1 Filed Pursuant to Rule 424(b)(2) Registration No. 333-70419 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED JANUARY 19, 1999) (LOGO) PRISON REALTY CORPORATION 1,350,000 SHARES COMMON STOCK --------------------- This is a prospectus supplement for the sale of 1,350,000 shares of common stock by Prison Realty Corporation (the "Company," "we" or "us") to an institutional investor. This sale, in conjunction with the Company's previous sale of 1,250,000 shares to the same institutional investor on March 15, 1999, results in the sale of an aggregate of 2,600,000 shares of common stock at an average negotiated purchase price of $18.26 per share, resulting in aggregate proceeds to the Company of $47,477,500. The net proceeds to the Company from these sales, after the payment of expenses relating to the offering by the Company, are $47,182,030. The Company, which generally sells shares of its common stock to this institutional investor on a monthly basis, previously reported the March 15, 1999 sale in a prospectus supplement filed with the Securities and Exchange Commission on March 17, 1999. The net proceeds from these sales will be used by the Company for general corporate purposes, including, among others, repaying its obligations as they become due, redeeming its outstanding indebtedness, financing, all or in part, future purchases of real estate properties meeting its business objectives and strategies, capital expenditures and working capital. Pending use of the net proceeds for any of these purposes, the Company may invest the net proceeds in short-term investment grade instruments, interest-bearing bank accounts, certificates of deposit, money market securities, U.S. Government securities or mortgage-backed securities guaranteed by federal agencies or use the proceeds to reduce its short-term debt. On March 29, 1999, the last reported sales price of the Company's common stock on the New York Stock Exchange was $17.94. The Company's common stock is listed on the New York Stock Exchange under the symbol "PZN." The shares of common stock sold under this prospectus supplement will be listed on the New York Stock Exchange after the Company notifies the New York Stock Exchange that the shares have been issued. The Company is the largest self-administered and self-managed real estate investment trust, or REIT, specializing in acquiring, developing and owning correctional and detention facilities. As of March 29, 1999, the Company owned 48 correctional and detention facilities, of which ten new facilities were under construction, in 17 states, the District of Columbia and the United Kingdom with a total design capacity in excess of 46,000 beds. As of March 29, 1999, approximately 30,000 beds were leased under 38 operating leases. The Company is currently developing approximately 16,000 beds through the construction of the ten new facilities and the expansion of six currently operating facilities. The Company's principal business strategy is to design, build, finance and/or acquire and develop correctional and detention facilities from and for both government entities and private prison operators, to expand the design capacity of its existing facilities and to lease these facilities under long-term "triple net" leases to government entities and qualified third-party operators. As of March 29, 1999, a privately-held Tennessee corporation, operating under the name "Corrections Corporation of America" ("Operating Company"), leased 30 of the Company's 48 facilities. The Company also leases three of its facilities to private operators other than Operating Company and leases five of its facilities to government entities. It is currently anticipated that Operating Company will additionally lease nine of the ten Company facilities currently under construction. Operating Company has contracts to manage and operate 38 correctional and detention facilities currently in operation. The Company's relationship with Operating Company is more fully described under "Information About the Company" in the accompanying prospectus. The Company was incorporated as a Maryland corporation in September 1998. The Company's principal executive offices are located at 10 Burton Hills Boulevard, Suite 100, Nashville, Tennessee, and its telephone number is (615) 263-0200. You should read this prospectus supplement along with the prospectus that follows. Both documents contain information you should consider when making your investment decision. You should rely only on the information provided or incorporated by reference in this prospectus supplement and the prospectus. The Company has not authorized anyone else to provide you with different information. The Company is not making an offer of shares of common stock in any state where the offer is not permitted. You should not assume that the information in this prospectus supplement is accurate as of any date other than the date on the front of these documents. --------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- The date of this prospectus supplement is March 30, 1999 S-1
2 TABLE OF CONTENTS Prospectus Supplement....................................... S-1 Where You Can Find More Information......................... i Incorporation of Certain Documents by Reference............. i The Company............................................... i Corrections Corporation of America........................ ii CCA Prison Realty Trust................................... ii Cautionary Statement Concerning Forward-Looking Information............................................... iii The Company................................................. 1 Selected Unaudited Pro Forma Combined Financial Information............................................... 2 Company Selected Pro Forma Combined Financial Information............................................. 3 CCA Selected Historical Consolidated Financial Information............................................... 4 Prison Realty Selected Historical Consolidated Financial Information............................................... 5 Risk Factors................................................ 7 The Company is Dependent on Operating Company, as Primary Lessee of the Company's Facilities, for its Revenues and Ability to Make Distributions to Its Stockholders....... 7 Existing Conflicts of Interest May Have an Effect on the Company................................................. 7 The Company is Dependent on Outside Financing to Support its Growth; Dilutive Effect of Such Financing........... 9 Ownership of Shares of the Capital Stock of the Company Involves Risks Inherent in the Corrections and Detention Industry................................................ 10 General................................................. 10 Short-Term Nature of Government Contracts............... 10 Dependence on Government Appropriations................. 11 Dependence on Government Agencies for Inmates........... 11 Dependence on Ability to Develop New Prisons and Contracts; Opposition of Organized Labor.............. 11 Options to Purchase..................................... 11 Legal Proceedings....................................... 11 Ownership of Shares of the Capital Stock of the Company Involves Tax Related Risks.............................. 12 Dependence on Qualification as a REIT................... 12 Adverse Effects of REIT Minimum Distribution Requirements.......................................... 12 Requirement to Distribute Accumulated Earnings and Profits............................................... 13 Tax Legislation......................................... 13 Ownership of Shares of the Capital Stock of the Company Involves Risks Inherent in the Investment in Real Estate Properties.............................................. 13 General................................................. 13 Environmental Matters................................... 14 Uninsured Loss.......................................... 14 The Company is Dependent on Certain Individuals for Its Management.............................................. 15 The Company Lacks Control Over Day-to-Day Operations and Management of Its Facilities............................ 15 The Company Imposes Limits on the Ownership of its Capital Stock to Maintain Qualification as a REIT............... 15 Certain Provisions of the Company's Governing Documents May Limit Changes in Control of the Company............. 16 Year 2000 Compliance Issues May Have an Effect on the Company................................................. 17 A Fluctuation in Market Interest Rates May Affect the Price of the Company's Capital Stock.................... 18 Certain Agreements Relating to the Operating Company Credit Facility May Limit Operating Company's Ability to Satisfy Obligations to the Company...................... 18 Factors to be Considered by ERISA Plan Fiduciaries........ 18 Information About the Company............................... 19 General................................................... 19 Relationship with Operating Company....................... 19 Relationship with Service Company A....................... 27 Relationship with Service Company B....................... 28
3 Relationship Between Operating Company and the Service Companies............................................... 28 Certain Information Incorporated by Reference............. 29 Recent Financings and Related Agreements.................... 29 The Company............................................... 29 Operating Company......................................... 30 Use of Proceeds............................................. 31 Description of Capital Stock................................ 31 General................................................... 31 Common Stock.............................................. 32 Preferred Stock........................................... 32 Restrictions on Ownership of Capital Stock................ 35 Certain Other Provisions of Maryland Law and Charter Documents............................................... 37 Description of Common Stock Purchase Rights................. 39 Description of Debt Securities.............................. 39 General................................................... 39 Payment, Registration, Transfer and Exchange.............. 42 Description of Warrants..................................... 42 Plan of Distribution........................................ 43 Material Federal Income Tax Consequences.................... 44 Taxation of the Company................................... 45 Taxation of Stockholders.................................. 54 Other Tax Consequences...................................... 59 ERISA Considerations........................................ 59 Legal Matters............................................... 60 Experts..................................................... 60 Index to Financial Statements............................... F-1