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Report on CCA 2007 4th Quarter Conference Call

The Corrections Corporation of America (CCA), the nation’s largest prison provider, held its 2007 4th Quarter conference call earlier this year. During the call, CCA updated investors regarding capacity and addressed new beds the company was bringing online as a result of increased demand for new prison beds. Company representatives emphasized that while the country is an economic downturn, the prison system is not impacted by negative economic cycles.

As of February 2008, CCA 41 owned facilities with 50,909 beds and 24 managed only facilities with 26,751 beds. The company managed contracts with 20 states, all three federal agencies, and the District of Columbia. Further, of the beds that CCA owned or managed in 2007 about 6.64% were in Texas.

CCA likes to emphasize its strong presence in the private prison industry; controlling approximately 47% of the private prison and jail beds in the nation. The company acknowledged it's own contributions to the growth of the private prison industry where staff mentioned that in 1990 private prisons numbered 10,973 and in 2007 that number increased to over 164,000 beds.

 

Total Capacity

U.S. Market
Share
Owned and
Controlled Beds
CCA 77,660 47.2% 50,909
The Geo Group Inc. 43,402 26.4% 19,902
Cornell Companies 16,024 9.7% 14,017
Management & Training Corp. 11,945 7.3% 506
All Others 15,581 9.4% unavailable
TOTAL
164,612
100.0%

Source: CCA Q4 2007 Investor Presentation

CCA officials stated that new reports relating to a reduction in Texas prison capacity will not impact CCA contracts since the the private prison company was not planning any local expansion. However, CCA staff emphasized that the state continues to operate its prison -- public and private -- at capacity.

The call also addressed trends at the federal level, including those that would facilitate capacity expansion and benefit CCA's bottom line. Specifically, the recently passed federal FY 2008 budget supports an increase of the immigrant detention population of 32,000 prison beds up from 27,000 beds from FY 2007 and an increase from the President’s previous budget. Further, the budget authorizes the Department of Homeland Security (DHS) to issue future budget requests for additional capacity if needed and requires the agency to update Congress monthly on immigrant detention capacity.

Additionally, the President recently released his FY 2009 budget that increases detention population beds to 33,000. In 2005, funding for detention beds numbered only 19,000. As a result, there will be an addtional 1,000 to 1,500 new immigrant detention beds that will come online by 2009.

The call highlighted trends at the state and federal level and painted an overall picture of the direction of CCA. As advocates working to address the problem of mass incarceration and how private prison operators contribute to that growth it is truly disturbing to observe the comments of CCA represenatives who relish the nation's projected prison prison growth.