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Filed Pursuant to Rule 424(b)(2)
Registration No. 333-70419
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY 19, 1999)
(LOGO)
PRISON REALTY CORPORATION
1,350,000 SHARES
COMMON STOCK
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This is a prospectus supplement for the sale of 1,350,000 shares of common stock
by Prison Realty Corporation (the "Company," "we" or "us") to an institutional
investor. This sale, in conjunction with the Company's previous sale of
1,250,000 shares to the same institutional investor on March 15, 1999, results
in the sale of an aggregate of 2,600,000 shares of common stock at an average
negotiated purchase price of $18.26 per share, resulting in aggregate proceeds
to the Company of $47,477,500. The net proceeds to the Company from these sales,
after the payment of expenses relating to the offering by the Company, are
$47,182,030. The Company, which generally sells shares of its common stock to
this institutional investor on a monthly basis, previously reported the March
15, 1999 sale in a prospectus supplement filed with the Securities and Exchange
Commission on March 17, 1999. The net proceeds from these sales will be used by
the Company for general corporate purposes, including, among others, repaying
its obligations as they become due, redeeming its outstanding indebtedness,
financing, all or in part, future purchases of real estate properties meeting
its business objectives and strategies, capital expenditures and working
capital. Pending use of the net proceeds for any of these purposes, the Company
may invest the net proceeds in short-term investment grade instruments,
interest-bearing bank accounts, certificates of deposit, money market
securities, U.S. Government securities or mortgage-backed securities guaranteed
by federal agencies or use the proceeds to reduce its short-term debt.
On March 29, 1999, the last reported sales price of the Company's common stock
on the New York Stock Exchange was $17.94. The Company's common stock is listed
on the New York Stock Exchange under the symbol "PZN." The shares of common
stock sold under this prospectus supplement will be listed on the New York Stock
Exchange after the Company notifies the New York Stock Exchange that the shares
have been issued.
The Company is the largest self-administered and self-managed real estate
investment trust, or REIT, specializing in acquiring, developing and owning
correctional and detention facilities. As of March 29, 1999, the Company owned
48 correctional and detention facilities, of which ten new facilities were under
construction, in 17 states, the District of Columbia and the United Kingdom with
a total design capacity in excess of 46,000 beds. As of March 29, 1999,
approximately 30,000 beds were leased under 38 operating leases. The Company is
currently developing approximately 16,000 beds through the construction of the
ten new facilities and the expansion of six currently operating facilities.
The Company's principal business strategy is to design, build, finance and/or
acquire and develop correctional and detention facilities from and for both
government entities and private prison operators, to expand the design capacity
of its existing facilities and to lease these facilities under long-term "triple
net" leases to government entities and qualified third-party operators. As of
March 29, 1999, a privately-held Tennessee corporation, operating under the name
"Corrections Corporation of America" ("Operating Company"), leased 30 of the
Company's 48 facilities. The Company also leases three of its facilities to
private operators other than Operating Company and leases five of its facilities
to government entities. It is currently anticipated that Operating Company will
additionally lease nine of the ten Company facilities currently under
construction. Operating Company has contracts to manage and operate 38
correctional and detention facilities currently in operation. The Company's
relationship with Operating Company is more fully described under "Information
About the Company" in the accompanying prospectus.
The Company was incorporated as a Maryland corporation in September 1998. The
Company's principal executive offices are located at 10 Burton Hills Boulevard,
Suite 100, Nashville, Tennessee, and its telephone number is (615) 263-0200.
You should read this prospectus supplement along with the prospectus that
follows. Both documents contain information you should consider when making your
investment decision. You should rely only on the information provided or
incorporated by reference in this prospectus supplement and the prospectus. The
Company has not authorized anyone else to provide you with different
information. The Company is not making an offer of shares of common stock in any
state where the offer is not permitted. You should not assume that the
information in this prospectus supplement is accurate as of any date other than
the date on the front of these documents.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus supplement is March 30, 1999
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TABLE OF CONTENTS
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Prospectus Supplement....................................... S-1
Where You Can Find More Information......................... i
Incorporation of Certain Documents by Reference............. i
The Company............................................... i
Corrections Corporation of America........................ ii
CCA Prison Realty Trust................................... ii
Cautionary Statement Concerning Forward-Looking
Information............................................... iii
The Company................................................. 1
Selected Unaudited Pro Forma Combined Financial
Information............................................... 2
Company Selected Pro Forma Combined Financial
Information............................................. 3
CCA Selected Historical Consolidated Financial
Information............................................... 4
Prison Realty Selected Historical Consolidated Financial
Information............................................... 5
Risk Factors................................................ 7
The Company is Dependent on Operating Company, as Primary
Lessee of the Company's Facilities, for its Revenues and
Ability to Make Distributions to Its Stockholders....... 7
Existing Conflicts of Interest May Have an Effect on the
Company................................................. 7
The Company is Dependent on Outside Financing to Support
its Growth; Dilutive Effect of Such Financing........... 9
Ownership of Shares of the Capital Stock of the Company
Involves Risks Inherent in the Corrections and Detention
Industry................................................ 10
General................................................. 10
Short-Term Nature of Government Contracts............... 10
Dependence on Government Appropriations................. 11
Dependence on Government Agencies for Inmates........... 11
Dependence on Ability to Develop New Prisons and
Contracts; Opposition of Organized Labor.............. 11
Options to Purchase..................................... 11
Legal Proceedings....................................... 11
Ownership of Shares of the Capital Stock of the Company
Involves Tax Related Risks.............................. 12
Dependence on Qualification as a REIT................... 12
Adverse Effects of REIT Minimum Distribution
Requirements.......................................... 12
Requirement to Distribute Accumulated Earnings and
Profits............................................... 13
Tax Legislation......................................... 13
Ownership of Shares of the Capital Stock of the Company
Involves Risks Inherent in the Investment in Real Estate
Properties.............................................. 13
General................................................. 13
Environmental Matters................................... 14
Uninsured Loss.......................................... 14
The Company is Dependent on Certain Individuals for Its
Management.............................................. 15
The Company Lacks Control Over Day-to-Day Operations and
Management of Its Facilities............................ 15
The Company Imposes Limits on the Ownership of its Capital
Stock to Maintain Qualification as a REIT............... 15
Certain Provisions of the Company's Governing Documents
May Limit Changes in Control of the Company............. 16
Year 2000 Compliance Issues May Have an Effect on the
Company................................................. 17
A Fluctuation in Market Interest Rates May Affect the
Price of the Company's Capital Stock.................... 18
Certain Agreements Relating to the Operating Company
Credit Facility May Limit Operating Company's Ability to
Satisfy Obligations to the Company...................... 18
Factors to be Considered by ERISA Plan Fiduciaries........ 18
Information About the Company............................... 19
General................................................... 19
Relationship with Operating Company....................... 19
Relationship with Service Company A....................... 27
Relationship with Service Company B....................... 28
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Relationship Between Operating Company and the Service
Companies............................................... 28
Certain Information Incorporated by Reference............. 29
Recent Financings and Related Agreements.................... 29
The Company............................................... 29
Operating Company......................................... 30
Use of Proceeds............................................. 31
Description of Capital Stock................................ 31
General................................................... 31
Common Stock.............................................. 32
Preferred Stock........................................... 32
Restrictions on Ownership of Capital Stock................ 35
Certain Other Provisions of Maryland Law and Charter
Documents............................................... 37
Description of Common Stock Purchase Rights................. 39
Description of Debt Securities.............................. 39
General................................................... 39
Payment, Registration, Transfer and Exchange.............. 42
Description of Warrants..................................... 42
Plan of Distribution........................................ 43
Material Federal Income Tax Consequences.................... 44
Taxation of the Company................................... 45
Taxation of Stockholders.................................. 54
Other Tax Consequences...................................... 59
ERISA Considerations........................................ 59
Legal Matters............................................... 60
Experts..................................................... 60
Index to Financial Statements............................... F-1
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