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The GEO Group Reports First Quarter 2012 Results; Accelerates Dividend Policy To Third Quarter 2012 And Will Increase Cash Dividend In Fourth Quarter 2012

Stocks in this article: GEO

GEO expects its 2012 Adjusted EBITDA to be in a range of $330 million to $340 million and its 2012 Adjusted Funds from Operations to be in a range of $195 million to $205 million, or $3.18 to $3.34 per share.

GEO expects its second quarter 2012 revenues to be in a range of $410 million to $415 million and its pro forma earnings per share to be in a range of $0.40 to $0.42 per share, excluding $0.03 per share in after-tax start-up/transition expenses, international bid and proposal expenses, and M&A related expenses.

GEO’s increased earnings guidance reflects the previously announced continuation of the Golden State Community Correctional Facility contract in California through December 14, 2012 partially offset by the expected deactivation/transition of GEO’s managed-only contracts for the East Mississippi, Walnut Grove, and Marshall County Correctional Facilities, which the State of Mississippi has decided to competitively rebid this year. GEO had previously announced its decision to discontinue its management contract for the East Mississippi Correctional Facility effective July 19, 2012, and GEO’s increased earnings guidance for 2012 now assumes that all three contracts will be deactivated/transitioned in the second half of the year.

GEO’s 2012 financial guidance does not assume the potential reactivation of approximately 7,000 current beds in inventory which GEO is actively marketing to local, state, and federal customers. The after-tax carrying costs associated with keeping the facilities idle represent approximately $0.14 per share, of which more than half are non-cash expenses. GEO’s guidance also reflects approximately $0.18 per share in after-tax intangibles amortization expense mostly related to the acquisitions of Cornell Companies and BI.

Stock Repurchase Program

On July 14, 2011, GEO’s Board of Directors approved a stock repurchase program of up to $100.0 million of GEO’s common stock effective through December 31, 2012. Through the end of the first quarter 2012, GEO had repurchased approximately 3.9 million shares of its common stock for approximately $75.0 million.

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