<font> <font> Wednesday, August 05, 2009 4:01:00 PM ET </font> </font>
<font> Service Corporation International ( SCI ), a leading provider of deathcare products and services, today reported results for the second 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: </font>
<font> Three Months Ended Six Months Ended
(In millions, except for June 30, June 30,
per share amounts) ------------------- -------------------
2009 2008 2009 2008
------ ------ ------ ------
Revenues $513.9 $548.8 $1,024.5 $1,122.2
Operating income $69.1 $83.3 $154.6 $182.7
Net income attributable to
common stockholders $23.1 $31.4 $57.6 $72.9
Diluted earnings per share $.09 $.12 $.23 $.28
Earnings from continuing
operations excluding special
items(1) $30.0 $36.4 $60.9 $88.2
Diluted earnings per share
from continuing operations
excluding special items(1) $.12 $.14 $.24 $.33
Diluted weighted average
shares outstanding 251.1 263.1 250.7 264.2
Net cash provided by
operating activities $69.7 $70.2 $211.1 $116.5
Net cash provided by
operating activities
excluding special items(1) $69.7 $70.2 $211.1 $209.8
(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 heading "Non-GAAP Financial
Measures" or "Cash Flow and Capital Spending".
</font>
<font> Highlights: </font>
<font> -- Diluted earnings per share (EPS) from continuing operations excluding
special items was $0.12 in the second quarter 2009 compared to $0.14 in
the prior year second 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 than expected funeral services performed.
-- While funeral gross profit decreased slightly, funeral gross profit
margins improved to 20.7% from 19.9% as declines in funeral services
performed were more than offset by cost control initiatives.
-- Cemetery gross profit decreased $4.2 million due to a decline in
cemetery property sales and lower cemetery trust fund income compared to
prior year levels, which were partially offset by lower variable costs.
Cemetery gross profit exceeded our expectations as cost control
initiatives helped to offset expected cemetery revenue declines.
-- Despite the decline in earnings, net cash provided by operating
activities excluding special items for the quarter was flat to the prior
year at approximately $70 million due primarily to favorable working
capital initiatives and the cost control initiatives mentioned above.
</font>
<font> Tom Ryan, the Company’s President and Chief Executive Officer, commented on the second quarter of 2009: </font>
<font> "We are very pleased with our solid operational results this quarter, which were better than expected and reflect the actions we’ve taken to mitigate the economic and near-term pressures on our business. We also benefited from positive developments in the external environment, including a rebound in the financial markets and an improvement in consumer confidence. Cash flow performance continues to be strong and we have been actively deleveraging our capital structure, retiring more than $100 million of debt in the first half of 2009. Our solid financial position and healthy cash flow outlook provide us the flexibility to pursue opportunities to invest in the long-term growth of our business and to return value to our shareholders." </font>
<font> REVIEW OF RESULTS FOR SECOND QUARTER 2009 </font>
<font> Consolidated Segment Results </font>
<font> (In millions, except funeral services performed Three Months Ended
and average revenue per funeral service) June 30,
--------
2009 2008
---- ----
Funeral
-------
Funeral atneed revenue $222.9 $235.4
Funeral recognized preneed revenue 102.6 110.6
Other funeral revenue(1) 17.2 17.3
----- -----
Total funeral revenues $342.7 $363.3
Gross profit $71.1 $72.3
Gross margin percentage 20.7% 19.9%
Funeral services performed 63,749 67,919
Average revenue per funeral service $5,106 $5,094
Cemetery
--------
Cemetery atneed revenue $61.0 $65.8
Cemetery recognized preneed revenue 89.5 96.1
Other cemetery revenue (2) 20.7 23.6
----- -----
Total cemetery revenues $171.2 $185.5
Gross profit $30.7 $34.9
Gross margin percentage 17.9% 18.8%
(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.
</font>
<font> Comparable Funeral Results </font>
<font> The table below details comparable funeral results of operations ("same store") for the three months ended June 30, 2009 and 2008. We consider comparable operations to be those owned for the entire period beginning January 1, 2008 and ending June 30, 2009. </font>
<font> (Dollars in millions, except average Three Months Ended
revenue per funeral service and June 30,
average revenue per contract sold) --------------
2009 2008 Change
---- ---- ------
Comparable funeral revenue:
Atneed revenue $218.1 $232.3 $(14.2)
Recognized preneed revenue 101.5 109.1 (7.6)
Other funeral revenue(1) 17.1 17.2 (0.1)
------ ------ ------
Total comparable funeral revenues $336.7 $358.6 $(21.9)
Comparable gross profit $70.4 $73.0 $(2.6)
Comparable gross margin percentage 20.9% 20.4%
Comparable funeral services performed:
Preneed 21,879 22,809 (930)
Atneed 40,554 44,360 (3,806)
------ ------ ------
Total 62,433 67,169 (4,736)
Comparable average revenue per funeral
service $5,119 $5,083 $36
Comparable preneed funeral production:
Sales $119.9 $122.9 $(3.0)
Total preneed funeral contracts sold 20,868 22,275 (1,407)
Average revenue per contract sold $5,746 $5,517 $229
(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.
</font>
<font> -- Comparable funeral services performed decreased 7.1%, primarily related
to soft demand experienced at the beginning of the quarter. We believe
the decline in deaths in our markets is consistent with trends
experienced by other funeral service providers and industry vendors.
-- The comparable average revenue per funeral service grew 0.7% 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 3.5%.
-- The cremation rate increased 20 basis points to 42.9% in the second
quarter of 2009 compared to 42.7% for the same period of 2008.
-- Comparable funeral gross profit decreased $2.6 million, or 3.6%, due to
the impact of lower funeral services performed and a decrease in funeral
trust fund income, which were partially offset by lower variable
merchandise costs and a decline in personnel costs related to work force
initiatives. The gross margin percentage increased to 20.9% compared to
20.4% in 2008.
-- Preneed funeral sales production decreased $3.0 million, or 2.4%. Total
funeral contracts sold decreased 6.3% while the average revenue per
contract sold increased 4.2%. Preneed funeral sales are deferred and
recognized as revenues in the future when the funeral service is
performed.
</font>
<font> Comparable Cemetery Results </font>
<font> The table below details comparable cemetery results of operations ("same store") for the three months ended June 30, 2009 and 2008. We consider comparable operations to be those owned for the entire period beginning January 1, 2008 and ending June 30, 2009. </font>
<font> Three Months Ended
(Dollars in millions) June 30,
--------------
2009 2008 Change
---- ---- ------
Comparable cemetery revenue:
Atneed revenue $59.7 $65.6 $(5.9)
Recognized preneed revenue 88.8 96.0 (7.2)
Other cemetery revenue(1) 20.5 23.3 (2.8)
---- ---- -----
Total comparable cemetery revenues $169.0 $184.9 $(15.9)
Comparable gross profit $29.4 $34.8 $(5.4)
Comparable gross margin percentage 17.4% 18.8%
Comparable preneed and atneed cemetery
sales production:
Property $86.3 $94.9 $(8.6)
Merchandise and services 93.7 95.0 (1.3)
Discounts (16.5) (16.8) 0.3
----- ----- -----
Preneed and atneed cemetery sales
production $163.5 $173.1 $(9.6)
Recognition rate (2) 91% 93%
(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.
</font>
<font> -- Comparable atneed cemetery revenues declined $5.9 million, or 9.0%,
which we believe was primarily driven by a decline in deaths in our
markets.
-- Comparable recognized preneed cemetery revenues declined $7.2 million,
of which approximately $5 million related to a decline in preneed sales
production. However, this preneed sales production was better than we
expected as we began to see improvements in consumer sentiment late in
the quarter.
-- Other cemetery revenue decreased by $2.8 million, or 12.0%, as cemetery
trust fund income recognized from our preneed merchandise and service
and cemetery perpetual care trusts declined $2.4 million due to negative
market returns experienced in late 2008 and early 2009.
-- Cemetery gross profit decreased $5.4 million, due to the revenue
declines described above, which were largely offset by lower variable
selling compensation and merchandise expenses and a decline in personnel
costs related to work force initiatives.
</font>
<font> Cash Flow and Capital Spending </font>
<font> 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 performance prepared in accordance with GAAP. </font>
<font> Three Months Six Months Ended
Ended
(In millions) June 30, June 30,
---------------- ----------------
2009 2008 2009 2008
----- ----- ----- -----
Net cash provided by operating
activities, as reported $69.7 $70.2 $211.1 $116.5
Federal tax payment - - - 90.0
One-time Alderwoods transition
and other costs - - - 3.3
----- ----- ----- -----
Net cash provided by operating
activities, excluding special
items $69.7 $70.2 $211.1 $209.8
===== ===== ====== ======
</font>
<font> Net cash provided by operating activities, excluding special items, was $69.7 million for the second quarter of 2009, down slightly from $70.2 million in the prior year quarter. While we experienced a decrease in cash receipts related to declines in revenue during the quarter, these were largely offset by cost control initiatives mentioned above. Our cash flow also benefitted from favorable working capital initiatives, all of which resulted in cash flow that exceeded our expectations in the quarter. </font>
<font> As anticipated, we were also successful in prudently managing our capital expenditures during the first half of 2009. A summary of our capital expenditures is set forth below: </font>
<font> Three Months Ended Six Months Ended
(In millions) June 30, June 30,
--------------- --------------
2009 2008 2009 2008
----- ----- ----- -----
Capital improvements at existing
locations $8.2 $22.9 $17.1 $37.1
Development of cemetery property 6.9 12.4 16.1 23.0
Construction of new funeral home
facilities and other growth 3.9 3.5 9.3 7.9
----- ----- ----- -----
Total capital expenditures $19.0 $38.8 $42.5 $68.0
===== ===== ===== =====
</font>
<font> TRUST FUND RETURNS </font>
<font> 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 six months ended June 30, 2009 is set forth below: </font>
<font> Three Months Six Months
------------ ----------
Preneed Funeral 11.4% 6.4%
Preneed Cemetery 13.4% 8.2%
Cemetery Perpetual Care 10.4% 7.3%
Combined Trust Funds 11.9% 7.4%
</font>
<font> NON-GAAP FINANCIAL MEASURES </font>
<font> 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 affecting continuing operations. We also believe this measure helps facilitate comparisons to our competitors’ operating results. </font>
<font> 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. </font>
<font> Three Months Ended June 30,
------------------------------------
(In millions, except diluted EPS) 2009 2008
--------------- ----------------
Net Diluted Net Diluted
Income EPS Income EPS
------ ------ ------ ------
Net income attributable to
common stockholders, as
reported $23.1 $.09 $31.4 $.12
After-tax reconciling items:
Losses on dispositions and
impairment charges, net 5.7 .02 3.4 .01
Gain on early extinguishment
of debt (1.2) - - -
Change in certain tax
reserves 2.4 .01 1.2 .01
Discontinued operations - - 0.4 -
------ ------ ------ ------
operations excluding
special items $30.0 $.12 $36.4 $.14
====== ====== ====== ======
Diluted weighted average shares
outstanding (in thousands) 251,130 263,132
Six Months Ended June 30,
------------------------------------
(In millions, except diluted EPS) 2009 2008
---------------- ---------------
Net Diluted Net Diluted
Income EPS Income EPS
------ ------ ------ -----
Net income attributable to
common stockholders, as
reported $57.6 $.23 $72.9 $.28
After-tax reconciling items:
Losses on dispositions and
impairment charges, net 3.0 .01 11.6 .04
Gain on early extinguishment
of debt (2.1) (.01) - -
One-time Alderwoods
transition and other costs - - 0.7 -
Change in certain tax
reserves 2.4 .01 2.6 .01
Discontinued operations - - 0.4 -
------ ------ ------ -----
Earnings from continuing
operations excluding special
items $60.9 $.24 $88.2 $.33
====== ====== ====== ======
Diluted weighted average
shares outstanding (in
thousands) 250,672 264,228
</font>
<font> UPDATED OUTLOOK FOR FISCAL 2009 </font>
<font> Due to the better than anticipated performance in the first half of the year, primarily related to sales production and cost control initiatives, and the positive trust fund returns at the end of the second quarter among other factors, we are updating our guidance for potential earnings and cash flow in fiscal 2009 as follows: </font>
<font> Original Updated
(In millions except per share amounts) Guidance Guidance
-------- --------
Diluted earnings per share from continuing $.26 to $.36 $.36 to $.42
operations excluding special items (1)
Net cash provided by operating activities $220 to $300 $320 to $370
Capital improvements at existing facilities and $80 to $90 $70 to $80
cemetery development expenditures
(1) Diluted earnings per share excluding special items is a non-GAAP
financial measure. We normally reconcile this non-GAAP financial
measure to diluted earnings per share; however, diluted earnings per
share calculated in accordance with GAAP is not currently accessible
on a forward-looking basis. Our updated outlook for 2009 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 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, could
materially impact our forward-looking diluted EPS calculated in
accordance with GAAP, consistent with the historical disclosures found
earlier in this press release under the heading "Non-GAAP financial
measures".
</font>
<font> 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". </font>
<font> Conference Call and Webcast </font>
<font> We will host a conference call on Thursday, August 6, 2009, at 9:00 a.m. Central Daylight Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in number is (617) 213-8851 with the passcode of 51206268. 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 13, 2009 and can be accessed at (617) 801-6888 with the passcode of 51762101. Additionally, a replay of the conference call will be available on our website for approximately ninety days. </font>
<font> Cautionary Statement on Forward-Looking Statements </font>
<font> 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: </font>
<font> -- 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. If these tax matters are favorably
resolved, the accruals maintained by us will no longer be required, and
these amounts will be released through the 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 of 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 weakening 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 weakening economy.
</font>
<font> 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. </font>
<font> About Service Corporation International </font>
<font> Service Corporation International ( SCI ), headquartered in Houston, Texas, is North America’s leading provider of deathcare products and services. At June 30, 2009, we owned and operated 1,264 funeral homes and 365 cemeteries (of which 207 are combination locations) in 43 states, eight Canadian provinces, the District of Columbia and Puerto Rico. Through our businesses, we market the Dignity Memorial(R) 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(R), please visit www.dignitymemorial.com . </font>
<font> For additional information contact:
Investors: Debbie Young - Director / Investor Relations (713) 525-9088
Media: Lisa Marshall - Managing Director / Corporate (713) 525-3066
Communications
</font>
<font> SERVICE CORPORATION INTERNATIONAL
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2009 2008 2009 2008
------ ----- ---- ----
Revenues $513,949 $548,782 $1,024,544 $1,122,233
Costs and expenses (412,124) (441,621) (822,599) (877,475)
------- -------- -------- --------
Gross profit 101,825 107,161 201,945 244,758
------- -------- -------- --------
General and
Administrative
expenses (26,466) (21,655) (48,252) (46,730)
(Loss) gain on
divestitures and
impairment charges,
net (6,289) (3,858) 941 (15,904)
Other operating income - 1,691 - 585
------- -------- -------- --------
Operating income 69,070 83,339 154,634 182,709
Interest expense (32,386) (33,311) (64,056) (67,380)
Gain on early
extinguishment of
debt 1,830 - 3,440 -
Interest income 585 1,454 1,288 3,374
Other income (expense),
net 803 687 (743) (61)
------- -------- -------- --------
Income from continuing
operations before
income taxes 39,902 52,169 94,563 118,642
Provision for income
taxes (16,322) (20,395) (36,603) (45,364)
------- -------- -------- --------
Income from continuing
operations 23,580 31,774 57,960 73,278
Loss from discontinued
operations - (377) - (362)
------- -------- -------- --------
Net income 23,580 31,397 57,960 72,916
Net gain
attributable to
noncontrolling
interests (476) - (326) -
------- -------- -------- --------
Net income
attributable to
common
stockholders $23,104 $31,397 $57,634 $72,916
======== ======== ======== ========
Basic earnings per share:
Income from continuing
operations
attributable to
common stockholders $.09 $.12 $.23 $.28
Net income
attributable to
common stockholders $.09 $.12 $.23 $.28
Diluted earnings per share:
Income from continuing
operations
attributable to
common stockholders $.09 $.12 $.23 $.28
Net income
attributable to
common stockholders $.09 $.12 $.23 $.28
Basic weighted
average number of
shares 250,977 259,655 250,461 260,565
======== ======== ======== ========
Diluted weighted
average number of
shares 251,130 263,132 250,672 264,228
======== ======== ======== ========
</font>
<font> SERVICE CORPORATION INTERNATIONAL
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(In thousands, except share amounts)
June 30, December 31,
2009 2008
---------- ----------
Assets
Current assets:
Cash and cash equivalents $170,389 $128,397
Receivables, net 74,949 96,145
Inventories 31,111 31,603
Deferred tax asset 79,571 79,571
Current assets held for sale 1,397 1,279
Other 29,955 18,515
---------- ----------
Total current assets 387,372 355,510
---------- ----------
Preneed funeral receivables, net and trust
investments 1,250,633 1,191,692
Preneed cemetery receivables, net and trust
investments 1,186,044 1,062,952
Cemetery property, at cost 1,457,823 1,458,981
Property and equipment, net 1,549,955 1,567,875
Non-current assets held for sale 100,375 97,512
Goodwill 1,171,695 1,178,969
Deferred charges and other assets 363,294 452,634
Cemetery perpetual care trust investments 767,740 744,758
---------- ----------
$8,234,931 $8,110,883
========== ==========
Liabilities & Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities $288,823 $294,859
Current maturities of long-term debt 27,971 27,104
Current liabilities held for sale 659 465
Income taxes 2,092 4,354
---------- ----------
Total current liabilities 319,545 326,782
---------- ----------
Long-term debt 1,727,092 1,821,404
Deferred preneed funeral revenues 594,679 588,198
Deferred preneed cemetery revenues 811,496 771,117
Deferred income taxes 319,374 288,677
Non-current liabilities held for sale 76,397 75,537
Other liabilities 321,704 356,090
Deferred preneed funeral and cemetery
receipts held in trust 1,936,470 1,817,665
Care trusts’ corpus 767,981 772,234
Stockholders’ equity:
Common stock, $1 per share par value,
500,000,000 shares authorized,
251,414,517, and 249,953,075 shares
issued, respectively, 251,004,884 and
249,472,075 shares outstanding,
respectively
251,005 249,472
Capital in excess of par value 1,720,182 1,733,814
Accumulated deficit (669,122) (726,756)
Accumulated other comprehensive income 57,907 36,649
---------- ----------
Total common stockholders’ equity 1,359,972 1,293,179
Noncontrolling interests 221 -
---------- ----------
Total equity 1,360,193 1,293,179
---------- ----------
$8,234,931 $8,110,883
========== ==========
</font>
<font> SERVICE CORPORATION INTERNATIONAL
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In thousands)
Six Months Ended
June 30,
2009 2008
-------- --------
Cash flows from operating activities:
Net income $57,960 $72,916
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 (3,440) -
Depreciation and amortization 55,438 55,675
Amortization of intangible assets 10,855 12,333
Amortization of cemetery property 13,940 16,526
Amortization of loan costs 1,694 1,863
Provision for doubtful accounts 5,905 3,915
Provision for deferred income taxes 32,924 28,079
(Gain) loss on divestitures and
impairment charges, net (941) 15,904
Share-based compensation 5,168 5,256
Excess tax benefits from share-based
awards - (2,170)
Change in assets and liabilities, net of
effects from acquisitions and divestitures:
Decrease in receivables 12,642 6,484
Decrease (increase) in other assets 9,183 (10,069)
Increase (decrease) in payables and
other liabilities 4,105 (128,320)
Effect of preneed funeral production and
maturities:
Decrease in preneed funeral receivables
and trust investments 11,019 15,098
Increase in deferred preneed funeral
revenue 4,752 20,836
Decrease in funeral deferred preneed
funeral receipts held in trust (15,838) (24,640)
Effect of preneed cemetery production
and deliveries:
(Increase) decrease in preneed cemetery
receivables and trust investments (5,369) 24,206
Increase in deferred preneed cemetery
revenue 20,794 20,421
Decrease in cemetery deferred preneed
cemetery receipts held in trust (9,673) (17,578)
Other - (585)
-------- --------
Net cash provided by operating activities 211,118 116,512
Cash flows from investing activities:
Capital expenditures (42,470) (68,035)
Proceeds from divestitures and sales of
property and equipment 14,788 12,831
Acquisitions (219) (7,871)
Net withdrawals (deposits) of restricted
funds and other 129 (21,477)
-------- --------
Net cash used in investing activities
from continuing operations (27,772) (84,552)
Net cash provided by investing
activities from discontinued operations - 858
-------- --------
Net cash used in investing activities (27,772) (83,694)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt - 72,000
Payments of debt (101,229) (54,367)
Principal payments on capital leases (13,045) (12,013)
Purchase of Company common stock - (79,470)
Proceeds from exercise of stock options 2,363 3,596
Excess tax benefits from share-based awards - 2,170
Payments of dividends (20,020) (20,879)
Bank overdrafts and other (13,394) (6,714)
-------- --------
Net cash used in financing activities (145,325) (95,677)
Effect of foreign currency on cash and
cash equivalents 3,971 (1,035)
-------- --------
Net increase (decrease) in cash and cash
equivalents 41,992 (63,894)
Cash and cash equivalents at beginning
of period 128,397 168,594
-------- --------
Cash and cash equivalents at end of
period $170,389 $104,700
======== ========
</font>
<font> SOURCE Service Corporation International </font>
<font> http://www.sci-corp.com
</font>
$7.4 (08/06/09)
