Corrections Corp. (CXW) Responds to DOJ Action on Private Prisons; Says BOP Contracts Represent ~7% of Annual Revs
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Corrections Corporation of America (NYSE: CXW) responded to the Federal Bureau of Prisons' ("BOP") decision to amend the Criminal Alien Requirement XVI ("CAR 16") solicitation by reducing the previously announced 10,800 contract beds to 3,600 contract beds in response to recommendations from the Department of Justice to reduce future reliance on privately operated prison facilities. CCA's Eden Detention Center, containing 1,422 beds, is included in the CAR 16 solicitation.
"We have been a keen observer of the BOP's declining inmate population over the last three years. Nonetheless, we are disappointed with the BOP's decision to reduce its utilization of privately operated facilities to meet their capacity needs, and believe our value proposition remains strong," said Damon Hininger, CCA's chief executive officer.
At this time the contracts at the three facilities CCA operates on behalf of the BOP remain unchanged, and the BOP will determine whether to extend these contracts at the end of their respective contract terms. These contracts represent approximately $131.2 million in annual revenues, or approximately seven percent of CCA's total annual revenue, at operating margins consistent with CCA's owned and managed facility portfolio average.
CCA will continue to provide a valuable public service to our government partners serving over 65,000 inmates, detainees, and residents in 85 facilities pursuant to over 100 contracts. CCA will also remain focused on diversifying our value proposition for our many government partners by developing and delivering mission-critical secure and non-secure facilities, residential reentry options and innovative, real estate-only solutions that provide an attractive avenue for creating long-term shareholder value.
Webcast and Replay Information
We will host a webcast conference call at 11:00 a.m. Central Time (12:00 p.m. Eastern Time) on Friday, August 19, 2016, to discuss the matters addressed in this press release. To listen to this discussion, please access “Presentations, Webcasts and Events” of the Investors section at www.cca.com. The conference call will be archived on our website following the completion of the call. In addition, a telephonic replay will be available at 12:00 p.m. Central Time (1:00 p.m. Eastern Time) on August 19, 2016, through 12:00 p.m. Central Time (1:00 p.m. Eastern Time) on August 27, 2016. To access the telephonic replay, dial 888-203-1112 and enter passcode 9732981.
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