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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to_______             

Commission file number: 1-14260 

 

The GEO Group, Inc.

(Exact name of registrant as specified in its charter) 

 

 

Florida

 

65-0043078

(State or other jurisdiction of

incorporation or organization)

 

(IRS Employer

Identification No.)

 

 

 

4955 Technology Way

Boca Raton, Florida

 

33431

(Address of principal executive offices)

 

(Zip Code)

 

(561) 893-0101

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.01 par value per share

 

GEO

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No  

As of August 4, 2020, the registrant had 121,333,944 shares of common stock outstanding.

 

 

 

 


Table of Contents

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

3

ITEM 1. FINANCIAL STATEMENTS

3

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

4

CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2020 (UNAUDITED) AND DECEMBER 31, 2019

5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

6

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

27

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

47

ITEM 4. CONTROLS AND PROCEDURES

47

PART II - OTHER INFORMATION

48

ITEM 1. LEGAL PROCEEDINGS

48

ITEM 1A. RISK FACTORS

48

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

49

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

49

ITEM 4. MINE SAFETY DISCLOSURES

49

ITEM 5. OTHER INFORMATION

49

ITEM 6. EXHIBITS

50

SIGNATURES

51

 

2


Table of Contents

 

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2020 AND 2019

(In thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2020

 

 

June 30, 2019

 

 

June 30, 2020

 

 

June 30, 2019

 

Revenues

 

$

587,829

 

 

$

613,966

 

 

$

1,192,846

 

 

$

1,224,633

 

Operating expenses

 

 

445,339

 

 

 

453,168

 

 

 

906,661

 

 

 

910,165

 

Depreciation and amortization

 

 

33,434

 

 

 

32,352

 

 

 

66,761

 

 

 

64,821

 

General and administrative expenses

 

 

45,543

 

 

 

47,271

 

 

 

99,325

 

 

 

93,695

 

Operating income

 

 

63,513

 

 

 

81,175

 

 

 

120,099

 

 

 

155,952

 

Interest income

 

 

5,248

 

 

 

8,045

 

 

 

10,686

 

 

 

16,441

 

Interest expense

 

 

(30,610

)

 

 

(38,932

)

 

 

(64,790

)

 

 

(79,212

)

(Loss) gain on extinguishment of debt

 

 

 

 

 

(5,741

)

 

 

1,563

 

 

 

(5,741

)

Income before income taxes and equity in earnings of affiliates

 

 

38,151

 

 

 

44,547

 

 

 

67,558

 

 

 

87,440

 

Provision for income taxes

 

 

4,196

 

 

 

4,532

 

 

 

10,742

 

 

 

9,372

 

Equity in earnings of affiliates, net of income tax provision of

   $484, $357, $928 and $716, respectively

 

 

2,699

 

 

 

1,821

 

 

 

4,959

 

 

 

4,417

 

Net income

 

 

36,654

 

 

 

41,836

 

 

 

61,775

 

 

 

82,485

 

Net loss attributable to noncontrolling interests

 

 

66

 

 

 

78

 

 

 

126

 

 

 

134

 

Net income attributable to The GEO Group, Inc.

 

$

36,720

 

 

$

41,914

 

 

$

61,901

 

 

$

82,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

119,810

 

 

 

119,168

 

 

 

119,602

 

 

 

118,972

 

Diluted

 

 

119,964

 

 

 

119,544

 

 

 

119,937

 

 

 

119,517

 

Net income per common share attributable to The GEO Group,

   Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share attributable to The GEO Group,

   Inc. - basic

 

$

0.31

 

 

$

0.35

 

 

$

0.52

 

 

$

0.69

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share attributable to The GEO Group,

   Inc. - diluted

 

$

0.31

 

 

$

0.35

 

 

$

0.52

 

 

$

0.69

 

Dividends declared per share

 

$

0.48

 

 

$

0.48

 

 

$

0.96

 

 

$

0.96

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3


Table of Contents

 

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2020 AND 2019

(In thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2020

 

 

June 30, 2019

 

 

June 30, 2020

 

 

June 30, 2019

 

Net income

 

$

36,654

 

 

$

41,836

 

 

$

61,775

 

 

$

82,485

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

4,003

 

 

 

29

 

 

 

(4,804

)

 

 

1,761

 

Pension liability adjustment, net of tax provision

   of $28, $11, $57 and $22, respectively

 

 

106

 

 

 

42

 

 

 

213

 

 

 

(605

)

Change in fair value of derivative instrument

   classified as cash flow hedge, net of tax (benefit) provision of

   $(51), $809, $(1,258) and $1,014, respectively

 

 

(163

)

 

 

4,583

 

 

 

(4,675

)

 

 

5,746

 

Total other comprehensive income (loss), net of tax

 

 

3,946

 

 

 

4,654

 

 

 

(9,266

)

 

 

6,902

 

Total comprehensive income

 

 

40,600

 

 

 

46,490

 

 

 

52,509

 

 

 

89,387

 

Comprehensive loss attributable to noncontrolling interests

 

 

65

 

 

 

73

 

 

 

173

 

 

 

129

 

Comprehensive income attributable to The GEO Group, Inc.

 

$

40,665

 

 

$

46,563

 

 

$

52,682

 

 

$

89,516

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4


Table of Contents

 

THE GEO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020 AND DECEMBER 31, 2019

(In thousands, except share data)

 

 

 

June 30,

2020

 

 

December 31,

2019

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

75,734

 

 

$

32,463

 

Restricted cash and cash equivalents

 

 

28,345

 

 

 

32,418

 

Accounts receivable, less allowance for doubtful accounts of $2,862 and $4,183,

   respectively

 

 

361,030

 

 

 

430,982

 

Contract receivable, current portion

 

 

6,078

 

 

 

11,199

 

Prepaid expenses and other current assets

 

 

39,133

 

 

 

40,716

 

Total current assets

 

 

510,320

 

 

 

547,778

 

Restricted Cash and Investments

 

 

32,703

 

 

 

30,923

 

Property and Equipment, Net

 

 

2,130,126

 

 

 

2,144,722

 

Assets Held for Sale

 

 

4,526

 

 

 

6,059

 

Contract Receivable

 

 

355,964

 

 

 

360,647

 

Operating Lease Right-of-Use Assets, Net

 

 

123,401

 

 

 

121,527

 

Deferred Income Tax Assets

 

 

36,278

 

 

 

36,278

 

Goodwill

 

 

776,349

 

 

 

776,356

 

Intangible Assets, Net

 

 

198,826

 

 

 

210,070

 

Other Non-Current Assets

 

 

74,219

 

 

 

83,174

 

Total Assets

 

$

4,242,712

 

 

$

4,317,534

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

86,155

 

 

$

99,232

 

Accrued payroll and related taxes

 

 

76,925

 

 

 

54,672

 

Accrued expenses and other current liabilities

 

 

186,272

 

 

 

191,608

 

Operating lease liabilities, current portion

 

 

26,992

 

 

 

26,208

 

Current portion of finance lease liabilities, long-term debt and non-recourse debt

 

 

24,577

 

 

 

24,208

 

Total current liabilities

 

 

400,921

 

 

 

395,928

 

Deferred Income Tax Liabilities

 

 

19,254

 

 

 

19,254

 

Other Non-Current Liabilities

 

 

104,601

 

 

 

88,526

 

Operating Lease Liabilities

 

 

99,264

 

 

 

97,291

 

Finance Lease Liabilities

 

 

2,608

 

 

 

2,954

 

Long-Term Debt

 

 

2,371,556

 

 

 

2,408,297

 

Non-Recourse Debt

 

 

300,213

 

 

 

309,236

 

Commitments and Contingencies (Note 11)

 

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 30,000,000 shares authorized,

   none issued or outstanding

 

 

 

 

 

 

Common stock, $0.01 par value, 187,500,000 shares authorized,

   126,156,711 and 125,435,573 issued and 121,370,096

   121,225,319 outstanding, respectively

 

 

1,262

 

 

 

1,254

 

Additional paid-in capital

 

 

1,252,037

 

 

 

1,230,865

 

Distributions in excess of earnings

 

 

(174,038

)

 

 

(119,779

)

Accumulated other comprehensive loss

 

 

(29,554

)

 

 

(20,335

)

Treasury stock, 4,786,615 and 4,210,254 shares, at cost, respectively

 

 

(104,457

)

 

 

(95,175

)

Total shareholders’ equity attributable to The GEO Group, Inc.

 

 

945,250

 

 

 

996,830

 

Noncontrolling interests

 

 

(955

)

 

 

(782

)

Total shareholders’ equity

 

 

944,295

 

 

 

996,048

 

Total Liabilities and Shareholders’ Equity

 

$

4,242,712

 

 

$

4,317,534

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5


Table of Contents

 

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

FOR THE SIX MONTHS ENDED

JUNE 30, 2020 AND 2019

(In thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

2020

 

 

June 30,

2019

 

Cash Flow from Operating Activities:

 

 

 

 

 

 

 

 

Net income

 

$

61,775

 

 

$

82,485

 

Net loss attributable to noncontrolling interests

 

 

126

 

 

 

134

 

Net income attributable to The GEO Group, Inc.

 

 

61,901

 

 

 

82,619

 

Adjustments to reconcile net income attributable to The GEO Group, Inc. to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

66,761

 

 

 

64,821

 

Stock-based compensation

 

 

14,474

 

 

 

12,180

 

(Gain) loss on extinguishment of debt

 

 

(1,563

)

 

 

5,741

 

Amortization of debt issuance costs, discount and/or premium and other non-cash

   interest

 

 

3,378

 

 

 

5,023

 

Provision for doubtful accounts

 

 

184

 

 

 

259

 

Equity in earnings of affiliates, net of tax

 

 

(4,959

)

 

 

(4,417

)

Dividends received from unconsolidated joint venture

 

 

2,892

 

 

 

3,088

 

Loss on sale/disposal of property and equipment, net

 

 

2,781

 

 

 

1,972

 

Loss on assets held for sale

 

 

774

 

 

 

1,083

 

Changes in assets and liabilities, net of effects of acquisitions:

 

 

 

 

 

 

 

 

Changes in accounts receivable, prepaid expenses and other assets

 

 

69,647

 

 

 

38,866

 

Changes in contract receivable

 

 

2,457

 

 

 

3,151

 

Changes in accounts payable, accrued expenses and other liabilities

 

 

38,049

 

 

 

2,681

 

Net cash provided by operating activities

 

 

256,776

 

 

 

217,067

 

Cash Flow from Investing Activities:

 

 

 

 

 

 

 

 

Insurance proceeds - damaged property

 

 

4,597

 

 

 

10,761

 

Proceeds from sale of property and equipment

 

 

137

 

 

 

304

 

Proceeds from sale of assets held for sale

 

 

1,300

 

 

 

 

Change in restricted investments

 

 

(1,749

)

 

 

(4,816

)

Capital expenditures

 

 

(53,470

)

 

 

(55,410

)

Net cash used in investing activities

 

 

(49,185

)

 

 

(49,161

)

Cash Flow from Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt

 

 

225,579

 

 

 

170,000

 

Payments on long-term debt

 

 

(262,411

)

 

 

(213,926

)

Payments on non-recourse debt

 

 

(2,908

)

 

 

(326,942

)

Proceeds from non-recourse debt

 

 

 

 

 

326,127

 

Taxes paid related to net share settlements of equity awards

 

 

(2,789

)

 

 

(4,177

)

Proceeds from issuance of common stock in connection with ESPP

 

 

296

 

 

 

252

 

Payment for repurchases of common stock

 

 

(9,009

)

 

 

 

Debt issuance costs

 

 

 

 

 

(9,937

)

Proceeds from the exercise of stock options

 

 

 

 

 

1,077

 

Cash dividends paid

 

 

(116,160

)

 

 

(116,122

)

Net cash used in financing activities

 

 

(167,402

)

 

 

(173,648

)

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash

   and Cash Equivalents

 

 

(960

)

 

 

824

 

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash

   and Cash Equivalents

 

 

39,229

 

 

 

(4,918

)

Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, beginning of period

 

 

67,472

 

 

 

84,472

 

Cash, Cash Equivalents and Restricted Cash and Cash Equivalents, end of period

 

$

106,701

 

 

$

79,554

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

Non-cash Investing and Financing activities:

 

 

 

 

 

 

 

 

Right-of-use assets obtained from operating lease liabilities upon adoption of new

   lease standard

 

$

 

 

$

147,000

 

Right-of-use assets obtained from operating lease liabilities

 

$

6,384

 

 

$

 

Equipment obtained from finance lease liabilities

 

$

579

 

 

$

 

Conversion of pension liability to shares of common stock

 

$

8,925

 

 

$

 

Capital expenditures in accounts payable and accrued expenses

 

$

6,083

 

 

$

6,442

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6


Table of Contents

 

THE GEO GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The GEO Group, Inc., a Florida corporation, and subsidiaries (the “Company” or “GEO”) is a fully-integrated real estate investment trust (“REIT”) specializing in the ownership, leasing and management of secure facilities, processing centers and community reentry centers in the United States, Australia, South Africa and the United Kingdom. The Company owns, leases and operates a broad range of facilities including maximum, medium and minimum security facilities, processing centers, as well as community-based reentry facilities and offers an expanded delivery of rehabilitation services under its 'GEO Continuum of Care' platform. The 'GEO Continuum of Care' program integrates enhanced rehabilitative programs, which are evidence-based and include cognitive behavioral treatment and post-release services, and provides academic and vocational classes in life skills and treatment programs while helping individuals reintegrate into their communities. The Company develops new facilities based on contract awards, using its project development expertise and experience to design, construct and finance what it believes are state-of-the-art facilities that maximize security and efficiency. The Company provides innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants. The Company also provides secure transportation services for individuals as contracted domestically and in the United Kingdom through its joint venture GEO Amey PECS Ltd. (“GEOAmey”). At June 30, 2020, the Company’s worldwide operations include the management and/or ownership of approximately 93,000 beds at 125 facilities, including idle facilities, projects under development and recently awarded contracts, and also include the provision of community supervision services for more than 210,000 individuals, including approximately 100,000 through an array of technology products including radio frequency, GPS, and alcohol monitoring devices.

 

The Company's unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States and the instructions to Form 10-Q and consequently do not include all disclosures required by Form 10-K. The accounting policies followed for quarterly financial reporting are the same as those disclosed in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2020 for the year ended December 31, 2019. The accompanying December 31, 2019 consolidated balance sheet has been derived from those audited financial statements. Additional information may be obtained by referring to the Company’s Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair presentation of the financial information for the interim periods reported in this Quarterly Report on Form 10-Q have been made. Results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results for the entire year ending December 31, 2020, or for any other future interim or annual periods.

 

Risks and uncertainties

In December 2019, a novel strain of coronavirus, now known as COVID-19 (“COVID-19”), was reported in Wuhan, China and has since extensively impacted the global health and economic environment. In January 2020, the World Health Organization (“WHO”) declared it a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.  

The Company has been closely monitoring the impact of the COVID-19 pandemic on all aspects of its business and geographies, including how it will impact those entrusted in its care and governmental partners. The Company did incur significant disruptions during the six months ended June 30, 2020 from the COVID-19 pandemic and, it is unable to predict the overall future impact that the COVID-19 pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties.

The COVID-19 pandemic and related government-imposed mandatory closures, shelter in-place restrictions and social distancing protocols and increased expenditures on engineering controls, personal protective equipment, diagnostic testing, medical expenses, temperature scanners, protective plexiglass barriers and increased sanitation have had, and will continue to have, a severe impact on global economic conditions and the environment in which the Company operates. Starting in late March and early April, the Company began to observe negative impacts from the pandemic on its performance in its secure services business, specifically with its U.S. Immigration and Customs Enforcement (“ICE”) Processing Centers and U.S. Marshals Facilities, as a result of declines in crossings and apprehensions along the Southwest border and a decrease in court sentencing at the federal level. Various governmental agencies have also taken steps to decrease the number of those in custody to adhere to social distancing protocols. Additionally, its reentry services business conducted through its GEO Care business segment has also been negatively impacted, specifically its residential reentry centers and non-residential day reporting programs were impacted by declines in programs due to lower levels of referrals by federal, state and local agencies. Additionally, the Company has experienced the transmission of COVID-19 among detainees and staff at most of its facilities during the first two quarters of 2020 and continuing into the third quarter of 2020. If the Company is unable to mitigate the transmission of COVID-19 at its facilities it could experience a material adverse effect on its financial position, results of operations and cash flows. Although the Company is unable to predict the duration or scope of the COVID-19 pandemic or estimate the extent of the negative financial impact to its operating results, an extended period of depressed economic activity necessitated to combating the disease, and the severity and duration of the related global economic crisis may adversely impact its future financial performance.

2. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has recorded goodwill as a result of its various business combinations. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the tangible assets and intangible assets acquired net of

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liabilities assumed, including noncontrolling interests. Changes in the Company's goodwill balances from January 1, 2020 to June 30, 2020 are as follows (in thousands):

 

 

 

January 1,

2020

 

 

Foreign Currency

Translation

 

 

June 30,

2020

 

GEO Secure Services

 

$

316,366

 

 

$

 

 

$

316,366

 

GEO Care

 

 

459,589

 

 

 

 

 

 

459,589

 

International Services

 

 

401

 

 

 

(7

)

 

 

394

 

Total Goodwill

 

$

776,356

 

 

$

(7

)

 

$

776,349

 

 

The Company has also recorded other finite and indefinite-lived intangible assets as a result of its various business combinations. The Company's intangible assets include facility management contracts, covenants not to compete, trade names and technology, as follows (in thousands):

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Weighted

Average

Useful Life

(years)

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying

Amount

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying

Amount

 

Facility management contracts

 

 

16.3

 

 

$

308,329

 

 

$

(158,507

)

 

$

149,822

 

 

$

308,432

 

 

$

(148,171

)

 

$

160,261

 

Technology

 

 

7.3

 

 

 

33,700

 

 

 

(29,896

)

 

 

3,804

 

 

 

33,700

 

 

 

(29,091

)

 

 

4,609

 

Trade names

 

Indefinite

 

 

 

45,200

 

 

 

 

 

 

45,200

 

 

 

45,200

 

 

 

 

 

 

45,200

 

Total acquired intangible assets

 

 

 

 

 

$

387,229

 

 

$

(188,403

)

 

$

198,826

 

 

$

387,332

 

 

$

(177,262

)

 

$

210,070

 

 

Amortization expense was $11.2 million for each of the six months ended June 30, 2020 and 2019, respectively. Amortization expense was primarily related to the GEO Secure Services and GEO Care segments' amortization of acquired facility management contracts. As of June 30, 2020, the weighted average period before the next contract renewal or extension for the acquired facility management contracts was approximately 1.9 years. Although the facility management contracts acquired have renewal and extension terms in the near term, the Company has historically maintained these relationships beyond the current contractual periods.

Estimated amortization expense related to the Company's finite-lived intangible assets for the remainder of 2020 through 2024 and thereafter is as follows (in thousands):

 

Fiscal Year

 

Total

Amortization

Expense

 

Remainder of 2020

 

$

12,224

 

2021