BOCA RATON, Fla.--(BUSINESS WIRE)--The GEO Group, Inc. (NYSE: GEO) ("GEO") today announced that it has received a favorable private letter ruling from the Internal Revenue Service in connection with GEO’s previously announced conversion to a real estate investment trust (“REIT”). GEO also has received an opinion from Skadden, Arps, Slate, Meagher & Flom, LLP, which advised GEO on its REIT conversion that GEO qualifies as a REIT. Based on the receipt of the private letter ruling and the Skadden REIT opinion, GEO’s Board of Directors (the “Board”) has authorized GEO to elect REIT status effective January 1, 2013. GEO will seek inclusion in the appropriate REIT indices at the earliest possible date.
GEO also announced that on January 17, 2013, the Board declared GEO’s first ever quarterly cash dividend as a REIT of $0.50 per share of common stock based on GEO’s new outstanding share count of approximately 71.3 million, which includes the issuance of approximately 9.7 million shares in connection with GEO’s previously announced $350 million special dividend which was paid on December 31, 2012. GEO’s quarterly REIT cash dividend of $0.50 per share will be paid on March 1, 2013 to shareholders of record as of the close of business on February 15, 2013.
George C. Zoley, GEO's Chairman, CEO and Founder, said, “We are very pleased to have received a favorable private letter ruling from the Internal Revenue Service. This important milestone validates the decisive actions taken by our Board and our management team to position GEO to achieve REIT status effective January 1, 2013 and enable our shareholders to begin enjoying the benefits of REIT status as soon as possible. We are also delighted that we were able to complete our earnings and profits distribution in 2012, which provided our shareholders with maximum value. The declaration of our first quarterly cash dividend as a REIT of $0.50 per share and our expected total annual dividends of $2.00 per share in 2013 are indicative of our continued commitment to return value to our shareholders.”
GEO retained Skadden, Arps, Slate, Meagher & Flom LLP and Akerman Senterfitt as legal advisors, Bank of America Merrill Lynch and Barclays Capital as financial co-advisors, and Deloitte, LLP as accounting advisors to assist in GEO’s REIT conversion. The opinion of Skadden, Arps, Slate, Meagher & Flom LLP was based on various assumptions relating to GEO’s organization and operation, and was conditioned upon fact-based representations made by GEO’s management regarding GEO’s organization, assets, and income, and the present and future conduct of GEO’s business operations.
About The GEO Group, Inc.
The GEO Group, Inc. is the world's leading diversified provider of correctional, detention, and community reentry services to federal, state, and local government agencies around the globe. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, and the United Kingdom. GEO's worldwide operations include 18,000 employees, 101 correctional, detention and community reentry facilities, including projects under development, and 73,000 owned and/or managed beds.
This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially affect actual results. Factors that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO's ability to meet its financial guidance given the various risks to which its business is exposed; (2) GEO's ability to declare future cash dividends; (3) GEO's ability to successfully pursue further growth and continue to create shareholder value; (4) risks associated with GEO's ability to control operating costs associated with contract start-ups; (5) GEO's ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO's operations without substantial costs; (6) GEO's ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (7) GEO's ability to obtain future financing on acceptable terms; (8) GEO's ability to sustain company-wide occupancy rates at its facilities; (9) GEO's ability to access the capital markets in the future on satisfactory terms or at all; and (10) other factors contained in GEO's Securities and Exchange Commission filings, including the Form 10-K, 10-Q and 8-K reports.