The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from PR Newswire

Service Corporation International Announces Second Quarter 2013 Financial Results And Raises 2013 Guidance

Wednesday, July 24, 2013

Service Corporation International Announces Second Quarter 2013 Financial Results And Raises 2013 Guidance

16:07 EDT Wednesday, July 24, 2013

- Conference call on Thursday, July 25, 2013, at 9:00 a.m. Central Time.

HOUSTON, July 24, 2013 /PRNewswire/ -- Service Corporation International (NYSE: SCI), the largest provider of deathcare products and services in North America, today reported results for the second quarter 2013. Our unaudited condensed consolidated financial statements can be found at the end of this press release. The table below summarizes our key financial results: 

(In millions, except for per share amounts)

Three Months Ended June 30,

Six Months Ended

 June 30,

2013

2012

2013

2012

Revenues

$

625.5

$

597.4

$

1,277.9

$

1,199.9

Operating income

$

89.1

$

99.7

$

216.9

$

200.8

Net income attributable to common stockholders

$

33.6

$

37.1

$

91.2

$

85.1

Diluted earnings per share

$

0.16

$

0.17

$

0.42

$

0.39

Earnings from continuing operations excluding special items(1)

$

40.9

$

39.9

$

101.5

$

85.0

Diluted earnings per share from continuing operations excluding  special items(1)

$

0.19

$

0.18

$

0.48

$

0.38

Diluted weighted average shares outstanding

215.9

218.9

215.6

221.1

Net cash provided by operating activities

$

75.8

$

62.6

$

226.9

$

158.4

Net cash provided by operating activities excluding special items(1)

$

78.2

$

69.6

$

232.2

$

165.4

 

(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 "Cash Flow and Capital Spending" and "Non-GAAP Financial Measures".

 

Quarterly Highlights:

  • On May 29, 2013 we announced an agreement to acquire Stewart Enterprises, Inc. which would further strengthen and complement our North American presence.
  • Diluted earnings per share from continuing operations excluding special items increased 5.6% to $0.19 in the second quarter 2013 compared to $0.18 in the prior year second quarter.
  • Funeral gross profit decreased by $1.5 million, or 1.8%, and funeral gross margin percentage decreased to 19.3% from 20.6% due primarily to higher selling-related costs resulting from increased preneed funeral sales production.
  • Cemetery gross profit decreased $0.9 million, or 1.9%, and cemetery gross margin percentage decreased to 21.7% from 23.1% due primarily to higher selling-related costs associated with increased preneed cemetery sales production that was partially offset by higher trust fund income.
  • Net cash provided by operating activities excluding special items increased to $78.2 million compared to $69.6 million in 2012, primarily as a result of timing differences in working capital.

Tom Ryan, the Company's President and Chief Executive Officer, commented on the second quarter of 2013:"We are very pleased to have announced during this quarter our agreement to acquire Stewart Enterprises which we believe will meaningfully expand our scale while delivering on our commitment to increase shareholder value through prudent capital deployment. We are excited about adding Stewart's great businesses and their very talented people to our organization.  The planning for integration is ongoing with the Stewart team and we believe we are on track to close the transaction in late 2013 or early 2014. 

"We are also pleased to report another successful quarter where both earnings and cash flow exceeded our internal expectations. Based on our strong results in the first half of the year, we are increasing both our earnings per share and cash flow guidance for the full year 2013. We continue to be optimistic about our opportunities for growth enhanced by the Stewart acquisition and our preneed sales strategies that are strengthened by an aging demographic."

REVIEW OF RESULTS FOR SECOND QUARTER AND FIRST HALF OF 2013

Consolidated Segment Results

(See definitions of revenue line items later in this earnings release.)

(In millions, except funeral services performed and average revenue per funeral service)

Three Months Ended

June 30,

Six Months Ended

June 30,

2013

2012

2013

2012

Funeral

Funeral atneed revenue

$

236.6

$

234.5

$

503.6

$

487.2

Funeral matured preneed revenue

130.3

120.2

276.7

252.0

Funeral recognized preneed revenue

18.1

14.1

36.9

27.8

Other funeral revenue

30.8

27.6

60.7

53.7

Total funeral revenues

$

415.8

$

396.4

$

877.9

$

820.7

Gross profit

$

80.2

$

81.7

$

200.3

$

181.8

Gross margin percentage

19.3

%

20.6

%

22.8

%

22.2

%

Funeral services performed

70,043

68,851

149,831

143,557

Average revenue per funeral service

$

5,238

$

5,152

$

5,208

$

5,149

Cemetery

Cemetery atneed revenue

$

61.6

$

58.9

$

122.5

$

117.3

Cemetery recognized preneed revenue

120.2

118.1

224.2

214.7

Other cemetery revenue

27.9

24.0

53.3

47.2

Total cemetery revenues

$

209.7

$

201.0

$

400.0

$

379.2

Gross profit

$

45.6

$

46.5

$

85.1

$

74.0

Gross margin percentage

21.7

%

23.1

%

21.3

%

19.5

%

Comparable Funeral Results

The table below details comparable funeral results of operations ("same store") for the three months ended June 30, 2013 and 2012, including the results of the Neptune Society for both periods. We consider comparable operations to be those owned for the entire period beginning January 1, 2012 and ending June 30, 2013.  

(Dollars in millions, except average revenue per funeral service and average revenue per contract sold)

Three Months Ended

June 30,

2013

2012

Comparable funeral revenue:

Atneed revenue(1)

230.8

233.4

Matured preneed revenue(2)

129.1

119.7

Recognized preneed revenue(3)

16.9

13.9

Other funeral revenue(4)

30.5

27.5

Total comparable funeral revenues

$

407.3

$

394.5

Comparable gross profit

$

79.1

$

81.5

Comparable gross margin percentage

19.4

%

20.7

%

Comparable funeral services performed

68,037

68,477

Comparable average revenue per funeral service

$

5,290

$

5,156

Comparable preneed funeral sales production:

Sales

$

188.3

$

169.7

Preneed funeral contracts sold - SCI (excluding Neptune Society)

28,207

26,367

Preneed funeral contracts sold - Neptune Society

11,769

9,675

Average revenue per contract sold - SCI (excluding Neptune Society)

$

5,853

$

5,780

Average revenue per contract sold - Neptune Society

$

1,968

$

1,787

(1)

Funeral atneed revenue represents merchandise and funeral services sold after a death has occurred.

(2)

Funeral matured preneed revenue represents merchandise and services sold on a preneed contract but delivered and/or performed after a death has occurred.

(3)

Funeral recognized preneed revenue represents merchandise and products sold on a preneed contract and delivered before a death has occurred, including funeral merchandise and travel protection insurance, which primarily represent sales by the Neptune Society.

(4)

Other funeral revenue consists primarily of General Agency 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 revenues increased by $12.8 million, reflecting an increase in the average revenue per funeral service as well as increases in recognized preneed revenues and general agency revenue.
  • The comparable average revenue per funeral service (which includes atneed and matured preneed revenue) grew 2.6% over the prior year quarter which helped to offset a 0.6% decline in funeral services performed. Excluding an unfavorable Canadian currency impact and a benefit from higher trust fund income, the average revenue per funeral service grew approximately 2.0%. This was achieved despite a 160 basis point increase in the cremation rate to 50.0% in the second quarter of 2013.
  • Comparable funeral gross profit decreased $2.4 million, or 2.9%, compared to the prior year quarter, while the gross margin percentage decreased 130 basis points to 19.4%. Higher revenues were offset primarily by higher selling-related expenses associated with an 11% growth in preneed sales production. Additionally, we also experienced higher levels of expenses primarily related to workers' compensation claims and incentive compensation. Finally, we have begun to experience increased costs associated with growing our salesforce and related support infrastructure.
  • Comparable preneed funeral sales production increased $18.6 million, or 11.0%, compared to the prior year. This was positively impacted by a 21.6% increase in Neptune funeral contracts sold with a sales average increase of 10.1%. Excluding Neptune, SCI's number of preneed funeral contracts sold also increased 7.0%. Preneed funeral sales are deferred and recognized as revenues in future periods when the funeral service is performed, unless the corresponding merchandise or product is delivered before death has occurred.

Comparable Cemetery Results

The table below details comparable cemetery results of operations ("same store") for the three months ended June 30, 2013 and 2012. We consider comparable operations to be those owned for the entire period beginning January 1, 2012 and ending June 30, 2013.  

(Dollars in millions)

Three Months Ended

June 30,

2013

2012

Comparable cemetery revenue:

Atneed revenue(1)

$

61.6

$

58.9

Recognized preneed revenue(2)

120.2

118.1

Other cemetery revenue(3)

27.9

23.9

Total comparable cemetery revenues

$

209.7

$

200.9

Comparable gross profit

$

45.7

$

46.7

Comparable gross margin percentage

21.8

%

23.2

%

Comparable preneed and atneed cemetery sales production:

Property

$

131.0

$

123.7

Merchandise and services

104.4

99.5

Discounts

(27.4)

(24.2)

Preneed and atneed cemetery sales production

$

208.0

$

199.0

   Recognition rate (4)

87

%

89

%

(1)

Cemetery atneed revenue represents property, merchandise and services sold after a death has occurred

(2)

Cemetery recognized preneed revenue represents property sold on a preneed contract and merchandise and services sold on a preneed contract that have been delivered or performed.

(3)

Other cemetery revenue is primarily related to cemetery merchandise and service trust fund income, endowment care trust fund income, royalty income, and interest and finance charges earned from customer receivables on preneed installment contracts.

(4)

Represents the ratio of current period revenue recognition stated as a percentage of current period sales production.

  • Comparable cemetery revenues increased $8.8 million, or 4.4%, generally as a result of higher preneed and atneed sales production as well as an increase in trust fund income during the quarter.
  • Comparable cemetery gross profit decreased $1.0 million and the gross margin percentage decreased to 21.8% compared to 23.2%. Comparable margins were temporarily reduced as the timing of cemetery property revenue recognition differed from the associated selling expenses. Additionally, we experienced higher levels of expenses primarily related to workers' compensation claims and incentive compensation. Finally, we have begun to experience increased costs associated with growing our salesforce and related support infrastructure.
  • Included in the preneed and atneed cemetery sales production above is an increase of $7.5 million, or 5.4%, in preneed cemetery sales production for the current quarter.

Other Financial Results 

  • General and administrative expenses increased $1.6 million to $31.2 million. The current quarter included $3.2 million of costs related to the pending acquisition of Stewart Enterprises and $1.7 million of other system integration costs, whereas the same period of 2012 included $2.2 million of system integration costs.

Cash Flow and Capital Spending  

Set forth below is a reconciliation of our reported net cash provided by operating activities prepared in accordance with GAAP to net cash provided by operating activities excluding special items. 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.

(In millions)

Three Months Ended

June 30,

Six Months Ended

 June 30,

2013

2012

2013

2012

Net cash provided by operating activities, as reported

$

75.8

$

62.6

$

226.9

$

158.4

System and Process Transition Costs

0.1

0.4

1.6

0.4

Acquisition Costs

1.4

1.5

Legal Defense Fees

0.9

2.2

IRS Audit Payment

6.6

6.6

Net cash provided by operating activities excluding special items

$

78.2

$

69.6

$

232.2

$

165.4

  • Net cash provided by operating activities excluding special items increased $8.6 million to $78.2 million compared to $69.6 million in 2012. This increase was primarily related to the timing of cash receipts associated with preneed sales of cemetery property. We also had better collections, which were somewhat offset by the timing of cash outflows related to vendor payments.
  • A summary of our capital expenditures is set forth below:

  Capital Expenditures (In millions)

Three Months Ended

 June 30,

Six Months Ended

June 30,

2013

2012

2013

2012

Capital improvements at existing locations

$

17.7

$

18.0

$

32.5

$

31.8

Development of cemetery property

7.8

9.6

14.0

17.6

Construction of new funeral home facilities

2.7

1.0

4.3

2.6

Total capital expenditures

$

28.2

$

28.6

$

50.8

$

52.0

 

TRUST FUND RETURNS 

Total trust fund returns include realized and unrealized gains and losses and dividends.  A summary of our consolidated trust fund returns for the three and six months ended June 30, 2013 is set forth below:

Three Months

Six Months

Preneed Funeral

(0.7)%

5.5%

Preneed Cemetery

(0.2)%

6.5%

Cemetery Perpetual Care

(1.3)%

2.7%

Combined Trust Funds

(0.7)%

4.9%

 

OUTLOOK FOR 2013

Our current outlook for potential earnings and cash flow in 2013 is as follows:

(In millions except per share amounts)

Updated 2013

Annual Guidance

Diluted earnings per share from continuing operations excluding special items (1)

$.87 to $.93

Net cash provided by operating activities excluding special items (1)

$410 to $435

Capital improvements at existing facilities and cemetery development expenditures

$105 to $115

 

(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, diluted earnings per share and net cash provided by operating activities calculated in accordance with GAAP are not currently accessible on a forward-looking basis. Our guidance for 2013 excludes the following because this information is not currently available for 2013: Gains or losses associated with asset divestitures, gains or losses associated with the early extinguishment of debt, potential tax reserve adjustments, acquisition and transition costs, 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 divestitures, could materially impact our forward-looking diluted EPS and net cash provided by operating activities calculated in accordance with GAAP, consistent with the historical disclosures found in this press release under the headings "Cash Flow and Capital Spending" and "Non-GAAP financial measures".

 

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, that 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".

NON-GAAP FINANCIAL MEASURES 

Earnings from continuing operations excluding special items and diluted earnings per share from continuing operations excluding special items shown above are 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 or expense items not affecting continuing operations. We also believe these measures help facilitate comparisons to our competitors' operating results.

Set forth below is a reconciliation of our reported net income attributable to common stockholders to earnings from continuing operations excluding special items and our GAAP diluted earnings per share to diluted earnings per share from continuing operations excluding special items. 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.

(In millions, except diluted EPS)

Three Months Ended June 30,

2013

2012

Net

Income

Diluted

EPS

Net

Income

Diluted

EPS

Net income attributable to common stockholders, as reported

$

33.6

$

0.16

$

37.1

$

0.17

After-tax reconciling items:

Impact of divestitures and impairment charges, net

3.3

0.01

?

?

System and process transition costs

1.1

0.01

1.4

?

Acquisition and transition costs

2.5

0.01

?

?

Gain on early extinguishment of debt, net

(0.3)

?

?

?

Legal defense fees

0.6

?

?

?

Change in certain tax reserves

0.1

?

1.4

0.01

Earnings from continuing operations and diluted earnings per share excluding special items

$

40.9

$

0.19

$

39.9

$

0.18

Diluted weighted average shares outstanding (in thousands)

215,946

218,906

 

(In millions, except diluted EPS)

Six Months Ended June 30,

2013

2012

Net

Income

Diluted

EPS

Net

Income

Diluted

EPS

Net income attributable to common stockholders, as reported

$

91.2

$

0.42

$

85.1

$

0.39

After-tax reconciling items:

Impact of divestitures and impairment charges, net

4.0

0.02

0.3

?

System and process transition costs

1.6

0.01

1.4

0.01

Acquisition and transition costs

2.6

0.02

0.1

?

Gain on early extinguishment of debt, net

(0.3)

?

?

?

Legal defense fees

1.4

0.01

?

?

Change in certain tax reserves

1.0

?

(1.9)

(0.02)

Earnings from continuing operations and diluted earnings per share excluding special items

$

101.5

$

0.48

$

85.0

$

0.38

Diluted weighted average shares outstanding (in thousands)

215,603

221,058

 

Conference Call and Webcast

We will host a conference call on Thursday, July 25, 2013, at 9:00 a.m. Central Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in number is (630) 691-2761 with the passcode of 35291650. 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 August 24, 2013 and can be accessed at (630) 652-3042 with the passcode of 35291650#. 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:

  • Our affiliated funeral and cemetery trust funds own investments in equity securities, fixed income securities, and mutual funds, which are affected by market conditions that are beyond our control.
  • We may be required to replenish our affiliated funeral and cemetery trust funds in order to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow.
  • Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.
  • Our credit agreements contain covenants that may prevent us from engaging in certain transactions.
  • If we lost the ability to use surety bonding to support our preneed funeral and preneed cemetery activities, we may be required to make material cash payments to fund certain trust fund.
  • The funeral home and cemetery industry continues to be increasingly competitive.
  • Increasing death benefits related to preneed funeral contracts funded through life insurance or annuity contracts may not cover future increases in the cost of providing a price-guaranteed funeral service.
  • The financial condition of third-party insurance companies that fund our preneed funeral contracts may impact our future revenues.
  • Unfavorable results of litigation, including currently pending class action cases concerning cemetery or burial practices, could have a material adverse impact on our financial statements.
  • Unfavorable publicity could affect our reputation and business.
  • If the number of deaths in our markets declines, our cash flows and revenues may decrease.
  • If we are not able to respond effectively to changing consumer preferences, our market share, revenues and profitability could decrease.
  • The continuing upward trend in the number of cremations performed in North America could result in lower revenues and gross profit.
  • Our funeral home and cemetery businesses are high fixed-cost businesses.
  • Regulation and compliance could have a material adverse impact on our financial results.
  • Increased costs, including potential increased health care costs, may have a negative impact on earnings and cash flows.
  • Cemetery burial practice claims could have a material adverse impact on our financial results.
  • A number of years may elapse before particular tax matters, for which we have established accruals, are audited and finally resolved.
  • Declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future goodwill impairments and/or other intangible assets.
  • Any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results.
  • The acquisition of Stewart Enterprises, Inc. is subject to certain closing conditions that, if not satisfied or waived, will result in the acquisition not being completed, which may cause the market price of SCI common stock to decline.
  • We may fail to realize the anticipated benefits of the acquisition of Stewart Enterprises.
  • The acquisition of Stewart Enterprises may result in unexpected consequences to our business and results of operations.
  • Our level of indebtedness following the completion of the acquisition of Stewart Enterprises could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from fulfilling our obligations under our indebtedness.

For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings included in our 2012 Annual Report on Form 10-K, which was filed February 13, 2013. 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 June 30, 2013, we owned and operated 1,435 funeral homes and 374 cemeteries (of which 213 are combination locations) in 43 states, eight Canadian provinces and the District of Columbia.  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.

For additional information contact:

Investors:

Debbie Young - Director / Investor Relations

(713) 525-9088

Media:

Lisa Marshall - Managing Director / Corporate Communications

(713) 525-3066

 

 

SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

Three Months Ended

 June 30,

Six Months Ended

June 30,

2013

2012

2013

2012

Revenues

$

625,505

$

597,372

$

1,277,857

$

1,199,878

Costs and expenses

(499,684)

(469,183)

(992,436)

(944,122)

Gross profit

125,821

128,189

285,421

255,756

General and administrative expenses

(31,162)

(29,558)

(62,028)

(55,517)

(Losses) gains on divestitures and impairment charges, net

(5,545)

1,058

(6,514)

568

Operating income

89,114

99,689

216,879

200,807

Interest expense

(32,740)

(33,894)

(65,509)

(67,482)

Gains on early extinguishment of debt, net

468

?

468

?

Other (expense) income, net

(699)

(2,221)

(1,683)

1,684

Income from continuing operations before income taxes

56,143

63,574

150,155

135,009

Provision for income taxes

(21,708)

(25,935)

(56,997)

(49,055)

Net income

34,435

37,639

93,158

85,954

Net (income) loss attributable to noncontrolling interests

(820)

(563)

(1,922)

(853)

Net income attributable to common stockholders

$

33,615

$

37,076

$

91,236

$

85,101

Basic earnings per share

$

0.16

$

0.17

$

0.43

$

0.39

Diluted earnings per share

$

0.16

$

0.17

$

0.42

$

0.39

Basic weighted average number of shares

211,821

215,898

211,602

218,015

Diluted weighted average number of shares

215,946

218,906

215,603

221,058

 

SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED BALANCE SHEET

(In thousands, except share amounts)

June 30, 2013

December 31, 2012

ASSETS

Current assets:

Cash and cash equivalents

$

221,086

$

92,708

Receivables, net

90,678

101,817

Deferred tax asset

42,782

42,864

Inventories, net

24,280

24,560

Other

25,221

20,546

Total current assets

404,047

282,495

Preneed funeral receivables, net and trust investments

1,535,244

1,535,932

Preneed cemetery receivables, net and trust investments

1,904,140

1,826,835

Cemetery property, at cost

1,483,138

1,489,948

Property and equipment, net

1,623,701

1,641,101

Goodwill

1,374,374

1,382,410

Deferred charges and other assets

421,156

425,267

Cemetery perpetual care trust investments

1,109,249

1,099,580

$

9,855,049

$

9,683,568

LIABILITIES & EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

356,602

$

373,783

Current maturities of long-term debt

36,412

31,429

Income taxes

1,714

6,892

Total current liabilities

394,728

412,104

Long-term debt

1,920,383

1,916,621

Deferred preneed funeral revenues

526,489

536,647

Deferred preneed cemetery revenues

899,846

861,148

Deferred tax liability

517,583

471,198

Other liabilities

399,406

399,950

Deferred preneed funeral and cemetery receipts held in trust

2,670,395

2,624,321

Care trusts' corpus

1,108,358

1,098,752

Stockholders' Equity:

Common stock, $1 per share par value, 500,000,000 shares authorized, 212,063,882 and 211,056,501 shares issued, respectively, and 211,941,935 and 211,046,501 shares outstanding, respectively

211,942

211,047

Capital in excess of par value

1,293,863

1,307,058

Accumulated deficit

(196,576)

(286,795)

Accumulated other comprehensive income

94,457

111,717

Total common stockholders' equity

1,403,686

1,343,027

Noncontrolling interests

14,175

19,800

Total Equity

1,417,861

1,362,827

$

9,855,049

$

9,683,568

 

SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

Six Months Ended

June 30,

2013

2012

Cash flows from operating activities:

Net income

$

93,158

$

85,954

Adjustments to reconcile net income to net cash provided by operating activities:

     Gains on early extinguishment of debt, net

(468)

?

     Depreciation and amortization

61,247

59,111

     Amortization of intangible assets

11,412

12,157

     Amortization of cemetery property

19,588

21,004

     Amortization of loan costs

2,486

2,406

     Provision for doubtful accounts

3,132

5,039

     Provision for deferred income taxes

42,103

39,933

     Losses(gains) on divestitures and impairment charges, net

6,514

(568)

     Share-based compensation

5,850

4,969

     Excess tax benefits from share-based awards

(5,558)

?

Change in assets and liabilities, net of effects from acquisitions and divestitures:

     Decrease in receivables

4,586

3,486

     Increase in other assets

(4,840)

(7,540)

     Decrease in payables and other liabilities

(7,073)

(27,734)

     Effect of preneed funeral production and maturities:

          Decrease in preneed funeral receivables, net and trust investments

28,170

26,991

          Decrease in deferred preneed funeral revenue

(4,231)

(18,805)

          Decrease in deferred preneed funeral receipts held in trust

(28,576)

(15,693)

     Effect of preneed cemetery production and deliveries:

          Increase in preneed cemetery receivables, net and trust investments

(32,380)

(60,056)

          Increase in deferred preneed cemetery revenue

40,733

25,416

          (Decrease) increase in deferred preneed cemetery receipts held in trust

(8,969)

4,032

     Other

62

(1,719)

Net cash provided by operating activities

226,946

158,383

Cash flows from investing activities:

Capital expenditures

(50,762)

(52,062)

Acquisitions

(3,606)

(10,550)

Proceeds from divestitures and sales of property and equipment, net

5,550

7,135

Net withdrawals of restricted funds and other

341

(4,514)

Net cash used in investing activities

(48,477)

(59,991)

Cash flows from financing activities:

Proceeds from the issuance of long-term debt

?

12,907

Payments of debt

(4,695)

(829)

Principal payments on capital leases

(12,967)

(12,823)

Proceeds from exercise of stock options

4,856

3,793

Excess tax benefit from share-based awards

5,558

?

Purchase of Company common stock

(1,708)

(104,700)

Payments of dividends

(27,553)

(21,959)

Purchase of Neptune Society non-controlling interest

(8,333)

?

Bank overdrafts and other

(3,681)

1,074

Net cash used in by financing activities

(48,523)

(122,537)

Effect of foreign currency

(1,568)

919

Net increase (decrease) in cash and cash equivalents

128,378

(23,226)

Cash and cash equivalents at beginning of period

92,708

128,569

Cash and cash equivalents at end of period

$

221,086

$

105,343

SOURCE Service Corporation International

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections