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HOUSTON, Nov. 4 /PRNewswire-FirstCall/ -- Service Corporation International (NYSE: SCI), the largest provider of deathcare products and services in North America, today reported results for the third quarter 2009. Our unaudited condensed consolidated financial statements can be found at the end of this press release. The table below summarizes our key financial results:
Three Months Ended Nine Months Ended
(In millions, except for September 30, September 30,
per share amounts)
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues $497.2 $516.4 $1,521.8 $1,638.7
Operating income $78.0 $49.0 $232.6 $231.7
Net income attributable to
common stockholders $31.2 $14.6 $88.8 $87.6
Diluted earnings per share $.12 $.06 $.35 $.33
Earnings from
continuing operations
excluding special items(1) $32.4 $23.9 $93.3 $112.1
Diluted earnings per
share from continuing
operations excluding
special items(1) $.13 $.09 $.37 $.43
Diluted weighted average
shares outstanding 253.0 260.4 251.3 263.0
Net cash provided by
operating activities $94.2 $116.9 $305.3 $233.4
Net cash provided by
operating activities
excluding special items(1) $94.2 $116.9 $305.3 $326.7
(1) Earnings from continuing operations excluding special items, diluted earnings per share from continuing operations excluding special items, and net cash provided by operating activities excluding special items are non-GAAP financial measures. A reconciliation to net income, diluted earnings per share, and net cash provided by operating activities computed in accordance with GAAP can be found later in this press release under the headings "Non-GAAP Financial Measures" and "Cash Flow and Capital Spending."
Quarter Highlights:
-- Diluted earnings per share from continuing operations excluding special
items was $0.13 in the third quarter 2009 compared to $0.09 in the prior
year third quarter. These results exceeded our internal expectations as
cost reduction initiatives, better than expected trust fund performance,
and better than expected preneed cemetery production more than offset
lower funeral services performed in the quarter.
-- Funeral gross profit increased $9.5 million, or 16.0%, and funeral gross
margin percentage improved to 20.9% from 16.9% as significant
efficiencies obtained from cost control initiatives more than offset
declines in funeral services performed.
-- Cemetery gross profit increased $9.4 million, or 40.7%, and cemetery
gross margin percentage improved to 19.3% from 13.9% due to an increase
in preneed cemetery property sales, higher cemetery trust fund income
and reductions in costs compared to prior year levels, which were
partially offset by lower atneed revenues in the third quarter.
-- Net cash provided by operating activities excluding special items for
the quarter was $94.2 million, a decrease of $22.7 million compared to
the prior year, reflecting the impact of partially funding an October
payroll in the current quarter, disbursements for mid-year incentive
compensation and lower receipts on preneed receivables, which were
partially offset by higher earnings.
Tom Ryan, the Company's President and Chief Executive Officer, commented on the third quarter of 2009:
"Our financial performance for the quarter was very encouraging, and continued the trend of strong financial results for the year, and I want to thank all of our associates for their efforts and hard work in achieving these results. We believe our proactive response to the challenging economic climate, which included realigning our cost structure to promote sustainable operating efficiency and investing in our sales production channel, has been validated by the results achieved, as operating income surpassed prior year results for the quarter. Moreover, our fundamentally sound business model and efficient cost structure will provide the basis for high margin growth as we expand the organization both organically and through acquisition."
"We recently announced the acquisition of Keystone North America Inc., the fifth largest provider of deathcare products and services in North America. The transaction is anticipated to close in the first quarter of 2010 and is expected to be immediately accretive to earnings and cash flow. Looking forward, we intend to continue to capitalize on our leading market position, utilizing our strength as the industry leader to make our business stronger and to enhance shareholder value."
REVIEW OF RESULTS FOR THIRD QUARTER 2009
Consolidated Segment Results
(In millions, except funeral services performed
and average revenue per funeral service) Three Months Ended
September 30,
-------------
2009 2008
---- ----
Funeral
-------
Funeral atneed revenue $211.7 $229.6
Funeral recognized preneed revenue 99.6 103.7
Other funeral revenue(1) 17.6 17.1
---- ----
Total funeral revenues $328.9 $350.4
Gross profit $68.7 $59.2
Gross margin percentage 20.9% 16.9%
Funeral services performed 60,494 65,177
Average revenue per funeral service $5,146 $5,114
Cemetery
--------
Cemetery atneed revenue $59.2 $65.1
Cemetery recognized preneed revenue 89.1 79.5
Other cemetery revenue (2) 20.0 21.4
---- ----
Total cemetery revenues $168.3 $166.0
Gross profit $32.5 $23.1
Gross margin percentage 19.3% 13.9%
(1) Other funeral revenue consists primarily of General Agency (GA) revenues, which are commissions we receive from third-party insurance companies for life insurance policies or annuities sold to preneed customers for the purpose of funding preneed funeral arrangements.
(2) Other cemetery revenue is primarily related to cemetery merchandise and service trust fund income, endowment care trust fund income, and interest and finance charges earned from customer receivables on preneed installment contracts.
Comparable Funeral Results
The table below details comparable funeral results of operations ("same store") for the three months ended September 30, 2009 and 2008. We consider comparable operations to be those owned for the entire period beginning January 1, 2008 and ending September 30, 2009.
(Dollars in millions, except average
revenue per funeral service and average
revenue per contract sold) Three Months Ended
September 30,
-------------
2009 2008 Change
---- ---- ------
Comparable funeral revenue:
Atneed revenue $207.8 $218.7 $(10.9)
Recognized preneed revenue 98.5 102.0 (3.5)
Other funeral revenue(1) 17.7 17.0 0.7
---- ---- ---
Total comparable funeral revenues $324.0 $337.7 $(13.7)
Comparable gross profit $69.9 $59.9 $10.0
Comparable gross margin percentage 21.6% 17.7%
Comparable funeral services performed:
Preneed 20,723 20,946 (223)
Atneed 38,543 41,172 (2,629)
------ ------ -------
Total 59,266 62,118 (2,852)
Comparable average revenue per funeral
service $5,168 $5,163 $5
Comparable preneed funeral production:
Sales $122.7 $126.5 $(3.8)
Total preneed funeral contracts sold 21,572 22,125 (553)
Average revenue per contract sold $5,688 $5,718 $(30)
(1) Other funeral revenue consists primarily of General Agency (GA) revenues, which are commissions we receive from third-party insurance companies for life insurance policies or annuities sold to preneed customers for the purpose of funding preneed funeral arrangements.
-- Comparable funeral services performed decreased 4.6%, primarily related
to soft demand experienced in our markets. We believe this decline is
consistent with trends experienced by other funeral service providers
and industry vendors.
-- The comparable average revenue per funeral service grew 0.1% over the
prior year quarter. Excluding an unfavorable Canadian currency impact
and lower funeral trust fund income, the average revenue per funeral
service grew approximately 1.9%.
-- The cremation rate increased 50 basis points to 42.8% in the third
quarter of 2009 compared to 42.3% for the same period of 2008.
-- Comparable funeral gross profit increased $10.0 million, or 16.7%, and
gross margin percentage increased to 21.6% compared to 17.7% in 2008 due
to lower variable merchandise costs, a decline in personnel costs
related to work force initiatives and a reduction in our self-insurance
reserves, which were partially offset by the impact of lower funeral
services performed.
-- Preneed funeral sales production decreased $3.8 million, or 3.0%. Total
funeral contracts sold decreased 2.5% while the average revenue per
contract sold decreased 0.5%. Preneed funeral sales are deferred and
recognized as revenues in the future when the funeral service is
performed.
Comparable Cemetery Results
The table below details comparable cemetery results of operations ("same store") for the three months ended September 30, 2009 and 2008. We consider comparable operations to be those owned for the entire period beginning January 1, 2008 and ending September 30, 2009.
Three Months Ended
(Dollars in millions) September 30,
-------------
2009 2008 Change
---- ---- ------
Comparable cemetery revenue:
Atneed revenue $58.1 $61.6 $(3.5)
Recognized preneed revenue 88.6 79.3 9.3
Other cemetery revenue(1) 19.7 21.0 (1.3)
---- ---- ----
Total comparable cemetery revenues $166.4 $161.9 $4.5
Comparable gross profit $32.2 $22.4 $9.8
Comparable gross margin percentage 19.4% 13.8%
Comparable preneed and atneed cemetery
sales production:
Property $87.3 $75.3 $12.0
Merchandise and services 87.2 83.9 3.3
Discounts (16.8) (13.9) (2.9)
------ ------ -----
Preneed and atneed cemetery sales
production $157.7 $145.3 $12.4
Recognition rate (2) 93% 97%
(1) Other cemetery revenue is primarily related to cemetery merchandise and service trust fund income, endowment care trust fund income and interest and finance charges earned from customer receivables on preneed installment contracts.
(2) Represents the ratio of current period revenue recognition stated as a percentage of current period sales production.
-- Comparable atneed cemetery revenues declined $3.5 million, or 5.7%,
which we believe was primarily driven by a decline in deaths in our
markets.
-- Comparable recognized preneed cemetery revenues increased $9.3 million,
primarily as a result of strong cemetery property sales production in
the current period.
-- Cemetery gross profit increased $9.8 million, and gross margin
percentage increased to 19.4% compared to 13.8% in 2008 due to the
higher preneed revenues described above, a decline in personnel costs
related to work force initiatives, and a reduction in our self-insurance
reserves, partially offset by lower atneed revenues.
-- Preneed and atneed cemetery sales production increased $12.4 million, or
8.5%, primarily due to higher property sales resulting from new company
sales initiatives coinciding with an overall improvement in the general
economic climate.
Other Financial Results
-- General and administrative expenses of $21.0 million in the third
quarter of 2009 increased $4.9 million compared to the third quarter of
2008 primarily because the prior year quarter reflected a $4.0 million
reduction in corporate bonuses and long-term incentive plans.
-- We recognized a $2.2 million net pretax loss on divestitures and
impairment charges in the third quarter of 2009 compared to $12.8
million in 2008. These losses were due primarily to impairment charges
on various locations in North America.
-- Prior year results included Hurricane expenses of $4.3 million
reflecting estimated property damages incurred at various locations
caused by Hurricane Ike in September 2008, net of estimated insurance
recoveries.
-- Interest expense decreased to $29.4 million in the third quarter of
2009, compared to $33.2 million in the third quarter of 2008. The
decrease was primarily due to lower average levels of debt.
-- During the third quarter of 2009, we purchased $17.2 million of our
senior notes and debentures on the open market. As a result of these
transactions, we recognized a gain of $0.5 million, which represents a
$0.8 million discount to early extinguish the debt, partially offset by
the write-off of unamortized deferred loan costs of $0.3 million.
-- Our income tax rate was 38.8% in the third quarter of 2009 compared to
7.3% in the third quarter of 2008. The low tax rate in 2008 reflects
discrete items, including the release of tax reserves due to the
expiration of statutory limitations and state tax planning.
Cash Flow and Capital Spending
Set forth below is a reconciliation of net cash provided by operating activities excluding special items to our reported net cash provided by operating activities prepared in accordance with GAAP. We do not intend for this information to be considered in isolation or as a substitute for other measures of liquidity prepared in accordance with GAAP.
Three Months Nine Months
Ended Ended
(In millions) September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Net cash provided by operating
activities, as reported $94.2 $116.9 $305.3 $233.4
Federal tax payment - - - 90.0
One-time Alderwoods transition
and other costs - - - 3.3
--- --- --- ---
Net cash provided by operating
activities, excluding special
items $94.2 $116.9 $305.3 $326.7
===== ====== ====== ======
Net cash provided by operating activities, excluding special items, was $94.2 million for the third quarter of 2009, down from $116.9 million in the prior year quarter. The decrease reflected the impact of partially funding an October payroll in the current quarter, disbursements for mid-year incentive compensation, and lower receipts on preneed receivables, which were partially offset by our cost control initiatives mentioned above. Although our cash flow was lower than the prior year quarter, it did exceed our expectations for the current period due to favorable working capital initiatives.
Consistent with our financial objectives, we were successful in prudently managing our capital expenditures during the three and nine month periods ended September 30, 2009. A summary of our capital expenditures is set forth below:
Three Months Ended Nine Months Ended
(In millions) September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Capital improvements at existing
locations $9.9 $21.9 $27.0 $59.0
Development of cemetery property 7.7 14.2 23.8 37.2
Construction of new funeral home
facilities and other growth 2.4 4.2 11.7 12.1
--- --- ---- ----
Total capital expenditures $20.0 $40.3 $62.5 $108.3
===== ===== ===== ======
TRUST FUND RETURNS
Total trust fund returns include realized and unrealized gains and losses and dividends. A summary of our U.S. trust fund returns for the three and nine months ended September 30, 2009 is set forth below:
Three Months Nine Months
------------ -----------
Preneed Funeral 11.1% 18.2%
Preneed Cemetery 12.9% 22.1%
Cemetery Perpetual Care 10.5% 18.6%
Combined Trust Funds 11.6% 19.9%
NON-GAAP FINANCIAL MEASURES
Earnings from continuing operations excluding special items, diluted earnings per share from continuing operations excluding special items, and net cash provided by operating activities excluding special items shown above are all non-GAAP financial measures. We believe these non-GAAP financial measures provide a consistent basis for comparison between quarters and better reflect the performance of our core operations, as they are not influenced by certain income, expense and cash items not impacting continuing operations. We also believe this measure helps facilitate comparisons to our competitors' operating results.
Set forth below is a reconciliation of earnings from continuing operations excluding special items to our reported net income attributable to common stockholders and diluted earnings per share from continuing operations excluding special items to our GAAP diluted earnings per share. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.
Three Months Ended September 30,
(In millions, except --------------------------------
diluted EPS) 2009 2008
---- ----
Net Diluted Net Diluted
Income EPS Income EPS
------ --- ------ ---
Net income attributable to
common stockholders, as
reported $31.2 $.12 $14.6 $.06
After-tax reconciling items:
Losses on divestitures and
impairment charges, net 2.3 .01 8.3 .03
Gain on extinguishment of debt (0.3) - - -
Change in certain tax reserves (0.8) - 1.0 -
----- --- --- ---
Earnings from continuing
operations excluding
special items $32.4 $.13 $23.9 $.09
===== ==== ===== ====
Diluted weighted average
shares outstanding (in
thousands) 253,048 260,370
Nine Months Ended September 30,
(In millions, except -------------------------------
diluted EPS) 2009 2008
---- ----
Net Diluted Net Diluted
Income EPS Income EPS
------ --- ------ ---
Net income attributable to
common stockholders, as
reported $88.8 $.35 $87.6 $.33
After-tax reconciling items:
Losses on divestitures and
impairment charges, net 5.3 .02 19.8 .09
Gain on early
extinguishment of debt (2.4) (.01) - -
One-time Alderwoods
transition and other costs - - 0.7 -
Change in certain tax
reserves 1.6 .01 3.6 .01
Discontinued operations - - 0.4 -
--- --- --- ---
Earnings from continuing
operations excluding
special items $93.3 $.37 $112.1 $.43
===== ==== ====== ====
Diluted weighted average
shares outstanding (in
thousands) 251,272 263,002
OUTLOOK FOR REMAINDER OF 2009 AND 2010
Our outlook for potential earnings and cash flow in the fourth quarter and full year of 2009 as well as fiscal 2010 is as follows:
4th Qtr 2009 Updated 2009 2010
(In millions except per share Guidance Guidance Guidance
amounts) -------- -------- --------
Diluted earnings per share
from continuing operations
excluding special items (1) $.09 to $.11 $.46 to $.48 $.45 to $.53
Net cash provided by
operating activities
excluding special items (1) $45 to $60 $350 to $365 $300 to $350
Capital improvements at existing
facilities and cemetery
development expenditures Approx. $20 Approx. $70 $85 to $95
(1) Diluted earnings per share from continuing operations excluding special items and net cash provided by operating activities excluding special items are non-GAAP financial measures. We normally reconcile these non-GAAP financial measures to diluted earnings per share and net cash provided by operating activities; however, these measures calculated in accordance with GAAP are not currently accessible on a forward-looking basis. Our updated outlook for 2009 and preliminary guidance for 2010 excludes the following because this information is not currently available: Gains or losses associated with asset dispositions, gains or losses associated with the early extinguishment of debt, potential tax reserve adjustments and/or potential cash tax payments, and potential costs associated with settlements of litigation or the recognition of receivables for insurance recoveries associated with litigation. The foregoing items, especially gains or losses associated with asset dispositions and tax adjustments, could materially impact our forward-looking diluted earnings per share and cash flow calculated in accordance with GAAP, consistent with the historical disclosures found earlier in this press release under the headings "Non-GAAP Financial Measures" and "Cash Flow and Capital Spending".
This outlook reflects management's current views and estimates regarding future economic and financial market conditions, company performance and financial results, business prospects, the competitive environment and other events. This outlook is subject to a number of risks and uncertainties, many of which are beyond the control of SCI, which could cause actual results to differ materially from the potential results highlighted above. A further list and description of these risks and uncertainties and other matters can be found later in this press release under "Cautionary Statement on Forward-Looking Statements".
Conference Call and Webcast
We will host a conference call on Thursday, November 5, 2009, at 8:00 a.m. Central Standard Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in number is (617) 801-9715 with the passcode of 63815855. The conference call will also be broadcast live via the Internet and can be accessed through our website at www.sci-corp.com. A replay of the conference call will be available through November 10, 2009 and can be accessed at (617) 801-6888 with the passcode of 30304932. Additionally, a replay of the conference call will be available on our website for approximately ninety days.
Cautionary Statement on Forward-Looking Statements
The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate" or "predict," that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by us, or on our behalf. Important factors, which could cause actual results to differ materially from those in forward-looking statements include, among others, the following:
-- Changes in general economic conditions, both domestically and
internationally, impacting financial markets (e.g., marketable security
values, access to capital markets, as well as currency and interest rate
fluctuations) that could negatively affect us, particularly, but not
limited to, levels of trust fund income, interest expense, and negative
currency translation effects.
-- Changes in operating conditions such as supply disruptions and labor
disputes.
-- Our inability to achieve the level of cost savings, productivity
improvements or earnings growth anticipated by management, whether due
to significant increases in energy costs (e.g., electricity, natural gas
and fuel oil), costs of other materials, employee-related costs or other
factors.
-- Inability to complete acquisitions, divestitures or strategic alliances
as planned or to realize expected synergies and strategic benefits.
-- The outcomes of pending lawsuits, proceedings, and claims against us and
the possibility that insurance coverage is deemed not to apply to these
matters or that an insurance carrier is unable to pay any covered
amounts to us.
-- Allegations regarding compliance with laws, regulations, industry
standards, and customs regarding funeral or burial procedures and
practices.
-- The amounts payable by us with respect to our outstanding legal matters
exceeding our established reserves.
-- Amounts that we may be required to replenish into our affiliated funeral
and cemetery trust funds in order to meet minimal funding requirements.
-- The outcome of pending Internal Revenue Service audits. We maintain
accruals for tax liabilities which relate to uncertain tax matters. If
these tax matters are unfavorably resolved, we will make any required
payments to tax authorities. While such payments would affect our cash
flow, we do not believe they would impair our ability to service debt or
our overall liquidity. If these tax matters are favorably resolved, the
accruals maintained by us will no longer be required, and these amounts
will be released through our tax provision at the time of resolution.
-- Our ability to manage changes in consumer demand and/or pricing for our
products and services due to several factors, such as changes in numbers
of deaths, cremation rates, competitive pressures, and local economic
conditions.
-- Changes in domestic and international political and/or regulatory
environments in which we operate, including potential changes in tax,
accounting, and trusting policies.
-- Changes in credit relationships impacting the availability of credit and
the general availability of credit in the marketplace.
-- Our ability to successfully access surety and insurance markets at a
reasonable cost.
-- Our ability to successfully leverage our substantial purchasing power
with certain of our vendors.
-- The effectiveness of our internal control over financial reporting, and
our ability to certify the effectiveness of the internal controls and to
obtain an unqualified attestation report from our auditors regarding the
effectiveness of our internal control over financial reporting.
-- The possibility that restrictive covenants in our credit agreement and
privately placed debt securities may prevent us from engaging in certain
transactions.
-- Our ability to buy our common stock under our share repurchase programs,
which could be impacted by, among others, restrictive covenants in our
bank agreements, unfavorable market conditions, the market price of our
common stock, the nature of other investment opportunities presented to
us from time to time, and the availability of funds necessary to
continue purchasing common stock.
-- The financial conditions of third-party insurance companies that fund
our preneed funeral contracts may impact our future revenues.
-- Continued economic crisis and financial and stock market declines could
reduce future potential earnings and cash flows and could result in
future goodwill impairments.
-- The weakened economy may cause customers to reassess preneed funeral or
cemetery arrangements or decrease the amounts atneed customers are
willing to pay or consider cremation as opposed to burial.
-- Changes in our funeral and cemetery trust funds, investments in equity
securities, fixed income securities, and mutual funds could be
significantly negatively impacted by the weakened economy.
For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2008 Annual Report on Form 10-K. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. We assume no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us, whether as a result of new information, future events or otherwise.
About Service Corporation International
Service Corporation International (NYSE: SCI), headquartered in Houston, Texas, is North America's leading provider of deathcare products and services. At September 30, 2009, we owned and operated 1,250 funeral homes and 364 cemeteries (of which 206 are combination locations) in 43 states, eight Canadian provinces, the District of Columbia and Puerto Rico. Through our businesses, we market the Dignity Memorial® brand which offers assurance of quality, value, caring service, and exceptional customer satisfaction. For more information about Service Corporation International, please visit our website at www.sci-corp.com. For more information about Dignity Memorial®, please visit www.dignitymemorial.com.
SERVICE CORPORATION INTERNATIONAL
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues $497,217 $516,439 $1,521,761 $1,638,672
Costs and expenses (396,054) (434,171) (1,218,653) (1,311,646)
--------- --------- ----------- -----------
Gross profit 101,163 82,268 303,108 327,026
------- ------ ------- -------
General and administrative
expenses (20,961) (16,110) (69,213) (62,840)
Loss on divestitures and
impairment charges, net (2,221) (12,819) (1,280) (28,723)
Hurricane expense, net - (4,313) - (4,313)
Other operating income - - - 585
--- --- --- ---
Operating income 77,981 49,026 232,615 231,735
Interest expense (29,383) (33,222) (93,439) (100,602)
Gain on early
extinguishment of debt 482 - 3,922 -
Interest income 584 1,128 1,872 4,502
Other income (expense), net 301 (1,000) (442) (1,061)
--- ------- ----- -------
Income from continuing
operations before income
taxes 49,965 15,932 144,528 134,574
Provision for income taxes (19,403) (1,160) (56,006) (46,524)
-------- ------- -------- --------
Income from continuing
operations 30,562 14,772 88,522 88,050
Loss from discontinued
operations - - - (362)
--- --- --- -----
Net income 30,562 14,772 88,522 87,688
Net gain attributable
to noncontrolling
interests 600 (133) 274 (133)
--- ----- --- -----
Net income
attributable to
common stockholders $31,162 $14,639 $88,796 $87,555
======= ======= ======= =======
Basic earnings per share:
Income from continuing
operations attributable
to common stockholders $.12 $.06 $.35 $.34
Net income attributable
to common stockholders $.12 $.06 $.35 $.34
Diluted earnings per share:
Income from continuing
operations attributable
to common stockholders $.12 $.06 $.35 $.33
Net income attributable
to common stockholders $.12 $.06 $.35 $.33
Basic weighted average
number of shares 251,765 257,408 250,858 259,505
======= ======= ======= =======
Diluted weighted average
number of shares 253,048 260,370 251,272 263,002
======= ======= ======= =======
SERVICE CORPORATION INTERNATIONAL
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(In thousands, except share amounts)
September 30, December 31,
2009 2008
------------ ------------
Assets
Current assets:
Cash and cash equivalents $233,485 $128,397
Receivables, net 71,829 96,145
Inventories 30,717 31,603
Deferred tax asset 79,571 79,571
Current assets held for sale 1,512 1,279
Other 20,189 18,515
------ ------
Total current assets 437,303 355,510
------- -------
Preneed funeral receivables, net and trust
investments 1,313,363 1,191,692
Preneed cemetery receivables, net and
trust investments 1,310,989 1,062,952
Cemetery property, at cost 1,459,350 1,458,981
Property and equipment, net 1,546,670 1,567,875
Non-current assets held for sale 103,242 97,512
Goodwill 1,175,528 1,178,969
Deferred charges and other assets 368,593 452,634
Cemetery perpetual care trust investments 848,159 744,758
------- -------
$8,563,197 $8,110,883
========== ==========
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $299,934 $294,859
Current maturities of long-term debt 26,061 27,104
Current liabilities held for sale 625 465
Income taxes 1,623 4,354
----- -----
Total current liabilities 328,243 326,782
------- -------
Long-term debt 1,717,507 1,821,404
Deferred preneed funeral revenues 600,653 588,198
Deferred preneed cemetery revenues 812,390 771,117
Deferred income taxes 329,956 288,677
Non-current liabilities held for sale 80,181 75,537
Other liabilities 321,992 356,090
Deferred preneed funeral and cemetery
receipts held in trust 2,103,825 1,817,665
Care trusts' corpus 849,459 772,234
Stockholders' equity:
Common stock, $1 per share par value,
500,000,000 shares authorized,
253,594,517, and 249,953,075 shares
issued, respectively, 253,184,884 and
249,472,075 shares outstanding,
respectively
253,185 249,472
Capital in excess of par value 1,721,253 1,733,814
Accumulated deficit (637,960) (726,756)
Accumulated other comprehensive income 82,893 36,649
------ ------
Total common stockholders' equity 1,419,371 1,293,179
Noncontrolling interests (380) -
----- ---
Total equity 1,418,991 1,293,179
--------- ---------
$8,563,197 $8,110,883
========== ==========
SERVICE CORPORATION INTERNATIONAL
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In thousands)
Nine Months Ended
September 30,
-----------------
2009 2008
---- ----
Cash flows from operating activities:
Net income $88,522 $87,688
Adjustments to reconcile net income to
net cash provided by operating
activities:
Loss from discontinued operations, net
of tax - 362
Gain on early extinguishment of debt,
net (3,922) -
Depreciation and amortization 82,821 84,219
Amortization of intangible assets 16,148 18,145
Amortization of cemetery property 21,723 23,824
Amortization of loan costs 2,526 2,718
Provision for doubtful accounts 8,606 6,768
Provision for deferred income taxes 42,418 94,107
Loss on divestitures and impairment
charges, net 1,280 28,723
Share-based compensation 7,505 7,626
Excess tax benefits from share-based
awards - (3,219)
Change in assets and liabilities, net of
effects from acquisitions and
divestitures:
Decrease in receivables 13,296 7,786
Decrease (increase) in other assets 12,916 (71,977)
Increase (decrease) in payables and
other liabilities 21,285 (92,603)
Effect of preneed funeral production and
maturities:
Decrease in preneed funeral receivables
and trust investments 18,645 8,605
Increase in deferred preneed funeral
revenue 8,679 23,229
Decrease in funeral deferred preneed
funeral receipts held in trust (24,858) (25,284)
Effect of preneed cemetery production
and deliveries:
(Increase) decrease in preneed cemetery
receivables and trust investments (27,019) 29,734
Increase in deferred preneed cemetery
revenue 20,590 23,186
Decrease in cemetery deferred preneed
cemetery receipts held in trust (5,811) (19,596)
Other (1) (592)
--- -----
Net cash provided by operating
activities 305,349 233,449
Cash flows from investing activities:
Capital expenditures (62,460) (108,324)
Proceeds from divestitures and sales of
property and equipment 20,984 19,221
Acquisitions (3,359) (8,545)
Net deposits of restricted funds and
other (1,023) (21,476)
------- --------
Net cash used in investing activities
from continuing operations (45,858) (119,124)
Net cash provided by investing
activities from discontinued operations - 858
--- ---
Net cash used in investing activities (45,858) (118,266)
Cash flows from financing activities:
Proceeds from the issuance of long-term
debt - 72,807
Payments of debt (118,436) (54,403)
Principal payments on capital leases (18,704) (18,550)
Purchase of Company common stock - (79,470)
Proceeds from exercise of stock options 13,405 6,097
Excess tax benefits from share-based
awards - 3,219
Payments of dividends (30,060) (31,166)
Bank overdrafts and other (9,240) (8,757)
------- -------
Net cash used in financing activities (163,035) (110,223)
Effect of foreign currency on cash and
cash equivalents 8,632 (1,651)
----- -------
Net increase in cash and cash
equivalents 105,088 3,309
Cash and cash equivalents at beginning
of period 128,397 168,594
------- -------
Cash and cash equivalents at end of
period $233,485 $171,903
======== ========
For additional information contact:
Investors:
Debbie Young
Director / Investor Relations
(713) 525-9088
Media:
Lisa Marshall
Managing Director / Corporate Communications
(713) 525-3066
SOURCE Service Corporation International
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