<PAGE>   1
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1998

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                         SECURITIES EXCHANGE ACT OF 1934
            FOR THE TRANSACTION PERIOD FROM __________ TO __________.

                         COMMISSION FILE NUMBER: 1-13560
                                                ---------

                       CORRECTIONS CORPORATION OF AMERICA
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

                TENNESSEE                               62-1156308
----------------------------------------     -----------------------------------
     (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                Identification Number)

        10 BURTON HILLS BOULEVARD
          NASHVILLE, TENNESSEE                            37215
----------------------------------------     -----------------------------------
(Address of principal executive offices)               (Zip Code)


                                 (615) 263-3000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                      NONE
--------------------------------------------------------------------------------
                (Former name, address and fiscal year if changed
                              since last report)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes   X      No 
    ------      ------

                                   80,523,735
--------------------------------------------------------------------------------
               (Outstanding shares of the issuer's common stock as
                              of August 1, 1998)




<PAGE>   2


                       CORRECTIONS CORPORATION OF AMERICA

             FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                      INDEX



<TABLE>
<CAPTION>
                                                                                                                  Page
PART I. FINANCIAL INFORMATION:                                                                                   Number
                                                                                                                 ------

<S>          <C>                                                                                                 <C>
  Item 1.    Financial Statements

             Consolidated Balance Sheets
             June 30, 1998 (Unaudited) and December 31, 1997                                                         3

             Consolidated Statements of Operations
             Three months ended June 30, 1998 and 1997
             (Unaudited)                                                                                             4

             Consolidated Statements of Operations
             Six months ended June 30, 1998 and 1997
             (Unaudited)                                                                                             5

             Consolidated Statements of Cash Flows
             Six months ended June 30, 1998 and 1997
             (Unaudited)                                                                                           6-7

             Notes to Consolidated Financial Statements
             (Unaudited)                                                                                          8-10

  Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations                                                                 10-13

  Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                              13


PART II.  OTHER INFORMATION

  Item 1.    Legal Proceedings                                                                                      14

  Item 2.    Changes in Securities and Use of Proceeds                                                              14

  Item 3.    Defaults Upon Senior Securities                                                                        14

  Item 4.    Submission of Matters to a Vote of Security Holders                                                 14-15

  Item 5.    Other Information                                                                                      15

  Item 6.    Exhibits and Reports on Form 8-K                                                                       15
</TABLE>




                                                                               2
<PAGE>   3


PART I.  FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                            June 30,         December 31,
                                                              1998               1997
                                                           ---------          ---------
                                                          (Unaudited)
<S>                                                        <C>                <C>      
ASSETS

Current assets:
   Cash and cash equivalents                               $ 133,455          $ 136,147
   Accounts receivable, net of allowances                    115,712             89,822
   Prepaid expenses                                            7,374              4,868
   Other                                                       3,207              2,585
                                                           ---------          ---------

      Total current assets                                   259,748            233,422

Property and equipment, net                                  432,785            266,493
Other long-term assets:
   Notes receivable                                           57,661             59,264
   Investment in direct financing leases                      76,024             90,184
   Deferred tax assets                                        12,946             10,195
   Other assets                                               56,437             38,382
                                                           ---------          ---------
                                                           $ 895,601          $ 697,940
                                                           =========          =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                        $  63,737          $  32,094
   Accrued salaries and wages                                 11,699              9,778
   Income taxes payable                                        3,875             14,128
   Deferred tax liabilities                                    1,799              1,229
   Other accrued expenses                                     25,157             20,361
   Current portion of long-term debt                           5,841              5,847
   Current portion of deferred gain on real estate            13,223             13,223
                                                           ---------          ---------
       Total current liabilities                             125,331             96,660

Long-term debt, net of current portion                       265,659            127,075
Deferred gain on real estate transactions                    117,459            122,529
Other noncurrent liabilities                                      --              3,600
                                                           ---------          ---------
       Total liabilities                                     508,449            349,864
                                                           ---------          ---------

Stockholders' equity:
   Preferred stock                                               376                380
   Common stock                                               80,927             80,230
   Additional paid-in capital                                224,402            215,833
   Retained earnings                                          99,670             92,475
   Treasury stock, at cost                                   (18,223)           (40,842)
                                                           ---------          ---------
      Total stockholders' equity                             387,152            348,076
                                                           ---------          ---------
                                                           $ 895,601          $ 697,940
                                                           =========          =========
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.



                                                                               3
<PAGE>   4



               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                           Three months ended
                                                                June 30
                                                    ---------------------------
                                                       1998              1997
                                                    ---------          --------
<S>                                                 <C>                <C>     
Revenues                                            $ 164,071          $107,024

Expenses:
   Operating                                          114,623            77,978
   Lease                                               13,841             1,194
   General and administrative                           5,510             3,874
   Depreciation and amortization                        3,899             4,007
                                                    ---------          --------
   Total expenses                                     137,873            87,053
                                                    ---------          --------
Operating income                                       26,198            19,971
Interest (income) expense, net                         (2,420)              854
                                                    ---------          --------

Income before income taxes                             28,618            19,117
Provision for income taxes                              7,530             7,505
                                                    ---------          --------
Net income                                          $  21,088          $ 11,612
                                                    =========          ========




Net income per common share:
   Basic                                            $     .26          $    .15
                                                    =========          ========
   Diluted                                          $     .24          $    .13
                                                    =========          ========
Weighted average common shares outstanding:
   Basic                                               80,356            76,230
                                                    =========          ========
   Diluted                                             90,064            90,211
                                                    =========          ========
</TABLE>




The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.





                                                                               4
<PAGE>   5


               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                           Six months ended
                                                               June 30
                                                    ---------------------------
                                                       1998              1997
                                                    ---------          --------
<S>                                                 <C>                <C>     
Revenues                                            $ 305,369          $198,862

Expenses:
   Operating                                          214,342           140,992
   Lease                                               24,936             2,296
   General and administrative                          10,463             7,272
   Depreciation and amortization                        7,287             7,930
                                                    ---------          --------
   Total expenses                                     257,028           158,490
                                                    ---------          --------
Operating income                                       48,341            40,372
Interest (income) expense, net                         (5,211)            1,352
                                                    ---------          --------

Income before income taxes                             53,552            39,020
Provision for income taxes                             14,021            15,413
                                                    ---------          --------
Net income                                          $  39,531          $ 23,607
                                                    =========          ========

Net income per common share:
   Basic                                            $     .49          $    .31
                                                    =========          ========
   Diluted                                          $     .44          $    .27
                                                    =========          ========
Weighted average common shares outstanding:
   Basic                                               79,924            75,917
                                                    =========          ========
   Diluted                                             90,252            89,937
                                                    =========          ========
</TABLE>




The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.



                                                                               5
<PAGE>   6


               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                            Six months ended
                                                                                 June 30
                                                                      ----------------------------
                                                                         1998               1997
                                                                      ---------          ---------
<S>                                                                   <C>                <C>      
Cash Flows from Operating Activities:
   Net income                                                         $  39,531          $  23,607
   Adjustments to reconcile net income to net cash provided
       by operating activities:
          Depreciation and amortization                                   7,287              7,930
          Deferred and other noncash income taxes                         1,818              2,029
          Other noncash items                                               243                183
          Loss on disposal of assets                                          2                 86
          Equity in earnings of unconsolidated entities                    (544)              (313)
          Recognized gain on real estate transactions                    (5,070)                --
          Changes in assets and liabilities, net of acquisition:
               Accounts receivable                                      (24,253)            16,605
               Prepaid expenses                                          (2,367)            (3,973)
               Other current assets                                        (622)            (1,334)
               Accounts payable                                          31,248             34,386
               Income taxes payable                                     (10,253)            11,220
               Accrued expenses and other liabilities                     1,705              8,789
                                                                      ---------          ---------
                   Net cash provided by operating activities             38,725             99,215
                                                                      ---------          ---------
Cash Flows from Investing Activities:
   Additions of property and equipment                                 (189,225)          (148,188)
   Decrease in restricted cash                                               --              2,851
   Increase in other assets                                             (12,414)           (10,864)
   Acquisition of USCC subsidiaries, net of cash acquired                (9,341)                --
   Investment in affiliates, net                                           (157)                --
   Proceeds from disposals of assets                                     36,132                 14
   Increase in direct financing leases                                       --            (55,850)
   Payments received on direct financing leases and notes receivable      2,627              1,133
                                                                      ---------          ---------
                   Net cash used in investing activities               (172,378)          (210,904)
                                                                      ---------          ---------

Cash Flows from Financing Activities:
   Payments on long-term debt                                               (22)            (4,655)
   Proceeds from line of credit, net                                    140,000            119,500
   Payment of debt issuance costs                                        (2,925)              (495)
   Proceeds from exercise of stock options and warrants                   1,508              1,843
   Purchase of treasury stock                                            (7,600)                --
                                                                      ---------          ---------
                    Net cash provided by financing activities           130,961            116,193
                                                                      ---------          ---------
Net increase (decrease) in cash                                          (2,692)             4,504

CASH AND CASH EQUIVALENTS, beginning of period                          136,147              4,832
                                                                      ---------          ---------
CASH AND CASH EQUIVALENTS, end of period                              $ 133,455          $   9,336
                                                                      =========          =========
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.





                                                                               6
                                                                                
<PAGE>   7



               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                             Six months ended
                                                                                                  June 30
                                                                                         -------------------------
                                                                                           1998             1997
                                                                                         --------          -------
<S>                                                                                      <C>               <C>    
Supplemental Disclosures of Cash Flow Information:
   Cash paid during the period for:

       Interest (net of amounts capitalized)                                             $  2,921          $ 3,102
                                                                                         ========          =======
       Income taxes                                                                      $ 22,231          $ 1,492
                                                                                         ========          =======
Supplemental Schedule of Noncash Investing and Financing
   Activities:

   The Company acquired treasury stock and issued common stock through the
     exercise of stock options:
           Common stock                                                                  $    398          $   494
           Additional paid-in capital                                                       3,331            2,736
           Retained earnings                                                                 (114)            (829)
           Treasury stock, at cost                                                         (3,615)          (2,401)
                                                                                         --------          -------
                                                                                         $     --          $    --
                                                                                         ========          =======

   Long term debt was converted into common stock:
           Other assets                                                                  $      5          $    15
           Long-term debt                                                                  (1,400)            (900)
           Common stock                                                                        51              531
           Additional paid-in capital                                                          32              354
           Retained earnings                                                              (31,500)              --
           Treasury stock                                                                  32,812               --
                                                                                         --------          -------
                                                                                         $     --          $    --
                                                                                         ========          =======

   The Company converted a facility from investment in direct financing lease to
     property and equipment by acquiring the equity in the facility from the
     leasing entity:
           Accounts receivable                                                           $  3,500
           Property and equipment                                                         (16,207)         $    --
           Investment in direct financing leases                                           12,707               --
                                                                                         --------          -------
                                                                                         $     --          $    --
                                                                                         ========          =======
</TABLE>





                                                                               7
<PAGE>   8

               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.       CONSOLIDATED FINANCIAL STATEMENTS

         The consolidated balance sheets as of June 30, 1998 and December 31,
         1997, the consolidated statements of operations for the quarters ended
         June 30, 1998 and 1997, and the consolidated statements of operations
         and cash flows for the six month periods ended June 30, 1998 and 1997,
         have been prepared by the Company in accordance with the accounting
         policies described in its 1997 Annual Report on Form 10-K and should be
         read in conjunction with the notes thereto.

         In the opinion of management, all adjustments (which include only
         normal recurring adjustments) necessary to present fairly the financial
         position, results of operations and changes in cash flows at June 30,
         1998 and for all periods presented have been made.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted. The results of
         operations for the periods ended June 30, 1998, are not necessarily
         indicative of the operating results for the full year.


2.       ACQUISITIONS

         In April 1998, the Company acquired all of the outstanding capital
         stock of eight subsidiaries of U.S. Corrections Corporation ("USCC")
         (the "USCC Acquisition") for approximately $10,000,000, less cash
         acquired. By virtue of the USCC Acquisition, the Company acquired
         contracts to manage four currently operating facilities in Kentucky,
         each of which is owned by CCA Prison Realty Trust ("Prison Realty"), as
         well as one each in Florida and Texas, each of which is owned by
         governmental entities of Florida and Texas, respectively. The Company,
         or one of its affiliates, currently leases the four Kentucky facilities
         from Prison Realty, or one of its affiliates, pursuant to the terms of
         that certain Master Agreement to Lease dated July 1997, between the
         Company and Prison Realty (the "Master Lease"). The Company also
         acquired by virtue of the USCC Acquisition the right to enter into
         contracts to manage two facilities currently under construction that
         are located in North Carolina and owned by Prison Realty. The Company
         expects to lease these two facilities from Prison Realty pursuant to
         the terms and conditions of the Master Lease. The total number of beds
         currently operating or under construction under all of the
         aforementioned management contracts equals 5,743.

         In April 1998, the Company acquired a 376-bed correctional facility
         from a governmental entity for $18,389,000 and assumed management of
         the facility.

         In May 1998, in consideration for relinquishing its right to purchase a
         facility, the Company agreed to pay a governmental agency $3,500,000.
         As a result, the Company converted the facility from a direct financing
         lease to property and equipment. In lieu of a cash payment, the entity
         agreed to utilize a credit for management revenue billings beginning in
         July 1998 until the credit is exhausted.




                                                                               8
<PAGE>   9



3.       LONG-TERM DEBT

         The Company increased its revolving credit facility to $350,000,000 in
         June 1998. The facility matures in September 1999 and bears interest,
         at the election of the Company, at either the bank's prime rate or a
         rate which is 1.25% above the applicable 30, 60, or 90 day LIBOR rate.
         As of June 30, 1998, there was $210,000,000 borrowed under this
         facility. Letters of credit totaling $3,400,000 had been issued leaving
         the total unused commitment at $136,600,000.

4.       MERGER

         In April 1998, the Company signed a definitive agreement to merge with
         Prison Realty in a transaction that will give the shareholders of the
         Company the right to receive 0.875 Prison Realty common shares for
         every share of Company common stock. Prison Realty will operate as a
         real estate investment trust and the merger is expected to be
         consummated on or about January 1, 1999, subject to customary
         conditions, including approvals by certain regulatory agencies and the
         shareholders of both companies.

5.       EARNINGS PER SHARE

         The Company adopted the provisions of SFAS 128, "Earnings Per Share"
         effective December 31, 1997. Under the standards established by SFAS
         128, earnings per share is measured at two levels: basic earnings per
         share and diluted earnings per share. Basic earnings per share is
         computed by dividing net income by the weighted average number of
         common shares outstanding during the year. Diluted earnings per share
         is computed by dividing net income by the weighted average number of
         common shares after considering the additional dilution related to
         convertible preferred stock, convertible subordinated notes, options
         and warrants. All earnings per share amounts presented herein have been
         restated to reflect the adoption of SFAS No. 128.

         In computing diluted earnings per common share, the Company's stock
         warrants and stock options are considered dilutive using the treasury
         stock method, and the Series B convertible preferred stock and the 8.5%
         convertible subordinated notes are considered dilutive using the
         if-converted method. The following table presents information necessary
         to calculate diluted earnings per share for the second quarter and six
         months ended June 30:

<TABLE>
<CAPTION>
                                                                           Three months ended
                                                                                 June 30
                                                                         -----------------------
                                                                           1998            1997
                                                                         -------         -------


<S>                                                                      <C>             <C>    
         Net Income                                                      $21,088         $11,612
         Interest expense applicable to convertible subordinated
           notes, net of tax                                                 147             173
                                                                         -------         -------
         Adjusted net income                                             $21,235         $11,785
                                                                         =======         =======

         Weighted average common shares outstanding                       80,356          76,230
         Effect of dilutive options and warrants                           4,543           8,264
         Conversion of preferred stock                                       730              --
         Conversion of convertible subordinated notes                      4,435           5,717
                                                                         -------         -------
         Adjusted diluted common shares outstanding                       90,064          90,211
                                                                         -------         -------
         Diluted earnings per share                                      $   .24         $   .13
                                                                         =======         =======
</TABLE>





                                                                               9
<PAGE>   10



<TABLE>
<CAPTION>
                                                                            Six months ended
                                                                                 June 30
                                                                         -----------------------
                                                                           1998            1997
                                                                         -------         -------


<S>                                                                      <C>             <C>    
         Net Income                                                      $39,531         $23,607
         Interest expense applicable to convertible subordinated
           notes, net of tax                                                 307             351
                                                                         -------         -------
         Adjusted net income                                             $39,838         $23,958
                                                                         =======         =======

         Weighted average common shares outstanding                       79,924          75,917
         Effect of dilutive options and warrants                           4,828           8,303
         Conversion of preferred stock                                       732              --
         Conversion of convertible subordinated notes                      4,768           5,717
                                                                         -------         -------
         Adjusted diluted common shares outstanding                       90,252          89,937
                                                                         -------         -------
         Diluted earnings per share                                      $   .44         $   .27
                                                                         =======         =======
</TABLE>


6.       NEW PRONOUNCEMENT

         In April 1998, the AICPA issued Statement of Position ("SOP") 98-5,
         "Reporting on the Costs of Start-Up Activities", effective for fiscal
         years beginning after December 15, 1998. SOP 98-5 requires the costs of
         start-up activities to be expensed as incurred. In accordance with the
         provisions of SOP 98-5, the Company will adopt the new accounting
         method as of January 1, 1999 by recording a cumulative effect of a
         change in accounting principle. As of June 30, 1998, the Company's
         deferred start-up costs totaled $23,258,000.

7.       COMPREHENSIVE INCOME

         In June 1997, the Financial Accounting Standards Board issued SFAS No.
         130, "Reporting Comprehensive Income", effective for fiscal years
         beginning after December 15, 1997. SFAS No.130 requires that changes in
         the amounts of certain items, including gains and losses on certain
         securities, be shown in the financial statements. The Company adopted
         the provisions of SFAS No. 130 on January 1, 1998. The Company's
         comprehensive income is substantially equivalent to net income for the
         quarters ended and six months ended June 30, 1998 and 1997.


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS

         The following discussion should be read in conjunction with the
         financial statements and notes thereto appearing elsewhere in this
         report.

         Management's Discussion and Analysis of Financial Condition and Results
         of Operations includes certain forward-looking statements about the
         Company's business, revenues, prospects, expenditures and operating and
         capital requirements. In addition, forward-looking statements may be
         included in various other Company documents to be issued in the future
         and in various oral statements by Company representatives to securities
         analysts and potential investors from time to time. Any such statements
         are subject to risks that could cause the actual results to vary
         materially. The risks and uncertainties associated with the
         forward-looking information include the strength of the markets in
         which the Company operates, competitive market conditions, general
         economic growth, interest rates and capital market conditions.
         Reference is hereby made to the more detailed discussion of such risks
         in the Company's Annual Report on Form 10-K.




                                                                              10
<PAGE>   11

         RESULTS OF OPERATIONS

         REVENUES AND OPERATING EXPENSES

         Revenues for the second quarter and first half of 1998 increased 53%
         and 54%, respectively, over the comparable periods of 1997. Management
         revenues increased $56,447,000 and $105,368,000 for the second quarter
         and first half of 1998, respectively, as compared to the same periods
         of 1997. The increase in management revenues was due to compensated
         mandays increasing by 56% and 54%, respectively, over the comparable
         periods of 1997. In April 1998, the Company acquired all of the issued
         and outstanding capital stock of eight corporate subsidiaries of USCC.
         By virtue of the USCC Acquisition, the Company acquired contracts to
         manage four currently operating facilities in Kentucky, each of which
         is owned by Prison Realty, as well as one facility in Florida and one
         in Texas, each of which is owned by governmental entities of Florida
         and Texas respectively. The USCC Acquisition resulted in a total of
         3,181 beds brought on line in the second quarter of 1998. The Company
         also acquired a 376-bed facility from a governmental entity, expanded
         three existing facilities totaling 635 beds and opened a 1,440-bed
         facility for a cumulative total of 5,632 new beds added during the
         second quarter of 1998. These beds were in addition to the 2,381 beds
         brought on line in the first quarter of 1998 and resulted in the
         Company cumulatively adding 8,013 beds during the first half of 1998.
         Transportation revenues increased $600,000 and $1,140,000,
         respectively, for the second quarter and first quarter of 1998 over the
         same relative time periods of 1997. These increases were a result of
         continued expansion of the customer base and increased utilization of
         three hubs opened in 1997.

         Operating expenses for the second quarter and first half of 1998
         increased 47% and 52%, respectively, over the comparable periods of
         1997. This increase was due to the increased compensated mandays and
         compensated mileage that the Company realized in the second quarter and
         first half of 1998 as previously mentioned. While operating costs
         increased in volume, management operating costs per compensated manday
         decreased to $29.46 for the second quarter of 1998 as compared to
         $30.51 for the second quarter of 1997. The cost per compensated mandays
         has decreased due to the continued focus on cost containment and
         economies of scale realized with the opening of larger facilities and
         expansions of existing facilities.

         General and administrative expenses for the second quarter and first
         half of 1998 increased 42% and 44%, respectively, over the comparable
         periods of 1997. However, as a percentage of revenues, general and
         administrative expenses declined to 3.4% for the second quarter and
         first half of 1998 as compared to 3.6% and 3.7% for the comparable
         periods of 1997. As the Company continues to grow, general and
         administrative expenses should increase in volume but continue to
         decrease as a percentage of revenues.

         Depreciation and amortization for the second quarter and first half of
         1998 declined 3% and 8%, respectively, over the comparable periods of
         1997. The decrease is primarily due to the sale of 13 facilities to
         Prison Realty in 1997 and 1998.

         Lease expense increased significantly in the second quarter and first
         half of 1998 as a result of the lease agreements that the Company
         entered into with Prison Realty in 1997 and 1998. As of June 30, 1998,
         the Company had entered into lease agreements with Prison Realty on 17
         facilities, including the four USCC facilities.

         OTHER EXPENSES

         Interest expense, net, for the second quarter and first six months of
         1998 was actually interest income of $2,420,000 and $5,211,000,
         respectively, as compared to interest expense of $854,000 and
         $1,352,000 in the comparable periods of 1997. This change to interest
         income was primarily the result of the sale of facilities to Prison
         Realty which allowed the Company to benefit from interest earnings on
         its increased cash balances.



                                                                              11
<PAGE>   12



         INCOME TAXES

         The Company's effective tax rate decreased to approximately 26% in the
         second quarter and first half of 1998. The decrease is due to the
         recognition of certain tax benefits realized in 1997 and 1998. The
         Company is recognizing these benefits over the next four years which
         should result in maintaining a consistent effective tax rate.


         FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         The Company's business is capital intensive in relation to the
         development of a correctional facility. The Company's efforts to obtain
         contracts, construct additional facilities and maintain its day-to-day
         operations have required the continued acquisition of funds through
         borrowings and equity offerings. The Company has financed these
         activities through the sale of capital stock, subordinated convertible
         notes and senior secured debt, through the issuance of taxable and
         tax-exempt bonds, by bank borrowings, by assisting governmental
         agencies in the issuance of municipal bonds and most recently through
         the sale and leaseback of certain correctional facilities to Prison
         Realty.

         Cash flow from operations, calculated on an EBITDA basis, for the first
         six months of 1998 was $55,628,000 as compared to $48,302,000 in the
         comparable period of 1997. The Company has strengthened its cash flow
         through its expanded business, additional focus on larger, more
         profitable facilities, the expansion of existing facilities where
         economies of scale can be realized, and the continuing effort of cost
         containment.

         In June 1998, the Company increased its revolving credit facility with
         a group of banks to $350,000,000. This facility matures in September
         1999 and is used for general corporate purposes and the issuance of
         letters of credit. The credit facility bears interest, at the election
         of the Company, at either the bank's prime rate or a rate which is
         1.25% above the applicable 30, 60, or 90 day LIBOR rate. Interest is
         payable quarterly with respect to prime rate loans and at the
         expiration of the applicable LIBOR period with respect to LIBOR based
         loans. There are no prepayment penalties associated with the credit
         facility. The credit facility requires the Company, among other things,
         to maintain certain net worth, leverage and debt service coverage
         ratios. The facility also limits certain payments and distributions. As
         of June 30, 1998, there was $210,000,000 borrowed under this facility.
         Letters of credit totaling $3,400,000 had been issued leaving the total
         unused commitment at $136,600,000.

         The Company also has a $2,500,000 credit facility with a bank that
         provides for the issuance of letters of credit and matures in September
         1999. As of June 30, 1998 there were $1,595,000 in letters of credit
         issued, leaving the unused commitment at $905,000.

         The Company anticipates making cash investments in connection with
         future acquisitions and expansions. In addition, in accordance with the
         developing trend of private prison managers making strategic financial
         investments in facilities, the Company plans to use a portion of its
         cash to finance start-up costs, leasehold improvements and equity
         investments in facilities, if appropriate in connection with
         undertaking new contracts. The Company believes that the cash flow from
         operations, the availability of future capital from Prison Realty and
         amounts available under its credit facility will be sufficient to meet
         its capital requirements for the foreseeable future. Furthermore,
         management believes that additional resources may be available to the
         Company through a variety of other financing methods.

         YEAR 2000 COMPLIANCE

         In 1997, the Company made significant improvements to its computer
         systems, software and applications. Although the company believes that
         its software applications and programs are "year 2000 compliant", there
         can be no assurance that coding errors or other defects will not be
         discovered in the future. Also, the company has not initiated formal
         communications with 





                                                                              12
<PAGE>   13

         any of the entities that contract with it to determine the extent to
         which the Company is vulnerable to those third parties failure to
         remediate their own year 2000 issues. Any year 2000 compliance problem
         of the Company or other third parties could result in a material
         adverse effect on the Company's business, prospects, results of
         operations and financial condition.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.





                                                                              13
<PAGE>   14


         PART II - OTHER INFORMATION

         Item 1.     LEGAL PROCEEDINGS

                     In April, 1998, the Company became subject to seven
                     lawsuits brought by various shareholders of the Company and
                     relating to the proposed merger of the Company with and
                     into Prison Realty. All of the lawsuits were filed in
                     Chancery Court for Davidson County in Nashville, Tennessee.
                     The lawsuits have since been consolidated into a single
                     lawsuit in Chancery Court for Davidson County in Nashville,
                     Tennessee. The lawsuit names the Company and its directors
                     as defendants. The plaintiff in the action represents a
                     putative class of all public holders of the Company's
                     common stock.

                     The consolidated complaint alleges, among other things,
                     that the directors of the Company breached their fiduciary
                     duties to the Company and/or the Company's public
                     shareholders by approving the merger. The complaint seeks,
                     among other things, preliminary and permanent injunctive
                     relief prohibiting consummation of the merger as presently
                     proposed and directing the Company or the individual
                     defendants to adopt a procedure or process, such as an
                     auction, to obtain the highest possible price for the
                     Company. The complaints also seek unspecified damages,
                     attorney's fees and other relief. The Company is contesting
                     this action vigorously.

         Item 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS

                     None.

         Item 3.     DEFAULT UPON SENIOR SECURITIES

                     None.

         Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                     The annual meeting of shareholders of the Company was held
                     on May 12, 1998. A total of 69,648,000 shares of the
                     Company's common stock, constituting a quorum of those
                     shares entitled to vote, were represented at the meeting by
                     shareholders either present in person or by proxy. At such
                     meeting the following seven (7) nominees for election as
                     directors of the Company were elected without opposition,
                     with no nominee for director receiving less that 67,858,000
                     votes, or 97% of the shares represented at the meeting:
                     Samuel W. Bartholomew, Jr., Thomas W. Beasley, Lucius E.
                     Burch, III, Doctor R. Crants, Jean-Pierre Cuny, Joseph F.
                     Johnson, Jr., and R. Clayton McWhorter. The shareholders
                     also approved and/or ratified the following proposals
                     presented to them pursuant to the vote totals indicated
                     next to each item:






                                                                              14
<PAGE>   15

                 PROPOSAL                               VOTE (# OF SHARES)

<TABLE>
<CAPTION>
                                                              FOR              AGAINST           ABSTAINED
                                                              ---              -------           ---------

<S>                                                           <C>                <C>             <C>    
         Approval of Company's Non-Employee
         Directors Compensation Plan (the "Plan")
         whereby the Non-Employee Directors' of
         the Company may elect to receive the
         cash compensation they are entitled to
         as an annual retainer for serving as a
         director of the Company in the form of
         shares of the Company's common stock.                64,429,000         5,072,000       147,000

         Ratification of the grant of an option to
         purchase 80,000 shares of the Company's
         common stock to Joseph F. Johnson, Jr., a
         director of the Company.                             54,713,000        14,694,000       240,000

         Ratification of the action of the Board of 
         Directors in selecting the firm of Arthur 
         Andersen LLP to be the independent auditors 
         of the Company for the fiscal year ending 
         December 31, 1998.                                   69,508,000            77,000        64,000
</TABLE>

Item 5. OTHER INFORMATION 

        None.

Item 6. EXHIBITS AND CURRENT REPORTS ON FORM 8-K

         a) Exhibits.

         2.1      Agreement and Plan of Merger, dated as of April 18, 1998, by
                  and between Corrections Corporation of America, and CCA Prison
                  Realty Trust (previously filed as Exhibit 2.1 to the Company's
                  Report on Form 8-K filed April 22, 1998 and incorporated
                  herein by reference).

         10.1     Amended and Restated Credit Agreement dated June 24, 1998 by
                  and among Corrections Corporation of America as Borrower,
                  certain subsidiaries of Borrower, certain Lenders, First Union
                  National Bank, as the Administrative Agent for the Lenders,
                  Canadian Imperial Bank of Commerce, as Documentation Agent,
                  and NationsBank, N.A. as Syndication Agent.

         10.2     Corrections Corporation of America Non-Employee Director's
                  Compensation Plan (filed as Appendix A to the Company's
                  definitive Proxy Statement filed March 31, 1998 relating to
                  its 1998 Annual Meeting of Shareholders and incorporated
                  herein by reference).

         27       Financial Data Schedule (for SEC use only).

         27.1     Restated Financial Data Schedule for the quarter ended June
                  30, 1997 (for SEC use only).

         b) Current Reports on Form 8-K

                  Report on Form 8-K filed April 22, 1998 relating to the merger
                  of Corrections Corporation of America with and into CCA Prison
                  Realty Trust and the acquisition of all of the issued and
                  outstanding capital stock of eight corporate subsidiaries
                  of U.S. Corrections Corporation.



                                                                              15
<PAGE>   16




                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                       CORRECTIONS CORPORATION OF AMERICA
                                       -----------------------------------
                                                 (Registrant)




August 14, 1998                        /s/ Darrell K. Massengale
-----------------------                -----------------------------------------
    (Date)                             Darrell K. Massengale
                                       Chief Financial Officer
                                       Secretary, Principal Accounting Officer




                                                                              16