|
THE GEO GROUP, INC.*
CONSOLIDATED STATEMENTS OF INCOME
Fiscal Years Ended December 28, 2008, December 30, 2007, and December 31, 2006
|
| |
2008
|
2007
|
2006
|
| |
(In thousands, except per share data)
|
|
Revenues
|
$1,043,006
|
$976,299
|
$818,439
|
|
Operating Expenses
|
822,053
|
787,862
|
679,886
|
|
Depreciation and Amortization
|
37,406
|
33,218
|
21,682
|
|
General and Administrative Expenses
|
69,151
|
64,492
|
56,268
|
|
Operating Income
|
114,396
|
90,727
|
60,603
|
|
Interest Income
|
7,045
|
8,746
|
10,687
|
|
Interest Expense
|
-30,202
|
-36,051
|
-28,231
|
|
Write-off of Deferred Financing Fees from Extinguishment of Debt
|
|
-4,794
|
-1,295
|
|
Income before Income Taxes, Minority Interest, Equity in Earnings of Affiliates, and Discontinued Operations
|
91,239
|
58,628
|
41,764
|
|
Provision for Income Taxes
|
34,033
|
22,293
|
15,215
|
|
Minority Interest
|
-376
|
-397
|
-125
|
|
Equity in Earnings of Affiliates, net of income tax (benefit) provision of ($805), $1,030, and $56
|
4,623
|
2,151
|
1,576
|
|
Income from Continuing Operations
|
61,453
|
38,089
|
28,000
|
|
Income (loss) from Discontinued Operations, net of tax provision of $236, $2,310, and $1,139
|
-2,551
|
3,756
|
2,031
|
|
Net Income
|
$58,902
|
$41,845
|
$30,031
|
|
Weighted Average Common Shares Outstanding:
|
|
|
|
|
Basic
|
50,539
|
47,727
|
34,442
|
|
Diluted
|
51,830
|
49,192
|
35,744
|
|
Earnings (loss) per Common Share:
|
|
|
|
|
Basic:
|
|
|
|
|
Income from continuing operations
|
$1.22
|
$0.80
|
$0.81
|
|
Income (loss) from discontinued operations
|
-0.05
|
0.08
|
0.06
|
|
Net income per share -basic
|
$1.17
|
$0.88
|
$0.87
|
|
Diluted:
|
|
|
|
|
Income from continuing operations
|
$1.19
|
$0.77
|
$0.78
|
|
Income (loss) from discontinued operations
|
-0.05
|
0.08
|
0.06
|
|
Net income per share -diluted
|
$1.14
|
$0.85
|
$0.84
|
4. Property and Equipment (in Part)
Property and equipment consist of the following at fiscal year-end:
| |
Useful Life
(Years)
|
2008
|
2007
|
| |
(In thousands)
|
|
|
|
Land
|
-
|
$49,686
|
$43,340
|
|
Buildings and improvements
|
2 to 40
|
765,103
|
635,809
|
|
Leasehold improvements
|
1 to 15
|
68,845
|
57,737
|
|
Equipment
|
3 to 10
|
55,007
|
44,895
|
|
Furniture and fixtures
|
3 to 7
|
9,033
|
6,819
|
|
Facility construction in progress
|
|
56,574
|
87,987
|
| |
|
$1,004,248
|
$876,587
|
|
Less accumulated depreciation and amortization
|
|
-125,632
|
-93,224
|
| |
|
$878,616
|
$783,363
|
The Company's construction in progress primarily consists of development costs associated with the Facility construction and design segment for contracts with various federal, state, and local agencies for which we have management contracts. Interest capitalized in property and equipment was $4.3 million and $2.9 million for the fiscal years ended December 28, 2008, and December 30, 2007, respectively.
Required
a. What is the gross interest expense for 2008 and 2007?
b. What is the interest reported on the income statement for 2008, 2007, and 2006?
c. What was the interest added to property and equipment during 2008 and 2007?
d. When is capitalized interest recognized as an expense? Describe.
e. What was the effect on income from capitalizing interest? Describe.
f. Compute times interest earned for 2008 and 2007. Comment on the absolute amounts and the trend.