Cornell Companies Opens Regional Detention Center at Albuquerque; South Tower Accepts U.S. Marshals Service Detainees.

ALBUQUERQUE, N.M. -- Cornell Companies (NYSE:CRN) opened the South Tower of the Regional Correctional Center (RCC) at Albuquerque, N.M., formerly the Bernalillo County Detention Center, yesterday. A group of 48 detainees from the United States Marshals Service were the first to arrive at the 528-bed South Tower.

At a ribbon cutting ceremony conducted on June 30th in front of the facility, Thomas R. Jenkins, Jr., president and chief operating officer, stated, "We are pleased to put this valuable asset back into use and to partner with our downtown neighbors, as well as our customers. This is a win-win situation for all parties and it took the collective efforts of city and county officials and Cornell to make this opportunity a reality. We look forward to serving our federal customers along with being available to help the state and county meet their incarceration needs."

"This announcement further demonstrates the appropriateness of the Company's development focus, which includes jails," Jenkins added. "We are committed to delivering on our development strategy to the benefit of our investors and the customers we serve."

After the ribbon cutting, tours of the facility were given. Anthony Romero, warden, said, "The improvements that we have made to the physical facility demonstrate our commitment to safety and security. In addition, we have expanded the medical services area to include observation rooms, examination rooms and dental and x-ray areas."

In addition to inpatient medical services, inmates will be offered educational opportunities, life skills training, along with substance abuse and addiction counseling.

When renovations to the North Tower are completed this fall, the total service capacity will be 970. The facility is expected to be ramped-up to capacity by year's end, at which time it will generate an estimated annualized revenue of approximately $24 million. RCC Albuquerque will employ approximately 175 people, the vast majority of whom will come from Bernalillo and surrounding counties.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current plans and actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, among others, (1) the outcomes of pending putative class action shareholder and derivative lawsuits, and related insurance coverage, (2) the outcome of the pending SEC investigation of Cornell, (3) Cornell's ability to win new contracts and to execute its growth strategy, (4) risks associated with acquisitions and the integration thereof (including the ability to achieve administrative and operating cost savings and anticipated synergies), (5) the timing and costs of the opening of new programs and facilities or the expansions of existing facilities, (6) Cornell's ability to negotiate contracts at those facilities for which it currently does not have an operating contract, (7) significant charges to expense of deferred costs associated with financing and other projects in development if management determines that one or more of such projects is unlikely to be successfully concluded, (8) results from alternative deployment or sale of facilities such as the New Morgan Academy or the inability to do so, (9) Cornell's ability to negotiate a contract amendment with the BOP related to the Moshannon Valley Correctional Center and Cornell's ability to resume construction of that facility, (10) changes in governmental policy and/or funding to discontinue or not renew existing arrangements, to eliminate or discourage the privatization of correctional, detention and pre-release services in the United States, or to eliminate rate increase, (11) the availability of financing on terms that are favorable to Cornell, and (12) fluctuations in operating results because of occupancy, competition (including competition from two competitors that are substantially larger than Cornell), increases in cost of operations, fluctuations in interest rates and risks of operations.

The Regional Correctional Center is managed and operated by Houston-based Cornell Companies, which is a leading private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. Cornell provides a diversified portfolio of services for adults and juveniles, including incarceration and detention, transition from incarceration, drug and alcohol treatment programs, behavioral rehabilitation and treatment, and grades 3-12 alternative education in an environment of dignity and respect, emphasizing community safety and rehabilitation in support of public policy. Cornell (http://www.cornellcompanies.com) has contracts to operate 71 facilities with a total service capacity of 17,622. Cornell's facilities are located in 16 states and the District of Columbia.