1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 29, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to COMMISSION FILE NUMBER 1-14260 WACKENHUT CORRECTIONS CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 65-0043078 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4200 Wackenhut Drive #100, Palm Beach Gardens, Florida 33410-4243 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (561) 622-5656 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] At August 1, 1997, 21,984,142 shares of the registrant's Common Stock were issued and outstanding. Page 1 of 16
2 WACKENHUT CORRECTIONS CORPORATION PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following consolidated financial statements of Wackenhut Corrections Corporation, a Florida corporation (the "Corporation") have been prepared in accordance with the instructions to Form 10-Q and therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with generally accepted accounting principles. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the financial information for the interim periods reported have been made. Results of operations for the twenty-six weeks ended June 29, 1997 are not necessarily indicative of the results for the entire fiscal year ending December 28, 1997. Page 2 of 16
3 WACKENHUT CORRECTIONS CORPORATION CONSOLIDATED STATEMENTS OF INCOME FOR THE THIRTEEN WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996 (IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED) <TABLE> <CAPTION> THIRTEEN WEEKS ENDED ------------------------------------------------- JUNE 29, 1997 JUNE 30, 1996 ----------------------- ---------------------- <S> <C> <C> Revenues $ 51,509 $ 33,416 Operating expenses (including amounts related to Parent of $1,496 and $949) 43,166 28,660 Depreciation and amortization 1,510 770 ----------------------- ---------------------- Contribution from operations 6,833 3,986 G&A expense (including amounts related to Parent of $387 and $357) 3,044 2,073 ----------------------- ---------------------- Operating income 3,789 1,913 Interest income (including amounts related to Parent of ($42) and $0) 286 656 ----------------------- ---------------------- Income before income taxes and equity income of affiliate 4,075 2,569 Provision for income taxes 1,603 895 ----------------------- ---------------------- Income before equity income of affiliate 2,472 1,674 Equity income of affiliate, net of income tax provision of $157 and $88 251 140 ----------------------- ---------------------- Net income $ 2,723 $ 1,814 ======================= ====================== Earnings per share $ 0.12 $ 0.08 ======================= ====================== Weighted average shares outstanding 22,634 22,676 ======================= ====================== </TABLE> The accompanying notes to consolidated financial statements are an integral part of these statements. Page 3 of 16
4 WACKENHUT CORRECTIONS CORPORATION CONSOLIDATED STATEMENTS OF INCOME FOR THE TWENTY-SIX WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996 (IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED) <TABLE> <CAPTION> TWENTY-SIX WEEKS ENDED --------------------------------------------- JUNE 29, 1997 JUNE 30, 1996 ----------------------- ---------------------- <S> <C> <C> Revenues $ 92,736 $ 62,850 Operating expenses (including amounts related to Parent of $2,727 and $1,604) 77,566 53,216 Depreciation and amortization 2,658 1,606 ----------------------- ---------------------- Contribution from operations 12,512 8,028 G&A expense (including amounts related to Parent of $775 and $716) 5,451 4,396 ----------------------- ---------------------- Operating income 7,061 3,632 Interest income (including amounts related to Parent of ($108) and $109) 818 1,297 ----------------------- ----------------------- Income before income taxes and equity income of affiliate 7,879 4,929 Provision for income taxes 3,072 1,829 ----------------------- ---------------------- Income before equity income of affiliate 4,807 3,100 Equity income of affiliate, net of income tax provision of $311 and $114 497 182 ----------------------- ---------------------- Net income $ 5,304 $ 3,282 ======================= ====================== Earnings per share $ 0.23 $ 0.15 ======================= ====================== Weighted average shares outstanding 22,613 21,767 ======================= ====================== </TABLE> The accompanying notes to consolidated financial statements are an integral part of these statements. Page 4 of 16
5 WACKENHUT CORRECTIONS CORPORATION CONSOLIDATED BALANCE SHEETS JUNE 29, 1997 AND DECEMBER 29, 1996 (IN THOUSANDS EXCEPT SHARE DATA) <TABLE> <CAPTION> JUNE 29, 1997 DECEMBER 29, 1996 ----------------------- ------------------------ (UNAUDITED) <S> <C> <C> ASSETS Current Assets: Cash $ 25,612 $ 44,368 Accounts receivable (net) 32,945 24,879 Other 7,142 6,066 ----------------------- ------------------------ Total current assets 65,699 75,313 Property and equipment, net 28,999 18,975 Investments in and advances to affiliates 4,812 1,810 Deferred charges, net 10,814 7,522 Unamortized cost in excess of net assets of acquired companies, net 1,955 2,224 Other 5,025 967 ----------------------- ------------------------ $ 117,304 $ 106,811 ======================= ======================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 4,622 $ 4,020 Accrued payroll and related taxes 5,629 4,558 Accrued expenses 3,967 3,717 Current portion of long-term debt 12 12 Deferred income tax liability, net 1,162 876 ----------------------- ------------------------ Total current liabilities 15,392 13,183 ----------------------- ------------------------ Deferred income taxes, net 8,497 5,434 ----------------------- ------------------------ Long-term debt 361 225 ----------------------- ------------------------ Shareholders' equity: Preferred stock, $.01 par value, 10,000,000 shares authorized --- --- Common stock, $.01 par value, 30,000,000 shares authorized, 21,969,272 and 21,937,992 shares issued and outstanding 220 219 Additional paid-in capital 73,397 72,986 Retained earnings 19,652 14,348 Cumulative translation adjustment (215) 416 ----------------------- ------------------------ Total shareholders' equity 93,054 87,969 ======================= ======================== $ 117,304 $ 106,811 ======================= ======================== </TABLE> The accompanying notes to consolidated financial statements are an integral part of these balance sheets. Page 5 of 16
6 WACKENHUT CORRECTIONS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWENTY-SIX WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996 (IN THOUSANDS) (UNAUDITED) <TABLE> <CAPTION> TWENTY-SIX WEEKS ENDED --------------------------------------------------- JUNE 29, 1997 JUNE 30, 1996 ------------------------ ----------------------- <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,304 $ 3,282 Adjustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization expense 2,658 1,606 Equity income of affiliates (809) (296) Changes in assets and liabilities -- (Increase) decrease in assets: Accounts receivable (8,245) (3,175) Deferred income tax asset - current --- 51 Other current assets (1,112) (890) Other assets 399 99 Increase (decrease) in liabilities: Accounts payable and accrued expenses 1,052 (294) Accrued payroll and related taxes 1,153 763 Deferred income tax liability - current 286 63 Deferred income taxes - non-current 3,063 1,343 ------------------------ ----------------------- NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES $ 3,749 $ 2,552 ------------------------ ----------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Investments in affiliates (2,193) --- Capital expenditures (11,764) (1,107) Deferred charge expenditures (8,789) (1,648) ------------------------ ----------------------- NET CASH USED IN INVESTING ACTIVITIES $ (22,746) $ (2,755) ------------------------ ----------------------- </TABLE> (Continued) The accompanying notes to consolidated financial statements are an integral part of these statements. Page 6 of 16
7 WACKENHUT CORRECTIONS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWENTY-SIX WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996 (IN THOUSANDS) (UNAUDITED) (Continued) <TABLE> <CAPTION> TWENTY-SIX WEEKS ENDED ----------------------------------------------- JUNE 29, 1997 JUNE 30, 1996 --------------------- ---------------------- <S> <C> <C> CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock $ --- $ 51,606 Proceeds from exercise of stock options 350 320 Retirement of debt (6) (779) Proceeds from debt 147 --- Advances from Parent 22,777 45,124 Repayments to Parent (22,777) (45,124) --------------------- ---------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES $ 491 $ 51,147 --------------------- ---------------------- Effect of exchange rate changes on cash (250) 162 Net (decrease) increase in cash (18,756) 51,106 Cash, beginning of period 44,368 909 --------------------- ---------------------- CASH, END OF PERIOD $ 25,612 $ 52,015 ===================== ====================== SUPPLEMENTAL DISCLOSURES: Impact on equity from tax benefit related to the exercise of options issued under the company's non- qualified stock option plan $ --- $ 636 ===================== ====================== </TABLE> The accompanying notes to consolidated financial statements are an integral part of these statements. Page 7 of 16
8 WACKENHUT CORRECTIONS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed for the quarterly financial reporting are the same as those disclosed in Note 2 of the Notes To Consolidated Financial Statements included in the Corporation's Form 10-K filed with the Securities and Exchange Commission on March 28, 1997 for the fiscal years ended December 29, 1996, December 31, 1995 and January 1, 1995. Certain prior year amounts have been reclassified to conform with current year financial statement presentation. 2. EARNINGS PER SHARE Statement of Financial Accounting Standards No. 128, "Earnings per Share" requires the disclosure of basic and diluted earnings per share for periods ending after December 15, 1997. The computation under SFAS No. 128 differs from the primary and fully diluted earnings per share computed under APB Opinion No. 15 primarily in the manner in which potential common stock is treated. Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. In the computation of diluted earnings per share, the weighted-average number of common shares outstanding is adjusted for the effect of all potential common stock. The basic and diluted earnings per share computed according to SFAS No. 128 are as follows: PRO-FORMA THIRTEEN WEEKS ENDED -------------------- JUNE 29, 1997 JUNE 30, 1996 ------------- ------------- Basic earnings per share $ 0.12 $ 0.08 Diluted earnings per share 0.12 0.08 PRO-FORMA TWENTY-SIX WEEKS ENDED ---------------------- JUNE 29, 1997 JUNE 30, 1996 ------------- ------------- Basic earnings per share $ 0.24 $ 0.16 Diluted earnings per share 0.23 0.15 Page 8 of 16
9 WACKENHUT CORRECTIONS CORPORATION 3. DOMESTIC AND INTERNATIONAL OPERATIONS A summary of domestic and international operations is presented below: <TABLE> <CAPTION> TWENTY-SIX WEEKS ENDED JUNE 29, 1997 JUNE 30, 1996 ----------------------- ----------------------- (in thousands) <S> <C> <C> REVENUES Domestic operations $ 74,781 $ 48,218 International operations 17,955 14,632 ----------------------- ----------------------- Total revenues $ 92,736 $ 62,850 ======================= ======================= OPERATING INCOME Domestic operations $ 5,014 $ 2,203 International operations 2,047 1,429 ----------------------- ----------------------- Total operating income $ 7,061 $ 3,632 ======================= ======================= JUNE 29, 1997 DECEMBER 29, 1996 ----------------------- ----------------------- (in thousands) IDENTIFIABLE ASSETS Domestic operations $ 99,850 $ 96,872 International operations 17,454 9,938 ----------------------- ----------------------- Total identifiable assets $ 117,304 $ 106,811 ======================= ======================= </TABLE> 4. FINANCING INSTRUMENTS In June 1997, the Company entered into a $30 million multi-currency revolving credit facility with a syndicate of banks, the proceeds of which may be used for working capital, acquisitions and general corporate purposes. The credit facility also includes a letter of credit of up to $10 million for the issuance of standby letters of credit. As of August 1, 1997, no amounts were outstanding under this facility. In June 1997, the Company also entered into an $80 million operating lease facility that has been established to acquire and develop new correctional institutions used in its business. As a condition of this facility, the Company unconditionally agreed to guarantee certain obligations of First Security Bank, National Association, a party to the aforementioned operating lease facility. As of August 1, 1997, approximately $16 million of properties were under development. 5. SUBSEQUENT EVENT On July 18, 1997, Atlantic Shores Healthcare, Inc. a wholly-owned subsidiary of Wackenhut Corrections Corporation, completed the purchase of an 86-bed psychiatric hospital in Fort Lauderdale, Florida for $6 million. The hospital has been renamed Atlantic Shores Hospital. Page 9 of 16
10 WACKENHUT CORRECTIONS CORPORATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION In June 1997, the Company entered into a $30 million multi-currency revolving credit facility with a syndicate of banks, the proceeds of which may be used for working capital, acquisitions and general corporate purposes. The credit facility also includes a letter of credit of up to $10 million for the issuance of standby letters of credit. As of August 1, 1997, no amounts were outstanding under this facility. In June 1997, the Company also entered into an $80 million operating lease facility that has been established to acquire and develop new correctional institutions used in its business. As a condition of this facility, the Company unconditionally agreed to guarantee certain obligations of First Security Bank, National Association, a party to the aforementioned operating lease facility. As of August 1, 1997, approximately $16 million of properties were under development. In June 1997, the Company also purchased the Queens Private Correctional Facility, a 66,000 square foot building currently being used by the Company as a 200-bed federal detention facility, for $6.6 million. The Company also invested another $5.5 million to renovate the building. Reference is made to Item 7, Part II of the Corporation's Annual Report on Form 10-K for the fiscal year ended December 29, 1996, filed with the Securities and Exchange Commission on March 28, 1997, for further discussion and analysis of information pertaining to the Corporation's results of operations, liquidity and capital resources. RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the Corporation's consolidated financial statements and the notes thereto. COMPARISON OF THIRTEEN WEEKS ENDED JUNE 29, 1997 AND THIRTEEN WEEKS ENDED JUNE 30, 1996: Revenues increased by 54.1% to $51.5 million in the thirteen weeks ended June 29, 1997 ("Second Quarter 1997") from $33.4 million in the thirteen weeks ended June 30, 1996 ("Second Quarter 1996"). The increase in revenues in Second Quarter 1997 compared to Second Quarter 1996 is primarily attributable to increased compensated resident days resulting from the opening of two facilities in the first half of 1996 (Willacy County Unit, Willacy County, Texas in January 1996, and Marshall County Correctional Facility, Marshall County, Mississippi in June 1996), the opening of five facilities in the First Quarter of 1997 (South Bay Correctional Facility, South Bay, Florida in February 1997, Travis County Community Justice Center, Travis County, Texas in March 1997, Bayamon Regional Detention Center, Bayamon, Puerto Rico in March 1997, Queens Private Correctional Facility, Queens, New York in March 1997 and Fulham Correctional Center, Victoria, Australia in March 1997) and improved occupancy at the Central Texas Parole Violator Facility in San Antonio, Texas. Page 10 of 16
11 WACKENHUT CORRECTIONS CORPORATION The number of compensated resident days in domestic facilities increased to 1,141,607 in Second Quarter 1997 from 752,474 in Second Quarter 1996. In addition, compensated resident days in the Company's Australian facilities increased to 142,840 from 111,748 for the comparable periods. As a result of the increase in compensated resident days, average facility occupancy in domestic facilities increased to 96.4% of capacity in Second Quarter 1997 compared to 95.2% in the same period in Second Quarter 1996. Operating expenses increased by 50.6% to $43.2 million in Second Quarter 1996 compared to $28.7 million in Second Quarter 1996. The increase primarily reflected the seven facilities that opened in 1996 and 1997, as described above. Depreciation and amortization increased by 96.1% to $1.5 million in Second Quarter 1997 from $770,000 in Second Quarter 1996. This increase is due to deferred charge amortization attributable to the new facilities and depreciation associated with the purchase of two facilities. Contribution from operations increased 71.4% to $6.8 million in Second Quarter 1997 from $4.0 million in Second Quarter 1996 due primarily to the opening of the South Bay Correctional Facility in February 1997, the openings of the Queens Private Correctional Facility, Travis County Community Justice Center and Fulham Correctional Center in March 1997, improved occupancy at the Central Texas Parole Violator Facility, and a full six months of operating results at the Marshall County Correctional Facility which opened in June 1996. General and administrative expenses increased 46.8% to $3.0 million in Second Quarter 1997 from $2.1 million in Second Quarter 1996. This increase is primarily attributable to increased business development activities in response to additional interest in the Company's services. Operating income increased by 98.1% to $3.8 million in Second Quarter 1997 from $1.9 million in Second Quarter 1996. As described above, the opening of four facilities and improved occupancy at the Central Texas Parole Violator Facility were the principal factors contributing to the increase in operating income during Second Quarter 1997. Income before taxes and equity income of affiliate increased by 58.6% to $4.1 million in Second Quarter 1997 from $2.6 million in Second Quarter 1996 due to the factors described above, offset by lower interest income since the Company has deployed cash to strategic opportunities. Provision for income taxes increased to $1.6 million in Second Quarter 1997 from $895,000 in Second Quarter 1996 due to higher taxable income, and a higher effective tax rate. Equity income of affiliates increased by 79.39% to $251,000 in Second Quarter 1997 from $140,000 in Second Quarter 1996. This increase is due to two expansions at the H.M. Prison Doncaster (Doncaster, England) in June 1996 and March 1997, and income earned from two court escort contracts that commenced operations in May 1996. Net income increased by 50.1% to $2.7 million in Second Quarter 1997 from $1.8 million in Second Quarter 1996 as a result of the factors described above. Page 11 of 16
12 WACKENHUT CORRECTIONS CORPORATION COMPARISON OF TWENTY-SIX WEEKS ENDED JUNE 27, 1997 AND TWENTY-SIX WEEKS ENDED JUNE 30, 1996: Revenues increased by 47.6% to $92.7 million in the twenty-six weeks ended June 29, 1997 ("First Half 1997") from $62.9 million in the twenty-six weeks ended June 30, 1996 ("First Half 1996"). The increase in revenues in First Half 1997 compared to First Half 1996 is primarily attributable to increased compensated resident days resulting from the opening of two facilities in the first half of 1996 (Willacy County Unit, Willacy County, Texas in January 1996, and Marshall County Correctional Facility, Marshall County, Mississippi in June 1996), the assumption of operational responsibility for an existing facility (Delaware County Prison, Delaware County, Pennsylvania in April 1996), the opening of five facilities in the First Quarter of 1997 (South Bay Correctional Facility, South Bay, Florida in February 1997, Travis County Community Justice Center, Travis County, Texas in March 1997, Bayamon Regional Detention Center, Bayamon, Puerto Rico in March 1997, Queens Private Correctional Facility, Queens, New York in March 1997 and Fulham Correctional Center, Victoria,Australia in March 1997) and improved occupancy at the Central Texas Parole Violator Facility in San Antonio, Texas. The number of compensated resident days in domestic facilities increased to 2,105,395 in First Half 1997 from 1,389,295 in First Half 1996. In addition, compensated resident days in Australian facilities increased to 250,038 from 223,496 for the comparable periods. As a result of the increase in compensated resident days, average facility occupancy in domestic facilities increased to 96.9% of capacity in First Half of 1997 compared to 95.7% in First Half of 1996. Operating expenses increased by 45.8% to $77.6 million in First Half 1997 compared to $53.2 million in First Half 1996. This increase primarily reflected the eight facilities that opened in 1996 and 1997, as described above. Depreciation and amortization increased by 65.5% to $2.7 million in the First Half 1997 from $1.6 million in the First Half 1996. This increase is due to deferred charge amortization attributable to the new facilities and depreciation associated with the purchase of two facilities. Contributions from operations increased by 55.9% to $12.5 million in First Half 1997 from $8.0 million in First Half 1996 due primarily to the opening of the South Bay Correctional Facility in February 1997, the openings of the Queens Private Correctional Facility, Travis County Community Justice Center and Fulham Correctional Center in March 1997, improved occupancy at the Central Texas Parole Violator Facility, and a full six months of operating results at the Marshall County Correctional Facility which opened in June 1996. General and administrative expenses increased by 24% to $5.5 million in First Half 1997 from $4.4 million in First Half 1996. This increase is primarily attributable to increased business development activities in response to additional interest in the Company's services. Operating income increased by 94.4% to $7.1 million in First Half 1997 from $3.6 million in First Half 1996. As described above, the opening of four facilities and improved occupancy at the Central Texas Parole Violator Facility were the principal factors contributing to the increase in operating income during Second Quarter 1997. Page 12 of 16
13 WACKENHUT CORRECTIONS CORPORATION Income before taxes and equity loss increased by 59.9% to $7.9 million in First Half 1997 from $4.9 million in First Half 1996 due to the factors described above, offset by lower interest income since the Company has deployed cash to strategic opportunities. Provision for income taxes increased to $3.1 million in First Half 1997 from $1.8 million in First Half 1996 due to higher taxable income, and an increase in the Company's effective tax rate. Equity income of affiliates increased 173% to $497,000 for First Half 1997 from $182,000 in First Half 1996. The current year increase results from two expansions at the H.M. Prison Doncaster (Doncaster, England) in June 1996 and March 1997, and income earned from two court escort contracts that commenced operations in May 1996. Net income increased by 61.6% to $5.3 million in First Half 1997 from $3.3 million in First Half 1996 as a result of the factors described above. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable. Page 13 of 16
14 WACKENHUT CORRECTIONS CORPORATION PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The nature of the Corporation's business results in claims or litigation against the Corporation for damages arising from the conduct of its employees or others. Except for routine litigation incidental to the business of the Corporation, there are no pending material legal proceedings to which the Corporation or any of its subsidiaries is a party or to which any of their property is subject. The Corporation believes that the outcome of the proceedings to which it is currently a party will not have a material adverse effect upon its operations or financial condition. ITEM 2. CHANGES IN SECURITIES Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders of the Corporation was held on April 24, 1997 in Palm Beach Gardens, Florida. All directors nominated for election were elected by a majority of the votes cast and the tabulation of the votes cast were as follows: VOTES FOR VOTES WITHHELD Norman A. Carlson 20,881,163 46,191 Benjamin R. Civiletti 20,847,433 79,921 Manuel J. Justiz 20,877,433 49,921 Floretta McKenzie 20,876,613 50,741 John Ruffle 20,880,233 47,121 Anthony P. Travisono 20,879,813 47,541 George R. Wackenhut 20,879,063 48,291 Richard R. Wackenhut 20,881,883 45,471 George C. Zoley 20,881,933 45,421 The second matter voted upon at the Annual Meeting was the ratification of the action of the Board of Directors appointing the firm of Arthur Andersen LLP to be the independent certified public accountants of the Corporation for the fiscal year 1997. The tabulation of the votes on this matter was as follows: For: 20,874,560 Against: 17,970 Abstain: 34,824 ITEM 5. OTHER INFORMATION Not applicable. Page 14 of 16
15 WACKENHUT CORRECTIONS CORPORATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - The following exhibits are filed as part of this quarterly report. Exhibit No. Description 4.1 Credit Agreement, dated as of June 19, 1997, by and among Wackenhut Corrections Corporation, as Borrower, NationsBank National Association, as Agent and as Lender, ScotiaBanc Inc. and Barnett Bank, N.A., as Co-Agents and as Lenders, and the Lenders Party thereto from time to time. 4.2 Participation Agreement, dated as of June 19, 1997, among Wackenhut Corrections Corporation, as Construction Agent and as Lessee, First Security Bank, National Association, as Owner Trustee under the Wackenhut Corrections Trust 1997-1, the Various Banks and Other Lending Institutions which are Parties thereto from time to time, as Holders, the Various Banks and Other Lending Institutions which are parties thereto from time to time, as the Lenders, and NationsBank, National Association, as Administrative Agent for the Lenders. 4.3 Credit Agreement, dated as of June 19, 1997, among First Security Bank, National Association, as Owner Trustee for Wackenhut Corrections Trust 1997, as Borrower, the Several Lenders from time to time parties thereto, and NationsBank, National Association, as Administrative Agent. 4.4 Second Amended and Restated Trust Agreement (Wackenhut Corrections Trust 1997-1), dated as of June 19, 1997, among NationsBank, National Association, and the other financial institutions parties thereto, as Holders, and First Security Bank, National Association, as Owner Trustee. 4.5 Security Agreement, dated as of June 19, 1997, between First Security Bank, National Association, as Owner Trustee under the Wackenhut Corrections Trust 1997-1, and NationsBank, National Association, as Agent for the Lenders and Holders. 4.6 Lease Agreement dated as of June 19, 1997, between First Security Bank, National Association, as Owner Trustee under the Wackenhut Corrections Trust 1997-1, as Lessor, and Wackenhut Corrections Corporation, as Lessee. 4.7 Agency Agreement, date as of June 19, 1997, between Wackenhut Corrections Corporation, as Construction Agent, and First Security Bank National Association, as Owner Trustee under the Wackenhut Corrections Trust 1997-1, as Lessor. 4.8 Guaranty Agreement (Series A Obligations), dated as of June 19, 1997, by and among Wackenhut Corrections Corporation, as guarantor to NationsBank, National Association, as Administrative Agent. 27 Financial Data Schedule (for S.E.C. use only). (b) Reports on Form 8-K - The Corporation did not file a Form 8-K during the first half of 1997. Page 15 of 16
16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. August 11, 1997 /s/ John G. O'Rourke -------------------------------- John G. O'Rourke Senior Vice President - Finance, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer) Page 16 of 16