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Corrections Corporation Of America's CEO Discusses Q2 2011 Results - Earnings Call Transcript

Stocks in this article: CXW

Overall, I was very pleased with our performance in the second quarter. I would especially like to thank all of our fellow CCA colleagues for the distinguished performance that they have been able to achieve for our company this year.

Now I would like to hand the call over to Todd to discuss the detailed financials, and after which I’ll discuss how we see the market and our opportunities going forward. Todd?

Todd Mullenger

Thank you, Damon, and good morning, everyone. We are very pleased with our second quarter operating results. In the second quarter of 2011 we generated $0.39 of adjusted EPS compared to $0.34 of adjusted EPS in Q2 2010, a 14.7% increase. The second quarter financial performance exceeded our forecast due primarily to favorable operating costs performance driven by lower than average employee medical expenses and lower than average legal settlement expenses. You may recall from past quarters that these are two expense line items that can experience material variation from one quarter to the next.

Revenue per compensated man-day in Q2 was up slightly against last year at $58.40 reflecting increases in per diem rates from certain federal and state partners, offset by change in mix with more managed-only populations that carry a lower per diem. Although average daily populations 5.4%, average compensated occupancy for the quarter was 89% compared to 90.1% last year, a decrease that reflects the addition of new capacity for the activation of our Nevada Southern facility in 2Quarter 2010.

Operating expenses per man-day declined 1.4% compared to a year ago which reflects the lower than average employee benefits and legal expenses, our efforts to improve operating efficiencies, the low inflationary environment and increases in compensated man-days. The net result was that margin per man-day rates increased against last year with Q2 2011 at 32% versus 30.9% last year.

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