Service Corporation International Announces Fourth Quarter 2009 Financial Results and Updates 2010 Guidance
- Conference call on Thursday, February 25, 2010, at 9:00 a.m. Central Standard Time.
HOUSTON, Feb. 24 /PRNewswire-FirstCall/ -- Service Corporation International (NYSE: SCI), the largest provider of deathcare products and services in North America, today reported results for the fourth quarter 2009. Our consolidated financial statements can be found at the end of this press release. The table below summarizes our key financial results:
Three Months Ended Twelve Months Ended
December 31, December 31,
(In millions, except for ------------ ------------
per share amounts) 2009 2008 2009 2008
---- ---- ---- ----
Revenues $531.8 $517.0 $2,053.5 $2,155.6
Operating income $91.3 $60.9 $323.9 $292.7
Net income attributable
to common stockholders $34.3 $9.5 $123.1 $97.1
Diluted earnings per share $.13 $.04 $.49 $.37
Earnings from continuing
operations excluding
special items(1) $35.7 $22.1 $129.0 $134.2
Diluted earnings per share
from continuing operations
excluding special items(1) $.14 $.09 $.51 $.51
Diluted weighted average
shares outstanding 255.1 254.9 252.5 261.0
Net cash provided by operating
activities $66.8 $116.9 $372.1 $350.3
Net cash provided by operating
activities excluding
special items(1) $66.8 $28.7 $372.1 $355.4
(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 "Non-GAAP Financial Measures"
and "Cash Flow and Capital Spending".
Highlights:
- Diluted earnings per share from continuing operations excluding special items was $0.14 in the fourth quarter 2009 compared to $0.09 in the prior year fourth quarter. These improvements reflect strong preneed cemetery sales production, better than expected trust fund performance, and cost reduction initiatives that contributed to enhanced operating margins.
- Funeral gross profit increased $9.2 million, or 12.7%, and funeral gross margin percentage improved to 23.0% from 20.3% as higher average revenue per service, strong general agency revenues, and efficiencies obtained from cost control initiatives more than offset declines in funeral services performed.
- Cemetery gross profit increased $17.1 million, or 88.6%, and cemetery gross margin percentage improved to 20.6% from 12.0% due to a significant increase in preneed cemetery property sales, substantially higher cemetery trust fund income, and reductions in costs compared to prior year levels, which were partially offset by lower atneed revenues in the fourth quarter.
- Net cash provided by operating activities excluding special items for the quarter was $66.8 million, an increase of $38.1 million compared to the prior year. The increase reflects greater cash realization correlating with higher earnings in the current period and the benefit from substantially funding a payroll in the third quarter.
Tom Ryan, the Company's President and Chief Executive Officer, commented on the fourth quarter of 2009:
"We were pleased with our operating results for the fourth quarter. Our strong finish to the year was especially gratifying in light of the challenging economic conditions that existed throughout the period. Our sales team demonstrated impressive leadership by developing dynamic market initiatives and delivering a solid performance in preneed sales that more than offset the softer atneed market. We also improved our profit margins during the period, reflecting the continued containment of field operating expenses. 2009 was a testament to the focus, hard work, and dedication of our 20,000 employees who made this success possible."
REVIEW OF RESULTS FOR FOURTH QUARTER AND FISCAL YEAR ENDED 2009
---------------------------------------------------------------
Consolidated Segment Results
(In millions, except funeral services performed and average
revenue per funeral service)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Funeral
-------
Funeral atneed revenue $229.0 $235.0 $903.8 $967.5
Funeral recognized
preneed revenue 108.9 108.2 422.2 446.7
Other revenues(1) 17.4 13.2 65.8 61.5
---- ---- ---- ----
Total funeral revenues $355.3 $356.4 $1,391.8 $1,475.7
Gross profit $81.7 $72.5 $305.7 $312.5
Gross margin percentage 23.0% 20.3% 22.0% 21.2%
Funeral services performed 64,472 67,683 258,044 278,165
Average revenue per
funeral service $5,240 $5,071 $5,139 $5,084
Cemetery
--------
Cemetery atneed revenue $60.6 $62.8 $240.7 $259.3
Cemetery recognized
preneed revenue 94.0 84.5 342.3 339.6
Other revenue (2) 21.9 13.2 78.7 81.0
---- ---- ---- ----
Total cemetery revenues $176.5 $160.5 $661.7 $679.9
Gross profit $36.4 $19.3 $115.5 $106.3
Gross margin percentage 20.6% 12.0% 17.5% 15.6%
(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 December 31, 2009 and 2008. We consider comparable operations to be those owned for the entire period beginning January 1, 2008 and ending December 31, 2009.
(Dollars in millions, except average revenue per funeral service and
average revenue per contract sold)
Three Months Ended
December 31,
------------
2009 2008 Change
---- ---- ------
Comparable funeral revenue:
Atneed revenue $223.5 $228.1 $(4.6)
Recognized preneed revenue 108.2 106.2 2.0
Other funeral revenue(1) 17.2 13.1 4.1
---- ---- ---
Total comparable funeral revenues $348.9 $347.4 $1.5
Comparable gross profit $82.2 $75.0 $7.2
Comparable gross margin percentage 23.6% 21.6%
Comparable funeral services performed:
Preneed 22,488 22,793 (305)
Atneed 40,823 42,898 (2,075)
------ ------ ------
Total 63,311 65,691 (2,380)
Comparable average revenue per
funeral service $5,239 $5,089 $ 150
Comparable preneed funeral production:
Sales $113.8 $94.6 $19.2
Total preneed funeral contracts sold 19,389 16,510 2,879
Average revenue per contract sold $5,869 $5,732 $ 137
(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 revenues increased $1.5 million, as higher average revenues per funeral service and higher General Agency revenues more than offset the decline in funeral services performed.
- Comparable funeral gross profit increased $7.2 million, or 9.6%, and gross margin percentage increased to 23.6% compared to 21.6% in 2008 due to a decline in personnel costs related to work force initiatives and the impact of other field level cost controls, which were partially offset by higher incentive compensation expenses.
- Comparable funeral services performed decreased 3.6%, primarily related to soft demand experienced in our relevant 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 2.9% over the prior year quarter. Excluding a favorable Canadian currency impact and higher funeral trust fund income, the average revenue per funeral service grew approximately 1.2%.
- Preneed funeral sales production increased $19.2 million, or 20.3%. Total funeral contracts sold increased 17.4% while the average revenue per contract sold increased 2.4%. Preneed funeral sales are deferred and recognized as revenues in the future when the funeral service is performed.
- The cremation rate increased 140 basis points to 41.2% in the fourth quarter of 2009 compared to 39.8% for the same period of 2008.
Comparable Cemetery Results
The table below details comparable cemetery results of operations ("same store") for the three months ended December 31, 2009 and 2008. We consider comparable operations to be those owned for the entire period beginning January 1, 2008 and ending December 31, 2009.
(Dollars in millions) Three Months Ended
December 31,
------------
2009 2008 Change
---- ---- ------
Comparable cemetery revenue:
Atneed revenue $59.0 $61.2 $(2.2)
Recognized preneed revenue 93.7 84.1 9.6
Other cemetery revenue(1) 21.5 13.3 8.2
---- ---- ---
Total comparable cemetery revenues $174.2 $158.6 $15.6
Comparable gross profit $36.1 $19.9 $16.2
Comparable gross margin percentage 20.7% 12.5%
Comparable preneed and atneed
cemetery sales production:
Property $86.4 $64.9 $21.5
Merchandise and services 85.2 77.1 8.1
Discounts (15.6) (12.0) (3.6)
----- ----- ----
Preneed and atneed cemetery sales
production $156.0 $130.0 $26.0
Recognition rate (2) 98% 112%
(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 $2.2 million, or 3.6%, which we believe was primarily driven by a decline in deaths in our markets.
- Comparable recognized preneed cemetery revenues increased $9.6 million, or 11.4%, primarily as a result of strong cemetery property sales production in the current period.
- Other cemetery revenue increased $8.2 million, or 61.7%, in the current quarter, reflecting substantially improved trust fund income over the comparable period in the prior year.
- Cemetery gross profit increased $16.2 million, and gross margin percentage increased to 20.7% compared to 12.5% in 2008 due to the higher preneed revenues and trust fund income described above and a decline in personnel costs related to work force initiatives, partially offset by lower atneed revenues.
- Preneed and atneed cemetery sales production increased $26.0 million, or 20.0%, primarily attributable to higher property sales resulting from strong sales initiatives coinciding with an overall improvement in the general economic climate.
Other Financial Results
- General and administrative expenses were $33.1 million in the fourth quarter of 2009, an increase of $8.5 million compared to the fourth quarter of 2008. The increase was primarily due to acquisition expenses related to Keystone North America and Palm Mortuaries, and higher incentive compensation expense incurred during the fourth quarter of 2009.
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 performance prepared in accordance with GAAP.
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
(In millions) 2009 2008 2009 2008
---- ---- ---- ----
Net cash provided by operating
activities, as reported $66.8 $116.9 $372.1 $350.3
Pension termination contribution - 3.0 - 3.0
Net tax refund - (91.2) - (1.2)
Alderwoods transition and
other costs - - - 3.3
--- --- --- ---
Net cash provided by
operating activities excluding
special items $66.8 $28.7 $372.1 $355.4
===== ===== ====== ======
- Net cash provided by operating activities excluding special items was $66.8 million for the fourth quarter of 2009, up from $28.7 million in the prior year quarter. The increase reflects greater cash realization correlating with higher earnings in the current period and the benefit from substantially funding a payroll in the third quarter.
Consistent with our financial objectives, we were successful in prudently managing our capital expenditures during the three and twelve month periods ended December 31, 2009. A summary of our capital expenditures is set forth below:
Three Months Ended Twelve Months Ended
(In millions) December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Capital improvements at existing
locations $10.4 $19.5 $37.4 $78.5
Development of cemetery property 6.7 18.0 30.5 55.2
Construction of new funeral home
facilities and other growth 4.2 8.3 15.9 20.4
--- --- ---- ----
Total capital expenditures $21.3 $45.8 $83.8 $154.1
===== ===== ===== ======
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 twelve months ended December 31, 2009 is set forth below:
Three Months Twelve Months
------------ -------------
Preneed Funeral 4.0% 23.0%
Preneed Cemetery 4.2% 27.3%
Cemetery Perpetual Care 3.3% 22.4%
Combined Trust Funds 3.9% 24.6%
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 affecting continuing operations. We also believe these measures help 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 December 31,
-------------------------------
(In millions, except diluted EPS) 2009 2008
---- ----
Net Diluted Net Diluted
Income EPS Income EPS
------ --- ------ ---
Net income attributable to
common stockholders, as reported $34.3 $.13 $9.5 $.04
After-tax reconciling items:
(Gains) losses on divestitures
and impairment charges, net (3.6) (.01) 4.6 .02
Acquisition costs 8.2 0.3 - -
Loss on early extinguishment
of debt .03 - - -
Change in certain tax reserves (3.5) (.01) 8.0 .03
---- ---- --- ---
Earnings from continuing
operations excluding
special items $35.7 $.14 $22.1 $.09
===== ==== ===== ====
Diluted weighted average shares
outstanding (in thousands) 255,113 254,876
Twelve Months Ended December 31,
--------------------------------
(In millions, except diluted EPS) 2009 2008
---- ----
Net Diluted Net Diluted
Income EPS Income EPS
------ --- ------ ---
Net income attributable to
common stockholders, as
reported $123.1 $.49 $97.1 $.37
After-tax reconciling items:
Losses on divestitures and
impairment charges, net 1.8 .01 24.5 .10
Acquisition costs 8.2 .03 - -
Gain on early extinguishment
of debt (2.1) (.01) - -
Alderwoods transition and
other costs - - 0.7 -
Change in certain tax
reserves (2.0) (.01) 11.5 .04
Discontinued operations - - 0.4 -
--- --- --- ---
Earnings from continuing
operations excluding special
items $129.0 $.51 $134.2 $.51
====== ==== ====== ====
Diluted weighted average shares
outstanding (in thousands) 252,484 260,983
OUTLOOK FOR 2010
Fiscal 2010
Our outlook for potential earnings and cash flow in 2010 is as follows:
(In millions except per share amounts)
Diluted earnings per share from continuing
operations excluding special items (1) $.48 to $.56
Net cash provided by operating activities
excluding special items (1) $300 to $350
Capital improvements at existing facilities
and cemetery development expenditures $85 to $95
(1) Diluted earnings per share 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 preliminary guidance for 2010 excludes
the following because this information is not currently available:
Gains or losses associated with asset divestitures, gains or losses
associated with the early extinguishment of debt, potential tax
reserve adjustments and/or cash taxes, acquisition 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 earlier in this press release under the
heading "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, 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, February 25, 2010, at 9:00 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) 213-8066 with the passcode of 31959512. 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 March 4, 2010 and can be accessed at (617) 801-6888 with the passcode of 27201005. 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.
- Our 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 minimum 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 it 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 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.
- Declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future goodwill impairments.
- 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.
- Failure to consummate the acquisition of Keystone.
- Failure to realize the anticipated benefits and/or successful implementation of the acquisition of Keystone, which could prove to be disruptive and could result in the combined business failing to meet our expectations.
For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2009 Annual Report on Form 10-K, which we anticipate filing by February 25, 2010. 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 December 31, 2009, we owned and operated 1,254 funeral homes and 372 cemeteries (of which 212 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.
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 Twelve Months Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues $531,759 $516,950 $2,053,520 $2,155,622
Costs and expenses (413,683) (425,205) (1,632,336) (1,736,851)
-------- -------- ---------- ----------
Gross profit 118,076 91,745 421,184 418,771
------- ------ ------- -------
General and administrative
expenses (33,077) (24,607) (102,290) (87,447)
Gains (losses) on
divestitures and
impairment charges, net 5,533 (7,401) 4,253 (36,124)
Other operating income 740 1,200 740 (2,528)
--- ----- --- ------
Operating income 91,272 60,937 323,887 292,672
Interest expense (35,542) (33,672) (128,981) (134,274)
(Loss) gain on early
extinguishment of debt (776) - 3,146 -
Other (expense) income, net (114) 1,456 1,316 4,897
---- ----- ----- -----
Income from continuing
operations before
income taxes 54,840 28,721 199,368 163,295
Provision for income taxes (20,269) (19,193) (76,275) (65,717)
------- ------- ------- -------
Income from continuing
operations 34,571 9,528 123,093 97,578
Loss from discontinued
operations - - - (362)
--- --- --- ----
Net income 34,571 9,528 123,093 97,216
Net (income) loss
attributable to
noncontrolling interests (269) - 5 (133)
---- --- --- ----
Net income attributable
to common stockholders $34,302 $9,528 $123,098 $97,083
======= ====== ======== =======
Basic earnings per share:
Income from continuing
operations attributable to
common stockholders $.14 $.04 $.49 $.38
Net income attributable to
common stockholders $.14 $.04 $.49 $.38
Diluted earnings per share:
Income from continuing
operations attributable
to common stockholders $.13 $.04 $.49 $.37
Net income attributable
to common stockholders $.13 $.04 $.49 $.37
Basic weighted average
number of shares 253,704 253,942 251,709 258,106
======= ======= ======= =======
Diluted weighted average
number of shares 255,113 254,876 252,484 260,983
======= ======= ======= =======
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEET
(In thousands, except share amounts)
December 31, December 31,
2009 2008
---- ----
Assets
Current assets:
Cash and cash equivalents $179,745 $128,397
Receivables, net 92,228 96,145
Deferred tax asset 51,534 79,571
Inventories 31,117 31,603
Current assets held for sale 1,197 1,279
Other 21,640 18,515
------ ------
Total current assets 377,461 355,510
------- -------
Preneed funeral receivables, net
and trust investments 1,356,353 1,191,692
Preneed cemetery receivables,
net and trust investments 1,382,717 1,062,952
Cemetery property, at cost 1,489,065 1,458,981
Property and equipment, net 1,591,074 1,567,875
Non-current assets held for sale 80,901 97,512
Goodwill 1,201,332 1,178,969
Deferred charges and other assets 522,389 452,634
Cemetery perpetual care trust
investments 889,689 744,758
------- -------
$8,890,981 $8,110,883
========== ==========
Liabilities & Equity
Current liabilities:
Accounts payable and
accrued liabilities $312,821 $294,859
Current maturities of long-term debt 49,957 27,104
Current liabilities held for sale 501 465
Income taxes 2,236 4,354
----- -----
Total current liabilities 365,515 326,782
------- -------
Long-term debt 1,840,532 1,821,404
Deferred preneed funeral revenues 596,966 588,198
Deferred preneed cemetery revenues 817,543 771,117
Deferred income taxes 246,730 288,677
Non-current liabilities held for sale 68,332 75,537
Other liabilities 380,263 356,090
Deferred preneed funeral and
cemetery receipts held in trust 2,201,403 1,817,665
Care trusts' corpus 890,909 772,234
Equity:
Common stock, $1 per share
par value, 500,000,000 shares
authorized, 254,027,384 and
249,953,075 shares issued,
respectively, 254,017,384 and
249,472,075 shares outstanding,
respectively 254,017 249,472
Capital in excess of par value 1,735,493 1,733,814
Accumulated deficit (603,876) (726,756)
Accumulated other comprehensive income 97,142 36,649
------ ------
Total common stockholders' equity 1,482,776 1,293,179
Noncontrolling interests 12 -
--- ---
Total Equity 1,482,788 1,293,179
--------- ---------
$8,890,981 $8,110,883
========== ==========
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Twelve Months Ended
December 31,
------------
2009 2008
---- ----
Cash flows from operating activities:
Net income $123,093 $97,216
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 (3,146) -
Depreciation and amortization 111,102 114,157
Amortization of intangible assets 21,698 23,636
Amortization of cemetery property 30,664 32,690
Amortization of loan costs 7,575 3,573
Provision for doubtful accounts 11,351 9,243
Provision for deferred income taxes 57,866 109,118
(Gains) losses on divestitures
and impairment charges, net (4,253) 36,124
Share-based compensation 9,684 9,970
Change in assets and liabilities,
net of effects from acquisitions
and divestitures:
Increase in receivables (8,245) (409)
Decrease in other assets 11,161 26,100
Increase (decrease) in payables
and other liabilities 30,899 (143,956)
Effect of preneed funeral
production and maturities:
Decrease in preneed funeral
receivables and trust investments 18,963 7,271
Increase in deferred preneed
funeral revenue 92 23,785
Decrease in funeral deferred
preneed funeral receipts
held in trust (22,558) (23,334)
Effect of preneed cemetery
production and deliveries:
(Increase) decrease in preneed
cemetery receivables and
trust investments (41,427) 36,333
Increase in deferred preneed
cemetery revenue 24,999 11,408
Decrease in cemetery deferred
preneed cemetery receipts
held in trust (11,702) (22,388)
Other 4,254 (585)
----- ----
Net cash provided by operating
activities 372,070 350,314
Cash flows from investing activities:
Capital expenditures (83,790) (154,101)
Acquisitions (84,932) (8,828)
Proceeds from divestitures
and sales of property and equipment 32,696 32,543
Net deposits of restricted
funds and other (16,459) (21,741)
------- -------
Net cash used in investing activities
from continuing operations (152,485) (152,127)
Net cash provided by investing
activities from discontinued operations - 858
--- ---
Net cash used in investing activities (152,485) (151,269)
Cash flows from financing activities:
Payments of Debt (269,172) (112,302)
Principal payments on capital leases (24,288) (25,851)
Proceeds from the issuance of
long-term debt 150,000 82,133
Debt issuance costs (8,146) -
Proceeds from exercise of
stock options 17,407 14,812
Purchase of Company common stock - (142,155)
Payments of dividends (40,195) (41,501)
Bank overdrafts and other (4,036) (5,779)
------ ------
Net cash used in financing activities (178,430) (230,643)
Effect of foreign currency 10,193 (8,599)
------ ------
Net increase (decrease) in cash
and cash equivalents 51,348 (40,197)
Cash and cash equivalents at
beginning of period 128,397 168,594
------- -------
Cash and cash equivalents at
end of period $179,745 $128,397
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SOURCE Service Corporation International
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