Corrections Corporation of America Announces Third Quarter Results

November 1, 2001
NASHVILLE, Tenn., Nov 1, 2001 /PRNewswire via COMTEX/ -- Corrections Corporation of America (NYSE: CXW) (the "Company") (formerly Prison Realty Trust, Inc.) today announced its operating results for the three and nine-month periods ended September 30, 2001.

The third quarter results discussed below include the operating results of the former operating company that was acquired October 1, 2000, and the former service companies that were acquired December 1, 2000. As a result of these acquisitions, the operating results of the Company for the third quarter of 2001 and the third quarter of 2000 are not comparable.

For the three months ended September 30, 2001, the Company reported a net loss available to common stockholders of $5.7 million, or $0.23 per share, compared with a net loss available to common stockholders of $261.1 million, or $22.04 per share, for the prior-year three-month period. For the nine months ended September 30, 2001, the Company reported a net loss available to common stockholders of $20.3 million, or $0.84 per share, compared with a net loss available to common stockholders of $378.5 million, or $31.96 per share, for the same period in 2000. The results for the three and nine months ended September 30, 2001, include the effects of non-cash charges of $5.6 and $11.9 million, respectively, associated with the accounting for an interest rate swap agreement in accordance with Statement of Financial Accounting Standards No. 133. Per share results for 2000 have been retroactively restated to reflect the one-for-ten reverse stock split of the Company's common stock effective May 18, 2001.

Third quarter consolidated revenue amounted to $248.2 million. Consolidated EBITDA for the quarter was $50.2 million, while average compensated occupancy for the quarter was 88.8%.

Commenting on the results for the third quarter, President and CEO John Ferguson stated, "We are pleased with the Company's continued operational improvement. Revenue per man-day increased for the third consecutive quarter while at the same time we continued to aggressively manage costs. Looking forward, we are pursuing a number of initiatives which, if successful, should increase occupancy and return the Company to profitability."

Asset Sales/Debt Repayment

On October 3, 2001, the Company sold its Southern Nevada Women's Correctional facility for $24.1 million. Proceeds from the sale were used to reduce the outstanding total balance under the Company's senior bank credit facility. During 2001, the Company has reduced total debt balances by approximately $186.8 million through a combination of cash generated from asset sales and working capital.

Refinancing Status

After giving consideration to conditions currently existing in the debt and capital markets, the Company has determined to seek a modification of the revolving loan portion of its senior bank credit facility to convert it into a term loan maturing December 31, 2002. The revolving loan, currently amounting to approximately $269.4 million, is due January 1, 2002. The modification and related amendment to extend the maturity will require the consent of 100% of the participants in the revolving credit portion of the senior bank credit facility, and is currently expected to require the consent of two-thirds of the lenders in the term loan portion of the senior bank credit facility.

Operating EBITDA/Liquidity

EBITDA for the third quarter amounted to $50.2 million while debt service for the quarter, excluding non-cash items, amounted to $25.2 million. At September 30, 2001, the Company had cash on hand of approximately $33.4 million and had $50.0 million available under a working capital line of credit. The outstanding balance under the Company's senior bank credit facility has been reduced from $972.3 million on January 1, 2001, to its current balance of $794.1 million.

Operations Update

For the quarter ended September 30, 2001, key operating statistics were as follows:

    Metric          Quarter Ended  Quarter Ended   Quarter Ended Quarter Ended
                     September 30,    June 30,       March 31,    December 31,
                           2001         2001          2001            2000

    Average Available
     Beds                 61,343       61,408        61,462          61,462
    Average Compensated
     Occupancy              88.8%        89.1%         88.3%           86.9%
    Total Compensated
     Man-Days          5,010,195    4,979,785     4,883,865       4,915,894

    Revenue per Compensated
     Man-Day              $48.46       $48.03        $47.91          $46.96
    Operating Expenses per
    Compensated Man-Day:
     Fixed                $27.28       $27.09        $26.98          $26.32
     Variable               9.62        10.05         10.08           12.39
     Total                $36.90       $37.14        $37.06          $38.71

    Operating Margin per
     Compensated Man-Day  $11.56       $10.89        $10.85           $8.25

    Operating Margin Rate   23.8%        22.7%         22.6%           17.6%

During the quarter, the Company successfully renewed contracts in five jurisdictions at increased rates. In addition, two prison facilities received notification of accreditation from the American Correctional Association. At September 30, 2001, approximately 77% of the Company's facilities have received ACA accreditation.

"The Company generated another solid quarter on a number of fronts," stated Ferguson. "Although this quarter's operating performance is encouraging, we also recognize that there are several objectives we must accomplish before year-end including the modification of our credit facility. We intend to work diligently with our lender group to accomplish the modification with the goal of putting permanent financing in place during the first half of next year."

About the Company

The Company is the nation's largest provider of outsourced detention and corrections management services, housing an inmate population larger than that of all but five public correctional systems in the United States. 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, each of the Company's facilities offers a variety of rehabilitation and educational programs, including basic education, life skills and employment training and substance abuse treatment. The Company also provides health care (including medical, dental and psychiatric services), institutional food services and work and recreational programs. The Company owns or manages approximately 65,000 beds in 70 facilities in the United States and Puerto Rico, with 64 facilities under contract for management containing approximately 61,000 beds, four leased facilities and two facilities under construction.

Forward-Looking Statements

This press release contains statements that are forward-looking statements as defined within 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. Factors that could cause operating and financial results to differ are described in the Company's Form 10-K, as well as in other documents filed with the Securities and Exchange Commission, and these factors include, but are not limited to, the growth of the private cohe date hereof or for any changes or modifications made to the press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.

                     (FORMERLY PRISON REALTY TRUST, INC.)

    ASSETS                                       September 30,    December 31,
                                                      2001            2000

    Cash and cash equivalents                        $33,376        $20,889
    Restricted cash                                   10,024          9,209
    Accounts receivable, net of
     allowance of $838 and $1,486, respectively      147,292        132,306
    Income tax receivable                              1,293         32,662
    Prepaid expenses and other current assets         17,664         18,726
    Assets held for sale under contract               23,912         24,895
     Total current assets                            233,561        238,687

    Property and equipment, net                    1,578,544      1,615,130

    Investment in direct financing lease                  --         23,808
    Assets held for sale                              46,429        138,622
    Goodwill                                         105,905        109,006
    Other assets                                      36,265         51,739

     Total assets                                 $2,000,704     $2,176,992


    Accounts payable and accrued expenses           $198,994       $243,312
    Income tax payable                                 8,824          8,437
    Distributions payable                             15,865          9,156
    Current portion of long-term debt                286,528         14,594
     Total current liabilities                       510,211        275,499

    Long-term debt, net of current portion           708,392      1,137,976
    Deferred tax liabilities                          58,426         56,450
    Fair value of interest rate swap agreement        15,084             --
    Other liabilities                                 19,329         19,052
     Total liabilities                             1,311,442      1,488,977

    Commitments and contingencies

        Preferred stock - $0.01 par value;
         50,000 shares authorized:
         Series A - 4,300 shares issued
         and outstanding; stated at liquidation
         preference of $25.00 per share
                                                    107,500         107,500
    Series B - 3,828 and 3,297 shares
     issued and outstanding at
     September 30, 2001 and December 31, 2000,
     respectively; stated at liquidation
     preference of $24.46 per share                  93,622          80,642
    Common stock - $0.01 par value;
     80,000 and 400,000 shares authorized;
     25,133 and 235,395 shares issued and
     25,132 and 235,383 shares outstanding
     at September 30,2001 and
     December 31, 2000, respectively                    251           2,354
    Additional paid-in capital                    1,314,092       1,299,390
    Deferred compensation                            (3,644)         (2,723)
    Retained deficit                               (819,178)       (798,906)
    Treasury stock, 1.2 shares and 12 shares,
     respectively, at cost                             (242)           (242)
    Accumulated other comprehensive loss             (3,139)             --
    Total stockholders' equity                      689,262         688,015

    Total liabilities and stockholders' equity   $2,000,704      $2,176,992

                     (FORMERLY PRISON REALTY TRUST, INC.)

                        Consolidated    Combined   Consolidated    Combined
                       Three Months   Three Months  Nine Months   Nine Months
                          Ended           Ended        Ended         Ended
                      September 30,  September 30, September 30, September 30,
                            2001            2000          2001          2000
     Management and other  $247,072       $26,066     $728,981       $26,066
     Rental                   1,116        15,464        5,314        38,390
     Licensing fees from
      affiliates                 --         2,324           --         7,566
                            248,188        43,854      734,295        72,022
     Operating              189,552        21,691      563,388        21,691
     General and
      administrative          8,431         9,024       25,465        43,764
     Lease                       --           256           --           256
     Depreciation and
      amortization           14,211        15,439       40,088        41,770
     Licensing fees to
      Operating Company          --           501           --           501
     Administrative service
      fee to Operating Company   --           900           --           900
     Write-off of amounts under
      lease arrangements         --         3,504           --        11,920
     Impairment loss             --        19,239           --        19,239
                            212,194        70,554      628,941       140,041

    OPERATING INCOME (LOSS)  35,994       (26,700)     105,354       (68,019)

     Equity loss and amortization
      of deferred gain, net      90         9,135          265        13,392
     Interest expense, net   29,637        35,741       96,752        95,490
     Other income                --        (3,099)          --        (3,099)
     Change in fair value of
      interest rate swap
      agreement               5,649            --       11,945            --
     Loss on disposal of assets 180         3,023          141         3,324
     Unrealized foreign currency
      transaction (gain) loss  (215)        2,012          129         9,542
     Stockholder litigation
      settlements                --        75,406           --        75,406
                             35,341       122,218      109,232       194,055

     AND MINORITY INTEREST      653      (148,918)      (3,878)     (262,074)

     Income tax expense      (1,217)     (109,888)      (1,479)     (109,888)

     INTEREST                  (564)     (258,806)      (5,357)     (371,962)

     Minority interest in net
      loss of PMSI and JJFMSI    --           318           --           318

    NET LOSS                   (564)     (258,488)      (5,357)     (371,644)

    Distributions to preferred
     stockholders            (5,114)       (2,585)     (14,915)       (6,885)

     STOCKHOLDERS           $(5,678)    $(261,073)    $(20,272)    $(378,529)

     COMMON SHARE            $(0.23)      $(22.04)      $(0.84)      $(31.96)

     AND DILUTED             24,749        11,846       24,215        11,842

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SOURCE Corrections Corporation of America

Karin Demler of Corrections Corporation of America,
+1-615-263-3005 (CXW)

Copyright (C) 2001 PR Newswire. All rights reserved.