CCA to Modify Contract With California Reducing Total Population
CCA (Corrections Corporation of America) (NYSE: CXW), the nation's largest partnership corrections provider to government agencies, announced today that it has agreed to modify its existing contract with the California Department of Corrections and Rehabilitation (CDCR) 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 2012. The reduction is expected to be completed by October 1, 2012. 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 $0.04. However, at the present time, we are not revising our 2012 guidance, but will consider this and other factors when we provide updated guidance as part of our second quarter earnings release in August.
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