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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Jan. 02, 2011	Feb. 24, 2011	Jul. 02, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	GEO GROUP INC
Entity Central Index Key	0000923796
Document Type	10-K
Trading Symbol	GEO
Document Period End Date	Jan. 02, 2011
Amendment Flag	false
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--01-02
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 990,316,029
Entity Common Stock, Shares Outstanding		64,441,459

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 02, 2011	Jan. 03, 2010	Dec. 28, 2008
Consolidated Statements of Income [Abstract]
Revenues	$ 1,269,968	$ 1,141,090	$ 1,043,006
Operating Expenses	975,020	897,099	822,053
Depreciation and Amortization	48,111	39,306	37,406
General and Administrative Expenses	106,364	69,240	69,151
Operating Income	140,473	135,445	114,396
Interest Income	6,271	4,943	7,045
Interest Expense	(40,707)	(28,518)	(30,202)
Loss on Extinguishment of Debt	(7,933)	(6,839)
Income Before Income Taxes, Equity in Earnings of Affiliates, and Discontinued Operations	98,104	105,031	91,239
Provision for Income Taxes	39,532	42,079	34,033
Equity in Earnings of Affiliates, net of income tax provision (benefit) of $2,212, $1,368 and ($805)	4,218	3,517	4,623
Income from Continuing Operations	62,790	66,469	61,829
Loss from Discontinued Operations, net of tax provision (benefit) of $0, ($216), and $236		(346)	(2,551)
Net income	62,790	66,123	59,278
Loss (Earnings) Attributable to Noncontrolling Interests	678	(169)	(376)
Net Income Attributable to The GEO Group, Inc.	$ 63,468	$ 65,954	$ 58,902
Weighted Average Common Shares Outstanding:
Basic	55,379	50,879	50,539
Diluted	55,989	51,922	51,830
Basic:
Income from continuing operations	$ 1.15	$ 1.30	$ 1.22
Loss from discontinued operations			(0.05)
Net income per share-basic	1.15	1.30	1.17
Diluted:
Income from continuing operations	1.13	1.28	1.19
Loss from discontinued operations		(0.01)	(0.05)
Net income per share-diluted	$ 1.13	$ 1.27	$ 1.14
Comprehensive Income (Loss):
Net income	$ 62,790	$ 66,123	$ 59,278
Total other comprehensive income, (loss) net of tax	4,645	12,174	(14,361)
Total comprehensive income	67,435	78,297	44,917
Comprehensive (income) loss attributable to noncontrolling interests	608	428	(210)
Comprehensive income attributable to The GEO Group, Inc.	$ 68,043	$ 78,725	$ 44,707

Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2011	Jan. 03, 2010	Dec. 28, 2008
Consolidated Statements of Income [Abstract]
Income tax provision on equity in earnings of affiliate	$ 2,212	$ 1,368	$ (805)
Tax benefit on discontinued operations		$ (216)	$ 236

Consolidated Balance Sheets - USD ($)
$ in Thousands

12 Months Ended

Jan. 02, 2011

Jan. 03, 2010

Current Assets

Cash and cash equivalents

$ 39,664

$ 33,856

Restricted cash and investments (including VIEs of $34,049 and $6,212, respectively)

^[1]

41,150

13,313

Accounts receivable, less allowance for doubtful accounts of $1,308 and $429

275,484

200,756

Deferred income tax assets, net

32,126

17,020

Prepaid expenses and other current assets

36,710

14,689

Total current assets

425,134

279,634

Restricted Cash and Investments (including VIEs of $33,266 and $8,182, respectively)

49,492

20,755

Property and Equipment, Net (including VIEs of $167,209 and $28,282, respectively)

1,511,292

998,560

Assets Held for Sale

9,970

4,348

Direct Finance Lease Receivable

37,544

37,162

Deferred Income Tax Assets, Net

936

Goodwill

244,947

40,090

Intangible Assets, Net

87,813

17,579

Other Non-Current Assets

56,648

49,690

Total Assets

2,423,776

1,447,818

Current Liabilities

Accounts payable

73,880

51,856

Accrued payroll and related taxes

33,361

25,209

Accrued expenses

121,647

80,759

Current portion of capital lease obligations, long-term debt and non-recourse debt (including VIEs of $19,365 and $4,575, respectively)

41,574

19,624

Total current liabilities

270,462

177,448

Deferred Income Tax Liabilities

63,546

7,060

Other Non-Current Liabilities

46,862

33,142

Capital Lease Obligations

13,686

14,419

Long-Term Debt

798,336

453,860

Non-Recourse Debt (including VIEs of $132,078 and $31,596, respectively)

$ 191,394

$ 96,791

Commitments and Contingencies (Note 15)

Shareholders' Equity

Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued or outstanding

$ 0

Common stock, $0.01 par value, 90,000,000 shares authorized, 84,506,772 and 67,704,008 issued and 64,432,459 and 51,629,005 outstanding, respectively

845

516

Additional paid-in capital

718,489

351,550

Retained earnings

428,545

365,927

Accumulated other comprehensive income

10,071

5,496

Treasury stock 20,074,313 and 16,075,003 shares, at cost, at January 2, 2011 and January 3, 2010

(139,049)

(58,888)

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

1,018,901

664,601

Noncontrolling interests

20,589

497

Total shareholders' equity

1,039,490

665,098

Total Liabilities and Shareholders' Equity

$ 2,423,776

$ 1,447,818

[1]	Variable Interest Entity or "VIE"

Consolidated Balance Sheets (Parenthetical) - USD ($)

Jan. 02, 2011

Jan. 03, 2010

Current Assets

Restricted cash and investments, current

^[1]

$ 41,150,000

$ 13,313,000

Allowance for doubtful accounts

1,308,000

429,000

Noncurrent Assets

Restricted cash and investments, noncurrent

49,492,000

20,755,000

Property and equipment

1,511,292,000

998,560,000

Current Liabilities

Non-Recourse debt, current

41,574,000

19,624,000

Liabilities, Noncurrent [Abstract]

Non-Recourse debt, noncurrent

191,394,000

96,791,000

Shareholders' Equity

Preferred stock, par value

$ 0.01

Preferred stock, shares authorized

30,000,000

Preferred stock, shares issued

Preferred stock, shares outstanding

Common stock, par value

$ 0.01

Common stock, shares authorized

90,000,000

Common stock, shares issued

84,506,772

67,704,008

Treasury stock, shares

20,074,313

16,075,003

Variable Interest Entity, Primary Beneficiary

Current Assets

Restricted cash and investments, current

^[1]

$ 34,049,000

$ 6,212,000

Noncurrent Assets

Restricted cash and investments, noncurrent

33,266,000

8,182,000

Property and equipment

167,209,000

28,282,000

Current Liabilities

Non-Recourse debt, current

19,365,000

4,575,000

Liabilities, Noncurrent [Abstract]

Non-Recourse debt, noncurrent

$ 132,078,000

$ 31,596,000

[1]	Variable Interest Entity or "VIE"

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2011	Jan. 03, 2010	Dec. 28, 2008
Cash Flow from Operating Activities:
Net income	$ 62,790	$ 66,123	$ 59,278
Net (income) loss attributable to noncontrolling interests	678	(169)	(376)
Net income attributable to The GEO Group, Inc.	63,468	65,954	58,902
Adjustments to reconcile net income from continuing operations attributable to The GEO Group, Inc. to net cash provided by operating activities:
Restricted stock expense	3,261	3,509	3,015
Stock option plan expense	1,378	1,813	1,530
Depreciation and amortization expense	48,111	39,306	37,406
Amortization of debt issuance costs and discount	3,209	3,412	3,042
Deferred tax provision (benefit)	17,941	10,010	2,656
Provision for doubtful accounts	815	139	602
Equity in earnings of affiliates, net of tax	(4,218)	(3,517)	(4,623)
Income tax benefit of equity compensation	(3,926)	(601)	(786)
(Gain) Loss on sale of property and equipment	(646)	119	157
Loss on extinguishment of debt	7,933	6,839
Changes in assets and liabilities, net of acquisition:
Changes in accounts receivable, prepaid expenses and other assets	(14,350)	3,057	(29,897)
Changes in accounts payable, accrued expenses and other liabilities	3,226	(4,753)	2,478
Net cash provided by operating activities of continuing operations	126,202	125,287	74,482
Net cash (used in) provided by operating activities of discontinued operations		5,818	(3,013)
Net cash provided by operating activities	126,202	131,105	71,469
Cash Flow from Investing Activities:
Acquisitions, cash consideration, net of cash acquired	(260,255)	(38,386)
Just Care purchase price adjustment	(41)
Proceeds from sale of property and equipment	528	179	1,136
Purchase of shares in consolidated affiliate			(2,189)
Change in restricted cash	(11,432)	2,713	452
Capital expenditures	(97,061)	(149,779)	(130,990)
Net cash used in investing activities	(368,261)	(185,273)	(131,591)
Cash Flow from Financing Activities:
Cash dividends to noncontrolling interest		(176)	(125)
Proceeds from long-term debt	726,000	333,000	156,000
Payments on long-term debt	(397,445)	(267,474)	(100,156)
Income tax benefit of equity compensation	3,926	601	786
Debt issuance costs	(8,400)	(17,253)	(3,685)
Termination of interest rate swap agreements		1,719
Payments for purchase of treasury shares	(80,000)
Payments for retirement of common stock	(7,078)
Proceeds from the exercise of stock options	6,695	1,457	753
Net cash provided by financing activities	243,698	51,874	53,573
Effect of Exchange Rate Changes on Cash and Cash Equivalents	4,169	4,495	(6,199)
Net Increase (Decrease) in Cash and Cash Equivalents	5,808	2,201	(12,748)
Cash and Cash Equivalents, beginning of period	33,856	31,655	44,403
Cash and Cash Equivalents, end of period	39,664	33,856	31,655
Cash paid during the year for:
Income taxes	34,475	34,185	29,895
Interest	36,310	32,075	34,486
Non-cash investing and financing activities:
Fair value of assets acquired, net of cash acquired	680,378	44,239
Acquisition, equity consideration	358,076
Total liabilities assumed	246,071	5,853
Capital expenditures in accounts payable and accrued expenses	$ 11,237	$ 10,418	$ 20,376

Consolidated Statements of Shareholders' Equity and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 02, 2011	Jan. 03, 2010	Dec. 28, 2008
Statement [Line Items]
Beginning Balance	$ 665,098	$ 579,597	$ 529,347
Proceeds from stock options exercised	6,695	1,457	753
Tax benefit related to equity compensation	3,926	601	786
Stock based compensation expense	1,378	1,813	1,530
Amortization of restricted stock	3,261	3,509	3,015
Common Stock issued in connection with the Merger	358,076
Noncontrolling interest acquired in connection with the Merger	20,700
Retirement of common stock	(7,078)
Purchase of treasury shares	(80,000)
Purchase of subsidiary shares from noncontrolling interest			(626)
Dividends paid to noncontrolling interest on subsidiary common stock		(176)	(125)
Comprehensive income:
Net income	62,790	66,123	59,278
Other comprehensive income (loss) (Note 3)	4,645	12,174	(14,361)
Total comprehensive income	67,435	78,297	44,917
Ending Balance	1,039,490	665,098	579,597
Common Stock
Statement [Line Items]
Beginning Balance	$ 516	$ 511	$ 510
Beginning Balance,Shares	51,629	51,123	50,976
Proceeds from stock options exercised	$ 14	$ 3	$ 1
Proceeds from stock options exercised, Shares	1,353	372	171
Restricted stock granted		$ 2
Restricted stock granted, Shares	40	168	24
Restricted stock cancelled, Value	$ (1)
Restricted stock cancelled, Shares	(41)	(34)	(48)
Common Stock issued in connection with the Merger	$ 158
Common Stock issued in connection with the Merger, Shares	15,764
Retirement of common stock	$ 158
Retirement of common stock, Shares	(314)
Purchase of treasury shares, Shares	(3,999)
Comprehensive income:
Ending Balance	$ 845	$ 516	$ 511
Ending Balance, Shares	64,432	51,629	51,123
Additional Paid-in Capital
Statement [Line Items]
Beginning Balance	$ 351,550	$ 344,175	$ 338,092
Proceeds from stock options exercised	6,681	1,454	752
Tax benefit related to equity compensation	3,926	601	786
Stock based compensation expense	1,378	1,813	1,530
Restricted stock granted		(2)
Amortization of restricted stock	3,261	3,509	3,015
Common Stock issued in connection with the Merger	357,918
Retirement of common stock	(6,225)
Comprehensive income:
Ending Balance	718,489	351,550	344,175
Retained Earnings
Statement [Line Items]
Beginning Balance	365,927	299,973	241,071
Retirement of common stock	(850)
Comprehensive income:
Net income	63,468	65,954	58,902
Ending Balance	428,545	365,927	299,973
Accumulated Other Comprehensive Income (Loss)
Statement [Line Items]
Beginning Balance	5,496	(7,275)	6,920
Comprehensive income:
Other comprehensive income (loss) (Note 3)	4,575	12,771	(14,195)
Ending Balance	10,071	5,496	(7,275)
Treasury Stock
Statement [Line Items]
Beginning Balance	$ (58,888)	$ (58,888)	$ (58,888)
Beginning Balance,Shares	(16,075)	(16,075)	(16,075)
Retirement of common stock	$ (161)
Purchase of treasury shares	$ (80,000)
Purchase of treasury shares, Shares	(3,999)
Comprehensive income:
Ending Balance	$ (139,049)	$ (58,888)	$ (58,888)
Ending Balance, Shares	(20,074)	(16,075)	(16,075)
Noncontrolling Interest
Statement [Line Items]
Beginning Balance	$ 497	$ 1,101	$ 1,642
Noncontrolling interest acquired in connection with the Merger	20,700
Purchase of subsidiary shares from noncontrolling interest			(626)
Dividends paid to noncontrolling interest on subsidiary common stock		(176)	(125)
Comprehensive income:
Net income	(678)	169	376
Other comprehensive income (loss) (Note 3)	70	(597)	(166)
Ending Balance	$ 20,589	$ 497	$ 1,101

Summary of Business Operations and Significant Accounting Policies

12 Months Ended

Jan. 02, 2011

Summary of Business Operations and Significant Accounting Policies [Abstract]

Summary of Business Operations and Significant Accounting Policies


1.	Summary of Business Operations and Significant Accounting Policies

The GEO Group, Inc., a Florida corporation, and subsidiaries (the “Company”, or “GEO”) is a leading developer and provider of government-outsourced services specializing in the management of correctional, detention and mental health residential treatment services facilities in the United States, Australia, South Africa, the United Kingdom and Canada. On August 12, 2010, the Company acquired Cornell Companies Inc. (“Cornell”), pursuant to a definitive merger agreement (the “Merger”), and as of January 2, 2011, the Company’s worldwide operations included the management and/or ownership of approximately 81,000 beds at 118 correctional, detention and residential treatment facilities including projects under development. The Company operates a broad range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, community based services, youth services and mental health and residential treatment facilities. We also provide secure transportation services for offender and detainee populations as contracted.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. The significant accounting policies of the Company are described below.

Fiscal Year

The Company’s fiscal year ends on the Sunday closest to the calendar year end. Fiscal year 2010 included 52 weeks. Fiscal year 2009 included 53 weeks and fiscal year 2008 included 52 weeks. The Company reports the results of its South African equity affiliate, South African Custodial Services Pty. Limited, (“SACS”), its consolidated South African entity, South African Custodial Management Pty. Limited (“SACM”) and the activities of its consolidated special purpose entity, Municipal Correctional Finance, L.P. (“MCF”) on a calendar year end, due to the availability of information.

Consolidation

The accompanying consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and the Company’s activities relative to the financing of operating facilities (the Company’s variable interest entities are discussed further in Note 1 and also in Notes 3 and 10). The equity method of accounting is used for investments in non-controlled affiliates in which the Company’s ownership ranges from 20 to 50 percent, or in instances in which the Company is able to exercise significant influence but not control. The Company reports SACS under the equity method of accounting. Noncontrolling interests in consolidated entities represent equity that other investors have contributed to MCF and SACM. Non-controlling interests are adjusted for income and losses allocable to the other shareholders in these entities. All significant intercompany balances and transactions have been eliminated.

Reclassifications

The Company’s noncontrolling interest in SACM has been reclassified from operating expenses to noncontrolling interest in the consolidated statements of income as this item has become more significant due to the presentation of the noncontrolling interest of MCF acquired from Cornell in the Merger. Also, as a result of the acquisition of Cornell, management’s review of certain segment financial data was revised with regard to the Bronx Community Re-entry Center and the Brooklyn Community Re-entry Center. These facilities now report within the GEO Care segment and are no longer included with U.S. Detention & Corrections. The segment data has been revised for all periods presented. All prior year amounts have been conformed to the current year presentation.

Discontinued Operations

The termination of any of the Company’s management contracts, by expiration or otherwise, may result in the classification of the operating results of such management contract, net of taxes, as a discontinued operation. The Company reflects such events as discontinued operations so long as the financial results can be clearly identified, the operations and cash flows are completely eliminated from ongoing operations, and so long as the Company does not have any significant continuing involvement in the operations of the component after the disposal or termination transaction. The component unit for which cash flows are considered to be completely eliminated exists at the customer level. Historically, the Company has classified operations as discontinued in the period they are announced as normally all continuing cash flows cease within three to six months of that date.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include reserves for self-insured retention related to general liability insurance, workers’ compensation insurance, auto liability insurance, medical malpractice insurance, employer group health insurance, percentage of completion and estimated cost to complete for construction projects, estimated useful lives of property and equipment, stock based compensation and allowance for doubtful accounts. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While the Company believes that such estimates are reasonable when considered in conjunction with the consolidated financial statements taken as a whole, the actual amounts of such estimates, when known, will vary from these estimates. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted.

During the first quarter of 2010, the Company completed a depreciation study on its owned correctional facilities. In evaluating useful lives of these assets, the Company considered how long the assets will remain functionally efficient and effective, given competitive factors, economic environment, technological advancements and quality of construction. Based on the results of the depreciation study, the Company revised the estimated useful lives of certain buildings from its historical estimate of 40 years to a revised estimate of 50 years, effective January 4, 2010. The basis for the change in the useful life of the Company’s owned correctional facilities is due to the expectation that these facilities are capable of being used for a longer period than previously anticipated based on quality of construction and effective building maintenance. The Company accounted for the change in the useful lives as a change in estimate which was accounted for prospectively beginning January 4, 2010 by depreciating the assets’ carrying values over their revised remaining useful lives. For fiscal year 2010, the change resulted in a reduction in depreciation and amortization expense of $3.7 million, an increase to net income of $2.2 million and an increase in diluted earnings per share of $0.04.

Cash and Cash Equivalents

Cash and cash equivalents include all interest-bearing deposits or investments with original maturities of three months or less. The Company maintains cash and cash equivalents with various financial institutions. These financial institutions are located throughout the United States, Australia, South Africa, Canada and the United Kingdom.

Concentration of Credit Risk

The Company maintains deposits of cash in excess of federally insured limits with certain financial institutions and accordingly, the Company is subject to credit risk. Other than cash, financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivable, a direct finance lease receivable, long-term debt and financial instruments used in hedging activities. The Company’s cash management and investment policies restrict investments to low-risk, highly liquid securities, and the Company performs periodic evaluations of the credit standing of the financial institutions with which it deals.

Accounts Receivable

Accounts receivable consists primarily of trade accounts receivable due from federal, state, and local government agencies for operating and managing correctional facilities, providing youth and community based services, providing mental health and residential treatment services, providing construction and design services and providing inmate residential and prisoner transportation services. The Company generates receivables with its governmental clients and with other parties in the normal course of business as a result of billing and receiving payment. The Company regularly reviews outstanding receivables, and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established loss reserves, the Company makes judgments regarding its customers’ ability to make required payments, economic events and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. The Company also performs ongoing credit evaluations of customers’ financial condition and generally does not require collateral. Generally, the Company receives payment for these services thirty to sixty days in arrears. However, certain of the Company’s accounts receivable, some of which relate to receivables purchased in connection with the Cornell acquisition, are paid by customers after the completion of their program year and therefore can be aged in excess of one year. The Company maintains reserves for potential credit losses, and such losses traditionally have been within its expectations. Actual write-offs are charged against the allowance when collection efforts have been unsuccessful. As of January 2, 2011, $3.8 million of the Company’s trade receivables were considered to be long-term and are classified as Other Non-Current Assets in the accompanying Consolidated Balance Sheet.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets include assets that are expected to be realized within the next fiscal year. Included in the balance at January 2, 2011 is $17.3 million of federal and state income tax overpayments that will be applied against tax payments due in 2011.

Notes Receivable

The Company has notes receivable from its former joint venture partner in the United Kingdom related to a subordinated loan extended to the joint venture partner while an active member of the partnership. The balance outstanding as of January 2, 2011 and January 3, 2010 was $3.2 million and $3.5 million, respectively and is included in other non-current assets in the accompanying balance sheets. The notes bear interest at a rate of 13%, have semi-annual payments due June 15 and December 15 through June 2018.

Restricted Cash and Investments

The Company’s restricted cash balances are attributable to: (i) amounts held in escrow or in trust in connection with the 1,904-bed South Texas Detention Complex in Frio County, Texas and the 1,575-bed Northwest Detention Center in Tacoma, Washington, (ii) certain cash restriction requirements at the Company’s wholly owned Australian subsidiary related to the non-recourse debt and other guarantees, (iii) MCF’s bond fund payment account, debt servicing reserve fund and escrow fund primarily used to segregate rental payments from Cornell to MCF for the purposes of servicing the non-recourse debt and making distributions to equity holders, and (iv) amounts restricted to fund the GEO Group Deferred Compensation Plan. The current portion of restricted cash represents the amount expected to be paid within the next twelve months for debt service and amounts that may be paid as distributions to the equity holders of MCF under the Agreement of Limited Partnership.

Direct Finance Leases

The Company accounts for the portion of its contracts with certain governmental agencies that represent capitalized lease payments on buildings and equipment as investments in direct finance leases. Accordingly, the minimum lease payments to be received over the term of the leases less unearned income are capitalized as the Company’s investments in the leases. Unearned income is recognized as income over the term of the leases using the effective interest method.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Buildings and improvements are depreciated over 2 to 50 years. Equipment and furniture and fixtures are depreciated over 3 to 10 years. Accelerated methods of depreciation are generally used for income tax purposes. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the term of the lease. The Company performs ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. The estimated useful lives are determined and continually evaluated based on the period over which services are expected to be rendered by the asset. If the assessment indicates that assets will be used for a longer or shorter period than previously anticipated, the useful lives of the assets are revised, resulting in a change in estimate. Maintenance and repairs are expensed as incurred. Interest is capitalized in connection with the construction of correctional and detention facilities. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life.

The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. If a long-lived asset is part of a group that includes other assets, the unit of accounting for the long-lived asset is its group. Generally, the Company groups its assets by facility for the purposes of considering whether any impairment exists. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset group and its eventual disposition. When considering the future cash flows of a facility, the Company makes assumptions based on historical experience with its customers, terminal growth rates and weighted average cost of capital. While these estimates do not generally have a material impact on the impairment charges associated with managed-only facilities, the sensitivity increases significantly when considering the impairment on facilities that are either owned or leased by the Company. Events that would trigger an impairment assessment include deterioration of profits for a business segment that has long-lived assets, or when other changes occur that might impair recovery of long-lived assets such as the termination of a management contract. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset.

Assets Held Under Capital Leases

Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. Amortization expense is recognized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the related lease and is included in depreciation expense.

Goodwill and Other Intangible Assets

The Company’s goodwill is not amortized and is tested for impairment annually and whenever events or circumstances arise that indicate impairment may have occurred. Impairment testing is performed for all reporting units that contain goodwill. For the purposes of impairment testing, the Company determines the recoverability of goodwill by comparing the carrying value of the reporting unit, including goodwill, to the fair value of the reporting unit. The reporting unit is the same as the operating segment for U.S. Detention & Corrections and is at a level below the operating segment for GEO Care. The Company has identified its reporting units based on the criteria management uses to make key decisions about the business. If the fair value is determined to be less than the carrying value, the Company computes the impairment charge as the excess of the carrying value of the reporting unit goodwill over the implied fair value of the reporting unit goodwill. For the purposes of the goodwill impairment test, the Company determined fair value of the reporting unit using a discounted cash flow model. Growth rates for sales and profits are determined using inputs from the Company’s long term planning process. The Company also makes estimates for discount rates and other factors based on market conditions, historical experience and other environmental factors. Changes in these forecasts could significantly impact the fair value of the reporting unit. During the year, management monitors the actual performance of the business relative to the fair value assumptions used during the annual impairment test. For the interim periods in the fiscal year ended January 2, 2011, the Company’s management did not identify any triggering events that would require an update to the annual impairment test. As such, the Company performed its annual impairment test, on the measurement date of October 4, 2010 which is on the first day of the Company’s fourth fiscal quarter and did not identify any impairment in the carrying value of its goodwill. The estimated fair value of the reporting units significantly exceeded the carrying value of the reporting units. A 10% decrease in the fair value of any of our reporting units as of October 4, 2010 would have had no impact on the carrying value of our goodwill. There were no impairment charges recorded in the fiscal year ended January 3, 2010. In the fiscal year ended December 28, 2008, the Company wrote off goodwill of $2.3 million associated with the termination of its transportation services business in the United Kingdom. There were no changes since the prior year to the methodology the Company applies to determine the fair value of the reporting units used in its goodwill test.

The Company has goodwill and other intangible assets as a result of business combinations and also in connection with the purchase of additional shares in the Company’s consolidated South African joint venture. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible assets and other intangible assets acquired. Other acquired intangible assets are recognized separately if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the intangible asset can be sold, transferred, licensed, rented or exchanged, regardless of the Company’s intent to do so. The Company’s other intangible assets have finite lives and include facility management contracts and non-compete agreements. The facility management contracts represent customer relationships in the form of management contracts acquired at the time of each business combination and the non-compete agreements represent the estimated value of contractually restricting certain employees from competing with the Company. The Company currently amortizes its acquired intangible assets with finite lives over periods ranging from one to seventeen years considering the period and the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up; or, if that pattern cannot be reliably determined, using a straight-line amortization method over a period that may be shorter than the ultimate life of such intangible asset. There is no residual value associated with the Company’s finite-lived intangible assets. The Company records the costs associated with renewal and extension of facility management contracts as expenses in the period they are incurred.

Debt Issuance Costs

Debt issuance costs totaling $14.8 million and $17.9 million at January 2, 2011 and January 3, 2010, respectively, are included in other non-current assets in the consolidated balance sheets and are amortized to interest expense using the effective interest method, over the term of the related debt.

Variable Interest Entities

The Company evaluates its joint ventures and other entities in which it has a variable interest (a “VIE”), generally in the form of investments, loans, guarantees, or equity in order to determine if it has a controlling financial interest and is required to consolidate the entity as a result. The reporting entity with a variable interest that provides the entity with a controlling financial interest in the VIE will have both of the following characteristics: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company does not consolidate its 50% owned South African joint venture in SACS, a VIE. SACS joint venture investors are GEO and Kensani Holdings, Pty. Ltd; each partner owns a 50% share. The Company has determined it is not the primary beneficiary of SACS since it does not have the power to direct the activities of SACS that most significantly impact its performance. As such, this entity is accounted for as an equity affiliate. SACS was established in 2001 and was subsequently awarded a 25-year contract to design, finance and build the Kutama Sinthumule Correctional Centre in Louis Trichardt, South Africa. To fund the construction of the prison, SACS obtained long-term financing from its equity partners and lenders, the repayment of which is fully guaranteed by the South African government, except in the event of default, in which case the government guarantee is reduced to 80%. The Company’s maximum exposure for loss under this contract is limited to its investment in joint venture of $27.6 million at January 2, 2011 and its guarantees related to SACS discussed in Note 14.

The Company consolidates South Texas Local Development Corporation (“STLDC”), a VIE. STLDC was created to finance construction for the development of a 1,904-bed facility in Frio County, Texas. STLDC, the owner of the complex, issued $49.5 million in taxable revenue bonds and has an operating agreement with the Company, which provides the Company with the sole and exclusive right to operate and manage the detention center. The operating agreement and bond indenture require the revenue from the contract be used to fund the periodic debt service requirements as they become due. The net revenues, if any, after various expenses such as trustee fees, property taxes and insurance premiums are distributed to the Company to cover operating expenses and management fees. The Company is responsible for the entire operations of the facility including the payment of all operating expenses whether or not there are sufficient revenues. The bonds have a ten-year term and are non-recourse to the Company. At the end of the ten-year term of the bonds, title and ownership of the facility transfers from STLDC to the Company. See Note 14.

As a result of the acquisition of Cornell in August 2010, the Company assumed the variable interest in MCF of which it is the primary beneficiary and consolidates the entity as a result. MCF was created in August 2001 as a special limited partnership for the purpose of acquiring, owning, leasing and operating low to medium security adult and juvenile correction and treatment facilities. At its inception, MCF purchased assets representing eleven facilities from Cornell and leased those assets back to Cornell under a Master Lease Agreement (the “Lease”). These assets were purchased from Cornell using proceeds from the 8.47% Taxable Revenue Bonds, Series 2001 (“8.47% Revenue Bonds”) due 2016, which are limited non-recourse obligations of MCF and collateralized by the bond reserves, assignment of subleases and substantially all assets related to the eleven facilities. Under the terms of the Lease with Cornell, assumed by the Company, the Company will lease the assets for the remainder of the 20-year base term, which ends in 2021, and has options at its sole discretion to renew the Lease for up to approximately 25 additional years. MCF’s sole source of revenue is from the Company and as such the Company has the power to direct the activities of the VIE that most significantly impact its performance. The Company’s risk is generally limited to the rental obligations under the operating leases. This entity is included in the accompanying consolidated financial statements and all intercompany transactions are eliminated in consolidation.

Noncontrolling Interests

Noncontrolling interests in consolidated entities represent equity that other investors have contributed to MCF and the noncontrolling interest in SACM. Noncontrolling interests are adjusted for income and losses allocable to the other shareholders in these entities.

Upon acquisition of Cornell, the Company assumed MCF as a variable interest entity and allocated a portion of the purchase price to the noncontrolling interest based on the estimated fair value of MCF as of August 12, 2010. The noncontrolling interest in MCF represents 100% of the equity in MCF which was contributed by its partners at inception in 2001. The Company includes the results of operations and financial position of MCF, its variable interest entity, in its consolidated financial statements. MCF owns eleven facilities which it leases to the Company.

The Company includes the results of operations and financial position of South African Custodial Management Pty. Limited (“SACM” or the “joint venture”), its majority-owned subsidiary, in its consolidated financial statements. SACM was established in 2001 to operate correctional centers in South Africa. The joint venture currently provides security and other management services for the Kutama Sinthumule Correctional Centre in the Republic of South Africa under a 25-year management contract which commenced in February 2002. The Company’s and the second joint venture partner’s shares in the profits of the joint venture are 88.75% and 11.25%, respectively. There were no changes in the Company’s ownership percentage of the consolidated subsidiary during the fiscal year ended January 2, 2011.

Fair Value Measurements

The Company carries certain of its assets and liabilities at fair value, measured on a recurring basis, in the accompanying consolidated balance sheets. The Company also has certain assets and liabilities which are not carried at fair value in its accompanying balance sheets and discloses the fair value measurements for those assets and liabilities in Note 11 and Note 12. The Company establishes fair value of its assets and liabilities using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels which distinguish between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The level in the fair value hierarchy within which the respective fair value measurement falls is determined based on the lowest level input that is significant to the measurement in its entirety. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities, Level 2 inputs are other than quotable market prices included in Level 1 that are observable for the asset or liability either directly or indirectly through corroboration with observable market data. Level 3 inputs are unobservable inputs for the assets or liabilities that reflect management’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Revenue Recognition

Facility management revenues are recognized as services are provided under facility management contracts with approved government appropriations based on a net rate per day per inmate or on a fixed monthly rate. A limited number of the Company’s contracts have provisions upon which a small portion of the revenue for the contract is based on the performance of certain targets. Revenue based on the performance of certain targets is less than 2% of the Company’s consolidated annual revenues. These performance targets are based on specific criteria to be met over specific periods of time. Such criteria includes the Company’s ability to achieve certain contractual benchmarks relative to the quality of service it provides, non-occurrence of certain disruptive events, effectiveness of its quality control programs and its responsiveness to customer requirements and concerns. For the limited number of contracts where revenue is based on the performance of certain targets, revenue is either (i) recorded pro rata when revenue is fixed and determinable or (ii) recorded when the specified time period lapses. In many instances, the Company is a party to more than one contract with a single entity. In these instances, each contract is accounted for separately. The Company has not recorded any revenue that is at risk due to future performance contingencies.

Construction revenues are recognized from the Company’s contracts with certain customers to perform construction and design services (“project development services”) for various facilities. In these instances, the Company acts as the primary developer and subcontracts with bonded National and/or Regional Design Build Contractors. These construction revenues are recognized as earned on a percentage of completion basis measured by the percentage of costs incurred to date as compared to the estimated total cost for each contract. Provisions for estimated losses on uncompleted contracts and changes to cost estimates are made in the period in which the Company determines that such losses and changes are probable. Typically, the Company enters into fixed price contracts and does not perform additional work unless approved change orders are in place. Costs attributable to unapproved change orders are expensed in the period in which the costs are incurred if the Company believes that it is not probable that the costs will be recovered through a change in the contract price. If the Company believes that it is probable that the costs will be recovered through a change in the contract price, costs related to unapproved change orders are expensed in the period in which they are incurred, and contract revenue is recognized to the extent of the costs incurred. Revenue in excess of the costs attributable to unapproved change orders is not recognized until the change order is approved. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to estimated costs and income, and are recognized in the period in which the revisions are determined. As the primary contractor, the Company is exposed to the various risks associated with construction, including the risk of cost overruns. Accordingly, the Company records its construction revenue on a gross basis and includes the related cost of construction activities in Operating Expenses.

When evaluating multiple element arrangements for certain contracts where the Company provides project development services to its clients in addition to standard management services, the Company follows revenue recognition guidance for multiple element arrangements. This revenue recognition guidance related to multiple deliverables in an arrangement provides guidance on determining if separate contracts should be evaluated as a single arrangement and if an arrangement involves a single unit of accounting or separate units of accounting and if the arrangement is determined to have separate units, how to allocate amounts received in the arrangement for revenue recognition purposes. In instances where the Company provides these project development services and subsequent management services, generally, the arrangement results in no delivered elements at the onset of the agreement. The elements are delivered over the contract period as the project development and management services are performed. Project development services are not provided separately to a customer without a management contract. The Company can determine the fair value of the undelivered management services contract and therefore, the value of the project development deliverable, is determined using the residual method.

Lease Revenue

Prior to the acquisition of Cornell in August 2010, the Company leased two of its owned facilities to the third parties, one of which was Cornell. There is now only one owned facility that the Company leases to an unrelated third party. The lease has a term of ten years and expires in January 2018 with an option to extend for up to three additional five-year terms. The carrying value of this leased facility as of January 2, 2011 and January 3, 2010 was $36.1 million and $36.9 million, respectively, net of accumulated depreciation of $3.2 million and $2.3 million, respectively. Rental income received on this lease for the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008 was $4.5 million, $4.5 million and $4.4 million, respectively. Future minimum rentals on this lease are as follows:


Fiscal Year	Annual Rental
	(In thousands)

2011	$	4,477
2012		4,489
2013		4,623
2014		4,762
2015		4,905
Thereafter		10,690

	$	33,946

Income Taxes

Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Significant judgments are required to determine the consolidated provision for income taxes. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. Realization of the Company’s deferred tax assets is dependent upon many factors such as tax regulations applicable to the jurisdictions in which the Company operates, estimates of future taxable income and the character of such taxable income. Additionally, the Company must use significant judgment in addressing uncertainties in the application of complex tax laws and regulations. If actual circumstances differ from the Company’s assumptions, adjustments to the carrying value of deferred tax assets or liabilities may be required, which may result in an adverse impact on the results of its operations and its effective tax rate. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria. The Company has not made any significant changes to the way it accounts for its deferred tax assets and liabilities in any year presented in the consolidated financial statements. Based on its estimate of future earnings and its favorable earnings history, the Company currently expects full realization of the deferred tax assets net of any recorded valuation allowances. Furthermore, tax positions taken by the Company may not be fully sustained upon examination by the taxing authorities. In determining the adequacy of our provision (benefit) for income taxes, potential settlement outcomes resulting from income tax examinations are regularly assessed. As such, the final outcome of tax examinations, including the total amount payable or the timing of any such payments upon resolution of these issues, cannot be estimated with certainty.

Reserves for Insurance Losses

The nature of the Company’s business exposes it to various types of third-party legal claims, including, but not limited to, civil rights claims relating to conditions of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, medical malpractice claims, product liability claims, intellectual property infringement claims, claims relating to employment matters (including, but not limited to, employment discrimination claims, union grievances and wage and hour claims), property loss claims, environmental claims, automobile liability claims, contractual claims and claims for personal injury or other damages resulting from contact with our facilities, programs, electronic monitoring products, personnel or prisoners, including damages arising from a prisoner’s escape or from a disturbance or riot at a facility. In addition, the Company’s management contracts generally require it to indemnify the governmental agency against any damages to which the governmental agency may be subject in connection with such claims or litigation. The Company maintains a broad program of insurance coverage for these general types of claims, except for claims relating to employment matters, for which the Company carries no insurance. There can be no assurance that the Company’s insurance coverage will be adequate to cover all claims to which it may be exposed. It is the Company’s general practice to bring merged or acquired companies into its corporate master policies in order to take advantage of certain economies of scale.

The Company currently maintains a general liability policy and excess liability policy for U.S. Detention & Corrections, GEO Care’s Community-Based Services, GEO Care’s Youth Services and BI, Inc. with limits of $62.0 million per occurrence and in the aggregate. A separate $35.0 million limit applies to medical professional liability claims arising out of correctional healthcare services. The Company’s wholly owned subsidiary, GEO Care, Inc., has a separate insurance program for its residential services division, with a specific loss limit of $35.0 million per occurrence and in the aggregate with respect to general liability and medical professional liability. The Company is uninsured for any claims in excess of these limits. The Company also maintains insurance to cover property and other casualty risks including, workers’ compensation, environmental liability and automobile liability.

For most casualty insurance policies, the Company carries substantial deductibles or self-insured retentions — $3.0 million per occurrence for general liability and hospital professional liability, $2.0 million per occurrence for workers’ compensation and $1.0 million per occurrence for automobile liability. In addition, certain of the Company’s facilities located in Florida and other high-risk hurricane areas carry substantial windstorm deductibles. Since hurricanes are considered unpredictable future events, no reserves have been established to pre-fund for potential windstorm damage. Limited commercial availability of certain types of insurance relating to windstorm exposure in coastal areas and earthquake exposure mainly in California may prevent the Company from insuring some of its facilities to full replacement value.

With respect to operations in South Africa, the United Kingdom and Australia, the Company utilizes a combination of locally-procured insurance and global policies to meet contractual insurance requirements and protect the Company. The Company’s Australian subsidiary is required to carry tail insurance on a general liability policy providing an extended reporting period through 2011 related to a discontinued contract.

Of the reserves discussed above, the Company’s most significant insurance reserves relate to workers’ compensation and general liability claims. These reserves are undiscounted and were $40.2 million and $27.2 million as of January 2, 2011 and January 3, 2010, respectively. The Company uses statistical and actuarial methods to estimate amounts for claims that have been reported but not paid and claims incurred but not reported. In applying these methods and assessing their results, the Company considers such factors as historical frequency and severity of claims at each of its facilities, claim development, payment patterns and changes in the nature of its business, among other factors. Such factors are analyzed for each of the Company’s business segments. The Company estimates may be impacted by such factors as increases in the market price for medical services and unpredictability of the size of jury awards. The Company also may experience variability between its estimates and the actual settlement due to limitations inherent in the estimation process, including its ability to estimate costs of processing and settling claims in a timely manner as well as its ability to accurately estimate the Company’s exposure at the onset of a claim. Because the Company has high deductible insurance policies, the amount of its insurance expense is dependent on its ability to control its claims experience. If actual losses related to insurance claims significantly differ from the Company’s estimates, its financial condition, results of operations and cash flows could be materially adversely impacted.

Comprehensive Income

The Company’s total comprehensive income is comprised of net income attributable to The GEO Group, Inc., net income attributable to noncontrolling interests, foreign currency translation adjustments, net unrealized loss on derivative instruments, and pension liability adjustments in the Consolidated Statements of Shareholders’ Equity and Comprehensive Income.

Foreign Currency Translation

The Company’s foreign operations use their local currencies as their functional currencies. Assets and liabilities of the operations are translated at the exchange rates in effect on the balance sheet date and shareholders’ equity is translated at historical rates. Income statement items are translated at the average exchange rates for the year. The positive (negative) impact of foreign currency fluctuation is included in shareholders’ equity as a component of accumulated other comprehensive income, net of income tax, and totaled $5.1 million, $10.7 million and ($10.7) million for the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008, respectively.

Derivatives

The Company’s primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in interest rates. The Company measures its derivative financial instruments at fair value and records derivatives as either assets or liabilities on the balance sheet. For derivatives that are designed as and qualify as effective cash flow hedges, the portion of gain or loss on the derivative instrument effective at offsetting changes in the hedged item is reported as a component of accumulated other comprehensive income and reclassified into earnings when the hedged transaction affects earnings. For derivative instruments that are designated as and qualify as effective fair value hedges, the gain or loss on the derivative instruments as well as the offsetting gain or loss on the hedged items attributable to the hedged risk is recognized in current earnings as interest income (expense) during the period of the change in fair values.

The Company formally documents all relationships between hedging instruments and hedge items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes attributing all derivatives that are designated as cash flow hedges to floating rate liabilities and attributing all derivatives that are designated as fair value hedges to fixed rate liabilities. The Company also assesses whether each derivative is highly effective in offsetting changes in the cash flows of the hedged item. Fluctuations in the value of the derivative instruments are generally offset by changes in the hedged item; however, if it is determined that a derivative is not highly effective as a hedge or if a derivative ceases to be a highly effective hedge, the Company will discontinue hedge accounting prospectively for the affected derivative.

Stock-Based Compensation Expense

The Company recognizes the cost of stock based compensation awards based upon the grant date fair value of those awards. The Company uses a Black-Scholes option valuation model to estimate the fair value of each option awarded. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized.

The fair value of stock-based awards was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions for fiscal years ending 2010, 2009 and 2008, respectively:


	2010			2009			2008

Risk free interest rates		0.16	%		2.00	%		2.87	%
Expected term		3 months			4-5years			4-5years
Expected volatility		43	%		41	%		41	%
Expected dividend		—			—			—

The options granted in 2010 were the replacement options granted to former Cornell employees. Expected volatilities are based on the historical and implied volatility of the Company’s common stock. The Company uses historical data to estimate award exercises and employee terminations within the valuation model. The expected term of the awards represents the period of time that awards granted are expected to be outstanding and is based on historical data and expected holding periods. For awards granted as replacement stock options in 2010, the risk-free rate is based on the rate for three-month U.S. Treasury Bonds, which is consistent with the expected term of the award. For awards granted in 2009 and 2008, the risk-free rate is based on the rate for five year U.S. Treasury Bonds, which is consistent with the expected term of the awards.

Treasury Stock

We account for repurchases of our common stock, if any, using the cost method with common stock in treasury classified in our consolidated balance sheets as a reduction of shareholders’ equity.

On February 22, 2010, the Company announced that its Board of Directors approved a stock repurchase program for up to $80.0 million of the Company’s common stock which was effective through March 31, 2011. During the fiscal year ended January 2, 2011, the Company completed repurchases of shares of its common stock under the share repurchase program. The stock repurchase program was implemented through purchases made from time to time in the open market or in privately negotiated transactions, in accordance with applicable Securities and Exchange Commission requirements. The program also included repurchases from time to time from executive officers or directors of vested restricted stock and/or vested stock options. The stock repurchase program did not obligate the Company to purchase any specific amount of its common stock and could be extended or suspended at any time at the Company’s discretion. During the fiscal year ended January 2, 2011, the Company completed the program and purchased 4.0 million shares of its common stock, at an aggregate cost of $80.0 million, using cash on hand and cash flow from operating activities. Included in the shares repurchased for the fiscal year ended January 2, 2011 were 1.1 million shares repurchased from executive officers at an aggregate cost of $22.3 million.

Earnings Per Share

Basic earnings per share is computed by dividing income from continuing operations by the weighted-average number of common shares outstanding. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator includes dilutive common share equivalents such as share options and restricted shares.

Recent Accounting Pronouncements

The Company implemented the following accounting standards in the fiscal year ended January 2, 2011:

In December 2009, the FASB issued ASU No. 2009-17, previously known as FAS No. 167, “Amendments to FASB Interpretation No. FIN 46(R)” (SFAS No. 167). ASU No. 2009-17 amends the manner in which entities evaluate whether consolidation is required for VIEs. The consolidation requirements under the revised guidance require a company to consolidate a VIE if the entity has all three of the following characteristics (i) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity’s economic performance, (ii) the obligation to absorb the expected losses of the legal entity, and (iii) the right to receive the expected residual returns of the legal entity. Further, this guidance requires that companies continually evaluate VIEs for consolidation, rather than assessing based upon the occurrence of triggering events. As a result of adoption, which was effective for the Company’s interim and annual periods beginning after November 15, 2009, companies are required to enhance disclosures about how their involvement with a VIE affects the financial statements and exposure to risks. The implementation of this standard did not have a material impact on the Company’s financial position, results of operations and cash flows.

In January 2010, the FASB issued ASU No. 2010-2 which addresses implementation issues related to changes in ownership provisions of consolidated subsidiaries, investees and joint ventures. The amendment clarifies that the scope of the decrease in ownership provisions outlined in the current consolidation guidance apply to (i) a subsidiary or group of assets that is a business or nonprofit activity, (ii) a subsidiary that is a business or nonprofit activity and is transferred to an equity method investee or joint venture and (iii) to an exchange of a group of assets that constitute a business or nonprofit activity for a noncontrolling interest in an entity. The amendment also makes certain other clarifications and expands disclosures about the deconsolidation of a subsidiary or derecognition of a group of assets within the scope of the current consolidation guidance. These amendments became effective for the Company’s interim and annual reporting periods beginning after December 15, 2009. The implementation of this standard did not have a material impact on the Company’s financial position, results of operations and cash flows.

In January 2010, the FASB issued ASU No. 2010-6 which requires additional disclosures relative to transfers of assets and liabilities between Levels 1 and 2 of the fair value hierarchy. Additionally, the amendment requires companies to present activity in the reconciliation for Level 3 fair value measurements on a gross basis rather than on a net basis. This update also provides clarification to existing disclosures relative to the level of disaggregation and disclosure of inputs and valuation techniques for fair value measurements that fall into either Level 2 or Level 3. This amendment became effective for the Company’s interim and annual reporting period after December 15, 2009, except for disclosures related to activity in Level 3 fair value measurements which are effective for the Company’s first reporting period beginning after December 15, 2010. The implementation of this standard, relative to Levels 1 and 2 of the fair value hierarchy, did not have a material impact on the Company’s financial position, results of operations and cash flows. The Company does not expect the adoption of the standard relative to Level 3 investments to have a material impact on the Company’s financial position, results of operations and cash flows.

In July 2010, the FASB issued ASU No. 2010-20 which affects all entities with financing receivables, excluding short-term trade accounts receivable or receivables measured at fair value or lower of cost or fair value. The objective of the amendments in this update is for an entity to provide disclosures that facilitate financial statement users’ evaluation of the following: (i) the nature of credit risk inherent in the entity’s portfolio of financing receivables, (ii) how that risk is analyzed and assessed in arriving at the allowance for credit losses, (iii) the changes and reasons for those changes in the allowance for credit losses. These disclosures are effective for the Company for interim and annual reporting periods ending on or after December 15, 2010. The implementation of this standard did not have a material adverse impact on the Company’s financial position, results of operation and cash flows.

The following accounting standards will be adopted in future periods:

In October 2009, the FASB issued ASU No. 2009-13 which provides amendments to revenue recognition criteria for separating consideration in multiple element arrangements. As a result of these amendments, multiple deliverable arrangements will be separated more frequently than under existing GAAP. The amendments, among other things, establish the selling price of a deliverable, replace the term fair value with selling price and eliminate the residual method so that consideration would be allocated to the deliverables using the relative selling price method. This amendment also significantly expands the disclosure requirements for multiple element arrangements. This guidance will become effective for the Company prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company does not believe that the implementation of this standard will have a material adverse impact on its financial position, results of operation and cash flows.

In December 2010, the FASB issued ASU No. 2010-28 related to goodwill and intangible assets. Under current guidance, testing for goodwill impairment is a two-step test. When a goodwill impairment test is performed, an entity must assess whether the carrying amount of a reporting unit exceeds its fair value (Step 1). If it does, an entity must perform an additional test to determine whether goodwill has been impaired and to calculate the amount of that impairment (Step 2). The objective of ASU No 2010-28 is to address circumstances in which entities have reporting units with zero or negative carrying amounts. The amendments in this guidance modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts to require an entity to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists after considering certain qualitative characteristics, as described in this guidance. This guidance will become effective for the Company in fiscal years, and interim periods within those years, beginning after December 15, 2010. The Company currently does not have any reporting units with a zero or negative carrying value and does not expect that the impact of this accounting standard will have a material impact on the Company’s financial position, results of operations and/or cash flows.

Also, in December 2010, the FASB issued ASU No. 2010-29 related to financial statement disclosures for business combinations entered into after the beginning of the first annual reporting period beginning on or after December 15, 2010. The amendments in this guidance specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. These amendments also expand the supplemental pro forma disclosures under current guidance for business combinations to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company does not expect that the impact of this accounting standard will have a material impact on the Company’s financial position, results of operations and/or cash flows.

Business Combination

12 Months Ended

Jan. 02, 2011

Business Combination [Abstract]

Business Combination


2.	Business Combinations

Acquisition of Cornell Companies, Inc.

On August 12, 2010, the Company completed its acquisition of Cornell pursuant to a definitive merger agreement entered into on April 18, 2010, and amended on July 22, 2010, between the Company, GEO Acquisition III, Inc., and Cornell. Under the terms of the merger agreement, the Company acquired 100% of the outstanding common stock of Cornell for aggregate consideration of $618.3 million, excluding cash acquired of $12.9 million and including: (i) cash payments for Cornell’s outstanding common stock of $84.9 million, (ii) payments made on behalf of Cornell related to Cornell’s transaction costs accrued prior to the acquisition of $6.4 million, (iii) cash payments for the settlement of certain of Cornell’s debt plus accrued interest of $181.9 million using proceeds from GEO’s senior credit facility, (iv) common stock consideration of $357.8 million, and (v) the fair value of stock option replacement awards of $0.2 million. The value of the equity consideration was based on the closing price of the Company’s common stock on August 12, 2010 of $22.70.

Purchase price allocation

GEO is identified as the acquiring company for US GAAP accounting purposes. Under the purchase method of accounting, the aggregate purchase price is allocated to Cornell’s net tangible and intangible assets based on their estimated fair values as of August 12, 2010, the date of closing and the date that GEO obtained control over Cornell. In order to determine the fair values of a significant portion of the assets acquired and liabilities assumed, the Company engaged third party independent valuation specialists. The preliminary work performed by the third party independent valuation specialists has been considered in management’s estimates of certain of the fair values reflected in the purchase price allocation below. For any other assets acquired and liabilities assumed for which the Company is not considering the work of third party independent valuation specialists, the fair value determined by the Company’s management represents the price management believes would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. For long term assets, liabilities and the noncontrolling interest in MCF for which there was no active market price available for valuation, the Company used Level 3 inputs to estimate the fair market value.

The allocation of the purchase price for this transaction at August 12, 2010 has not been finalized. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair values of certain tangible assets and liabilities acquired, the valuation of certain intangible assets acquired and income taxes. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that the Company determines to be material will be applied retrospectively to the period of acquisition. The purchase price of $618.3 million has been preliminarily allocated to the estimated fair values of the assets acquired and liabilities assumed as of August 12, 2010 as follows (in ’000’s):


	Preliminary
	Purchase Price
	Allocation

Accounts receivable	$	55,142
Prepaid and other current assets		13,314
Deferred income tax assets		21,273
Restricted assets		44,096
Property and equipment		462,771
Intangible assets		75,800
Out of market lease assets		472
Other long-term assets		7,510

Total assets acquired	$	680,378

Accounts payable and accrued expenses		(56,918	)
Fair value of non-recourse debt		(120,943	)
Out of market lease liabilities		(24,071	)
Deferred income tax liabilities		(42,771	)
Other long-term liabilities		(1,368	)

Total liabilities assumed		(246,071	)

Total identifiable net assets		434,307
Goodwill		204,724

Fair value of Cornell’s net assets		639,031
Noncontrolling interest		(20,700	)

Total consideration for Cornell, net of cash acquired	$	618,331

As shown above, the Company recorded $204.7 million of goodwill related to the purchase of Cornell. The strategic benefits of the Merger include the combined Company’s increased scale and the diversification of service offerings. These factors contributed to the goodwill that was recorded upon consummation of the transaction. Of the goodwill recorded in relation to the Merger, only $1.5 million of goodwill resulting from a previous Cornell acquisition is deductible for federal income tax purposes; the remainder of goodwill is not deductible. Included in net assets acquired is gross contractual accounts receivable of approximately $62.8 million, of which approximately $7.7 million is expected to be uncollectible. Identifiable intangible assets purchased in the acquisition and their weighted average amortization periods in total and by major intangible asset class, as applicable, are included in the table below (in thousands):


	Weighted Average		Fair Value
	Amortization Period		as of August 12, 2010

Goodwill		n/a	$	204,724
Identifiable intangible assets
Facility Management contracts		12.5 years	$	70,100
Covenants not to compete		1.8 years		5,700

Total identifiable intangible assets		11.7 years	$	75,800

As of January 2, 2011 the weighted average period before the next contract renewal or extension for acquired Cornell contracts was approximately one year. Although the contracts have renewal and extension terms in the near future, Cornell has historically maintained these relationships beyond the contractual periods.

The following table sets forth amortization expense for each of the five succeeding years and thereafter related to the finite-lived intangible assets acquired during the fiscal year ended January 2, 2011:


	U.S. Detention &
Fiscal Year	Corrections		GEO Care		Total

2011	$	4,448	$	4,137	$	8,585
2012		3,680		3,385		7,065
2013		2,950		2,669		5,619
2014		2,950		2,669		5,619
2015		2,950		2,669		5,619
Thereafter		19,517		20,328		39,845

Net carrying value as of January 2, 2011	$	36,495	$	35,857	$	72,352

Pro forma financial information

The results of operations of Cornell are included in the Company’s results of operations from August 12, 2010. The following unaudited pro forma information combines the consolidated results of operations of the Company and Cornell as if the acquisition had occurred at the beginning of fiscal year 2009. The pro forma financial information below has been calculated after adjusting primarily for the following: (i) depreciation and amortization expense that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied at the beginning of fiscal year 2009; (ii) the impact of the Company’s $750.0 million Senior Credit Facility which closed on August 4, 2010; (iii) the elimination of $15.7 million in acquisition related expenses recognized in the fiscal year ended January 2, 2011; and (iv) the related tax effects at the estimated statutory income tax rate. The pro forma amounts are included for comparative purposes and may not necessarily reflect the results of operations that would have resulted had the acquisition been completed at a date other than as specified and may not be indicative of the results that will be attained in the future. For the purposes of the table and disclosure below, earnings is the same as net income attributable to the GEO Group Inc., shareholders (in ’000’s):


	Fiscal Year Ended
	January 2, 2011		January 3, 2010

Pro forma revenues	$	1,517.6	$	1,551.8
Pro forma net income attributable to the GEO Group Inc., shareholders	$	90.5	$	92.8

The Company has included revenue and earnings of $151.1 million and $9.8 million, respectively, in its consolidated statement of income for fiscal year ended January 2, 2011 for Cornell activity since August 12, 2010, the date of acquisition.

Acquisition of BII Holding

On December 21, 2010, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BII Holding, GEO Acquisition IV, Inc., a Delaware corporation and wholly-owned subsidiary of GEO (“Merger Sub”), BII Investors IF LP, in its capacity as the stockholders’ representative, and AEA Investors 2006 Fund L.P. (“AEA”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into BII Holding (the “Merger”), with BII Holding (“BI”) continuing as the surviving corporation and a wholly-owned subsidiary of GEO. Pursuant to the Merger Agreement, the Company paid merger consideration of $415.0 million in cash, subject to certain adjustments, including an adjustment for working capital. All indebtedness of BI under its senior term loan and senior subordinated note purchase agreement was repaid by BI with a portion of the $415.0 million of merger consideration. Refer to Note 21.

Shareholders' Equity

12 Months Ended

Jan. 02, 2011

Shareholders' Equity [Abstract]

Shareholders' Equity


3.	Shareholders’ Equity

Common Stock

Each holder of the Company’s common stock is entitled to one vote per share on all matters to be voted upon by the Company’s shareholders. Upon any liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share equally in all assets available for distribution after payment of all liabilities, subject to the liquidation preference of shares of preferred stock, if any, then outstanding. The Company did not pay any cash dividends on its common stock for fiscal years 2010, 2009 or 2008. Future dividends, if any, will depend, on the Company’s future earnings, its capital requirements, its financial condition and on such other factors as the Board of Directors may take into consideration.

Preferred Stock

In April 1994, the Company’s Board of Directors authorized 30 million shares of “blank check” preferred stock. The Board of Directors is authorized to determine the rights and privileges of any future issuance of preferred stock such as voting and dividend rights, liquidation privileges, redemption rights and conversion privileges.

Rights Agreement

On October 9, 2003, the Company entered into a rights agreement with EquiServe Trust Company, N.A., as rights agent. Under the terms of the rights agreement, each share of the Company’s common stock carries with it one preferred share purchase right. If the rights become exercisable pursuant to the rights agreement, each right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock at a fixed price, subject to adjustment. Until a right is exercised, the holder of the right has no right to vote or receive dividends or any other rights as a shareholder as a result of holding the right. The rights trade automatically with shares of our common stock, and may only be exercised in connection with certain attempts to acquire the Company. The rights are designed to protect the interests of the Company and its shareholders against coercive acquisition tactics and encourage potential acquirers to negotiate with our Board of Directors before attempting an acquisition. The rights may, but are not intended to, deter acquisition proposals that may be in the interests of the Company’s shareholders.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) represents the change in shareholders’ equity from transactions and other events and circumstances arising from non-shareholder sources. The Company’s comprehensive income (loss) includes net income, effect of foreign currency translation adjustments that arise from consolidating foreign operations that do not impact cash flows, projected benefit obligation recognized in other comprehensive income and the change in net unrealized gains or losses on derivative instruments. The components of accumulated other comprehensive income (loss) are as follows:


				Projected Beneftt
				Obligation						Accumulated
				Recognized in Other			Gains and Losses			Other
	Foreign Currency			Comprehensive			on Derivative			Comprehensive
	Translation, Net			Income (Loss)			Instruments			Income (Loss)

Balance December 30, 2007	$	4,930		$	(1,621	)	$	3,611		$	6,920
Change in foreign currency translation, net of tax benefit of $413		(10,742	)		—			—			(10,742	)
Pension liabiltiy adjustment, net of tax expense of $17		—			27			—			27
Unrealized loss on derivative instruments, net of tax benefit of $2,113		—			—			(3,480	)		(3,480	)

Balance December 28, 2008		(5,812	)		(1,594	)		131			(7,275	)

Change in foreign currency translation, net of tax expense of $1,129		10,658			—			—			10,658
Pension liabiltiy adjustment, net of tax expense of $636		—			942			—			942
Unrealized gain on derivative instruments, net of income tax benefit of $645		—			—			1,171			1,171

Balance January 3, 2010		4,846			(652	)		1,302			5,496

Change in foreign currency translation, net of tax expense of $1,313		5,084			—			—			5,084
Pension liabilty adjustment, net of tax benefit of $232		—			(383	)		—			(383	)
Unrealized gain on derivative instruments, net of income tax benefit of $69		—			—			(126	)		(126	)

Balance January 2, 2011	$	9,930		$	(1,035	)	$	1,176		$	10,071

Stock repurchases

On February 22, 2010, the Company announced that its Board of Directors approved a stock repurchase program for up to $80.0 million of the Company’s common stock which was effective through March 31, 2011. The stock repurchase program was implemented through purchases made from time to time in the open market or in privately negotiated transactions, in accordance with applicable Securities and Exchange Commission requirements. The program also included repurchases from time to time from executive officers or directors of vested restricted stock and/or vested stock options. The stock repurchase program did not obligate the Company to purchase any specific amount of its common stock and could be suspended or extended at any time at the Company’s discretion. During the fiscal year ended January 2 2011, the Company completed the program and purchased 4.0 million shares of its common stock at a cost of $80.0 million using cash on hand and cash flow from operating activities. Of the aggregate 4.0 million shares repurchased during the fiscal year ended January 2, 2011, 1.1 million shares were repurchased from executive officers at an aggregate cost of $22.3 million.

Also during the fiscal year ended January 2, 2011, the Company repurchased 0.3 million shares of common stock from certain directors and executives for an aggregate cost of $7.1 million. These shares were retired by the Company immediately upon repurchase.

Noncontrolling Interests

Equity Incentive Plans

12 Months Ended

Jan. 02, 2011

Equity Incentive Plans [Abstract]

Equity Incentive Plans


4.	Equity Incentive Plans

The Company had awards outstanding under four equity compensation plans at January 2, 2011: The Wackenhut Corrections Corporation 1994 Stock Option Plan (the “1994 Plan”); the 1995 Non-Employee Director Stock Option Plan (the “1995 Plan”); the Wackenhut Corrections Corporation 1999 Stock Option Plan (the “1999 Plan”); and The GEO Group, Inc. 2006 Stock Incentive Plan (the “2006 Plan” and, together with the 1994 Plan, the 1995 Plan and the 1999 Plan, the “Company Plans”).

On August 12, 2010, the Company’s Board of Directors adopted and its shareholders approved an amendment to the 2006 Plan to increase the number of shares of common stock subject to awards under the 2006 Plan by 2,000,000 shares from 2,400,000 to 4,400,000 shares of common stock. The 2006 Plan specifies that up to 1,083,000 of such total shares pursuant to awards granted under the plan may constitute awards other than stock options and stock appreciation rights, including shares of restricted stock. See “Restricted Stock” below for further discussion. As of January 2, 2011, the Company had 952,850 shares of common stock available for issuance pursuant to future awards that may be granted under the plan of which up to 351,722 were available for the issuance of awards other than stock options. As a result of the acquisition of Cornell, the Company issued 35,750 replacement stock option awards with an aggregate fair value as of August 12, 2010 of $0.2 million which is included in the purchase price consideration. These awards were fully vested at the grant date and had a term of 90 days.

Except for 846,186 shares of restricted stock issued under the 2006 Plan as of January 2, 2011, all of the awards previously issued under the Company Plans consisted of stock options. Although awards are currently outstanding under all of the Company Plans, the Company may only grant new awards under the 2006 Plan.

Under the terms of the Company Plans, the vesting period and, in the case of stock options, the exercise price per share, are determined by the terms of each plan. All stock options that have been granted under the Company Plans are exercisable at the fair market value of the common stock at the date of the grant. Generally, the stock options vest and become exercisable ratably over a four-year period, beginning immediately on the date of the grant. However, the Board of Directors has exercised its discretion to grant stock options that vest 100% immediately for the Chief Executive Officer. In addition, stock options granted to non-employee directors under the 1995 Plan became exercisable immediately. All stock options awarded under the Company Plans expire no later than ten years after the date of the grant, except for the replacement awards issued in connection with the Cornell acquisition discussed above.

Stock Options

A summary of the activity of the Company’s stock options plans is presented below:


				Wtd. Avg.		Wtd. Avg.		Aggregate
				Exercise		Remaining		Intrinsic
	Shares			Price		Contractual Term		Value
	(In thousands)							(In thousands)

Options outstanding at January 3, 2010		2,807		$	10.26		4.80	$	32,592
Granted		36			16.33
Exercised		(1,353	)		4.95
Forfeited/Canceled		(89	)		19.73

Options outstanding at January 2, 2011		1,401		$	15.01		5.84	$	13,517

Options exercisable at January 2, 2011		1,044		$	13.22		5.04	$	11,942

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of fiscal year 2010 and the exercise price, times the number of shares that are “in the money”) that would have been received by the option holders had all option holders exercised their options on January 2, 2011. This amount changes based on the fair value of the company’s stock. The total intrinsic value of options exercised during the fiscal years ended January 2, 2011, January 3, 2010, and December 28, 2008 was $21.1 million, $6.2 million, and $2.9 million, respectively.

The following table summarizes information about the exercise prices and related information of stock options outstanding under the Company Plans at January 2, 2011:


	Options Outstanding						Options Exercisable
			Wtd. Avg.		Wtd. Avg.				Wtd. Avg.
	Number		Remaining		Exercise		Number		Exercise
Exercise Prices	Outstanding		Contractual Life		Price		Exercisable		Price

3.17 — 3.98		37,527		1.8		3.30		37,527		3.30
4.67 — 4.90		77,454		2.3		4.67		77,454		4.67
5.13 — 5.13		132,000		1.1		5.13		132,000		5.13
5.30 — 7.70		210,297		4.7		6.96		210,297		6.96
7.83 — 20.63		294,600		6.4		15.62		214,000		15.07
21.07 — 21.56		647,700		7.6		21.26		372,600		21.34
21.64 — 28.24		1,000		8.8		21.70		400		21.70

Total		1,400,578		5.8	$	15.01		1,044,278	$	13.22

For the years ended January 2, 2011, January 3, 2010 and December 28, 2008, the amount of stock-based compensation expense related to stock options was $1.4 million, $1.8 million and $1.5 million, respectively. The weighted average grant date fair value of options granted during the fiscal years ended January 2, 2011 and January 3, 2010 and December 28, 2008 was $6.73, $7.41 and $6.58 per share, respectively.

The following table summarizes the status of non-vested stock options as of January 2, 2011 and changes during the fiscal year ending January 2, 2011:


				Wtd. Avg. Grant
	Number of Shares			Date Fair Value

Options non-vested at January 3, 2010		595,758		$	7.39
Granted(a)		35,750			6.73
Vested		(227,408	)		7.32
Forfeited		(47,800	)		7.30

Options non-vested at January 2, 2011		356,300		$	7.37


(a)		These options were granted as replacement awards to former Cornell option holders. The options were fully vested at the acquisition date and the fair value of the awards was included in purchase price consideration.

As of January 2, 2011, the Company had $1.9 million of unrecognized compensation costs related to non-vested stock option awards that are expected to be recognized over a weighted average period of 2.5 years. The total fair value of shares vested during the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008, was $2.1 million, $1.8 million and $1.2 million, respectively. Proceeds received from stock options exercises for 2010, 2009 and 2008 was $6.7 million, $1.5 million and $0.8 million, respectively. Additional tax benefits realized from tax deductions associated with the exercise of stock options and the vesting of restricted stock activity for 2010, 2009 and 2008 totaled $3.9 million, $0.6 million and $0.8 million, respectively.

Restricted Stock

Shares of restricted stock become unrestricted shares of common stock upon vesting on a one-for-one basis. The cost of these awards is determined using the fair value of the Company’s common stock on the date of the grant and compensation expense is recognized over the vesting period. The shares of restricted stock granted under the 2006 Plan vest in equal 25% increments on each of the four anniversary dates immediately following the date of grant. A summary of the activity of restricted stock is as follows:


				Wtd. Avg.
				Grant date
	Shares			Fair value

Restricted stock outstanding at January 3, 2010		383,100		$	19.66
Granted		40,280			22.70
Vested		(222,100	)		18.84
Forfeited/Canceled		(40,750	)		21.38

Restricted stock outstanding at January 2, 2011		160,530		$	21.12

During the fiscal year ended January 2, 2011, January 3, 2010 and December 28, 2008, the Company recognized $3.3 million, $3.5 million and $3.0 million, respectively, of compensation expense related to its outstanding shares of restricted stock. As of January 2, 2011, the Company had $2.2 million of unrecognized compensation expense that is expected to be recognized over a weighted average period of 2.0 years.

Discontinued Operations

12 Months Ended

Jan. 02, 2011

Discontinued Operations [Abstract]

Discontinued Operations


5.	Discontinued Operations

During the fiscal year 2008, the Company discontinued operations at certain of its domestic and international subsidiaries. Where significant, the results of operations, net of taxes, as further described below, have been reflected in the accompanying consolidated financial statements as such for all periods presented.

U.S. Detention & Corrections. On November 7, 2008, the Company announced its receipt of notice for the discontinuation of its contract with the State of Idaho, Department of Correction (“Idaho DOC”) for the housing of approximately 305 out-of-state inmates at the managed-only Bill Clayton Detention Center (the “Detention Center”) effective January 5, 2009. On August 29, 2008, the Company announced its discontinuation of its contract with Delaware County, Pennsylvania for the management of the county-owned 1,883-bed George W. Hill Correctional Facility effective December 31, 2008.

International Services. On December 22, 2008, the Company announced the closure of its U.K.-based transportation division, Recruitment Solutions International (“RSI”). As a result of the termination of its transportation business in the United Kingdom, the Company wrote off assets of $2.6 million including goodwill of $2.3 million.

GEO Care. On June 16, 2008, the Company announced the discontinuation by mutual agreement of its contract with the State of New Mexico Department of Health for the management of the Fort Bayard Medical Center effective June 30, 2008.

There were no continuing cash flows from the operations in the fiscal year ended January 2, 2011 and as such, there are no amounts reclassified to discontinued operations for this period. The following are the revenues related to discontinued operations for the fiscal years ended December 28, 2008 and January 3, 2010 (in thousands):


	2010		2009		2008
	(In thousands)

Revenues — International Services	$	—	$	—	$	1,806
Revenues — U.S. Detention & Corrections	$	—	$	210	$	43,784
Revenues — GEO Care	$	—	$	—	$	1,806

Property and Equipment

12 Months Ended

Jan. 02, 2011

Property and Equipment [Abstract]

Property and Equipment


6.	Property and Equipment

Property and equipment consist of the following at fiscal year end:


	Useful
	Life		2010			2009
	(Years)		(In thousands)

Land		—	$	97,393		$	60,331
Buildings and improvements		2 to 50		1,131,895			797,185
Leasehold improvements		1 to 29		260,167			95,696
Equipment		3 to 10		77,906			63,382
Furniture and fixtures		3 to 7		18,453			11,731
Facility construction in progress				120,584			129,956

Total			$	1,706,398		$	1,158,281
Less accumulated depreciation and amortization				(195,106	)		(159,721	)

Property and equipment, net			$	1,511,292		$	998,560

The Company depreciates its leasehold improvements over the shorter of their estimated useful lives or the terms of the leases including renewal periods that are reasonably assured. The Company’s construction in progress primarily consists of development costs associated with the Facility Construction & Design segment for contracts with various federal, state and local agencies for which we have management contracts. Interest capitalized in property and equipment was $4.1 million and $4.9 million for the fiscal years ended January 2, 2011 and January 3, 2010, respectively.

Depreciation expense was $41.4 million, $36.3 million and $31.9 million for the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008, respectively.

At January 2, 2011 and January 3, 2010, the Company had $18.2 million and $18.2 million of assets recorded under capital leases including $17.5 million related to buildings and improvements, $0.7 million related to equipment. Capital leases are recorded net of accumulated amortization of $4.7 million and $3.9 million, at January 2, 2011 and January 3, 2010, respectively. Depreciation expense related to capital leases for the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008 was $0.8 million, $0.8 million and $0.9 million, respectively and is included in Depreciation and Amortization in the accompanying statements of income.

Assets Held for Sale

12 Months Ended

Jan. 02, 2011

Assets Held for Sale [Abstract]

Assets Held for Sale


7.	Assets Held for Sale

The Company records its assets held for sale at the lower of cost or estimated fair value. The Company estimates fair value by using third party appraisers or other valuation techniques. The Company does not record depreciation for its assets held for sale.

As of January 2, 2011, the Company’s assets held for sale consisted of two assets:

On March 17, 2008, the Company purchased its former Coke County Juvenile Justice Center (the “Center”) at a cost of $3.1 million. In October 2008, the Company established a formal plan to sell the asset and began active discussions with certain parties interested in purchasing the Center. The Company identified a buyer in 2010 and expects to sell the facility in 2011; however, this sale is subject to the buyer obtaining financing and/or government appropriation. If the buyer is unable to obtain the funds necessary to purchase the Center, the Company will need to locate another buyer. There can be no assurance that the prospective buyer can obtain the financing, no assurance that the Company will be able to locate another buyer in the event that this buyer is not able to obtain the financing and no assurance that the Center will be sold for its carrying value. The Center is included in the segment assets of U.S. Detention & Corrections and was recorded at its net realizable value of $3.1 million at January 2, 2011 and at January 3, 2010.

On August 12, 2010, the Company acquired the Washington D.C. Facility in connection with its purchase of Cornell. This facility met the criteria as held for sale during the Company’s fiscal year ended January 2, 2011 and has been designated as such. The carrying value of this asset as of January 2, 2011 was $6.9 million. The Company believes it has found a third party buyer and expects to close on the sale in early 2011. The sale of this property, which is recorded as an asset held for sale with GEO Care segment assets, will not result in a gain or loss.

In conjunction with the acquisition of CSC in November 2005, the Company acquired land associated with a program that had been discontinued by CSC in October 2003. The land, with a corresponding carrying value of $1.3 million, was sold in October 2010 for $2.1 million, net of sales costs. The Company recognized a gain on the sale of the land of $0.8 million which is included in operating expenses in the accompanying statement of income. The gain on the sale is reported in the Company’s U.S. Detention & Corrections reportable segment.

Investment in Direct Finance Leases

12 Months Ended

Jan. 02, 2011

Investment in Direct Finance Leases [Abstract]

Investment in Direct Finance Leases


8.	Investment in Direct Finance Leases

The Company’s investment in direct finance leases relates to the financing and management of one Australian facility. The Company’s wholly-owned Australian subsidiary financed the facility’s development with long-term debt obligations, which are non-recourse to the Company.

The future minimum rentals to be received are as follows:


	Annual
Fiscal Year	Repayment
	(In thousands)

2011	$	8,548
2012		8,652
2013		8,792
2014		8,968
2015		9,560
Thereafter		12,544

Total minimum obligation	$	57,064
Less unearned interest income		(14,724	)
Less current portion of direct finance lease		(4,796	)

Investment in direct finance lease	$	37,544

Derivative Financial Instruments

12 Months Ended

Jan. 02, 2011

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments


9.	Derivative Financial Instruments

In November 2009, the Company executed three interest rate swap agreements (the “Agreements”) in the aggregate notional amount of $75.0 million. In January 2010, the Company executed a fourth interest rate swap agreement in the notional amount of $25.0 million. The Company has designated these interest rate swaps as hedges against changes in the fair value of a designated portion of the 73/4% Senior Notes due 2017 (“73/4% Senior Notes”) due to changes in underlying interest rates. The Agreements, which have payment, expiration dates and call provisions that mirror the terms of the Notes, effectively convert $100.0 million of the Notes into variable rate obligations. Each of the swaps has a termination clause that gives the counterparty the right to terminate the interest rate swaps at fair market value, under certain circumstances. In addition to the termination clause, the Agreements also have call provisions which specify that the lender can elect to settle the swap for the call option price. Under the Agreements, the Company receives a fixed interest rate payment from the financial counterparties to the agreements equal to 73/4% per year calculated on the notional $100.0 million amount, while it makes a variable interest rate payment to the same counterparties equal to the three-month LIBOR plus a fixed margin of between 4.16% and 4.29%, also calculated on the notional $100.0 million amount. Changes in the fair value of the interest rate swaps are recorded in earnings along with related designated changes in the value of the Notes. Total net gains (loss) recognized and recorded in earnings related to these fair value hedges was $5.2 million and $(1.9) million in the fiscal periods ended January 2, 2011 and January 3, 2010, respectively. As of January 2, 2011 and January 3, 2010, the fair value of the swap assets (liabilities) was $3.3 million and $(1.9) million, respectively. There was no material ineffectiveness of these interest rate swaps during the fiscal periods ended January 2, 2011.

The Company’s Australian subsidiary is a party to an interest rate swap agreement to fix the interest rate on the variable rate non-recourse debt to 9.7%. The Company has determined the swap, which has a notional amount of $50.9 million, payment and expiration dates, and call provisions that coincide with the terms of the non-recourse debt to be an effective cash flow hedge. Accordingly, the Company records the change in the value of the interest rate swap in accumulated other comprehensive income, net of applicable income taxes. Total net unrealized gain (loss) recognized in the periods and recorded in accumulated other comprehensive income, net of tax, related to these cash flow hedges was $(0.1) million, $1.2 million and ($3.5) million for the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008, respectively. The total value of the Australia swap asset as of January 2, 2011 and January 3, 2010 was $1.8 million and $2.0 million, respectively, and is recorded as a component of other assets in the accompanying consolidated balance sheets. There was no material ineffectiveness of this interest rate swap for the fiscal periods presented. The Company does not expect to enter into any transactions during the next twelve months which would result in the reclassification into earnings or losses associated with this swap currently reported in accumulated other comprehensive income (loss).

During the fiscal year ended January 3, 2010, the Company received proceeds of $1.7 million for the settlement of an aggregate notional amount of $50.0 million of interest rate swaps related to its $150.0 million 81/4% Senior Notes due 2013 (“81/4% Senior Notes”). The lenders to these swap agreements elected to prepay their obligations at the call option price which equaled the fair value at the respective call dates.

Goodwill and Other Intangible Assets, Net

12 Months Ended

Jan. 02, 2011

Goodwill and Other Intangible Assets, Net [Abstract]

Goodwill and Other Intangible Assets, Net


10.	Goodwill and Other Intangible Assets, Net

Changes in the Company’s goodwill balances for 2010 were as follows (in thousands):


					Purchase price			Foreign
					allocation			currency
	January 3, 2010		Acquisitions		adjustment			translation		January 2, 2011

U.S. Detention & Corrections	$	21,692	$	153,882	$	1,126		$	—	$	176,700
GEO Care		17,729		50,500		(744	)		—		67,485
International Services		669		—		—			93		762

Total Goodwill	$	40,090	$	204,382	$	382		$	93	$	244,947

On August 12, 2010, the Company acquired Cornell and recorded $204.7 million in goodwill representing the strategic benefits of the Merger including the combined Company’s increased scale and the diversification of service offerings. During the fiscal year ended January 2, 2011, the Company made adjustments to its purchase accounting in the amount of $0.4 million, net, primarily related to Cornell. Among other adjustments, this change in allocation resulted from the Company’s analyses primarily related to certain receivables, intangible assets, insurance liabilities and certain income and non-income tax items.

Intangible assets consisted of the following (in thousands):


	Useful Life		U.S. Detention &			International
	in Years		Corrections			Services			GEO Care			Total

Facility management contracts		1-17	$	14,450		$	2,468		$	6,600		$	23,518
Covenants not to compete		4		1,470			—			—			1,470

Gross carrying value as of January 3, 2010				15,920			2,468			6,600			24,988

Changes during fiscal year ended January 2, 2011 due to:
Facility management contracts acquired		12-13		35,400			—			34,700			70,100
Covenants not to compete related to Cornell acquisition		1-2		2,879			—			2,821			5,700
Foreign currency translation				—			286			—			286

Gross carrying value at January 2, 2011				54,199			2,754			44,121			101,074
Accumulated amortization expense				(10,146	)		(325	)		(2,790	)		(13,261	)

Net carrying value at January 2, 2011			$	44,053		$	2,429		$	41,331		$	87,813

As of January 2, 2011, the weighted average period before the next contract renewal or extension for all of the Company’s the facility management contracts was approximately 1.5 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 contractual periods.

Accumulated amortization expense in total and by asset class is as follows (in thousands):


	U.S. Detention &		International
	Corrections		Services		GEO Care		Total

Facility management contracts	$	9,496	$	325	$	2,153	$	11,974
Covenants not to compete		650		—		637		1,287

Total accumulated amortization expense	$	10,146	$	325	$	2,790	$	13,261

Amortization expense was $5.7 million, $2.0 million and $1.8 million for the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008, respectively, and primarily related to the U.S. Detention & Corrections amortization of intangible assets for acquired management contracts.

Estimated amortization expense related to the Company’s finite-lived intangible assets for fiscal year 2011 through fiscal year 2015 and thereafter is as follows (in thousands):


	U.S. Detention &		International
	Corrections -		Services -		GEO Care -
	Expense		Expense		Expense		Total Expense
Fiscal Year	Amortization		Amortization		Amortization		Amortization

2011	$	5,783	$	151	$	4,984	$	10,918
2012		4,894		151		4,185		9,230
2013		3,556		151		3,236		6,943
2014		3,556		151		3,096		6,803
2015		3,556		151		3,065		6,772
Thereafter		22,708		1,674		22,765		47,147

	$	44,053	$	2,429	$	41,331	$	87,813

Fair Value of Assets and Liabilities

12 Months Ended

Jan. 02, 2011

Fair Value of Assets and Liabilities [Abstract]

Fair Value of Assets and Liabilities


11.	Fair Value of Assets and Liabilities

The Company is required to measure certain of its financial assets and liabilities at fair value on a recurring basis. The Company does not have any financial assets and liabilities which it carries and measures at fair value using Level 1 techniques, as defined above. The investments included in the Company’s Level 2 fair value measurements consist of an interest rate swap held by the Company’s Australian subsidiary, an investment in Canadian dollar denominated fixed income securities and a guaranteed investment contract which is a restricted investment related to CSC of Tacoma LLC discussed further in Note 14. The Company does not have any Level 3 financial assets or liabilities it measures on a recurring basis.

The following table provides a summary of the Company’s significant financial assets and liabilities carried at fair value and measured on a recurring basis (in thousands):


			Fair Value Measurements at January 2, 2011
	Carrying		Quoted Prices in		Significant Other		Significant
	Value at		Active Markets		Observable Inputs		Unobservable
	January 2, 2011		(Level 1)		(Level 2)		Inputs (Level 3)

Assets:
Interest rate swap derivative assets	$	5,131	$	—	$	5,131	$	—
Investments other than derivatives	$	7,533	$	—		7,533	$	—


			Fair Value Measurements at January 3, 2010
	Carrying		Quoted Prices in		Significant Other		Significant
	Value at		Active Markets		Observable Inputs		Unobservable
	January 3, 2010		(Level 1)		(Level 2)		Inputs (Level 3)

Assets:
Interest rate swap derivative assets	$	2,020	$	—	$	2,020	$	—
Investments other than derivatives	$	7,269	$	—	$	7,269	$	—
Liabilities:
Interest rate swap derivative liabilities	$	1,887	$	—	$	1,887	$	—

Financial Instruments

12 Months Ended

Jan. 02, 2011

Financial Instruments [Abstract]

Financial Instruments


12.	Financial Instruments

The Company’s balance sheet reflects certain financial instruments at carrying value. The following table presents the carrying values of those instruments and the corresponding fair values (in thousands):


	January 2, 2011
	Carrying		Estimated
	Value		Fair Value

Assets:
Cash and cash equivalents	$	39,664	$	39,664
Restricted cash and investments, including current portion		90,642		90,642
Liabilities:
Borrowings under the Senior Credit Facility	$	557,758	$	562,610
73/4% Senior Notes		250,078		265,000
Non-recourse debt, Australian subsidiary		46,300		46,178
Other non-recourse debt, including current portion		176,384		180,340


	January 3, 2010
	Carrying		Estimated
	Value		Fair Value

Assets:
Cash and cash equivalents	$	33,856	$	33,856
Cash, Restricted, including current portion		34,068		34,068
Liabilities:
Borrowings under the Senior Credit Facility	$	212,963	$	203,769
73/4% Senior Notes		250,000		255,000
Non-recourse debt, including current portion		113,724		113,360

The fair values of the Company’s Cash and cash equivalents, and Restricted cash and investments approximate the carrying values of these assets at January 2, 2011 and January 3, 2010 due to the short-term nature of these instruments. The fair values of 73/4% Senior Notes and Other non-recourse debt are based on market prices, where available. The fair value of the non-recourse debt related to the Company’s Australian subsidiary is estimated using a discounted cash flow model based on current Australian borrowing rates for similar instruments. The fair value of the borrowings under the Senior Credit Facility is based on an estimate of trading value considering the company’s borrowing rate, the undrawn spread and similar market instruments.

Accrued Expenses

12 Months Ended

Jan. 02, 2011

Accrued Expenses [Abstract]

Accrued Expenses


13.	Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	2010		2009

Accrued interest	$	12,153	$	5,913
Accrued bonus		12,825		8,567
Accrued insurance		44,237		30,661
Accrued property and other taxes		15,723		5,219
Construction retainage		2,012		8,250
Other		34,697		22,149

Total	$	121,647	$	80,759

Debt

12 Months Ended

Jan. 02, 2011

Debt [Abstract]

Debt


14.	Debt

Debt consisted of the following (in thousands):


	2010			2009

Capital Lease Obligations	$	14,470		$	15,124
Senior Credit Facility:
Term loans		347,625			—
Discount on term loan		(1,867	)		154,963
Revolver		212,000			58,000

Total Senior Credit Facility	$	557,758		$	212,963
73/4% Senior Notes
Notes Due in 2017		250,000			250,000
Discount on Notes		(3,227	)		(3,566	)
Swap on Notes		3,305			(1,887	)

Total 73/4% Senior Notes	$	250,078		$	244,547
Non-Recourse Debt :
Non-recourse debt	$	212,445		$	113,724
Premium on non-recourse debt		11,403			—
Discount on non-recourse debt		(1,164	)		(1,692	)

Total non recourse debt		222,684			112,032
Other debt		—			28

Total debt	$	1,044,990		$	584,694

Current portion of capital lease obligations, long-term debt and non-recourse debt		(41,574	)		(19,624	)
Capital lease obligations, long-term portion		(13,686	)		(14,419	)
Non-recourse debt		(191,394	)		(96,791	)

Long-term debt	$	798,336		$	453,860

Senior Credit Facility

On August 4, 2010, the Company executed a new $750.0 million senior credit facility (the “Senior Credit Facility”), through the execution of a Credit Agreement, by and among GEO, as Borrower, BNP Paribas, as Administrative Agent, and the lenders who are, or may from time to time become, a party thereto. The Senior Credit Facility is comprised of (i) a $150.0 million Term Loan A (“Term Loan A”), initially bearing interest at LIBOR plus 2.5% and maturing August 4, 2015, (ii) a $200.0 million Term Loan B (“Term Loan B”) initially bearing interest at LIBOR plus 3.25% with a LIBOR floor of 1.50% and maturing August 4, 2016 and (iii) a Revolving Credit Facility (“Revolver”) of $400.0 million initially bearing interest at LIBOR plus 2.5% and maturing August 4, 2015.

Indebtedness under the Revolver and the Term Loan A bears interest based on the Total Leverage Ratio as of the most recent determination date, as defined, in each of the instances below at the stated rate:


		Interest Rate under the Revolver and Term Loan A

LIBOR borrowings		LIBOR plus 2.00% to 3.00%.
Base rate borrowings		Prime Rate plus 1.00% to 2.00%.
Letters of credit		2.00% to 3.00%.
Unused Revolver		0.375% to 0.50%.

The Senior Credit Facility contains certain customary representations and warranties, and certain customary covenants that restrict the Company’s ability to, among other things as permitted (i) create, incur or assume indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in mergers, acquisitions and asset sales, (v) make restricted payments, (vi) issue, sell or otherwise dispose of capital stock, (vii) engage in transactions with affiliates, (viii) allow the total leverage ratio or senior secured leverage ratio to exceed certain maximum ratios or allow the interest coverage ratio to be less than 3.00 to 1.00, (ix) cancel, forgive, make any voluntary or optional payment or prepayment on, or redeem or acquire for value any senior notes, (x) alter the business the Company conducts, and (xi) materially impair the Company’s lenders’ security interests in the collateral for its loans.

The Company must not exceed the following Total Leverage Ratios, as computed at the end of each fiscal quarter for the immediately preceding four quarter-period:


	Total Leverage Ratio -
Period	Maximum Ratio

August 4, 2010 through and including the last day of the fiscal year 2011		4.50 to 1.00
First day of fiscal year 2012 through and including that last day of fiscal year 2012		4.25 to 1.00
Thereafter		4.00 to 1.00

The Senior Credit Facility also does not permit the Company to exceed the following Senior Secured Leverage Ratios, as computed at the end of each fiscal quarter for the immediately preceding four quarter-period:


	Senior Secured Leverage Ratio -
Period	Maximum Ratio

August 4, 2010 through and including the last day of the fiscal year 2011		3.25 to 1.00
First day of fiscal year 2012 through and including that last day of fiscal year 2012		3.00 to 1.00
Thereafter		2.75 to 1.00

Additionally, there is an Interest Coverage Ratio under which the lender will not permit a ratio of less than 3.00 to 1.00 relative to (a) Adjusted EBITDA for any period of four consecutive fiscal quarters to (b) Interest Expense, less that attributable to non-recourse debt of unrestricted subsidiaries.

Events of default under the Senior Credit Facility include, but are not limited to, (i) the Company’s failure to pay principal or interest when due, (ii) the Company’s material breach of any representations or warranty, (iii) covenant defaults, (iv) liquidation, reorganization or other relief relating to bankruptcy or insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold, (vii) material environmental liability claims which have been asserted against the Company, and (viii) a change in control. All of the obligations under the Senior Credit Facility are unconditionally guaranteed by certain of the Company’s subsidiaries and secured by substantially all of the Company’s present and future tangible and intangible assets and all present and future tangible and intangible assets of each guarantor, including but not limited to (i) a first-priority pledge of substantially all of the outstanding capital stock owned by the Company and each guarantor, and (ii) perfected first-priority security interests in substantially all of the Company’s, and each guarantors, present and future tangible and intangible assets and the present and future tangible and intangible assets of each guarantor. The Company’s failure to comply with any of the covenants under its Senior Credit Facility could cause an event of default under such documents and result in an acceleration of all of outstanding senior secured indebtedness. The Company believes it was in compliance with all of the covenants of the Senior Credit Facility as of January 2, 2011.

On August 4, 2010 in connection with its entry into the $750.0 million Senior Credit Facility, the Company terminated its prior senior credit facility, the Third Amended and Restated Credit Agreement (the “Prior Senior Credit Agreement”), dated as of January 24, 2007, as amended. The Prior Senior Credit Agreement, as of August 4, 2010, consisted of a $152.2 million term loan B (“Prior Term Loan B”) and a $330.0 million revolver (“Prior Revolver”) with outstanding borrowings on August 4, 2010 of $115.0 million. The Prior Term Loan B bore interest at LIBOR plus 2.00% and the Prior Revolver bore interest at LIBOR plus 3.25% at the time of terminating the Prior Senior Credit Agreement. The Prior Term Loan B component was scheduled to mature in January 2014 and the Prior Revolver component was scheduled to mature in September 2012. The weighed average interest rate on outstanding borrowings under the Senior Credit Facility, as amended, as of January 2, 2011 was 3.5%. The weighed average interest rate on outstanding borrowings under the, Prior Senior Credit Agreement as of January 3, 2010 was 2.62%.

On August 4, 2010, the Company used approximately $280 million in aggregate proceeds from the Term Loan B and the Revolver primarily to repay existing borrowings and accrued interest under its Prior Senior Credit Agreement of $267.7 million and also used $6.7 million for financing fees related to the Senior Credit Facility. The Company received, as cash, the remaining proceeds of $3.2 million. On August 12, 2010, the Company borrowed $290.0 million under its Senior Credit Facility and used the aggregate cash proceeds primarily for $84.9 million in cash consideration payments to Cornell’s stockholders in connection with the Merger, transaction costs of approximately $14.0 million, the repayment of $181.9 million for Cornell’s 10.75% Senior Notes due July 2012 plus accrued interest and Cornell’s Revolving Line of Credit due December 2011 plus accrued interest. As of January 2, 2011, the Company had $148.1 million outstanding under the Term Loan A, $199.5 million outstanding under the Term Loan B, and its $400.0 million Revolver had $212.0 million outstanding in loans, $57.0 million outstanding in letters of credit and $131.0 million available for borrowings. The Company intends to use future borrowings for the purposes permitted under the Senior Credit Facility, including for general corporate purposes. The Company wrote off $7.9 million in deferred financing costs related to the termination of the Prior Senior Credit Agreement.

73/4% Senior Notes

On October 20, 2009, the Company completed a private offering of $250.0 million in aggregate principal amount of its 73/4% Senior Notes due 2017. These senior unsecured notes pay interest semi-annually in cash in arrears on April 15 and October 15 of each year, beginning on April 15, 2010. The Company realized net proceeds of $246.4 million at the close of the transaction, net of the discount on the notes of $3.6 million. The Company used the net proceeds of the offering to fund the repurchase of all of its 81/4% Senior Notes due 2013 and pay down part of the Revolving Credit Facility under our Prior Senior Credit Agreement.

The 73/4% Senior Notes and the guarantees will be unsecured, unsubordinated obligations of The GEO Group Inc., and the guarantors and will rank as follows: pari passu with any unsecured, unsubordinated indebtedness of GEO and the guarantors; senior to any future indebtedness of GEO and the guarantors that is expressly subordinated to the notes and the guarantees; effectively junior to any secured indebtedness of GEO and the guarantors, including indebtedness under the Company’s Senior Credit Facility, to the extent of the value of the assets securing such indebtedness; and effectively junior to all obligations of the Company’s subsidiaries that are not guarantors. After October 15, 2013, the Company may, at its option, redeem all or a part of the 73/4% Senior Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and liquidated damages, if any, on the 73/4% Senior Notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on October 15 of the years indicated below:


Year	Percentage

2013		103.875	%
2014		101.938	%
2015 and thereafter		100.000	%

Before October 15, 2013, the Company may redeem some or all of the 73/4% Senior Notes at a redemption price equal to 100% of the principal amount of each note to be redeemed plus a make-whole premium described under “Description of Notes — Optional Redemption” together with accrued and unpaid interest. In addition, at any time prior to October 15, 2012, the Company may redeem up to 35% of the notes with the net cash proceeds from specified equity offerings at a redemption price equal to 107.750% of the principal amount of each note to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption.

The indenture governing the notes contains certain covenants, including limitations and restrictions on the Company’s and its restricted subsidiaries’ ability to: incur additional indebtedness or issue preferred stock; make dividend payments or other restricted payments; create liens; sell assets; enter into transactions with affiliates; and enter into mergers, consolidations, or sales of all or substantially all of the Company’s assets. As of the date of the indenture, all of the Company’s subsidiaries, other than certain dormant domestic subsidiaries and all foreign subsidiaries in existence on the date of the indenture, were restricted subsidiaries. The Company’s unrestricted subsidiaries will not be subject to any of the restrictive covenants in the indenture. The Company’s failure to comply with certain of the covenants under the indenture governing the 73/4% Notes could cause an event of default of any indebtedness and result in an acceleration of such indebtedness. In addition, there is a cross-default provision which becomes enforceable upon failure of payment of indebtedness at final maturity. The Company believes it was in compliance with all of the covenants of the Indenture governing the 73/4% Senior Notes as of January 2, 2011.

Non-Recourse Debt

South Texas Detention Complex:

The Company has a debt service requirement related to the development of the South Texas Detention Complex, a 1,904-bed detention complex in Frio County, Texas, acquired in November 2005 from Correctional Services Corporation (“CSC”). CSC was awarded the contract in February 2004 by the Department of Homeland Security, U.S. Immigration and Customs Enforcement (“ICE”) for development and operation of the detention center. In order to finance its construction of the complex, STLDC was created and issued $49.5 million in taxable revenue bonds. These bonds mature in February 2016 and have fixed coupon rates between 4.34% and 5.07%. Additionally, the Company is owed $5.0 million of subordinated notes by STLDC which represents the principal amount of financing provided to STLDC by CSC for initial development.

The Company has an operating agreement with STLDC, the owner of the complex, which provides it with the sole and exclusive right to operate and manage the detention center. The operating agreement and bond indenture require the revenue from the contract with ICE be used to fund the periodic debt service requirements as they become due. The net revenues, if any, after various expenses such as trustee fees, property taxes and insurance premiums are distributed to the Company to cover operating expenses and management fees. The Company is responsible for the entire operation of the facility including the payment of all operating expenses whether or not there are sufficient revenues. STLDC has no liabilities resulting from its ownership. The bonds have a ten-year term and are non-recourse to the Company and STLDC. The bonds are fully insured and the sole source of payment for the bonds is the operating revenues of the center. At the end of the ten-year term of the bonds, title and ownership of the facility transfers from STLDC to the Company. The Company has determined that it is the primary beneficiary of STLDC and consolidates the entity as a result. The carrying value of the facility as of January 2, 2011 and January 3, 2010 was $27.0 million and $27.2 million, respectively, and is included in property and equipment in the accompanying balance sheets.

On February 1, 2010, STLDC made a payment from its restricted cash account of $4.6 million for the current portion of its periodic debt service requirement in relation to the STLDC operating agreement and bond indenture. As of January 2, 2011, the remaining balance of the debt service requirement under the STLDC financing agreement is $32.1 million, of which $4.8 million is due within the next twelve months. Also, as of January 2, 2011, included in current restricted cash and non-current restricted cash is $6.2 million and $9.3 million, respectively, of funds held in trust with respect to the STLDC for debt service and other reserves.

Northwest Detention Center

On June 30, 2003, CSC arranged financing for the construction of the Northwest Detention Center in Tacoma, Washington, referred to as the Northwest Detention Center, which was completed and opened for operation in April 2004. The Company began to operate this facility following its acquisition in November 2005. In connection with the original financing, CSC of Tacoma LLC, a wholly owned subsidiary of CSC, issued a $57.0 million note payable to the Washington Economic Development Finance Authority (“WEDFA”), an instrumentality of the State of Washington, which issued revenue bonds and subsequently loaned the proceeds of the bond issuance back to CSC for the purposes of constructing the Northwest Detention Center. The bonds are non-recourse to the Company and the loan from WEDFA to CSC is non-recourse to the Company. These bonds mature in February 2014 and have fixed coupon rates between 3.80% and 4.10%.

The proceeds of the loan were disbursed into escrow accounts held in trust to be used to pay the issuance costs for the revenue bonds, to construct the Northwest Detention Center and to establish debt service and other reserves. On October 1, 2010, CSC of Tacoma LLC made a payment from its restricted cash account of $5.9 million for the current portion of its periodic debt service requirement in relation to the WEDFA bond indenture. As of January 2, 2011, the remaining balance of the debt service requirement is $25.7 million, of which $6.1 million is classified as current in the accompanying balance sheet.

As of January 2, 2011, included in current restricted cash and non-current restricted cash is $7.1 million and $1.8 million, respectively, of funds held in trust with respect to the Northwest Detention Center for debt service and other reserves.

MCF

Upon completion of the acquisition of Cornell, the obligations of MCF under its 8.47% Revenue Bonds remained outstanding. These bonds bear interest at a rate of 8.47% per annum and are payable in semi-annual installments of interest and annual installments of principal. All unpaid principal and accrued interest on the bonds is due on the earlier of August 1, 2016 (maturity) or as noted under the bond documents. The bonds are limited, nonrecourse obligations of MCF and are collateralized by the property and equipment, bond reserves, assignment of subleases and substantially all assets related to the facilities owned by MCF. The bonds are not guaranteed by the Company or its subsidiaries.

The 8.47% Revenue Bond indenture provides for the establishment and maintenance by MCF for the benefit of the trustee under the indenture of a debt service reserve fund. As of January 2, 2011, the debt service reserve fund has a balance of $23.4 million. The debt service reserve fund is available to the trustee to pay debt service on the 8.47% Revenue Bonds when needed, and to pay final debt service on the 8.47% Revenue Bonds. If MCF is in default in its obligation under the 8.47% Revenue Bonds indenture, the trustee may declare the principal outstanding and accrued interest immediately due and payable. MCF has the right to cure a default of non-payment obligations. The 8.47% Revenue Bonds are subject to extraordinary mandatory redemption in certain instances upon casualty or condemnation. The 8.47% Revenue Bonds may be redeemed at the option of MCF prior to their final scheduled payment dates at par plus accrued interest plus a make-whole premium.

Australia

The Company’s wholly-owned Australian subsidiary financed the development of a facility and subsequent expansion in 2003 with long-term debt obligations. These obligations are non-recourse to the Company and total $46.3 million and $45.4 million at January 2, 2011 and January 3, 2010, respectively. The term of the non-recourse debt is through 2017 and it bears interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary are matched by a similar or corresponding commitment from the government of the State of Victoria. As a condition of the loan, the Company is required to maintain a restricted cash balance of AUD 5.0 million, which, at January 2, 2011, was $5.1 million. This amount is included in non-current restricted cash and the annual maturities of the future debt obligation are included in non-recourse debt.

Debt Repayment

Debt repayment schedules under capital lease obligations, long-term debt and non-recourse debt are as follows:


	Capital			Long-Term			Non-					Term			Total Annual
Fiscal Year	Leases			Debt			Recourse			Revolver		Loan			Repayment
							(In thousands)

2011	$	1,950		$	—		$	31,290		$	—	$	9,500		$	42,740
2012		1,950			—			33,281			—		11,375			46,606
2013		1,950			—			35,616			—		20,750			58,316
2014		1,940			—			38,002			—		47,000			86,942
2015		1,932			—			33,878			212,000		116,500			364,310
Thereafter		12,842			250,000			40,378			—		142,500			445,720

	$	22,564		$	250,000		$	212,445		$	212,000	$	347,625		$	1,044,634

Original issuer’s discount		—			(3,227	)		(1,164	)		—		(1,867	)		(6,258	)
Current portion		(784	)		—			(31,290	)		—		(9,500	)		(41,574	)
Interest imputed on Capital Leases		(8,094	)		—			—			—		—			(8,094	)
Fair value premium on non-recourse debt		—			—			11,403			—		—			11,403
Interest rate swap		—			3,305			—			—		—			3,305

Non-current portion	$	13,686		$	250,078		$	191,394		$	212,000	$	336,258		$	1,003,416

Guarantees

In connection with the creation SACS, the Company entered into certain guarantees related to the financing, construction and operation of the prison. The Company guaranteed certain obligations of SACS under its debt agreements up to a maximum amount of 60.0 million South African Rand, or $9.1 million, to SACS’ senior lenders through the issuance of letters of credit. Additionally, SACS is required to fund a restricted account for the payment of certain costs in the event of contract termination. The Company has guaranteed the payment of 60% of amounts which may be payable by SACS into the restricted account and provided a standby letter of credit of 8.4 million South African Rand, or $1.3 million, as security for its guarantee. The Company’s obligations under this guarantee are indexed to the CPI and expire upon SACS’ release from its obligations in respect of the restricted account under its debt agreements. No amounts have been drawn against these letters of credit, which are included in the Company’s outstanding letters of credit under its Revolver.

The Company has agreed to provide a loan, of up to 20.0 million South African Rand, or $3.0 million (the “Standby Facility”), to SACS for the purpose of financing SACS’ obligations under its contract with the South African government. No amounts have been funded under the Standby Facility, and the Company does not currently anticipate that such funding will be required by SACS in the future. The Company’s obligations under the Standby Facility expire upon the earlier of full funding or SACS’ release from its obligations under its debt agreements. The lenders’ ability to draw on the Standby Facility is limited to certain circumstances, including termination of the contract.

The Company has also guaranteed certain obligations of SACS to the security trustee for SACS’ lenders. The Company secured its guarantee to the security trustee by ceding its rights to claims against SACS in respect of any loans or other finance agreements, and by pledging the Company’s shares in SACS. The Company’s liability under the guarantee is limited to the cession and pledge of shares. The guarantee expires upon expiration of the cession and pledge agreements.

In connection with a design, build, finance and maintenance contract for a facility in Canada, the Company guaranteed certain potential tax obligations of a not-for-profit entity. The potential estimated exposure of these obligations is Canadian Dollar (“CAD”) 2.5 million, or $2.5 million, commencing in 2017. The Company has a liability of $1.8 million and $1.5 million related to this exposure as of January 2, 2011 and January 3, 2010, respectively. To secure this guarantee, the Company purchased Canadian dollar denominated securities with maturities matched to the estimated tax obligations in 2017 to 2021. The Company has recorded an asset and a liability equal to the current fair market value of those securities on its consolidated balance sheet. The Company does not currently operate or manage this facility.

At January 2, 2011, the Company also had seven letters of guarantee outstanding under separate international facilities relating to performance guarantees of its Australian subsidiary totaling $9.4 million. The Company does not have any off balance sheet arrangements.

Commitments and Contingencies

12 Months Ended

Jan. 02, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies


15.	Commitments and Contingencies

Operating Leases

The Company leases correctional facilities, office space, computers and transportation equipment under non-cancelable operating leases expiring between 2011 and 2046. The future minimum commitments under these leases are as follows:


Fiscal Year	Annual Rental
	(In thousands)

2011	$	30,948
2012		29,774
2013		25,019
2014		17,798
2015		16,416
Thereafter		61,226

	$	181,181

The Company’s corporate offices are located in Boca Raton, Florida, under a lease agreement which was amended in September 2010. The current lease expires in March 2020 and has two 5-year renewal options for a full term ending March 2030. In addition, the Company leases office space for its regional offices in Charlotte, North Carolina; San Antonio, Texas; and Los Angeles, California. As a result of the Company’s acquisition of Cornell in August 2010, the Company is also currently leasing office space in Houston, Texas and Pittsburg, Pennsylvania. The Company also leases office space in Sydney, Australia, Sandton, South Africa, and Berkshire, England through its overseas affiliates to support its Australian, South African, and UK operations, respectively. These rental commitments are included in the table above. Certain of these leases contain leasehold improvement incentives, rent holidays, and scheduled rent increases which are included in the Company’s rent expense recognized on a straight-line basis. Minimum rent expense associated with the Company’s leases having initial or remaining non-cancelable lease terms in excess of one year was $25.4 million, $18.7 million and $18.5 million for fiscal years 2010, 2009 and 2008, respectively.

Litigation, Claims and Assessments

In June 2004, the Company received notice of a third-party claim for property damage incurred during 2001 and 2002 at several detention facilities formerly operated by its Australian subsidiary. The claim relates to property damage caused by detainees at the detention facilities. The notice was given by the Australian government’s insurance provider and did not specify the amount of damages being sought. In August 2007, a lawsuit (Commonwealth of Australia v. Australasian Connectional Services PTY, Limited No. SC 656) was filed against the Company in the Supreme Court of the Australian Capital Territory seeking damages of up to approximately AUD 18 million, as of January 2, 2011, or $18.4 million, plus interest. The Company believes that it has several defenses to the allegations underlying the litigation and the amounts sought and intends to vigorously defend its rights with respect to this matter. The Company has established a reserve based on its estimate of the most probable loss based on the facts and circumstances known to date and the advice of legal counsel in connection with this matter. Although the outcome of this matter cannot be predicted with certainty, based on information known to date and the Company’s preliminary review of the claim and related reserve for loss, the Company believes that, if settled unfavorably, this matter could have a material adverse effect on its financial condition, results of operations or cash flows. The Company is uninsured for any damages or costs that it may incur as a result of this claim, including the expenses of defending the claim.

During the fourth fiscal quarter of 2009, the Internal Revenue Service (“IRS”) completed its examination of the Company’s U.S. federal income tax returns for the years 2002 through 2005. Following the examination, the IRS notified the Company’s management that it proposed to disallow a deduction that the Company realized during the 2005 tax year. In December of 2010, the Company reached an agreement with the office of IRS Appeals on the amount of the deduction, which is currently being reviewed at a higher level. As a result of the pending agreement, the Company reassessed the probability of potential settlement outcomes and reduced its income tax accrual of $4.9 million by $2.3 million during the fourth quarter of 2010. However, if the disallowed deduction were to be sustained in full, it could result in a potential tax exposure to the Company of $15.4 million. The Company believes in the merits of its position and intends to defend its rights vigorously, including its rights to litigate the matter if it cannot be resolved favorably with the office of IRS Appeals. If this matter is resolved unfavorably, it may have a material adverse effect on the Company’s financial position, results of operations and cash flows.

In October 2010, the IRS audit for the Company’s U.S. income tax returns for fiscal years 2006 through 2008 was concluded and resulted in no changes to the Company’s income tax positions.

The Company’s South Africa joint venture had been in discussions with the South African Revenue Service (“SARS”) with respect to the deductibility of certain expenses for the tax periods 2002 through 2004. The joint venture operates the Kutama Sinthumule Correctional Centre and accepted inmates from the South African Department of Correctional Services in 2002. During 2009, SARS notified the Company that it proposed to disallow these deductions. The Company appealed these proposed disallowed deductions with SARS and in October 2010, received a notice of favorable ruling relative to these proceedings. If SARS should appeal, the Company believes it has defenses in these matters and intends to defend its rights vigorously. If resolved unfavorably, the Company’s maximum exposure would be $2.6 million.

On April 27, 2010, a putative stockholder class action was filed in the District Court for Harris County, Texas by Todd Shelby against Cornell, members of Cornell’s board of directors, individually, and the Company. The plaintiff filed an amended complaint on May 28, 2010, alleging, among other things, that the Cornell directors, aided and abetted by Cornell and the Company, breached their fiduciary duties in connection with the Cornell Acquisition. Among other things, the amended complaint sought to enjoin Cornell, its directors and the Company from completing the Cornell Acquisition and sought a constructive trust over any benefits improperly received by the defendants as a result of their alleged wrongful conduct. The parties reached a settlement which has been approved by the court and, as a result, the court dismissed the action with prejudice. The settlement of this matter did not have a material adverse impact on our financial condition, results of operations or cash flows.

The nature of the Company’s business exposes it to various types of claims or litigation against the Company, including, but not limited to, civil rights claims relating to conditions of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, medical malpractice claims, claims relating to employment matters (including, but not limited to, employment discrimination claims, union grievances and wage and hour claims), property loss claims, environmental claims, automobile liability claims, indemnification claims by its customers and other third parties, contractual claims and claims for personal injury or other damages resulting from contact with the Company’s facilities, programs, personnel or prisoners, including damages arising from a prisoner’s escape or from a disturbance or riot at a facility. Except as otherwise disclosed above, the Company does not expect the outcome of any pending claims or legal proceedings to have a material adverse effect on its financial condition, results of operations or cash flows.

Collective Bargaining Agreements

The Company had approximately 17% of its workforce covered by collective bargaining agreements at January 2, 2011. Collective bargaining agreements with four percent of employees are set to expire in less than one year.

Contract Terminations

The following contracts were terminated during the fiscal year ended January 2, 2011. The Company does not expect that the termination of these contracts will have a material adverse impact, individually or in aggregate, on its financial condition, results of operations or cash flows.

On April 4, 2010, the Company’s wholly-owned Australian subsidiary completed the transition of its management of the Melbourne Custody Center (the “Center”) to another service provider. The Center was operated on behalf of the Victoria Police to house prisoners, escort and guard prisoners for the Melbourne Magistrate Courts and to provide primary healthcare.

On April 14, 2010, the Company announced the results of the re-bids of two of its managed-only contracts. The State of Florida has issued a Notice of Intent to Award contracts for the 1,884-bed Graceville Correctional Facility located in Graceville, Florida and the 985-bed Moore Haven Correctional Facility located in Moore Haven, Florida to another operator. These contracts terminated effective September 26, 2010 and August 1, 2010, respectively.

On June 22, 2010, the Company announced the discontinuation of its managed-only contract for the 520-bed Bridgeport Correctional Center in Texas following a competitive re-bid process conducted by the State of Texas. The contract was terminated effective August 31, 2010.

Effective September 1, 2010, the Company’s management contract for the operation of the 450-bed South Texas Intermediate Sanction Facility terminated. This facility was not owned by the Company.

Effective May 29, 2011, the Company’s subsidiary in the United Kingdom will no longer manage the 215-bed Campsfield House Immigration Removal Centre in Kidlington, England.

Commitments

The Company is currently developing a number of projects using company financing. The Company’s management estimates that these existing capital projects will cost approximately $282.4 million, of which $54.9 million was spent through the end of 2010. The Company estimates the remaining capital requirements related to these capital projects to be approximately $227.5 million, which will be spent through fiscal years 2011 and 2012. Capital expenditures related to facility maintenance costs are expected to range between $20.0 million and $25.0 million for fiscal year 2010. In addition to these current estimated capital requirements for 2011 and 2010, the Company is currently in the process of bidding on, or evaluating potential bids for the design, construction and management of a number of new projects. In the event that the Company wins bids for these projects and decides to self-finance their construction, its capital requirements in 2011 could materially increase.

Consulting agreement with Wayne H. Calabrese

Wayne H. Calabrese, the Company’s former Vice Chairman, President and Chief Operating Officer retired effective December 31, 2010. Mr. Calabrese’s business development and oversight responsibilities were reassigned throughout the Company’s senior management team and existing corporate structure. Mr. Calabrese will continue to work with the Company in a consulting capacity pursuant to a consulting agreement, dated as of August 26, 2010 for a minimum term of one year. Under the terms of the Consulting Agreement, which began on January 3, 2011, Mr. Calabrese provides services to the Company and its subsidiaries for a monthly consulting fee. Services provided include business development and contract administration assistance relative to new and existing contracts.

Earnings Per Share

12 Months Ended

Jan. 02, 2011

Earnings Per Share [Abstract]

Earnings Per Share


16.	Earnings Per Share

Basic earnings per share is computed by dividing the income from continuing operations attributable to The GEO Group Inc., shareholders by the weighted average number of outstanding shares of common stock. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator includes dilutive common stock equivalents such as stock options and shares of restricted stock. Basic and diluted earnings per share (“EPS”) were calculated for the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008 as follows (in thousands, except per share data):


Fiscal Year	2010		2009			2008
	(In thousands, except per share data)

Income from continuing operations	$	62,790	$	66,469		$	61,829
Net (income) loss attributable to noncontrolling interests		678		(169	)		(376	)

Income from continuing operations attributable to The GEO Group, Inc.	$	63,468	$	66,300		$	61,453
Basic earnings per share from continuing operations attributable to The GEO Group, Inc.:
Weighted average shares outstanding		55,379		50,879			50,539

Per share amount	$	1.15	$	1.30		$	1.22

Diluted earnings per share from continuing operations attributable to The GEO Group, Inc.:
Weighted average shares outstanding		55,379		50,879			50,539
Effect of dilutive securities:
Employee and director stock options and restricted stock		610		1,043			1,291

Weighted average shares assuming dilution		55,989		51,922			51,830

Per share amount	$	1.13	$	1.28		$	1.19

For the fiscal year ended January 2, 2011, 25,570 weighted average shares of stock underlying options were excluded from the computation of diluted EPS because the effect would be anti-dilutive. No shares of restricted stock were anti-dilutive.

For the fiscal year ended January 3, 2010, 69,492 weighted average shares of stock underlying options and 107 weighted average shares of restricted stock were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

For the fiscal year December 28, 2008, 372,725 weighted average shares of stock underlying options and 8,986 weighted average shares of restricted stock were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

Benefit Plans

12 Months Ended

Jan. 02, 2011

Benefit Plans [Abstract]

Benefit Plans


17.	Benefit Plans

The Company has two non-contributory defined benefit pension plans covering certain of the Company’s executives. Retirement benefits are based on years of service, employees’ average compensation for the last five years prior to retirement and social security benefits. Currently, the plans are not funded. The Company purchased and is the beneficiary of life insurance policies for certain participants enrolled in the plans.

As of January 2, 2011, the Company had a non-qualified deferred compensation agreement with its Chief Executive Officer (“CEO”) which was modified in 2002, and again in 2003. The current agreement provides for a lump sum payment upon retirement, no sooner than age 55. As of January 2, 2011, the CEO had reached age 55 and was eligible to receive the payment upon retirement. Prior to the effective retirement date of December 31, 2010, Wayne H. Calabrese, the Company’s former Vice Chairman, President and Chief Operating Officer, also had a deferred compensation agreement under the non-qualified deferred compensation plan. As a result of his retirement, the Company paid $4.4 million in discounted retirement benefits under his non-qualified deferred compensation agreement, including a gross up of $1.6 million for certain taxes as specified in the deferred compensation agreement. As a result of Mr. Calabrese’s retirement, the Company recognized $0.3 million in settlement charges. During the fiscal year ended January 2, 2011, the Company repurchased 358,126 shares from Mr. Calabrese under the stock repurchase program for $7.5 million. The Company also purchased 268,475 shares from Mr. Calabrese for $6.1 million which were retired by the Company immediately upon repurchase.

The following table summarizes key information related to the Company’s pension plans and retirement agreements. The table illustrates the reconciliation of the beginning and ending balances of the benefit obligation showing the effects during the periods presented attributable to each of the following: service cost, interest cost, plan amendments, termination benefits, actuarial gains and losses. The Company’s liability relative to its pension plans and retirement agreements was $13.8 million and $16.2 million as of January 2, 2011 and January 3, 2010, respectively. The long-term portion of the pension liability as of January 2, 2011 and January 3, 2010 was $13.6 million and $16.0 million, respectively, and is included in Other Non-Current liabilities in the accompanying balance sheets. The assumptions used in the Company’s calculation of accrued pension costs are based on market information and the Company’s historical rates for employment compensation and discount rates, respectively.


	2010			2009

Change in Projected Benefit Obligation
Projected Benefit Obligation, Beginning of Year	$	16,206		$	19,320
Service Cost		525			563
Interest Cost		746			717
Plan Amendments		—			—
Actuarial (Gain) Loss		986			(1,047	)
Benefits Paid		(4,633	)		(3,347	)

Projected Benefit Obligation, End of Year	$	13,830		$	16,206

Change in Plan Assets
Plan Assets at Fair Value, Beginning of Year	$	—		$	—
Company Contributions		4,633			3,347
Benefits Paid		(4,633	)		(3,347	)

Plan Assets at Fair Value, End of Year	$	—		$	—

Unfunded Status of the Plan	$	(13,830	)	$	(16,206	)

Amounts Recognized in Accumulated Other Comprehensive Income
Prior Service Cost		—			41
Net Loss		1,671			1,014

Total Pension Cost	$	1,671		$	1,055


	Fiscal 2010			Fiscal 2009

Components of Net Periodic Benefit Cost
Service Cost	$	525		$	563
Interest Cost		746			717
Amortization of:
Prior Service Cost		41			41
Net Loss		33			249
Settlements		297			241

Net Periodic Pension Cost	$	1,642		$	1,811

Weighted Average Assumptions for Expense
Discount Rate		5.75	%		5.75	%
Expected Return on Plan Assets		N/A			N/A
Rate of Compensation Increase		4.50	%		4.50	%

The amount included in other accumulated comprehensive income as of January 2, 2011 that is expected to be recognized as a component of net periodic benefit cost in fiscal year 2011 is $0.2 million.

The benefit payments reflected in the table below represent the Company’s obligations to employees that are eligible for retirement or have already retired and are receiving deferred compensation benefits:


	Pension
Fiscal Year	Benefits
	(In thousands)

2011	$	5,944
2012		236
2013		234
2014		284
2015		296
Thereafter		6,836

	$	13,830

The Company also maintains the GEO Group Inc., Deferred Compensation Plan (“Deferred Compensation Plan”), a non-qualified deferred compensation plan for employees who are ineligible to participate in its qualified 401(k) plan. Eligible employees may defer a fixed percentage of their salary and the Company matches employee contributions up to a certain amount based on the employee’s years of service. Payments will be made at retirement age of 65, at termination of employment or earlier depending on the employees’ elections. Effective December 18, 2009, the Company established a rabbi trust; the purpose of which is to segregate the assets of the Deferred Compensation Plan from the Company’s cash balances. The funds in the rabbi trust will not be available to the Company for any purpose other than to fund the Deferred Compensation Plan; however, these funds may be available to the Company’s creditors in the event the Company becomes insolvent. All employee and employer contributions relative to the Deferred Compensation Plan are made directly to the rabbi trust. As of January 2, 2011, the Company has transferred an aggregate of $5.8 million in cash to the rabbi trust to fund the Deferred Compensation Plan, all of which is reflected as restricted cash in the accompanying balance sheet. The Company recognized expense related to its contributions of $0.2 million, $0.1 million and $0.1 million in fiscal years 2010, 2009 and 2008, respectively. The total liability, including the current portion, for this plan at January 2, 2011 and January 3, 2010 was $6.2 million and $4.7 million, respectively. The liability, excluding current portion of $0.2 million and $0.4 million as of January 2, 2011 and January 3, 2010, respectively, is included in other non-current liabilities in the accompanying consolidated balance sheets.

Business Segment and Geographic Information

12 Months Ended

Jan. 02, 2011

Business Segment and Geographic Information [Abstract]

Business Segment and Geographic Information


18.	Business Segment and Geographic Information

Operating and Reporting Segments

The Company conducts its business through four reportable business segments: U.S. Detention & Corrections segment; International Services segment; GEO Care segment; and Facility Construction & Design segment. The Company has identified these four reportable segments to reflect the current view that the Company operates four distinct business lines, each of which constitutes a material part of its overall business. The U.S. Detention & Corrections segment primarily encompasses U.S.-based privatized corrections and detention business. The International Services segment primarily consists of privatized corrections and detention operations in South Africa, Australia and the United Kingdom. The GEO Care segment, which is operated by the Company’s wholly-owned subsidiary GEO Care, Inc., represents services provided to adult offenders and juveniles for mental health, residential and non-residential treatment, educational and community based programs and pre-release and half-way house programs, all of which is currently conducted in the U.S. The Facility Construction & Design segment consists of contracts with various state, local and federal agencies for the design and construction of facilities for which the Company has management contracts. Generally, the assets and revenues from the Facility Construction & Design segment are offset by a similar amount of liabilities and expenses. As a result of the acquisition of Cornell, management’s review of certain segment financial data was revised with regards to the Bronx Community Re-entry Center and the Brooklyn Community Re-entry Center. These facilities now report within the GEO Care segment and are no longer included with U.S. Detention & Corrections. Segment disclosures reflect these reclassifications for all periods presented.

The segment information presented in the prior periods has been reclassified to conform to the current presentation (in thousands):


Fiscal Year	2010			2009			2008

Revenues:
U.S. Detention & Corrections	$	842,417		$	772,497		$	700,587
International Services		190,477			137,171			128,672
GEO Care		213,819			133,387			127,850
Facility Construction & Design		23,255			98,035			85,897

Total revenues	$	1,269,968		$	1,141,090		$	1,043,006

Depreciation and amortization:
U.S. Detention & Corrections	$	39,744		$	35,855		$	33,770
International Services		1,767			1,448			1,556
GEO Care		6,600			2,003			2,080
Facility Construction & Design		—			—			—

Total depreciation and amortization	$	48,111		$	39,306		$	37,406

Operating Income:
U.S. Detention & Corrections	$	204,398		$	178,329		$	156,317
International Services		12,311			8,017			10,737
GEO Care		27,746			17,958			16,167
Facility Construction & Design		2,382			381			326

Operating income from segments		246,837			204,685			183,547
General and Administrative Expenses		(106,364	)		(69,240	)		(69,151	)

Total operating income	$	140,473		$	135,445		$	114,396

The increase in revenues for U.S. Detention & Corrections and GEO Care in 2010 compared to 2009 is primarily due to the acquisition of Cornell in August 2010 which contributed additional revenues to these segments of $85.5 million and $65.7 million, respectively. The increase in revenues for U.S. Detention & Corrections in 2009 compared to 2008 is primarily attributable to project activations, capacity increases and per diem rate increases at existing facilities and new management contracts. The Company experienced increases in revenues from International Services in 2010 as a result of positive fluctuations in foreign currency translation as well as from its new management contracts for the operation of the Parklea Correctional Centre in Sydney, Australia (“Parklea”) and the Harmondsworth Immigration Removal Centre in London, England (“Harmondsworth”). The Company provided services under these contracts for the full year in 2010 compared to a partial period during 2009. In 2010, the Company experienced significant decreases in revenues reported in its Facility Construction & Design segment as a result of the completion of Blackwater River Correctional Facility in Milton Florida (“Blackwater River”).

In 2010, a significant increase in operating income for the U.S. Detention & Corrections and GEO Care reporting segments was the result of the Company’s acquisition of Cornell in August 2010 which resulted in additional operating income of $15.9 million and $10.9 million, respectively. Additional increases related to GEO Care in 2010, and to a lesser extent in 2009, are associated with the Company’s acquisition of Just Care, Inc., September 30, 2009. In 2010, the Company experienced significant decreases in operating income reported in its Facility Construction & Design segment as a result of the completion of Blackwater River.


	2010		2009

Segment assets:
U.S. Detention & Corrections	$	1,855,777	$	1,143,248
International Services		103,004		95,659
GEO Care		301,601		110,231
Facility Construction & Design		26		13,736

Total segment assets	$	2,260,408	$	1,362,874

Assets in the Company’s Facility Construction & Design segment are primarily made up of accounts receivable, which includes trade receivables and construction retainage receivable.

Pre-Tax Income Reconciliation of Segments

The following is a reconciliation of the Company’s total operating income from its reportable segments to the Company’s income before income taxes, equity in earnings of affiliates and discontinued operations, in each case, during the fiscal years ended January 2, 2011, January 3, 2010, and December 28, 2008, respectively.


Fiscal Year Ended	2010			2009			2008
	(In thousands)

Operating income from segments	$	246,837		$	204,685		$	183,547
Unallocated amounts:
General and administrative expense		(106,364	)		(69,240	)		(69,151	)
Net interest expense		(34,436	)		(23,575	)		(23,157	)
Costs related to early extinguishment of debt		(7,933	)		(6,839	)		—

Income before income taxes, equity in earnings of affiliates and discontinued operations	$	98,104		$	105,031		$	91,239

Asset Reconciliation

The following is a reconciliation of the Company’s reportable segment assets to the Company’s total assets as of January 2, 2011 and January 3, 2010, respectively.


	2010		2009

Reportable segment assets	$	2,260,408	$	1,362,874
Cash		39,664		33,856
Deferred income tax		33,062		17,020
Restricted cash and investments		90,642		34,068

Total assets	$	2,423,776	$	1,447,818

Geographic Information

During each of the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008, the Company’s international operations were conducted through (i) the Company’s wholly owned Australian subsidiary, The GEO Group Australia Pty. Ltd., through which the Company has management contracts for four correctional facilities and also provides comprehensive healthcare services to nine government-operated prisons; (ii) the Company’s consolidated joint venture in South Africa, SACM, through which the Company manages one correctional facility; and (iii) the Company’s wholly-owned subsidiary in the United Kingdom, The GEO Group UK Ltd., through which the Company manages two facilities including the Campsfield House Immigration Removal Centre and the Harmondsworth Immigration Removal Centre.


Fiscal Year	2010		2009		2008
	(In thousands)

Revenues:
U.S. operations	$	1,079,491	$	1,003,919	$	914,334
Australia operations		142,648		103,197		101,995
South African operations		19,231		16,843		15,316
United Kingdom		28,598		17,131		11,361

Total revenues	$	1,269,968	$	1,141,090	$	1,043,006

Long-lived assets:
U.S. operations	$	1,506,666	$	994,327	$	875,703
Australia operations		3,603		2,887		2,000
South African operations		439		447		492
United Kingdom		584		899		421

Total long-lived assets	$	1,511,292	$	998,560	$	878,616

Sources of Revenue

The Company derives most of its revenue from the management of privatized correction and detention facilities. The Company also derives revenue from GEO Care and from the construction and expansion of new and existing correctional, detention and GEO Care facilities. All of the Company’s revenue is generated from external customers.


Fiscal Year	2010		2009		2008
	(In thousands)

Revenues:
Detention & Corrections	$	1,032,894	$	909,668	$	829,259
GEO Care		213,819		133,387		127,850
Facility Construction & Design		23,255		98,035		85,897

Total revenues	$	1,269,968	$	1,141,090	$	1,043,006

Equity in Earnings of Affiliates

Equity in earnings of affiliates for 2010, 2009 and 2008 includes the operating results from one of the Company’s joint ventures in South Africa, SACS. This joint venture is accounted for under the equity method and the Company’s investment in SACS is presented as a component of other non-current assets in the accompanying consolidated balance sheets.

A summary of financial data for SACS is as follows:


Fiscal Year	2010		2009		2008
	(In thousands)

Statement of Operations Data
Revenues	$	46,005	$	37,736	$	35,558
Operating income		18,350		14,958		13,688
Net income		8,435		7,034		9,247
Balance Sheet Data
Current assets		40,624		33,808		18,421
Noncurrent assets		50,613		47,453		37,722
Current liabilities		3,552		2,888		2,245
Non-current liabilities		60,129		53,877		41,321
Shareholders’ equity		27,556		24,496		12,577

As of January 2, 2011 and January 3, 2010, the Company’s investment in SACS was $13.8 million and $12.2 million, respectively. The investment is included in other non-current assets in the accompanying consolidated balance sheets.

Business Concentration

Except for the major customers noted in the following table, no other single customer made up greater than 10% of the Company’s consolidated revenues for the following fiscal years.


Customer	2010			2009			2008

Various agencies of the U.S Federal Government:		35	%		31	%		28	%
Various agencies of the State of Florida:		14	%		16	%		17	%

Credit risk related to accounts receivable is reflective of the related revenues.

Income Taxes

12 Months Ended

Jan. 02, 2011

Income Taxes [Abstract]

Income Taxes


19.	Income Taxes

The United States and foreign components of income (loss) before income taxes and equity income from affiliates are as follows:


	2010		2009			2008
	(In thousands)

Income (loss) before income taxes, equity earnings in affiliates, and discontinued operations
United States	$	84,531	$	96,651		$	78,542
Foreign		13,573		8,380			12,697

		98,104		105,031			91,239

Discontinued operations:
Income (loss) from operation of discontinued business		—		(562	)		(2,316	)

Total	$	98,104	$	104,469		$	88,923

Taxes on income (loss) consist of the following components:


	2010			2009			2008
	(In thousands)

Federal income taxes:
Current	$	13,316		$	24,443		$	24,164
Deferred		16,070			10,734			2,621

		29,386			35,177			26,785

State income taxes:
Current		2,713			2,889			2,626
Deferred		3,136			310			(558	)

		5,849			3,199			2,068

Foreign:
Current		5,562			4,737			4,587
Deferred		(1,265	)		(1,034	)		593

		4,297			3,703			5,180

Total U.S. and foreign		39,532			42,079			34,033

Discontinued operations:
Taxes (benefit) from operations of discontinued business		—			(216	)		236

Total	$	39,532		$	41,863		$	34,269

A reconciliation of the statutory U.S. federal tax rate (35.0%) and the effective income tax rate is as follows:


	2010			2009			2008
	(In thousands)

Continuing operations:
Provisions using statutory federal income tax rate	$	34,336		$	36,761		$	31,934
State income taxes, net of federal tax benefit		3,671			2,949			2,635
Change in contingent tax liabilities		(2,366	)		1,591			—
Impact of nondeductible transaction costs		3,230			283			—
Other, net		661			495			(536	)

Total continuing operations		39,532			42,079			34,033

Discontinued operations:
Taxes (benefit) from operations of discontinued business		—			(216	)		236

Provision (benefit) for income taxes	$	39,532		$	41,863		$	34,269

The components of the net current deferred income tax asset as of January 2, 2011 and January 3, 2010 are as follows:


	2010		2009
	(In thousands)

Accrued liabilities	$	20,277	$	11,938
Accrued compensation		8,805		4,438
Other, net		3,044		644

Total asset	$	32,126	$	17,020

The components of the net non-current deferred income tax asset as of January 2, 2011 and January 3, 2010 are as follows:


	2010		2009
	(In thousands)

Depreciation	$	936	$	—

Total asset	$	936	$	—

The components of the net non-current deferred income tax liability as of January 2, 2011 and January 3, 2010 are as follows:


	2010			2009
	(In thousands)

Deferred compensation	$	7,628		$	7,955
Net operating losses		7,988			6,150
Tax credits		4,414			4,203
Deferred loan costs		2,143			2,211
Equity Awards		2,047			1,638
Other, net		223			1,700
Bond discount		(780	)		(916	)
Residual U.S. tax liability on unrepatriated foreign earnings		(3,052	)		(1,775	)
Valuation allowance		(7,793	)		(5,587	)
Deferred Rent		(10,630	)		( 684	)
Intangible assets		(28,657	)		(5,521	)
Depreciation		(37,077	)		(16,434	)

Total liability	$	(63,546	)	$	(7,060	)

Deferred income taxes should be reduced by a valuation allowance if it is not more likely than not that some portion or all of the deferred tax assets will be realized. On a periodic basis, management evaluates and determines the amount of the valuation allowance required and adjusts such valuation allowance accordingly. At fiscal year end 2010 and 2009, the Company has a valuation allowance of $7.9 million and $6.0 million, respectively related to deferred tax assets for foreign net operating losses, state net operating losses and state tax credits. The valuation allowance increased by $1.9 million during the fiscal year ended January 2, 2011 primarily due to additional state net operating losses acquired as part of the merger with Cornell. In the fiscal year ended January 3, 2010, the Company implemented new guidance relative to the accounting for business combinations and as such, for years beginning after December 15, 2008, the Company records the reduction of a valuation allowance related to business acquisitions as a reduction of income tax expense.

The Company provides income taxes on the undistributed earnings of non-U.S. subsidiaries except to the extent that such earnings are indefinitely invested outside the United States. At January 2, 2011, $13.1 million of accumulated undistributed earnings of non-U.S. subsidiaries were indefinitely invested. At the existing U.S. federal income tax rate, additional taxes (net of foreign tax credits) of $4.1 million would have to be provided if such earnings were remitted currently.

At fiscal year end 2010, the Company had $3.9 million of Federal net operating loss carryforwards which begin to expire in 2020 and $50.3 million of combined net operating loss carryforwards in various states which begin to expire in 2011.

Also at fiscal year end 2010, the Company had $11.8 million of foreign operating losses which carry forward indefinitely and $6.8 million of state tax credits which begin to expire in 2011. The Company has recorded a full and partial valuation allowance against the deferred tax assets related to the foreign operating losses and state tax credits, respectively.

In fiscal 2008, the Company’s equity affiliate SACS recognized a one time tax benefit of $1.9 million related to a change in the tax treatment applicable to the affiliate with retroactive effect. Under the tax treatment, expenses which were previously disallowed are now deductible for South African tax purposes. The one time tax benefit relates to an increase in the deferred tax assets of the affiliate as a result of the change in tax treatment.

The Company recognizes the cost of employee services received in exchange for awards of equity instruments based upon the grant date fair value of those awards. The exercise of non-qualified stock options which have been granted under the Company’s stock option plans give rise to compensation income which is includable in the taxable income of the applicable employees and deducted by the Company for federal and state income tax purposes. Such compensation income results from increases in the fair market value of the Company’s common stock subsequent to the date of grant. At fiscal year end 2010, the deferred tax asset net of a valuation allowance related to unexercised stock options and restricted stock grants for which the company has recorded a book expense was $2.5 million.

The Company implemented guidance relative to accounting for uncertainties in income taxes, effective at the beginning of the Company’s fiscal year ended December 30, 2007. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):


	2010			2009			2008
	(In thousands)

Balance at Beginning of Period	$	5,947		$	5,889		$	5,417
Additions based on tax positions related to the current year		3,251			479			1,877
Additions for tax positions of prior years		200			4,854			659
Additions from current year acquisitions		2,928			—			—
Reductions for tax positions of prior years		(2,891	)		(1,877	)		(1,809	)
Reductions as result of a lapse of applicable statutes of limitations		—			—			(169	)
Settlements		(173	)		(3,398	)		(86	)

Balance at End of Period	$	9,262		$	5,947		$	5,889

All amounts in the reconciliation are reported on a gross basis and do not reflect a federal tax benefit on state income taxes. Inclusive of the federal tax benefit on state income taxes the ending balance as of January 2, 2011 is $8.0 million. Included in the balance at January 2, 2011 is $3.2 million related to tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. Under deferred tax accounting, the timing of a deduction does not affect the annual effective tax rate but does affect the timing of tax payments. In addition to a decrease in the unrecognized tax benefits related to the reversal of these timing related tax positions, the Company also anticipates a significant decrease in the unrecognized tax benefits within 12 months of the reporting date of approximately $2.3 million. Reductions for tax positions of prior years reported in the reconciliation for 2010 include amounts related to proposed federal audit adjustments for the years 2002 through 2005, for which the company reached an agreement with the office of IRS Appeals which is currently being reviewed at a higher level. The balance at January 2, 2011 includes $4.0 million of unrecognized tax benefits which, if ultimately recognized, will reduce the Company’s annual effective tax rate.

The Company is subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2002. In the fourth quarter of 2009 the U.S. Internal Revenue Service commenced an examination of the Company’s U.S. income tax returns for 2006 through 2008. In October 2010, the audit was concluded and resulted in no changes to the Company’s income tax positions.

During the fourth fiscal quarter of 2009, the IRS completed its examination of the Company’s U.S. federal income tax returns for the years 2002 through 2005. Following the examination, the IRS notified the Company that it proposed to disallow a deduction that the Company realized during the 2005 tax year. The Company appealed this proposed disallowed deduction with the IRS’s appeals division. In December 2010, the Company reached an agreement with the office of IRS Appeals on the amount of the deduction which is currently being reviewed at a higher level. The Company previously reported that if the disallowed deduction were to be sustained on appeal, it could result in a potential tax exposure to the Company of up to $15.4 million. The Company believes in the merits of its position and intends to defend its rights vigorously, including its rights to litigate the matter if it cannot be resolved favorably at the IRS’s appeals level. If this matter is resolved unfavorably, it may have a material adverse effect on the Company’s financial position, results of operations and cash flows.

The calculation of the Company’s provision (benefit) for income taxes requires the use of significant judgment and involves dealing with uncertainties in the application of complex tax laws and regulations. In determining the adequacy of the Company’s provision (benefit) for income taxes, potential settlement outcomes resulting from income tax examinations are regularly assessed. As such, the final outcome of tax examinations, including the total amount payable or the timing of any such payments upon resolution of these issues, cannot be estimated with certainty.

During the fiscal years ended January 2, 2011, January 3, 2010 and December 28, 2008, the Company recognized $(0.8) million, $0.1 million and $0.4 million in interest and penalties, respectively. The Company had accrued $1.5 million and $2.0 million for the payment of interest and penalties at January 2, 2011, and January 3, 2010, respectively. The Company classifies interest and penalties as interest expense and other expense, respectively.

Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Jan. 02, 2011

Selected Quarterly Financial Data [Abstract]

Selected Quarterly Financial Data (Unaudited)


20.	Selected Quarterly Financial Data (Unaudited)

The Company’s selected quarterly financial data is as follows (in thousands, except per share data):


	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter(4)

2010
Revenues(1)	$	287,542	$	280,095	$	327,933	$	374,398
Operating income(2)		34,524		33,050		29,524		43,375
Income from continuing operations(3)		17,708		17,025		5,010		23,047
Income (loss) from discontinued operations, net of tax		—		—		—		—
Basic earnings per share:
Income from continuing operations	$	0.35	$	0.35	$	0.09	$	0.37
Income (loss) from discontinued operations		—		—		—		—

Net income per share	$	0.35	$	0.35	$	0.09	$	0.37
Diluted earnings per share:
Income from continuing operations	$	0.34	$	0.35	$	0.09	$	0.36
Income (loss) from discontinued operations		—		—		—		—

Net income per share	$	0.34	$	0.35	$	0.09	$	0.36


	First			Second		Third		Fourth
	Quarter			Quarter		Quarter		Quarter(4)

2009
Revenues(1)	$	259,061		$	276,379	$	294,865	$	310,785
Operating income(2)		29,723			30,954		35,217		39,551
Income from continuing operations(3)		15,096			16,551		19,302		15,520
Income (loss) from discontinued operations, net of tax		(366	)		20		—		—
Basic earnings per share:
Income from continuing operations	$	0.30		$	0.32	$	0.38	$	0.30
Income (loss) from discontinued operations		(0.01	)		0.01		0.00		0.00

Net income per share	$	0.29		$	0.33	$	0.38	$	0.30
Diluted earnings per share:
Income from continuing operations	$	0.29		$	0.32	$	0.37	$	0.30
Income (loss) from discontinued operations		(0.01	)		0.00		0.00		0.00

Net income per share	$	0.28		$	0.32	$	0.37	$	0.30


(1)		Revenues increased in First and Second Quarters of 2010 compared to 2009 primarily as a result of contributions from the International Services segment which benefited from changes in foreign currency translation rates and new contracts for the operation of Parklea Correctional Centre in Australia and Harmondsworth Immigration Removal Centre in the United Kingdom. The Company also experienced increases in its GEO Care segment during these same periods due to the operation of the Columbia Regional Care Center in Columbia, South Carolina. The primary increases in the Third and Fourth Quarters of 2010 compared to the same periods in 2009 were primarily attributable to the Company’s acquisition of Cornell in August 2010. Revenues in Third Quarter 2010 and Fourth Quarter 2010 include $53.6 million and $97.6 million, respectively, in Cornell revenues. Second Quarter 2010, Third Quarter 2010, and Fourth Quarter 2010 revenues for the Facility Construction & Design segment were significantly lower than revenues generated in these same periods during 2009 primarily due to the completion of Blackwater River Correctional Facility. The decrease in revenues related to this segment for these periods was $20.1 million, $36.2 million and $19.9 million, respectively.

(2)		Operating income for Third Quarter 2010 and Fourth Quarter 2010 includes the impact of non-recurring transaction expenses of $15.7 million and $9.7 million, respectively, associated with the Company’s acquisition of Cornell in August 2010 and its acquisition of BI completed in February 2011. Operating income for approximately half of Third Quarter 2010 and for the entire Fourth Quarter 2010 includes $7.6 million and $19.2 million, respectively, of Cornell’s results. Operating income for First, Second, Third and Fourth Quarters 2009 includes start up costs of $1.2 million, $0.6 million, $1.0 million and $2.1 million, respectively for new facility management contracts.

(3)		Income from continuing operations in Fourth Quarter 2010 and Fourth Quarter 2009 includes losses of $7.9 million and $6.8 million, respectively, associated with the extinguishment of debt. In October 2010, the Company terminated its Third Amended and Restated Credit Agreement and entered into a new Senior Credit Facility. In October 2009, the Company repaid its 81/4% Senior Notes and wrote off the related deferred financing costs.

(4)		Fourth Quarter 2009 was a fourteen-week fiscal period in the fifty-three week fiscal year ended January 3, 2010. All of the other fiscal quarters presented had thirteen-week reporting periods.

Subsequent Events

12 Months Ended

Jan. 02, 2011

Subsequent events [Abstract]

Subsequent events


21.	Subsequent events

Acquisition of B.I. Incorporated

On February 10, 2011, the Company completed its previously announced acquisition of B.I., a Colorado corporation, pursuant to an Agreement and Plan of Merger, dated as of December 21, 2010 (the “Merger Agreement”), with BII Holding, a Delaware corporation, which owns BI, GEO Acquisition IV, Inc., a Delaware corporation and wholly-owned subsidiary of GEO (“Merger Sub”), BII Investors IF LP, in its capacity as the stockholders’ representative, and AEA Investors 2006 Fund L.P. Under the terms of the Merger Agreement, Merger Sub merged with and into BII Holding (the “Merger”), with BII Holding emerging as the surviving corporation of the merger. As a result of the Merger, the Company paid merger consideration of $415.0 million in cash excluding transaction related expenses and subject to certain adjustments. Under the Merger Agreement, $12.5 million of the merger consideration was placed in an escrow account for a one-year period to satisfy any applicable indemnification claims pursuant to the terms of the Merger Agreement by GEO, the Merger Sub or its affiliates. At the time of the BI Acquisition, approximately $78.4 million, including accrued interest was outstanding under BI’s senior term loan and $107.5 million, including accrued interest was outstanding under its senior subordinated note purchase agreement, excluding the unamortized debt discount. All indebtedness of BI under its senior term loan and senior subordinated note purchase agreement were repaid by BI with a portion of the $415.0 million of merger consideration. BI will be integrated into the Company’s wholly-owned subsidiary, GEO Care.

The Company is identified as the acquiring company for US GAAP accounting purposes. Under the purchase method of accounting, the purchase price for BI will be allocated to BI’s net tangible and intangible assets based on their estimated fair values as of February 10, 2011, the date of closing and the date that the Company obtained control over BI. In order to determine the fair values of a significant portion of the assets acquired and liabilities assumed, the Company will likely engage a third party independent valuation specialist. For any other assets acquired and liabilities assumed for which the Company is not obtaining an independent valuation, the fair value determined by the Company’s management will represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. With the exception of any adjustments which may occur during the one-year measurement period proscribed by GAAP, the Company expects to establish a preliminary purchase price allocation with respect to the acquisition of BI by the end of the first quarter of the fiscal year 2011. The accounting for this acquisition was not complete at the time of this filing and accordingly, the Company has not presented the required business combination disclosures. The Company expects to record goodwill in connection with this transaction however, due to the timing of the closing of the transaction and the filing date of the Company’s Annual Report on Form 10-K, it was impracticable for the Company to determine the value of any goodwill. As of the date of this filing, several significant inputs to the purchase accounting model had not been completed such as valuations for: (i) intangible assets related to acquired service contracts, (ii) property and equipment acquired, (iii) intangible assets related to any research and development projects and/or technology, (iv) intangible assets relative to trade names and patents, (vi) income taxes, (vii) other assets and liabilities for which the Company has not yet determined fair value. Additionally, it was impracticable to include meaningful pro forma financial results for the Company and BI on a combined basis as BI has a different fiscal year end than the Company and has not yet completed the close process around its quarterly financial information or its compilation for financial statements for a twelve-month period. The Company expects the pro forma adjustments to primarily consist of incremental interest expense related to the cash paid to the BI shareholders, estimates for the amortization of acquisition intangible assets, depreciation expense based on the fair value of property and equipment acquired, income tax effects, and other expenses which will result from the purchase price allocation and determination of fair value for assets acquired and liabilities assumed.

Stock-Based Awards

On February 28, 2011, the Company’s Board of Directors approved the award of 205,000 performance based shares to the Company’s Chief Executive Officer and Senior Vice Presidents which will vest over a 3-year period. These awards will be forfeited if the Company does not achieve certain targeted revenue in its fiscal year ended January 1, 2012.

Senior Notes due 2021

On February 10, 2011, the Company completed the issuance of $300.0 million in aggregate principal amount of ten-year, 6.625% senior unsecured notes due 2021 (the “6.625% Senior Notes”) in a private offering under an Indenture dated as of February 10, 2011 among the Company, certain of its domestic subsidiaries, as guarantors, and Wells Fargo Bank, National Association, as trustee. The 2021 Notes were offered and sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended, and outside the United States in accordance with Regulations S under the Securities Act. The 6.625% Senior Notes were issued at a coupon rate and yield to maturity of 6.625%. Interest on the 6.625% Senior Notes will accrue at the rate of 6.625% per annum and will be payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2011. The 6.625% Senior Notes mature on February 15, 2021. The Company used the net proceeds from this offering along with $150.0 million of borrowings under its Senior Credit Facility to finance the acquisition of BI and to pay related fees, costs, and expenses. The Company used the remaining net proceeds for general corporate purposes.

Amendment to Senior Credit Facility

On February 8, 2011, the Company entered into Amendment No. 1, dated as of February 8, 2011, to the Credit Agreement dated as of August 4, 2010, by and among the Company, the Guarantors party thereto, the lenders party thereto and BNP Paribas, as administrative agent, (“Amendment No. 1”). Amendment No. 1, among other things amended certain definitions and covenants relating to the total leverage ratios and the senior secured leverage ratios set forth in the Credit Agreement. This amendment increased the Company’s borrowing capacity by $250.0 million and is comprised of $150.0 million in borrowings under a new Term Loan A-2 due August 2015, initially bearing interest at LIBOR plus 2.75%, and an incremental $100.0 million in borrowing capacity under the existing Revolver. Following the amendment, the Senior Credit Facility is now comprised of: $150.0 million Term Loan A due August 2015; $150.0 million Term Loan A-2 due August 2015; $200.0 million Term Loan B due August 2016; and $500.0 million Revolving Credit Facility due August 2015. Incremental borrowings of $150.0 million under our amended Senior Credit Facility along with proceeds from our $300.0 million offering of the 6.625% Senior Notes were used to finance the acquisition of BI. As of February 10, 2011 and following the BI acquisition, the Company had $493.4 million in borrowings outstanding, net of discount, under the Term Loans, $210.0 million in borrowings under the Revolving Credit Facility, approximately $56.2 million in letters of credit and $233.8 million in additional borrowing capacity under the Revolving Credit Facility.

Condensed Consolidating Financial Information

12 Months Ended

Jan. 02, 2011

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Financial Information


22.	Condensed Consolidating Financial Information

On October 20, 2009, the Company completed an offering of $250.0 million aggregate principal amount of its 73/4% Senior Notes due 2017 (the “Original Notes”). The Original Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States only to non-U.S. persons in accordance with Regulation S promulgated under the Securities Act. In connection with the sale of the Original Notes, the Company entered into a Registration Rights Agreement with the initial purchasers of the Original Notes party thereto, pursuant to which the Company and its Subsidiary Guarantors (as defined below) agreed to file a registration statement with respect to an offer to exchange the Original Notes for a new issue of substantially identical notes registered under the Securities Act (the “Exchange Notes”, and together with the Original Notes, the “73/4% Senior Notes”). The 73/4% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company and certain of its wholly-owned domestic subsidiaries (the “Subsidiary Guarantors”).

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(d) of Regulation S-X promulgated under the Securities Act, presents the condensed consolidating financial information separately for:

(i) The GEO Group, Inc., as the issuer of the 73/4% Senior Notes;

(ii) The Subsidiary Guarantors, on a combined basis, which are 100% owned by The Geo Group, Inc., and which are guarantors of the 73/4% Senior Notes;

(iii) The Company’s other subsidiaries, on a combined basis, which are not guarantors of the 73/4% Senior Notes (the “Subsidiary Non-Guarantors”);

(iv) Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the Subsidiary Non-Guarantors and (b) eliminate the investments in the Company’s subsidiaries; and

(v) The Company and its subsidiaries on a consolidated basis.

CONDENSED CONSOLIDATING BALANCE SHEET


	As of January 2, 2011
			Combined		Combined
			Subsidiary		Non-Guarantor
	The GEO Group Inc.		Guarantors		Subsidiaries		Eliminations			Consolidated
	(Dollars in thousands)

ASSETS
Cash and cash equivalents	$	2,614	$	221	$	36,829		—		$	39,664
Restricted cash and investments		—		—		41,150		—			41,150
Accounts receivable, less allowance for doubtful accounts		121,749		129,903		23,832		—			275,484
Deferred income tax assets, net		15,191		12,808		4,127		—			32,126
Prepaid expenses and other current assets		12,325		23,555		9,256		(8,426	)		36,710

Total current assets		151,879		166,487		115,194		(8,426	)		425,134

Restricted Cash and Investments		6,168		—		43,324		—			49,492
Property and Equipment, Net		433,219		867,046		211,027		—			1,511,292
Assets Held for Sale		3,083		6,887		—		—			9,970
Direct Finance Lease Receivable		—		—		37,544		—			37,544
Intercompany Receivable		203,703		14,380		1,805		(219,888	)		—
Deferred Income Tax Assets, Net		—				936					936
Goodwill		34		244,151		762		—			244,947
Intangible Assets, Net		—		85,384		2,429		—			87,813
Investment in Subsidiaries		1,184,297		—		—		(1,184,297	)		—
Other Non-Current Assets		24,020		45,820		28,558		(41,750	)		56,648

	$	2,006,403	$	1,430,155	$	441,579	$	(1,454,361	)	$	2,423,776


LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	57,015	$	13,254	$	3,611		—		$	73,880
Accrued payroll and related taxes		6,535		10,965		15,861		—			33,361
Accrued expenses		55,081		41,368		33,624		(8,426	)		121,647
Current portion of capital lease obligations, long-term debt and non-recourse debt		9,500		782		31,292		—			41,574

Total current liabilities		128,131		66,369		84,388		(8,426	)		270,462

Deferred Income Tax Liabilities		15,874		47,652		20		—			63,546
Intercompany Payable		1,805		199,994		18,089		(219,888	)		—
Other Non-Current Liabilities		22,767		25,839		40,006		(41,750	)		46,862
Capital Lease Obligations		—		13,686		—		—			13,686
Long-Term Debt		798,336		—		—		—			798,336
Non-Recourse Debt		—		—		191,394		—			191,394
Commitments & Contingencies
Total Shareholders’ Equity		1,039,490		1,076,615		107,682		(1,184,297	)		1,039,490

	$	2,006,403	$	1,430,155	$	441,579	$	(1,454,361	)	$	2,423,776

CONDENSED CONSOLIDATING BALANCE SHEET


	As of January 3, 2010
			Combined		Combined
			Subsidiary		Non-Guarantor
	The GEO Group Inc.		Guarantors		Subsidiaries		Eliminations			Consolidated
	(Dollars in thousands)

ASSETS
Cash and cash equivalents	$	12,376	$	5,333	$	16,147		—		$	33,856
Restricted cash and investments		—		—		13,313		—			13,313
Accounts receivable, less allowance for doubtful accounts		110,643		53,457		36,656		—			200,756
Deferred income tax assets, net		12,197		1,354		3,469		—			17,020
Prepaid expenses and other current assets		4,428		2,311		7,950		—			14,689

Total current assets		139,644		62,455		77,535		—			279,634

Restricted Cash and Investments		2,900		—		17,855		—			20,755
Property and Equipment, Net		438,504		489,586		70,470		—			998,560
Assets Held for Sale		3,083		1,265		—		—			4,348
Direct Finance Lease Receivable		—		—		37,162		—			37,162
Intercompany Receivable		3,324		13,000		1,712		(18,036	)		—
Goodwill		34		39,387		669		—			40,090
Intangible Assets, Net		—		15,268		2,311		—			17,579
Investment in Subsidiaries		650,605		—		—		(650,605	)		—
Other Non-Current Assets		23,431		—		26,259		—			49,690

	$	1,261,525	$	620,961	$	233,973	$	(668,641	)	$	1,447,818


LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	35,949	$	6,622	$	9,285		—		$	51,856
Accrued payroll and related taxes		6,729		5,414		13,066		—			25,209
Accrued expenses		55,720		2,890		22,149		—			80,759
Current portion of capital lease obligations, long-term debt and non-recourse debt		3,678		705		15,241		—			19,624

Total current liabilities		102,076		15,631		59,741		—			177,448

Deferred Income Tax Liabilities		6,652		—		408		—			7,060
Intercompany Payable		1,712		—		16,324		(18,036	)		—
Other Non-Current Liabilities		32,127		1,015		—		—			33,142
Capital Lease Obligations		—		14,419		—		—			14,419
Long-Term Debt		453,860		—		—		—			453,860
Non-Recourse Debt		—		—		96,791		—			96,791
Commitments & Contingencies
Total Shareholders’ Equity		665,098		589,896		60,709		(650,605	)		665,098

	$	1,261,525	$	620,961	$	233,973	$	(668,641	)	$	1,447,818


	For the Fiscal Year Ended January 2, 2011
				Combined			Combined
				Subsidiary			Non-Guarantor
	The GEO Group, Inc.			Guarantors			Subsidiaries			Eliminations			Consolidated

Revenues	$	589,009		$	522,526		$	226,005		$	(67,572	)	$	1,269,968
Operating Expenses		518,387			344,046			180,159			(67,572	)		975,020
Depreciation and Amortization		17,011			25,787			5,313			—			48,111
General and Administrative Expenses		46,840			41,552			17,972			—			106,364

Operating Income		6,771			111,141			22,561			—			140,473
Interest Income		5,309			1,326			5,836			(6,200	)		6,271
Interest Expense		(29,484	)		(6,126	)		(11,297	)		6,200			(40,707	)
Loss on Extinguishment of Debt		(7,933	)		—			—			—			(7,933	)

Income (Loss) Before Income Taxes, Equity in Earnings of Affiliates, and Discontinued Operations		(25,337	)		106,341			17,100			—			98,104
Provision for Income Taxes		(6,775	)		41,090			5,217			—			39,532
Equity in Earnings of Affiliates, net of income tax provision		—			—			4,218			—			4,218

Income from Continuing Operations Before Equity Income of Consolidated Subsidiaries		(18,562	)		65,251			16,101			—			62,790
Income from Consolidated Subsidiaries, net of income tax provision		81,352									(81,352	)		—

Income from Continuing Operations		62,790			65,251			16,101			(81,352	)		62,790
Add (Subtract): Loss (Earnings) Attributable to Noncontrolling Interests		—			—			—			678			678

Net Income Attributable to The GEO Group, Inc.	$	62,790		$	65,251		$	16,101		$	(80,674	)	$	63,468


	For the Fiscal Year Ended January 3, 2010
				Combined			Combined
				Subsidiary			Non-Guarantor
	The GEO Group Inc.			Guarantors			Subsidiaries			Eliminations			Consolidated

Revenues	$	620,271		$	335,588		$	235,747		$	(50,516	)	$	1,141,090
Operating Expenses		523,820			218,679			205,116			(50,516	)		897,099
Depreciation and Amortization		17,877			17,128			4,301			—			39,306
General and Administrative Expenses		36,042			19,500			13,698			—			69,240

Operating Income		42,532			80,281			12,632			—			135,445
Interest Income		202			12			4,729			—			4,943
Interest Expense		(19,709	)		—			(8,809	)		—			(28,518	)
Loss on Extinguishment of Debt		(6,839	)		—			—			—			(6,839	)

Income (Loss) Before Income Taxes, Equity in Earnings of Affiliates, and Discontinued Operations		16,186			80,293			8,552			—			105,031
Provision for Income Taxes		6,439			31,937			3,703			—			42,079
Equity in Earnings of Affiliates, net of income tax provision		—			—			3,517						3,517

Income from Continuing Operations Before Equity Income of Consolidated Subsidiaries		9,747			48,356			8,366			—			66,469
Income from Consolidated Subsidiaries, net of income tax provision		56,722									(56,722	)		—

Income from Continuing Operations		66,469			48,356			8,366			(56,722	)		66,469
Loss from Discontinued Operations, net of income tax provision		(346	)		(193	)		—			193			(346	)

Net Income		66,123			48,163			8,366			(56,529	)		66,123
Add (Subtract): Loss (Earnings) Attributable to Noncontrolling Interests		—			—			—			(169	)		(169	)

Net Income Attributable to The GEO Group, Inc.	$	66,123		$	48,163		$	8,366		$	(56,698	)	$	65,954


	For the Fiscal Year Ended December 28, 2008
				Combined			Combined
				Subsidiary			Non-Guarantor
	The GEO Group Inc.			Guarantors			Subsidiaries			Eliminations			Consolidated

Revenues	$	545,590		$	327,079		$	215,157		$	(44,820	)	$	1,043,006
Operating Expenses		469,903			216,380			180,590			(44,820	)		822,053
Depreciation and Amortization		16,284			16,120			5,002			—			37,406
General and Administrative Expenses		34,682			20,792			13,677			—			69,151

Operating Income		24,721			73,787			15,888			—			114,396
Interest Income		323			84			6,638			—			7,045
Interest Expense		(20,505	)		—			(9,697	)		—			(30,202	)
Loss on Extinguishment of Debt		—			—			—			—			—

Income (Loss) Before Income Taxes, Equity in Earnings of Affiliates, and Discontinued Operations		4,539			73,871			12,829			—			91,239
Provision for Income Taxes		1,670			27,183			5,180			—			34,033
Equity in Earnings of Affiliates, net of income tax provision		—			—			4,623			—			4,623

Income from Continuing Operations Before Equity Income of Consolidated Subsidiaries		2,869			46,688			12,272			—			61,829
Income from Consolidated Subsidiaries, net of income tax provision		58,960									(58,960	)		—

Income from Continuing Operations		61,829			46,688			12,272			(58,960	)		61,829
Loss from Discontinued Operations, net of income tax provision		(2,551	)		(628	)		(2,929	)		3,557			(2,551	)

Net Income		59,278			46,060			9,343			(55,403	)		59,278
Add (Subtract): Loss (Earnings) Attributable to Noncontrolling Interests		—			—			—			(376	)		(376	)

Net Income Attributable to The GEO Group, Inc.	$	59,278		$	46,060		$	9,343		$	(55,779	)	$	58,902

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


	For the Fiscal Year Ended January 2, 2011
				Combined			Combined
				Subsidiary			Non-Guarantor
	The GEO Group Inc.			Guarantors			Subsidiaries			Consolidated
	(Dollars in thousands)

Cash Flow From Operating Activities:
Net cash provided by operating activities	$	75,651		$	10,922		$	39,629		$	126,202

Cash Flow from Investing Activities:
Acquisition, cash consideration, net of cash acquired		(260,255	)		—			—			(260,255	)
Just Care purchase price adjustment		—			(41	)		—			(41	)
Proceeds from sale of property and equipment		—			528			—			528
Change in restricted cash		—			—			(11,432	)		(11,432	)
Capital expenditures		(80,016	)		(15,801	)		(1,244	)		(97,061	)

Net cash used in investing activities		(340,271	)		(15,314	)		(12,676	)		(368,261	)

Cash Flow from Financing Activities:
Proceeds from long-term debt		726,000			—			—			726,000
Payments on long-term debt		(386,285	)		(720	)		(10,440	)		(397,445	)
Income tax benefit of equity compensation		3,926			—			—			3,926
Debt issuance costs		(8,400	)		—			—			(8,400	)
Payments for purchase of treasury shares		(80,000	)		—			—			(80,000	)
Payments on retirement of common stock		(7,078	)		—			—			(7,078	)
Proceeds from the exercise of stock options		6,695			—			—			6,695

Net cash provided by (used in) financing activities		254,858			(720	)		(10,440	)		243,698

Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			4,169			4,169

Net Increase (Decrease) in Cash and Cash Equivalents		(9,762	)		(5,112	)		20,682			5,808
Cash and Cash Equivalents, beginning of period		12,376			5,333			16,147			33,856

Cash and Cash Equivalents, end of period	$	2,614		$	221		$	36,829		$	39,664

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


	For the Fiscal Year Ended January 3, 2010
				Combined			Combined
				Subsidiary			Non-Guarantor
	The GEO Group Inc.			Guarantors			Subsidiaries			Consolidated
	(Dollars in thousands)

Cash Flow From Operating Activities:
Net cash provided by operating activities	$	(5,448	)	$	119,792		$	16,761		$	131,105

Cash Flow from Investing Activities:
Acquisition, cash consideration, net of cash acquired		—			(38,386	)		—			(38,386	)
Proceeds from sale of property and equipment		150			29			—			179
Dividends from subsidiary		7,400			—			(7,400	)		—
Change in restricted cash		—			—			2,713			2,713
Capital expenditures		(72,379	)		(75,556	)		(1,844	)		(149,779	)

Net cash used in investing activities		(64,829	)		(113,913	)		(6,531	)		(185,273	)

Cash Flow from Financing Activities:
Cash dividends to noncontrolling interests		—			—			(176	)		(176	)
Proceeds from long-term debt		333,000			—			—			333,000
Payments on long-term debt		(252,678	)		(676	)		(14,120	)		(267,474	)
Income tax benefit of equity compensation		601			—			—			601
Debt issuance costs		(17,253	)		—			—			(17,253	)
Termination of interest rate swap agreements		1,719			—			—			1,719
Proceeds from the exercise of stock options		1,457			—			—			1,457

Net cash provided by (used in) financing activities		66,846			(676	)		(14,296	)		51,874

Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			4,495			4,495

Net Increase (Decrease) in Cash and Cash Equivalents		(3,431	)		5,203			429			2,201
Cash and Cash Equivalents, beginning of period		15,807			130			15,718			31,655

Cash and Cash Equivalents, end of period	$	12,376		$	5,333		$	16,147		$	33,856

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


	For the Fiscal Year Ended December 28, 2008
				Combined			Combined
				Subsidiary			Non-Guarantor
	The GEO Group Inc.			Guarantors			Subsidiaries			Consolidated
	(Dollars in thousands)

Cash Flow From Operating Activities:
Net cash provided by operating activities	$	42,322		$	3,374		$	25,773		$	71,469

Cash Flow from Investing Activities:
Proceeds from sale of property and equipment		—			1,029			107			1,136
Purchase of shares in consolidated affiliate		—			—			(2,189	)		(2,189	)
Dividend from subsidiary		2,676			—			(2,676	)		—
Change in restricted cash		—			29			423			452
Capital expenditures		(123,401	)		(3,615	)		(3,974	)		(130,990	)

Net cash used in investing activities		(120,725	)		(2,557	)		(8,309	)		(131,591	)

Cash Flow from Financing Activities:
Cash dividends to noncontrolling interests		—			—			(125	)		(125	)
Proceeds from long-term debt		156,000			—			—			156,000
Payments on long-term debt		(85,678	)		(822	)		(13,656	)		(100,156	)
Income tax benefit of equity compensation		786			—			—			786
Debt issuance costs		(3,685	)		—			—			(3,685	)
Proceeds from the exercise of stock options		753			—			—			753

Net cash provided by (used in) financing activities		68,176			(822	)		(13,781	)		53,573

Effect of Exchange Rate Changes on Cash and Cash Equivalents		—			—			(6,199	)		(6,199	)

Net Increase (Decrease) in Cash and Cash Equivalents		(10,227	)		(5	)		(2,516	)		(12,748	)
Cash and Cash Equivalents, beginning of period		26,034			135			18,234			44,403

Cash and Cash Equivalents, end of period	$	15,807		$	130		$	15,718		$	31,655

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Jan. 02, 2011

Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Accounts

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
For the Fiscal Years Ended January 2, 2011, January 3, 2010, and December 28, 2008


	Balance at		Charged to			Charged			Deductions,			Balance at
	Beginning		Cost and			to Other			Actual			End of
Description	of Period		Expenses			Accounts			Charge-Offs			Period
	(In thousands)

YEAR ENDED JANUARY 2, 2011:
Allowance for doubtful accounts	$	429	$	932		$	—		$	(53	)	$	1,308
YEAR ENDED JANUARY 3, 2010:
Allowance for doubtful accounts	$	625	$	485		$	(346	)	$	(335	)	$	429
YEAR ENDED DECEMBER 28, 2008:
Allowance for doubtful accounts	$	445	$	602		$	(302	)	$	(120	)	$	625
YEAR ENDED JANUARY 2, 2011:
Asset Replacement Reserve	$	—	$	—		$	—		$	—		$	—
YEAR ENDED JANUARY 3, 2010:
Asset Replacement Reserve	$	623	$	(613	)	$	—		$	(10	)	$	—
YEAR ENDED DECEMBER 28, 2008:
Asset Replacement Reserve	$	885	$	54		$	—		$	(316	)	$	623

Label	Element	Value
Common Stock, Shares, Outstanding	us-gaap_CommonStockSharesOutstanding	51,629,005
Common Stock, Shares, Outstanding	us-gaap_CommonStockSharesOutstanding	64,432,459