Blog: GEO GROUP INC : Results of Operations and Financial Condition, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – marketscreener.com

Item 2.02 Results of Operations and Financial Condition.

The disclosures contained in Item 7.01 (including Exhibit 99.1) below with
respect to the registrant’s historic results of operations or financial
condition are incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

Beginning in November 2021, The GEO Group, Inc. (“GEO” and, together with its
direct or indirect subsidiaries, the “Company”) engaged in confidential
discussions with (i) certain members of an ad hoc group of holders (the
“Noteholder Group”) of the Company’s 5.125% Senior Notes due 2023, 5.875% Senior
Notes due 2024, and 6.00% Senior Notes due 2026 (such notes, collectively, the
“Senior Notes”), (ii) certain members of an ad hoc group of term lenders (the
“Term Lender Group”) under the Company’s Third Amended and Restated Credit
Agreement, dated as of March 23, 2017 (as subsequently amended, the “Credit
Agreement” and the term loans made thereunder, the “Term Loans”), and (iii) the
administrative agent and certain lenders that have provided revolving credit
loans and commitments under the Credit Agreement (such lenders, the “RCF
Lenders” and such loans, the “RCF Loans”) concerning a potential refinancing,
exchange, recapitalization, or other transaction or series of transactions to
reduce the Company’s funded recourse debt and address its nearer term maturities
(a “Potential Transaction”). The Company undertook these discussions on a
confidential basis pursuant to non-disclosure agreements with the applicable
members of the Noteholder Group and the Term Lender Group, and, in the case of
the RCF Lenders, the confidentiality provisions of the Credit Agreement.

In connection with these discussions, the Company delivered a presentation and
an initial proposal for a Potential Transaction to the Noteholder Group, the
Term Lender Group, and the RCF Lenders. The Company thereafter engaged in
negotiations, and exchanged counterproposals, with each such creditor group.

As of January 5, 2022, the Company has not reached agreement with the Noteholder
Group, the Term Lender Group, or the RCF Lenders with respect to the material
terms of a Potential Transaction. Based on discussions with, and feedback from,
these creditor groups, the Company anticipates that negotiations concerning a
Potential Transaction will continue. In addition, the Company will continue to
actively examine other options to address its funded recourse debt and its
nearer term maturities, including but not limited to, capital markets
transactions, repurchases, redemptions exchanges, refinancings, repayments of
existing indebtedness, and/or potential sales of additional Company-owned
assets, if opportunities to do so are available on acceptable terms.

Although the Company anticipates that negotiations with the above-referenced
creditor groups toward a Potential Transaction will continue, in accordance with
the terms of its non-disclosure agreements with the Noteholder Group and the
Term Lender Group, the Company is disclosing through this Current Report certain
information provided to the Noteholder Group and the Term Lender Group pursuant
to such non-disclosure agreements and in connection with the above-referenced
discussions and a summary of the most recent proposal for a Potential
Transaction delivered by each of the Company, the Noteholder Group, and the Term
Lender Group (the “Potential Transaction Information”). The Potential
Transaction Information includes certain pro forma financial projections for
fiscal years 2021 through 2024, predicated on consummation of the Potential
Transaction, among other assumptions set forth therein. The Company’s actual
results for the fourth quarter 2021 and the fiscal year ended December 31, 2021,
will be reported in its forthcoming Annual Report on Form 10-K. The Potential
Transaction Information is attached as Exhibit 99.1 hereto and incorporated
herein by reference.

For information concerning the Noteholder Group, holders of the Senior Notes may
contact Houlihan Lokey Capital, Inc., the financial advisor to the Noteholder
Group, by email at bondholders@hl.com.

The information furnished in Item 2.02 above and this Item 7.01, including
Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or
otherwise subject to the liabilities of that section, nor shall such information
be deemed incorporated by reference in any filings under the Securities Act of
1933, as amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such filing. The filing of this Item 7.01 of this Current
Report on Form 8-K shall not be deemed an admission as to the materiality of any
information herein that is required to be disclosed solely by reason of
Regulation FD.

Forward-looking statements

This Current Report on Form 8-K (including Exhibit 99.1 hereto) contains
forward-looking statements regarding future events and future performance of GEO
that involve risks and uncertainties that could materially and adversely affect
actual results, including statements regarding GEO’s proposed steps and
potential alternatives to address its future debt maturities. 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 and similar
expressions. Risks and uncertainties that could cause actual results to vary
from current expectations and forward-looking statements contained in this
Current Report include, but are not limited to: (i) GEO’s ability to meet its
financial guidance for 2021 given the various risks to which its business is
exposed; (ii) GEO’s ability to reach agreement concerning a Potential
Transaction on advantageous terms or at all, or otherwise deleverage and repay,
refinance, or otherwise address its debt maturities in an amount or on the
timeline it expects, or at all; (iii) GEO’s ability to obtain financing or
access the capital

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markets in the future on acceptable terms or at all; (iv) GEO’s ability to
identify and successfully complete any potential sales of additional
Company-owned assets on commercially advantageous terms on a timely basis, or at
all; (v) general economic and market conditions, including changes to
governmental budgets and its impact on new contract terms, contract renewals,
renegotiations, per diem rates, fixed payment provisions, and occupancy levels;
(vi) GEO’s ability to successfully pursue growth and continue to create
shareholder value; and (vii) a variety of other factors contained in GEO’s other
filings with the U.S. Securities and Exchange Commission, many of which are
difficult to predict and outside of GEO’s control.

Item 9.01 Financial Statements and Exhibits.



(d) Exhibits:



Exhibit
Number       Description of Exhibit

99.1           Potential Transaction Information

104          Cover Page Interactive Data File (embedded within the Inline XBRL document)

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