The GEO Group, Inc. (GEO) 8-K The Geo Group Reports Fourth Quarter 2006 Results and Increases 2007 Guidance by $0.15 Eps

EXHIBIT 99.1

NEWS RELEASE

     One Park Place, Suite 700n 621 Northwest 53^rd Streetn Boca Raton, Florida 33487n www.thegeogroupinc.com

CR-07-09

THE GEO GROUP REPORTS FOURTH QUARTER 2006 RESULTS
AND INCREASES 2007 GUIDANCE BY $0.15 EPS

• 4Q Income from Continuing Operations Increased to $10.5 Million — $0.52 EPS

• 4Q Pro-Forma Income from Continuing Operations Increased to $10.7 Million — $0.53 EPS

• 4Q Revenue Increased to $247.4 Million from $164.9 Million

• Increases Pro Forma 2007 Guidance by $0.15 EPS

Boca Raton, Fla. — February 27, 2007 — The GEO Group (NYSE: GEO)(“GEO”) today reported fourth quarter and full-year 2006 financial results. GEO reported fourth quarter 2006 Income from Continuing Operations of $10.5 million, or $0.52 per share, based on 20.2 million diluted weighted average shares outstanding, compared with a loss of $1.3 million, or $0.09 per share, based on 15.0 million diluted weighted average shares outstanding in the fourth quarter of 2005. GEO reported 2006 Income from Continuing Operations of $30.3 million, or $1.70 per share, based on 17.9 million diluted weighted average shares outstanding, compared with $5.9 million, or $0.39 per share, based on 15.0 million diluted weighted average shares outstanding for 2005.

Fourth quarter 2006 pro forma income from continuing operations increased 197% to $10.7 million, or $0.53 per share from $3.6 million, or $0.24 per share, in the fourth quarter of 2005. Pro forma income from continuing operations for 2006 increased 166% to $32.4 million, or $1.81 per share, from $12.2 million, or $0.81 per share, for 2005. Please see the section of this press release below entitled “Important Information on GEO’s Non-GAAP Financial Measures” for information on how GEO defines Pro Forma Income from Continuing Operations.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said: “We are very pleased with our strong operational and financial performance during 2006. The primary factors driving our improved financial results are the successful acquisition and integration of Correctional Services Corporation in November 2005; stronger results at a number of our federal facilities due to improved contract terms and higher occupancy levels as a result of the U.S. Secure Border Initiative; and new contract wins by our three business units of U.S. Corrections, GEO Care, and International Services.

“We continue to have a strong organic growth pipeline with projects totaling more than 5,400 beds under development representing more than $94 million in expected annual operating revenues. These projects are expected to start between the first quarter of 2007 and the second quarter of 2008. In addition, our successful acquisition of CentraCore Properties Trust allows our company to regain control of 11 important facilities and has positioned us to pursue future potential growth opportunities through the expansion of existing facilities.”

Pro Forma Income from Continuing Operations excludes the items set forth in the table below, which presents a reconciliation of pro forma income from continuing operations to GAAP Income from Continuing Operations for the fourth quarter and year-end 2006.

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NEWS RELEASE

Table 1. Reconciliation of Pro Forma Income from Continuing Operations to GAAP Income from Continuing Operations

(In thousands except per share data)	13 Weeks Ended			13 Weeks Ended			52 Weeks Ended			52 Weeks Ended
	31-Dec-06			1-Jan-06			31-Dec-06			1-Jan-06
Income from Continuing Operations	$	10,537		$	(1,323	)	$	30,308		$	5,879
2006
Start-Up Expenses		926						2,045
Deferred Financing Fees		—						803
International Tax Benefit		(750	)					(750	)
2005
International Tax Benefit					(8,517	)					(8,517	)
Start-Up Expenses					592						592
Michigan Impairment Charge					12,630						12,630
Job Reclassification Expenses					242						242
U.S. Job Creation Tax Benefit					—						(1,704	)
Queens Transition Costs					—						479
Deferred Financing Fees					—						752
Jena, Louisiana Write-Off					—						2,596
Insurance Adjustment					—						(789	)
Pro Forma Income from Continuing Operations	$	10,713		$	3,624		$	32,406		$	12,160
Diluted Earnings Per Share
Income from Continuing Operations	$	0.52		$	(0.09	)	$	1.70		$	0.39
2006
Start-Up Expenses		0.05						0.11
Deferred Financing Fees		—						0.04
International Tax Benefit		(0.04	)					(0.04	)
2005
International Tax Benefit					(0.56	)					(0.56	)
Start-Up Expenses					0.03						0.03
Michigan Impairment Charge					0.85						0.85
Job Reclassification Expenses					0.01						0.01
U.S. Job Creation Tax Benefit					—						(0.11	)
Queens Transition Costs					—						0.03
Deferred Financing Fees					—						0.05
Jena, Louisiana Write-Off					—						0.17
Insurance Adjustment					—						(0.05	)
Diluted Pro Forma Earnings Per Share	$	0.53		$	0.24		$	1.81		$	0.81
Weighted Average Shares Outstanding		20,170			14,978			17,872			15,015

Revenue
GEO reported a 50% increase in fourth quarter 2006 revenue to $247.4 million from $164.9 million in the fourth quarter of 2005. Fourth quarter 2006 revenue includes $37 million in pass-through construction revenues. GEO reported a 40% increase in 2006 revenue to $860.9 million from $612.9 million in 2005. 2006 revenue includes $74 million in pass-through construction revenues. Exclusive of pass-through construction revenues, GEO reported fourth quarter 2006 operating revenues of $210.4 million and year-end 2006 operating revenues of $786.9 million. U.S. Corrections revenue for 2006 increased to $612.8 million from $473.3 million for 2005. International Services revenue for 2006 increased to $103.6 million from $98.8 million for 2005. GEO Care revenue for 2006 increased to $70.4 million from $32.6 million for 2005.

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NEWS RELEASE

Adjusted EBITDA and Adjusted EBITDAR
Fourth quarter 2006 Adjusted EBITDA increased 71% to $25.2 million from $14.7 million in the fourth quarter of 2005. Adjusted EBITDAR for the fourth quarter of 2006 increased 49% to $31.2 million from $20.9 million for the fourth quarter of 2005. Adjusted EBITDA for 2006 increased 86% to $91.2 million from $49.1 million for 2005. Adjusted EBITDAR for 2006 increased 54% to $116.9 million from $75.7 million for 2005. Please see the section of this press release below entitled “Important Information on GEO’s Non-GAAP Financial Measures” for information on how GEO defines Adjusted EBITDA and Adjusted EBITDAR.

The following table presents a reconciliation from Adjusted EBITDA and Adjusted EBITDAR to GAAP Net Income for the fourth quarter and year-end 2006.

Table 2. Reconciliation from Adjusted EBITDA and Adjusted EBITDAR to GAAP Net Income

(In thousands)	13 Weeks Ended		13 Weeks Ended			52 Weeks Ended		52 Weeks Ended
	31-Dec-06		1-Jan-06			31-Dec-06		1-Jan-06
Net Income	$	10,515	$	(807	)	$	30,031	$	7,006
Discontinued Operations		22		(516	)		277		(1,127	)
Interest Expense, Net		3,355		4,641			17,544		13,862
Income Tax Provision		5,363		(13,707	)		16,505		(11,826	)
Depreciation and Amortization		4,467		4,949			22,235		15,876
EBITDA	$	23,722	$	(5,440	)	$	86,592	$	23,791
Adjustments, Pre-tax
2006
Start-Up Expenses		1,494					3,298
Deferred Financing Fees		—					1,295
2005
International Tax Benefit				(2,057	)				(2,057	)
Start-Up Expenses				977					977
Michigan Impairment Charge				20,859					20,859
Job Reclassification Expenses				400					400
Queens Transition Costs				—					798
Deferred Financing Fees				—					1,360
Jena, Louisiana Write-Off				—					4,255
Insurance Adjustment				—					(1,300	)
Adjusted EBITDA	$	25,216	$	14,739		$	91,185	$	49,083
Lease Rental Expense		5,960		6,123			25,700		26,611
Adjusted EBITDAR	$	31,176	$	20,862		$	116,885	$	75,694

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NEWS RELEASE

Adjusted Free Cash Flow
Adjusted Free Cash Flow for the fourth quarter of 2006 increased 106% to $9.9 million from $4.8 million for the fourth quarter of 2005. Adjusted Free Cash Flow for 2006 increased 136% to $47.9 million from $20.3 million for 2005. Please see the section of this press release below entitled “Important Information on GEO’s Non-GAAP Financial Measures” for information on how GEO defines Adjusted Free Cash Flow.

The following table presents a reconciliation from Adjusted Free Cash Flow to GAAP Income from Continuing Operations for the fourth quarter and year-end 2006.

Table 3. Reconciliation of Adjusted Free Cash Flow to GAAP Income from Continuing Operations

(In thousands)	13 Weeks Ended			13 Weeks Ended			52 Weeks Ended			52 Weeks Ended
	31-Dec-06			1-Jan-06			31-Dec-06			1-Jan-06
Income from Continuing Operations	$	10,537		$	(1,323	)	$	30,308		$	5,879
Depreciation and Amortization		4,467			4,949			22,235			15,876
Income Tax Provision		5,363			(13,707	)		16,505			(11,826	)
Income Taxes Paid		(2,199	)		3,068			(11,336	)		(632	)
Stock Based Compensation Included in G&A		424			—			1,341			—
Maintenance Capital Expenditures		(8,049	)		(7,979	)		(10,665	)		(13,564	)
Equity in Earnings of Affiliates, Net of Income Tax		(538	)		(2,280	)		(1,576	)		(2,079	)
Minority Interest		(80	)		(202	)		(125	)		(742	)
Write-off of Deferred Financing Fees		—			—			1,295			1,360
Start-Up Expenses		—			977			—			977
Michigan Impairment Charge		—			20,859			—			20,859
Job Reclassification Expenses		—			400			—			400
Queens Transition Costs		—			—			—			798
Jena, Louisiana Write-Off		—			—			—			4,255
Insurance Adjustment		—			—			—			(1,300	)
Adjusted Free Cash Flow	$	9,925		$	4,762		$	47,982		$	20,261

Important Information on GEO’s Non-GAAP Financial Measures
Pro Forma Income from Continuing Operations, Adjusted EBITDA, Adjusted EBITDAR, and Adjusted Free Cash Flow are non-GAAP financial measures. Pro Forma Income from Continuing Operations is defined as Income from Continuing Operations excluding Start-Up Expenses, Deferred Financing Fees, and the other items set forth in Table 1 above. Adjusted EBITDA is defined as EBITDA excluding Start-Up Expenses, Deferred Financing Fees, and the other items set forth in Table 2 above. Adjusted EBITDAR is defined as Adjusted EBITDA including Lease Rental Expense. Adjusted Free Cash Flow is defined as Income from Continuing Operations after giving effect to the items set forth in Table 3 above. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measurements of these items is included in Tables 1, 2, and 3 respectively set forth above in this press release. GEO believes that these financial measures are important operating measures that supplement discussion and analysis of GEO’s financial results derived in accordance with GAAP. These non-GAAP financial measures should be read in conjunction with GEO’s consolidated financial statements and related notes included in GEO’s filings with the Securities and Exchange Commission.

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NEWS RELEASE

2007 Financial Guidance
GEO is increasing its 2007 earnings guidance to a pro forma range of $1.90 to $2.05 per share, exclusive of $0.12 per share in after-tax start-up expenses associated with facility openings. GEO expects 2007 operating revenues to be in the range of $890 million to $910 million exclusive of pass-through construction revenues.

GEO expects first quarter 2007 earnings to be in a pro forma range of $0.37 to $0.39 per share, exclusive of $0.06 per share in after-tax start-up expenses. GEO expects first quarter 2007 operating revenues to be in the range of $215 million to $220 million exclusive of pass-through construction revenues.

GEO expects second quarter 2007 earnings to be in a pro forma range of $0.47 to $0.51 per share, exclusive of $0.01 per share in after-tax start-up expenses. GEO expects second quarter 2007 operating revenues to be in the range of $221 million to $226 million exclusive of pass-through construction revenues.

GEO expects third quarter 2007 earnings to be in a pro forma range of $0.50 to $0.54 per share, exclusive of $0.05 per share in after-tax start-up expenses. GEO expects third quarter 2007 operating revenues to be in the range of $224 million to $229 million exclusive of pass-through construction revenues.

GEO expects fourth quarter 2007 earnings to be in a pro forma range of $0.56 to $0.61 per share. GEO expects fourth quarter 2007 operating revenues to be in the range of $230 million to $235 million exclusive of pass-through construction revenues.

GEO’s 2007 financial guidance does not include any potential contracts for the utilization of GEO’s available bed capacity at the Northlake Correctional Facility in Baldwin, Michigan or the LaSalle Correctional Facility in Jena, Louisiana. The upper end of GEO’s 2007 earnings guidance includes a modest contribution from increased utilization of the New Castle Correctional Facility in New Castle, Indiana.

2007 Operating Revenue Guidance(In Millions)
(Exclusive of Pass-Through Construction Revenue)	1Q 2007	2Q 2007	3Q 2007	4Q 2007	FY 2007
Previously Issued Guidance					$880 - $905
Revised Guidance (February 27, 2007)	$215 - $220	$221 - $226	$224 - $229	$230 - $235	$890 - $910

2007 Earnings Per Share
	1Q 2007	2Q 2007	3Q 2007	4Q 2007	FY 2007
Previously Issued GAAP Guidance					$1.65 - $1.80
After-Tax Start-Up Expenses					$0.10
Previously Issued Pro Forma Guidance					$1.75 - $1.90
Revised GAAP Guidance (February 27, 2007)	$0.31 - $0.33	$0.46 - $0.50	$0.45 - $0.49	$0.56 - $0.61	$1.78 - $1.93
After-Tax Start-Up Expenses	$0.06	$0.01	$0.05	—	$0.12
Revised Pro Forma Guidance (February 27, 2007)	$0.37- $0.39	$0.47 - $0.51	$0.50 - $0.54	$0.56 - $0.61	$1.90 - $2.05
Diluted Weighted Average Shares Outstanding(In Millions)	20.2	20.2	20.2	20.2	20.2

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NEWS RELEASE

Conference Call Information
GEO has scheduled a conference call and simultaneous webcast at 3:00 PM (Eastern Time) today to discuss GEO’s fourth quarter 2006 financial results as well as GEO’s progress and outlook. The call-in number for the U.S. is 1-800-299-0148 and the international call-in number is 1-617-801-9711. The participant pass-code for the conference call is 94502562. In addition, a live audio webcast of the conference call may be accessed on the Conference Calls/Webcasts section of GEO’s investor relations home page atwww.thegeogroupinc.com. A replay of the audio webcast will be available on the website for one year. A telephonic replay of the conference call will be available until March 27, 2007 at 1-888-286-8010 (U.S.) and 1-617-801-6888 (International). The pass-code for the telephonic replay is 28385790. GEO will discuss Non-GAAP (“Pro Forma”) basis information on the conference call. A reconciliation from Non-GAAP (“Pro Forma”) basis information to GAAP basis results may be found on the Conference Calls/Webcasts section of GEO’s investor relations home page atwww.thegeogroupinc.com.

About The GEO Group, Inc.
The GEO Group, Inc. (“GEO”) is a world leader in the delivery of correctional, detention, and residential treatment services to federal, state, and local government agencies around the globe. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, Canada, and the United Kingdom. GEO’s worldwide operations include 64 correctional and residential treatment facilities with a total design capacity of approximately 55,000 beds.

Safe-Harbor Statement
This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially affect actual results, including statements regarding estimated earnings, revenues and costs and our ability to maintain growth and strengthen contract relationships. Factors that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to meet its financial guidance for 2007 given the various risks to which its business is exposed; (2) GEO’s ability to successfully pursue further growth and continue to enhance shareholder value; (3) GEO’s ability to access the capital markets in the future on satisfactory terms or at all; (4) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (5) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (6) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (7) GEO’s ability to obtain future financing on acceptable terms; (8) GEO’s ability to sustain company-wide occupancy rates at its facilities; and (9) other factors contained in GEO’s Securities and Exchange Commission filings, including the forms 10-K, 10-Q and 8-K reports.

Fourth quarter and year-end financial tables to follow:

NEWS RELEASE

THE GEO GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRTEEN AND FIFTY-TWO WEEKS ENDED
DECEMBER 31, 2006 AND JANUARY 1, 2006
(In thousands, except per share data)
(UNAUDITED)

	Thirteen Weeks Ended						Fifty-two Weeks Ended
	December 31, 2006			January 1, 2006			December 31, 2006			January 1, 2006
Revenues	$	247,404		$	164,874		$	860,882		$	612,900
Operating expenses		210,246			159,227			718,178			540,128
Depreciation and amortization		4,467			4,949			22,235			15,876
General and administrative expenses		13,894			13,165			56,268			48,958
Operating income		18,797			(12,467	)		64,201			7,938
Interest income		2,881			2,281			10,687			9,154
Interest expense		(6,236	)		(6,922	)		(28,231	)		(23,016	)
Write off of deferred financing fees from extinguishment of debt		—			—			(1,295	)		(1,360	)
Income before income taxes, minority interest, equity in earnings of affiliate and discontinued operations		15,442			(17,108	)		45,362			(7,284	)
Provision for income taxes		5,363			(13,707	)		16,505			(11,826	)
Minority interest		(80	)		(202	)		(125	)		(742	)
Equity in earnings (loss) of affiliate		538			2,280			1,576			2,079
Income from continuing operations		10,537			(1,323	)		30,308			5,879
Income (loss) from discontinued operations		(22	)		516			(277	)		1,127
Net income	$	10,515		$	(807	)	$	30,031		$	7,006
Weighted-average common shares outstanding:
Basic		19,405			14,493			17,221			14,370
Diluted		20,170			14,978			17,872			15,015
Income per common share:
Basic:
Income from continuing operations	$	0.54		$	(0.09	)	$	1.76		$	0.41
Income (loss) from discontinued operations		0.00			0.03			(0.02	)		0.08
Net income per share-basic	$	0.54		$	(0.06	)	$	1.74		$	0.49
Diluted:
Income from continuing operations	$	0.52		$	(0.09	)	$	1.70		$	0.39
Income (loss) from discontinued operations		0.00			0.04			(0.02	)		0.08
Net income per share-diluted	$	0.52		$	(0.05	)	$	1.68		$	0.47

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NEWS RELEASE

The GEO Group, Inc. — Operating Data

	13 Weeks			13 Weeks			52 Weeks			52 Weeks
	Ended			Ended			Ended			Ended
	December 31, 2006			January 1, 2006			December 31, 2006			January 1, 2006
*Revenue-producing beds		48,873			43,187			48,873			43,187
*Compensated man-days		4,154,112			3,161,501			15,788,208			12,607,525
*Average occupancy1		98.5	%		99.0	%		97.4	%		97.5	%

*Includes South Africa

¹Does not include GEO’s idle facilities.

THE GEO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2006 and January 1, 2006

	2006		2005
	(In thousands, except per
	share data)
ASSETS
Current Assets
Cash and cash equivalents	$	111,520	$	57,094
Restricted cash		13,953		8,882
Accounts receivable, less allowance for doubtful accounts of $926 and $224		162,867		127,612
Deferred income tax asset		19,492		19,755
Other current assets		14,922		15,826
Current assets of discontinued operations		—		123
Total current assets		322,754		229,292
Restricted Cash		19,698		17,484
Property and Equipment, Net		287,374		282,236
Assets Held for Sale		1,610		5,000
Direct Finance Lease Receivable		47,367		38,492
Deferred Income Tax Assets		4,941		—
Goodwill and Other Intangible Assets, Net		41,554		52,127
Other Non Current Assets		18,155		14,880
	$	743,453	$	639,511
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	48,890	$	27,762
Accrued payroll and related taxes		31,320		26,985
Accrued expenses		77,675		70,177
Current portion of deferred revenue		1,830		1,894
Current portion of capital lease obligations, long-term debt and non-recourse debt		12,685		8,441
Current liabilities of discontinued operations		1,303		1,260
Total current liabilities		173,703		136,519
Deferred Revenue		1,755		3,267
Deferred Tax Liability		—		2,085
Minority Interest		1,297		1,840
Other Non Current Liabilities		24,816		19,601
Capital Lease Obligations		16,621		17,072
Long-Term Debt		144,971		219,254
Non-Recourse Debt		131,680		131,279
Total shareholders’ equity		248,610		108,594
	$	743,453	$	639,511

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