SEGMENT REPORTING

9 Months Ended

Sep. 30, 2014

SEGMENT REPORTING

11. SEGMENT REPORTING

As of September 30, 2014, CCA owned and managed 49 correctional and detention facilities, and managed 12 correctional and detention facilities it did not own. In addition, CCA owned three facilities that it leased to third-party operators. 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 2013 Form 10-K. 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. 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 net operating income for the reportable segments and a reconciliation to CCA’s operating income is as follows for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Revenue:
Owned and managed	$	345,105		$	344,150		$	1,020,041		$	1,034,251
Managed-only		53,915			76,132			178,246			225,754
Total management revenue		399,020			420,282			1,198,287			1,260,005
Operating expenses:
Owned and managed		227,816			232,778			683,143			696,681
Managed-only		47,300			65,177			159,581			194,730
Total operating expenses		275,116			297,955			842,724			891,411
Facility net operating income:
Owned and managed		117,289			111,372			336,898			337,570
Managed-only		6,615			10,955			18,665			31,024
Total facility net operating income		123,904			122,327			355,563			368,594
Other revenue (expense):
Rental and other revenue		9,454			1,184			25,103			3,189
Other operating expense		(7,596	)		(3,534	)		(14,978	)		(12,301	)
General and administrative		(27,635	)		(23,570	)		(79,586	)		(80,162	)
Depreciation and amortization		(28,277	)		(28,151	)		(85,413	)		(83,203	)
Asset impairments		—			(985	)		(2,238	)		(985	)
Operating income	$	69,850		$	67,271		$	198,451		$	195,132

The following table summarizes capital expenditures including accrued amounts for the reportable segments for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2014		2013		2014		2013
Capital expenditures:
Owned and managed	$	101,920	$	33,439	$	151,391	$	56,781
Managed-only		872		756		2,271		2,161
Corporate and other		4,995		2,606		7,872		5,497
Discontinued operations		—		—		—		72
Total capital expenditures	$	107,787	$	36,801	$	161,534	$	64,511

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

	September 30, 2014		December 31, 2013
Assets:
Owned and managed	$	2,733,764	$	2,715,719
Managed-only		71,958		81,551
Corporate and other		295,428		210,140
Discontinued operations		—		15
Total assets	$	3,101,150	$	3,007,425