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 "Item 1A. Risk Factors," and "Forward-Looking Statements -
Safe Harbor" below. The discussion should be read in conjunction with the
consolidated financial statements and notes thereto.

We specialize in the ownership, leasing and management of secure, reentry
facilities and processing centers and the provision of community-based services
in the United States, Australia and South Africa. We own, lease and operate a
broad range of secure facilities including maximum, medium and minimum-security
facilities, processing centers, and community-based reentry facilities. We offer
counseling, education and/or treatment for alcohol and drug abuse problems at
most of the domestic facilities we manage. We are also a provider of innovative
compliance technologies, industry-leading monitoring services, and
evidence-based supervision and treatment programs for community-based parolees,
probationers and pretrial defendants. Additionally, we have a contract with ICE
to provide supervision and reporting services designed to improve the
participation of non-detained aliens in the immigration court system. We develop
new facilities based on contract awards, using our project development expertise
and experience to design, construct and finance what we believe are
state-of-the-art facilities that maximize security and efficiency. We also
provide secure transportation services for offender and detainee populations as
contracted domestically and in the United Kingdom through our joint venture
GEOAmey.

As of December 31, 2021, our worldwide operations included the management and/or
ownership of approximately 86,000 beds at 106 correctional, detention and
reentry facilities, including idle facilities, and also included the provision
of servicing more than 210,000 individuals in a community-based environment on
behalf of federal, state and local correctional agencies located in all 50
states.

For the years ended December 31, 2021 and 2020, we had consolidated revenues of
$2.3 billion and $2.4 billion, respectively, and we maintained an average
company-wide facility occupancy rate of 85.4% including 74,834 active beds and
excluding 11,200 idle beds for the year ended December 31, 2021, and 86.1%
including 89,499 active beds and excluding 3,334 idle beds and beds under
development for the year ended December 31, 2020.

REIT Election



On December 2, 2021, we announced that our Board unanimously approved a plan to
terminate our REIT election and become a taxable C Corporation, effective for
the year ended December 31, 2021. As a result, we are no longer required to
operate under REIT rules, including the requirement to distribute at least 90%
of REIT taxable income to our stockholders, which provides us with greater
flexibility to use our free cash flow. Effective January 1, 2021, we are subject
to federal and state income taxes on our taxable income at applicable tax rates,
and are no longer entitled to a tax deduction for dividends paid. We operated as
a REIT for the 2020 tax year, and existing REIT requirements and limitations,
including those established by our organizational documents, remained in place
until December 31, 2020. Refer to Note 16 - Income Taxes of the Notes to the
audited consolidated financial statements included in Part II, Item 8 of this
Annual Report on Form 10-K. The Board also voted unanimously to discontinue our
quarterly dividend payment and prioritize allocating our free cash flow to
reduce debt.

Critical Accounting Policies and Estimates



     The consolidated financial statements in this report are prepared in
conformity with U.S. generally accepted accounting principles, or GAAP. 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 at the date of
the consolidated financial statements and the reported amounts of revenue and
expenses during the reporting period. A summary of our significant accounting
policies is described in Note 1 - Summary of Business Organization, Operations
and Significant Accounting Policies of the notes to the consolidated financial
statements contained Part II, Item 8 of this Annual Report. The significant
accounting policies and estimates which we believe are the most critical to aid
in fully understanding and evaluating our reported financial results include the
following:

     Asset Impairments

The following table summarizes the Company's idled facilities as of December 31,
2021 and their respective carrying values, excluding equipment and other assets
that can be easily transferred to other facilities.

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                                                     Design                       Net Carrying Value
         Facility                  Segment          Capacity       Year Idled     December 31, 2021
Great Plains Correctional
Facility                       Secure Services          1,940            2021    $             68,479
D. Ray James Correctional
Facility                       Secure Services          1,900            2021                  52,724
Rivers Correctional
Facility                       Secure Services          1,450            2021                  39,644
Big Spring Correctional
Facility                       Secure Services          1,732            2021                  35,828
Flightline Correctional
Facility                       Secure Services          1,800            2021                  37,090
McFarland Female Community
Reentry Facility               Secure Services            300            2020                  11,498
Perry County Correctional
Facility                       Secure Services            690            2015                  11,186
Cheyenne Mountain Recovery
Center                         Reentry Services           750            2020                  17,145
Coleman Hall                   Reentry Services           350            2017                   8,139
Total                                                  10,912                    $            281,733



We review long-lived assets to be held and used for impairment whenever events
or changes in circumstances indicate that the carrying amount of such assets may
not be fully recoverable. Events that would trigger an impairment assessment
include deterioration of profits for a business segment that has long-lived
assets, or when other changes occur that might impair recovery of long-lived
assets such as the termination of a management contract or a prolonged decrease
in population. If impairment indicators are present, we perform a recoverability
test to determine whether or not an impairment loss should be measured.

We test idle facilities for impairment upon notification that the facilities
will no longer be utilized by the customer. If a long-lived asset is part of a
group that includes other assets, the unit of accounting for the long-lived
asset is its group. Generally, we group assets by facility for the purpose of
considering whether any impairment exists. The estimates of recoverability are
based on projected undiscounted cash flows associated with actual marketing
efforts where available or, in other instances, projected undiscounted cash
flows that are comparable to historical cash flows from management contracts at
similar facilities and sensitivity analyses that consider reductions to such
cash flows. Our sensitivity analyses include adjustments to projected cash flows
compared to the historical cash flows due to current business conditions which
impact per diem rates as well as labor and other operating costs, changes
related to facility mission due to changes in prospective clients, and changes
in projected capacity and occupancy rates. We also factor in prolonged periods
of vacancies as well as the time and costs required to ramp up facility
population once a contract is obtained. We perform the impairment analysis on an
annual basis for each of the idle facilities and take into consideration updates
each quarter for market developments affecting the potential utilization of each
of the facilities in order to identify events that may cause the Company to
reconsider the most recent assumptions. Such events could include negotiations
with a prospective customer for the utilization of an idle facility at terms
significantly less favorable than the terms used in our most recent impairment
analysis, or changes in legislation surrounding a particular facility that could
impact our ability to house certain types of individuals at such facility.
Further, a substantial increase in the number of available beds at other
facilities we own, or in the marketplace, could lead to deterioration in market
conditions and projected cash flows. Although they are not frequently received,
an unsolicited offer to purchase any of our idle facilities, at amounts that are
less than their carrying value could also cause us to reconsider the assumptions
used in the most recent impairment analysis. We have identified marketing
prospects to utilize each of the remaining currently idled facilities and have
determined that no current impairment exists. However, we can provide no
assurance that we will be able to secure management contracts to utilize our
idle facilities, or that we will not incur impairment charges in the future.

Reserves for Insurance Losses



The nature of our business exposes us to various types of third-party legal
claims, including, but not limited to, civil rights claims relating to
conditions of confinement and/or mistreatment, sexual misconduct claims brought
by individuals within our care, 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, contractual claims and claims for personal
injury or other damages resulting from contact with our facilities, programs,
electronic monitoring products, personnel or individuals within our care,
including damages arising from the escape of an individual in our care or from a
disturbance or riot at a facility. In addition, our management contracts
generally require us to indemnify the governmental agency against any damages to
which the governmental agency may be subject in connection with such claims or
litigation. We maintain a broad program of insurance coverage for these general
types of claims, except for claims relating to employment matters, for which we
carry no insurance. There can be no assurance that our insurance coverage will
be adequate to cover all claims to which we may be exposed. It is our general
practice to bring merged or acquired companies into our corporate master
policies in order to take advantage of certain economies of scale.

On October 1, 2021, GEO formed a wholly owned captive insurance subsidiary, Florina Insurance Company, Inc. ("Florina"), to enhance our risk financing strategies. Florina is incorporated in the state of Vermont and is licensed and regulated by the state of Vermont, including


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with respect to its insurance programs, levels of liquidity and other
requirements. GEO began procuring insurance policies to cover deductibles for
workers' compensation, general liability, automobile liability, medical
professional liability and directors and officers' liability as well as
procuring insurance policies for its directors' and officers' excess liability
and excess medical professional liability through Florina effective October 1,
2021. Florina holds cash and investments in order to meet solvency requirements
and meet financial obligations as presented, including an investment portfolio
of marketable fixed income and equity securities.

We currently maintain a general liability policy and excess liability policies
with total limits of $70.0 million per occurrence and $90.0 million total
general liability annual aggregate limits covering the operations of U.S. Secure
Services, Reentry services and Electronic Monitoring and Supervision Services.
We have a claims-made liability insurance program with a specific loss limit of
$40.0 million per occurrence and in the aggregate related to medical
professional liability claims arising out of correctional healthcare services.
We are uninsured for any claims in excess of these limits. We also maintain
insurance to cover property and other casualty risks including, workers'
compensation, environmental liability, cybersecurity liability and automobile
liability.

For most casualty insurance policies, we carry substantial deductibles or
self-insured retentions of $4.0 million per occurrence for general liability and
$5 million per occurrence for medical professional liability, $2.0 million per
occurrence for workers' compensation, $2.5 million per occurrence for directors
and officers' liability and $1.0 million per occurrence for automobile
liability. In addition, certain of our facilities located in Florida and other
high-risk hurricane areas carry substantial windstorm deductibles. Since
hurricanes are considered unpredictable future events, no reserves have been
established to pre-fund for potential windstorm damage. Limited commercial
availability of certain types of insurance relating to windstorm exposure in
coastal areas and earthquake exposure mainly in California and the Pacific
Northwest may prevent us from insuring some of its facilities to full
replacement value.

With respect to operations in South Africa and Australia, we utilize a combination of locally-procured insurance and global policies to meet contractual insurance requirements and protect us. In addition to these policies, our Australian subsidiary carries tail insurance on a general liability policy related to a discontinued contract.



Of the insurance policies discussed above, our most significant insurance
reserves relate to workers' compensation, general liability and auto claims.
These reserves, which include Florina's reserves and GEO's legacy reserves, are
undiscounted and were $74.2 million and $78.9 million as of December 31, 2021
and 2020, respectively, and are included in Accrued Expenses in the accompanying
Consolidated Balance Sheets. We use statistical and actuarial methods to
estimate amounts for claims that have been reported but not paid and claims
incurred but not reported. In applying these methods and assessing their
results, we consider such factors as historical frequency and severity of claims
at each of our facilities, claim development, payment patterns and changes in
the nature of our business, among other factors. Such factors are analyzed for
each of our business segments. Our estimates may be impacted by such factors as
increases in the market price for medical services and unpredictability of the
size of jury awards. We also may experience variability between our estimates
and the actual settlement due to limitations inherent in the estimation process,
including our ability to estimate costs of processing and settling claims in a
timely manner as well as our ability to accurately estimate our exposure at the
onset of a claim. Because we have high deductible insurance policies, the amount
of our insurance expense is dependent on our ability to control our claims
experience. If actual losses related to insurance claims significantly differ
from our estimates, our financial condition, results of operations and cash
flows could be materially adversely impacted.

Goodwill and Other Intangible Assets, Net

Goodwill



We have recorded goodwill as a result of our business combinations. Goodwill is
recorded as the difference, if any, between the aggregate consideration paid for
an acquisition and the fair value of the net tangible assets and other
intangible assets acquired. Our goodwill is not amortized and is tested for
impairment annually on the first day of the fourth quarter, and whenever events
or circumstances arise that indicate impairment may have occurred. Impairment
testing is performed for all reporting units that contain goodwill. The
reporting units are the same as the reportable segments for U.S. Secure
Services, Electronic Monitoring and Supervision Services, Reentry Services and
International Services.

Under provisions of the qualitative analysis, when testing goodwill for
impairment, we first assess qualitative factors to determine whether the
existence of events or circumstances leads to a determination that it is more
likely than not that the fair value of a reporting unit is less than its
carrying amount. If, after assessing the totality of events or circumstances, we
determine it is more likely than not that the fair value of a reporting unit is
less than its carrying amount, we perform a quantitative impairment test to
identify goodwill impairment and measure the amount of goodwill impairment loss
to be recognized, if any. The qualitative factors used by GEO's management to
determine the likelihood that the fair value of the reporting unit is less than
the carrying amount include, among other things, a review of overall economic
conditions and their current and future impact on our existing business, our
financial performance and stock price, industry outlook and market competition.
With respect to the qualitative assessments, management determined that, as of
October 1, 2021, it was more likely than not that the fair values of the
reporting units exceeded their carrying values. During the year ended December
31, 2020, in connection with our annual impairment test, we performed a
quantitative analysis for our Reentry Services Segment using a third-party
valuation firm to determine the estimated fair value of the reporting unit using
a discounted cash flow model. A discount rate of 10% was utilized to adjust the
cash flow forecasts based on management's estimate of a market participant's
weighted-average cost of capital. Growth rates for sales and profits were

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determined using inputs from our long-term planning process. We also made
estimates for discount rates and other factors based on market conditions,
historical experience and other economic factors. Changes in these factors could
significantly impact the fair value of the reporting unit. With respect to the
Reentry Services reporting unit that was assessed quantitatively, management
determined that the carrying value exceeded its fair value due to future
declines in cash flow projections primarily due to the negative impact of the
COVID-19 pandemic on our reentry facilities. As such, we recorded a goodwill
impairment charge of $21.1 million during the year ended December 31, 2020. A
change in one or combination of the assumptions discussed above could have
impacted the estimated fair value of the reporting unit. If our expectations of
future results and cash flows decrease significantly or other economic
conditions deteriorate, goodwill may be further impaired.

Other Intangible Assets, Net



We have also recorded other finite and indefinite lived intangible assets as a
result of previously completed business combinations. Other acquired finite and
indefinite lived intangible assets are recognized separately if the benefit of
the intangible asset is obtained through contractual or other legal rights, or
if the intangible asset can be sold, transferred, licensed, rented or exchanged,
regardless of our intent to do so. Our intangible assets include facility
management contracts, trade names and technology. The facility management
contracts represent customer relationships in the form of management contracts
acquired at the time of each business combination; the value of BI's and
Protocol Criminal Justice, Inc.'s ("Protocol") trade names represent, among
other intangible benefits, name recognition to its customers and intellectual
property rights; and the acquired technology represents BI's innovation with
respect to its GPS tracking, monitoring, radio frequency monitoring, voice
verification monitoring and alcohol compliance systems, Protocol's innovation
with respect to its customer relationship management software and Soberlink,
Inc.'s innovation with respect to its alcohol monitoring devices. When
establishing useful lives, we consider the period and the pattern in which the
economic benefits of the intangible asset are consumed or otherwise used up; or,
if that pattern cannot be reliably determined, using a straight-line
amortization method over a period that may be shorter than the ultimate life of
such intangible asset. We also consider the impact of renewal terms when
establishing useful lives. We currently amortize our acquired facility
management contracts over periods ranging from three to twenty-one years and its
acquired technology over seven years to eight years. There is no residual value
associated with our finite-lived intangible assets. We review our trade name
assets for impairment whenever events or changes in circumstances indicate that
the carrying amount of such assets may not be fully recoverable. We do not
amortize its indefinite lived intangible assets. We review our indefinite lived
intangible assets annually or more frequently if events or changes in
circumstances indicate that the asset might be impaired. These reviews resulted
in no significant impairment to the carrying value of the indefinite lived
intangible assets for all periods presented. We record the costs associated with
renewal and extension of facility management contracts as expenses in the period
they are incurred.


Recent Accounting Pronouncements

The Company implemented the following accounting standards during the year ended December 31, 2021:




In November 2020, the SEC issued a final rule, Management's Discussion and
Analysis, Selected Financial Data, and Supplementary Financial Information, that
amended certain SEC disclosure requirements to primarily modernize, enhance and
simplify financial statement disclosures required by Regulation S-K. We have
adopted provisions in the rule in the fourth quarter of fiscal 2021, which
primarily resulted in the removal of the selected financial data previously
required by Item 301 and the removal of the quarterly financial data previously
required by Item 302.

In August 2020, the FASB issued ASU 2020-06, "Debt - Debt with Conversion and
Other Options". The guidance in this update simplifies the 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 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 satisfied in order to classify a contract as equity, which is expected
to decrease the number of freestanding instruments and embedded derivatives
accounted for as assets or liabilities. Finally, the amendments revise the
guidance on calculating earnings per share, requiring use of the if-converted
method for all convertible instruments and rescinding an entity's ability to
rebut the presumption of share settlement for instruments that may be settled in
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. We elected to early adopt this standard effective January 1, 2021. The
adoption of this standard did not have a material impact on our financial
position, results of operations or cash flows.

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
disclosure framework project. The amendments in this update remove, modify and
add certain disclosures primarily related to amounts in accumulated other
comprehensive income expected to be recognized as components of net periodic
benefit cost over the next fiscal year, explanations for reasons for significant
gains and losses related to changes in the benefit obligation for the period,
and projected and accumulated benefit obligations. The new standard was
effective for us beginning January 1, 2021. The adoption of this standard did
not have a material impact on our financial position, results of operations or
cash flows.

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The following accounting standards will be adopted in future periods:



In March 2020, the FASB issued ASU 2020-04, "Reference Reform Rate (Topic 848):
Facilitation of the Effects of Reference Rate Reform on Financial Reporting," to
provide temporary optional expedients and 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. We are currently
evaluating the impact of reference rate reform and the potential application of
this guidance.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not, or are not expected to, have a material effect on the Company's results of operations or financial position.

Results of Operations



We have determined that our previously reportable business segment, Facility
Construction and Design, no longer qualifies as a reportable segment as it no
longer meets certain quantitative thresholds and has been aggregated with our
International Services reportable business segment below. In addition, we
appointed a new Chief Executive Officer, the chief operating decision maker,
during fiscal 2021. Based on changes to the way our chief operating decision
maker views the business and financial results used to allocate resources to our
electronic monitoring and supervision services operations, along with the growth
of the business, we will report the electronic monitoring and supervision
services operation as a separate reportable segment. This new segment will be
presented as Electronic Monitoring and Supervision Services. Previously, the
electronic monitoring and supervision services operations were included in our
GEO Care reportable segment. In addition, our GEO Care reportable segment was
renamed to Reentry Services and will include services provided to adults for
residential and non-residential treatment, educational and community-based
programs, pre-release and half-way house programs  We have retroactively
restated our segment presentation for the years ended December 31, 2021, 2020
and 2019 to reflect this change. Refer to Note 15 - Business Segments and
Geographic Information of the Notes to the audited consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K.

The following discussion should be read in conjunction with our consolidated
financial statements and the notes to the consolidated financial statements
accompanying this report. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results may differ materially
from those anticipated in the forward-looking statements as a result of certain
factors, including, but not limited to, those described under "Item 1A. Risk
Factors" and those included in other portions of this report.

2021 versus 2020

Revenues

                                                     % of                         % of                        %
                                      2021         Revenue         2020         Revenue      $ Change      Change
                                                               (Dollars in thousands)
U.S. Secure Services               $ 1,488,936         66.0 %   $ 1,571,216         66.9 %   $ (82,280 )      (5.2 )%
Electronic Monitoring and
Supervision Services                   278,934         12.4 %       241,944         10.3 %      36,990        15.3 %
Reentry Services                       274,893         12.2 %       309,398         13.2 %     (34,505 )     (11.2 )%
International Services                 213,849          9.5 %       227,540          9.7 %     (13,691 )      (6.0 )%
Total                              $ 2,256,612        100.0 %   $ 2,350,098        100.0 %   $ (93,486 )      (4.0 )%



U.S. Secure Services

Revenues decreased by $82.3 million in 2021 compared to 2020 due to aggregate
net decreases of $194.7 million primarily due to the ramp-down/deactivations of
our company-owned D. Ray James, Rivers, Moshannon Valley, Flightline, Big
Springs, Reeves I & II and Great Plains Correctional Facilities as well as our
Queens Detention Facility and McFarland Female Community Reentry Facility. We
also experienced the ramp-down/deactivations of our managed-only Bay and
Graceville Correctional Facilities. These decreases were partially offset by
aggregate net increases of $72.5 million resulting from the activations in late
2020 and early 2021 of our company-owned Golden State, Desert View and Central
Valley Annexes and 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 $39.9 million primarily
due to increased occupancy at our USMS facilities.



The number of compensated mandays in U.S. Secure Services facilities was
approximately 18.7 million in 2021 and 21.4 million in 2020. We experienced an
aggregate net decrease of approximately 2,700,000 mandays as a result of net
decreases in population as a result of

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the impact of the COVID-19 pandemic as well as contract terminations, partially
offset by contract activations 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. Secure Services facilities was 88.2%
and 88.3% of capacity in 2021 and 2020, respectively, excluding idle facilities.

Electronic Monitoring and Supervision Services

Revenues increased by $37.0 million in 2021 compared to 2020 primarily due to increased client and participant counts.

Reentry Services



Revenues decreased by $34.5 million in 2021 compared to 2020 primarily related
to decreases of $10.9 million due to contract terminations/closures of
underutilized facilities which have been impacted by the COVID-19 pandemic and
other economic factors. Additionally, we experienced a decrease of $38.3 million
as a result of the sale of our youth business which was effective July 1, 2021.
We also 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. These decreases
were partially offset by increases of $16.3 million due to new/reactivated
contracts and programs.

International Services



Revenues for International Services decreased by $13.7 million in 2021 compared
to 2020. We experienced a net decrease in revenues of $27.6 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.
Partially offsetting this decrease was an increase due to foreign exchange rate
fluctuations of $14.0 million.


Operating Expenses


                                                      % of                           % of
                                                    Segment                        Segment                         %
                                      2021          Revenues         2020          Revenues       $ Change      Change
                                                                  (Dollars in thousands)
U.S. Secure Services               $ 1,112,290           74.7 %   $ 1,191,562           75.8 %   $  (79,272 )      (6.7 )%
Electronic Monitoring and
Supervision Services                   121,442           43.5 %       112,844           46.6 %        8,598         7.6 %
Reentry Services                       205,992           74.9 %       261,359           84.5 %      (55,367 )     (21.2 )%
International Services                 189,322           88.5 %       205,730           90.4 %      (16,408 )      (8.0 )%
Total                              $ 1,629,046                    $ 1,771,495                    $ (142,449 )      (8.0 )%


Operating expenses consist of those expenses incurred in the operation and management of our Secure Services, Electronic Monitoring and Supervision Services, Reentry Services and International Services segments.

U.S. Secure Services



Operating expenses for U.S. Secure Services decreased by $79.3 million in 2021
compared to 2020 primarily due to decreases of $130.0 million related to the
ramp-down/deactivations of our company-owned D. Ray James, Rivers, Moshannon
Valley, Big Springs, Flightline, Reeves I & II and Great Plains Correctional
Facilities as well as our Queens Detention Facility and McFarland Female
Community Reenty Facility. We also experienced the ramp-down/deactivations of
our managed-only Bay and Graceville Correctional Facilities. These decreases
were partially offset by increases of $45.1 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. Additionally, we experienced
aggregate net increases of $5.6 million primarily due to increased occupancy at
our USMS facilities mainly due to the large increase in the number of crossings
at the Southern border during 2021 partially offset by decreased occupancy at
our ICE facilities and the associated decrease in related variable costs.

Electronic Monitoring and Supervision Services

Operating expenses increased by $8.6 million in 2021 compared to 2020 primarily due to increased client and participant counts.


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Reentry Services



Operating expenses decreased by $55.4 million during 2021 compared to 2020
primarily due to aggregate decreases of $28.0 million related to contract
terminations/closures of underutilized facilities as a result of the COVID-19
pandemic and other economic factors. We also experienced a decrease of $36.3
million as a result of the sale of our youth business which was effective July
1, 2021. These decreases were partially offset by increases of $4.2 million due
to new/reactivated contracts and programs and day reporting center openings and
increases of $4.7 million in census levels at certain of our community-based and
reentry centers. Operating expenses as a percentage of revenue decreased in 2021
compared to 2020 primarily due to the closure of underperforming/underutilized
facilities as discussed above.

International Services



Operating expenses for International Services decreased by $16.4 million in 2021
compared to 2020. We experienced a net decrease in operating expenses of $31.4
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 $15.0 million.


Depreciation and Amortization



                                                   % of                        % of
                                                  Segment                     Segment                       %
                                     2021         Revenue        2020         Revenue      $ Change       Change
                                                               (Dollars in thousands)
U.S. Secure Services               $  83,721           5.6 %   $  80,702           5.1 %   $   3,019          3.7 %
Electronic Monitoring and
Supervision Services                  30,422          10.9 %      31,678          13.1 %      (1,256 )       (4.0 )%
Reentry Services                      18,773           6.8 %      20,154           6.5 %      (1,381 )       (6.9 )%
International Services                 2,261           1.1 %       2,146           0.9 %         115          5.4 %
Total                              $ 135,177           6.0 %   $ 134,680           5.7 %   $     497          0.4 %



U.S. Secure Services

U.S. Secure Services depreciation and amortization expense increased in 2021
compared to 2020 primarily due to renovations in connection with our contract
activations at certain of our company-owned facilities as previously discussed.

Electronic Monitoring and Supervision Services

Depreciation and amortization expense decreased in 2021 compared to 2020 due to certain assets becoming fully depreciated and/or amortized.

Reentry Services

Depreciation and amortization expense decreased in 2021 compared to 2020 primarily due to certain asset dispositions as discussed under Net Gain (Loss) on Asset Dispositions further below.

International Services

Depreciation and amortization expense increased slightly in 2021 compared to 2020 primarily due to foreign exchange rate fluctuations.

Other Unallocated Operating Expenses




                                        2021        % of Revenue        2020        % of Revenue      $ Change      % Change
                                                                      (Dollars in thousands)
General and Administrative Expenses   $ 204,306               9.1 %   $ 193,372               8.2 %   $  10,934           5.7 %




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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.
General and administrative expenses increased in 2021 compared to 2020 by $10.9
million primarily due to one-time employee restructuring expenses of $9.0
million. We also experienced an increase of $6.6 million in professional fees
for financial and legal advisors assisting us in reviewing capital structure
alternatives. Partially offsetting this increase was a decrease in stock-based
compensation of $4.7 million along with less travel, marketing, business
development and other corporate administrative expenses primarily due to the
impacts of the COVID-19 pandemic.


Goodwill Impairment Charges


                                     2021       % of Revenue        2020    

% of Revenue $ Change % Change


                                                                   (Dollars in thousands)
Goodwill Impairment Charges        $      -               0.0 %   $ 21,146               0.9 %   $ (21,146 )        100.0 %


In connection with our annual goodwill testing, in 2020 we determined that the
carrying value of our reentry services reporting unit exceeded its fair value as
a result of projections of future declines in cash flow primarily due to the
impact of the COVID-19 pandemic. As such, we recorded a goodwill impairment
charge of $21.1 million during the year ended December 31, 2020. Refer to Note 1
- Summary of Business Organization, Operations and Significant Accounting
Policies - Goodwill and Other Intangible Assets of the Notes to the audited
consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K


Non-Operating Income and Expense

Interest Income and Interest Expense



                                   % of                        % of
                     2021         Revenue        2020         Revenue       $ Change      % Change
                                                (Dollars in thousands)
Interest Income    $  24,007           1.1 %   $  23,072           1.0 %   $      935           4.1 %
Interest Expense   $ 129,460           5.7 %   $ 126,837           5.4 %   $    2,623           2.1 %



Interest income increased in 2021 compared to 2020 primarily due to higher cash
balances at our international subsidiaries along with the effect of foreign
exchange rate fluctuations related to our contract receivable balance for our
facility in Ravenhall, Australia.

Interest expense increased in 2021 compared to 2020 primarily due to higher
balances on the revolver component of our credit facility. During 2021, we drew
down significant amounts on our revolver as a conservative precautionary step to
preserve liquidity, maintain financial flexibility, and obtain additional funds
for general corporate purposes. Partially offsetting the increase was the effect
of decreases in the LIBOR rate. Refer to Note 12- Debt of the Notes to the
audited consolidated financial statements included in Part II, Item 8 of this
Annual Report on Form 10-K.

Gain on Extinguishment of Debt



                                                 % of                      % of
                                    2021        Revenue       2020        Revenue       $ Change       % Change
                                                              (Dollars in thousands)
Gain on Extinguishment of Debt     $ 4,693           0.2 %   $ 5,319

0.2 % $ (626 ) (11.8 )%





During 2021, we repurchased $22.5 million in aggregate principal amount of our
5.125% Senior Notes 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 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 $4.7 million, net of the write-off of
associated unamortized deferred loan costs.

During 2020, we repurchased approximately $7.5 million in aggregate principal
amount of our 5.875% Senior Notes at a weighted average price of 77.28% for a
total cost of $5.8 million. Additionally, during 2020, we repurchased
approximately $18.2 million in aggregate principal amount of our 5.125% Senior
Notes at a weighted average price of 78.99% for a total cost of $14.3 million.
As a result of these repurchases, we recognized a net gain on extinguishment of
debt of $5.3 million during the year ended December 31, 2020.

Refer to Note 12- Debt of the Notes to the audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.


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Net Gain (Loss) on Disposition of Assets




                                    2021       % of Revenue        2020        % of Revenue       $ Change      % Change
                                                                   (Dollars in thousands)
Net Gain (Loss) on Disposition
of Assets                          $ 5,499               0.2 %   $ (6,831 )             (0.3 )%   $  12,330        (180.5 )%


The net gain on disposition of assets in 2021 was primarily due to the sale of
our interest in Talbot Hall, located in New Jersey, and the sale of our
company-owned McCabe Center, located in Texas. The gain was partially offset by
a loss on the divestiture of our youth division on July 1, 2021. Refer to Note
17- Commitments, Contingencies and Other Matters of the Notes to the audited
consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K. The net loss on disposition of assets in 2020 was primarily
due to the impairment of our leased Logan and Toler Hall facilities, located in
New Jersey.

Provision for Income Taxes




                                                  Effective                    Effective
                                     2021           Rate           2020          Rate         $ Change      % Change
                                                                 (Dollars in thousands)
Provision for Income Taxes         $ 122,730            63.6 %   $ 20,463            16.5 %   $ 102,267           500 %



The provision for income taxes in 2021 increased compared to 2020 along with the
effective tax rate principally due to the Company electing to terminate its REIT
status and become a taxable C corporation. In 2021, there was a $74.6 million
discrete tax expense, inclusive of a one-time, non-cash deferred tax charge of
$70.8 million related to the termination of the REIT status and a $3.6 million
discrete tax expense related to stock compensation that vested during the period
which is similar to the related amount incurred in 2020. In contrast, in 2020,
there was a $4.2 million discrete tax expense, inclusive of a $3.6 million
discrete tax expense related to stock compensation that vested during the
period. Furthermore, the effective tax rate increased as a result of the
goodwill impairment, which is not deductible for tax purposes. For years prior
to 2021, we were a REIT and as such were required to distribute at least 90% of
our REIT taxable income to shareholders and in turn were allowed a deduction for
the distribution at the REIT level. Our wholly owned taxable REIT subsidiaries
were fully subject to federal, state and foreign income taxes, as applicable. We
estimate our 2022 annual effective tax rate to be in the range of approximately
27% to 29% exclusive of any discrete items.



Equity in Earnings of Affiliates




                                                 % of                      % of
                                    2021        Revenue       2020        Revenue      $ Change       % Change
                                                              (Dollars in thousands)
Equity in Earnings of Affiliates   $ 7,141           0.3 %   $ 9,166

0.4 % $ (2,025 ) (22.1 )%





Equity in earnings of affiliates, presented net of income taxes, represents the
earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates
in 2021 compared to 2020 decreased primarily due to unfavorable performance at
GEOAmey.


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2020 versus 2019

Revenues

                                                     % of                         % of                         %
                                      2020         Revenue         2019         Revenue       $ Change      Change
                                                                (Dollars in thousands)
U.S. Secure Services               $ 1,571,216         66.9 %   $ 1,601,679         64.6 %   $  (30,463 )      (1.9 )%
Electronic Monitoring and
Supervision Services                   241,944         10.3 %       256,954         10.4 %      (15,010 )      (5.8 )%
Reentry Services                       309,398         13.2 %       357,295         14.4 %      (47,897 )     (13.4 )%
International Services                 227,540          9.7 %       261,994         10.6 %      (34,454 )     (13.2 )%
Total                              $ 2,350,098        100.0 %   $ 2,477,922        100.0 %   $ (127,824 )      (5.2 )%


U.S. Secure Services



Revenues decreased in 2020 by $30.5 million compared to 2019 primarily due to
net decreases in populations of $36.5 million at our ICE processing centers and
USMS facilities due to the COVID-19 pandemic, which resulted in declines in
crossings and apprehensions along the Southwest border, as well as decreases in
court sentencing at the federal levels. Additionally, revenues decreased by
$66.1 million due to the discontinuation of our California Modified Community
Correctional Facility contracts along with other contract discontinuations.
Various governmental agencies have also taken steps to decrease the number of
those in custody to adhere to social distancing protocols. We also experienced
net decreases in population, transportation services and/or rates of $3.7
million at our BOP and state facilities. These decreases were partially offset
by increases of $75.8 million resulting from the activation of our contracts at
our company-owned and previously idled South Louisiana Processing Center in
Basile, Louisiana during the third quarter of 2019, our company-owned and
previously idled North Lake Correctional Facility in Baldwin, Michigan which was
activated on October 1, 2019, our managed-only contract for the El Centro
Detention Center in California which was effective in December 2019, the
activation of our company-owned Golden State Annex facility in California which
was effective in September 2020 as well as the activation of the county-owned
Reeves County Detention Center I & II in the third quarter of 2019.


The number of compensated mandays in U.S. Secure Services facilities was
approximately 21.7 million in 2020 and 23.5 million in 2019. We experienced an
aggregate net decrease of approximately 1,800,000 mandays as a result of net
decreases in population as a result of the impact of the COVID-19 pandemic as
well as contract terminations, partially offset by contract activations
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. Secure Services facilities was 89.3% and 94.9% of capacity in 2020 and
2019, respectively, excluding idle facilities.

Electronic Monitoring and Supervision Services

Revenues decreased in 2020 by $15.0 million compared to 2019 primarily due to decreases in blended rates and average client and participant counts.

Reentry Services



Revenues decreased in 2020 by $47.9 million compared to 2019 primarily due to
aggregate decreases of $42.4 million related to contract
discontinuations/closures of underutilized facilities which have been impacted
by the COVID-19 pandemic and other factors. In addition, we experienced
decreases of $11.4 million related to net 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. These decreases were
partially offset by increases of $5.9 million due to new/reactivated contracts
and programs.

International Services

Revenues for International Services decreased by $34.5 million in 2020 compared
to 2019 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 along with the effects of foreign exchange rate
fluctuations.

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Operating Expenses


                                                      % of                           % of
                                                    Segment                        Segment                        %
                                      2020          Revenues         2019          Revenues      $ Change      Change
                                                                 (Dollars in thousands)
U.S. Secure Services               $ 1,191,562           75.8 %   $ 1,199,314           74.9 %   $  (7,752 )      (0.6 )%
Electronic Monitoring and
Supervision Services                   112,844           46.6 %       122,588           47.7 %      (9,744 )      (7.9 )%
Reentry Services                       261,359           84.5 %       293,036           82.0 %     (31,677 )     (10.8 )%
International Services                 205,730           90.4 %       243,127           92.8 %     (37,397 )     (15.4 )%
Total                              $ 1,771,495                    $ 1,858,065                    $ (86,570 )      (4.7 )%




U.S. Secure Services

Operating expenses for U.S. Secure Services decreased by $7.8 million in 2020
compared to 2019. We experienced decreases of $31.5 million at certain of our
facilities primarily due to contract discontinuations. Additionally, we
experienced aggregate net decreases of $26.8 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 $50.5
million from the activation of our contracts at our company-owned and previously
idled South Louisiana Processing Center in Basile, Louisiana during the third
quarter of 2019, our company-owned and previously idled North Lake Correctional
Facility in Baldwin, Michigan which was activated on October 1, 2019, our
managed-only contract for the El Centro Detention Center in California which was
effective in December 2019 as well as activation of our company-owned Golden
State Annex facility in California which was effective in September 2020.


Electronic Monitoring and Supervision Services

Operating expenses decreased by $9.7 million in 2020 compared to 2019 primarily due to decreases in average client and participant counts.

Reentry Services



Operating expenses for Reentry Services decreased by $31.7 million during 2020
compared to 2019 primarily due to net decreases of $30.2 million from contract
discontinuations/closures of underutilized facilities. Additionally, we
experienced $7.3 million of net decreases related to census levels at certain of
our community-based reentry centers and day reporting centers due to the impact
of the COVID-19 pandemic. These decreases were partially offset by increases of
$5.8 million due to new/reactivated contracts and programs and day reporting
center openings.

International Services

Operating expenses for International Services decreased by $37.4 million in 2020
compared to 2019 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 along with the effects of foreign exchange rate
fluctuations.



Depreciation and Amortization


                                                   % of                        % of
                                                  Segment                     Segment                        %
                                     2020         Revenue        2019         Revenue       $ Change       Change
                                                               (Dollars in thousands)
U.S. Secure Services               $  80,702           5.1 %   $  78,974           4.9 %   $    1,728          2.2 %
Electronic Monitoring and
Supervision Services                  31,678          13.1 %      29,828          11.6 %        1,850          6.2 %
Reentry Services                      20,154           6.5 %      19,953           5.6 %          201          1.0 %
International Services                 2,146           0.9 %       2,070           0.8 %           76          3.7 %
Total                              $ 134,680           6.0 %   $ 130,825           5.6 %   $    3,855          2.9 %


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U.S. Secure Services

U.S. Secure Services depreciation and amortization expense increased in 2020
compared to 2019 primarily due to renovations in connection with our contract
activations at certain of our company-owned facilities as previously discussed.

Electronic Monitoring and Supervision Services



Electronic Monitoring and Supervisions Services depreciation and amortization
expense increased in 2020 compared to 2019 due to certain leasehold improvement
and equipment additions.

Reentry Services

Reentry Services depreciation and amortization expense increased in 2020 compared to 2019 primarily due to renovations at certain of our centers.

International Services

Depreciation and amortization expense increased slightly in 2020 compared to 2019 as a result of renovations during 2019 and 2020 at several of our international facilities.

Other Unallocated Operating Expenses

General and Administrative Expenses




                                        2020        % of Revenue        2019        % of Revenue       $ Change      % Change
                                                                       (Dollars in thousands)
General and Administrative Expenses   $ 193,372               8.2 %   $ 185,926               7.5 %   $    7,446           4.0 %



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.
General and administrative expenses increased in 2020 compared to 2019 primarily
due to higher stock-based compensation expense of $1.6 million, $2.5 million in
insurance expense associated with policy renewals as well as normal personnel
and compensation adjustments, professional, consulting, business development and
other administrative expenses including COVID-19 related expenses. These
increases were partially offset by less travel, marketing and other corporate
administrative expenses primarily due to the impacts of the COVID-19 pandemic.


Goodwill Impairment Charges


                                     2020       % of Revenue        2019       % of Revenue      $ Change       % Change
                                                                   (Dollars in thousands)
Goodwill Impairment Charges        $ 21,146               0.9 %   $      -               0.0 %   $  21,146          100.0 %


In connection with our annual goodwill testing, we determined that the carrying
value of our reentry services reporting unit exceeded its fair value as a result
of projections of future declines in cash flow primarily due to the impact of
the COVID-19 pandemic. As such, we recorded a goodwill impairment charge of
$21.1 million during the year ended December 31, 2020.

Non-Operating Income and Expense

Interest Income and Interest Expense




                                   % of                        % of
                     2020         Revenue        2019         Revenue      $ Change       % Change
                                                (Dollars in thousands)
Interest Income    $  23,072           1.0 %   $  28,934           1.2 %   $  (5,862 )        (20.3 )%
Interest Expense   $ 126,837           5.4 %   $ 151,024           6.1 %   $ (24,187 )        (16.0 )%




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Interest income decreased in 2020 compared to 2019 primarily due to the effect
of foreign exchange rate fluctuations related to our contract receivable balance
for our facility in Ravenhall, Australia.

Interest expense decreased in 2020 compared to 2019 primarily due to lower
interest rates on our variable rate debt. Also contributing to the decrease was
a reduction in higher interest rate debt balances. During 2019, we repurchased
approximately $56.0 million in aggregate principal amount of its 5.875% Senior
Notes due 2022. During 2020, we repurchased approximately $7.5 million in
aggregate principal amount of its 5.875% Senior Notes due 2024. Additionally,
during 2020, we repurchased approximately $18.2 million in aggregate principal
amount of its 5.125% Senior Notes due 2023.

Gain (Loss) on Extinguishment of Debt




                                                      % of                       % of
                                         2020        Revenue        2019        Revenue      $ Change      % Change
                                                                   (Dollars in thousands)
Gain (Loss) on Extinguishment of Debt   $ 5,319           0.2 %   $ (4,795 

) -0.2 % $ 10,114 (210.9 )%





During 2020, we repurchased approximately $7.5 million in aggregate principal
amount of our 5.875% Senior Notes due 2024 at a weighted average price of $78.99
for a total cost of $5.8 million. Additionally, during 2020, we repurchased
approximately $18.2 million in aggregate principal amount of our 5.125% Senior
Notes due 2023 at a weighted average price of $77.28 for a total cost of $14.4
million. As a result of these repurchase, we incurred a net gain on
extinguishment of debt of $5.3 million.

On May 22, 2019, we completed an offering of non-recourse notes related to our
Ravenhall facility in Australia. The net proceeds from this offering were used
to refinance our outstanding construction facility. As a result of the
transaction, we incurred a $4.5 million loss on extinguishment of debt related
to swap termination fees and unamortized deferred loan costs associated with the
construction facility. Additionally, on June 12, 2019, GEO entered into
Amendment No. 2 to our credit agreement. Under the amendment, the maturity date
of our revolver has been extended to May 17, 2024. As a result of the amendment,
we incurred a loss on extinguishment of debt of $1.2 million related to certain
unamortized deferred loan costs.

Additionally, during 2019, we repurchased approximately $56 million in aggregate
principal amount of our 5.875% Senior Notes due 2022 at a weighted average price
of 97.55% for a total cost of $54.7 million. As the result of the repurchases,
we recognized a net gain on extinguishment of debt of $0.9 million which
partially offset the loss discussed above.

Net Loss on Disposition of Assets




                                    2020       % of Revenue       2019       % of Revenue       $ Change       % Change
                                                                  (Dollars in thousands)
Loss on Disposition of Assets      $ 6,831               0.3 %   $ 2,693               0.1 %   $    4,138          153.7 %


The net loss on disposition of assets in 2020 was primarily due to the
impairment of our leased Logan and Toler Hall facilities, located in New Jersey.
The net loss on disposition of assets in 2019 was primarily due to the
impairment of our Penn Pavillion regional office in New Jersey and our JB Evans
Correctional Center in Louisiana.

Provision for Income Taxes


                                                 Effective                    Effective
                                     2020          Rate           2019          Rate          $ Change       % Change
                                                                 (Dollars in thousands)
Provision for Income Taxes         $ 20,463            16.5 %   $ 16,648             9.6 %   $    3,815             23 %



The provision for income taxes in 2020 increased compared to 2019 along with the
effective tax rate which is due to a change in the composition of our income
between our REIT and TRS subsidiaries and certain non-recurring items. In 2020,
there was a $4.2 million discrete tax expense, inclusive of a $3.6 million
discrete tax expense related to stock compensation that vested during the
period. In contrast, in 2019, there was a $0.5 million discrete tax benefit, net
of a $0.2 million discrete tax expense related to stock compensation that vested
during the period. Furthermore, the effective tax rate increased as a result of
the impairment, which is not deductible for tax purposes. As a REIT, we were
required to distribute at least 90% of our taxable income to shareholders and in
turn are allowed a deduction for the distribution at the REIT level. Our wholly
owned taxable REIT subsidiaries continued to be fully subject to federal, state
and foreign income taxes, as applicable.

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Equity in Earnings of Affiliates




                                                 % of                      % of
                                    2020        Revenue       2019        Revenue       $ Change       % Change
                                                              (Dollars in thousands)
Equity in Earnings of Affiliates   $ 9,166           0.4 %   $ 9,532

0.4 % $ (366 ) (3.8 )%





Equity in earnings of affiliates, presented net of income taxes, represents the
earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates
in 2020 compared to 2019 decreased slightly primarily due to the effects of
foreign exchange rate fluctuations.

Financial Condition

Capital Requirements



Our current cash requirements consist of amounts needed for working capital,
debt service, supply purchases, investments in joint ventures, and capital
expenditures related to either the development of new secure, processing 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. Additional capital needs may also arise in the future with respect to
possible acquisitions, other corporate transactions or other corporate purposes.

As of December 31, 2021, we were developing a number of contractually committed
projects that we estimate will cost approximately $20.9 million, of which $8.3
million was spent through December 31, 2021. We estimate our remaining
contractually committed capital requirements to be approximately $12.6 million.
These projects are expected to be completed through 2022.

We plan to fund all of our capital needs, including capital expenditures, from
cash on hand, cash from operations, borrowings under our Senior Credit Facility
and any other financings which our management and Board of Directors, in their
discretion, may consummate. Currently, our primary source of liquidity to meet
these requirements is cash flow from operations and borrowings under the $900.0
million Revolver. Our management believes that cash on hand, cash flows from
operations and availability under our Senior Credit Facility will be adequate to
support our capital requirements for 2022 as disclosed under "Capital
Requirements" above.

Liquidity and Capital Resources

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. Interest on the notes is payable
semi-annually in arrears on March 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 will pay or deliver, as the case may
be, cash or a combination of cash and shares of our common stock. As of December
31, 2021, conditions had not been met to exchange the notes.

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.

                                       63
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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 year ended December 31, 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 refinancing
lenders party thereto, the other lenders party thereto, GEO and GEO Corrections
Holdings, Inc. and the administrative agent. Under the amendment, the maturity
date of the revolver component of the Credit Agreement has been extended to May
17, 2024. The borrowing capacity under the amended revolver will remain at $900
million, and its pricing will remain unchanged, currently bearing interest at
LIBOR plus 2.25%. As a result of the transaction, we incurred a loss on
extinguishment of debt of $1.2 million related to certain unamortized deferred
loan costs. Additionally, loan costs of $4.7 million were incurred and
capitalized in connection with the transaction.

A syndicate of approximately 65 lenders participate in our Credit Agreement, six
of 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 this Annual Report on Form 10-K for further discussion.
The banks that have withdrawn participation remain contractually committed for
approximately three years. Additionally, these six banks represent 54% of the
lending commitments under the revolver component of our senior credit facility.
We are in frequent communication with potential new lenders as well as the
credit rating agencies. In March 2021, Moody's Investors Service downgraded
GEO's issuer rating to B2 and in May 2021, Standard & Poor's S&P Global
downgraded GEO's issuer rating to CCC+.

As of December 31, 2021, we had $762.0 million in aggregate borrowings
outstanding under the Term Loan, $784.9 million in borrowings under the
revolver, and approximately $95.8 million in letters of credit which left $19.3
million in additional borrowing capacity under the revolver. In addition, we
have the ability to increase the Senior Credit Facility by an additional $450.0
million, subject to lender demand and prevailing market conditions and
satisfying the relevant borrowing conditions thereunder. Refer to Note 12 - Debt
in the notes to our audited consolidated financial statements included in Part
II, Item 8 of this Annual Report on Form 10-K.

Debt Repurchases



On August 16, 2019, our Board authorized us 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 our term loan under our Amended Credit Agreement
through cash purchases, in open market, privately negotiated transactions, or
otherwise, up to an aggregate maximum of $100.0 million, subject to certain
limitations through December 31, 2020. On February 11, 2021, our 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.

During 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 $4.7 million, net of the
write-off of associated unamortized deferred loan costs.

During 2020, we repurchased approximately $7.5 million in aggregate principal
amount of our 5.875% Senior Notes due 2024 at a weighted average price of 77.28%
for a total cost of $5.8 million. Additionally, during 2020, we repurchased
approximately $18.2 million in aggregate principal amount of our 5.125% Senior
Notes due 2023 at a weighted average price of 78.99% for a total cost of $14.3
million. As a result of these repurchases, we recognized a net gain on
extinguishment of debt of $5.3 million during the year ended December 31, 2020.

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

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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 2024, the indenture governing
the 6.00% Senior Notes, 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
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 December 31, 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.

We may from time to time seek to purchase or retire our outstanding senior notes
through repurchases, redemptions and/or exchanges for equity securities, in open
market purchases, privately negotiated transactions or otherwise. Such
repurchases, redemptions or exchanges, if any, will depend on prevailing market
conditions, our liquidity requirements, contractual restrictions and other
factors. The amounts involved may be material.


Senior Credit Facility



In 2021, we elected to draw down significant amounts in borrowings under the
revolver component of our credit facility as a conservative precautionary step
to preserve liquidity, maintain financial flexibility and obtain funds for
general business purposes.


Quarterly Dividends


As previously discussed above, on December 2, 2021, GEO's Board unanimously
approved a plan to terminate our REIT status and become a taxable C Corporation,
effective for the year ended December 31, 2021. In connection with terminating
the GEO's REIT status, the Board also voted unanimously to discontinue our
quarterly dividend payments and prioritize allocating GEO's free cash flow to
reduce debt.

Stock Buyback Program

On February 14, 2018, we announced that our Board authorized a stock buyback
program authorizing us to repurchase up to a maximum of $200 million of our
shares of common stock. The stock buyback program was funded primarily with cash
on hand, free cash flow and borrowings under our $900 million revolving credit
facility. The program expired on October 20, 2020. The stock buyback program was
intended to be implemented through purchases made from time to time in the open
market or in privately negotiated transactions, in accordance with applicable
SEC requirements. The stock buyback program did not obligate us to purchase any
specific amount of our common stock and could have been suspended or extended at
any time at the discretion of our Board. During the year ended December 31,
2020, we purchased 553,665 shares of our common stock at a cost of $9.0 million
primarily purchased with proceeds from our Revolver. There were no purchases of
our common stock during the years ended December 31, 2021 or 2019.


Automatic Shelf Registration on Form S-3



On October 30, 2020, we filed an automatic shelf registration on Form S-3 with
the SEC that enables us to offer for sale, from time to time and as the capital
markets permit, an unspecified amount of common stock, preferred stock, debt
securities, guarantees of debt securities, warrants and units. The shelf
registration statement is automatically effective and is valid for three years.


Prospectus Supplement

On June 28, 2021, in connection with the shelf registration, we filed with the
SEC 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 $300 million through
sales agents. Sales of shares of our common stock under the prospectus
supplement and equity distribution agreements entered into with the sales
agents, if any, will be made in negotiated transactions or transactions that are
deemed to be "at the market" offerings as defined in Rule 415 under the
Securities Act of 1933. There were no shares of common stock sold under this
prospectus supplement during the year ended December 31, 2021.

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Non-Recourse Debt

Northwest ICE Processing Center



On December 9, 2011, the Washington Economic Development Finance Authority
issued $54.4 million of its Washington Economic Development Finance Authority
Taxable Economic Development Revenue Bonds, series 2011 ("2011 Revenue Bonds").
The 2011 Revenue Bonds were issued to provide funds to make a loan to
Correctional Services Corporation ("CSC") for purposes of reimbursing GEO for
costs incurred by GEO for the 2009 expansion of the Northwest ICE Processing
Center and paying the costs of issuing the 2011 Revenue Bonds. The payment of
principal and interest on the bonds was non-recourse to GEO. None of the bonds
nor CSC's obligations under the loan were obligations of GEO nor were they
guaranteed by GEO. The 2011 Revenue Bonds matured in October 2021 and were
satisfied in full.

Australia - Ravenhall



In connection with a design and build facility 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. Refer to Note 6 - Contract Receivable in the notes to our consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form
10-K. The Construction Facility provided for non-recourse funding up to AUD 791
million, or $609.8 million, based on exchange rates as of December 31, 2021.
Construction draws were funded throughout the project according to a fixed
utilization schedule as defined in the syndicated facility agreement. The term
of the Construction Facility was through September 2019 and bore interest at a
variable rate quoted by certain Australian banks plus 200 basis points. On May
22, 2019, we completed an offering of AUD 461.6 million, or $355.2 million,
based on exchange rates as of December 31, 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, we incurred a $4.5 million loss on extinguishment
of debt related to swap termination fees and unamortized deferred loan costs
associated with the Construction Facility. Additionally, loan costs of
approximately $7.5 million were incurred and capitalized in connection with the
offering.

Other

In August 2019, we entered into two identical Notes (as defined below) in the
aggregate amount of $44.3 million which are secured by loan agreements and
mortgage and security agreements on certain real property and improvements. The
terms of the Notes are through September 1, 2034 and bear interest at LIBOR plus
200 basis points and are payable in monthly installments plus interest. We have
entered into interest rate swap agreements to fix the interest rate to 4.22%.
Included in the balance at December 31, 2021 is $0.6 million of deferred loan
costs incurred in the transaction. Refer to Note 7 - Derivative Financial
Instruments in the notes to our consolidated financial statements included in
Part II, Item 8 of this Annual Report on Form 10-K.

Guarantees



The Company has entered into certain guarantees in connection with the design,
financing and construction of certain facilities as well as loan, working
capital and other obligation guarantees for our subsidiaries in Australia, South
Africa and our joint ventures. Refer to Note 12 - Debt in the notes to our
consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K.

Executive Retirement Agreement




We have a non-qualified deferred compensation agreement with our former Chief
Executive Officer ("former CEO"). The agreement provides for a lump sum payment
upon retirement, no sooner than age 55. As of December 31, 2021, the former CEO
had reached age 55 and was eligible to receive the payment upon retirement. If
the Company's former CEO had retired as of December 31, 2021, we would have had
to pay him a lump sum of approximately $5.0 million in cash.



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GEO and our former CEO, entered into on May 27, 2021, and effective July 1,
2021, an Amended and Restated Executive Retirement Agreement which replaced the
prior February 26, 2020 agreement discussed below. Pursuant to the terms of the
Amended and Restated Executive Retirement Agreement, upon the date that the
former CEO ceases to provide services to GEO, we will pay to the former CEO an
amount equal to $3,600,000 (the "2021 Grandfathered Payment") which shall be
paid in cash. The Grandfathered Payment shall be credited with interest at a
rate of 5% compounded quarterly (the "Grandfathered Earnings Account").
Additionally, at the end of each calendar year provided that Mr. Zoley is still
providing services to GEO pursuant to the Executive Chairman Agreement, we will
credit an amount equal to $1,000,000 at the end of each calendar year (the
"Employment Contributions Account"). The 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 GEO, we will pay Mr. Zoley in one
lump sum cash payment each of the 2021 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. As the former CEO's retirement payment will no longer be settled with
a fixed number of shares of GEO's common stock, $3,600,000 has been reclassified
from equity to other non-current liabilities in 2021. Refer to Note 17 -
Commitments, Contingencies and Other Matters of the notes to our consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form
10-K for further information.


The prior executive retirement agreement entered into on February 26, 2020
provided that upon the former CEO's retirement from GEO, we would have had to
pay a lump sum amount equal to $8,925,065 (determined as of February 26, 2020)
(the "Grandfathered Payment") which would have been paid in the form of a fixed
number of shares of our common stock. The Grandfathered Payment would have been
delayed for six months and a day following the effective date of our former
CEO's termination of employment in compliance with Section 409A of the Internal
Revenue Code of 1986, as amended.


On February 26, 2020, an amount equal to the Grandfathered Payment was invested
in our common stock ("GEO Shares"). The number of our shares of common stock as
of this date was equal to the Grandfathered Payment divided by the closing price
of our common stock on this date (rounded up to the nearest whole number of
shares), which equaled 553,665 shares of our common stock. Additional shares of
our common stock were credited with a value equal to any dividends declared and
paid on our shares of common stock, calculated by reference to the closing price
of our common stock on the payment date for such dividends (rounded up to the
nearest whole number of shares).


We had established several trusts for the purpose of paying the retirement
benefit pursuant to the amended and restated executive retirement agreement. The
trusts were revocable "rabbi trusts" and the assets of the trusts are subject to
the claims of our creditors in the event of our insolvency.




Guarantor Financial Information



GEO's 6.50% Exchangeable Senior Notes, 6.00% Senior Notes, 5.125% Senior Notes
and the 5.875% Senior Notes 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):




                                                     Year Ended
                                                  December 31, 2021
Net operating revenues                           $         2,032,884
Income from operations                                       267,413
Net income                                                    45,312
Net income attributable to The GEO Group, Inc.                45,312





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Summarized balance sheets (in thousands):




                              December 31, 2021       December 31, 2020
Current assets               $           707,457     $           607,044
Noncurrent assets (a)                  3,115,622               3,268,260
Current liabilities                      314,233                 350,041
Noncurrent liabilities (b)             2,820,252               2,737,673

(a) Includes amounts due from non-guarantor subsidiaries of $22.5 million and

$26.7 million as of December 31, 2021 and 2020, respectively.

(b) Includes amounts due to non-guarantor subsidiaries of $14.8 million and

$17.4 million as of December 31, 2021 and 2020, respectively.

Off-Balance Sheet Arrangements

Except as discussed above, and in the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, we do not have any off-balance sheet arrangements.

We are also exposed to various commitments and contingencies which may have a material adverse effect on our liquidity. See Note 17 - Commitments, Contingencies and Other Matters in the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Derivatives



In August 2019, we entered into two interest rate swap agreements in the
aggregate notional amount of $44.3 million to fix the interest rate on certain
of our variable rate debt to 4.22%. We have designated these interest rate swaps
as hedges against changes in the cash flows of two identical promissory notes
(the "Notes") which are secured by loan agreements and mortgage and security
agreements on certain real property and improvements. We have determined that
the swaps have payment, expiration dates, and provisions that coincide with the
terms of the Notes and are therefore considered to be effective cash flow
hedges. Accordingly, we record the change in fair value of the interest rate
swaps as accumulated other comprehensive income (loss), net of applicable taxes.
Total unrealized gains recorded in total other comprehensive income (loss), net
of tax, related to these cash flow hedges was $2.2 million during the year ended
December 31, 2021. The total fair value of the swap liabilities as of December
31, 2021 was $3.2 million and is recorded as a component of Other Non-Current
liabilities within the accompanying balance sheet. There was no material
ineffectiveness for the period presented. We do not expect to enter into any
transactions during the next twelve months which would result in
reclassification into earnings or losses associated with these swaps currently
reported in accumulated other comprehensive income (loss). Refer to Note 12 -
Debt and Note 7 - Derivative Financial Instruments in the notes to our audited
consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K for further information.

Our Australian subsidiary entered into interest rate swap agreements to fix the
interest rate on our variable rate non-recourse debt related to a project in
Ravenhall, a locality near Melbourne, Australia to 4.2%. We determined that the
swaps had payment, expiration dates, and provisions that coincided with the
terms of the non-recourse debt and were therefore considered to be effective
cash flow hedges. Accordingly, we recorded the change in the fair value of the
interest rate swaps in accumulated other comprehensive income (loss), net of
applicable income taxes. On May 22, 2019, we refinanced the associated debt and
terminated the swap agreements which resulted in the reclassification of $3.9
million into losses that were previously reported in accumulated other
comprehensive income (loss). Refer to Note 12 - Debt and Note 7 - Derivative
Financial Instruments in the notes to our audited consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K for
further information.

Cash Flow

Cash, cash equivalents, restricted cash and cash equivalents as of December 31,
2021 was $548.3 million, compared to $311.9 million as of December 31, 2020 and
was impacted by the following:

Net cash provided by operating activities in 2021 and 2020 was $282.6 million
and $441.7 million, respectively. Net cash provided by operating activities in
2021 was positively impacted by non-cash expenses such as depreciation and
amortization, deferred tax provision, amortization of debt issuance costs,
discount and/or premium and other non-cash interest, stock-based compensation
expense, loss on sale/disposal of property and equipment and dividends received
from our unconsolidated joint venture. Equity in earnings of affiliates
negatively impacted cash along with gain on extinguishment of debt and net gain
on disposition of assets. Changes in accounts receivable, prepaid expenses and
other assets decreased in total by a net of $9.5 million, representing a
positive impact on cash. The decrease was primarily driven by the timing of
billings and collections. Changes in accounts payable, accrued expenses and
other liabilities increased by $58.1 million which positively impacted cash. The
increase was primarily due to the timing of payments.

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Additionally, cash provided by operating activities in 2021 was positively
impacted by a decrease in contract receivable of $6.2 million. The decrease
relates to the timing of payments received and interest accrued, along with the
effect of foreign exchange rates, related to the Ravenhall Project. Refer to
Note 6 - Contract Receivable included in the notes to our audited consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form
10-K.

Net cash provided by operating activities in 2020 was positively impacted by
non-cash expenses such as depreciation and amortization, deferred tax provision,
amortization of debt issuance costs, discount and/or premium and other non-cash
interest, stock-based compensation expense, loss on extinguishment of debt,
goodwill impairment charges and dividends received from our unconsolidated joint
venture. Equity in earnings of affiliates negatively impacted cash. Changes in
accounts receivable, prepaid expenses and other assets decreased in total by a
net of $68.2 million, representing a positive impact on cash. The decrease was
primarily driven by the timing of billings and collections. Changes in accounts
payable, accrued expenses and other liabilities increased by $57.3 million which
positively impacted cash. The increase was primarily due to the timing of
payments and also due to accruals for the deferral of the employer's share of
Social Security taxes of $42 million under the Coronavirus Aid, Relief and
Economic Security Act ("CARES Act"). Refer to Note 17 - Commitments,
Contingencies and Other Matters included in the notes to our audited
consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K.

Additionally, cash provided by operating activities in 2020 was positively
impacted by a decrease in contract receivable of $5.2 million. The decrease
relates to the timing of payments received and interest accrued, along with the
effect of foreign exchange rates, related to the Ravenhall Project. Refer to
Note 6 - Contract Receivable included in the notes to our audited consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form
10-K.


Net cash used in investing activities of $53.7 million in 2021 was primarily the
result of capital expenditures of $69.4 million and changes in restricted
investments of $18.7 million, offset by proceeds from sale of real estate assets
of $21.2 million, proceeds from the sale of property and equipment of $4.1
million and payments received on note receivable of $8.0 million. Net cash used
in investing activities of $104.2 million in 2020 was primarily the result of
capital expenditures of $108.8 million and changes in restricted investments of
$7.4 million, offset by insurance proceeds from damaged property primarily
related to hurricanes of $9.5 million and proceeds from sale of real estate of
$2.4 million.

Net cash provided by financing activities in 2021 reflects payments of $360.3
million on long term debt offset by $435.0 million of proceeds from long term
debt and payments on non-recourse debt of $21.6 million. We also paid cash
dividends of $30.5 million and paid $9.6 million of debt issuance costs in
connection with the issuance of our 6.50% Exchangeable Senior Notes. Refer to
Note 12 - Debt included in the notes to our audited consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Net cash used in financing activities in 2020 reflects payments of $816.2
million on long term debt offset by $960.6 million of proceeds from long term
debt and payments on non-recourse debt of $13.8 million. We also paid cash
dividends of $216.1 million and purchased $9.0 million of shares of our common
stock.

Inflation

We believe that inflation, in general, did have a negative impact but did not
have a material effect on our results of operations during 2021 and 2020. While
some of our contracts include provisions for inflationary indexing, inflation
could have a substantial adverse effect on our results of operations in the
future to the extent that wages and salaries, which represent our largest
recurring/fixed expense, increase at a faster rate than the per diem or fixed
rates received by us for our management services.

Funds from Operations



Funds from Operations ("FFO") is a widely accepted supplemental non-GAAP measure
utilized to evaluate the operating performance of real estate companies. It is
defined in accordance with the standards established by the National Association
of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income
(loss) attributable to common shareholders (computed in accordance with United
States Generally Accepted Accounting Principles), excluding real estate related
depreciation and amortization, excluding gains and losses from the cumulative
effects of accounting changes, extraordinary items and sales of properties, and
including adjustments for unconsolidated partnerships and joint ventures.

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



Normalized FFO is defined as FFO adjusted for certain items which by their
nature are not comparable from period to period or that tend to obscure the
Company's actual operating performance, including for the periods presented net
goodwill impairment charges, pre-tax, gain on extinguishment of debt, pre-tax,
start-up expenses, pre-tax, one-time employee restructuring expenses, pre-tax,
loss and settlement on asset divestiture, pre-tax, M&A related expenses,
pre-tax, changes in tax structure to C corporation, close-out expenses, pre-tax,
COVID-19 expenses, pre-tax and the tax effect of adjustments to funds from
operations.

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

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

Our assessment of our operations is focused on long-term sustainability. The
adjustments we make to derive the non-GAAP measures of Normalized FFO and AFFO
exclude items which may cause short-term fluctuations in net income 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 as non-operational items and certain other charges that are
highly variable from year to year, they provide our investors with performance
measures that reflect the impact to operations from trends in occupancy rates,
per diem rates, operating costs and interest costs, providing a perspective not
immediately apparent from net income 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 external
comparisons of our historical operating performance and our business units and
provide continuity to investors for comparability purposes.

Our reconciliation of net income attributable to GEO to FFO, Normalized FFO and
AFFO for the years ended December 31, 2021 and 2020, respectively, is as follows
(in thousands):

                                                         December 31,       December 31,
                                                             2021               2020
Funds From Operations
Net income attributable to The GEO Group, Inc.          $       77,418     $      113,032
Real estate related depreciation and amortization               75,622      

73,659


(Gain) loss real estate assets, net of tax                     (10,056 )    

6,831


                 NAREIT Defined FFO                     $      142,984     $      193,522
Goodwill impairment charge, pre-tax                                  -             21,146
Start-up expenses, pre-tax                                       1,723              4,401
M&A related expenses, pre-tax                                    8,118                  -
One-time employee restructuring expenses, pre-tax                7,459                  -
Loss & settlement on asset divestiture, pre-tax                  6,333                  -
Gain on extinguishment of debt                                  (4,693 )           (5,319 )
COVID-19 expenses, pre-tax                                           -      

9,883


Close-out expenses, pre-tax                                      1,475      

5,935


Change in tax structure to C Corp                               70,813                  -
Tax effect of adjustments to funds from operations *               (26 )    

(300 )


          Normalized Funds from Operations              $      234,186     $      229,268
Non-real estate related depreciation and amortization           59,555      

61,021


Consolidated maintenance capital expenditures                  (16,769 )          (19,729 )
Stock-based compensation expenses                               19,199      

23,896


Other non-cash revenue & expense, pre-tax                       (4,408 )    

(735 ) Amortization of debt issuance costs, discount and/or premium and other non-cash interest

                              7,498              6,892
           Adjusted Funds from Operations               $      299,261     $      300,613




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*   Tax adjustments relate to (gain) loss on real estate assets, goodwill
    impairment charges, gain on debt extinguishment, start-up expenses, M&A

related expenses, one-time employee restructuring expenses, loss & settlement

on asset divestiture, COVID-19 expenses and close-out expenses.

Outlook



The following discussion of our future performance 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 statement. Please refer to "Item 1A. Risk Factors" in this
Annual Report on Form 10-K, the "Forward-Looking Statements - Safe Harbor," as
well as the other disclosures contained in this Annual Report on Form 10-K, 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.

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 agency partners to implement
best practices consistent with the guidance issued by the Centers for Disease
Control and Prevention. 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:
Guidance

• We issued guidance to all our facilities, consistent with the guidance

issued for correctional and detention facilities by the Centers for Disease

Control and Prevention ("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.

• As of the end of November 2021, we had administered approximately 192,000

COVID-19 tests to those in our care at our U.S. 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.

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.


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• 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 and communicated these obligations and
      requirements via meetings, memos, and postings.

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

social distancing and modified facility 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 and

      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 individuals 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; these measures align with recommendations from

the CDC's Advisory Committee on Immunization Practices (ACIP), as well as

criteria established through the FDA's 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.

• As of the end of November 2021, GEO has worked with our government agency

partners and State and Local Health Departments to administer vaccinations

to more than 42,000 individuals in our Secure Services facilities.




    We will continue 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 Annual Report on Form 10-K.

Economic Impact



The COVID-19 pandemic and related government-imposed mandatory closures, 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 which we operate. In early
2020, we began to observe negative impacts from the pandemic on our

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performance in our secure services business as a result of declines in crossings
and apprehensions along the Southwest border, a decrease in court sentencing at
the federal level and reduced operational capacity to promote social distancing
protocols. In addition to court mandates related to COVID-19 that limit capacity
utilization at certain facilities, a driver of low utilization across ICE
facilities have been the Title 42 COVID-19 related restrictions that have been
in place at the Southwest border since March 2020. Additionally, our reentry
services business conducted through our Reentry Services business segment has
also been negatively impacted, specifically our residential reentry centers were
impacted due to lower levels of referrals by federal, state and local agencies.
Throughout the pandemic, new intake at residential reentry centers have
significantly slowed down as governmental agencies across the country have opted
for non-residential alternatives, including furloughs, home confinement and day
reporting. We expect that the COVID-19 pandemic will continue to have an impact
on our populations for at least part of 2022, depending on various factors.
While we experienced a significant increase in COVID-19 cases at the end of the
fourth quarter of 2021 and in the early part of 2022, consistent with the spread
of the Omicron variant across the country, we are currently seeing a significant
decline in cases among our staff and the individuals in our care. 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. 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 to combating 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 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 a
government's willingness to maintain or grow public-private partnerships in the
future. While state finances overall were stable prior to the COVID-19 pandemic,
future budgetary pressures may cause state 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 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. Any positive trends in the
industry may be offset by several factors, including budgetary constraints,
contract modifications, contract terminations, contract non-renewals, contract
re-bids and/or the decision to not re-bid a contract 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.


    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 the USMS, utilize GEO's support 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. As of December 31, 2021, GEO has one company-owned facility
under direct contract with the BOP, which has a current contract option period
that expires on September 30, 2022, and three company-owned/company-leased
facilities under direct contracts with USMS, which have current contract option
periods that expire between March 31, 2022 and September 30, 2023. These
facilities combined represented approximately 8% of our revenues for the year
ended December 31, 2021.

    President Biden's administration may implement additional executive orders
or directives relating to federal criminal justice policies and/or immigration
policies, which may impact the federal government's use of public-private
partnerships with respect to secure correctional and detention facilities and
immigration processing centers, including with respect to our contracts, and/or
may impact the budget and spending priorities of federal agencies, including the
BOP, USMS, and ICE, which is an agency of the U.S. Department of Homeland
Security.

    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 in re-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. Currently, we have public-private partnership contracts in place with
ICE and the USMS relating to secure services facilities located in California.
GEO and the DOJ 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. On October 5, 2021, the Ninth
Circuit Court of Appeals reversed a prior U.S. District Court decision
dismissing the requests by GEO and the United States for declaratory and
injunctive relief and ruled that AB32 conflicts with federal law in violation of
the Supremacy Clause of the U.S. Constitution and discriminates against the
federal government in violation of the intergovernmental immunity doctrine.


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   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.

   In Delaware County, Pennsylvania, we received notice that the County intends
to take over management of the managed-only George W. Hill Correctional Facility
effective April 2022. The George W. Hill Correctional Facility generates
approximately $46 million in annualized revenue for GEO.

   Internationally, we are exploring 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 New South
Wales, Australia, we have developed a 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 transitioned the management contract in
October 2021. In addition, we transitioned the Arthur Gorrie Correctional Centre
to government operation in the State of Queensland, Australia at the end of June
2020.


    With respect to our reentry services, electronic monitoring services, and
community-based services business, we are currently pursuing a number of
business development opportunities. Related to opportunities for community-based
reentry services, we are working with our existing federal, state, and local
clients to leverage new opportunities for both residential reentry facilities as
well as non-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 approximately 65% of our operating expenses
in both 2021 and 2020. Additional significant operating expenses include food,
utilities and inmate medical costs. In 2021 and 2020, operating expenses totaled
approximately 72% and 75% of our consolidated revenues, respectively. Our
operating expenses as a percentage of revenue in 2022 will be impacted by the
opening of any new or existing facilities as a result of the cost of
transitioning and/or start-up operations related to a facility opening. During
2022, we will incur carrying costs for facilities that were vacant in 2021. As
of December 31, 2021, our worldwide operations include the management and/or
ownership of approximately 86,000 beds at 106 secure, processing and community
services facilities, including idle facilities, and also included the provision
of monitoring of more than 210,000 individuals in a community-based environment
on behalf of federal, state and local correctional agencies located in all 50
states.

General and Administrative Expenses



General and administrative expenses consist primarily of corporate management
salaries and benefits, professional fees and other administrative expenses. In
2021 and 2020, general and administrative expenses totaled approximately 9% and
8%, respectively, of our consolidated revenues. We expect general and
administrative expenses as a percentage of revenue in 2022 to remain consistent
or decrease as a result of cost savings initiatives as well as less travel,
marketing and other corporate administrative expenses primarily due to the
impacts of the COVID-19 pandemic

Idle Facilities



In our Secure Services segment, we are currently marketing 9,812 vacant beds
with a net book value of approximately $256 million at seven of our idle
facilities to potential customers. In our Reentry Services segment, we are
currently marketing 1,100 vacant beds with a net book value of approximately
$25.3 million at two of our idle facilities to potential customers. The combined
annual carrying cost of these idle facilities in 2022 is estimated to be $22.0
million, including depreciation expense of $12.7 million. We currently do not
have any firm commitments or agreements in place to activate these facilities
but have ongoing contact with several potential customers. Historically, some
facilities have been idle for multiple years before they received a new contract
award. The per diem rates that we charge our clients often vary by contract
across our portfolio. However, if the nine idle facilities in our Secure
Services and Reentry Services segments were to be activated using our Secure
Services and Reentry Services average per diem rate in 2021, (calculated as
revenue divided by the number of mandays) and based on the average occupancy
rate in our facilities for 2021, we would expect to receive annual incremental
revenue of approximately $290 million and an increase in annual earnings per
share of approximately $.30 to $.35 per share based on our average operating
margin. Refer to discussion in Item I, Part I - Business under Executive Order
and Contract Developments above for discussion of recent developments.


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Forward-Looking Statements - Safe Harbor



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

• 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;

• 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 and


       the impact of fluctuations in occupancy levels on our revenues and
       profitability;

• the impact of our termination of our REIT election and the discontinuation

of quarterly dividend payments and our ability to maximize the use of cash

flows to repay debt, deleverage and internally fund growth;

• our obligations to pay income taxes will increase beginning with our income


       taxes for the year ended December 31, 2021, which will result in a
       reduction to our earnings and could have negative consequences to us;


    •  we may fail to realize the anticipated benefits of terminating our REIT
       election or those benefits may take longer to realize than expected, if at
       all, or may not offset the costs of terminating our REIT election and
       becoming a taxable C Corporation;

• if we failed to remain qualified as a REIT for those years we elected REIT

status, we would be subject to corporate income taxes and would not be able

to deduct distributions to stockholders when computing our taxable income

for those years;

• 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;


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• 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;

• 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 successfully pursue an appeal to reverse the recent

       unfavorable verdict and judgments in the retrial of the lawsuits in the
       State of Washington, our company being required to record an accrual for
       the judgments in the future, and our ability to defend similar other

pending litigation and the effect such litigation may have on our company;

• our ability to accurately estimate on an annual basis, loss reserves


       related to general liability, workers' compensation and automobile
       liability claims;

• our ability to fulfill our debt service obligations and its impact on our

liquidity;

• our ability to deleverage and repay, refinance or otherwise address our

debt maturities in an amount or on the timeline we expect, or at all;

• 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;

• our ability to identify and successfully complete any potential sales of

additional Company-owned assets and businesses in commercially advantageous

terms on a timely basis, or at all;

• 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;


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• 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;

• 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 and political 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;


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• 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;

• the interruption, delay or failure of the provision of our services or

information systems could adversely affect our business;

• 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 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;

• 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;

• 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 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;

• 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;




  • we are subject to risks related to corporate social responsibility;


  • the market price of our common stock may vary substantially;

• 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;

• various anti-takeover protections applicable to us may make an acquisition


       of us more difficult and reduce the market value of our common stock;


    •  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;

• we may issue additional debt securities that could limit our operating

flexibility and negatively affect the value of our common stock; and

• other factors contained in our filings with the SEC, including, but not


       limited to, those detailed in this 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, except as
required by law. 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 report.

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