~~93.0%~~88.6% and ~~94.0%~~89.2% of capacity in the ~~Third~~Second Quarter ~~2017~~2021 and ~~Third~~Second Quarter ~~2016,~~2020, respectively, excluding idle facilities.

GEO Care

Revenues increased by $3.7 million in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016~~2020 primarily due to increases of $4.4 million due to new/reactivated contracts and programs. Additionally, we experienced an increase of $4.3 million due to increased client and participant counts under our Intensive Supervision and Appearance Program (“ISAP”) and electronic monitoring services. These increases were partially offset by decreases of $3.4 million due to contract terminations/closures of underutilized facilities which have been impacted by the COVID-19 pandemic and other factors. Additionally, we experienced net decreases of $1.6 million due to decreases in census levels at certain of our community-based and reentry centers due to declines in programs as a result of lower levels of referrals by federal, state and local agencies primarily due to the impact of the COVID-19 pandemic.

International Services

Revenues for International Services increased by $1.7 million in Second Quarter 2021 compared to Second Quarter 2020. We experienced a net decrease in revenues of $2.9 million which was primarily due to the transition of the Arthur Gorrie Correctional Centre to government operation in State of Queensland, Australia at the end of June 2020. This was offset by an increase due to foreign exchange rate fluctuations of $4.6 million.

Facility Construction & Design

In Second Quarter 2021 and Second Quarter 2020, we had Facility Construction & Design services related to an expansion project at our Fulham Correctional Centre in Australia which has been substantially completed. The decrease was due to a decrease in construction activity as the project neared completion.

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Operating Expenses

	2021		% of Segment Revenues			2020		% of Segment Revenues			$ Change			% Change
	(Dollars in thousands)
U.S. Secure Services	$	268,963		73.0	%	$	294,368		75.5	%	$	(25,405	)		(8.6	)%
GEO Care		87,317		61.5	%		95,601		69.2	%		(8,284	)		(8.7	)%
International Services		48,615		88.5	%		47,474		89.1	%		1,141			2.4	%
Facility Construction & Design		114		57.3	%		6,592		99.6	%		(6,478	)		(98.3	)%
Total	$	405,009		71.6	%	$	444,035		75.5	%	$	(39,026	)		(8.8	)%

U.S. Secure Services

Operating expenses for U.S. Secure Services decreased by $25.4 million in Second Quarter 2021 compared to Second Quarter 2020 primarily due to decreases of $35.6 million related to the ramp-down/deactivations of our company-owned D. Ray James, Rivers, Moshannon Valley and Great Plains Correctional Facilities as well as our Queens Detention Facility which expired on January 31, 2021, March 31, 2021, March 31, 2021, May 31, 2021 and March 31, 2021, respectively. Additionally, we experienced aggregate net decreases of $3.8 million related to decreases in population, transportation services and the variable costs associated with those services primarily as a result of the impacts of the COVID-19 pandemic as described above. These decreases were partially offset by increases of $14.0 million resulting from the activations in late 2020 and early 2021 of our company-owned Golden State, Desert View and Central Valley Annexes as well as our company-owned Eagle Pass Detention Center.

GEO Care

Operating expenses for GEO Care decreased by $8.3 million during Second Quarter 2021 compared to Second Quarter 2020 primarily due to aggregate ~~increases~~decreases of ~~$36.9~~$4.5 million ~~from~~related to contract terminations/closures of underutilized facilities as a result of the COVID-19 pandemic and other factors. In addition, we experienced net decreases of $6.7 million related to net decreases in census levels at certain of our ~~acquisition~~community-based and reentry centers due to declines in programs as a result of ~~CEC on April 5, 2017. We also experienced~~lower levels of referrals by federal, state and local agencies due to the impact of the COVID-19 pandemic. These decreases were partially offset by increases of $2.3 million ~~primarily~~due to new/reactivated contracts and programs and day reporting center openings. We also experienced an increase of $0.6 million due to increases in average client and participant counts under our ISAP and electronic monitoring services. ~~These increases were partially offset by $4.4 million related~~Operating expenses as a percentage of revenue decreased in Second Quarter 2021 compared to ~~net decreases in census levels at certain~~Second Quarter 2020 primarily due to the closure of ~~our community-based and reentry centers~~underperforming/underutilized facilities as ~~well as contract terminations.~~discussed above.

International Services

~~Revenues~~Operating expenses for International Services increased by $1.1 million in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016 increased by $5.2 million~~2020. We experienced a net ~~increase~~decrease in operating expenses of ~~$5.0~~$6.2 million which was primarily ~~attributable~~due to the ~~expansion~~transition of ~~our Fulham facility and net population increases~~the Arthur Gorrie Correctional Centre to government operation in State of Queensland, Australia at ~~our Australian subsidiary. Additionally, we had~~the end of June 2020. This decrease was partially offset by an increase due to foreign exchange rate fluctuations of ~~$0.2 million resulting from the weakening of the U.S. dollar against certain international currencies.~~$7.3 million.

Facility Construction & Design

~~Revenues for our~~In Second Quarter 2021 and Second Quarter 2020, we had Facility Construction & Design services ~~relate~~related to ~~the commencement of design and construction activity for~~an expansion project at our ~~Ravenhall Prison Contract executed~~Fulham Correctional Centre in ~~September 2014 with the Department of Justice in the State of Victoria, Australia.~~Australia which has been substantially completed. The decrease iswas due to ~~decreased~~a decrease in construction activity ~~during 2017~~ as the project ~~gets closer to~~neared completion. ~~Our margin on this construction activity is not significant.~~

~~Operating Expenses~~

   2017    % of Segment
Revenues 2016    % of Segment
Revenues $ Change % Change
   (Dollars in thousands)
U.S. Corrections & Detention
   $ 268,718    73.6 % $ 248,024    72.0 % $ 20,694 8.3 %
GEO Care
   90,949    67.6 % 60,051    60.2 % 30,898 51.5 %
International Services
   41,752    91.5 % 38,051    94.1 % 3,701 9.7 %
Facility Construction & Design
   21,715    101.3 % 69,533    99.7 % (47,818 ) (68.8 )%






Total
   $ 423,134    74.7 % $ 415,659    75.0 % $ 7,475 1.8 %

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

~~U.S. Corrections & Detention~~

The increase in operating expenses for U.S. Corrections & Detention reflects an increase of $20.2 million resulting from our acquisition of CEC on April 5, 2017 as well as the activation and intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center in January 2017. We also had aggregate net increases in operating expenses of $0.4 million at certain of our facilities primarily due to net increases in population, transportation services and the variable costs associated with those increases. Operating expenses as a percentage of revenues have increased during Third Quarter 2017 which is primarily related to our acquisition of CEC. As we continue to integrate CEC into our operations, we expect to realize cost savings and other synergies in line with our other domestic correctional facilities.

~~GEO Care~~

Operating expenses for GEO Care increased by $30.9 million during Third Quarter 2017 from Third Quarter 2016 primarily due to $29.3 million from our acquisition of CEC on April 5, 2017. We also experienced net increases of $1.6 million primarily due to increases in average client and participant counts under our ISAP and electronic monitoring services and program growth at our community-based and reentry centers. Operating expenses as a percentage of revenues have increased during Third Quarter 2017 which is primarily related to our acquisition of CEC. As we continue to integrate CEC into our operations, we expect to realize cost savings and other synergies in line with our other community-based and reentry centers.

~~International Services~~

Operating expenses for International Services in Third Quarter 2017 compared to Third Quarter 2016 increased by $3.7 million. We experienced a net increase of $2.5 million primarily attributable to the expansion of our Fulham facility and net population increases at our Australian subsidiary. Additionally, we had an increase due to foreign exchange rate fluctuations of $1.2 million resulting from the weakening of the U.S. dollar against certain international currencies. Operating expenses have decreased as a percentage of revenue primarily due to certain nonrecurring labor related issues at our South African subsidiary in Third Quarter 2016.

~~Facility Construction & Design~~

Operating expenses for our Facility Construction & Design services relate to the commencement of design and construction activity for our Ravenhall Prison Contract executed in September 2014 with the Department of Justice in the State of Victoria, Australia. The decrease is due to decreased construction activity during 2017 as the project gets closer to completion.

Depreciation and Amortization

																	2021		% of Segment Revenue			2020		% of Segment Revenue			$ Change			% Change
	2017		% of Segment Revenue			2016		% of Segment Revenue			$ Change			% Change			(Dollars in thousands)
	(Dollars in thousands)
U.S. Corrections & Detention	$	18,802		5.2	%	$	18,563		5.4	%	$	239			1.3	%
U.S. Secure Services																	$	20,529		5.6	%	$	20,131		5.2	%	$	398			2.0	%
GEO Care		12,368		9.2	%		9,721		9.7	%		2,647			27.2	%		12,190		8.6	%		12,789		9.3	%		(599	)		(4.7	)%
International Services		479		1.0	%		499		1.2	%		(20	)		(4.0	)%		587		1.1	%		514		1.0	%		73			14.2	%

Total	$	31,649		5.6	%	$	28,783		5.2	%	$	2,866			10.0	%	$	33,306		5.9	%	$	33,434		5.7	%	$	(128	)		(0.4	)%

~~U.S. Corrections & Detention~~

U.S. ~~Corrections & Detention~~Secure Services

U.S. Secure Services depreciation and amortization expense increased ~~slightly~~ in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016~~2020 primarily due to renovations ~~made~~in connection with our contract activations at ~~several~~certain of our ~~facilities as well as our acquisition~~company-owned facilities.

Table of ~~CEC on April 5, 2017.~~Contents

GEO Care

GEO Care depreciation and amortization expense ~~increased~~decreased in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016~~2020 primarily due to ~~new facilities and intangible assets acquired in~~certain asset dispositions at our ~~acquisition of CEC on April 5, 2017.~~company-owned centers.

International Services

Depreciation and amortization expense ~~remained relatively consistent~~increased slightly in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016 as a result of certain assets becoming fully depreciated and there were no significant additions or renovations during 2016 or 2017 at our international subsidiaries.~~

2020 primarily due to foreign exchange rate fluctuations.

Other Unallocated Operating Expenses

   2017    % of
Revenue 2016    % of
Revenue $ Change    % Change
   (Dollars in thousands)
General and Administrative Expenses
   $ 49,074    8.7 % $ 37,483    6.8 % $ 11,591    30.9 %

	2021		% of Revenue			2020		% of Revenue			$ Change		% Change
	(Dollars in thousands)
General and Administrative Expenses	$	54,688		9.7	%	$	45,543		7.7	%	$	9,145		20.1	%

General and administrative expenses comprise substantially all of our other unallocated operating expenses which primarily includes corporate management salaries and benefits, professional fees and other administrative expenses. ~~The increase in general~~General and administrative expenses increased in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016~~2020 by $9.1 million primarily due to one-time employee restructuring expenses of $7.5 million. The remainder of the increase was primarily ~~attributable to (i) merger and acquisition expenses (which include certain transition expenses) of $5.0 million related to our acquisition of CEC; (ii) highernon-cash~~ ~~stock-based compensation expense of $1.7 million compared to the prior year and (iii) increases related~~due to normal ~~personnel and compensation adjustments,~~ professional, consulting ~~business development~~ and other administrative ~~fees in~~expenses as well as the ~~aggregate~~impacts of ~~$4.9 million.~~the COVID-19 pandemic.

~~Non Operating~~Non-Operating Expenses

Interest Income and Interest Expense


	2017		% of Revenue			2016		% of Revenue			$ Change		% Change			2021		% of Revenue			2020		% of Revenue			$ Change		% Change
	(Dollars in thousands)															(Dollars in thousands)
Interest Income	$	14,648		2.6	%	$	7,928		1.4	%	$	6,720		84.8	%	$	5,985		1.1	%	$	5,248		0.9	%	$	737		14.0	%
Interest Expense	$	38,719		6.8	%	$	33,428		6.0	%	$	5,291		15.8	%	$	32,053		5.7	%	$	30,610		5.2	%	$	1,443		4.7	%

Interest income increased in ~~the Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016~~2020 primarily due to ~~interest income earned on our contract receivable related to our prison project in Ravenhall, Australia. Refer to Note 12 - Business Segments and Geographic Information~~the effect of ~~the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q.~~foreign exchange rate fluctuations.

Interest expense increased in ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016~~2020 primarily due to higher balances under the revolver component of our credit facility. During 2021, we drew down $170 million on our revolver as a conservative precautionary step to preserve liquidity, maintain financial flexibility, and obtain additional ~~interest incurred on higher debt balances resulting from our acquisition of CEC on April 5, 2017. Also contributing to~~funds for general corporate purposes. Partially offsetting the increase was the ~~construction loan interest related to~~effect of decreases in the LIBOR rate.

Gain on Extinguishment of Debt

	2021		% of Revenue			2020		% of Revenue			$ Change		% Change
	(Dollars in thousands)
Gain on Extinguishment of Debt	$	1,654		0.3	%	$	—		0.3	%	$	1,654		100.0	%

During Second Quarter 2021, we repurchased $19.5 million in aggregate principal amount of our ~~prison project in Ravenhall, Australia~~5.125% Senior Notes due to2023 at a ~~higher loan balance compared to the prior period. These increases were partially offset by~~weighted average price of $90.88 for a ~~reduction~~total cost of ~~debt as~~$17.7 million. As a result of these transactions, we recognized a gain on extinguishment of debt of $1.7 million, net of the ~~proceeds used from our common stock offering.~~ write-off of associated unamortized deferred loan costs.

Refer to Note ~~10 -~~10- Debt ~~and Note 6 - Shareholders’ Equity~~ of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form~~10-Q.~~ 10-Q for further discussion.

Loss on Dispositions of Real Estate

2021

% of Revenue

2020

% of Revenue

$ Change

% Change

(Dollars in thousands)

Loss on Dispositions of Real Estate

$
2,950

0.5
%

$
1,304

0.2
%

$
1,646

126.2
%

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The increase in Second Quarter 2021 compared to Second Quarter 2020 is primarily due to the disposition of certain assets at our company-owned Queens Detention Center located in New York, our company-owned Alle Kiski Pavillion located in Pennsylvania and our company-owned DuPage Interventions center located in Illinois during Second Quarter 2021.

Income Tax Provision

	2021		Effective Rate			2020		Effective Rate			$ Change		% Change
	(Dollars in thousands)
Provision for Income Taxes	$	5,063		11.2	%	$	4,196		11.0	%	$	867		20.7	%

   2017    Effective Rate 2016    Effective Rate $ Change % Change
   (Dollars in thousands)
Income Taxes
   $ 1,720    4.4 % $ 4,970    10.6 % $ (3,250 ) (65.4 )%

The provision for income taxes during ~~Third~~Second Quarter ~~2017 decreased~~2021 increased compared to ~~Third~~Second Quarter ~~2016 along with the~~2020 while our effective tax ~~rate.~~rate remained at about 11%. The ~~decrease~~increase in the tax expense is primarily due to a change in the composition of our income ~~which reduced the income of~~between our ~~taxable~~REIT and TRS subsidiaries and ~~favorable~~certain non-recurring ~~items which lowered the effective rate~~ items. In Second Quarter 2021, there was a $0.5 million net discrete tax expense as compared to a $0.7 million net discrete tax benefit in the ~~quarter.~~second quarter of 2020. As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn we are allowed a deduction for the distribution at the REIT level. Our ~~wholly-owned~~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 in the range of approximately 6%11% to 8%13% exclusive of any discrete items.

Equity in Earnings of Affiliates, net of Income Tax Provision

   2017    % of
Revenue 2016    % of
Revenue $ Change % Change
   (Dollars in thousands)
Equity in Earnings of Affiliates
   $ 1,342    0.2 % $ 1,693    0.3 % $ (351 ) (20.7 )%

	2021		% of Revenue			2020		% of Revenue			$ Change			% Change
	(Dollars in thousands)
Equity in Earnings of Affiliates	$	1,942		0.3	%	$	2,699		0.5	%	$	(757	)		(28.0	)%

Equity in earnings of affiliates, presented net of income ~~taxes,~~tax provision, represents the earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates decreased during ~~Third~~Second Quarter ~~2017~~2021 compared to ~~Third~~Second Quarter ~~2016 decreased~~2020 primarily due to ~~nonrecurring~~less favorable ~~contract adjustments received in Third Quarter 2016~~performance by GEOAmey.

Comparison of ~~Nine Months 2017~~First Half 2021 and ~~Nine Months 2016~~First Half 2020

Revenues

	2021		% of Revenue			2020		% of Revenue			$ Change			% Change
	(Dollars in thousands)
U.S. Secure Services	$	755,405		66.2	%	$	787,827		66.0	%	$	(32,422	)		(4.1	)%
GEO Care		277,387		24.3	%		282,703		23.7	%		(5,316	)		(1.9	)%
International Services		108,405		9.5	%		110,104		9.2	%		(1,699	)		(1.5	)%
Facility Construction & Design		599		0.1	%		12,212		1.0	%		(11,613	)		(95.1	)%
Total	$	1,141,796		100.0	%	$	1,192,846		100.0	%	$	(51,050	)		(4.3	)%

   2017    % of Revenue 2016    % of Revenue $ Change % Change
   (Dollars in thousands)
U.S. Corrections & Detention
   $ 1,073,840    63.4 % $ 1,024,395    63.5 % $ 49,445 4.8 %
GEO Care
   377,740    22.3 % 289,722    18.0 % 88,018 30.4 %
International Services
   130,261    7.7 % 116,468    7.2 % 13,793 11.8 %
Facility Construction & Design
   112,602    6.6 % 182,326    11.3 % (69,724 ) (38.2 )%






Total
   $ 1,694,443    100.0 % $ 1,612,911    100.0 % $ 81,532 5.1 %

U.S. ~~Corrections & Detention~~Secure Services

Revenues ~~increased~~decreased by $32.4 million in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016~~First Half 2020 primarily due to aggregate ~~increases~~decreases of ~~$54.4~~$78.6 million ~~as a result~~due to the ramp-down/deactivations of our ~~acquisition of CEC on April 5, 2017~~company-owned D. Ray James, Rivers, Moshannon Valley and Great Plains Correctional Facilities as well as ~~the activation~~our Queens Detention Facility which expired on January 31, 2021, March 31, 2021, March 31, 2021, May 31, 2021 and ~~intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center in January 2017.~~March 31, 2021, respectively. These ~~increases~~decreases were partially offset by aggregate net ~~decreases~~increases of ~~$5.0~~$47.6 million ~~at certain~~resulting from the activations in late 2020 and early 2021 of our ~~facilities~~company-owned Golden State, Desert View and Central Valley Annexes, our company-owned Eagle Pass Detention Center and our managed-only contract for the El Centro Detention Center in California which was effective in December 2020. In addition, we experienced aggregate net increases in populations, transportation services and/or rates of $6.2 million due to ~~aggregate net~~increased occupancy at our USMS facilities mainly due to the large increase in the number of crossings at the Southern border during 2021. These increases in occupancy were offset by decreases in population, transportation ~~services~~ and/or ~~rates.~~rates of $7.6 million at our BOP and State facilities primarily due to the impacts of the COVID-19 pandemic.

The number of compensated mandays in U.S. ~~Corrections & Detention~~Secure Services facilities was approximately ~~16.6~~10.1 million in ~~Nine Months 2017~~First Half 2021 and ~~16.5~~11.1 million in ~~Nine Months 2016.~~Second Quarter 2020. We experienced an aggregate net ~~increase~~decrease of approximately ~~130,000~~1,000,000 mandays as a result of ~~our acquisition of CEC~~contract terminations, partially offset by contract activations and ~~contract activation~~increases in occupancies discussed above. 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~~Secure Services facilities was ~~93.3% and 93.2%~~90.5% of capacity in ~~Nine Months 2017~~both First Half 2021 and ~~Nine Months 2016, respectively,~~First Half 2020, excluding idle facilities.

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GEO Care

Revenues ~~increased~~decreased by $5.3 million in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016~~First Half 2020 primarily due to ~~aggregate increases~~decreases of ~~$73.2~~$10.1 million ~~from~~due to contract terminations/closures of underutilized facilities which have been impacted by the COVID-19 pandemic and other economic factors. Additionally, we experienced net decreases of $7.5 million due to decreases in census levels at certain of our ~~acquisition~~community-based and reentry centers due to declines in programs as a result of ~~CEC on April 5, 2017. We also experienced increases~~lower levels of ~~$19.9 million~~referrals by federal, state and local agencies primarily due to the impact of the COVID-19 pandemic. These decreases were partially offset by increases ~~in average~~of $8.4 million due to new/reactivated contracts and programs as well as an increase of $3.9 million due to increased client and participant counts under our ISAP and electronic monitoring services.

International Services

Revenues for International Services decreased by $1.7 million in First Half 2021 compared to First Half 2020. We experienced a net decrease in revenues of $9.7 million which was primarily due to the transition of the Arthur Gorrie Correctional Centre to government operation in State of Queensland, Australia at the end of June 2020. This decrease was partially offset by an increase due to foreign exchange rate fluctuations of $8.0 million.

Facility Construction & Design

In First Half 2021 and First Half 2020, we had Facility Construction & Design services related to an expansion project at our Fulham Correctional Centre in Australia which has been substantially completed. The decrease was due to a decrease in construction activity as the project neared completion.

Operating Expenses

	2021		% of Segment Revenues			2020		% of Segment Revenues			$ Change			% Change
	(Dollars in thousands)
U.S. Secure Services	$	566,741		75.0	%	$	599,606		76.1	%	$	(32,865	)		(5.5	)%
GEO Care		171,557		61.8	%		195,809		69.3	%		(24,252	)		(12.4	)%
International Services		94,361		87.0	%		98,189		89.2	%		(3,828	)		(3.9	)%
Facility Construction & Design		501		83.6	%		12,177		99.7	%		(11,676	)		(95.9	)%
Total	$	833,160		73.0	%	$	905,781		75.9	%	$	(72,621	)		(8.0	)%

U.S. Secure Services

Operating expenses for U.S. Secure Services decreased by $32.9 million in First Half 2021 compared to First Half 2020 primarily due to decreases of $55.9 million related to the ramp-down/deactivations of our company-owned D. Ray James, Rivers, Moshannon Valley and Great Plains Correctional Facilities as well as our Queens Detention Facility which expired on January 31, 2021, March 31, 2021, March 31, 2021, May 31, 2021 and March 31, 2021, respectively. Additionally, we experienced aggregate net decreases of $8.1 million related to decreases in population, transportation services and the variable costs associated with those services primarily as a result of the impacts of the COVID-19 pandemic. These ~~increases~~decreases were partially offset by ~~$5.1~~increases of $31.1 million resulting from the activations in late 2020 and early 2021 of our company-owned Golden State, Desert View and Central Valley Annexes, our company-owned Eagle Pass Detention Center and our managed-only contract for the El Centro Detention Center in California which was effective in December 2020.

GEO Care

Operating expenses for GEO Care decreased by $24.3 million during First Half 2021 compared to First Half 2020 primarily due to aggregate decreases of $12.4 million related to contract terminations/closures of underutilized facilities as a result of the COVID-19 pandemic and economic other factors. In addition, we experienced decreases of $13.7 million related to net decreases in census levels at certain of our community-based and reentry centers due to declines in programs as ~~well as terminated contracts.~~

~~International Services~~

~~Revenues for International Services in Nine Months 2017 compared to Nine Months 2016 increased~~a result of lower levels of referrals by ~~$13.8 million We experienced a net increase of $10.8 million primarily attributable~~federal, state and local agencies due to the expansion of our Fulham facility and net population increases at our Australian subsidiary. Additionally, we had an increase due to foreign exchange rate fluctuations of $3.0 million resulting from the weakeningimpact of the ~~U.S. dollar against certain international currencies.~~

~~Facility Construction & Design~~

Revenues for our Facility Construction & Design services relate to the commencement of design and construction activity for our Ravenhall Prison Contract executed in September 2014 with the Department of Justice in the State of Victoria, Australia. The decrease is due to decreased construction activity during 2017 as the project gets closer to completion. Our margin on this construction activity is not significant.

~~Operating Expenses~~

   2017    % of Segment
Revenues 2016    % of Segment
Revenues $ Change % Change
   (Dollars in thousands)
U.S. Corrections & Detention
   $ 792,727    73.8 % $ 748,383    73.1 % $ 44,344 5.9 %
GEO Care
   248,934    65.9 % 180,529    62.3 % 68,405 37.9 %
International Services
   120,403    92.4 % 110,235    94.6 % 10,168 9.2 %
Facility Construction & Design
   114,222    101.4 % 181,855    99.7 % (67,633 ) (37.2 )%






Total
   $ 1,276,286    75.3 % $ 1,221,002    75.7 % $ 55,284 4.5 %

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

~~U.S. Corrections & Detention~~

The increase in operating expenses for U.S. Corrections & Detention reflects an increase of $45.6 million resulting from our acquisition of CEC on April 5, 2017 as well as the activation and intake of detainees related to our new contract at our company-owned Folkston ICE Processing Center in January 2017. These increases were partially offset by aggregate decreases in operating expenses of $1.3 million at certain of our facilities primarily due to net decreases in population, transportation services and the variable costs associated with those decreases.

~~GEO Care~~

~~Operating expenses for GEO Care increased by $68.4 million during Nine Months 2017 from Nine Months 2016 primarily due to $57.0 million from our acquisition of CEC on April 5, 2017.~~COVID-19 pandemic. We also experienced ~~increases~~a decrease of ~~$11.4~~$1.7 million ~~primarily~~ due to ~~increases~~decreases in average client and participant counts under our ISAP and electronic monitoring services as a result of policy changes by the former administration which reduced the number of enrollments at the Southern border. These decreases were partially offset by increases of $3.5 million due to new/reactivated contracts and ~~program growth at our community-based~~programs and ~~reentry centers.~~day reporting center openings. Operating expenses as a percentage of ~~revenues have increased during Nine Months 2017 which is~~revenue decreased in Second Quarter 2021 compared to Second Quarter 2020 primarily ~~related~~due to ~~our acquisition~~the closure of ~~CEC. As we continue to integrate CEC into our operations, we expect to realize cost savings and other synergies in line with our other community-based and reentry centers.~~underperforming/underutilized facilities as discussed above.

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International Services

Operating expenses for International Services decreased by $3.8 million in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016 increased by $10.2 million.~~First Half 2020. We experienced a net ~~increase~~decrease in operating expenses of ~~$5.6~~$17.1 million which was primarily ~~attributable~~due to the ~~expansion~~transition of ~~our Fulham facility and net population increases~~the Arthur Gorrie Correctional Centre to government operation in State of Queensland, Australia at ~~our Australian subsidiary. Additionally, we had~~the end of June 2020. This decrease was partially offset by an increase due to foreign exchange rate fluctuations of $4.6 million resulting from the weakening of the U.S. dollar against certain international currencies. Operating expenses have decreased as a percentage of revenue primarily due to certain nonrecurring labor related issues at our South African subsidiary in Nine Months 2016.$13.3 million.

Facility Construction & Design

~~Operating expenses for our~~In First Half 2021 and First Half 2020, we had Facility Construction & Design services ~~relate~~related to ~~the commencement of design and construction activity for~~an expansion project at our ~~Ravenhall Prison Contract executed~~Fulham Correctional Centre in ~~September 2014 with the Department of Justice in the State of Victoria, Australia.~~Australia which has been substantially completed. The decrease iswas due to ~~decreased~~a decrease in construction activity ~~during 2017~~ as the project ~~nears~~neared completion.

Depreciation and Amortization

	2021		% of Segment Revenue			2020		% of Segment Revenue			$ Change			% Change
	(Dollars in thousands)
U.S. Secure Services	$	41,248		5.5	%	$	40,297		5.1	%	$	951			2.4	%
GEO Care		25,022		9.0	%		25,465		9.0	%		(443	)		(1.7	)%
International Services		1,153		1.1	%		999		0.9	%		154			15.4	%
Total	$	67,423		5.9	%	$	66,761		5.6	%	$	662			1.0	%

   2017    % of Segment
Revenue 2016    % of Segment
Revenue $ Change % Change
   (Dollars in thousands)
U.S. Corrections & Detention
   $ 56,275    5.2 % $ 55,720    5.4 % $ 555 1.0 %
GEO Care
   34,744    9.2 % 28,635    9.9 % 6,109 21.3 %
International Services
   1,445    1.1 % 1,531    1.3 % (86 ) (5.6 )%






Total
   $ 92,464    5.5 % $ 85,886    5.3 % $ 6,578 7.7 %

~~U.S. Corrections & Detention~~

U.S. ~~Corrections & Detention~~Secure Services

U.S. Secure Services depreciation and amortization expense increased ~~slightly~~ in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016~~First Half 2020 primarily due to renovations ~~made~~in connection with our contract activations at ~~several~~certain of our ~~facilities as well as our acquisition of CEC on April 5, 2017.~~company-owned facilities.

GEO Care

GEO Care depreciation and amortization expense ~~increased~~decreased in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016~~First Half 2020 primarily due to ~~new facilities and intangible assets acquired in~~certain asset dispositions at our ~~acquisition of CEC on April 5, 2017.~~company-owned centers.

International Services

Depreciation and amortization expense ~~decreased slightly~~increased in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016 as a result of certain assets becoming fully depreciated and there were no significant additions or renovations during 2016 or 2017 at our international subsidiaries.~~First Half 2020 primarily due to foreign exchange rate fluctuations.

Other Unallocated Operating Expenses

   2017    % of
Revenue 2016    % of
Revenue $ Change    % Change
   (Dollars in thousands)
General and Administrative Expenses
   $ 143,866    8.5 % $ 108,448    6.7 % $ 35,418    32.7 %

	2021		% of Revenue			2020		% of Revenue			$ Change		% Change
	(Dollars in thousands)
General and Administrative Expenses	$	103,167		9.0	%	$	99,325		8.3	%	$	3,842		3.9	%

General and administrative expenses comprise substantially all of our other unallocated operating expenses which primarily includes corporate management salaries and benefits, professional fees and other administrative expenses. ~~The increase in general~~General and administrative expenses increased in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016~~First Half 2020 by $3.8 million primarily due to one-time employee restructuring expenses of $7.5 million. Partially offsetting this increase was a decrease in stock-based compensation of $3.0 million. The remainder of the decrease was primarily ~~attributable~~due to ~~(i) merger and acquisition expenses (which include certain transition expenses) of $17.9 million related to our acquisition of CEC; (ii) highernon-cash~~ ~~stock-based compensation expense of $5.2 million and (iii) increases related to normal personnel and compensation adjustments, professional, consulting,~~less travel, marketing, business development and other corporate administrative ~~fees in~~expenses primarily due to the ~~aggregate~~impacts of ~~$12.3 million.~~the COVID-19 pandemic.

~~Non Operating~~Non-Operating Expenses

Interest Income and Interest Expense

	2021		% of Revenue			2020		% of Revenue			$ Change			% Change
	(Dollars in thousands)
Interest Income	$	12,187		1.1	%	$	10,686		0.9	%	$	1,501			14.0	%
Interest Expense	$	63,897		5.6	%	$	64,790		5.4	%	$	(893	)		(1.4	)%

   2017    % of
Revenue 2016    % of
Revenue $ Change    % Change
   (Dollars in thousands)
Interest Income
   $ 38,971    2.3 % $ 18,387    1.1 % $ 20,584    111.9 %
Interest Expense
   $ 109,702    6.5 % $ 93,864    5.8 % $ 15,838    16.9 %

Interest income increased in ~~the Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016~~First Half 2020 primarily due to ~~interest income earned on our contract receivable related to our prison project in Ravenhall, Australia. Refer to Note 12 - Business Segments and Geographic Information~~the effect of ~~the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report onForm 10-Q.~~foreign exchange rate fluctuations.

Interest expense ~~increased~~decreased in ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016~~First Half 2020 primarily due to ~~additional interest incurred on higher debt balances resulting from our acquisition of CEC on April 5, 2017. Also contributing to the increase~~decreases in LIBOR rates. This decrease was ~~the construction loan interest related to our prison project in Ravenhall, Australia due to a higher loan balance compared to the prior period. These increases were~~ partially offset by increases from higher balances on the revolver component of our credit facility. During 2021, we drew down

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$170 million on our revolver as a ~~reduction~~conservative precautionary step to preserve liquidity, maintain financial flexibility, and obtain additional funds for general corporate purposes.

Gain on Extinguishment of ~~debt as~~Debt

	2021		% of Revenue			2020		% of Revenue			$ Change		% Change
	(Dollars in thousands)
Gain on Extinguishment of Debt	$	4,693		0.4	%	$	1,563		0.1	%	$	3,130		200.3	%

During First Half 2021, we repurchased $22.5 million in aggregate principal amount of our 5.125% Senior Notes due 2023 at a weighted average price of $90.68 for a total cost of $20.4 million. We also repurchased $17.2 million in aggregate principal amount of our 5.875% Senior Notes due 2024 at a weighted average price of $79.51 for a total cost of $13.7 million. As a result of ~~the proceeds used from our common stock offering. Refer to Note 10 - Debt and Note 6 - Shareholders’ Equity~~these transactions, we recognized a gain on extinguishment of debt of $4.7 million, net of the ~~Notes to Unaudited Consolidated Financial Statements included~~write-off of associated unamortized deferred loan costs.

During First Half 2020, we repurchased approximately $5.5 million in ~~Part I, Item 1 of this Quarterly Report on Form10-Q.~~

~~Loss on Extinguishment of Debt~~

   2017    % of
Revenue 2016    % of
Revenue $ Change % Change
   (Dollars in thousands)
Loss on Extinguishment of Debt
   $ —      —   % $ 15,885    1.0 % $ (15,885 ) (100.0 )%

~~During Nine Months 2016, we completed a tender offer and redemption~~aggregate principal amount of our ~~6.625%~~5.125% Senior Notes due 2023 at a weighted average price of $70.68 for a total cost of $3.9 million. As a result of these transactions, we recognized a gain on extinguishment of debt of $1.6 million, net of the write-off of associated unamortized deferred loan costs.

(Gain) Loss on Dispositions of Real Estate

	2021			% of Revenue			2020		% of Revenue			$ Change			% Change
	(Dollars in thousands)
(Gain) Loss on Dispositions of Real Estate	$	(10,379	)		(1.8	)%	$	880		0.1	%	$	(11,259	)		(1,279.4	)%

The net gain in First Half 2021 ~~which resulted in a loss of $15.9 million related~~is primarily due to the ~~tender premium~~sale of our interest in Talbot Hall, located in New Jersey, and ~~deferred costs associated with~~ the ~~6.625% Senior Notes due 2021.~~sale of our company-owned McCabe Center, located in Texas.

Income Tax Provision

	2021		Effective Rate			2020		Effective Rate			$ Change		% Change
	(Dollars in thousands)
Provision for Income Taxes	$	12,999		12.8	%	$	10,742		15.9	%	$	2,257		21.0	%

   2017    Effective Rate 2016    Effective Rate $ Change % Change
   (Dollars in thousands)
Income Taxes
   $ 5,590    5.0 % $ 12,000    11.3 % $ (6,410 ) (53.4 )%

The provision for income taxes during ~~Nine Months 2017~~First Half 2021 increased while our effective tax rate decreased compared to ~~Nine Months 2016 along with~~First Half 2020. The decrease in the effective ~~tax rate. The decrease~~rate is primarily due to the tax benefit on the merger and acquisition expenses of $17.9 million related to our acquisition of CEC incurred in Nine Months 2017 contrasted with the debt extinguishment costs incurred by the REIT in Nine Months 2016 which carried no tax benefit but had the result of increasing the effective rate in that nine month period. Furthermore, a change in the composition of our income ~~which reduced the income of~~between our ~~taxable~~REIT and TRS subsidiaries ~~also contributed~~and certain non-recurring items. In First Half 2021, there was a $1.9 million net discrete tax expense compared to a ~~lower rate during Nine Months 2017. Additionally, we had a $1.5~~$2.1 million net discrete tax ~~benefit~~expense in ~~2017 as provided under ASUNo. 2016-09,~~~~Compensation - Stock Compensation (Topic 718).~~~~Refer~~First Half 2020. Included in the provision for income taxes were $2.3 million and $2.7 million of discrete tax expense in First Half 2021 and 2020, respectively, related to ~~Note 14 - Recent Accounting Pronouncements of~~stock compensation that vested during the ~~Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q.~~respective periods. As a REIT, we are required to distribute at least 90% of our taxable income to shareholders and in turn we are allowed a deduction for the distribution at the REIT level. Our ~~wholly-owned~~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 in the range of approximately 6%11% to 8%13% exclusive of any discrete items.

Equity in Earnings of Affiliates, net of Income Tax Provision

   2017    % of
Revenue 2016    % of
Revenue $ Change % Change
   (Dollars in thousands)
Equity in Earnings of Affiliates
   $ 4,255    0.3 % $ 4,943    0.3 % $ (688 ) (13.9 )%

	2021		% of Revenue			2020		% of Revenue			$ Change			% Change
	(Dollars in thousands)
Equity in Earnings of Affiliates	$	4,007		0.4	%	$	4,959		0.4	%	$	(952	)		(19.2	)%

Equity in earnings of affiliates, presented net of income ~~taxes,~~tax provision, represents the earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates decreased during ~~Nine Months 2017~~First Half 2021 compared to ~~Nine Months 2016 decreased~~First Half 2020 primarily due to ~~nonrecurring~~less favorable ~~contract adjustments received in Nine Months 2016~~performance by GEOAmey.

Financial Condition

Capital Requirements

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~~secure services and 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 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~~

Table of credit of £12 million, or $16.1 million, based on exchange rates as of September 30, 2017, for GEOAmey’s operations. As of September 30, 2017, $3.4 million was outstanding to each of the joint ventures.Contents

We currently have contractual commitments for a number of projects using Company financing. We estimate that the cost of these existing active capital projects will be approximately ~~$243.9~~$39.7 million of which ~~$82.6~~$30.6 million was spent through ~~September~~June 30, ~~2017.~~2021. Weestimate that the remaining capital requirements related to these capital projects will be ~~$161.3~~$9.1 million which will be spent through 2018. Additionally, in connection with the Ravenhall Prison Project, we have a contractual commitment for construction of the facility and have entered into a syndicated facility agreement with National Australia Bank Limited to provide funding for the project up to AUD 791.0 million, or $619.7 million, based on exchange rates as of September 30, 2017.2021.

Liquidity and Capital Resources

Indebtedness

6.50% Exchangeable Senior Notes due 2026

On February 24, 2021, our wholly-owned subsidiary, GEO Corrections Holdings, Inc. (“GEOCH”), completed a private offering of $230 million aggregate principal amount of 6.50% exchangeable senior unsecured notes due 2026 (the “Convertible Notes”), which included the full exercise of the initial purchasers’ over-allotment option to purchase an additional $30 million aggregate principal amount of Convertible Notes. The Convertible Notes will mature on February 23, 2026, unless earlier repurchased or exchanged. The Convertible Notes bear interest at the rate of 6.50% per year plus an additional amount based on the dividends paid by GEO on its common stock, $0.01 par value per share. Interest on the notes is payable semi-annually in arrears on March ~~23, 2017,~~1 and September 1 of each year, beginning on September 1, 2021.

Subject to certain restrictions on share ownership and transfer, holders may exchange the notes at their option prior to the close of business on the business day immediately preceding November 25, 2025, but only under the following circumstances: (1) during the five consecutive business day period after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of our common stock and the exchange rate for the notes on each such trading day; or (2) upon the occurrence of certain specified corporate events. On or after November 25, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the notes, holders may exchange their notes at any time, regardless of the foregoing circumstances. Upon exchange of a note, we ~~executed~~will pay or deliver, as the case may be, cash or a ~~third amended~~combination of cash and ~~restated credit agreement~~shares of our common stock. As of June 30, 2021, conditions had not been met to convert.

Upon conversion, we will pay or deliver, as the case may be, cash or a combination of cash and shares of common stock. The initial conversion rate is 108.4011 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $9.225 per share of common stock). The conversion rate will be subject to adjustment in certain events. If GEO or GEOCH undergoes a fundamental change, holders may require GEOCH to purchase the notes in whole or in part for cash at a fundamental change purchase price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date.

We used the net proceeds from this offering, including the exercise in full of the initial purchasers' over-allotment option to fund the redemption of the then outstanding amount of approximately $194.0 million of our existing 5.875% senior notes due 2022, to re-purchase additional senior notes and we used the remaining net proceeds to pay related transaction fees and expenses, and for general corporate purposes of the Company. As a result of the redemption, deferred loan costs in the amount of approximately $0.7 million were written off to loss on extinguishment of debt during the six months ended June 30, 2021.

The notes were offered in the United States only to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act, and outside of the United States to non-U.S. persons in compliance with Regulation S under the Securities Act. Neither the notes nor any of the shares of the Company’s common stock issuable upon exchange of the notes, if any, have been, or will be, registered under the Securities Act and, unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from the registration requirements under the Securities Act.

Credit Agreement

On June 12, 2019, we entered into Amendment No. 2 to the Third Amended and Restated Credit Agreement (the "Credit Agreement") by and among ~~The~~the refinancing lenders party thereto, the other lenders party thereto, GEO ~~Group, Inc.~~ and ~~GEO Corrections Holdings, Inc., (“Corrections” and, together with GEO, the “Borrowers”), the Australian Borrowers named therein, BNP Paribas, as Administrative Agent,~~GEOCH and the ~~lenders who are, or may from time~~administrative agent. Under the amendment, the maturity date of the revolver was extended to ~~time become,~~May 17, 2024. The borrowing capacity under the amended revolver remains at $900.0 million, and its pricing remains unchanged currently bearing interest at LIBOR plus 2.25%. As a ~~party thereto (the “Credit Agreement”). The Credit Agreement refinances our prior $291.0~~result of the amendment, we incurred a loss on extinguishment of debt of $1.2 million ~~term~~during 2019 related to certain unamortized deferred loan reestablishes our ability to implement at a later date an Australian Dollar Letter of Credit Facility (the “Australian LC Facility”) providing for the issuance of financial letters of credit and performance letters of credit, in each case denominated in Australian Dollars up to AUD275 million, an increase from the prior AUD225 million Australian Dollar letter of credit facility, and certain other modifications to the prior credit agreement. Loancosts. Additionally, loan costs of ~~approximately $7.0~~$4.7 million were incurred and capitalized in connection with the ~~transaction.~~amendment.

~~The~~A syndicate of approximately 65 lenders participate in our Credit Agreement, ~~evidences a credit facility (the “Credit Facility”) consisting~~six of ~~an $800 million term loan (the “Term Loan”) bearing interest at LIBOR plus 2.25% (with a LIBOR floor~~which have indicated that they do not intend to provide new financing to GEO but will honor their existing obligations. Refer to Item 1A - Risk Factors included in Part I of ~~0.75%), and a $900 million revolving credit facility (the “Revolver”) initially bearing interest at LIBOR plus 2.25% (with no LIBOR floor) together with AUD275 million under~~ the ~~Australian LC Facility. As of September 30, 2017, there were no letters of credit issued under~~Annual Report on Form 10-K for the ~~Australian LC Facility. Amounts to be borrowed by GEO under the Credit Agreement are subject to the satisfaction of customary conditions to borrowing.~~year ended December 31, 2020 for further discussion. The ~~Term Loan component is scheduled to mature on March 23, 2024. The revolving credit commitment component is scheduled to mature on May 19, 2021; provided,~~banks that ~~if on October 3, 2019 both the maturity dates of all term loans and incremental term loans~~ have ~~not been extended to a date that is 5~~¹⁄₂ years after March 23, 2017 or a later date, and the senior secured leverage ratio exceeds 2.50 to 1.00, then the termination date will be October 3, 2019. The Credit Agreement also has an accordion feature of $450.0 million, subject to lender demand and prevailing market conditions and satisfying the relevant borrowing conditions.

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 6.25 to 1.00, allow the senior secured leverage ratio to exceed 3.50 to 1.00, or allow the interest coverage ratio to bewithdrawn participation remain contractually committed for approximately three years. Additionally, these six banks represent 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.

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.

All of the obligations under the Credit Agreement are unconditionally guaranteed by certain domestic subsidiaries of GEO and the Credit Agreement and the related guarantees are secured by a perfected first-priority pledge of substantially all25% of our 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 us and each guarantor inoverall borrowing capacity under our ~~domestic subsidiaries.~~

~~The Australian Borrowers are wholly owned foreign subsidiaries of GEO. We have designated each of the Australian Borrowers as restricted subsidiaries under the~~ Credit Agreement. ~~However,~~We are in frequent communication with potential new lenders as well as the ~~Australian Borrowers are not obligated~~credit rating agencies. In March 2021, Moody’s Investors Service downgraded GEO’s issuer rating to ~~pay or perform any obligations under the Credit Agreement other than their own obligations as Australian Borrowers under the Credit Agreement. The Australian Borrowers do not pledge any~~B2 and in May 2021, Standard & Poor’s S&P Global downgraded GEO’s issuer rating to CCC+.

Table of ~~their assets to secure any obligations under the Credit Agreement.~~Contents

~~On August 18, 2016, the Company executed a Letter of Offer by and among GEO and HSBC Bank Australia Limited (the “Letter of Offer”) providing for a bank guarantee line and bank guarantee/standbysub-facility~~ in an aggregate amount of AUD100 million, or $78.3 million, based on exchange rates in effect as of September 30, 2017 (collectively, the “Bank Guarantee Facility”). The Bank Guarantee Facility allows GEO to provide letters of credit to assure performance of certain obligations of its wholly owned subsidiary relating to its prison project in Ravenhall, located near Melbourne, Australia. The Bank Guarantee Facility is unsecured. The issuance of letters of credit under the Bank Guarantee Facility is subject to the satisfaction of the conditions precedent specified in the Letter of Offer. Letters of credit issued under the bank guarantee lines are due on demand and letters of credit issued under the bank guarantee/standby~~sub-facility~~ cannot have a duration exceeding twelve months. The Bank Guarantee Facility may be terminated by HSBC Bank Australia Limited on 90 days written notice. As of September 30, 2017, there was AUD100 million, or $78.3 million based on exchange rates at September 30, 2017, in letters of credit issued under the Bank Guarantee Facility.

As of ~~September~~June 30, ~~2017,~~2021, we had ~~$796.0~~approximately $766.0 million in aggregate borrowings outstanding ~~net of discount,~~ under ~~the Term Loan and $245.9~~our term loan, approximately $789.4 million in borrowings under ~~the Revolver,~~our revolver, and approximately ~~$65.0~~$68.3 million in letters of credit which left ~~$589.2~~approximately $42.3 million in additional borrowing capacity under the Revolver. The weighted average interest rate on outstanding borrowings under the Credit Agreement as of June 30, 2021 was 2.54%.

On April 30, 2021 and May 4, 2021, we elected to draw down $20 million and $150 million, respectively in borrowings under the revolver component of our credit facility as a conservative precautionary step to preserve liquidity, maintain financial flexibility, and obtain additional funds for general corporate purposes.

Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q for further discussion.

Australia - Ravenhall

In connection with a design and build project agreement with the State of Victoria, in September 2014, we entered into a syndicated facility agreement (the "Construction Facility") to provide debt financing for construction of the project. The Construction Facility provided for non-recourse funding up to AUD 791.0 million, or approximately $593.9 million, based on exchange rates as of June 30, 2021. In accordance with the terms of the contract, upon completion and commercial acceptance of the project in late 2017, the State of Victoria made a lump sum payment of AUD310 million, or approximately $252.7 million, based on exchange rates as of June 30, 2021. The term of the Construction Facility was through September 2020 and bore interest at a variable rate quoted by certain Australian banks plus 200 basis points. On ~~April 18, 2016,~~May 22, 2019, we completed an offering of ~~$350~~AUD 461.6 million, or $346.6 million, based on exchange rates as of June 30, 2021, aggregate principal amount of ~~6.00% Senior~~the Non-Recourse Notes. The amortizing Non-Recourse Notes ~~due 2026.~~were issued by Ravenhall Finance Co Pty Limited in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The ~~notes will mature on April 15, 2026 and have~~Non-Recourse Notes were issued with a coupon ~~rate~~ and yield to maturity of ~~6.00%. Interest is payable semi-annually cash in arrears on April 15 and October 15~~4.23% with a maturity date of ~~each year.~~March 31, 2042. The net proceeds from this offering were used to ~~fund~~refinance the ~~tender offer~~outstanding Construction Facility and ~~the redemption of all of our 6.625% Senior Notes due 2021,~~ to pay all related fees, costs and expenses associated with the transaction. As a result of the transaction, we incurred a $4.5 million loss on extinguishment of debt related to swap termination fees and ~~for general corporate purposes including repaying borrowings under our Revolver.~~unamortized deferred costs associated with the Construction Facility. Additionally, loan costs of approximately $7.5 million were incurred and capitalized in connection with the offering.

~~On September 25, 2014,~~Other

In August 2020, we ~~completed an offering of $250.0 million~~entered into two identical promissory notes in the aggregate ~~principal~~ amount of ~~5.875% Senior Notes due 2024.~~$44.3 million which are secured by loan agreements and mortgage and security agreements on certain real property and improvements. The terms of the promissory notes ~~will mature on October 15, 2024~~are through September 1, 2034 and bear interest at LIBOR plus 200 basis points and are payable in monthly installments plus interest. We have ~~a coupon~~entered into interest rate ~~and yield~~swap agreements to ~~maturity~~fix the interest rate to 4.22%. Included in the balance at June 30, 2021 is $0.7 million of ~~5.875%. Interest is payable semi-annually~~deferred loan costs incurred in ~~cash in arrears on April 15 and October 15, which commenced on April 15, 2015. The proceeds received from~~ the ~~5.875% Senior Notes due 2024 were used to pay down outstanding borrowings under our Revolver and pay related fees, costs and expenses.~~transaction. Refer to Note 9 - Derivative Financial Instruments and Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q ~~for further discussion.~~

In connection with a new design and build prison project agreement in Ravenhall, 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. The Construction Facility provides for~~non-recourse~~ funding up to AUD 791 million, or approximately $620 million, based on exchange rates as of September 30, 2017. Construction draws are 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 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 approximately $243 million, based on exchange rates as of September 30, 2017, 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, 2017, approximately $550 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 9 - Derivative Financial Instruments 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.~~

On October 3, 2013, we completed an offering of $250.0 million aggregate principal amount of 5.875% Senior Notes due 2022. The 5.875% Senior Notes due 2022 will mature on January 15, 2022 and have a coupon rate and yield to maturity of 5.875%. Interest is payable semi-annually on January 15 and July 15 each year, which commenced on January 15, 2014. The proceeds received from the 5.875% Senior Notes due 2022 were used, together with cash on hand, to fund the repurchase, redemption or other discharge of our 7.75% senior notes due 2017 and to pay related transaction fees and expenses.

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 to repay the prior revolver credit draws outstanding under the prior senior credit facility. Refer to Note 10 - Debt 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.

In addition to the debt outstanding under the Credit Facility, the 6.50% Convertible Notes, the 6.00% Senior Notes, the 5.125% Senior Notes, ~~the 5.875~~^.~~% Senior Notes due 2022~~ and the 5.875% Senior Notes due 2024, ~~discussed above,~~ we also have significant debt obligations which, although these obligations arenon-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 Form10-K for the year ended December 31, ~~2016.~~2020. 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. Thesenon-recourse obligations, commitments and contingencies and guarantees are further discussed in our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2020.

Debt Repurchases

On August 16, 2019, our Board authorized us to repurchase and/or retire a portion of our 6.00% Senior Notes due 2026, the 5.875% Senior Notes due 2024, the 5.125% Senior Notes due 2023 and the 5.875% Senior Notes due 2022 (collectively the "GEO Senior Notes") and our term loan under our Amended Credit Agreement through cash purchases, in open market purchases, privately negotiated transactions, or otherwise, up to an aggregate maximum of $100.0 million, subject to certain limitations through December 31, 2020. During the Second Quarter 2021, the 5.875% Senior Notes due 2022 were redeemed in connection with the offering of the Convertible Notes discussed above. On February 11, 2021, our Board authorized a new repurchase program for repurchases/retirements of part of the above referenced GEO Senior Notes and term loan, subject to certain limitations up to an aggregate maximum of $100.0 million through December 31, 2022.

During the six months ended June 30, 2021, we repurchased $22.5 million in aggregate principal amount of our 5.125% Senior Notes due 2023 at a weighted average price of 90.68% for a total cost of $20.4 million. Additionally, we repurchased $17.2 million in aggregate principal amount of our 5.875% Senior Notes due 2024 at a weighted average price of 79.51% for a total cost of $13.7 million. As a result of these repurchases, we recognized a net gain on extinguishment of debt of $5.6 million.

Table of Contents

During the six months ended June 30, 2020, we repurchased $5.5 million in aggregate principal amount of our 5.125% Senior Notes due 2023 at a weighted average price of 70.68% for a total cost of $3.9 million. As a result of these repurchases, we recognized a net gain on extinguishment of debt of $1.6 million.

Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our indebtedness.

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 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. Additionally, the magnitude, severity and duration of the COVID-19 pandemic may negatively impact the availability of opportunities for future business and/or asset acquisitions and market conditions generally. 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 5.125% Senior Notes, the indenture governing the 5.875% Senior Notes due ~~2022, the indenture governing the 5.875% Senior Notes due~~ 2024, the indenture governing the 6.00% Senior Notes, ~~due 2026~~the indenture governing our Convertible 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~~effect 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 were in compliance with our debt covenants as of June 30, 2021 and we expect to continue 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.

~~Common Stock Offering~~

On March 7, 2017, we entered into an underwriting agreement related to the issuance and sale of 9,000,000 shares of our common stock, par value $.01 per share. The offering price to the public was $27.80 per share and the underwriters agreed to purchase the shares from us pursuant to the underwriting agreement at a price of $26.70 per share. In addition, under the terms of the underwriting agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 1,350,000 shares of common stock. On March 8, 2017, the underwriters exercised in full their option to purchase the additional 1,350,000 shares of common stock. On March 13, 2017, we announced that we had completed the sale of 10,350,000 shares of common stock with its previously announced underwritten public offering. We received gross proceeds (before underwriting discounts and estimated offering expenses) of approximately $288.1 million from the offering, including approximately $37.6 million in connection with the sale of the additional shares. The 10,350,000 shares of common stock were issued under our previously effective shelf registration filed with the Securities and Exchange Commission as discussed below. The net proceeds of this offering were used to repay amounts outstanding under the revolver portion of our senior credit facility and for general corporate purposes.

~~Prospectus Supplement~~

~~In September 2014, we filed with the Securities and Exchange Commission an automatic shelf registration statement on FormS-3.~~ On November 10, 2014, in connection with the shelf registration, we filed with the Securities and Exchange Commission a prospectus supplement related to the offer and sale from time to time of our common stock at an aggregate offering price of up to $150.0 million through sales agents. Sales of shares of our common stock under the prospectus supplement and the equity distribution agreements entered into with the sales agents, if any, could have been made in negotiated transactions or transactions that were deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933. There were no shares of common stock sold under this prospectus supplement during the nine months ended September 30, 2017 or during the year ended December 31, 2016. We sold 10,350,000 shares of common stock in a public offering during the nine months ended September 30, 2017 pursuant to this automatic shelf registration statement under the preliminary prospectus supplement filed on March 7, 2017 and the final prospectus supplement filed on March 9, 2017. On September 12, 2017, the shelf registration expired. On October 20, 2017, we filed with the SEC a new automatic shelf registration statement on Form~~S-3.~~ ~~Under this shelf registration, we~~ may from time to time ~~sell~~seek to purchase or retire our outstanding senior notes through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, ~~combination~~will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Quarterly Dividends

On April 7, 2021, we announced that our Board had immediately suspended our quarterly dividend payments with the goal of ~~securities described~~maximizing the use of cash flows to repay debt, deleverage and internally fund growth. While we currently intend to maintain our corporate tax structure as a REIT, our Board is evaluating our corporate tax structure as a REIT. Our Board’s evaluation of our current corporate tax structure and our REIT status is expected to take into consideration, among other factors, potential changes to our financial operating performance, as well as, potential changes to the Code applicable to U.S. corporations and REITs. As a part of this evaluation, we have engaged financial advisors and legal advisors to assist in evaluating various capital structure alternatives. Our Board expects to conclude its evaluation in the ~~prospectus~~fourth quarter of 2021, and should our Board determine to maintain our REIT status, an additional dividend payment may be required before year-end in ~~one or more offerings. Each time that we sell securities, we will provide a prospectus supplement that will contain specific information about~~order to meet the ~~terms of that offering~~minimum REIT distribution requirements under the Code.

Guarantor Financial Information

GEO’s 6.50% Convertible Notes, 6.00% Senior Notes, 5.125% Senior Notes and the ~~securities being offered.~~5.875% Senior Notes due 2024 are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of our wholly-owned domestic subsidiaries (the “Subsidiary Guarantors”).

Summarized financial information is provided for The GEO Group, Inc. (“Parent”) and the Subsidiary Guarantors on a combined basis in accordance with SEC Regulation S-X Rules 3-10 and 13-01. The accounting policies used in the preparation of this summarized financial information are consistent with those elsewhere in the condensed consolidated financial statements of the Company, except that intercompany transactions and balances of the Parent and Subsidiary Guarantor entities with non-guarantor entities have not been eliminated. Intercompany transactions between the Parent and Subsidiary Guarantors have been eliminated and equity in earnings from and investments in non-guarantor subsidiaries have not been presented.

Summarized statement of operations (in thousands):

	Six Months Ended June 30, 2021
Net operating revenues	$	1,027,471
Income from operations		130,664
Net income		73,392
Net income attributable to The GEO Group, Inc.		73,392

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Summarized balance sheets (in thousands):

	June 30, 2021		December 31, 2020
Current assets	$	615,592	$	607,044
Noncurrent assets (a)		3,229,842		3,268,260
Current liabilities		322,761		350,041
Noncurrent liabilities (b)		2,805,383		2,737,673

(a)	Includes amounts due from non-guarantor subsidiaries of $24.4 million and $26.7 million as of June 30, 2021 and December 31, 2020, respectively.

(b)	Includes amounts due to non-guarantor subsidiaries of $15.0 million and $17.4 million as of June 30, 2021 and December 31, 2020, respectively.

Capital Requirements

As a REIT, we are subject to a number of organizational and operational requirements, including a requirement that we annuallydistribute 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 and will be based upon various factors. As discussed above, on April 7, 2021, we announced that our Board had immediately suspended our quarterly dividend payments with the goal of maximizing the use of cash flows to repay debt, deleverage and internally fund growth. While we currently intend to maintain our corporate tax structure as a REIT, our Board is evaluating our corporate tax structure as a REIT.

We plan to fund all of our capital needs, including distributions of our REIT taxable income ~~in order~~necessary to maintain our REIT qualification should our Board determine to maintain our REIT status., and capital expenditures, from cash on hand, cash from operations, borrowings under our Credit Facility and any other financings which our management and Board, in their discretion, may consummate. Currently, our primary source of liquidity to meet these requirements is cash flow from operations and borrowings under ~~the~~our $900.0 million Revolver. Our management believes that our financial resources and sources of liquidity will allow us to manage the anticipated impact of COVID-19 on our business, financial condition, results of operations and cash flows. For the full-year 2021, we have reduced our planned capital spending by deferring capital expenditure projects where possible and closely managing our working capital. We have completed our annual budgeting process and have identified cost savings at the corporate and facility level. Additionally, we have identified company-owned facilities that can be sold to government agencies or third-party individuals. Our management believes that cash on hand, cash flows from operations and availability under our Credit Facility will be adequate to support our capital requirements for ~~2017~~2021 as disclosed under “Capital Requirements” above.

~~Executive Retirement Agreement~~

~~We have anon-qualified~~ ~~deferred compensation agreement with our Chief Executive Officer (“CEO”).~~ The challenges posed by COVID-19, as well as 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~~political environment, generally and ~~was eligible to receive the payment upon retirement. If our CEO had retired as of September 30, 2017, we would have had to pay him approximately $8.0 million. Based~~ on our ~~current capitalization,~~business are continuing to evolve. Consequently, we ~~do not believe that making~~will continue to evaluate our financial position in light of future developments, particularly those relating to the Executive Order and COVID-19.

Automatic Shelf Registration on Form S-3

Refer to Note 6 - Shareholders' Equity of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~payment would materially adversely impact our liquidity.~~Quarterly Report on Form 10-Q for further information.

Off-Balance Sheet Arrangements

Except as discussed ~~above, and~~ in the notes to our Unaudited Consolidated Financial Statements included in Part I, Item 1 of this ~~quarterly report~~Quarterly Report on Form10-Q, we do not have anyoff-balance sheet arrangements.

Cash Flow

Cash, cash equivalents and restricted cash and cash equivalents as of ~~September~~June 30, ~~2017~~2021 was ~~$51.5~~$517.1 million, compared to ~~$68.0~~$106.7 million as of ~~December 31, 2016.~~June 30, 2020.

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Operating Activities

Cash provided by operating activities amounted to ~~$57.8~~$205.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 versus cash ~~used in~~provided by operating activities of ~~$11.8~~$256.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. Cash provided by operating activities during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was positively impacted by net income attributable to GEO,non-cash expenses such as depreciation and amortization, amortization of debt issuance costs, discount and/or premium and other non-cash interest and stock-based compensation expense. Equity in earnings of affiliates, net of tax, gain on extinguishment of debt and gain on disposition of real estate negatively impacted cash. Changes in accounts receivable, prepaid expenses and other assets decreased in total by ~~$5.5~~$53.0 million, representing a positive impact on cash. The decrease was primarily driven by the favorable timing of billings and collections. Changes in accounts payable, accrued expenses and other liabilities decreased by ~~$18.3~~$15.1 million which negatively impacted cash. The decrease was primarily driven by the timing of payments.

Additionally, cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was ~~negatively~~positively impacted by ~~an increase~~a decrease in changes in contract receivable ~~of $163.1 million. This increase relates to costs incurred and estimated earnings in excess of billings~~ related to ~~the prison project~~our correctional facility in Ravenhall, ~~Australia. The contract receivable is expected to grow as construction services are performed~~Australia of $3.2 million which was a result of the timing of interest accruals and ~~will continue to have a negative impact on cash from operating activities until the balance is ultimately settled. In accordance with~~payments received towards the contract ~~the project will not be billed out until completion and commercial acceptance of the facility.~~receivable.

Cash ~~used in operating activities amounted to $11.8 million for the nine months ended September 30, 2016. Cash used in~~provided by operating activities during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2020 was positively impacted by net income attributable to GEO,non-cash expenses such as depreciation and amortization, amortization of debt issuance costs, discount and/or premium and other non-cash interest and stock-based compensation expense. Equity in earnings of affiliates, net of tax, negatively impacted cash. Changes in accounts receivable, prepaid expenses and other assets ~~increased~~decreased in total by ~~$34.0~~$68.8 million, representing a ~~negative~~positive impact on cash. The ~~increase~~decrease was primarily driven by ~~new facility activations as well as~~ the favorable timing of billings and collections. Changes in accounts payable, accrued expenses and other liabilities increased by ~~$8.2~~$38.0 million which positively impacted cash. The increase was primarily driven by ~~new facility activations as well as~~ the timing of payments.

Additionally, cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2020 was ~~negatively~~positively impacted by ~~an increase~~a decrease in changes in contract receivable ~~of $205.1 million. This increase relates to costs incurred and estimated earnings in excess of billings~~ related to ~~the prison project~~our correctional facility in Ravenhall, ~~Australia. The contract receivable is expected to grow as construction services are performed~~Australia of $2.5 million which was a result of the timing of interest accruals and ~~will continue to have a negative impact on cash from operating activities until the balance is ultimately settled. In accordance with~~payments received towards the contract ~~the project will not be billed out until completion and commercial acceptance of the facility.~~

receivable.

Investing Activities

Cash used in investing activities of ~~$461.6~~$32.3 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was primarily the result of capital expenditures of ~~$104.1~~$44.3 million ~~and our acquisition~~partially offset by proceeds from dispositions of ~~CEC, net~~real estate of ~~cash acquired, of $353.6~~$13.2 million. Cash used in investing activities of ~~$160.9~~$49.2 million during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2020 was primarily the result of capital expenditures of ~~$68.0 million and changes in restricted cash and investments of $97.7~~$53.5 million.

Financing Activities

Cash ~~provided by~~used in financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2017 amounted to $387.0~~2021 was approximately $32.5 million compared to cash ~~provided by~~used in financing activities of ~~$142.1~~$167.4 million during the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. Cash ~~provided by~~used in financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was primarily the result of ~~proceeds from long-term debt of $1,324.9 million which included proceeds received from the Company’s Term Loan which was modified on March 23, 2017. Additionally, we had proceeds fromnon-recourse~~ ~~debt of $123.8 million related to construction draws for our prison project in Ravenhall, Australia. These increases were partially offset by a decrease for~~ dividends paid of ~~$169.2~~$30.5 million, payments on long-term debt of ~~$1,093.1~~$356.8 million, payments on non-recourse debt of $3.8 million and payments on~~non-recourse~~of debt issuance costs of $9.6 million. These decreases were partially offset by proceeds from long-term debt of ~~$68.9~~$435.0 million. Cash ~~provided by~~used in financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2016 amounted to $142.1 million. Cash provided by financing activities during the nine months ended September 30, 2016~~2020 was primarily the result of dividends paid of $116.2 million, payments on long-term debt of $262.4 million, payments on non-recourse debt of $2.9 million and repurchases of common stock of $9.0 million. These decreases were partially offset by proceeds from long-term debt of ~~$813.1 million which included the issuance of our 6.00% Senior Notes. Additionally, we had proceeds fromnon-recourse~~ debt of $273.1 million related to construction draws for our prison project in Ravenhall, Australia. These increases were partially offset by a decrease for dividends paid of $146.0 million and payments on long-term debt of $775.3 million which included the redemption of our 6.625% Senior Notes due 2021.$225.6 million.

Non-GAAP Measures

Funds from Operations ~~(“FFO”~~("FFO") is a widely accepted supplementalnon-GAAP measure utilized to evaluate the operating performance of real estate investment trusts. 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, as supplementalnon-GAAP financial measures of real estate investment ~~trusts’~~trusts' operating ~~performances.~~performance.

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 ~~loss~~Covid-19 expenses, pre-tax, gain on extinguishment of debt,~~start-up~~ pre-tax, one-time employee restructuring expenses, ~~mergers and acquisitions (“M&A”) related~~pre-tax, start-up expenses, ~~(which include certain transition related expenses)~~pre-tax, close-out expenses, pre-tax and the tax effect of ~~those adjustments.~~adjustments to FFO.

AFFO is defined as Normalized FFO adjusted by addingnon-cash expenses such asnon-real estate related depreciation and amortization, ~~stock based~~stock-based compensation expense, the amortization of debt issuance costs, discount and/or premium and othernon-cash interest, and by subtracting recurring consolidated maintenance capital ~~expenditures.~~expenditures and other non-cash revenue and expenses.

Because of the unique design, structure and use of our ~~correctional~~secure facilities, processing centers and reentry centers, we believe that assessing the performance of our ~~correctional~~secure facilities, processing centers and reentry centers 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.

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Our assessment of our operations is focused on long-term sustainability. The adjustments we make to derive thenon-GAAP measures of Normalized FFO and AFFO exclude items which may cause short-term fluctuations in net income ~~from continuing operations~~attributable to GEO 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 asnon-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 net income ~~from continuing operations.~~ attributable to GEO.

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 externalcomparisons 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~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 is as follows (in thousands):

													Three Months Ended						Six Months Ended
	Three Months Ended						Nine Months Ended						June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Funds From Operations
Net income attributable to The GEO Group, Inc.	$	38,489		$	43,720		$	109,884		$	99,279		$	41,959		$	36,720		$	92,504		$	61,901
Add (Subtract):
Real estate related depreciation and amortization		16,782			15,334			48,718			45,697			18,846			18,384			37,818			36,780
Gain on sale of real estate assets *		—			—			(261	)		—

Loss (gain) on real estate assets														2,950			1,304			(10,379	)		880
NAREIT Defined FFO	$	55,271		$	59,054		$	158,341		$	144,976		$	63,755		$	56,408		$	119,943		$	99,561
Loss on extinguishment of debt		—			—			—			15,885

Start-up expenses		—			—			—			1,939

M&A related expenses		4,974			—			17,930			—

Tax effect of adjustments to Funds From Operations **		(1,430	)		—			(3,953	)		(749	)

Add (Subtract):
Gain on extinguishment of debt, pre-tax														(1,655	)		—			(4,694	)		(1,563	)
Start-up expenses, pre-tax														—			553			—			2,506
One-time employee restructuring expenses, pre-tax														7,459			—			7,459			—
Covid-19 expenses, pre-tax														—			3,877			—			4,769
Close-out expenses, pre-tax														—			2,284			—			4,220
Tax effect of adjustments to Funds From Operations *														105			(1,599	)		13			(762	)
Normalized Funds from Operations	$	58,815		$	59,054		$	172,318		$	162,051		$	69,664		$	61,523		$	122,721		$	108,731

Add (Subtract):
Non-real estate related depreciation and amortization		14,867			13,449			43,746			40,189			14,460			15,050			29,605			29,981
Consolidated maintenance capital expenditures		(5,822	)		(7,526	)		(17,179	)		(18,720	)		(4,203	)		(4,139	)		(8,142	)		(11,166	)
Stock-based compensation expense		4,859			3,186			14,852			9,675			4,023			4,706			11,426			14,474
Other non-cash revenue & expenses														(1,102	)		—			(2,204	)		—
Amortization of debt issuance costs, discount and/or premium and othernon-cash interest		4,246			3,303			11,922			8,330			1,903			1,708			3,586			3,378

Adjusted Funds from Operations	$	76,965		$	71,466		$	225,659		$	201,525		$	84,745		$	78,848		$	156,992		$	145,398

*	~~No tax impact~~

**	Tax effect of adjustments relate to loss (gain) on real estate assets, gain on extinguishment of debt, start-up expenses, Covid-19 expenses, severance expenses and ~~M&A related expenses (including transition related expenses)~~close-out expenses.

Outlook

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 statements. Please refer to “Part I - Item 1A. Risk Factors” and the ~~“Forward~~"Forward Looking Statements - Safe ~~Harbor”~~Harbor" sections in our Annual Report on Form10-K for the fiscal year ended December 31, ~~2016,~~2020, as well as the ~~“Forward-Looking~~"Part II – Item 1A. Risk Factors" and the "Forward-Looking Statements - Safe ~~Harbor”~~Harbor" section and other disclosures contained in the Form 10-Q for the quarter ended March 31, 2021 and this Form10-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 statements.

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Executive Order

On January 26, 2021, President Biden signed an Executive Order directing the United States Attorney General not to renew DOJ contracts with privately operated criminal detention facilities, as consistent with applicable law. Two agencies of the DOJ, the BOP and USMS, utilize our services. The BOP houses inmates who have been convicted of federal crimes, and the USMS is generally responsible for detainees who are awaiting trial or sentencing in U.S. federal courts. Our contracts with the BOP for our company-owned 1,940-bed Great Plains Correctional Facility, our company-owned 1,732-bed Big Spring Correctional Facility, our company-owned 1,800-bed Flightline Correctional Facility, and our company-owned 1,800-bed North Lake Correctional Facility have renewal option periods that expire on May 31, 2021, November 30, 2021, November 30, 2021, and September 30, 2022, respectively. Additionally, the contracts with the BOP for the county owned and managed 1,800-bed Reeves County Detention Center I & II and the 1,376-bed Reeves County Detention Center III have renewal option periods that expire September 30, 2022 and June 30, 2022, respectively. We have a management agreement with Reeves County, Texas for the management oversight of these two county-owned facilities. The Great Plains, Big Spring, Flightline, North Lake Correctional Facilities, Reeves County Detention Center I & II and Reeves County Detention Center III generated approximately $145 million in revenues for GEO during the year ended December 31, 2020. The BOP has experienced a decline in federal prison populations over the last several years, a trend that has more recently been accelerated by the COVID-19 global pandemic. As a result of the Executive Order and the decline in federal prison populations, our above-described contracts with the BOP may not be renewed over the coming years. On March 5, 2021, we were notified by the BOP that it had decided to not exercise its contract renewal option for the company-owned, 1,940-bed Great Plains Correctional Facility in Oklahoma, when the contract base period expired on May 31, 2021. On March 25, 2021, we were notified that the BOP had decided to terminate its contract with the county-owned and managed Reeves County Detention Center I & II effective May 10, 2021. For the six months ended June 30, 2021, our secure services contracts with the BOP accounted for approximately 10% of our total revenues.

The Executive Order only applies to agencies that are part of the DOJ, which includes the BOP and USMS. ICE facilities are not covered by the Executive Order as ICE is an agency of the Department of Homeland Security, not the DOJ. However, it is possible that the federal government could choose to take similar action on ICE facilities in the future. For the six months ended June 30, 2021, contracts for ICE Processing Centers, not including the alternatives to detention contract under ISAP, accounted for approximately 24% of our total revenues.

Coronavirus Disease (COVID-19) Pandemic

In December 2019, a novel strain of coronavirus, now known as COVID-19 (“COVID-19”), was reported in Wuhan, China and has since extensively impacted the global health and economic environment. In January 2020, the World Health Organization (“WHO”) declared it a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

Health and Safety

From the beginning of the global COVID-19 pandemic, our corporate, regional, and field staff have taken steps to mitigate the risks of the novel coronavirus and have worked with our government partners to implement best practices consistent with the guidance issued by the Centers for Disease Control and Prevention (“CDC”). Ensuring the health and safety of all those entrusted to our care and of our employees has always been our number one priority. GEO’s COVID-19 mitigation initiatives have included:

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Guidance

•	We issued guidance to all our facilities, consistent with the guidance issued for correctional and detention facilities by the CDC.

Testing

•	We increased testing capabilities at our secure services facilities and entered into contracts with multiple commercial labs to provide adequate testing supplies and services.

•	We invested approximately $2 million to acquire 45 Abbott Rapid COVID-19 ID NOW devices and testing kits capable of diagnosing not only COVID-19, but Influenza and Strep Throat.

•	By the end of June of 2021, we had administered more than 130,000 COVID-19 tests to those in our care at our secure services facilities.

Bi-Polar Ionization

•	We invested $3.7 million to install Bi-Polar Ionization Air Purification Systems at select secure services facilities to reduce the spread of airborne bacteria and viruses.

•

Bi-Polar Ionization Air Purification Systems are specially designed electronic devices that create bi-polar - negative and positive - ions that can effectively break down a wide variety of harmful bacterial and viral contaminations into a less complex and safe form by attacking the DNA of bacteria and viruses.

Facemasks and Personal Hygiene Products

•	We have provided continuing access to facemasks to all inmates and detainees, with a minimum of three facemasks per week or more often upon request.

•	We increased the frequency of distribution of personal hygiene products, including soap, shampoo and body wash, and tissue paper, and we are ensuring the daily availability of bars of soap or soap dispensers at each sink for hand washing in all of our facilities.

Social Distancing

•	We have implemented social distancing pursuant to directives from our government agency partners.

•	We have communicated social distancing obligations and requirements via meetings, memos, and postings.

•	We deployed floor markers throughout our facilities to inform and encourage social distancing.

•	We have modified inmate/detainee movements to accommodate social distancing.

Engineering Controls

•	We temporarily suspended onsite social visitation

•	We established requirements for staff to complete a medical questionnaire and pass a daily temperature check.

•	We modified intake procedures to screen new inmates/detainees.

•	We established isolation and quarantine procedures for COVID-19 positive and symptomatic cases, consistent with CDC guidelines.

Administrative/Work Practice Controls

•	We posted reminders regarding coughing and sneezing etiquette, the importance of frequent handwashing, and the use of facemasks.

•	We increased cleaning and disinfection of facilities, including high-touch areas (e.g., doorknobs/handles, light switches, handheld radios), housing unit dayrooms, dining areas, and other areas where inmates/detainees assemble.

•	We advised our employees to remain home if they exhibit flu-like symptoms, and we have exercised flexible paid leave and Paid Time Off policies to allow for employees to remain home if they exhibit flu-like symptoms or to care for a family member.

•	We enacted quarantine and testing policies for any employees who may have come into contact with an individual who has tested positive for COVID-19.

Vaccination

•

We are working closely with our government partners and State and Local Health Departments to coordinate vaccination efforts for staff, inmates, detainees, and residents at our secure facilities and reentry centers and programs across the country and the coordination of these vaccination efforts is in alignment with recommendations from the CDC’s Advisory Committee on Immunization Practices (ACIP), as well as criteria established through the Food and Drug Administration approval process.

•	The timing of vaccine distribution to staff, inmates, detainees, and residents is presently being directed by the Local and State Health Departments in the jurisdictions in which we operate through the guidance and prioritization recommendations offered by the CDC and ACIP.

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•	As of June of 2021, GEO has worked with our government agency partners and State and Local Health Departments to administer approximately 25,000 doses of the vaccine to inmates, detainees, and residents in our facilities.

•	Our staff are not required, nor mandated, to receive the vaccine but will be offered the vaccine when made available to them by their respective Local and/or State Health Departments.

•	We have also advised our staff that if they have any questions regarding vaccination, they should direct them to their health care provider and/or their respective Local/State Health Department.

Along with implementing these measures, GEO is continuing to coordinate closely with our government agency partners and local health agencies to ensure the health and safety of all those in our care and our employees. We are grateful for our frontline employees, who are making sacrifices daily to provide care for all those in our facilities, during this unprecedented global pandemic. Information on the steps we have taken to address and mitigate the risks of COVID-19 can be found at www.geogroup.com/COVID19. The information on or accessible through our website is not incorporated by reference in this Quarterly Report on Form 10-Q.

Economic Impact

The COVID-19 pandemic and related government-imposed mandatory closures, the efficacy and distribution of COVID-19 vaccines, shelter in-place restrictions and social distancing protocols and increased expenditures on engineering controls, personal protective equipment, diagnostic testing, medical expenses, temperature scanners, protective plexiglass barriers and increased sanitation have had, and will continue to ~~be encouraged~~have, a severe impact on global economic conditions and the environment in which we operate. Starting in late March and early April 2020, we began to observe negative impacts from the pandemic on our performance in our secure services business, specifically with our ICE Processing Centers and U.S. Marshals Facilities, as a result of a decrease in court sentencing at the federal level and reduced operational capacity to promote social distancing protocols which have continued into 2021. The federal government has also put in place Title 42 public health restrictions at the Southwest border, which result in the immediate removal of single adults apprehended by Border Patrol. This reduced operational capacity and the Title 42 public health restrictions may result in reduced reliance by ICE on GEO for detention beds and/or ICE processing centers. Additionally, our reentry services business conducted through our GEO Care business segment has also been negatively impacted, specifically our residential reentry centers and non-residential day reporting programs were impacted by declines in programs due to lower levels of referrals by federal, state and local agencies. We have also experienced the transmission of COVID-19 at most of our facilities continuing in Second Quarter 2021 and to date in the third quarter of 2021. If we are unable to mitigate the transmission of COVID-19 at our facilities, we could experience a material adverse effect on our financial position, results of operations and cash flows. We expect the continued impact of COVID-19 in the form of reduced operational capacity and decline in programs during the first part of 2021 with a slow recovery to more normalized operations by the ~~current~~end of 2021. Although we are unable to predict the duration or scope of the COVID-19 pandemic or estimate the extent of the overall future negative financial impact to our operating results, an extended period of depressed economic activity necessitated by actions to combat the disease, and the severity and duration of the related global economic crisis may adversely impact our future financial performance.

Revenue

Due to the uncertainty surrounding the COVID-19 pandemic, we are unable to determine the future landscape of growth ~~opportunities;~~opportunities in the near term; however, any positive trends may, to some extent, be adversely impacted by government budgetary constraints in light of the pandemic or any changes to ~~the government’s~~a government's willingness to maintain or grow public-private partnerships in the future. While state finances overall ~~are~~were stable prior to the COVID-19 pandemic, future budgetary pressures may cause state ~~correctional~~ agencies to 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.~~operators or the decision to not re-bid a contract after expiration of the contract term. 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,~~Any positive trends in the industry may be offset by several factors, including budgetary constraints, contract modifications, contract terminations, contractnon-renewals, contract re-bids and/or the decision to not re-bid a contract~~re-bids~~ after expiration of the contract term and the impact of any other potential changes to the willingness or ability to maintain or grow public-private partnerships on the part of other government agencies. We believe we have a strong relationship with our government agency partners and we believe that we operate facilities that maximize security, safety and efficiency while offering our suite of GEO Continuum of Care services and resources.

~~Although~~Prior to the Executive Order, we have historically had a relatively high contract renewal rate, however, 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 inre-bid situations, we cannot assure that we will prevail in any such future situations.

California enacted legislation that became effective on January 1, 2020 aimed at phasing out public-private partnership contracts for the operation of secure correctional facilities and detention facilities within California and facilities outside of the State of California housing State of California inmates. Additionally, we have public-private partnership contracts in place with ICE and the USMS relating to secure services facilities located in California. Our contract for our Central Valley facility was discontinued by the State of California at the end of September 2019, and our three other California secure facility contracts for our Desert View, Golden State, and McFarland Facilities were discontinued during 2020. During the fourth quarter of 2019, we signed two 15-year contracts with ICE for five company-owned facilities in California totaling 4,490 beds, including the Central Valley, Desert View, and Golden State

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facilities and a managed-only contract with the USMS for the government-owned, 512-bed El Centro Service Processing Center in California. Additionally, we and the U.S. Department of Justice have filed separate legal actions challenging the constitutionality of the attempted ban on new federal contracts entered into after the effective date of the California law. Recently the State of Washington approved a similar measure banning the use of public-private partnership contracts for the operation of detention facilities in the state., that GEO is also challenging in federal court. GEO’s contract for the company-owned 1,575-bed Northwest ICE Processing Center in Washington has a renewal option period that expires in 2025. The facility generates approximately $64 million in annualized revenues for GEO. The Delaware County Council has also been exploring how to end the public-private partnership arrangement for GEO’s managed-only contract for the 1,883-bed George W. Hill Correctional Facility located in Thornton, Pennsylvania and transition the operations to the county. The George W. Hill Correctional Facility generates approximately $46 million in annualized revenue for GEO.

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. We are pleased to have been awarded a ten-year contract renewal for the continued delivery of secure transportation under our GEOAmey joint venture in the United Kingdom. Total revenue over the ten-year period is expected to be approximately $760 million. In ~~September 2014,~~New South Wales, Australia, we ~~announced that~~have developed a ~~consortium led by us~~489-bed expansion at the Junee Correctional Centre which was substantially completed during the third quarter of 2020. We have also constructed a 137-bed expansion at the Fulham Correctional Centre in Victoria, Australia. With respect to our Dungavel House Immigration Removal Centre in the United Kingdom, we were unfortunately unsuccessful in the current competitive rebid process and ~~comprised of The GEO Group Australia Pty. Ltd., John Holland Construction and Honeywell signed a~~will transition the management contract ~~with~~in October 2021. In addition, we transitioned the ~~Department of Justice~~Arthur Gorrie Correctional Centre to government operation in the State of ~~Victoria for~~Queensland, Australia at the ~~development and operation~~end of a~~1,300-bed~~ capacity prison in Ravenhall, Australia. The Ravenhall facility is being developed under a public-private partnership financing structure with a capital contribution from us, which was made in January 2017, of approximately AUD 115 million, or $90.1 million, based on exchange rates as of September 30, 2017, and we anticipate returns on investment consistent with our company-owned facilities. The project is scheduled to achieve operational readiness during the fourth quarter of 2017.June 2020.

With respect to our reentry services, electronic monitoring services, and ~~youth~~community-based services business conducted through our GEO Care business segment, we are currently pursuing a number of business development opportunities. ~~Relative~~Related to opportunities for community-based reentry services, we are working with our existing federal, state, and local ~~correctional~~ clients to leverage new opportunities for both residential reentry facilities as well asnon-residential day reporting centers. However, in light of the uncertainty surrounding the COVID-19 pandemic, we may not be successful. We continue to expend resources on informing federal, 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 continue to yield results. We believe we are well positioned to capitalize on any suitable opportunities that become available in this area.

Operating Expenses

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 costs represented ~~54.0%~~60% and 58.2% of our operating expenses during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2021 and 2020, respectively. Additional significant operating expenses include food, utilities and ~~inmate~~ medical costs. During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021 and 2020, operating expenses totaled ~~75.3%~~73.0% and 75.9%, respectively, of our consolidated revenues. ~~Our~~We expect our operating expenses as a percentage of revenues in ~~2017~~2021 will be impacted by the opening of any new or existing idle facilities as a result of the cost of transitioning and/orstart-up operations related to a facility opening. During ~~2017,~~2021, we will incur carrying costs for facilities that are currently vacant. AsAdditionally, we have increased our spending on engineering controls, personal protective equipment, diagnostic testing, medical expenses, temperature scanners, protective plexiglass barriers and increased sanitation as a result of ~~September 30, 2017, our worldwide operations include the management and/or ownership~~COVID-19 and expect to incur several millions of approximately 96,000 beds at 140 correctional and detention facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of community supervision services for more than 185,000 offenders and pretrial defendants, including approximately 100,000 individuals through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

dollars in such costs in 2021.

General and Administrative Expenses

General and administrative expenses consist primarily of corporate management salaries and benefits, professional fees and other administrative expenses. During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021 and 2020, general and administrative expenses totaled ~~8.5%~~9.0% and 8.3%, respectively, of our consolidated revenues. We expect general and administrative expenses as a percentage of revenues in ~~2017~~2021 to remain consistent or decrease as a result of cost savings ~~initiatives. We expect business development costs~~initiatives as well as less travel, marketing and other corporate administrative expenses primarily due to ~~remain consistent or increase slightly as we pursue additional business development opportunities in all~~the impacts of ~~our business lines. We also plan to continue expending resources from time to time on~~ the ~~evaluation of potential acquisition targets.~~COVID-19 pandemic.

Idle Facilities

~~As of September 30, 2017, we~~We are currently marketing approximately ~~5,400~~9,500 vacant beds at ~~five~~seven of our U.S. Secure Services and two of our GEO Care idle facilities to potential customers. The annual net carrying cost of our idle facilities in ~~2017~~2021 is estimated to be ~~$11.9~~$8.0 million, inclusive of revenues earned on certain facilities during the first quarter of 2021 before they became idle, including depreciation expense of ~~$1.5~~$11.7 million. As of ~~September~~June 30, ~~2017,~~2021, these nine facilities had a combined net book value of ~~$137.3~~$225.5 million. We currently do not have any firm commitment or agreement in place to activate ~~these~~the remaining facilities. Historically, some facilities have been idle for multiple years before they received a new contract award. These idle facilities are included in the U.S. ~~Corrections & Detention segment.~~Secure Services and GEO Care segments. The per diem rates that we charge our clients often vary by contract across our portfolio. However, if ~~all of these~~the nine remaining idle facilities were to be activated using our U.S. ~~Corrections & Detention~~Secure Services and GEO Care average per diem ~~rate~~rates in ~~2017~~2021 (calculated as the U.S. ~~Corrections & Detention~~Secure Services and GEO Care revenue divided by the number of U.S. ~~Corrections & Detention~~Secure Services and GEO Care mandays) and based on the average occupancy rate in our ~~U.S. Corrections & Detention~~ facilities through ~~September~~June 30, ~~2017,~~2021, we would expect to receive incremental annualized revenue of approximately ~~$115~~$220 million and an annualized increase in earnings per share of approximately ~~$0.15~~$0.20 to ~~$0.20~~$0.25 per share based on our average ~~U.S. Corrections and Detention~~ operating ~~margin.~~

margins.

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~~ITEM 3.~~

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

We are exposed to market risks related to changes in interest rates with respect to our Credit Facility. Payments under the Credit Facility are indexed to a variable interest rate. Based on borrowings outstanding under the Credit Facility of ~~$1,041.9~~approximately $1,555 million and ~~$65.0~~approximately $68.3 million in outstanding letters of credit, as of ~~September~~June 30, ~~2017,~~2021, for every one percent increase in the average interest rate applicable to the Credit Facility, our total annual interest expense would increase by ~~$10.0~~approximately $16 million.

~~We have entered into certain interest rate swap arrangements for hedging purposes, fixing the interest rates on our Australiannon-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. 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.

Foreign Currency Exchange Rate Risk

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 South African Rand and the British Pound currency exchange rates. Based upon our foreign currency exchange rate exposure ~~at September~~as of June 30, ~~2017,~~2021, every 10 percent change in historical currency rates would have approximately a ~~$3.2~~$10.0 million effect on our financial position and approximately a ~~$1.5~~$1.6 million impact on our results of operations during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2021.

~~ITEM 4.~~

~~CONTROLS AND PROCEDURES.~~

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

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 Rules13a-15(e) and15d-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.

Changes in Internal Control Over Financial Reporting.

Our management is responsible to report any changes in our internal control over financial reporting (as such term is defined in Rules13a-15(f) and15d-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 Rules13a-15(f) and15d-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.

There were no significant changes to our internal control over financial reporting during the six months ended June 30, 2021.

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PART II - OTHER INFORMATION

~~ITEM 1.~~

~~LEGAL PROCEEDINGS.~~

ITEM 1. LEGAL PROCEEDINGS.

The information required herein is incorporated by reference from Note 11 - Commitments ~~Contingencies~~ and ~~Other~~Contingencies in the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form10-Q.

~~ITEM 1A.~~

~~RISK FACTORS.~~

ITEM 1A. RISK FACTORS.

Item 1A of Part I of our Annual Report on Form10-K for the year ended December 31, ~~2016~~2020 (the “2020 Form 10-K”) and Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (the “2021 Q1 Form 10-Q”) includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future prospects. We encourage you to read these risk factors in their entirety.

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

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 (in millions)
April 1, 2021 to April 30, 2021		—	$	—		—	$	—
May 1, 2021 to May 31, 2021		5,054	$	6.20		—	$	—
June 1, 2021 to June 30, 2021		7,329	$	8.80		—	$	—
Total		12,383				—

~~ITEM 2.~~

(1)

~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.~~

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, 2017 - July 31, 2017
—   $ —   —   $ —
August 1, 2017 - August 31, 2017
1,074 $ 27.85 —   $ —
September 1, 2017 - September 30, 2017
—   $ —   —   $ —

Total
1,074 —   $ —

~~(1)~~

~~The Company~~

We withheld ~~these~~12,383 shares through net share settlements to satisfy ~~minimum~~ statutory tax withholding requirements upon vesting of shares of restricted stock held by employees. These purchases were not made as part of a publicly announced plan or program.

~~ITEM 3.~~

~~DEFAULTS UPON SENIOR SECURITIES.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

~~ITEM 4.~~

~~MINE SAFETY DISCLOSURES~~

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

~~ITEM 5.~~

~~OTHER INFORMATION.~~

ITEM 5. OTHER INFORMATION.

Not applicable.

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~~ITEM 6.~~

~~EXHIBITS.~~

~~(A) Exhibits~~

ITEM 6. EXHIBITS.

(A)

Exhibits


3.1	Third Amended and Restated Bylaws of The GEO Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on June 21, 2021).

10.1	Confidential Separation and General Release Agreement, entered into between Blake Davis and The GEO Group, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 21, 2021).
10.2	The GEO Group, Inc. Amended and Restated 2018 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 4, 2021).
10.3	The GEO Group, Inc. Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on May 4, 2021).
10.4	Separation and General Release Agreement, dated as of May 27, 2021, by and between The GEO Group, Inc. and George C. Zoley (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 1, 2021).
10.5	Executive Chairman Employment Agreement, dated as of May 27, 2021, by and between The GEO Group, Inc. and George C. Zoley (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on June 1, 2021).
10.6	Amended and Restated Executive Retirement Agreement, dated as of May 27, 2021, by and between The GEO Group, Inc. and George C. Zoley (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on June 1, 2021).
10.7	Executive Employment Agreement, dated as of May 27, 2021, by and between The GEO Group, Inc. and Jose Gordo (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on June 1, 2021).

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		Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

104		The cover page from the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2021, has been formatted in Inline XBRL (included with the Exhibit 101 attachments).

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SIGNATURES

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.


				THE GEO GROUP, INC.

Date: ~~November 3, 2017~~	August 5, 2021	~~/s/~~	/s/ Brian R. Evans
		Brian R. Evans
		Senior Vice President & Chief Financial Officer
		~~(duly~~ (duly authorized officer and principal financial officer)

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