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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO _______________
COMMISSION FILE NUMBER 1-14472
Cornell Corrections, Inc. 401(k) Profit Sharing Plan
CORNELL CORRECTIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0433642
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4801 WOODWAY, SUITE #100E, HOUSTON, TEXAS 77056
- ----------------------------------------- ---------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 623-0790
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Plan Committee of
the Cornell Corrections, Inc. 401(k) Profit Sharing Plan:
We have audited the accompanying statements of net assets available for benefits
of the Cornell Corrections, Inc. 401(k) Profit Sharing Plan (the Plan) as of
December 31, 1997 and 1996, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1997. These financial
statements and schedules referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1997, reportable transactions for the
year ended December 31, 1997 and non-exempt transactions for the year ended
December 31, 1997 are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information in the statements of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Houston, Texas
June 24, 1998
<PAGE>
CORNELL CORRECTIONS, INC.
401(k) PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
AETNA AETNA AETNA FIDELITY
SERIES AETNA SERIES SERIES ADVISORS CORNELL
AETNA MONEY SERIES BALANCED GROWTH AND EQUITY CORRECTIONS, INC.
FIXED MARKET THE BOND GROWTH INCOME GROWTH COMMON
ACCOUNT FUND FUND FUND FUND FUND STOCK
------- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Receivables:
Employer Contributions................... $ 4,713 $ 1,760 $ 2,009 $ 4,589 $ 11,369 $ 11,283 $ 5,263
Employee Contributions................... 11,193 4,295 4,721 10,666 27,437 27,385 12,850
-------- -------- -------- -------- --------- --------- --------
Total Receivables...................... 15,906 6,055 6,730 15,255 38,806 38,668 18,113
Investments (at fair value):
Pooled Separate Accounts................. 620,094 304,188 386,835 292,484 1,203,876 396,602 --
Cornell Corrections, Inc. Common Stock... -- -- -- -- -- -- 290,353
Cash....................................... -- -- -- -- -- -- 24,561
Participant Loans........................ -- -- -- -- -- -- --
-------- -------- -------- -------- --------- --------- --------
Total Investments...................... 620,094 304,188 386,835 292,484 1,203,876 396,602 314,914
NET ASSETS AVAILABLE FOR BENEFITS.......... $636,000 $310,243 $393,565 $307,739 $1,242,682 $ 435,270 $333,027
======== ======== ======== ======== ========== ========= ========
</TABLE>
LOAN
ACCOUNT TOTAL
-------- ----------
ASSETS:
Receivables:
Employer Contributions ......................... $ -- $ 40,986
Employee Contributions ......................... -- 98,547
-------- ----------
Total Receivables ............................ -- 139,533
Investments (at fair value):
Pooled Separate Accounts ....................... -- 3,204,079
Cornell Corrections, Inc. Common Stock ......... -- 290,353
Cash ........................................... -- 24,561
Participant Loans .............................. 230,715 230,715
-------- ----------
Total Investments ............................ 230,715 3,749,708
NET ASSETS AVAILABLE FOR BENEFITS ................ $230,715 $3,889,241
======== ==========
The accompanying notes are an integral part of this financial statement.
<PAGE>
CORNELL CORRECTIONS, INC.
401(k) PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
AETNA AETNA
GUARANTEED GUARANTEED AETNA
AETNA AETNA ACCUMULATION ACCUMULATION FIXED
AETNA VARIABLE AETNA INVESTMENT ACCOUNT ACCOUNT ACCOUNT
VARIABLE ENCORE INCOME ADVISORS (SHORT-TERM (LONG-TERM (CREDITED TCI LOAN
FUND FUND SHARES FUND GAA) GAA) INTEREST) GROWTH ACCOUNT
---- ---- ------ ---- ---- ---- --------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Receivables:
Employer Contributions....... $ 15 $ 404 $ 415 $ 386 $ 12 $ -- $ 2,019 $ 352 $ --
Employee Contributions....... 34 942 968 901 27 (8) 4,712 822 --
------- -------- --------- -------- ------- ------- -------- -------- --------
Total Receivables.......... 49 1,346 1,383 1,287 39 (8) 6,731 1,174 --
Investments (at fair value):
Pooled Separate Accounts..... 962,627 487,225 70,336 203,676 10,857 7,865 537,170 255,321 --
Participant Loans............ -- -- -- -- -- -- -- -- 126,251
------- -------- --------- -------- ------- ------- -------- -------- --------
Total Investments.......... 962,627 487,225 70,336 203,676 10,857 7,865 537,170 255,321 126,251
NET ASSETS AVAILABLE FOR
BENEFITS......................$962,676 $488,571 $ 71,719 $204,963 $10,896 $ 7,857 $543,901 $256,495 $126,251
======== ======== ========= ======== ======= ======= ======== ======== ========
</TABLE>
TOTAL
----------
ASSETS:
Receivables:
Employer Contributions ..................................... $ 3,603
Employee Contributions ..................................... 8,398
----------
Total Receivables ........................................ 12,001
Investments (at fair value):
Pooled Separate Accounts ................................... 2,535,077
Participant Loans .......................................... 126,251
----------
Total Investments ........................................ 2,661,328
NET ASSETS AVAILABLE FOR
BENEFITS ................................................... $2,673,329
==========
The accompanying notes are an integral part of this financial statement.
<PAGE>
CORNELL CORRECTIONS, INC.
401(k) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
AETNA
AETNA AETNA SERIES FIDELITY
SERIES AETNA SERIES GROWTH ADVISORS CORNELL
AETNA MONEY SERIES BALANCED AND EQUITY CORRECTIONS, INC.
FIXED MARKET THE BOND GROWTH INCOME GROWTH COMMON
ACCOUNT FUND FUND FUND FUND FUND STOCK
------- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Net Investment Income (Loss) from
Pooled Separate Accounts .......... $ 25,937 $ 14,208 $ 14,204 $ 39,042 $ 244,804 $ 53,149 $ --
Net Appreciation of Common Stock .... -- -- -- -- -- -- 102,619
Interest ............................ 4,600 2,046 340 813 7,071 4,304 284
Employee Contributions .............. 149,366 37,857 36,404 90,332 273,545 173,328 64,135
Employer Contributions .............. 62,047 14,408 15,779 36,432 102,870 68,181 25,029
Employee Rollover Contributions ..... -- -- -- -- 3,477 6,078 4,421
--------- --------- --------- ----------- ----------- --------- ---------
Total Additions ................... 241,950 68,519 66,727 166,619 631,767 305,040 196,488
DEDUCTIONS:
Employee benefit payments,
withdrawals and other ............. (90,677) (128,165) (6,541) (14,528) (169,252) (42,896) (413)
Plan expenses ....................... (1,362) (27,674) (238) (341) (1,485) (561) (55)
--------- --------- --------- ----------- ----------- --------- ---------
Total Deductions .................. (92,039) (155,839) (6,779) (14,869) (170,737) (43,457) (468)
INTERFUND TRANSFERS, NET .............. 486,089 397,563 333,617 155,989 781,652 173,687 137,007
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS ....... 636,000 310,243 393,565 307,739 1,242,682 435,270 333,027
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR ......... -- -- -- -- -- -- --
--------- --------- --------- ----------- ----------- --------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR ............... $ 636,000 $ 310,243 $ 393,565 $ 307,739 $ 1,242,682 $ 435,270 $ 333,027
========= ========= ========= =========== =========== ========= =========
AETNA AETNA
GUARANTEED GUARANTEED AETNA
AETNA AETNA ACCUMULATION ACCUMULATION FIXED
AETNA VARIABLE AETNA INVESTMENT ACCOUNT ACCOUNT ACCOUNT
LOAN VARIABLE ENCORE INCOME ADVISORS (SHORT-TERM (LONG-TERM (CREDITED
ACCOUNT FUND FUND SHARES FUND GAA) GAA) INTEREST)
------- ---- ---- ------ ---- ---- ---- ---------
ADDITIONS:
Net Investment Income (Loss) from
Pooled Separate Accounts ........... $ -- $ 42,852 $ 4,388 $ 59 4,356 $ 103 $ 111 $ 6,418
Net Appreciation of Common Stock ..... -- -- -- -- -- -- -- --
Interest ............................. -- -- -- -- -- -- -- --
Employee Contributions ............... -- 73 -- 1 170 -- -- 72
Employer Contributions ............... -- 2,087 -- 1 50 -- -- 4
Employee Rollover Contributions ...... -- -- -- -- -- -- -- --
--------- ----------- --------- -------- -------- -------- --------- ---------
Total Additions .................... -- 45,012 4,388 61 4,576 103 111 6,494
DEDUCTIONS:
Employee benefit payments,
withdrawals and other .............. -- (232) -- -- (168) -- -- --
Plan expenses ........................ -- (1,915) (221) (350) (739) (42) (31) (1,462)
--------- ----------- --------- -------- -------- --------- --------- --------
Total Deductions ................... -- (2,147) (221) (350) (907) (42) (31) (1,462)
INTERFUND TRANSFERS, NET ............... 104,464 (1,005,541) (492,738) (71,430) (208,632) (10,957) (7,937) (548,933)
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS ........ 104,464 (962,676) (488,571) (71,719) (204,963) (10,896) (7,857) (543,901)
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR .......... 126,251 962,676 488,571 71,719 204,963 10,896 7,857 543,901
--------- ----------- --------- -------- -------- -------- --------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR ................ $ 230,715 $ -- $ -- $ -- $ -- $ -- $ -- $ --
========= =========== ========= ======== ========= ======== ========= =========
</TABLE>
TCI
GROWTH TOTAL
------ -----
ADDITIONS:
Net Investment Income (Loss) from
Pooled Separate Accounts ................. $ (31,941) $ 417,690
Net Appreciation of Common Stock ........... -- 102,619
Interest ................................... -- 19,458
Employee Contributions ..................... 173 825,456
Employer Contributions ..................... 52 326,940
Employee Rollover Contributions ............ -- 13,976
--------- -----------
Total Additions .......................... (31,716) 1,706,139
DEDUCTIONS:
Employee benefit payments,
withdrawals and other .................... -- (452,872)
Plan expenses .............................. (879) (37,355)
--------- -----------
Total Deductions ......................... (879) (490,227)
INTERFUND TRANSFERS, NET ..................... (223,900) --
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS .............. (256,495) 1,215,912
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR ................ 256,495 2,673,329
--------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR ...................... $ -- $ 3,889,241
========= ===========
The accompanying notes are an integral part of this financial statement.
<PAGE>
CORNELL CORRECTIONS, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. DESCRIPTION OF THE PLAN
GENERAL
The Cornell Corrections, Inc. 401(k) Profit Sharing Plan (the Plan) was
established on January 1, 1993, and is a trusteed defined contribution plan in
which generally all employees of Cornell Corrections, Inc. (the Company), are
eligible to participate. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The following description of the
Plan provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
PLAN ADMINISTRATION AND TRUSTEE
The Plan is administered by a retirement plan committee appointed by the board
of directors of the Company. The retirement plan committee gives the general
directions as to investment options available to participants. The retirement
plan committee has appointed Aetna Life Insurance and Annuity Company (Aetna) as
the Plan's assets custodian and the Plan record keeper to hold and control the
assets of the Plan in accordance with the terms of the Plan. The retirement plan
committee is the trustee of the Plan.
ELIGIBILITY AND CONTRIBUTIONS
All employees who have completed one year of service and have attained the age
of 21 are eligible to participate in the Plan. Following the completion of one
year of service, participants can enroll in the plan quarterly.
Employees may elect to contribute from 1 percent to 15 percent of their
compensation, as defined, up to the maximum allowed under Internal Revenue
Service (IRS) guidelines. The Company makes matching contributions equal to 50
percent of the participants' elective deferrals for the Plan year, not to exceed
6 percent of the participants' compensation.
PARTICIPANT ACCOUNTS AND INVESTMENT OPTIONS
Each participating employee's share of the net assets of the Plan is segregated
in an individual account. Participants exercise control over the types of
investments made on their behalf, provided that such investments shall be
invested only in investment funds designated by the retirement plan committee.
Each participant may elect to invest his/her contribution and the Company's
contributions made on the participant's behalf in any one or more of the
investment funds.
Prior to January 1, 1997, eight investment options had been created for the
purpose of providing participants with a choice of investments: the Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Investment
Advisors Fund, Aetna Guaranteed Accumulation Account (Short-Term GAA), Aetna
Guaranteed Accumulation Account (Long-Term GAA), Aetna Fixed Account (Credited
Interest) and TCI Growth.
<PAGE>
In January 1997, the retirement plan committee added an investment option
comprised principally of Cornell Corrections, Inc. common stock. In conjunction
with this modification, the existing investment options were replaced with the
following investment options: Aetna Fixed Account, Aetna Series Money Market
Fund, Aetna Series The Bond Fund, Aetna Series Balanced Growth Fund, Aetna
Series Growth and Income Fund and Fidelity Advisors Equity Growth Fund.
Participants may elect the account or combination of accounts into which their
contributions and their shares of the Company's contributions are invested.
Investment income or loss is allocated monthly to a participant's account in the
same ratio as the participant's investment in each fund bears to the total of
all participants' investments in each fund.
VESTING
All employee contributions are 100 percent vested and nonforfeitable at all
times. Participants become vested in the Company's contributions to the Plan as
follows:
YEARS OF SERVICE PERCENT VESTED
---------------- --------------
1 0%
2 20%
3 40%
4 60%
5 100%
FORFEITURES
Forfeitures of any employer contributions are to be used either to reduce the
Company's contributions to the Plan or to pay the expenses of the Plan. As of
December 31, 1997 and 1996, $41,428 and $32,301 of forfeitures are included in
net assets available for Plan benefits, respectively. During the year ended
December 31, 1997, $37,355 of forfeitures was utilized by the Company to pay the
expenses of the Plan.
PLAN TERMINATION
The Company currently intends to continue the Plan for the benefit of its
employees but reserves the right to discontinue contributions and/or terminate
the Plan, subject to the provisions of ERISA. In the event of a complete
termination of the Plan, the affected participants shall be fully vested in all
amounts allocated to their accounts, and such amounts shall be nonforfeitable.
LOANS
A participant may borrow from the Plan up to the lesser of $50,000 or 50 percent
of the participant's vested account balance with a minimum loan requirement of
$1,000. The loans are secured by the participant's vested account balance.
Interest is charged at the current commercial lending rate and is credited to
the participant's account. The participant is entitled to no more than one loan
concurrently.
PAYMENT OF BENEFITS
Benefits are payable to a participant upon separation from service, total and
permanent disability, retirement or death in accordance with the aforementioned
vesting schedule.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis of
accounting. The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan's management to use
estimates and assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS
Investments in the pooled separate accounts are stated at current value as
determined by Aetna by reference to published market data. The Company stock is
valued at its quoted market price. Participant loans are valued at cost which
approximates fair value. The net appreciation and depreciation of Plan assets is
based on the value of the assets at the beginning of the Plan year or at the
time of purchase during the year.
EXPENSES
Administrative and other expenses of the Plan are to be paid by the Company or
with forfeitures of the Plan.
OTHER
Certain 1996 amounts have been reclassified to conform with the 1997
presentation.
3. FEDERAL INCOME TAXES
The Plan obtained its latest determination letter on May 28, 1996, in which the
IRS stated that the Plan, as then designed, was in compliance with the
applicable requirements of the Internal Revenue Code. The retirement plan
committee believes that the Plan is being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, the retirement
plan committee believes that the Plan was qualified and the related trust was
tax-exempt as of December 31, 1997 and 1996.
4. SUBSEQUENT EVENT
Effective June 1, 1998, the retirement plan committee appointed Comerica as the
Plan's trustee, asset custodian and record keeper. The 1997 investment option
elections were replaced with the following: Franklin Balance Sheet Investment
Fund, Janus Worldwide Fund, Putnam Investors Fund A, Munder Index 500 Fund
(K-Shares), AIM Balanced Fund, Munder US Government Income Fund (K-Shares),
Munder US Treasury Money Market Fund (K-Shares) and Cornell Corrections, Inc.
common stock.
<PAGE>
SCHEDULE I
CORNELL CORRECTIONS, INC.
401(k) PROFIT SHARING PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF CURRENT
IDENTITY OF ISSUE/DESCRIPTION OF ASSET SHARES/UNITS COST VALUE
-------------------------------------- ------------ ---- -----
<S> <C> <C>
Aetna Life Insurance and Annuity Company :*
Aetna Fixed Account ......................................... n/a $ 597,809 $ 620,094
Aetna Series Money Market Fund .............................. 26,708 295,898 304,188
Aetna Series The Bond Fund .................................. 31,990 373,217 386,835
Aetna Series Balanced Growth Fund ........................... 20,536 257,591 292,484
Aetna Series Growth and Income Fund ......................... 60,515 1,011,956 1,203,876
Fidelity Advisors Equity Growth Fund ........................ 21,156 353,305 396,602
Cornell Corrections, Inc. Common Stock * ........................ 13,979 189,241 290,353
Cash ............................................................ n/a 24,561 24,561
Participant Loans (interest rates ranging from 7.50% to 9.25%) .. 230,715 230,715
---------- ----------
$3,334,293 $3,749,708
========== ==========
</TABLE>
* Indicates party in interest.
<PAGE>
SCHEDULE II
CORNELL CORRECTIONS, INC.
401(k) PROFIT SHARING PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PURCHASE SELLING COST OF NET
IDENTITY OF PARTY INVOLVED/DESCRIPTION PRICE (a)(b) PRICE (a)(b) SALES GAIN/(LOSS)
-------------------------------------- ------------ ------------ ----- -----------
<S> <C> <C> <C> <C>
I. SINGLE TRANSACTION
None
II. SERIES OF TRANSACTIONS IN THE SAME SECURITY
Aetna Variable Fund ..................................... $ -- $1,005,479 $1,037,635 $(32,156)
Aetna Variable Encore Fund .............................. -- 491,613 491,610 3
Aetna Investment Advisors Fund .......................... -- 208,032 214,780 (6,748)
Aetna Fixed Account (Credited Interest) ................. -- 543,588 542,108 1,480
TCI Growth Fund ......................................... -- 223,380 242,707 (19,327)
Aetna Fixed Account ..................................... 780,960 186,803 183,151 3,652
Aetna Series Money Market Fund .......................... 725,968 435,988 430,070 5,918
Aetna Series The Bond Fund .............................. 391,007 18,376 17,790 586
Aetna Series Balanced Growth Fund ....................... 326,205 72,763 68,614 4,149
Aetna Series Growth and Income Fund ..................... 1,512,922 553,850 500,966 52,884
Fidelity Advisors Equity Growth Fund .................... 533,554 190,101 180,249 9,852
Cornell Corrections, Inc. Common Stock .................. 194,604 6,870 5,363 1,507
</TABLE>
(a) Purchase and selling price include or are net of transactional expenses.
(b) Current value of asset on transaction date is equal to the purchase/selling
price.
The above transactions represent those defined as reportable transactions by
Section 2520.103-6 of the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. Five percent of the fair market value of the Plan's assets at January 1,
1997 was used to determine those transactions requiring disclosure.
<PAGE>
SCHEDULE III
CORNELL CORRECTIONS, INC.
401(k) PROFIT SHARING PLAN
ITEM 27(e) - SCHEDULE OF NON-EXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
RELATIONSHIP TO PLAN, DESCRIPTION OF TRANSACTIONS INCLUDING INTEREST
IDENTITY OF EMPLOYER OR OTHER MATURITY DATE, RATE OF INTEREST, AMOUNT INCURRED
PARTY INVOLVED PARTY IN INTEREST COLLATERAL AND MATURITY VALUE LOANED ON LOAN
<S> <C> <C> <C>
Cornell Employer Lending of monies from the Plan to
Corrections, Inc. the Employer (contributions not timely
remitted to the Plan) as follows:
Deemed loan dated November 21, 1997,
maturity of December 2, 1997, with
interest at 2.91% for the period $ 98,766 $1,054 (a)
</TABLE>
(a) Interest amount of $1,054 was remitted to the Plan by the Employer on June
25, 1998.
<PAGE>
INDEX TO EXHIBITS
23.1 Written Consent of Arthur Andersen LLP Dated June 29, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
CORNELL CORRECTIONS, INC.
Date: June 29, 1998 By: /s/ BRIAN E. BERGERON
---------------------
BRIAN E. BERGERON
Chief Financial Officer and
Plan Administrator
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 24, 1998, included in this Annual Report and
Form 11-K for the year ended December 31, 1997, into the previously filed Form
S-8 Registration Statement of Cornell Corrections, Inc. (File No. 333-19127).
ARTHUR ANDERSEN LLP
Houston, Texas
June 29, 1998
