Profile: Corrections Corporation of America (CXW.N)
31 Mar 2015
Corrections Corporation of America (CCA) incorporated on September 24, 1998, is a real estate investment trust. The Company is the owner and operator of privatized correctional and detention facilities and prison operators in the United States. As of September 30, 2014, CCA owned or controlled 52 correctional and detention facilities, and managed an additional 12 facilities owned by its government partners, with a total design capacity of approximately 84,500 beds in 19 states and the District of Columbia. Beginning of January 1, 2013, the Company has provided correctional services and conducted other operations through taxable REIT subsidiaries (TRSs). A TRS is a subsidiary of a REIT that is subject to applicable corporate income tax and certain qualification requirements.
The Company specializes in owning, operating, and managing prisons and other correctional facilities and providing inmate residential and prisoner transportation services for governmental agencies. In addition to providing the fundamental residential services relating to inmates, its facilities offer a variety of rehabilitation and educational programs, including basic education, religious services, life skills and employment training and substance abuse treatment. These services are intended to help reduce recidivism and to prepare inmates for their re-entry into society upon their release. The Company also provides health care (including medical, dental, and mental health services), food services, and work and recreational programs.
The Company’s customers consist of federal, state and local correctional and detention authorities. As of September 30, 2014, federal correctional and detention authorities represented 44% of its total revenue. Federal correctional and detention authorities primarily consist of the Federal Bureau of Prisons (BOP), the United States Marshals Service (USMS), and the United States Immigration and Customs Enforcement (ICE). Its management services contracts typically have terms of three to five years and contain multiple renewal options. Its facility contracts also contain clauses that allow the government agency to terminate the contract at any time without cause, and its contracts are generally subject to annual or bi-annual legislative appropriations of funds.
The Company is compensated for providing prison bed capacity and correctional services at an inmate per diem rate based upon actual or minimum guaranteed occupancy levels. Occupancy rates for a particular facility are typically low when opened or immediately following an expansion. However, beyond the start-up period, which typically ranges from 90 to 180 days, the occupancy rate tends to stabilize. As of September 30, 2014, the average compensated occupancy of its facilities, based on rated capacity, was 83.9% for all of the facilities it owned or managed, exclusive of facilities where operations have been discontinued.
The Company provides a variety of rehabilitative and educational programs at its facilities. Inmates at facilities the Company manage may receive basic education through academic programs designed to improve literacy levels and the opportunity to acquire GED certificates. The Company also offers vocational training to inmates who lack marketable job skills. Its craft vocational training programs are accredited by the National Center for Construction Education and Research. This foundation provides training curriculum and establishes industry standards for over 4,000 construction and trade organizations in the United States and several foreign countries. In addition, the Company offers life skills transition-planning programs that provide inmates with job search skills, health education, financial responsibility training, parenting training, and other skills associated with becoming productive citizens.
As of September 30, 2014, the Company provides transportation services to governmental agencies through its wholly owned TRS, TransCor America, LLC, or TransCor. CCA owns 52 correctional and detention facilities in 19 states and the District of Columbia. The Company also owns two corporate office buildings. Additionally, it manages 16 correctional and detention facilities owned by government agencies as of December 31, 2013. Owned and managed facilities include facilities placed into service that the Company owned and managed. Managed-only facilities include facilities owned by a third party and managed by the Company.
The Company competes with The GEO Group, Inc. and Management and Training Corporation.
Corrections Corporation of America
10 Burton Hills Blvd
NASHVILLE TN 37215-6105