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Corrections Corporation Of America's CEO Discusses Q3 2011 Results - Earnings Call Transcript

Stocks in this article: CXW

I’d now like to turn the call over to Mr. Hininger. Please go ahead, sir.

Damon Hininger – President and Chief Executive Officer

Thank you so much, (Gill). Good morning and thank you for joining our call today. With us today is our Chairman, John Ferguson and our CFO Todd Mullenger. Also joining us is our new Chief Corrections Officer, Harley Lappin and our VP of Finance, David Garfinkle.

In a few minutes, Todd will take you through the numbers for the quarter, then I’ll discuss market opportunities, after which we look forward to taking your questions. First though, I’d like to make some comments on the past quarter.

Let me start by saying that with this quarter, we accomplished a very significant industry milestone which is the purchase of the Lake Erie facility in Conneaut, Ohio. I will provide more commentary on this later, but we are very excited about the industry’s first purchase of a state-owned correctional facility. I am also very pleased with our third quarter results both operationally and financially. Our core business which remains us providing adult secure correctional and detention management services to our federal, state, and local partners remains very strong. As for the business going forward, we are living through a very favorable new development environment and macro environment is also very favorable.

For the second consecutive year, not one of the 50 states is appropriating money for new prisons which is going to further exacerbate the supply/demand imbalance. Additionally, in new state development we are seeing some potential partners come into the marketplace soon in a very meaningful way for new beds. For some, this is their first venture in using the private sector.

Finally, we are increasing occupancy within the system with considerable increases from the State of Gerogia and the United States Marshal Service during the year. And we get a new milestone recently with the United States Marshal Service, which has now have in nearly 12,000 prisoners with them around the country and that compares to 8100 on January 1st of 2010. Let me now say a few words about our focus on managing cost. As you know, we implemented a company-wide initiative in 2009 aimed at driving greater efficiency and we continue to make significant progress. We believe we had another good quarter on managing cost.

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