# Geo Group Inc: Form 10-Q for the period ended Sep 30, 2023

- Company: [Geo Group Inc](/companies/geo.md) (CIK 923796)
- Form: 10-Q
- Filed: 2023-11-08
- Accepted by EDGAR: Nov 8, 2023, 16:02 ET
- Period: 2023-09-30
- Accession: 0000950170-23-061074
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/923796/000095017023061074/geo-20230930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/923796/000095017023061074/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $602.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $1.80bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | $83.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | $268.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-07-01 to 2023-09-30 | $55.8m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2023-01-01 to 2023-09-30 | $165.1m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | $6.5m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | $30.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | $24.5m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | $82.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.16 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | $0.55 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.17 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | $0.56 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 123,433,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 123,479,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | $232.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $53.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-09-30 | $141.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $538.7m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $3.72bn | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $433.3m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2023-09-30 | $1.79bn | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2023-09-30 | $1.26bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 84,728 characters.

### Forward-Looking Information

This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking” statements are any statements that are not based on historical information. Statements other than statements of historical facts included in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, legal proceedings, our corporate structure and potential steps to address our future debt maturities are “forward-looking” statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and we can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or “cautionary statements,” include, but are not limited to:

- our ability to timely build and/or open facilities as planned, successfully manage such facilities and successfully integrate such facilities into our operations without substantial additional costs;
- our ability to estimate the government’s level of utilization of public-private partnerships for secure services and the impact of any modifications or reductions by our government customers of their utilization of public-private partnerships;
- our ability to accurately project the size and growth of public-private partnerships for secure services in the U.S. and internationally and our ability to capitalize on opportunities for public-private partnerships;
- our ability to successfully respond to any challenges or concerns that our government customers may raise regarding their use of public-private partnerships for secure services, including finding other government customers or alternative uses for facilities where a government customer has discontinued or announced that a contract with us will be discontinued;
- the impact of adopted or proposed executive action or legislation aimed at limiting public-private partnerships for secure facilities, processing centers and community reentry centers or limiting or restricting the business and operations of financial institutions or others who do business with us;
- our ability to successfully respond to delays encountered by states pursuing public-private partnerships for secure services and cost savings initiatives implemented by a number of states;
- our ability to activate the inactive beds at our idle facilities;
- our ability to maintain or increase occupancy rates at our facilities and the impact of fluctuations in occupancy levels on our revenues and profitability;
- the impact of our termination of our REIT election and the discontinuation of quarterly dividend payments and our ability to maximize the use of cash flows to repay debt, deleverage and internally fund growth;
- we may fail to realize the anticipated benefits of terminating our REIT election or those benefits may take longer to realize than expected, if at all, or may not offset the costs of terminating our REIT election and becoming a taxable C Corporation;
- if we failed to remain qualified as a REIT for those years we elected REIT status, we would be subject to additional corporate income taxes and would not be able to deduct distributions to shareholders when computing our taxable income for those years;
- our ability to expand, diversify and grow our secure services, reentry, community-based services, monitoring services, evidence-based supervision and treatment programs and secure transportation services businesses;
- our ability to win management contracts for which we have submitted proposals, retain existing management contracts, prevail in any challenge or protest involving the award of a management contract and meet any performance standards required by such management contracts;
- our ability to raise new project development capital given the often short-term nature of the customers’ commitment to use newly developed facilities;
- our ability to develop long-term earnings visibility;
- our ability to successfully conduct our operations in the United Kingdom and South Africa through joint ventures;
- the impact of the LIBOR transition;
- the instability of foreign exchange rates, exposing us to currency risks in Australia, the United Kingdom, and South Africa, or other countries in which we may choose to conduct our business;
- an increase in unreimbursed labor rates;
- our exposure to rising medical costs;
- our ability to manage costs and expenses relating to ongoing litigation arising from our operations;
- 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;
- our ability to accurately estimate on an annual basis, loss reserves related to general liability, workers’ compensation and automobile liability claims;
- our ability to fulfill our debt service obligations and its impact on our liquidity;
- our ability to deleverage and repay, refinance or otherwise address our debt maturities in an amount or on the timeline we expect, or at all;
- despite current indebtedness levels, we may still incur more indebtedness, which could further exacerbate the risks relating to our indebtedness;
- the covenants in the indentures governing the Convertible Notes, the 6.00% Senior Notes due 2026, the 5.875% Senior Notes due 2024 and the covenants in the indentures governing the 2028 Registered Notes, the 2028 Private Exchange Notes and the Exchange Credit Agreement impose significant operating and financial restrictions which may adversely affect our ability to operate our business;
- servicing our indebtedness will require a significant amount of cash and our ability to generate cash depends on many factors beyond our control and we may not be able to generate the cash required to service our indebtedness;
- because portions of our senior indebtedness have floating interest rates, an increase in interest rates would adversely affect cash flows;
- we depend on distributions from our subsidiaries to make payments on our indebtedness and these distributions may not be made;
- we may not be able to satisfy our repurchase obligations in the event of a change of control because the terms of our indebtedness or lack of funds may prevent us from doing so;
- the conditional exchange feature of the 6.5% Exchangeable Senior Notes, if triggered, may adversely affect our financial condition;
- the second lien notes and the related guarantees are effectively subordinated to our and our subsidiary guarantors' current senior secured indebtedness and structurally subordinated to the indebtedness of our subsidiaries that do not guarantee the second lien notes;
- it may be difficult to realize the value of the collateral securing the second lien notes and related guarantees;
- our ability to identify and successfully complete any potential sales of additional Company-owned assets and businesses on commercially advantageous terms on a timely basis, or at all;
- from time to time, we may not have a management contract with a client to operate existing beds at a facility or new beds at a facility that we are expanding, and we cannot assure you that such a contract will be obtained. Failure to obtain a management contract for these beds will subject us to carrying costs with no corresponding management revenue;
- negative conditions in the capital markets could prevent us from obtaining future financing on desirable terms, which could materially harm our business;
- we are subject to the loss of our facility management contracts, due to executive orders, terminations, non-renewals or competitive re-bids, which could adversely affect our results of operations and liquidity, including our ability to secure new facility management contracts from other government customers;
- our growth depends on our ability to secure contracts to develop and manage new secure facilities, processing centers and community-based facilities and to secure contracts to provide electronic monitoring services, community-based reentry services and monitoring and supervision services, the demand for which is outside our control;
- we may not be able to meet state requirements for capital investment or locate land for the development of new facilities, which could adversely affect our results of operations and future growth;
- we partner with a limited number of governmental customers who account for a significant portion of our revenues. The loss of, or a significant decrease in revenues from, these customers could seriously harm our financial condition and results of operations;
- State budgetary constraints may have a material adverse impact on us;
- competition for contracts may adversely affect the profitability of our business;
- we are dependent on government appropriations, which may not be made on a timely basis or at all and may be adversely impacted by budgetary constraints at the federal, state, local and foreign government levels;
- public and political resistance to the use of public-private partnerships for secure facilities, electronic monitoring and supervision as alternatives to detention, processing centers and community reentry centers could result in our inability to obtain new contracts or the loss of existing contracts, impact our ability to obtain or refinance debt financing or enter into commercial arrangements, which could have a material adverse effect on our business, financial condition, results of operations and the market price of our securities;
- adverse publicity may negatively impact our ability to retain existing contracts and obtain new contracts;
- we may incur significant start-up and operating costs on new contracts before receiving related revenues, which may impact our cash flows and may not be recouped;
- failure to comply with extensive government regulation and applicable contractual requirements could have a material adverse effect on our business, financial condition or results of operations;
- we may face community opposition to facility locations, which may adversely affect our ability to obtain new contracts;
- our business operations expose us to various liabilities for which we may not have adequate insurance and may have a material adverse effect on our business, financial condition or results of operations;
- we may not be able to obtain or maintain the insurance levels required by our government contracts;
- our exposure to rising general insurance costs;
- natural disasters, pandemic outbreaks, global political events and other serious catastrophic events could disrupt operations and otherwise materially adversely affect our business and financial condition;
- our international operations expose us to risks that could materially adversely affect our financial condition and results of operations;
- we conduct certain of our operations through joint ventures or consortiums, which may lead to disagreements with our joint venture partners or business partners and adversely affect our interest in the joint ventures or consortiums;
- we are dependent upon our senior management and our ability to attract and retain sufficient qualified personnel;
- our profitability may be materially adversely affected by inflation;
- various risks associated with the ownership of real estate may increase costs, expose us to uninsured losses and adversely affect our financial condition and results of operations;
- risks related to facility construction and development activities may increase our costs related to such activities;
- the rising cost and increasing difficulty of obtaining adequate levels of surety credit on favorable terms could adversely affect our operating results;
- adverse developments in our relationship with our employees could adversely affect our business, financial condition or results of operations;
- technological changes could cause our electronic monitoring products and technology, including our recently launched BI VeriWatch™ wrist-worn device, to become obsolete or require the redesign of our electronic monitoring products, which could have a material adverse effect on our business;
- any negative changes in the level of acceptance of or resistance to the use of electronic monitoring products, including our recently launched BI VeriWatch™ wrist-worn device, and services by governmental customers could have a material adverse effect on our business, financial condition and results of operations;
- we depend on a limited number of third parties to manufacture and supply quality infrastructure components for our electronic monitoring products. If our suppliers cannot provide the components or services we require in a timely manner and/or with such quality as we expect, our ability to market and sell our electronic monitoring products and services could be harmed;
- the interruption, delay or failure of the provision of our services or information systems could adversely affect our business;
- an inability to acquire, protect or maintain our intellectual property and patents in the electronic monitoring space could harm our ability to compete or grow;
- our electronic monitoring products could infringe on the intellectual property rights of others, which may lead to litigation that could itself be costly, could result in the payment of substantial damages or royalties, and/or prevent us from using technology that is essential to our products;
- we license intellectual property rights in the electronic monitoring space, including patents, from third party owners. If such owners do not properly maintain or enforce the intellectual property underlying such licenses, our competitive position and business prospects could be harmed. Our licensors may also seek to terminate our license;
- we may be subject to costly product liability claims from the use of our electronic monitoring products, which could damage our reputation, impair the marketability of our products and services and force us to pay costs and damages that may not be covered by adequate insurance;
- our ability to identify suitable acquisitions or dispositions, and to successfully complete such acquisitions or dispositions;
- as a result of our acquisitions, we have recorded and will continue to record a significant amount of goodwill and other intangible assets. In the future, our goodwill or other intangible assets may become impaired, which could result in material non-cash charges to our results of operations;
- we are subject to risks related to corporate social responsibility;
- the market price of our common stock may vary substantially. If the market price of our common stock were to decline further 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;
- future sales of shares of our common stock or securities convertible into common stock could adversely affect the market price of our common stock and may be dilutive to current shareholders;
- various anti-takeover protections applicable to us may make an acquisition of us more difficult and reduce the market value of our common stock;
- failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have an adverse effect on our business and the trading price of our common stock;
- we may issue additional debt securities that could limit our operating flexibility and negatively affect the value of our common stock;
- failure to comply with anti-bribery and anti-corruption laws could subject us to penalties and other adverse consequences; and
- other factors contained in our filings with the SEC, including, but not limited to, those detailed in the Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K filed with the SEC.

We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q.

### Introduction

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of numerous factors including, but not limited to, those described above under “Forward-Looking Information”, and under “Part I - Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. This discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

We specialize in the ownership, leasing and management of secure facilities, processing centers and reentry facilities and the provision of community-based services in the United States, Australia and South Africa. We own, lease and operate a broad range of secure facilities including maximum, medium and minimum-security facilities, processing centers, as well as community-based reentry facilities. We develop new facilities based on contract awards, using our project development expertise and experience to design, construct and finance what we believe are state-of-the-art facilities. We provide innovative technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community based programs. We also provide secure transportation services domestically and in the United Kingdom through our joint venture GEOAmey.

At September 30, 2023, 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 an average of more than 400,000 individuals, including nearly 180,000 through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

We provide a diversified scope of services on behalf of our government agency partners:

- our secure facility management services involve the provision of security, administrative, rehabilitation, education, and food services at secure services facilities;
- our reentry services involve supervision of individuals in community-based programs and re-entry centers and the provision of temporary housing, programming, employment assistance and other services with the intention of the successful reintegration of residents into the community;
- we provide comprehensive electronic monitoring and supervision services;
- we develop new facilities, using our project development experience to design, construct and finance what we believe are state-of-the-art facilities;
- we provide secure transportation services; and
- our services are provided at facilities which we either own, lease or are owned by the government.

For the nine months ended September 30, 2023 and 2022, we had consolidated revenues of $1,804.9 million and $1,756.0 million, respectively. We maintained an average company-wide facility occupancy rate of approximately 86% including 71,034 active beds and excluding 10,221 idle beds which includes those being marketed to potential customers and those classified as held for sale for the nine months ended September 30, 2023, and approximately 85% including 68,920 active beds and excluding 13,061 idle beds which includes those being marketed to potential customers for the nine months ended September 30, 2022.

Reference is made to Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on February 27, 2023, for further discussion and analysis of information pertaining to our financial condition and results of operations as of and for the year ended December 31, 2022.

### Business Segments

We conduct our business through four reportable business segments: our U.S. Secure Services segment; our Electronic Monitoring and Supervision Services segment; our Reentry Services segment and our International Services segment. We have identified these four reportable segments to reflect our current view that we operate four distinct business lines, each of which constitutes a material part of our overall business.

Our U.S. Secure Services segment primarily encompasses our U.S.-based public-private partnership secure services business. Our Electronic Monitoring and Supervision Services segment, which conducts its services in the U.S., consists of our electronic monitoring and supervision services. Our Reentry Services segment consists of various community-based and reentry services. Our

International Services segment primarily consists of our public-private partnership secure services operations in Australia and South Africa.

### Recent Developments

### Contract Developments

During the third quarter of 2023, we renewed two direct contracts with the U.S. Marshals Service. One was at our company-owned 1,900-bed Rio Grande Processing Center in Texas for a five-year term, and the second at our company-leased 770-bed Western Region Detention Facility in San Diego for a two-year term.

We also renewed three contracts with ICE for respective one-year terms that include our company-owned 700-bed Broward Transitional Center in Florida, our company-owned 1,904-bed South Texas ICE Processing Center, and our company-owned 1,314-bed Montgomery Processing Center in Texas and entered into a new emergency nine month contract to provide air operations support for ICE.

### Idle Facilities

We are currently marketing 9,332 vacant beds at seven of our idle facilities to potential customers which do not include assets classified as held for sale or idle facilities that are under a contract that has not yet been activated. The carrying values of these idle facilities totaled $235.7 million as of September 30, 2023, 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.

### Critical Accounting Policies

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, 2023, 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, 2022.

### RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the notes to our unaudited consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q.

### Comparison of Third Quarter 2023 and Third Quarter 2022

### Revenues

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **U.S. Secure Services** | $385,007 | 63.9% | $368,493 | 59.8% | $16,514 | 4.5% |
| **Electronic Monitoring and Supervision Services** | 94,489 | 15.7% | 137,039 | 22.2% | (42,550) | (31.0)% |
| **Reentry Services** | 71,375 | 11.8% | 65,406 | 10.6% | 5,969 | 9.1% |
| **International Services** | 51,914 | 8.6% | 45,745 | 7.4% | 6,169 | 13.5% |
| **Total** | $602,785 | 100.0% | $616,683 | 100.0% | $(13,898) | (2.3)% |

#### U.S. Secure Services

Revenues for U.S. Secure Services increased by $16.5 million in Third Quarter 2023 compared to Third Quarter 2022 primarily due to aggregate increases of $8.8 million due to the activation of new transportation contracts. 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 $16.6 million. These increases were partially offset by aggregate decreases of $8.8 million primarily due to the ramp-down/deactivation of our company-owned North Lake Correctional Facility.

The number of compensated mandays in U.S. Secure Services facilities was approximately 4.3 million in Third Quarter 2023 and 4.5 million in Third Quarter 2022. We experienced an aggregate net decrease of approximately 200,000 mandays as a result of contract terminations, partially offset by contract activations and increases in occupancies 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 86.6% and 88.8% of capacity in the Third Quarter 2023 and Third Quarter 2022, respectively, excluding idle facilities.

#### Electronic Monitoring and Supervision Services

Revenues for Electronic Monitoring and Supervision Services decreased by $42.6 million in Third Quarter 2023 compared to Third Quarter 2022 primarily due to decreases in average participant counts under the Intensive Supervision and Appearance Program ("ISAP").

#### Reentry Services

Revenues for Reentry Services increased by $6.0 million in Third Quarter 2023 compared to Third Quarter 2022 primarily due to increases of $1.7 million due to new day reporting center contracts. We also experienced a net aggregate increase of $4.2 million primarily related to increased census levels at certain of our community-based and reentry centers due to increased programming needs and referrals.

#### International Services

Revenues for International Services increased by $6.2 million in Third Quarter 2023 compared to Third Quarter 2022 primarily due to a net increase of $8.7 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 $2.5 million.

### Operating Expenses

*(Dollars in thousands)*

|  | 2023 | % of Segment Revenues | 2022 | % of Segment Revenues | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **U.S. Secure Services** | $301,201 | 78.2% | $281,694 | 76.4% | $19,507 | 6.9% |
| **Electronic Monitoring and Supervision Services** | 41,145 | 43.5% | 61,351 | 44.8% | (20,206) | (32.9)% |
| **Reentry Services** | 50,256 | 70.4% | 51,121 | 78.2% | (865) | (1.7)% |
| **International Services** | 48,065 | 92.6% | 42,044 | 91.9% | 6,021 | 14.3% |
| **Total** | $440,667 | 73.1% | $436,210 | 70.7% | $4,457 | 1.0% |

#### U.S. Secure Services

Operating expenses for U.S. Secure Services increased by $19.5 million in Third Quarter 2023 compared to Third Quarter 2022 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 $19.2 million. We also experienced an increase of $5.7 million related to new transportation contracts. Partially offsetting these increases were decreases of $5.4 million primarily related to the ramp-down/deactivation of our company-owned North Lake Correctional Facility. Operating expenses as a percentage of revenue have increased due to increased labor and medical costs and increased variable costs associated with population increases for several of our minimum guarantee contracts.

#### Electronic Monitoring and Supervision Services

Operating expenses for Electronic Monitoring and Supervision Services decreased by $20.2 million in Third Quarter 2023 compared to Third Quarter 2022 primarily due to decreases in variable costs related to decreases in average participant counts under ISAP.

#### Reentry Services

Operating expenses for Reentry Services decreased by $0.9 million during Third Quarter 2023 compared to Third Quarter 2022 primarily due to a decrease of $2.0 million due to contract terminations. Partially offsetting this decrease was an aggregate net increase of $2.2 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 $1.9 million due to new day reporting center contracts. We also experienced net favorable adjustments of $3.0 million primarily related to worker's compensation actuarial adjustments and employee retention credits from the IRS in Third Quarter 2023.

#### International Services

Operating expenses for International Services increased by $6.0 million in Third Quarter 2023 compared to Third Quarter 2022 primarily due to a net increase of approximately $8.4 million primarily due to expenses associated with our new health care contract in Australia. Partially offsetting this increase was a decrease related to foreign exchange rate fluctuations of $2.4 million.

### Depreciation and Amortization

*(Dollars in thousands)*

|  | 2023 | % of Segment Revenue | 2022 | % of Segment Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **U.S. Secure Services** | $19,619 | 5.1% | $19,337 | 5.2% | $282 | 1.5% |
| **Electronic Monitoring and Supervision Services** | 6,693 | 7.1% | 8,015 | 5.8% | (1,322) | (16.5)% |
| **Reentry Services** | 4,293 | 6.0% | 4,469 | 6.8% | (176) | (3.9)% |
| **International Services** | 568 | 1.1% | 509 | 1.1% | 59 | 11.6% |
| **Total** | $31,173 | 5.2% | $32,330 | 5.2% | $(1,157) | (3.6)% |

#### U.S. Secure Services

U.S. Secure Services depreciation and amortization expense increased in Third Quarter 2023 compared to Third Quarter 2022 primarily due to renovations at certain of our company-owned and leased facilities.

#### Electronic Monitoring and Supervision Services

Electronic Monitoring and Supervision Services depreciation and amortization expense decreased in Third Quarter 2023 compared to Third Quarter 2022 primarily due to certain assets becoming fully depreciated and/or amortized as well as the closing of certain ISAP locations.

#### Reentry Services

Reentry Services depreciation and amortization expense decreased in Third Quarter 2023 compared to Third Quarter 2022 primarily due to certain assets becoming fully depreciated and/or amortized as well as certain asset dispositions at our company-owned centers.

#### International Services

International Services depreciation and amortization expense was relatively consistent in Third Quarter 2023 compared to Third Quarter 2022.

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **General and Administrative Expenses** | $47,356 | 7.9% | $50,022 | 8.1% | $(2,666) | (5.3)% |

38

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 decreased by $2.7 million in Third Quarter 2023 compared to Third Quarter 2022 primarily due to decreases in professional fees, insurance and other administrative expenses.

### Non-Operating Expenses

### Interest Income and Interest Expense

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Interest Income** | $1,320 | 0.2% | $5,111 | 0.8% | $(3,791) | (74.2)% |
| **Interest Expense** | $55,777 | 9.3% | $46,537 | 7.5% | $9,240 | 19.9% |

Interest income decreased in Third Quarter 2023 compared to Third Quarter 2022 primarily due to the sale of our equity interest in the Ravenhall project in Australia in August 2022 and the corresponding decrease in interest income on the contract receivable. Also contributing to the decrease was the effect of foreign exchange rate fluctuations. 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.

On August 19, 2022, we completed an exchange offer to exchange certain of our outstanding 5.125% Senior Notes due 2023, 5.875% Senior Notes due 2024, 6.00% Senior Notes due 2026 and certain revolving credit loans and term loans under our senior secured credit facility into newly issued senior second lien secured notes and a new exchange credit agreement. Interest expense increased in Third Quarter 2023 compared to Third Quarter 2022 primarily due to higher interest rates on the new debt instruments as well as the net amortization of deferred issuance costs and discounts/premiums related to the transaction. Additionally, SOFR/LIBOR rates have increased in Third Quarter 2023 compared to Third Quarter 2022. 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.

### Loss on Extinguishment of Debt

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Loss on Extinguishment of Debt** | $91 | 0.0% | $37,487 | 6.1% | $(37,396) | (99.8)% |

During Third Quarter 2023, the Company made a mandatory quarterly prepayment on its Tranche 1 and Tranche 2 loans under its exchange credit agreement. In connection with the prepayment, the Company wrote off a proportionate amount of related deferred loan costs and discount/premium. 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.

During Third Quarter 2022, the Company completed an exchange offer to exchange certain of its outstanding 5.125% Senior Notes due 2023, 5.875% Senior Notes due 2024, 6.000% Senior Notes due 2026 and certain revolving credit loans and term loans under its senior secured credit facility into newly issued senior second lien secured notes and a new credit facility. As a result of the transactions, we recorded a net loss on extinguishment of debt of $37.5 million.

### Gain on Asset Divestitures

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Gain on Asset Divestitures** | $1,274 | 0.2% | $29,279 | 4.7% | $(28,005) | (95.6)% |

We experienced a gain on asset divestiture in Third Quarter 2023 primarily due to the sale of our company-owned 900-bed Albert Bo Robinson Assessment and Treatment Center.

During Third Quarter 2022, we sold our equity investment interest in the government-owned Ravenhall Correctional Centre project in Australia for approximately $84 million in gross proceeds, pre-tax to an unrelated third party. As a result of the transaction, we recorded a gain of approximately $29.3 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.

### Income Tax Provision

*(Dollars in thousands)*

|  | 2023 | Effective Rate | 2022 | Effective Rate | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Provision for Income Taxes** | $6,521 | 21.5% | $11,246 | 23.2% | $(4,725) | (42.0)% |

The provision for income taxes decreased during Third Quarter 2023 principally due to lower pre-tax income for the quarter. The effective tax rate decreased compared to Third Quarter 2022. In Third Quarter 2023, there was a $2.1 million net discrete tax benefit as compared to a $4.3 million net discrete tax benefit in Third Quarter 2022. Due to the lower pre-tax income during Third Quarter 2023, the net discrete benefit in the quarter had a larger impact on the effective tax rate. We estimate our 2023 annual effective tax rate to be in the range of approximately 27% to 30%, exclusive of any discrete items.

### Equity in Earnings of Affiliates, net of Income Tax Provision

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Equity in Earnings of Affiliates, net of Income Tax Provision** | $709 | 0.1% | $1,071 | 0.2% | $(362) | (33.8)% |

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 Third Quarter 2023 compared to Third Quarter 2022 due to unfavorable performance at SACS.

### Comparison of Nine Months 2023 and Nine Months 2022

### Revenues

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **U.S. Secure Services** | $1,123,507 | 62.2% | $1,073,140 | 61.1% | $50,367 | 4.7% |
| **Electronic Monitoring and Supervision Services** | 335,158 | 18.6% | 346,444 | 19.7% | (11,286) | (3.3)% |
| **Reentry Services** | 203,192 | 11.3% | 192,557 | 11.0% | 10,635 | 5.5% |
| **International Services** | 143,028 | 7.9% | 143,904 | 8.2% | (876) | (0.6)% |
| **Total** | $1,804,885 | 100% | $1,756,045 | 100.0% | $48,840 | 2.8% |

#### U.S. Secure Services

Revenues for U.S. Secure Services increased by $50.4 million in Nine Months 2023 compared to Nine Months 2022 primarily due to aggregate increases of $14.3 million due to the activation of new transportation contracts. 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 $75.5 million. These increases were partially offset by aggregate decreases of $39.4 million due to the ramp-down/deactivations of our company-owned North Lake Correctional Facility and our managed-only George W. Hill Correctional Facility.

The number of compensated mandays in U.S. Secure Services facilities was approximately 12.5 million in Nine Months 2023 and 13.3 million in Nine Months 2022. We experienced an aggregate net decrease of approximately 800,000 mandays as a result of contract terminations, partially offset by contract activations and increases in occupancies 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 86.2% and 88.2% of capacity in Nine Months 2023 and Nine Months 2022, respectively, excluding idle facilities.

#### Electronic Monitoring and Supervision Services

Revenues for Electronic Monitoring and Supervision Services decreased by $11.3 million in Nine Months 2023 compared to Nine Months 2022 primarily due to decreases in average participant counts under ISAP.

#### Reentry Services

Revenues for Reentry Services increased by $10.6 million in Nine Months 2023 compared to Nine Months 2022 primarily due to increases of $4.6 million due to new day reporting center contracts. We also experienced a net aggregate increase of $12.3 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 $6.3 million due to contract terminations.

#### International Services

Revenues for International Services decreased by $0.9 million in Nine Months 2023 compared to Nine Months 2022 primarily due to foreign exchange rate fluctuations of $9.5 million. This decrease was partially offset by a net increase of $8.6 million due to increased populations at our Australian subsidiary and our new health care contract in Australia.

### Operating Expenses

*(Dollars in thousands)*

|  | 2023 | % of Segment Revenues | 2022 | % of Segment Revenues | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **U.S. Secure Services** | $869,233 | 77.4% | $796,913 | 74.3% | $72,320 | 9.1% |
| **Electronic Monitoring and Supervision Services** | 147,144 | 43.9% | 162,072 | 46.8% | (14,928) | (9.2)% |
| **Reentry Services** | 153,078 | 75.3% | 144,563 | 75.1% | 8,515 | 5.9% |
| **International Services** | 132,832 | 92.9% | 129,614 | 90.1% | 3,218 | 2.5% |
| **Total** | $1,302,287 | 72.2% | $1,233,162 | 70.2% | $69,125 | 5.6% |

#### U.S. Secure Services

Operating expenses for U.S. Secure Services increased by $72.3 million in Nine Months 2023 compared to Nine Months 2022 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 $88.2 million. We also experienced an increase of $9.7 million related to new transportation contracts. Partially offsetting these increases were decreases of $25.6 million related to the ramp-down/deactivations of our company-owned North Lake Correctional Facility and our managed-only George W. Hill Correctional Facility. Operating expenses as a percentage of revenue have increased due to increased labor and medical costs and increased variable costs associated with population increases for several of our minimum guarantee contracts.

#### Electronic Monitoring and Supervision Services

Operating expenses for Electronic Monitoring and Supervision Services decreased by $14.9 million in Nine Months 2023 compared to Nine Months 2022 primarily due to decreases in variable costs related to decreases in average participant counts under ISAP. Operating expenses as a percentage of revenues decreased due to favorable cost trends.

#### Reentry Services

Operating expenses for Reentry Services increased by $8.5 million during Nine Months 2023 compared to Nine Months 2022 primarily due to an aggregate net increase of $9.2 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 $5.6 million due to the new day reporting center contracts. Partially offsetting these increases was a decrease of $6.3 million due to contract terminations.

#### International Services

Operating expenses for International Services increased by $3.2 million in Nine Months 2023 compared to Nine Months 2022 primarily due to a net increase of approximately $12.1 million primarily due to increases in populations at our Australian subsidiary and transitional expenses associated with our new health care contract in Australia. Partially offsetting this increase was a decrease related to foreign exchange rate fluctuations of $8.9 million.

### Depreciation and Amortization

*(Dollars in thousands)*

|  | 2023 | % of Segment Revenue | 2022 | % of Segment Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **U.S. Secure Services** | $58,685 | 5.2% | $61,233 | 5.7% | $(2,548) | (4.2)% |
| **Electronic Monitoring and Supervision Services** | 21,554 | 6.4% | 23,534 | 6.8% | (1,980) | (8.4)% |
| **Reentry Services** | 12,916 | 6.4% | 13,967 | 7.3% | (1,051) | (7.5)% |
| **International Services** | 1,632 | 1.1% | 1,550 | 1.1% | 82 | 5.3% |
| **Total** | $94,787 | 5.3% | $100,284 | 5.7% | $(5,497) | (5.5)% |

#### U.S. Secure Services

U.S. Secure Services depreciation and amortization expense decreased in Nine Months 2023 compared to Nine Months 2022 primarily due to certain assets becoming fully depreciated and/or amortized.

#### Electronic Monitoring and Supervision Services

Electronic Monitoring and Supervision Services depreciation and amortization expense decreased in Nine Months 2023 compared to Nine Months 2022 primarily due to certain assets becoming fully depreciated and/or amortized as well as the closing of certain ISAP locations.

#### Reentry Services

Reentry Services depreciation and amortization expense decreased in Nine Months 2023 compared to Nine Months 2022 primarily due to certain assets becoming fully depreciated and/or amortized as well as certain asset dispositions at our company-owned centers.

#### International Services

International Services depreciation and amortization expense was relatively consistent in Nine Months 2023 compared to Nine Months 2022.

### Other Unallocated Operating Expenses

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **General and Administrative Expenses** | $139,182 | 7.7% | $147,878 | 8.4% | $(8,696) | (5.9)% |

42

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 decreased by $8.7 million in Nine Months 2023 compared to Nine Months 2022 primarily due to decreases in professional fees, insurance and other administrative expenses.

### Non-Operating Expenses

### Interest Income and Interest Expense

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Interest Income** | $3,785 | 0.2% | $16,301 | 0.9% | $(12,516) | (76.8)% |
| **Interest Expense** | $165,081 | 9.1% | $111,383 | 6.3% | $53,698 | 48.2% |

Interest income decreased in Nine Months 2023 compared to Nine Months 2022 primarily due to the sale of our equity interest in the Ravenhall project in Australia in August 2022 and the corresponding decrease in interest income on the contract receivable. Also contributing to the decrease was the effect of foreign exchange rate fluctuations. 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.

On August 19, 2022, we completed an exchange offer to exchange certain of our outstanding 5.125% Senior Notes due 2023, 5.875% Senior Notes due 2024, 6.00% Senior Notes due 2026 and certain revolving credit loans and term loans under our senior secured credit facility into newly issued senior second lien secured notes and a new exchange credit agreement. Interest expense increased in Nine Months 2023 compared to Nine Months 2022 primarily due to higher interest rates on the new debt instruments as well as the net amortization of deferred issuance costs and discounts/premiums related to the transaction. Additionally, SOFR/LIBOR rates have increased in Nine Months 2023 compared to Nine Months 2022. 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.

### Loss on Extinguishment of Debt

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Loss on Extinguishment of Debt** | $1,845 | 0.1% | $37,487 | 2.1% | $(35,642) | (95.1)% |

During Nine Months 2023, the Company made a mandatory quarterly prepayment on its Tranche 1 and Tranche 2 loans under its exchange credit agreement. In connection with the prepayment, the Company wrote off a proportionate amount of related deferred loan costs and discount/premium. 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.

During Nine Months 2022, we completed an exchange offer to exchange certain of our outstanding 5.125% Senior Notes due 2023, 5.875% Senior Notes due 2024, 6.00% Senior Notes due 2026 and certain revolving credit loans and term loans under our senior secured credit facility into newly issued senior second lien secured notes and a new credit facility. As a result of the transactions, we recorded a net loss on extinguishment of debt of $37.5 million, net of the write-off of associated unamortized deferred loan costs.

### Gain on Asset Divestitures

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Gain on Asset Divestitures** | $3,449 | 0.2% | $32,332 | 1.8% | $(28,883) | (89.3)% |

We experienced a gain on asset divestitures in Nine Months 2023 primarily due to the sale of vacant land located in South Dallas County, Texas and the sale of our company-owned 900-bed Albert Bo Robinson Assessment and Treatment Center.

During Nine Months 2022, we sold our equity investment interest in the government-owned Ravenhall Correctional Centre project in Australia for approximately $84 million in gross proceeds, pre-tax to an unrelated third party. As a result of the transaction, we recorded a gain of approximately $29.3 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. The net gain in Nine Months 2022 also includes the sale of our Perry County Correctional Facility located in Alabama.

### Income Tax Provision

*(Dollars in thousands)*

|  | 2023 | Effective Rate | 2022 | Effective Rate | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Provision for Income Taxes** | $30,036 | 27.6% | $48,106 | 27.6% | $(18,070) | (37.6)% |

43

The provision for income taxes decreased during Nine Months 2023 due to lower pre-tax income for Nine Months 2023. In turn, our effective tax rate during Nine Months 2023 and Nine Months 2022 is the same. In Nine Months 2023 and Nine Months 2022, there was a $2.0 million and $2.3 million net discrete tax benefit, respectively. Included in the provision for income taxes in Nine Months 2023 and Nine Months 2022 were a $0.9 million and $2.0 million discrete tax expense related to stock compensation that vested during the respective periods. We estimate our 2023 annual effective tax rate to be in the range of approximately 27% to 30%, exclusive of any discrete items.

### Equity in Earnings of Affiliates, net of Income Tax Provision

*(Dollars in thousands)*

|  | 2023 | % of Revenue | 2022 | % of Revenue | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Equity in Earnings of Affiliates, net of Income Tax Provision** | $3,121 | 0.2% | $3,786 | 0.2% | $(665) | (17.6)% |

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 Nine Months 2023 compared to Nine Months 2022 primarily due to less favorable performance by GEOAmey and SACS.

### Financial Condition

### Capital Requirements

Our current cash requirements consist of amounts needed for working capital, debt service, supply purchases, research and development costs related to new electronic monitoring products, investments in joint ventures, and capital expenditures related to either the development of new secure, processing and reentry facilities, or the maintenance of existing facilities. In addition, some of our management contracts require us to make substantial initial expenditures of cash in connection with opening or renovating a facility. Generally, these initial expenditures are subsequently fully or partially recoverable as pass-through costs or are billable as a component of the per diem rates or monthly fixed fees to the contracting agency over the original term of the contract. Additional capital needs may also arise in the future with respect to possible acquisitions, other corporate transactions or other corporate purposes.

We currently have contractual commitments for a number of projects using Company financing. We estimate that the cost of these existing active capital projects will be approximately $57.8 million of which $43.0 million was spent through September 30, 2023. We estimate that the remaining capital requirements related to these capital projects will be $14.8 million which will be spent through the remainder of 2023.

We plan to fund all of our capital needs, including capital expenditures, from cash on hand, cash from operations, borrowings under our Exchange Credit Agreement and any other financings which our management and Board, in their discretion, may consummate. Currently, our primary source of liquidity to meet these requirements is cash flow from operations and borrowings under our Exchange Credit Agreement. Our management believes that our financial resources and sources of liquidity will allow us to manage our business, financial condition, results of operations and cash flows. We completed our annual budgeting process, and for 2023, we will continue to strategically manage our capital expenditures to maintain both short and long term financial objectives. Additionally, we may from time to time pursue transactions for the potential sale of additional assets and businesses and/or other strategic transactions. Our management believes that cash on hand, cash flows from operations and availability under our Exchange Credit Agreement will be adequate to support our capital requirements for 2023 as disclosed under “Capital Requirements” above and the next twelve months.

### Liquidity and Capital Resources

### Indebtedness

#### Exchange Offering

On August 19, 2022, we completed an exchange offer to exchange certain of our outstanding 5.125% Senior Notes due 2023, 5.875% Senior Notes due 2024, 6.00% Senior Notes due 2026 and certain revolving credit loans and term loans under our senior secured credit facility into newly issued senior second lien secured notes and a new Exchange Credit Agreement. 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.

Following the completed exchange offer in August 2022, S&P Global Ratings upgraded our issuer rating to B with a stable outlook. In September 2022, Moody’s Investors Service upgraded our corporate family rating to B3 with a stable outlook.

#### 6.50% Exchangeable Senior Notes due 2026

On February 24, 2021, our wholly owned subsidiary, GEOCH, completed a private offering of $230 million aggregate principal amount of 6.50% Exchangeable Notes due 2026, which included the full exercise of the initial purchasers’ over-allotment option to purchase an additional $30 million aggregate principal amount of Convertible Notes. The Convertible Notes will mature on February 23, 2026, unless earlier repurchased or exchanged. The Convertible Notes bear interest at the rate of 6.50% per year plus an additional amount based on the dividends paid by GEO on its common stock. Interest on the notes is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021.

Upon conversion, we will pay or deliver, as the case may be, cash or a combination of cash and shares of common stock. The initial conversion rate is 108.4011 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $9.225 per share of common stock). The conversion rate will be subject to adjustment in certain events. If GEO or GEOCH undergoes a fundamental change, holders may require GEOCH to purchase the notes in whole or in part for cash at a fundamental change purchase price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date.

Our debt outstanding under the new Exchange Credit Agreement, the New Registered Notes, the New Private Notes, the 6.50% Exchangeable Notes due 2026, the 6.00% Senior Notes due 2026 and the 5.875% Senior Notes due 2024 require cash expenditures for debt service. Our significant debt obligations could have material consequences. See “Risk Factors-Risks Related to Our High Level of Indebtedness” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022. We are exposed to various commitments and contingencies which may have a material adverse effect on our liquidity. We also have guaranteed certain obligations for certain of our international subsidiaries. These commitments, contingencies and guarantees are further discussed in our Annual Report on Form 10-K for the year ended December 31, 2022.

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 information on our indebtedness.

We consider opportunities for future business and/or asset acquisitions or dispositions as we deem appropriate when market conditions present opportunities. If we are successful in our pursuit of any new projects, our cash on hand, cash flows from operations and borrowings under the new Exchange Credit Agreement may not provide sufficient liquidity to meet our capital needs and we could be forced to seek additional financing or refinance our existing indebtedness. There can be no assurance that any such financing or refinancing would be available to us on terms equal to or more favorable than our current financing terms, or at all. In the future, our access to capital and ability to compete for future capital-intensive projects will also be dependent upon, among other things, our ability to meet certain financial covenants in the indenture governing the New Registered Notes, the indenture governing the New Private Notes, the indenture governing the 5.875% Senior Notes due 2024, the indenture governing the 6.00% Senior Notes due 2026, the indenture governing our Convertible Notes and our Exchange Credit Agreement. A substantial decline in our financial performance could limit our access to capital pursuant to these covenants and have a material adverse effect on our liquidity and capital resources and, as a result, on our financial condition and results of operations. In addition to these foregoing potential constraints on our capital, a number of state government agencies have been suffering from budget deficits and liquidity issues. While we were in compliance with our debt covenants as of September 30, 2023 and we expect to continue to be in compliance with our debt covenants, if these constraints were to intensify, our liquidity could be materially adversely impacted as could our ability to remain in compliance with these debt covenants.

#### Guarantor Financial Information

GEO’s New Registered Notes, New Private Notes, Convertible Notes, 6.00% Senior Notes due 2026, and the 5.875% Senior Notes due 2024 are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of our wholly owned domestic subsidiaries (the “Subsidiary Guarantors”).

Summarized financial information is provided for The GEO Group, Inc. (“Parent”) and the Subsidiary Guarantors on a combined basis in accordance with SEC Regulation S-X Rules 3-10 and 13-01. The accounting policies used in the preparation of this summarized financial information are consistent with those elsewhere in the consolidated financial statements of the Company, except that intercompany transactions and balances of the Parent and Subsidiary Guarantor entities with non-guarantor entities have not been eliminated. Intercompany transactions between the Parent and Subsidiary Guarantors have been eliminated and equity in earnings from and investments in non-guarantor subsidiaries have not been presented.

Summarized statement of operations (in thousands):

|  | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 |
| --- | ---: | ---: |
| Net operating revenues | $1,652,780 | $1,602,182 |
| Income from operations | 254,779 | 280,776 |
| Net income | 65,343 | 105,331 |
| Net income attributable to The GEO Group, Inc. | 65,343 | 105,331 |

Summarized balance sheets (in thousands):

|  | September 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Current assets | $462,402 | $492,080 |
| Noncurrent assets (a) | 3,031,037 | 3,059,195 |
| Current liabilities | 329,064 | 370,177 |
| Noncurrent liabilities (b) | 2,059,542 | 2,163,004 |

(a) Includes amounts due from non-guarantor subsidiaries of $32.4 million and $32.6 million as of September 30, 2023 and December 31, 2022, respectively.

(b) Includes amounts due to non-guarantor subsidiaries of $8.2 million and $8.9 million as of September 30, 2023 and December 31, 2022, respectively.

### Off-Balance Sheet Arrangements

Except as discussed in the notes to our Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, we do not have any off-balance sheet arrangements.

### Cash Flow

Cash, cash equivalents and restricted cash and cash equivalents as of September 30, 2023 was $206.2 million compared to $121.4 million as of September 30, 2022.

### Operating Activities

Net cash provided by operating activities amounted to $232.7 million for the nine months ended September 30, 2023 versus net cash provided by operating activities of $227.6 million for the nine months ended September 30, 2022. Cash provided by operating activities during the nine months ended September 30, 2023 was positively impacted by net income attributable to GEO, non-cash expenses such as depreciation and amortization, loss on sale/disposal of property and equipment, loss on extinguishment of debt, amortization of debt issuance costs, discount and/or premium and other non-cash interest, dividends received from unconsolidated joint ventures and stock-based compensation expense. Equity in earnings of affiliates, net of tax and gain on asset divestitures negatively impacted cash. Accounts receivable, prepaid expenses and other assets decreased in total by $45.1 million, representing a positive impact on cash. The decrease was primarily driven by the favorable timing of billings and collections. Accounts payable, accrued expenses and other liabilities decreased by $9.7 million which negatively impacted cash. The decrease was primarily driven by the timing of payments.

Net cash provided by operating activities for the nine months ended September 30, 2022 was positively impacted by net income attributable to GEO, non-cash expenses such as depreciation and amortization, amortization of debt issuance costs, discount and/or premium and other non-cash interest, dividends received from unconsolidated joint ventures and stock-based compensation expense. Equity in earnings of affiliates, net of tax, gain on sale/disposal of property and equipment and gain on asset divestitures negatively impacted cash. Changes in accounts receivable, prepaid expenses and other assets increased in total by $34.4 million, representing a negative impact on cash. The increase was primarily driven by the timing of billings and collections. Changes in accounts payable, accrued expenses and other liabilities increased by $9.0 million which positively impacted cash. The increase was primarily driven by the timing of payments.

### Investing Activities

Net cash used in investing activities of $38.4 million during the nine months ended September 30, 2023 was primarily the result of capital expenditures of $53.6 million and changes in restricted investments of $2.6 million, partially offset by proceeds from sale of real estate and other assets of $15.1 million and proceeds from sale of property and equipment of $2.7 million. Net cash provided by investing activities of $23.7 million during the nine months ended September 30, 2022 was primarily the result of capital expenditures of $72.2 million, changes in restricted investments of $5.5 million, partially offset by proceeds from sale of real estate and other assets of $99.8 million.

### Financing Activities

Net cash used in financing activities during the nine months ended September 30, 2023 was approximately $128.8 million compared to net cash used in financing activities of $670.1 million during the nine months ended September 30, 2022. Net cash used in financing activities during the nine months ended September 30, 2023 was primarily the result of payments on long-term debt of $131.4 million and taxes paid related to net share settlement of equity awards of $3.4 million partially offset by proceeds from sale of treasury shares of $5.8 million. Net cash provided by financing activities during the nine months ended September 30, 2022 was primarily the result of payments on long-term debt of $676.1 million, proceeds from long-term debt of $50.0 million, debt issuance costs of $41.5 million and payments on non-recourse debt of $1.3 million.

### Non-GAAP Measures

EBITDA is defined as net income adjusted by adding provisions for income tax, interest expense, net of interest income, loss on extinguishment of debt and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for gain on asset divestitures, pre-tax, net loss attributable to non-controlling interests, stock-based compensation expenses, pre-tax, transaction related expenses, pre-tax, other non-cash revenue and expenses, pre-tax, and certain other adjustments as defined from time to time.

Given the nature of our business as a real estate owner and operator, we believe that EBITDA and Adjusted EBITDA are helpful to investors as measures of our operational performance because they provide an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures, and to fund other cash needs or reinvest cash into our business.

We believe that by removing the impact of our asset base (primarily depreciation and amortization) and excluding certain non-cash charges, amounts spent on interest and taxes, and certain other charges that are highly variable from year to year, EBITDA and Adjusted EBITDA provide our investors with performance measures that reflect the impact to operations from trends in occupancy rates, per diem rates and operating costs, providing a perspective not immediately apparent from net income.

The adjustments we make to derive the non-GAAP measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in income from continuing operations and which we do not consider to be the fundamental attributes or primary drivers of our business plan and they do not affect our overall long-term operating performance.

EBITDA and Adjusted EBITDA provide disclosure on the same basis as that used by our management and provide consistency in our financial reporting, facilitate internal and external comparisons of our historical operating performance and our business units and provide continuity to investors for comparability purposes.

Our reconciliation of net income to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands):

|  | Three Months Ended September 30, 2023 | September 30, 2022 | Nine Months Ended September 30, 2023 | September 30, 2022 |
| --- | ---: | ---: | ---: | ---: |
| **Net income** | **$24,503** | **$38,312** | **$82,022** | **$130,164** |
| **Add:** |  |  |  |  |
| Income tax provision \* | 6,588 | 11,435 | 30,617 | 48,570 |
| Interest expense, net of interest income | 54,457 | 41,426 | 161,296 | 95,082 |
| Loss on extinguishment of debt | 91 | 37,487 | 1,845 | 37,487 |
| Depreciation and amortization | 31,173 | 32,330 | 94,787 | 100,284 |
| **EBITDA** | **$116,812** | **$160,990** | **$370,567** | **$411,587** |
| **Add (Subtract):** |  |  |  |  |
| Gain on asset divestitures, pre-tax | (1,274) | (29,279) | (3,449) | (32,332) |
| Net loss attributable to noncontrolling interests | 16 | 25 | 71 | 119 |
| Stock-based compensation expenses, pre-tax | 3,116 | 3,141 | 12,052 | 13,010 |
| Transaction related expenses, pre-tax | — | 1,322 | — | 1,322 |
| Other non-cash revenue & expenses, pre-tax | — | — | (687) | — |
| **Adjusted EBITDA** | **$118,670** | **$136,199** | **$378,554** | **$393,706** |
| \* including income tax provision on equity in earnings of affiliate |  |  |  |  |

48

### Outlook

The following discussion contains statements that are not limited to historical statements and, therefore, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied in the forward-looking statements. Please refer to “Part I - Item 1A. Risk Factors” and the "Forward Looking Statements - Safe Harbor" sections in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for further discussion on forward-looking statements and the risks and other factors that could prevent us from achieving our goals and cause the assumptions underlying the forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements.

As of the date of this filing, the public health emergency declaration related to the COVID-19 pandemic has ended. Despite this fact, there continues to be lingering impacts of the COVID-19 pandemic in the regions in which we operate. At this time, it is not possible for us to predict the duration or magnitude of the adverse results stemming from the outbreak and its lingering effects on our business or results of operations, financial condition, or liquidity. We will continue to coordinate closely with our government agency partners and local health agencies to ensure the health and safety of all those in our care and our employees.

We continue to be encouraged by the current landscape of growth opportunities; however, any positive trends may, to some extent, be adversely impacted by government budgetary constraints or any changes to a government's willingness to maintain or grow public-private partnerships in the future. While state finances overall are stable, future budgetary pressures may cause state agencies to pursue a number of cost savings initiatives which may include reductions in per diem rates and/or the scope of services provided by private operators or the decision to not re-bid a contract after expiration of the contract term. These potential cost savings initiatives could have a material adverse impact on our current operations and/or our ability to pursue new business opportunities. Additionally, if state budgetary constraints, as discussed above, develop, persist or intensify, our state customers’ ability to pay us may be impaired and/or we may be forced to renegotiate our management contracts on less favorable terms and our financial condition, results of operations or cash flows could be materially adversely impacted. We plan to actively bid on any new projects that fit our target profile for profitability and operational risk. Any positive trends in the industry may be offset by several factors, including budgetary constraints, contract modifications, contract terminations, contract non-renewals, contract re-bids and/or the decision to not re-bid a contract after expiration of the contract term and the impact of any other potential changes to the willingness or ability to maintain or grow public-private partnerships on the part of other government agencies. We believe we have a strong relationship with our government agency partners and we believe that we operate facilities that maximize security, safety and efficiency while offering our suite of GEO Continuum of Care programs, services and resources.

On January 26, 2021, President Biden signed an executive order directing the United States Attorney General not to renew DOJ contracts with privately operated criminal detention facilities, as consistent with applicable law. Two agencies of the DOJ, the BOP and the 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 September 30, 2023, 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. These facilities combined represented approximately 6% of our revenues for the nine months ended September 30, 2023. As of September 30, 2023, we no longer have any contracts with the BOP for secure correctional facilities.

President Biden’s 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.

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.

California enacted legislation that became effective on January 1, 2020 aimed at phasing out public-private partnership contracts for the operation of secure correctional facilities and detention facilities within California and facilities outside of the State of California housing State of California inmates. Currently, we have four public-private partnership contracts in place with ICE relating to secure services facilities located in California. The contracts for these facilities/annexes do not expire until December of 2034. GEO and the DOJ filed separate legal actions challenging the constitutionality of the attempted ban on new federal contracts entered into after the effective date of the California law. On October 5, 2021, the Ninth Circuit Court of Appeals reversed a prior U.S. District Court decision dismissing the requests by GEO and the United States for declaratory and injunctive relief and ruled that AB32 conflicts with federal law in violation of the Supremacy Clause of the U.S. Constitution and discriminates against the federal government in violation of the intergovernmental immunity doctrine. On April 26, 2022, the Ninth Circuit granted California’s petition for an en banc hearing and vacated the previous panel’s opinion. En banc arguments took place the week of June 21, 2022, in Pasadena, California. On September 26, 2022, in an 8-3 decision, the En Banc court vacated the prior decision denying the requests by GEO and the United States for declaratory and injunctive relief barring application of the California law to federal immigration processing centers. The Ninth Circuit Court of Appeals, En Banc, ruled that AB-32 would give California a virtual power of review over detention decisions made by ICE in violation of the Supremacy Clause. The court held that whether analyzed under intergovernmental immunity or preemption, California cannot exert such control over the federal government’s detention operations. The case was remanded to the U.S. District Court for further proceedings, consistent with the court’s ruling. On May 23, 2023, the District Court entered a Final Judgment and Permanent Injunction in favor of GEO and the United States. 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 information on our indebtedness.

Recently the State of Washington approved a similar measure, EHB 1090, banning the use of public-private partnership contracts for the operation of detention facilities in the state, that GEO also challenged in federal court. GEO's contract for the company-owned 1575-bed Northwest ICE Processing Center in Washington has a renewal option period that expires in 2025. On June 22, 2023, the State of Washington filed a stipulation indicating, among other things, that it will not enforce House Bill 1090 against GEO for its operation of the Northwest ICE Processing Center. The facility generated approximately $66 million in annualized revenues for GEO during the year ended December 31, 2022.

Internationally, we are exploring opportunities in our current markets and will continue to actively bid on any opportunities that fit our target profile for profitability and operational risk. We are pleased to have been awarded a ten-year contract renewal for the continued delivery of secure transportation under our GEOAmey joint venture in the United Kingdom. In January 2023, our Australian subsidiary, GEO Australia, entered into a contract with the Department of Justice and Community Safety in the State of Victoria for the delivery of primary health services across thirteen public prisons. The contract commenced on July 1, 2023 and is expected to generate approximately AUD47.5 million, or $31.8 million based on average exchange rates for the nine months ended September 30, 2023, in incremental annualized revenue for GEO.

With respect to our reentry services, electronic monitoring services, and community-based services business, we are currently pursuing a number of business development opportunities. Related to opportunities for community-based reentry services, we are working with our existing federal, state, and local clients to leverage new opportunities for both residential reentry facilities as well as non-residential day reporting centers. With respect to the Department of Homeland Security's ISAP, the number of participants steadily increased throughout 2022, however, since the beginning of 2023, there has been a decline in ISAP participants as a result of recent changes in immigration and budgetary pressures. There are no assurances that there will not be a further decline in ISAP participants in 2023 and beyond. Title 42, which provided for restrictions at the Southwest border under the COVID public health emergency declaration, ended on May 11, 2023. We are focused on delivering high quality services and developing new and innovative technology solutions. To this end, we recently launched VeriWatch, a new wrist-worn GPS tracking device that allows for real-time and discrete monitoring of individuals under community supervision. We continue to expend resources on informing federal, state and local governments about the benefits of public-private partnerships, and we anticipate that there will be new opportunities in the future as those efforts continue to yield results. We believe we are well positioned to capitalize on any suitable opportunities that become available in this area.

#### Operating Expenses

Operating expenses consist of those expenses incurred in the operation and management of our contracts to provide services to our governmental clients. Labor and related costs represented approximately 66% and 63% of our operating expenses during the nine months ended September 30, 2023 and 2022, respectively. Additional significant operating expenses include food, utilities and medical costs. During the nine months ended September 30, 2023 and 2022, operating expenses totaled approximately 72% and 70%, respectively, of our consolidated revenues. We expect our operating expenses as a percentage of revenues in 2023 will be impacted by the opening of any new or existing idle facilities as a result of the cost of transitioning and/or start-up operations related to a facility opening. We also expect that our operating expenses will be impacted by the effect of inflation on costs related to personnel, utilities, insurance, and medical and food, among other operational costs. During 2023, we will incur carrying costs for facilities that are currently vacant.

#### General and Administrative Expenses

General and administrative expenses consist primarily of corporate management salaries and benefits, professional fees and other administrative expenses. During each of the nine months ended September 30, 2023 and 2022, general and administrative expenses totaled approximately 8% of our consolidated revenues. We expect general and administrative expenses as a percentage of revenues in 2023 to remain consistent or decrease as a result of cost savings initiatives.

#### Idle Facilities

We are currently marketing 9,332 vacant beds at six of our U.S. Secure Services and at one of our Reentry Services idle facilities to potential customers. One of our U.S Secure Services idle facilities, the 750-bed Cheyenne Mountain Recovery Center, is currently under a contract that has not yet been activated. The annual net carrying cost of our idle facilities in 2023 is estimated to be $25.6 million, including depreciation expense of $12.5 million. As of September 30, 2023, these eight facilities had a combined net book value of $253.4 million. We currently do not have any firm commitment or agreement in place to activate the idle facilities. Historically, some facilities have been idle for multiple years before they received a new contract award. These idle facilities are included in the U.S. Secure Services and Reentry Services segments. The per diem rates that we charge our clients often vary by contract across our portfolio. However, if the eight remaining idle facilities were to be activated using our U.S. Secure Services and Reentry Services average per diem rates in 2023 (calculated as the U.S. Secure Services and Reentry Services revenue divided by the number of U.S. Secure Services and Reentry Services mandays) and based on the average occupancy rate in our facilities through September 30, 2023, we would expect to receive incremental annualized revenue of approximately $290 million and an annualized increase in earnings per share of approximately $0.28 to $0.33 per share based on our average operating margins.

## Market risk

As filed, 1,644 characters.

#### Interest Rate Risk

We are exposed to market risks related to changes in interest rates with respect to our Exchange Credit Agreement. Payments under the Exchange Credit Agreement are indexed to a variable interest rate. Based on borrowings outstanding under the Exchange Credit Agreement of approximately $982.7 million and approximately $76 million in outstanding letters of credit, as of September 30, 2023, for every one percent increase in the average interest rate applicable to the Exchange Credit Facility, our total annual interest expense would increase by approximately $10 million.

Additionally, we invest our cash in a variety of short-term financial instruments to provide a return. These instruments generally consist of highly liquid investments with original maturities at the date of purchase of three months or less. While these instruments are subject to interest rate risk, a hypothetical 100 basis point increase or decrease in market interest rates would not have a material impact on our financial condition or results of operations.

#### Foreign Currency Exchange Rate Risk

We are also exposed to market risks related to fluctuations in foreign currency exchange rates between the U.S. dollar, and the Australian dollar, the South African Rand and the British Pound currency exchange rates. Based upon our foreign currency exchange rate exposure as of September 30, 2023, every 10 percent change in historical currency rates would have approximately a $7.6 million effect on our financial position and approximately a $0.9 million impact on our results of operations during the nine months ended September 30, 2023.

## Controls and procedures

As filed, 2,821 characters.

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act), as of the end of the period covered by this report. On the basis of this review, our management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed in our reports filed with the SEC, under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

It should be noted that the effectiveness of our system of disclosure controls and procedures is subject to certain limitations inherent in any system of disclosure controls and procedures, including the exercise of judgment in designing, implementing and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events, and the inability to eliminate misconduct completely. Accordingly, there can be no assurance that our disclosure controls and procedures will detect all errors or fraud. As a result, by its nature, our system of disclosure controls and procedures can provide only reasonable assurance regarding management’s control objectives.

Changes in Internal Control Over Financial Reporting.

Our management is responsible to report any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management believes that there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. There were no significant changes to our internal control over financial reporting during the quarter ended September 30, 2023.

## Risk factors

As filed, 309 characters.

Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future prospects. We encourage you to read these risk factors in their entirety.

Filed Nov 8, 2023.
Source: SEC EDGAR, the filing index for accession 0000950170-23-061074. Last ingested by Listed: Oct 30, 2026, 17:29 ET. No prices; not investment advice.