GEO GROUP INC
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
GEO$27.80+10.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-093922
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0000950170-24-125597
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 228 previous paragraphs and 221 current paragraphs.
146 unchanged; 64 reworded; 9 added; 12 removed; 6 previous and 2 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Additionally, our 700-bed Broward Transitional Center; 1,314-bed Montgomery Processing Center; and 1,904-bed South Texas ICE Processing Center were renewed for one-year terms through August of 2025, and our Karnes County ICE Processing Center was renewed for a five-year term through August of 2029. Our 1,532-bed Aurora ICE Processing Center was also renewed for a one-year term through October of 2025.
Current report
Comparison of Third Quarter 2024 and Third Quarter 2023
Current report
Revenues for Reentry Services decreased by $1.3 million in Third Quarter 2024 compared to Third Quarter 2023 primarily due to decreases of $3.6 million due to contract terminations. These decreases were partially offset by aggregate net increases of $2.4 million related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals due to new day reporting center contracts.
Current report
Operating expenses for U.S. Secure Services decreased by $1.6 million in Third Quarter 2024 compared to Third Quarter 2023 primarily due to a favorable adjustment for penalties and interest upon entering into a managed audit program with the state of New Mexico taxing authorities of approximately $6.3 million. Refer to Note 11 - Commitments, Contingencies and Other Matters of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion. We also experienced a decrease of approximately $4.7 million related to the transition of operations at the state-owned 1,536-bed Lawrenceville Correctional Center in Virginia to the Virginia Department of Corrections. Partially offsetting these decreases were aggregate net increases in connection with labor and medical costs, transportation services, increased occupancies and the variable costs associated with those services of $9.4 million. Operating expenses as a percentage of segment revenue have decreased due to favorable operating margins on our new transportation contracts.
Current report
Gain on Asset Divestitures/Impairment
Current report
During Third Quarter 2023, we experienced a gain on asset divestiture primarily due to the sale of our company-owned 900-bed Albert Bo Robinson Assessment and Treatment Center.
Current report
Income Tax Provision
Current report
Comparison of Nine Months 2024 and Nine Months 2023
Current report
Revenues for Electronic Monitoring and Supervision Services decreased by $83.6 million in Nine Months 2024 compared to Nine Months 2023 primarily due to decreases in average participant counts under ISAP.
Removed paragraphs (12)
Previous report
Appointment of Mark Suchinski as Chief Financial Officer
Previous report
On June 4, 2024, our Board approved the appointment of Mark J. Suchinski as Senior Vice President and Chief Financial Officer, effective July 8, 2024. Refer to Note 11 - Commitments, Contingencies and Other Matters of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Previous report
On June 20, 2024 we announced that GEO had given notice to the Oklahoma Department of Corrections providing for the discontinuation of our management contract for the company-owned, 2,600-bed Lawton Correctional and Rehabilitation Facility, which was set to expire on June 30, 2024, unless new contract terms could be mutually agreed upon. Subsequently, on June 26th, we announced that GEO and the Oklahoma Department of Corrections had agreed to enter into a one-year contract under new agreed upon terms, effective through June 30, 2025, for GEO to continue operating the Lawton Facility.
Previous report
Comparison of Second Quarter 2024 and Second Quarter 2023
Previous report
Comparison of Six Months 2024 and Six Months 2023
Previous report
Revenues for Electronic Monitoring and Supervision Services decreased by $69.1 million in Six Months 2024 compared to Six Months 2023 primarily due to decreases in average participant counts under ISAP.
Previous report
Income Tax (Benefit) Provision
Previous report
On December 18, 2023, we received a new task order from ICE establishing February 19, 2024 as the end of the contract performance period, ten months short of the end of our 1,940-bed company owned Adelanto ICE Processing Center's base contract term. The next day, on December 19, 2023, ICE issued a public statement, saying, in part, that “While no final decision has been made regarding the disposition of the facility, ICE must consider the effect of ongoing litigation that prevents full use of the facility, likelihood of relief from that litigation, the cost associated with maintaining the facility and the operational requirements for effective national detention operations.”
Previous report
We believe the task order and public statement issued by ICE demonstrate that the government is considering whether to discontinue its use of the facility before the end of the contract’s base term due to the ongoing impact of the outdated COVID-19 related limitations imposed by the federal court over three years ago. As a result, GEO and the three unions representing the Facility’s employees have filed motions to protect GEO’s interests which include annualized revenues and the potential loss of jobs by 350-plus Facility employees. Subsequent to the filing of these motions, ICE extended the task order funding for the Adelanto contract through October 19, 2024.
Previous report
On January 26, 2021, President Biden signed an executive order directing the United States Attorney General not to renew United States Department of Justice ("DOJ") contracts with privately operated criminal detention facilities, as consistent with applicable law. Two agencies of the DOJ, the Federal Bureau of Prisons ("BOP") and the United States Marshals Service ("USMS"), utilized GEO’s support services at the time the executive order was signed. 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 June 30, 2024, GEO has three company-owned/company-leased facilities under direct contracts with USMS, which have current contract option periods that expire between September 2025 and September 2028. As of June 30, 2024, we no longer have any contracts with the BOP for secure correctional facilities.
Previous report
A future 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.
Previous report
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.
Reworded paragraphs (64)
Previous wording
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;
Current wording
our ability to successfully pursue an appeal to reverse the 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;
Previous wording
the market price of our common stock may vary substantially. If the market price of our common stock were to decline in the future at a specific measurement time period that impacts our public float calculation, we could potentially lose our status as a well-known seasoned issuer and/or large accelerated filer;
Current wording
the market price of our common stock may vary substantially;
Previous wording
At June 30, 2024, our worldwide operations include the management and/or ownership of approximately 81,000 beds at 100 secure services and community based facilities, including idle facilities, and also include the provision of community supervision services for individuals through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.
Current wording
At September 30, 2024, our worldwide operations include the management and/or ownership of approximately 80,000 beds at 99 secure services and community based facilities, including idle facilities, and also include the provision of community supervision services for individuals through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.
Previous wording
For the six months ended June 30, 2024 and 2023, we had consolidated revenues of $1,212.9 million and $1,202.1 million, respectively. We maintained an average company-wide facility occupancy rate of approximately 87.8% including 69,834 active beds and excluding 11,275 idle beds, which includes those being marketed to potential customers, for the six months ended June 30, 2024, and approximately 85.0% including 71,316 active beds and excluding 11,166 idle beds, which includes those being marketed to potential customers, for the six months ended June 30, 2023.
Current wording
For the nine months ended September 30, 2024 and 2023, we had consolidated revenues of $1,816.0 million and $1,804.9 million, respectively. We maintained an average company-wide facility occupancy rate of approximately 88% including 68,004 active beds and excluding 11,275 idle beds, which includes those being marketed to potential customers, for the nine months ended September 30, 2024, and approximately 86% including 71,034 active beds and excluding 10,221 idle beds, which includes those being marketed to potential customers, for the nine months ended September 30, 2023.
Previous wording
During the second quarter of 2024, ICE issued a task order for our company-owned 1,940-bed Adelanto ICE Processing Center in California which provides for continued funding through October 19, 2024, allowing additional time for ICE to obtain relief from previously disclosed COVID-related litigation that currently prevents full use of the Adelanto Center.
Current wording
During the second quarter of 2024, ICE issued a task order for our company-owned 1,940-bed Adelanto ICE Processing Center in California which provides for continued funding through October 19, 2024, allowing additional time for ICE to obtain relief from previously disclosed COVID-related litigation that currently prevents full use of the Adelanto Center. On October 4, 2024, we announced that ICE has exercised a five-year option period extending the contract for our Adelanto Center through December 19, 2029.
Previous wording
We are currently marketing 11,275 vacant beds at ten of our idle facilities to potential customers, with the exception of our company-owned 750-bed Cheyenne Mountain Recovery Center, which is under a contract that has not yet been activated. The carrying values of these idle facilities totaled $283.5 million as of June 30, 2024, excluding equipment and other assets that can be easily transferred for use at other facilities. Refer to Note 11 - Commitments, Contingencies and Other Matters of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Current wording
We are currently marketing (or awaiting activation) 11,275 vacant beds at nine of our ten idle facilities to potential customers, with the exception of our company-owned 750-bed Cheyenne Mountain Recovery Center, which is under a contract that has not yet been activated. The carrying values of these idle facilities totaled $282.8 million as of September 30, 2024, excluding equipment and other assets that can be easily transferred for use at other facilities. Refer to Note 11 - Commitments, Contingencies and Other Matters of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Previous wording
The accompanying unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. 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 as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We routinely evaluate our estimates based on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the six months ended June 30, 2024, we did not experience any significant changes in estimates or judgments inherent in the preparation of our consolidated financial statements. A summary of our significant accounting policies is contained in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
The accompanying unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. 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 as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We routinely evaluate our estimates based on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the nine months ended September 30, 2024, we did not experience any significant changes in estimates or judgments inherent in the preparation of our consolidated financial statements. A summary of our significant accounting policies is contained in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
Revenues for U.S. Secure Services increased by $29.6 million in the second quarter ended June 30, 2024 (the "Second Quarter 2024") compared to the second quarter ended June 30, 2023 (the "Second Quarter 2023") primarily due to aggregate increases of $8.2 million primarily due to the activation of new transportation contracts as well as our lease with the Oklahoma Department of Corrections for our company-owned Great Plains Correctional Facility which commenced on May 1, 2023. In addition, we experienced aggregate net increases in rates and/or per diem amounts in connection with contract modifications, transportation services and increased occupancies of $21.4 million.
Current wording
Revenues for U.S. Secure Services increased by $15.9 million in the third quarter ended September 30, 2024 (the "Third Quarter 2024") compared to the third quarter ended September 30, 2023 (the "Third Quarter 2023") due to aggregate net increases of $20.8 million primarily due to increases in occupancies, rates and/or per diem amounts in connection with contract modifications. Partially offsetting this increase were decreases of approximately $4.9 million related to the transition of operations at the state-owned 1,536-bed Lawrenceville Correctional Center in Virginia to the Virginia Department of Corrections.
Previous wording
The number of compensated mandays in U.S. Secure Services facilities was relatively consistent at approximately 4.3 million in Second Quarter 2024 and 4.2 million in Second Quarter 2023. 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 87.7% and 86.6% of capacity in the Second Quarter 2024 and Second Quarter 2023, respectively, excluding idle facilities.
Current wording
The number of compensated mandays in U.S. Secure Services facilities was relatively consistent at approximately 4.2 million in Third Quarter 2024 and Third Quarter 2023. 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 87.2% and 86.6% of capacity in the Third Quarter 2024 and Third Quarter 2023, respectively, excluding idle facilities.
Previous wording
Revenues for Electronic Monitoring and Supervision Services decreased by $23.3 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to decreases in average participant counts under the Intensive Supervision and Appearance Program ("ISAP").
Current wording
Revenues for Electronic Monitoring and Supervision Services decreased by $14.4 million in Third Quarter 2024 compared to Third Quarter 2023 primarily due to decreases in average participant counts under the Intensive Supervision and Appearance Program ("ISAP").
Previous wording
Revenues for International Services increased by $5.7 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to a net increase of $9.7 million due to increased populations at our Australian subsidiary and our new health care contract in Australia. Partially offsetting this increase was a decrease due to foreign exchange rate fluctuations of $4.0 million.
Current wording
Revenues for International Services was relatively consistent in Third Quarter 2024 compared to Third Quarter 2023. We experienced a net increase of $1.4 million primarily due to increased populations at our Australian subsidiary and our new health care contract in Australia. Partially offsetting this increase was a decrease due to foreign exchange rate fluctuations of $1.3 million.
Previous wording
Operating expenses for Electronic Monitoring and Supervision Services decreased by $5.5 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to decreases in variable costs related to decreases in average participant counts under ISAP.
Current wording
Operating expenses for Electronic Monitoring and Supervision Services decreased slightly in Third Quarter 2024 compared to Third Quarter 2023 primarily due to decreases in variable costs related to decreases in average participant counts under ISAP.
Previous wording
Operating expenses for Reentry Services increased by $0.4 million during Second Quarter 2024 compared to Second Quarter 2023 primarily due to aggregate net increases of $3.1 million related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals and the associated variable costs. We also experienced an increase of $0.5 million primarily due to new day reporting center contracts. Partially offsetting these increases was an aggregate net decrease of $3.2 million due to contract terminations.
Current wording
Operating expenses for Reentry Services increased by $2.9 million during Third Quarter 2024 compared to Third Quarter 2023 primarily due to aggregate net increases of $4.5 million related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals and the associated variable costs. Partially offsetting these increases was an aggregate net decrease of $1.6 million due to contract terminations.
Previous wording
Operating expenses for International Services increased by $5.2 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to a net increase of approximately $4.5 million primarily due to expenses associated with our new health care contract in Australia. We also experienced an increase related to foreign exchange rate fluctuations of $0.7 million.
Current wording
Operating expenses for International Services increased slightly in Third Quarter 2024 compared to Third Quarter 2023 primarily due to a net decrease in operating expenses of approximately $1.5 million primarily due to lower occupancies at our Australian subsidiary offset by an increase related to foreign exchange rate fluctuations of $1.6 million.
Previous wording
U.S. Secure Services depreciation and amortization expense increased in Second Quarter 2024 compared to Second Quarter 2023 primarily due to renovations at certain of our company-owned and leased facilities.
Current wording
U.S. Secure Services depreciation and amortization expense increased in Third Quarter 2024 compared to Third Quarter 2023 primarily due to renovations at certain of our company-owned and leased facilities.
Previous wording
Electronic Monitoring and Supervision Services depreciation and amortization expense decreased in Second Quarter 2024 compared to Second Quarter 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as the closing of certain ISAP locations.
Current wording
Electronic Monitoring and Supervision Services depreciation and amortization expense decreased in Third Quarter 2024 compared to Third Quarter 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as the closing of certain ISAP locations.
Previous wording
Reentry Services depreciation and amortization expense decreased in Second Quarter 2024 compared to Second Quarter 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as certain asset dispositions at our Company-owned centers.
Current wording
Reentry Services depreciation and amortization expense decreased in Third Quarter 2024 compared to Third Quarter 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as certain asset dispositions at our company-owned centers.
Previous wording
International Services depreciation and amortization expense was relatively consistent in Second Quarter 2024 compared to Second Quarter 2023.
Current wording
International Services depreciation and amortization expense was relatively consistent in Third Quarter 2024 compared to Third Quarter 2023.
Previous wording
Interest income increased by $0.7 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to higher cash balances on hand domestically and internationally.
Current wording
Interest income increased by $1.8 million in Third Quarter 2024 compared to Third Quarter 2023 primarily due to higher cash balances on hand domestically and internationally.
Previous wording
Interest expense decreased by $4.4 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to our Senior Notes Offering and new Term Loan under our new credit agreement that closed on April 18, 2024 which resulted in overall lower interest rates. We also retired the majority of our 6.50% Exchangeable Senior Notes due 2026 during Second Quarter 2024. Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Current wording
Interest expense decreased by $10.3 million in Third Quarter 2024 compared to Third Quarter 2023 primarily due to our Senior Notes Offering and new Term Loan under our new credit agreement that closed on April 18, 2024 which resulted in overall lower interest rates. We also retired the majority of our 6.50% Exchangeable Senior Notes due 2026 during the second quarter of 2024. Refer to
Previous wording
During Second Quarter 2024, we completed a Senior Note Offering which resulted in a loss on extinguishment of debt of approximately $82.3 million which consisted of the write-off of existing deferred financing costs and net discount/premiums and the payment of call premiums. Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Current wording
During Third Quarter 2024, we experienced a loss on extinguishment of debt of approximately $2.9 million which consisted of the write-off of existing deferred financing costs and the payment of call premiums in connection with mandatory payments made on our Term Loan. Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Previous wording
During Second Quarter 2023, we made a mandatory quarterly prepayment on our Tranche 1 and Tranche 2 loans under our prior senior credit facility. In connection with the prepayment, we wrote off a proportionate amount of related deferred loan costs and discount/premium.
Current wording
During Third Quarter 2023, we made a mandatory quarterly prepayment on our Tranche 1 and Tranche 2 loans under our prior senior credit facility. In connection with the prepayment, we wrote off a proportionate amount of related deferred loan costs and discount/premium.
Previous wording
There was a benefit from income taxes in Second Quarter 2024 due to pre-tax losses for the quarter. The effective tax rate increased compared to Second Quarter 2023. In Second Quarter 2024, there was a $4.5 million net discrete tax benefit as compared to a $0.7 million net discrete tax benefit in Second Quarter 2023. Included in the benefit from income taxes in Second Quarter 2024 there was a $0.1 million discrete tax benefit as compared to no discrete tax expense or benefit in Second Quarter 2023 related to stock compensation that vested during the respective periods. Also included in the net discrete tax benefit from income taxes in the Second Quarter 2024 was a $3.4 million discrete tax benefit from the interest deduction related to GEO shares provided to the holders of our 6.5% Exchangeable Senior Notes due 2026. We estimate our 2024 annual effective tax rate to be in the range of approximately 31% to 33%, exclusive of any discrete items.
Current wording
The provision for income taxes and the effective tax rate both increased in Third Quarter 2024 compared to the Third Quarter 2023. The increase in the effective tax rate is primarily due to the lower pre-tax income level for the Nine Months 2024 compared to 2023, while the higher provision is due to the higher effective tax rate and increased pre-tax income in Third Quarter 2024 compared to Third Quarter 2023. In Third Quarter 2024 and Third Quarter 2023, there was a $0.3 million and $2.1 million net discrete tax benefit, respectively. In Third Quarter 2024 and Third Quarter 2023 there was no discrete tax expense or benefit related to stock compensation that vested during the respective quarters. We estimate our 2024 annual effective tax rate to be in the range of approximately 31% to 33%, exclusive of any discrete items.
Previous wording
Equity in earnings of affiliates, presented net of income tax provision, represents the earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates decreased during Second Quarter 2024 compared to Second Quarter 2023 due to unfavorable insurance adjustments at SACS.
Current wording
Equity in earnings of affiliates, presented net of income tax provision, represents the earnings of SACS and GEOAmey in the aggregate. Equity in earnings of affiliates was relatively consistent during Third Quarter 2024 compared to Third Quarter 2023.
Previous wording
Revenues for U.S. Secure Services increased by $64.5 million in the six months ended June 30, 2024 (the "Six Months 2024") compared to the six months ended June 30, 2023 (the "Six Months 2023") primarily due to aggregate increases of $16.5 million primarily due to the activation of new transportation contracts as well as our lease with the Oklahoma Department of Corrections for our company-owned Great Plains Correctional Facility which commenced on May 1, 2023. In addition, we experienced aggregate net increases in rates and/or per diem amounts in connection with contract modifications, transportation services and increased occupancies of $48.0 million.
Current wording
Revenues for U.S. Secure Services increased by $80.4 million in the nine months ended September 30, 2024 (the "Nine Months 2024") compared to the nine months ended September 30, 2023 (the "Nine Months 2023") due to aggregate increases of $14.6 million primarily due to the activation of new transportation contracts as well as our lease with the Oklahoma Department of Corrections for our company-owned Great Plains Correctional Facility which commenced on May 1, 2023. In addition, we experienced aggregate net increases in rates and/or per diem amounts in connection with contract modifications, transportation services and increased occupancies of $70.7 million. Partially offsetting these increases were decreases of approximately $4.9 million related to the transition of operations at the state-owned 1,536-bed Lawrenceville Correctional Center in Virginia to the Virginia Department of Corrections.
Previous wording
The number of compensated mandays in U.S. Secure Services facilities was relatively consistent at approximately 8.5 million in Six Months 2024 and 8.3 million in Six Months 2023. 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 87.7% and 86.7% of capacity in the Six Months 2024 and Six Months 2023, respectively, excluding idle facilities.
Current wording
The number of compensated mandays in U.S. Secure Services facilities was approximately 12.7 million in Nine Months 2024 and 12.5 million in Nine Months 2023. We experienced an aggregate net increase of approximately 200,000 mandays primarily due to increased occupancies as 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 87.7% and 86.2% of capacity in the Nine Months 2024 and Nine Months 2023, respectively, excluding idle facilities.
Previous wording
Revenues for Reentry Services increased by $5.0 million in Six Months 2024 compared to Six Months 2023 primarily due to increases of $3.5 million due to new day reporting center contracts. We also experienced a net aggregate increase of $8.4 million primarily related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals. These increases were partially offset by decreases of $6.9 million due to contract terminations.
Current wording
Revenues for Reentry Services increased by $3.7 million in Nine Months 2024 compared to Nine Months 2023 primarily due to increases of $3.9 million due to new day reporting center contracts. We also experienced a net aggregate increase of $10.3 million primarily related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals. These increases were partially offset by decreases of $10.5 million due to contract terminations.
Previous wording
Revenues for International Services increased by $10.4 million in Six Months 2024 compared to Six Months 2023 primarily due to a net increase of $17.8 million due to increased populations at our Australian subsidiary and our new health care contract in Australia. Partially offsetting this increase was a decrease due to foreign exchange rate fluctuations of $7.4 million.
Current wording
Revenues for International Services increased by $10.5 million in Nine Months 2024 compared to Nine Months 2023 primarily due to a net increase of $22.1 million due to increased populations at our Australian subsidiary and our new health care contract in Australia. Partially offsetting this increase was a decrease due to foreign exchange rate fluctuations of $11.6 million.
Previous wording
Operating expenses for U.S. Secure Services increased by $34.3 million in Six Months 2024 compared to Six Months 2023 primarily due to aggregate net increases in connection with labor and medical costs, transportation services, increased occupancies and the variable costs associated with those services of $31.6 million. We also experienced an increase of $7.6 million primarily related to new transportation contracts. Partially offsetting these increases were decreases of $4.9 million primarily related to certain insurance adjustments. Operating expenses as a percentage of segment revenue have decreased due to favorable operating margins on our new transportation contracts.
Current wording
Operating expenses for U.S. Secure Services increased by $32.6 million in Nine Months 2024 compared to Nine Months 2023 primarily due to aggregate net increases in connection with labor and medical costs, transportation services, increased occupancies and the variable costs associated with those services of $35.1 million. We also experienced an increase of $7.3 million primarily related to new transportation contracts. Partially offsetting these increases were decreases of approximately $3.5 million related to the transition of operations at the state-owned 1,536-bed Lawrenceville Correctional Center in Virginia to the Virginia Department of Corrections. We also experienced a favorable adjustment for penalties and interest upon entering into a managed audit program with the state of New Mexico taxing authorities of approximately $6.3 million. Refer to Note 11 - Commitments, Contingencies and Other Matters of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion. Operating expenses as a percentage of segment revenue have decreased due to favorable operating margins on our new transportation contracts.
Previous wording
Operating expenses for Electronic Monitoring and Supervision Services decreased by $23.7 million in Six Months 2024 compared to Six Months 2023 primarily due to decreases in variable costs related to decreases in average participant counts under ISAP.
Current wording
Operating expenses for Electronic Monitoring and Supervision Services decreased by $23.7 million in Nine Months 2024 compared to Nine Months 2023 primarily due to decreases in variable costs related to decreases in average participant counts under ISAP.
Previous wording
Operating expenses for Reentry Services increased by $2.1 million during Six Months 2024 compared to Six Months 2023 primarily due to aggregate net increases of $4.6 million related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals and the associated variable costs. We also experienced an increase of $2.6 million primarily due to new day reporting center contracts. Partially offsetting these increases was an aggregate net decrease of $5.1 million due to contract terminations.
Current wording
Operating expenses for Reentry Services increased by $5.0 million during Nine Months 2024 compared to Nine Months 2023 primarily due to aggregate net increases of $8.8 million related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals and the associated variable costs. We also experienced an increase of $2.8 million primarily due to new day reporting center contracts. Partially offsetting these increases was an aggregate net decrease of $6.6 million due to contract terminations.
Previous wording
Operating expenses for International Services increased by $10.9 million in Six Months 2024 compared to Six Months 2023 primarily due to a net increase of approximately $8.4 million primarily due to expenses associated with increased populations and our new health care contract in Australia. We also experienced an increase related to foreign exchange rate fluctuations of $2.5 million.
Current wording
Operating expenses for International Services increased by $10.9 million in Nine Months 2024 compared to Nine Months 2023 primarily due to a net increase of approximately $9.3 million primarily due to expenses associated with increased populations and our new health care contract in Australia. We also experienced an increase related to foreign exchange rate fluctuations of $1.6 million.
Previous wording
U.S. Secure Services depreciation and amortization expense increased in Six Months 2024 compared to Six Months 2023 primarily due to renovations at certain of our company-owned and leased facilities.
Current wording
U.S. Secure Services depreciation and amortization expense increased in Nine Months 2024 compared to Nine Months 2023 primarily due to renovations at certain of our company-owned and leased facilities.
Previous wording
Electronic Monitoring and Supervision Services depreciation and amortization expense decreased in Six Months 2024 compared to Six Months 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as the closing of certain ISAP locations.
Current wording
Electronic Monitoring and Supervision Services depreciation and amortization expense decreased in Nine Months 2024 compared to Nine Months 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as the closing of certain ISAP locations.
Previous wording
Reentry Services depreciation and amortization expense decreased in Six Months 2024 compared to Six Months 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as certain asset dispositions at our Company-owned centers.
Current wording
Reentry Services depreciation and amortization expense decreased in Nine Months 2024 compared to Nine Months 2023 primarily due to certain assets becoming fully depreciated and/or amortized as well as certain asset dispositions at our company-owned centers.
Previous wording
International Services depreciation and amortization expense was relatively consistent in Six Months 2024 compared to Six Months 2023.
Current wording
International Services depreciation and amortization expense was relatively consistent in Nine Months 2024 compared to Nine Months 2023.
Previous wording
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 by $10.5 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to increases in certain transaction fees related to our private exchange transactions involving our convertible notes of $3.1 million, certain compensation adjustment decreases during Second Quarter 2023 of $4.1 million, with the remaining increase due to increases in business development, consulting and other administrative expenses.
Current wording
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 by $13.2 million in Nine Months 2024 compared to Nine Months 2023 primarily due to increases in certain transaction fees related to our private exchange transactions involving our convertible notes of $3.5 million, certain compensation adjustment decreases during Nine Months 2023 of $4.1 million, with the remaining increase due to increases in business development, consulting and other administrative expenses.
Previous wording
Interest income increased by $2.0 million in Six Months 2024 compared to Six Months 2023 primarily due to higher cash balances on hand domestically and internationally.
Current wording
Interest income increased by $3.8 million in Nine Months 2024 compared to Nine Months 2023 primarily due to higher cash balances on hand domestically and internationally.
Previous wording
Interest expense decreased by $7.4 million in Six Months 2024 compared to Six Months 2023 primarily due to our Senior Notes Offering and new Term Loan under our new credit agreement that closed on April 18, 2024 which resulted in overall lower interest rates. We also retired the majority of our 6.50% Exchangeable Senior Notes due 2026 during Six Months 2024. Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Current wording
Interest expense decreased by $17.6 million in Nine Months 2024 compared to Nine Months 2023 primarily due to our Senior Notes Offering and new Term Loan under our new credit agreement that closed on April 18, 2024 which resulted in overall lower interest rates. We also retired the majority of our 6.50% Exchangeable Senior Notes due 2026 during Nine Months 2024. Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Previous wording
During Six Months 2024, we completed a Senior Note Offering which resulted in a loss on extinguishment of debt of approximately $82.4 million which consisted of the write-off of existing deferred financing costs and net discount/premiums and the payment of call premiums. Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Current wording
During Nine Months 2024, we completed a Senior Note Offering and also made mandatory prepayments on our Term Loan which resulted in a loss on extinguishment of debt of approximately $85.3 million which consisted of the write-off of existing deferred financing costs and net discount/premiums and the payment of call premiums. Refer to Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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 were relatively consistent in Third Quarter 2024 compared to Third Quarter 2023.
Current report — wording carried from elsewhere
Note 10 - Debt of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Revenues for Reentry Services increased by $1.4 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to increases of $0.9 million due to new day reporting center contracts. We also experienced a net aggregate increase of $4.0 million primarily related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals. These increases were partially offset by decreases of $3.5 million due to contract terminations.
Previous report — wording carried elsewhere
Operating expenses for U.S. Secure Services increased by $15.3 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to aggregate net increases in connection with labor and medical costs, transportation services, increased occupancies and the variable costs associated with those services of $11.3 million. We also experienced an increase of $4.0 million primarily related to new transportation contracts. Operating expenses as a percentage of segment revenue have decreased due to favorable operating margins on our new transportation contracts.
Previous report — wording carried elsewhere
During Second Quarter 2024, we experienced an impairment loss of approximately $2.3 million related to two of our Company-owned facilities. Refer to Note 11 - Commitments, Contingencies and Other Matters -Idle Facilities of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion. We also donated a parcel of undeveloped land in Kern County, California which resulted in a loss on asset divestiture of approximately $0.6 million.
Previous report — wording carried elsewhere
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 by $13.4 million in Second Quarter 2024 compared to Second Quarter 2023 primarily due to increases in certain transaction fees related to our private exchange transactions involving our convertible notes of $3.1 million, certain compensation adjustment decreases during Second Quarter 2023 of $4.1 million, with the remaining increase due to increases in business development, consulting and other administrative expenses.
Previous report — wording carried elsewhere
(Loss) Gain on Asset Divestitures/Impairment
Previous report — wording carried elsewhere
During Six Months 2023, we experienced a gain on asset divestitures primarily due to the sale of vacant land located in South Dallas County, Texas for a net gain of approximately $2.2 million.