DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2014

DISCONTINUED OPERATIONS

5. DISCONTINUED OPERATIONS

In April 2014, the Financial Accounting Standards Board issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changed the criteria for reporting a discontinued operation. Specifically, ASU 2014-08 changed the current definition of “discontinued operations” so that only disposals of components that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results qualify for discontinued operations reporting. ASU 2014-08 also expanded the disclosure requirements for discontinued operations and requires new disclosures related to a disposal of an individually significant component of an entity that does not qualify for discontinued operations reporting. ASU 2014-08 is effective for interim and annual periods beginning after December 15, 2014, requires prospective application, and permits early adoption beginning in the first quarter of 2014.

CCA elected to early adopt ASU 2014-08 in the first quarter of 2014. Accordingly, under the guidelines of the new ASU 2014-08, the operations of the Bay Correctional Facility, Graceville Correctional Facility, and the Moore Haven Correctional Facility in Florida were not reported as discontinued operations upon expiration of the contracts effective January 31, 2014, as CCA concluded that the three facilities did not meet the new definition of a discontinued operation and that they were not individually significant components of an entity. However, operations of terminated contracts that previously qualified as discontinued operations before January 1, 2014 will continue to be reported as such in the respective prior periods.

During the second quarter of 2013, CCA announced that the Texas Department of Criminal Justice elected not to renew its contract for the 2,216-bed managed-only Dawson State Jail in Dallas, Texas due to a legislative budget reduction. As a result, upon expiration of the contract in August 2013, CCA ceased operations of the Dawson State Jail. During the second quarter of 2013, CCA also received notification that it was not selected for the continued management of the 1,000-bed managed-only Wilkinson County Correctional Facility in Woodville, Mississippi at the end of the contract on June 30, 2013. There were no results of operations during the first quarter of 2014 at these two facilities.

The following table summarizes the results of operations for these facilities for the three months ended March 31, 2013 (in thousands):

	For the Three Months Ended March 31, 2013
REVENUE:
Managed-only	$	9,001
		9,001
EXPENSES:
Managed-only		9,308
Depreciation and amortization		253
		9,561
LOSS FROM DISCONTINUED OPERATIONS BEFORE INCOME TAXES		(560	)
Income tax benefit		205
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES	$	(355	)

There were $6,000 of current assets and $0.4 million of accounts payable and accrued expenses associated with discontinued operations as of March 31, 2014. There were $15,000 of current assets and $0.9 million of accounts payable and accrued expenses associated with discontinued operations as of December 31, 2013.