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CCA Holds 2011 Third Quarter Conference Call -- Reports Excess Bed Capacity

The Corrections Corporation of America held its third quarter inv

CCA Logo
CCA Logo
estor call in early November.  The company reported an increase in revenue primarily due to an increase in federal contracts with various agencies.

"revenue for the third quarter of 2011 increased 1.9% to $433.5 million from $425.3 million during the third quarter of 2010, primarily driven by a 2.3% increase in average daily inmate populations... The increase in federal revenue primarily resulted from per diem increases associated with certain management contracts, higher populations primarily from the U.S. Marshals Service (USMS) as well as the commencement in October 2010 of a new contract with the USMS at [the] Nevada Southern Detention Center. These increases were partially offset by the September 30, 2010 expiration of the contract with the Federal Bureau of Prisons (BOP) at [the] California City facility, which contained a 95% guarantee through the expiration date."

The company is adding capacity to it’s overall system -- none in Texas -- at the Lake Erie Correctional Institution (Ohio), Jenkins Correctional Center (Georgia), and is expanding capacity under its McRae Correctional Facility (Georgia) with the BOP.  The prison profiteers reported an increase in  daily compensated population by 2.3% to 80,851 in the third quarter of 2011 from 79,053 during the same time last year. 

Despite expanded contracts and new capacity, company officials reported an excess inventory of 10,500 beds.  The excess capacity has the private prison profiteers looking for new contracts.  One potential customer is Harris County (Houston) where there are have been discussions about privatizing the jail system.  While we know there are better approaches that county officials can look too, it’s important to keep an eye on CCA and any negotiations that company is engaging in the bayou city.  Something to pay attention to in 2012.