John D. Ferguson - Chairman of the Board Damon T. Hininger - President, Chief Executive Officer, Director Todd J. Mullenger - Chief Financial Officer, Executive Vice President William F. Andrews - Director David Garfinkle - Vice President, Finance and Controller.

Jamie Sullivan - RBC Capital Markets Todd Van Fleet - First Analysis T.C. Robillard - Signal Hill Group Toby Summer - SunTrust Robinson Humphrey Kevin Campbell - Avondale Partners Manav Patnaik - Barclays Capital Chuck Ruff - Insight Management

Good morning everyone and welcome to CCA's Fourth Quarter 2009 Earnings Conference Call. If you need a copy of our press release or supplemental financial data, both documents are available on the investor page of our website at www.correctionscorp.com. Good morning everyone and welcome to Corrections Corporation of America's First Quarter 2009 Earnings Conference Call. If you need a copy of our press release or supplemental financial data, both documents are available on the investor page of our website at www.correctionscorp.com Before we begin, let me remind today's listeners that this call contains forward-looking statements pursuant to the Safe Harbor provisions of the Securities and Litigation Reform Act. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made today. Factors that could cause operating and financial results to differ are described in the press release, as well as our Form 10-K and other documents filed with the SEC. This call may include discussions of the non-GAAP measures. The reconciliation of the most comparable GAAP measurement is provided in our corresponding earnings release and included in the supplemental financial data on our website. We are under no obligation to update or revise any forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events. Participating on today's call will be our Chairman of the Board, John Ferguson; President and CEO, Damon Hininger; and Chief Financial Officer, Todd Mullenger. I'd now like to turn the call over to Mr. Ferguson. Please go ahead, sir.

Welcome everyone to CCA’s Fourth Quarter 2009 Earnings Call as well as a discussion about our 2010 forward-looking guidance. In addition to the three that were mentioned, in the room with us is Bill Andrews, one of our directors and David Garfinkle, our Vice President - Finance and Controller. So with that I will turn it over to Todd Mullenger.

Thank you John, and good morning everyone. Moving straight to discussions of our financial results. In the fourth quarter of 2009, we generated $0.36 of EPS compared to $0.32 per share in Q4 2008, which represents a 13% increase. Full year EPS normalized for unusual items totalled $1.28 representing a 7% increase over a $1.20 in 2008. Total revenues for the fourth quarter were up 4% over the last year reflecting a 5% increase in average daily-compensated populations. The primary drivers of our year-over-year revenue and earnings grow include increased compensated man-days from the states of California and Arizona as well as commencement of our new BOP contract at our Adams County facility. : Combined with year-over-year increases in U.S. Marshall populations under a contract that provides for a lower tiered per diem above a certain population level. Excluding these impacts per diems increased by approximately 1% year-over-year in the quarter. Average compensated occupancy for the quarter was 91.5% compared to 92.8%. We're continued to be pleased with operating expense performance, operating expenses per man-day in Q4 2009 were $39.97 compared to $40.22 a year ago, which represents a decrease of approximately 1%. The decrease in cost per man-day reflect contract modifications from our customers and the impact of our company wide initiative focussed on improving operating efficiencies. In addition during Q4 2009, we've recognized a significant improvement in our workers compensation expense, as a results of adjustments coming from an updated actual estimates. These improvements in operating cost were offset by operating inefficiencies as several of our facilities including North Georgia, which operated at 20% of capacity. Our Red Rock facility due to the ramps down of the Alaska populations, and our Prairie facility resulting from Minnesota and Washington populations ramping down. As a result of the operating inefficiencies…

Thank you, Todd and thank you so much callers for participating in our conference today. While we continue to face like all companies in corporate America a very challenging economy in the fourth quarter, I continue to be very proud of the 17,000 men and women of CCA and the job they have done in these very difficult circumstances. I would like to break my comments this morning into three topics. First of which is since we are giving our 2010 guidance today, I wanted to give some commentary around the state of the industry. Second is to share our short-term and long-term focus for the business and finally market observations and opportunities. So our observations on the state of the industry, let me first say that as we have often discussed during the course of 2009, the pressure our customers feel because of budget constraints is yet to subside as we enter 2010. Since late 2008, many of CCA’s customers have had to make difficult and controversial decisions that have affected their operations as well as our operations. At the beginning of this fiscal year, at least 17 of CCA’s state customers had a combined budget gap to fill of $72 billion. Seven months into this fiscal year, those same state customers have had another $17 billion budget gap open up that they will need to close by June. So it is clear that states are grappling on getting a good hand on their forecast. As mentioned by Todd, state budgets will continue to be a concern this year going into 2011. But on the positive side, of our state customers, this is probably the first time in 25 plus years where we have seen so little if any dollars has been appropriated for new prison beds or new…

Thank you (Operator Instructions). Your first question comes from Jamie Sullivan - RBC Capital Markets.

I’m wondering just on the state market side if you could just comment on where you see some movement on population increases and decreases and whether, where we stand this year versus last year. What seems to be more of a concern or a risk whether it would be the policy changes or the budget kind of per diem side of the equation?

Jamie this is Damon let me -- a couple of points you’ve asked there, so let me, I guess mentioned the policy, as I mentioned earlier you’ve seen some states and we talked a little bit about this during the course of 2009 where they have done a little tinkering around the edges. But wholesale changes in policy we haven’t seen a lot activity, especially if you look like State of California whether they are severely overcrowded, not a lot of the interest or doing changes in the policy although they are part of the overcrowding and playing back to the three judge panel they are trying to do something with parole and probation, but not a lot of activity, but that is always potentially would be a risk and something we’ll monitor in the short-term. As it relates to populations we are seeing some state still projecting increases in population, Georgia, Arizona, come to mind is some of the bigger one is Florida. We're seeing some states that are trying to take some short-term steps to deal with their populations and that comes to Colorado, for example, where they were trying to do accelerated releases to trying to somewhat affect their short-term population as they're dealing with this physical constraints. And then that the risk on pressure or per diems obviously that was an issue that we had in 2009 I think we reported that we had about a half a dozen of state where we sat down with them and looked a way to narrow our services to deal with their reduction per diem and so that's always a potential risk that we have in 2010 even going on 2011. I think that is most of the points in your question.

Is it too early to know how many of your stake customers are going to enter in those discussions with you. Again, you mentioned half a dozen last years will it be incremental new ones, the same ones any color you can provide there?]

Yes, that the short answer is don't know as you know obviously we're five weeks, six weeks into the New Year. Well, a lot of legislators coming back into session and so just now kind of rolling up your sleeves and determine how they're going to deal with some of these budget shortfalls that I mentioned earlier, so too early to tell which and how many.

You mentioned Colorado noticed that there were some population declines in three of your facilities there. Wondering, is that representative of some of their short-term fixes and policy changes or is that normal seasonality?

: Bottom line right now is that that continues to be a risk, but the ability to execute on that on behalf of the City of Colorado has been a challenge for them. So we have seen some different populations. But it’s not consistent what I think they had envisioned last summer.

Just curios, is the guidance, what does that contemplate in terms of few of the contracts that are out for re-compete this year, I know those Colorado facilities are and couple others. Just curious what you are assuming there?

Well, I’ll tell you the general rule, I’d assume we keep all the contracts coming up for renewal.

Your next question comes from Todd Van Fleet - First Analysis.

Just want to ask on startup, Todd was there any startup in Q4 and then what are the assumptions regarding startup expense in each of quarters in 2010 and then Todd I’ll ask you to comment also on G&A, I apologize if you provided some commentary but I didn’t get a sense as to an outlook for G&A levels for 2010?

With regards to startup, it’s about $2 million in Q4, $2 million in Q1 and probably $3 million in Q3, 2010. And with regards to G&A, G&A you can forecast flat to perhaps slightly down.

Your next question comes from T.C. Robillard - Signal Hill Group.

Just a follow up right on the heels of Todd's question there, when you said slightly down, are you talking in terms of sequentially and was that in absolute or in percentage terms for G&A?

Absolute full year.

Just wanted to, in first thanks for the great level of details that you guys put through in your prepared remarks and I just wanted to explore a little bit more in terms of the revenue per man-day and clearly don’t want to make a bigger issue out of this because I know it’s a multifaceted calculation. But I'm just trying to get my head around the drivers here and you said that some of it was due to the replacement within Hutto and then others was around increases in population under a certain marshal contract. I'm just trying to reconcile that it just seems that those population numbers seem small relative to the impact to the overall kind of calculation if you will and I'm just wondering if I can get some more granularity there or if you can help me flush that out.

We can track you to it, T. Don Hutto are migrating form a population of families which includes small children not juveniles but small children, much riskier population with families, greater staffing levels, much greater staffing levels and operating expense even given the small population just given the magnitude of the rest. When you are housing small children with adults, significant risk so the staffing pattern is going to be much higher and need to be much higher to protect against that risk. And then on the U.S. Marshal contract, it wasn't a small contract; it's a large contract where we renegotiated higher population levels overall but in return for tier per diem on the backend.

Okay, and then I guess this dovetails my next question, which is, as you're looking at the guidance, you had mentioned that (inaudible) take to kind of variety of scenarios particularly around populations and pricing. And so how should we thinking about revenue per man-day as we go through the first couple of quarters of 2010 particularly as it relates to this large Marshal contract. I mean should we be expecting kind of similar levels of change on year-over-year basis?

A lot of it is going to be dependant upon the actions the states take, right?

Yes.

So there’s certain amount of uncertainty there. But if we're fortunate enough to hold the line like we did last year, you’re going to be looking at flat to slightly down on the per diems. Our ultimate goal will be to hold the line on margin per man-day, which we did a pretty effective job this year. So even though we saw some anemic per diem growth, through a combination of internal cost containment, contract modifications from our customers and some other changes, we’re able to hold the line on margins per man-day, that would be our goal for this year. However given the uncertainty around the state budgets it's hard to pin that down exactly but I'd say, anemic per diem growth somewhat to last year with flattish margins.

Okay, in terms of the margin side, I know there’s still a lot of un-answered because the states are in the early parts of scrubbing through their own budgets, but what are your initial thoughts around the ability to hold margins flat? I mean there’s a thought process out there, that last year was all of the low hanging fruit in terms of contract modifications. And therefore, is there enough left for you to continue to modify? I’m just trying to balance that with kind of an apple (inaudible) meaning, states that you already did some modification versus states that hadn’t and again, how this all wraps into the blended number that you guys report? Simply asking, how comfortable are you that you guys can hold the margins flat with going into year-2 here of a real challenging budget environment?

To reinforce what Todd said, is that overall in 2009 we were overall successful with the six customers that came back to us. Your question about is there initial low hanging fruit, it really depends state by state, what their pressure and how far they want to go on narrowing the services that we provide in our facility. Part of it is also the state’s security questions that we’ve obviously got a good (couple) with a day off or two. So, it’s really going to be kind of a case by case on looking at what their constraints are, how much pressure they’re feeling from the governor and the legislature. We have seen some states being somewhat successful on getting some supplemental funding from the legislature because the DOCs have made a good case saying that they’ve done all they can on reducing their operating expenses. So, we (inaudible) 2009, obviously we’re going to use a lot of same playbook as we go into 2010 and even 2011.

Your next question comes from Toby Summer - SunTrust Robinson Humphrey

I wanted to get a sense for what kind of outcomes could lead towards the lower end of guidance and what kind of outcomes it might lead towards the higher end of guidance if you could give us a little bit of color on your thoughts there?

Sure, I think it would be less pricing pressure and less population pressure from the states as a result of their budgetary pressures could lead us towards the higher end of the guidance maybe combined with some flex points around the ramp ups of some of our facilities. So a slower ramp up on the California populations, lead us towards the lower end of the guidance range, a quicker ramp up towards the higher. Similarly, on some of the other contracts, Nevada Southern, if that were to ramp up more quickly or more slowly or the ramp ups of some of our expansions in Georgia, in Coffee and Wheeler. They ramp up more slowly were towards a lower end more quickly towards the higher end.

One follow up question California, you gave some good color there on opportunities. And, I just wanted to get your sense of what the customer is thinking. You are already a very big provider to the State of California and I wanted to see if you thought that at some point, the customers themselves may want to have an additional provider in the mix or whether you feel like you can continue to take advantage of all the opportunities that California has to offer you?

Well, we’re very proud of the fact, I said in my prepared remarks, the revised plans I gave to three judge panel, they called the out of state program (inaudible) to be in the exclusive provider right now to the State of California. We take great pride that they felt good about the program. Really, to answer to your question, I really can’t speak on behalf of the state and what are they thinking about the expanded use of beds out of state and as I mentioned, they do the RFI in December that will be available to everybody in the industry to provide proposal. So really probably it would be appropriate for me to comment or speculate on what they're thinking about, how they want to agree the program versus one vendor versus several vendors.

I think in your prepared remarks you talked about OFDT facility and that your Cal City facility may kind of fit the criteria there. Are there any other existing facilities that fit that criteria or is that a fairly limited pool of facilities that match the criteria?

I think RFI just came out last week or so, so I think we're still getting our hands around a little bit. I know it's due in the next day or two. So I don't know exactly what would else be in that location I guess if you just think globally about State of California (inaudible) think especially on local side there on limited capacity if any excess capacity.

Your next question comes from Kevin Campbell - Avondale Partners.

Damon, I was hoping maybe I missed your comments about the RFI in California, is there any additional detail you can provide about it or it just that they issued one in December and you responded on 28?

That’s yes, its about it, so if you think back Kevin I guess the last RFI I think our sense is that kind of the fit in fuel of the actual document and what they were requesting were very similar so came out in December we submitted response on 28th of December and then obviously I think we've got some pretty attractive options that would be worthy of consideration.

Was there anything specific in the RFI in terms of maybe numbers of beds or the types of beds they were looking for cell versus dorm that some of your facilities would be better suited for or anything like that.

I don’t think there was a number or quantity on the document and I think that’s consistent with the last four or five that they did. I can find out, I don’t know Kevin on some of the details relative to dorm and cell and them maybe some security features. I think it’s pretty consistent to the previous one.

A different definition, we have been getting quite a few questions over the last three or four months obviously about you guys potentially converting during the Opco/Propco sort of situation where you do sell lease back. Is that something that you guys would consider in the near term and if not what sort of, what have to happen for that to be of interest to you?

Well, I guess before I address your question, I guess let me I guess a couple of observations. First our Board and the management team continually review our capital structure and try to deploy our available resources to create the best powerful value for shareholders. I think hopefully we have demonstrated and I think it’s great evidence again that we reported in our earnings release last night that we take a look at our allocated capital over the last year and a half and determine is it appropriate to use that for new bed development or share repurchase. So, the share repurchase we again also announced a new program last night I think is another great example of that decision making process that we are always doing on a regular basis with management and the Board of Directors. I guess, the other way Kevin I’d say is that, kind of a general observation is that, there is a real element of truth to the idea that our real estate assets are very viable and we believe an example of this is that lives that we expect to utilize our assets is significantly a longer are going to exceed the (perceived) lives. So I guess with all of that being said, the idea of splitting the company into an operating company and a read proposes some real significant, what we think challenges, some of those are financial like the potential significant tax like just the time of establishing a structure like that. But I think a more critical issue with respect to our business and one that which might not be really apparent to the extent of forming a structure like that, might be the case where this may require some type of customer approval or some type of consent from…

One more question, can you comment the facilities that you have in Arizona that house out-of-state inmates from Hawaii and California? What is the likelihood that those customers would allow you to - or would transfer their inmates in those facilities to help fill some of your other inventory and then allow you to make those Arizona beds available for the 5000 beds RFP that’s moving forward there? Do you see that as likely? Have you talked to the other states about that at this point and what’s the push back you maybe getting?

I think that what we've demonstrated in the last few years as we think about those new opportunities is that that is definitely part of analysis and discussion and our strategy for those new business opportunities. So probably it wouldn't be appropriate for me to talk about what potentially customers in Arizona would or wouldn't be willing to do in moving out of those beds, but again I think if you see some of our actions we did in 2009 and further back, it's clear that's going to be part of our discussion and our strategy as we think about these new business opportunities.

And then one last question, your inventory, I think you guys said would be 7300 at the end of - with the new construction being taken by Georgia and the US Marshals, after you factor in Arizona and the withdrawal of their inmates and with the CAR 10 as well, what does that take you to, roughly? Is it - I’m getting a little bit above 12000, is that right?

That’s right. So, Cal City, Huerfano and Diamondback, those three - obviously we’ve gotten the notice on Huerfano, we have not got the notice on Arizona at Diamondback or - obviously the time in on the BOP at Cal City, but those three facilities combine at 5200 beds. So, it would be obviously north of that, if it’s the case where we’re not successful in finding a customer for one or all three of those facilities.

Your next question comes from Manav Patnaik - Barclays Capital.

I just have a few questions. The first one is, just trying to figure out as a follow up to one of the questions before, if you take for example, the six state customers that approached you guys last year in terms of introductions, and you had mentioned that you managed to work with them in terms of cutting costs as well and keeping margins relatively the same. Specific to those customers, if they come back again looking for (inaudible), how much more room is there for you guys to work with them in terms of keeping your margins roughly the same?

That’s a good, clear question. The short answer is, don’t know. It’s going to be really a case by case by customer. And, as I mentioned earlier, we have seen some states, especially the heads of corrections convey back to the executive or to the legislature that they have made some cuts, that potentially they’ve done their system and also maybe in our contracts and there is a point where they can't go any further. And, like I said, we have seen some activity, a little bit, where some states have been successful in getting some supplemental funding just because they can’t do anymore. So it’s really going to be a case-by-case where we are going to -- if we get approached, sit down with them, look at the contract again, see what the opportunities are relative to the services. And also, there is always a potential chance where you’ve got a situation where a state is severely overcrowded and so they’re trying to maybe get a little relief in their system. And so maybe we can offset a little bit of a reduction with a higher quantity. Those are always options that we’ve been somewhat successful in broaching with different states. And then, there have also been a few states, and probably Georgia is most noticeable one, where there also is an opportunity maybe to close some of their smaller less efficient facilities and so see the savings that way. So it’s not always it’s going to be just near in services it could be a case where we could either look at the additional quantity or them moving the population out of costly inefficient facilities.

And then, just on your comment on obviously, given the existing inventory that you guys have, the ROI that you would look at on new bills that would obviously be higher. I was wondering if you could provide, maybe a little more color, obviously you guys have stated in your presentations, the 13% to 15% pre tax returns that you look generally speaking. Like how much higher do your raise the ROI in the new bills given your extends of inventory right now?

It would be somewhere North of 13% or 15%, obviously. And it really would be case of the customer, some of the issues surrounding the customer for their short-term and long-term, not operational needs, but physical environment. So it won’t be a stock answer for all of our customers, it’s really going to be a case-by-case that will sit down and think about the risk. Some of the issues facing the customers we think about our proposals.

Two quick questions, of the various half dozen new customers that you said, on new states that you were in discussions although you had people on the ground. How many of those that just to trying to get a sense are currently not out sourcing or not using private prison?

I couldn't give you an exact number because what I said in my remarks is they are currently not doing business with CCA, there could be a couple of states there like I couldn't give an exact number that maybe one of our competitors has got a juvenile or community corrections within state, couldn't give you exact number there Manav.

You guys didn't addressed or mention just sort of the situation in Tennessee itself that the Governor's new budgets on your Whiteville facility, I was just wondering if you could give your read as of today in terms of what's going to happen there?

It's 2009, all over again. Obviously it's the same thing that happened last year. So as you know obviously there's going to be a new Governor and the Governor's mentioned in the January of next year there is a new DOC Director, so I suspect probably there would be a similar exercise as last year where the legislator who picked this up. The DOC did say I think several times during the course of late last year that they did see some incremental growth and didn't need those beds. So I think its just going to probably go as same exercises as last year we're likely to take it up and determine if that's appropriate to not fund those beds.

Your next question comes from Chuck Ruff - Insight Management.

Lot of states have been examining their sentencing and parole regulations etc in an attempt to reduce inmate population. Can you help me understand why you seem comfortable that that the country’s inmate population is going to continue to grow over a long-term, over the next three to five years?

Well, it’s -- some states have had some success, most notably I guess Kansas, New York and even somewhat in Texas on doing some structural changes on their both sensing and then the threshold that inmate become eligible for parole. Obviously Kansas and New York I said I think those are the most notable ones and they have gotten immediate attention. Those are not currently customers of CCA. But as we think about Arizona, Florida, Georgia, states that were doing business with, we haven’t seen really the interest or the ability of different stakeholders within the state to try to get some type of meaningful change. So that is always something we are going to monitor very closely and obviously affecting our decision making as we think about new state business and it’s tied a little bit to Manav’s question earlier about ROI. That is one factor we’ll think about and thinking about what a state may do in the short to long term to affect their population. So every state is going to be a little different and it’s that’s going to be part of our decision making process.

Your next question comes from Jamie Sullivan - RBC Capital Markets.

I guess, a quick question in the Federal market, you talked about some of the budget pressures on the ICE front and I was just wondering with the RFI’s and potential RFP’s out there, what needs to happen, what the budget impact is on the ability of those to move forward?

That’s a great question and that I think ties again to Manav’s question earlier about how we think about new construction. So as we think about new opportunities on Federal side, especially in ICE side where we are seeing a little bit of softening in the population, that will be definitely part of our decision making process and thinking about the risk versus reward on those type of opportunities.

But, I guess you don't see them, there is a delay that they need additional budget for them to move forward on the decision, not necessarily your strategy for the proposals?

I understand, yes I'm sorry. So no, we understand that especially there's one up in California, but that is a solution for population they already have primarily as we understand in the LA county jail system. So I guess the current thinking is that a lot of funding is already kind of built into their base, this is an opportunity to essentially get some consolidation, some cost savings but also some of the commitment that they've got those beds long-term in that part of the country.

Follow on to the new stage you're talking with. I'm just wondering what's the status of their systems are they currently experiencing sever capacity pressure or they more planning for population growth that they wont' be able absorb.

It's all of the above and so we are seeing some states that are overcapacity but its like all of our existing customers dealing with the toughest environment. So having similar challenge, do anything her in the short-term and then you've got some state that, potentially talk about building the capacity in state and they just don’t have the bandwidth to do any new bricks and mortar. So they are doing similar planning to think about what their needs are both for growth and also reliving overcrowding.

On the sate construction, either any of your customers currently underway with capacity expansion or building right now?

We saw a little bit of spend incrementally in fairly small quantities from existing state customers to deal with their growth. And so in essence what we saw of some states, and this is kind of part of their overall kind of short term strategy to deal with the tough fiscal environment is to add a few beds here and there throughout their system to deal with incremental growth and not do a formal expansion with their system or with CCA. So we have seen some of that and probably we'll still see some of that during this year going to next year. And then we also see Washington, Minnesota we mentioned and obviously Arizona has got the capacity to come in on line, both public and private over the next 12 months, but even that capacity coming on line, you have to ask the state, they still have a significant overcrowding problem and also a growth problem over the 3 years to 5 years. So the activity this year has been fairly limited on dollars being appropriated for new prison construction in like this tough fiscal environment, where you've got prioritize and determine how you're going to spend your money on new capital projects that relates to not only prisons but road, bridges, and schools and universities; prisons appears to be getting down the priority list.

Your next question comes from Todd Van Fleet - First Analysis.

Guys what’s the latest in Tennessee I guess specifically with respect to Whitefield in terms of funding and then Todd if you could provide us with the capitalized interest in the fourth quarter?

Todd, I'll address the Whitefield, that’s again feels a lot like 2009. It’s almost kind of the same as what happened last year. So, we think it’s going to be a very similar exercise as 2009, which is that the legislature will take this up. The previous DOC director, and I think Todd, you’re aware that there is a new director within the State of Tennessee, previous director, right before he left late last year, had indicated to some of the legislative committees that they were going to see incremental growth and that these were obviously cost effective beds and how they need these beds. So, I think we’ll go through a similar exercise where the legislature will take this up and think about potentially funding these beds through this fiscal year and potentially long-term. And, obviously a new Governor, there will be a new Governor in place in January of next year. With regards to capitalized interest Todd, the fourth quarter was called at $800,000. Our full year 2009 was $1.6 million.

And with that there are no further questions in queue. I would like to turn the conference back over to our speakers for any additional or closing remarks.

Okay, as always, we appreciate everyone taking the time to visit with us and hear our report. Appreciate the compliments on the thoroughness of it. We try to do that as best we can and we look forward to visiting with you next quarter. So we will see everyone then. Goodbye.

That does conclude today’s conference. We thank you for your participation.