SEGMENT REPORTING

3 Months Ended

Mar. 31, 2013

SEGMENT REPORTING

11. SEGMENT REPORTING

As of March 31, 2013, CCA owned and managed 49 correctional and detention facilities, and managed 18 correctional and detention facilities it did not own. Management views CCA’s operating results in two reportable segments: (1) owned and managed correctional and detention facilities and (2) managed-only correctional and detention facilities. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in the notes to consolidated financial statements included in CCA’s 2012 Form 10-K. Owned and managed facilities include the operating results of those facilities placed into service that were owned or controlled via a lease and managed by CCA. Managed-only facilities include the operating results of those facilities owned by a third party and managed by CCA. Following the Company’s reorganization to begin operating as a REIT effective January 1, 2013, the Company chose to reclassify the financial information provided for segment reporting purposes at two facilities where the property is effectively controlled by the Company under operating lease arrangements. Previously, the Company classified these two facilities controlled under operating leases within the managed-only segment. The Company now reports the financial information associated with these facilities as owned and managed and has reclassified its segment reporting for all periods presented. CCA measures the operating performance of each facility within the above two reportable segments, without differentiation, based on facility net operating income. CCA defines facility net operating income as a facility’s operating income or loss from operations before interest, taxes, goodwill impairment, depreciation, and amortization. Since each of CCA’s facilities within the two reportable segments exhibit similar economic characteristics, provide similar services to governmental agencies, and operate under a similar set of operating procedures and regulatory guidelines, the facilities within the identified segments have been aggregated and reported as one reportable segment.

The revenue and facility net operating income for the reportable segments and a reconciliation to CCA’s operating income is as follows for the three months ended March 31, 2013 and 2012 (in thousands):

	For the Three Months Ended March 31,
	2013			2012
Revenue:
Owned and managed	$	341,493		$	351,763
Managed-only		83,313			82,408
Total corrections revenue		424,806			434,171
Operating expenses:
Owned and managed		229,255			235,638
Managed-only		74,050			75,057
Total operating expenses		303,305			310,695
Facility net operating income
Owned and managed		112,238			116,125
Managed-only		9,263			7,351
Total facility net operating income		121,501			123,476
Other revenue (expense):
Other revenue		918			1,134
Other operating expense		(4,225	)		(4,839	)
General and administrative		(31,232	)		(21,840	)
Depreciation and amortization		(27,630	)		(28,387	)
Operating income	$	59,332		$	69,544

The following table summarizes capital expenditures for the reportable segments for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Capital expenditures:
Owned and managed	$	8,319	$	13,602
Managed-only		954		921
Corporate and other		1,530		6,947
Total capital expenditures	$	10,803	$	21,470

The assets for the reportable segments are as follows (amounts in thousands):

	March 31, 2013		December 31, 2012
Assets:
Owned and managed	$	2,638,260	$	2,654,791
Managed-only		95,361		119,191
Corporate and other		202,754		200,760
Total assets	$	2,936,375	$	2,974,742