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CCA to Lease California City Correctional Center to the California Department of Corrections and Rehabilitation

CCA to Lease California City Correctional Center to the California Department 
of Corrections and Rehabilitation 
Provides Update on Fourth Quarter Operating Trends 
NASHVILLE, TN -- (Marketwired) -- 10/15/13 --   CCA (Corrections
Corporation of America) (NYSE: CXW), America's largest owner of
partnership correctional and detention facilities, announced today
that it has entered into a lease for its 2,304-bed California City
Correctional Center with the California Department of Corrections and
Rehabilitation (CDCR). The Company is also providing an update on
certain operating trends it believes will negatively impact fourth
quarter financial results. 
California City Lease
 The lease agreement includes a three-year base
term with unlimited two-year renewal options upon mutual agreement.
Annual rent during the three-year base term is fixed at $28.5
million. After the three-year base term, the rent will be increased
annually by the lesser of CPI (Consumer Price Index) or 2%. CCA will
be responsible for repairs and maintenance, property taxes and
property insurance, while all other aspects and costs of facility
operations will be the responsibility of the CDCR. 
Lease payments are expected to commence on December 1, 2013. Monthly
lease payments are subject to reductions until certain tenant
improvements are completed and until all inmate populations currently
housed at the facility are removed. The facility currently houses
detainees for the U.S. Marshals Service (USMS) and Immigration and
Customs Enforcement (ICE). CCA has been working with both the USMS
and ICE to relocate their detainees and expects that some of the
populations will be relocated to other CCA facilities. We expect all
current inmate populations will be removed before the end of
December.  
CCA will provide $10 million in tenant improvements at no additional
cost to the CDCR. Additional tenant improvements, if deemed necessary
by the CDCR and agreed upon by CCA, would be funded by CCA and repaid
by CDCR in monthly installments over 15 years, beginning July 1,
2014. 
Damon Hininger, President and CEO, stated, "We appreciate the
opportunity to expand upon our longstanding relationship with the
CDCR and the state of California, and we're especially pleased to
have reached this agreement, which provides California an immediate
solution to help reach its population capacity goals. Our ability to
react quickly to our partners' needs with innovative solutions that
make the best use of taxpayer dollars exemplifies the flexibility
that CCA is able to provide the CDCR and other government agencies." 
Fourth Quarter Operating Trends
 The Company's USMS and ICE
populations have recently been trending below expectations which we
believe is largely due to the furlough of government employees and
other consequences of the federal government shutdown. The Company
also made a strategic decision to activate vacant bed capacity in
order to compete for the potential opportunity to house higher
populations for the state of California beginning in the fourth
quarter of this year. While the Company has begun to incur operating
expenses associated with the activation of the beds, California has
not yet made a decision on whether to contract for additional
out-of-state beds. The Company also expects to incur operating losses
during the fourth quarter from the ramp down of USMS and ICE
populations at our California City facility necessary to make the
facility available for lease to California. While these issues are
expected to negatively impact fourth quarter operating results, we
cannot make a precise estimate of the impact at this time. The
Company is reaffirming its previously issued earnings per share
guidance for the third quarter of 2013 as disclosed in its press
release announcing Second Quarter Financial Results issued on August
7, 2013 and expects to provide updated earnings guidance for the
fourth quarter and year ending December 31, 2013 reflecting the
issues described above as part of our regular third quarter earnings
press release to be issued after the close of business on November 6,
2013. 
About CCA
 CCA, a publicly traded real estate investment trust
(REIT), is the nation's largest owner of partnership correction and
detention facilities and one of the largest prison operators in the
United States, behind only the federal government and three states.
We currently own or control 53 correctional and detention facilities
and manage 16 additional facilities owned by our government partners,
with a total design capacity of approximately 90,000 beds in 20
states and the District of Columbia. CCA specializes in owning,
operating and managing prisons and other correctional facilities and
providing inmate residential, community re-entry and prisoner
transportation services for governmental agencies. In addition to
providing the fundamental residential services relating to inmates,
our facilities offer a variety of rehabilitation and educational
programs, including basic education, religious services, life skills
and employment training and substance abuse treatment.  
Forward-Looking Statements 
 This press release contains statements
as to our beliefs and expectations of the outcome of future events
that are forward-looking statements as defined within the meaning of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from the
statements made. These include, but are not limited to, the risks and
uncertainties associated with: (i) general economic and market
conditions, including the impact governmental budgets can have on our
per diem rates, occupancy, and overall utilization; (ii) fluctuations
in our operating results because of, among other things, changes in
occupancy levels, competition, increases in cost of operations,
fluctuations in interest rates and risks of operations; (iii) our
ability to obtain and maintain correctional facility management
contracts, including as a result of sufficient governmental
appropriations and as a result of inmate disturbances; (iv) changes
in the privatization of the corrections and detention industry, the
public acceptance of our services, the timing of the opening of and
demand for new prison facilities and the commencement of new
management contracts; (v) changes in governmental policy and in
legislation and regulation of the corrections and detention industry
that affect our business, including but not limited to, the impact of
the government shut down and furlough of federal government employees
including U.S. attorneys and other Justice Department employees and
the impact of the Budget Control Act of 2011 on federal corrections
budgets, and California's continued utilization of out of state
private correctional capacity; and (vi) increases in costs to
construct or expand correctional facilities that exceed original
estimates, or the inability to complete such projects on schedule as
a result of various factors, many of which are beyond our control,
such as weather, labor conditions and material shortages, resulting
in increased construction costs. Other factors that could cause
operating and financial results to differ are described in the
filings made from time to time by us with the Securities and Exchange
Commission.  
CCA takes no responsibility for updating the information contained in
this press release following the date hereof to reflect events or
circumstances occurring after the date hereof or the occurrence of
unanticipated events or for any changes or modifications made to this
press release. 
Contact: 
Karin Demler
Investors
615-263-3005 
Steve Owen
Media
615-263-3107 
 
 
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