Friday, December 03, 2021
The GEO Group, Inc. (GEO)
Changing Corporate Structure
With over 94,000 beds owned, leased or managed across its business lines and serving over 260,000 people daily, GEO is a leading provider of mission critical real estate to its governmental partners. The Company is the first fully integrated equity REIT specializing in the design, financing, development, and operation of secure facilities, processing centers, and community reentry centers in the U.S., Australia, South Africa, and the U.K.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Adopting C-Corp. In a not unexpected development, The GEO Group will become a taxable C-Corp., foregoing the existing REIT structure. The adoption is effective for the year ending December 31, 2021. The Company’s Board also voted to discontinue GEO’s quarterly dividend. The dividend was suspended this past April when management decided to explore changes to the corporate structure.
Near-term Impact. Given the 2021 effective date, during the fourth quarter GEO will incur a one-time, non-cash deferred tax charge of about $75 million and also expects to incur approximately $34 million in incremental tax expense due to the resulting higher corporate tax rate for 2021. The fourth quarter tax expense includes about $26 million in connection with the first three quarters of 2021 …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
