SEGMENT REPORTING

12 Months Ended

Dec. 31, 2013

SEGMENT REPORTING

16. SEGMENT REPORTING

As of December 31, 2013, CCA owned and managed 49 correctional and detention facilities, and managed 16 correctional and detention facilities it did not own. In addition, CCA owned four facilities that it leased to third-party operators, one of which is currently vacant. 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 Note 2. Owned and managed facilities include the operating results of those facilities placed into service that were owned or controlled via a long-term lease 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. Managed-only facilities include the operating results of those facilities owned by a third party and managed by CCA. 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, asset impairments, 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 contribution for the reportable segments and a reconciliation to CCA’s operating income is as follows for the three years ended December 31, 2013, 2012, and 2011 (in thousands):

	For the Years Ended December 31,
	2013			2012			2011
Revenue:
Owned and managed	$	1,386,355		$	1,418,783		$	1,386,470
Managed-only		301,454			299,599			295,916
Total management revenue		1,687,809			1,718,382			1,682,386
Operating expenses:
Owned and managed		941,638			935,680			884,987
Managed-only		261,903			263,678			257,362
Total operating expenses		1,203,541			1,199,358			1,142,349
Facility net operating income
Owned and managed		444,717			483,103			501,483
Managed-only		39,551			35,921			38,554
Total facility net operating income		484,268			519,024			540,037
Other revenue (expense):
Rental and other revenue		6,488			5,275			6,419
Other operating expense		(16,810	)		(17,693	)		(15,920	)
General and administrative expense		(103,590	)		(88,935	)		(91,227	)
Depreciation and amortization		(112,692	)		(113,063	)		(107,568	)
Asset impairments		(6,513	)		—			—
Operating income	$	251,151		$	304,608		$	331,741

The following table summarizes capital expenditures for the reportable segments for the years ended December 31, 2013, 2012, and 2011 (in thousands):

	For the Years Ended December 31,
	2013		2012		2011
Capital expenditures:
Owned and managed	$	96,975	$	55,222	$	152,272
Managed-only		3,719		3,507		6,642
Corporate and other		10,852		17,685		10,905
Discontinued operations		72		532		1,563
Total capital expenditures	$	111,618	$	76,946	$	171,382

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

	December 31,
	2013		2012
Assets:
Owned and managed	$	2,694,293	$	2,654,791
Managed-only		81,551		109,572
Corporate and other		231,566		200,760
Discontinued operations		15		9,619
Total assets	$	3,007,425	$	2,974,742