NASHVILLE, TN, Nov. 4, 2009 (Marketwire) --

NASHVILLE, TN -- (Marketwire) -- 11/04/09 -- Corrections Corporation of America (NYSE: CXW) (the "Company" or "CCA"), the nation's largest provider of corrections management services to government agencies, announced today its financial results for the third quarter and nine-month period ended September 30, 2009.

Financial Review - Third Quarter 2009 Compared with Third Quarter 2008

--  Total revenue increased 5.5% to $426.0 million with increases in
    average daily inmate populations of 4.5%

--  Earnings per diluted share (EPS) of $0.39

--  EPS excluding unusual tax benefits (Adjusted Diluted EPS) of $0.33
    

For the third quarter of 2009, CCA generated net income of $45.3 million, or $0.39 per diluted share, compared with net income of $37.9 million, or $0.30 per diluted share, for the third quarter of 2008. Results for the third quarter of 2009 include unusual income tax benefits aggregating $7.0 million, as further described hereafter. Excluding these income tax benefits, net income was $38.3 million, or $0.33 per diluted share.

Total revenue for the third quarter of 2009 increased 5.5% to $426.0 million from $403.8 million generated during the prior year period, primarily driven by a 4.5% increase in average daily inmate populations combined with a 1.3% increase in revenue per compensated man-day. Management revenue from state customers increased 6.6% to $224.9 million during the third quarter of 2009 from $211.0 million for the same period in 2008. The growth in state revenue from the third quarter of 2008 was primarily attributable to increases in inmate populations from California and Arizona that were partially offset by a reduction in inmate populations primarily from the states of Minnesota and Washington. Management revenue from federal customers increased 4.9% to $166.4 million generated during the third quarter of 2009, compared with $158.7 million generated during the third quarter of 2008. The increase in federal revenue was primarily driven by the commencement of our new management contract with the Federal Bureau of Prisons ("BOP") at our newly constructed Adams County Correctional Center during the third quarter of 2009.

Operating income during the third quarter of 2009 increased 6.6% to $79.3 million compared with $74.4 million for the prior year period. Operating income for the third quarter of 2009 was net of an increase in depreciation and amortization of $2.3 million for placing into service numerous expansion and development projects, as well as an increase in general and administrative expenses of $0.8 million. General and administrative expenses for the third quarter of 2009 include a $1.5 million accrual for the contractual severance benefit for our former chief executive officer who announced his decision to step down in August 2009, and $0.5 million of additional consulting fees associated with a company-wide initiative to improve operating efficiency. EBITDA for the third quarter of 2009 increased 7.0% to $104.8 million from $98.0 million during the same period in the prior year. Adjusted free cash flow increased 9.9% for the third quarter of 2009 to $68.1 million compared with $62.0 million during the prior year period. The increase in adjusted free cash flow was primarily attributable to the $4.9 million increase in operating income and a reduction in the amount of cash taxes paid resulting from the implementation of tax planning strategies, partially offset by an increase in maintenance and technology capital expenditures.

Net income for the third quarter of 2009 includes income tax benefits totaling $7.0 million for the reversal of a liability for uncertain tax positions that were effectively settled upon the completion of an audit by the Internal Revenue Service during the third quarter of 2009, along with the successful pursuit of additional income tax credits.

Our total average daily compensated population increased 4.5% to 79,081 in the third quarter of 2009 from 75,691 in the third quarter of 2008. However, since the end of the second quarter of 2008, we placed approximately 8,000 new beds into service. As a result of the additional capacity, total portfolio occupancy decreased to 91.3% during the third quarter of 2009 from 95.4% during the third quarter of 2008. The average number of available beds increased 9.2% to 86,632 during the third quarter of 2009 from 79,337 during the prior year quarter.

As of November 1, 2009, we had more than 8,800 unoccupied beds at facilities that had availability of 100 or more beds. However, this inventory of beds available is reduced to approximately 5,900 beds after taking into consideration the beds committed pursuant to new management contracts including the beds not yet occupied at the Adams County and North Georgia facilities, and pursuant to an amended agreement with the state of California.

Commenting on the financial results, Chief Executive Officer, Damon Hininger stated, "We are pleased with our third quarter financial results. Once again, we were able to generate earnings ahead of expectations, despite a challenging environment. Inmate populations at several facilities came in ahead of expectations and we were able to control our operating expenses. Although the environment surrounding state budgets continues to be challenging, we remain optimistic about our long-term outlook."

First Nine Months of 2009 Compared with First Nine Months of 2008

--  Total revenue increased 5.9% to  $1,242.9 million from $1,173.5
    million

--  EPS of $0.96 for the nine month period

--  EPS excluding special items (Adjusted Diluted EPS) increased 5.7% to
    $0.92 from $0.87

--  EBITDA excluding special items increased 7.0% to $304.6 million from
    $284.8 million
    

For the nine months ended September 30, 2009, the Company generated net income of $112.5 million, or $0.96 per diluted share, compared with net income of $110.4 million, or $0.87 per diluted share, for the nine months ended September 30, 2008. The Company generated net income of $107.9 million, or $0.92 per diluted share excluding the aforementioned tax benefits reflected during the third quarter of 2009 and the expenses associated with debt refinancing transactions, net of taxes, incurred during the second quarter of 2009. Also contributing to the improvement in earnings per share for the first nine months of 2009 was a share repurchase program, approved by our Board of Directors in November of 2008. Through the end of the third quarter of 2009 we purchased 10.7 million shares at a total cost of $125.0 million.

Operating income increased $11.1 million to $229.2 million during the first nine months of 2009 from $218.1 million during the same period in the prior year. The improvement in our operating income for the nine months ended September 30, 2009 resulted primarily from a 4.0% increase in our average daily inmate populations to 77,669 for the nine months ended September 30, 2009 from 74,655 during the nine months ended September 30, 2008.

Our financial results reflect an increase in depreciation and amortization expense of $8.8 million, or 13.2%, an increase in interest expense of $12.3 million, or 28.7%, and an increase in general and administrative expense of $4.8 million, or 8.0%. The increase in depreciation and amortization was attributable to placing into service approximately 10,500 beds during 2008 and 2009. Interest expense increased primarily due to the combination of higher debt balances used to fund the development and expansion projects, and lower capitalized interest on such projects during 2009 compared with 2008. General and administrative expenses during the nine-month period in 2009 increased as a result of consulting fees of $4.6 million associated with a company-wide initiative to improve operating efficiency as well as a $1.5 million accrual for the contractual severance benefit for our former chief executive officer who announced his decision to step down in August 2009.

Adjusted EPS, EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures. Please refer to the Supplemental Financial Information and related note following the financial statements herein for further discussion and reconciliations of these measures to GAAP financial measures.

Operations Highlights

For the quarters ended September 30, 2009 and 2008, key operating statistics for the continuing operations of the Company were as follows:

                                             Quarter Ended
                                              September 30,
                Metric                       2009       2008     % Change
                                           ---------  ---------  ---------
Average Available Beds                        86,632     79,337        9.2%
Average Compensated Occupancy                   91.3%      95.4%      -4.3%
Total Compensated Man-Days                 7,275,451  6,963,538        4.5%
Average Daily Compensated Population          79,081     75,691        4.5%

Revenue per Compensated Man-Day            $   58.39  $   57.66        1.3%
Operating Expense per Compensated Man-Day:
  Fixed                                        30.71      30.51        0.7%
  Variable                                      9.98       9.84        1.4%
                                           ---------  ---------
  Total                                        40.69      40.35        0.8%
                                           ---------  ---------

Operating Margin per Compensated Man-Day   $   17.70  $   17.31        2.3%
                                           =========  =========

Operating Margin                                30.3%      30.0%       1.0%

Total operating expenses per compensated man-day increased 0.8% during the third quarter of 2009 compared with the same period in 2008. A significant component of the increase in operating costs per man-day was due to continued ramp-up expenses incurred at our Adams County facility as well as staffing expenses incurred in anticipation of receiving detainees at our North Georgia facility. Also impacting the increase in operating expenses were operational inefficiencies associated with our inventory of available beds. However, we have experienced favorable reductions in certain operating expenses resulting from pricing concessions related to market conditions and impacts from a company-wide initiative of improving operating efficiencies.

Business Development Update

On November 2, 2009, we announced that we entered into an amendment of our agreement with the State of California Department of Corrections and Rehabilitation (the "CDCR"), providing the CDCR the ability to house up to 10,468 offenders in five facilities we own, an increase from 8,132 offenders under our previous agreement. We currently house approximately 7,900 offenders from the state of California. We currently expect to begin receiving additional inmates pursuant to the amendment during the first quarter of 2010, with a gradual ramp-up estimated to be completed during the first quarter of 2011.

During the third quarter we completed renovations of the 502-bed North Georgia Detention Center and began receiving detainees from the U.S. Immigration and Customs Enforcement during October 2009. We currently house approximately 100 detainees at this facility.

In August 2009, we announced that we were notified by the Alaska Department of Corrections that we were not selected in Alaska's competitive solicitation to house up to 1,000 inmates from the state of Alaska.