As a REIT, GEO would expect to generate $320 million to $330 million in 2013 Adjusted EBITDA, $215 million to $225 million in 2013 Funds from Operations, $200 million to $210 million in 2013 Adjusted Funds from Operations and $130 million to $140 million in 2013 pre-tax income. This financial performance would allow GEO to pay an estimated annual REIT dividend in 2013 of approximately $2.20 to $2.40 per share of common stock based on GEO's current outstanding share count of 61.6 million. GEO will provide further financial guidance for 2013 in its fourth quarter 2012 earnings announcement.
GEO expects to incur $15 million to $20 million in one-time REIT conversion costs/charges, including costs associated with modifying existing bank debt agreements. Approximately $10 million to $15 million of the one-time REIT-related costs/charges will be incurred in the fourth quarter of 2012, and the balance will be incurred in the first quarter of 2013. The one-time REIT conversion related costs/charges will be offset by the elimination of certain net deferred tax liabilities in the fourth quarter of 2012 resulting in a positive adjustment to earnings of $90 million to $110 million. GEO expects to incur an additional $3 million to $5 million in annual compliance expenses going forward.
Internal Corporate RestructuringIn order to position itself for REIT eligibility, GEO will reorganize its operations into separate legal wholly-owned operating business units through a taxable REIT subsidiary (“TRS”). Through the TRS structure, a small portion of GEO’s businesses, which are non-real estate related, such as GEO’s managed-only contracts, international operations, electronic monitoring services, and other non-residential facilities, will be part of wholly-owned taxable subsidiaries of the REIT, while most of GEO’s business segments, which are real estate related and involve company-owned and company-leased facilities, will be part of the REIT. The TRS structure will allow GEO to maintain the strategic alignment of almost all of its diversified business segments under one entity.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV