CCA to Lease California City Correctional Center to the California Department of Corrections and Rehabilitation

NASHVILLE, TN--(Marketwired - Oct 15, 2013) - CCA (Corrections Corporation of America) (NYSE: CXW), America's largest owner of partnership correctional and detention facilities, announced today that it has entered into a lease for its 2,304-bed California City Correctional Center with the California Department of Corrections and Rehabilitation (CDCR). The Company is also providing an update on certain operating trends it believes will negatively impact fourth quarter financial results.

California City Lease
The lease agreement includes a three-year base term with unlimited two-year renewal options upon mutual agreement. Annual rent during the three-year base term is fixed at $28.5 million. After the three-year base term, the rent will be increased annually by the lesser of CPI (Consumer Price Index) or 2%. CCA will be responsible for repairs and maintenance, property taxes and property insurance, while all other aspects and costs of facility operations will be the responsibility of the CDCR.

Lease payments are expected to commence on December 1, 2013. Monthly lease payments are subject to reductions until certain tenant improvements are completed and until all inmate populations currently housed at the facility are removed. The facility currently houses detainees for the U.S. Marshals Service (USMS) and Immigration and Customs Enforcement (ICE). CCA has been working with both the USMS and ICE to relocate their detainees and expects that some of the populations will be relocated to other CCA facilities. We expect all current inmate populations will be removed before the end of December.

CCA will provide $10 million in tenant improvements at no additional cost to the CDCR. Additional tenant improvements, if deemed necessary by the CDCR and agreed upon by CCA, would be funded by CCA and repaid by CDCR in monthly installments over 15 years, beginning July 1, 2014.

Damon Hininger, President and CEO, stated, "We appreciate the opportunity to expand upon our longstanding relationship with the CDCR and the state of California, and we're especially pleased to have reached this agreement, which provides California an immediate solution to help reach its population capacity goals. Our ability to react quickly to our partners' needs with innovative solutions that make the best use of taxpayer dollars exemplifies the flexibility that CCA is able to provide the CDCR and other government agencies."