ORGANIZATION AND OPERATIONS

12 Months Ended

Dec. 31, 2012

ORGANIZATION AND OPERATIONS

1. ORGANIZATION AND OPERATIONS

Corrections Corporation of America (together with its subsidiaries, the “Company” or “CCA”) is the nation’s largest owner of privatized correctional and detention facilities and one of the largest prison operators in the United States, behind only the federal government and three states. CCA currently operates 67 correctional and detention facilities, including 47 facilities that it owns, with a total design capacity of approximately 92,500 beds in 20 states and the District of Columbia. CCA also owns two additional correctional facilities that it leases to third-party operators, one of which is currently vacant.

CCA 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, CCA’s facilities offer a variety of rehabilitation and educational programs, including basic education, religious services, life skills and employment training and substance abuse treatment. These services are intended to help reduce recidivism and to prepare inmates for their successful reentry into society upon their release. CCA also provides health care (including medical, dental and mental health services), food services, and work and recreational programs.

In February 2013, CCA received a favorable ruling from the IRS substantially in the form submitted, and announced that the Company had completed its analysis of the feasibility and potential benefits of converting to a real estate investment trust (“REIT”) and had completed the reorganization of its corporate structure to begin operating as a REIT for federal income tax purposes effective January 1, 2013.

Beginning in 2013, CCA will provide correctional services and conduct other business activities through one or more Taxable REIT Subsidiaries (“TRSs”). A TRS is a subsidiary of a REIT that is subject to applicable corporate income tax and certain qualification requirements. CCA’s use of TRSs enables the Company to continue to provide correctional services at facilities it owns and at facilities owned by its government partners and to engage in certain other business activities while complying with REIT qualification requirements. CCA’s use of TRSs also allows it to retain income generated by these TRSs for reinvestment without the requirement of distributing those earnings.