The GEO Group Suspends Quarterly Dividend to Improve Compensation of Debt Although It Evaluates Corporate Framework
4 min readThe GEO Team, Inc. (NYSE: GEO) (“GEO”) introduced today that its Board of Directors (the “Board”) has instantly suspended GEO’s quarterly dividend payments with the objective of maximizing the use of cash flows to repay credit card debt, deleverage, and internally fund development. GEO now intends to sustain its corporate tax framework as a Genuine Estate Investment decision Trust (“REIT”), but the Board has decided to undertake an evaluation of GEO’s framework as a REIT.
The Board’s analysis of the current company tax framework and GEO’s REIT standing is predicted to get into thought, between other things, likely modifications to GEO’s economical operating performance, as effectively as, probable improvements to the Internal Profits Code of 1986, as amended (the “Code”) applicable to U.S. firms and REITs. The Board expects to conclude its analysis in the fourth quarter of 2021, and really should the Board establish not to adjust its recent intent to keep GEO’s REIT standing, an additional dividend payment may be needed before 12 months-stop in purchase to satisfy the minimal REIT distribution needs below the Code.
As of March 31, 2021, GEO had $291 million in cash on hand and somewhere around $209 million in borrowing capacity available underneath GEO’s revolving credit score facility, in addition to an accordion characteristic of $450 million beneath GEO’s senior credit score facility. GEO has cancelled approximately $35 million in funds expenditures previously prepared for 2021 and has established a target of repaying a minimum amount of $125-$150 million in web credit card debt all through 2021.
About The GEO Team
The GEO Team (NYSE: GEO) is a absolutely integrated equity genuine estate financial investment believe in specializing in the structure, funding, progress, and operation of safe services, processing facilities, and community reentry facilities in the United States, Australia, South Africa, and the United Kingdom. GEO is a main provider of enhanced in-custody rehabilitation, article-launch assist, electronic checking, and neighborhood-centered packages. GEO’s globally functions include things like the possession and/or management of 116 services totaling close to 92,000 beds, together with idle facilities and assignments below enhancement, with a workforce of up to somewhere around 21,000 specialists.
Harmless-Harbor Statement
This push release contains ahead-hunting statements concerning potential occasions and long run functionality of GEO that require hazards and uncertainties that could materially have an affect on real benefits, which includes statements regarding the Board’s final decision to quickly suspend GEO’s quarterly dividend payments with the purpose of maximizing the use of dollars flows to repay personal debt, deleverage, and internally fund progress, although the Board evaluates GEO’s current corporate tax framework and REIT standing. Threats and uncertainties that could lead to precise final results to change from latest expectations and ahead-on the lookout statements contained in this press release include, but are not confined to: (1) the Board’s means to evaluate and conclude its evaluation about GEO’s company tax framework and REIT position by the fourth quarter of 2021 (2) GEO’s means to cancel cash expenditures beforehand planned for 2021 and meet up with its debt compensation purpose for 2021 (3) the timing and scope of likely improvements to the Code applicable to U.S. companies and REITs (4) changes in federal and condition government plan, orders, directives, legislation and laws that influence general public-non-public partnerships with regard to protected, correctional and detention facilities, processing facilities and reentry centers, including the timing and scope of implementation of President Biden’s Govt Get directing the U.S. Attorney Common not to renew the U.S. Department of Justice contracts with privately operated felony detention amenities (5) adjustments in federal immigration coverage (6) community and political opposition to the use of public-non-public partnerships with regard to safe correctional and detention services, processing centers and reentry facilities (7) the magnitude, severity, and length of the latest COVID-19 world-wide pandemic, its effects on GEO and GEO’s capacity to mitigate the dangers related with COVID-19 (8) GEO’s capacity to maintain or enhance corporation-broad occupancy charges at its services in light-weight of the COVID-19 world pandemic and coverage and agreement announcements impacting GEO’s federal facilities in the United States (9) fluctuations in our functioning success, which includes as a result of deal terminations, agreement renegotiations, changes in occupancy levels and improves in our running charges, (10) standard economic and sector conditions, which include improvements to governmental budgets and its impact on new contract phrases, deal renewals, renegotiations, per diem charges, preset payment provisions, and occupancy amounts (11) GEO’s ability to well timed open up services as prepared, profitably take care of such facilities and effectively integrate these types of amenities into GEO’s functions with out significant expenses (12) GEO’s skill to win management contracts for which it has submitted proposals and to keep current administration contracts (13) pitfalls affiliated with GEO’s means to command functioning costs connected with deal start out-ups (14) GEO’s capability to properly go after advancement and carry on to create shareholder value (15) GEO’s means to get hold of funding or accessibility the funds marketplaces in the potential on appropriate terms or at all (16) GEO’s potential to keep on being skilled as a REIT, like its capacity to declare long term dividend payments, need to the Board figure out not to change its present intent to retain GEO’s REIT standing and (17) other things contained in GEO’s Securities and Exchange Fee periodic filings, such as its Type 10-K, 10-Q and 8-K reviews.
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