12.

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF THE COMPANY AND SUBSIDIARIES

The following condensed consolidating financial statements of the Company and subsidiaries have been prepared pursuant to Rule 3-10 of Regulation S-X. These condensed consolidating financial statements have been prepared from CCA’s financial information on the same basis of accounting as the consolidated financial statements. On December 31, 2012 CCA transferred certain real estate assets and contracts from certain of its subsidiaries to the Company (as the parent company). Accordingly, the Company (as the parent corporation to its subsidiaries) which heretofore had no independent assets or operations (as defined under Rule 3-10(f) of Regulation S-X) maintains its own independent assets as of June 30, 2014 and December 31, 2013.

CONDENSED CONSOLIDATING BALANCE SHEET

As of June 30, 2014

(in thousands)

Parent

Combined
Subsidiary
Guarantors

Consolidating
Adjustments
and Other

Total
Consolidated
Amounts

ASSETS

Cash and cash equivalents

15,293

31,322

—

46,615

Accounts receivable, net of allowance

211,830

183,369

(148,305

)

246,894

Current deferred tax assets

6,347

—

6,351

Prepaid expenses and other current assets

4,330

34,292

(9,615

)

29,007

Total current assets

231,457

255,330

(157,920

)

328,867

Property and equipment, net

2,451,128

87,868

—

2,538,996

Restricted cash

1,016

1,591

—

2,607

Investment in direct financing lease

4,382

—

4,382

Goodwill

—

16,110

—

16,110

Non-current deferred tax assets

—

6,434

(559

)

5,875

Other assets

254,542

47,474

(225,359

)

76,657

Total assets

2,942,525

414,807

(383,838

)

2,973,494

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued expenses

245,998

149,325

(157,885

)

237,438

Income taxes payable

644

—

676

Current liabilities of discontinued operations

—

370

—

370

Total current liabilities

246,030

150,339

(157,885

)

238,484

Long-term debt

1,195,000

115,000

(115,000

)

1,195,000

Deferred tax liabilities

559

—

(559

)

—

Other liabilities

1,306

39,074

—

40,380

Total liabilities

1,442,895

304,413

(273,444

)

1,473,864

Total stockholders’ equity

1,499,630

110,394

(110,394

)

1,499,630

Total liabilities and stockholders’ equity

2,942,525

414,807

(383,838

)

2,973,494

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2013

(in thousands)


	Parent		Combined Subsidiary Guarantors		Consolidating Adjustments and Other			Total Consolidated Amounts
ASSETS
Cash and cash equivalents	$	31,647	$	46,262	$	—		$	77,909
Accounts receivable, net of allowance		203,018		178,894		(136,955	)		244,957
Current deferred tax assets		2		9,239		—			9,241
Prepaid expenses and other current assets		7,580		22,856		(9,824	)		20,612
Current assets of discontinued operations		—		15		—			15

Total current assets		242,247		257,266		(146,779	)		352,734
Property and equipment, net		2,450,028		96,585		—			2,546,613
Restricted cash		1,016		4,573		—			5,589
Investment in direct financing lease		5,473		—		—			5,473
Goodwill		—		16,110		—			16,110
Non-current deferred tax assets		—		3,633		(555	)		3,078
Other assets		245,028		45,149		(212,349	)		77,828

Total assets	$	2,943,792	$	423,316	$	(359,683	)	$	3,007,425

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	234,277	$	164,745	$	(146,745	)	$	252,277
Income taxes payable		—		1,243		—			1,243
Current liabilities of discontinued operations		—		886		—			886

Total current liabilities		234,277		166,874		(146,745	)		254,406
Long-term debt		1,205,000		115,000		(115,000	)		1,205,000
Deferred tax liabilities		555		—		(555	)		—
Other liabilities		1,453		44,059		—			45,512

Total liabilities		1,441,285		325,933		(262,300	)		1,504,918

Total stockholders’ equity		1,502,507		97,383		(97,383	)		1,502,507

Total liabilities and stockholders’ equity	$	2,943,792	$	423,316	$	(359,683	)	$	3,007,425

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the three months ended June 30, 2014

(in thousands)

Parent

Combined
Subsidiary
Guarantors

Consolidating
Adjustments
and Other

Total
Consolidated
Amounts

REVENUES

314,311

314,508

(218,125

)

410,694

EXPENSES:

Operating

225,389

280,346

(218,125

)

287,610

General and administrative

8,253

18,306

—

26,559

Depreciation and amortization

20,108

8,644

—

28,752

Asset impairments

2,238

—

2,238

255,988

307,296

(218,125

)

345,159

OPERATING INCOME

58,323

7,212

—

65,535

OTHER (INCOME) EXPENSE:

Interest expense (income), net

8,809

(445

)

—

8,364

Other (income) expense

(125

)

(449

)

(39

)

(613

)

8,684

(894

)

(39

)

7,751

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

49,639

8,106

57,784

Income tax benefit (expense)

(2,138

)

—

(2,052

)

INCOME FROM CONTINUING OPERATIONS

49,725

5,968

55,732

Income from equity in subsidiaries

6,007

—

(6,007

)

—

NET INCOME

55,732

5,968

(5,968

)

55,732

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the three months ended June 30, 2013

(in thousands)


	Parent			Combined Subsidiary Guarantors			Consolidating Adjustments and Other			Total Consolidated Amounts
REVENUES	$	318,939		$	336,738		$	(230,672	)	$	425,005

EXPENSES:
Operating		237,181			297,492			(230,672	)		304,001
General and administrative		8,086			17,274			—			25,360
Depreciation and amortization		18,936			8,739			—			27,675

		264,203			323,505			(230,672	)		357,036

OPERATING INCOME		54,736			13,233			—			67,969

OTHER (INCOME) EXPENSE:
Interest expense, net		10,621			1,291			—			11,912
Expenses associated with debt refinancing transactions		28,386			7,917			—			36,303
Other (income) expense		(1	)		(17	)		(19	)		(37	)

		39,006			9,191			(19	)		48,178

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		15,730			4,042			19			19,791
Income tax benefit (expense)		(13	)		3,390			—			3,377

INCOME FROM CONTINUING OPERATIONS		15,717			7,432			19			23,168
Income from equity in subsidiaries		4,712			—			(4,712	)		—
Loss from discontinued operations, net of taxes		—			(2,739	)		—			(2,739	)

NET INCOME	$	20,429		$	4,693		$	(4,693	)	$	20,429

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the six months ended June 30, 2014

(in thousands)

Parent

Combined
Subsidiary
Guarantors

Consolidating
Adjustments
and Other

Total
Consolidated
Amounts

REVENUES

620,559

625,755

(431,398

)

814,916

EXPENSES:

Operating

445,094

561,294

(431,398

)

574,990

General and administrative

16,929

35,022

—

51,951

Depreciation and amortization

39,877

17,259

—

57,136

Asset impairments

2,238

—

2,238

504,138

613,575

(431,398

)

686,315

OPERATING INCOME

116,421

12,180

—

128,601

OTHER (INCOME) EXPENSE:

Interest expense, net

17,411

1,301

—

18,712

Other (income) expense

(163

)

(528

)

(309

)

(1,000

)

17,248

773

(309

)

17,712

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

99,173

11,407

309

110,889

Income tax expense

(134

)

(3,285

)

—

(3,419

)

INCOME FROM CONTINUING OPERATIONS

99,039

8,122

309

107,470

Income from equity in subsidiaries

8,431

—

(8,431

)

—

NET INCOME

107,470

8,122

(8,122

)

107,470

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the six months ended June 30, 2013

(in thousands)


	Parent		Combined Subsidiary Guarantors			Consolidating Adjustments and Other			Total Consolidated Amounts
REVENUES	$	632,376	$	669,731		$	(460,379	)	$	841,728

EXPENSES:
Operating		471,841		590,761			(460,379	)		602,223
General and administrative		17,695		38,897			—			56,592
Depreciation and amortization		37,587		17,465			—			55,052

		527,123		647,123			(460,379	)		713,867

OPERATING INCOME		105,253		22,608			—			127,861

OTHER (INCOME) EXPENSE:
Interest expense, net		20,716		3,762			—			24,478
Expenses associated with debt refinancing transactions		28,563		7,965			—			36,528
Other (income) expense		320		(218	)		(38	)		64

		49,599		11,509			(38	)		61,070

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		55,654		11,099			38			66,791
Income tax benefit (expense)		138,198		(374	)		—			137,824

INCOME FROM CONTINUING OPERATIONS		193,852		10,725			38			204,615
Income from equity in subsidiaries		7,669		—			(7,669	)		—
Loss from discontinued operations, net of taxes		—		(3,094	)		—			(3,094	)

NET INCOME	$	201,521	$	7,631		$	(7,631	)	$	201,521

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2014

(in thousands)

Parent

Combined
Subsidiary
Guarantors

Consolidating
Adjustments
And Other

Total
Consolidated
Amounts

Net cash provided by (used in) operating activities

147,625

(13,719

)

—

133,906

Net cash used in investing activities

(36,097

)

(5,810

)

—

(41,907

)

Net cash provided by (used in) financing activities

(127,882

)

4,579

—

(123,303

)

Net decrease in cash and cash equivalents

(16,354

)

(14,950

)

—

(31,304

)

CASH AND CASH EQUIVALENTS, beginning of period

31,647

46,272

—

77,919

CASH AND CASH EQUIVALENTS, end of period

15,293

31,322

—

46,615

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2013

(in thousands)


	Parent			Combined Subsidiary Guarantors			Consolidating Adjustments And Other		Total Consolidated Amounts
Net cash provided by (used in) operating activities	$	(57,630	)	$	240,489		$	—	$	182,859
Net cash used in investing activities		(21,146	)		(7,592	)		—		(28,738	)
Net cash provided by (used in) financing activities		87,747			(266,890	)		—		(179,143	)

Net increase (decrease) in cash and cash equivalents		8,971			(33,993	)		—		(25,022	)
CASH AND CASH EQUIVALENTS, beginning of period		—			62,897			—		62,897

CASH AND CASH EQUIVALENTS, end of period	$	8,971		$	28,904		$	—	$	37,875