GEO Group (GEO) Amends and Extends Senior Revolving Credit Facility and Confirms Q409 Earnings Guidance

October 21, 2009 8:50 AM EDT

The GEO Group (NYSE: GEO) announced today the closing of an extension and amendment to its Senior Revolving Credit Facility. The borrowing capacity under GEO's amended Revolver has been increased from $240 million to $325 million. The amended Revolver will bear interest at LIBOR plus 3.25% and will mature in September 2012. With this amendment, GEO's Senior Secured Credit Facility will be comprised of a $156 million Term Loan bearing interest at LIBOR plus 2.00% and maturing in January 2014 and the $325 million Revolver.

Following the completion and activation of GEO's currently committed capital projects in early 2010, GEO expects to have approximately $65 million in outstanding borrowings along with approximately $45 million set aside for letters of credit under its amended $325 million Revolver, leaving approximately $215 million in available borrowing capacity. Additionally, GEO expects to generate approximately $125 million in adjusted free cash flow on an annual run rate beginning in 2010. Over a two-year period, GEO expects to have approximately $465 million in available capital for new growth opportunities.

GEO also confirmed today its earnings guidance for the fourth quarter of 2009 in a pro forma range of $0.38 to $0.39 per diluted share, excluding approximately $0.08 per diluted share related to a one-time, after-tax write-off for the early extinguishment of debt associated with the redemption of GEO's $150 million, 81/4% senior unsecured notes due 2013 as well as $0.03 per diluted share in after-tax start-up/transition expenses related to the fourth quarter activation of the 354-bed Columbia Regional Care Center in Columbia, South Carolina; the 823-bed Parklea Correctional Centre in New South Wales, Australia; and the 545-bed expansion to the 1,030-bed Northwest Detention Center in Tacoma, Washington. GEO expects its fourth quarter 2009 total revenue to be in a range of $313 million to $318 million, including approximately $25 million in construction revenues. GEO's confirmed financial guidance reflects additional interest expense associated with the extension and amendment of its senior credit revolving facility and its recent $250 million, 73/4% senior unsecured notes offering.

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