Corrections Corp. to modify contract with California

theflyonthewall.com

CCA, or Corrections Corporation of America, announced that it has agreed to modify its existing contract with the California Department of Corrections and Rehabilitation to reduce the total number of inmates CCA houses for California from up to 9,588 to an average daily population of 9,038 for the upcoming fiscal year ending June 30, 2013. CCA currently houses approximately 9,200 inmates from the state of California. As a result, CCA expects to begin ramping down the California out-of-state population to align with the CDCR's new budgeted level beginning in July. The reduction is expected to be completed by October 1. The contractual 90% occupancy guarantee will be adjusted to reflect the lower contract capacity. All other terms of the contract remain unchanged. The full-year impact of the contract modification on earnings per share is estimated to be approximately 4c. However, at the present time, the company is not revising its 2012 guidance, but will consider this and other factors when it provides updated guidance as part of its Q2 earnings release in August.

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