- Conference call on Thursday, August 6, 2009, at 9:00 a.m. Central
Daylight Standard Time. HOUSTON, Aug. 5 /PRNewswire-FirstCall/ --
Service Corporation International (NYSE: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: 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".
Highlights: -- 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. Tom Ryan, the Company's President and
Chief Executive Officer, commented on the second quarter of 2009:
"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." REVIEW OF RESULTS FOR SECOND QUARTER 2009
Consolidated Segment Results (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. Comparable Funeral Results 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. (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. -- 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. Comparable Cemetery Results 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. 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. -- 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. 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 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 ===== ===== ====== ====== 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. 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: 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 ===== ===== ===== ===== 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 six months ended June 30, 2009 is set forth below: 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% 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 this measure helps facilitate
comparisons to our competitors' operating results. Set forth below
is a reconciliation of earnings from continuing operations
excluding special items to our reported net income attributable to
common stockholders and diluted earnings per share from continuing
operations excluding special items to our GAAP diluted earnings per
share. We do not intend for this information to be considered in
isolation or as a substitute for other measures of performance
prepared in accordance with GAAP. Three Months Ended 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
UPDATED OUTLOOK FOR FISCAL 2009 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: 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". 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". Conference Call and
Webcast 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
http://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. Cautionary Statement on Forward-Looking
Statements The statements in this press release that are not
historical facts are forward-looking statements made in reliance on
the "safe harbor" protections provided under the Private Securities
Litigation Reform Act of 1995. These statements may be accompanied
by words such as "believe," "estimate," "project," "expect,"
"anticipate" or "predict," that convey the uncertainty of future
events or outcomes. These statements are based on assumptions that
we believe are reasonable; however, many important factors could
cause our actual results in the future to differ materially from
the forward-looking statements made herein and in any other
documents or oral presentations made by us, or on our behalf.
Important factors, which could cause actual results to differ
materially from those in forward-looking statements include, among
others, the following: -- Changes in general economic conditions,
both domestically and internationally, impacting financial markets
(e.g., marketable security values, access to capital markets, as
well as currency and interest rate fluctuations) that could
negatively affect us, particularly, but not limited to, levels of
trust fund income, interest expense, and negative currency
translation effects. -- Changes in operating conditions such as
supply disruptions and labor disputes. -- Our inability to achieve
the level of cost savings, productivity improvements or earnings
growth anticipated by management, whether due to significant
increases in energy costs (e.g., electricity, natural gas and fuel
oil), costs of other materials, employee-related costs or other
factors. -- Inability to complete acquisitions, divestitures or
strategic alliances as planned or to realize expected synergies and
strategic benefits. -- The outcomes of pending lawsuits,
proceedings, and claims against us and the possibility that
insurance coverage is deemed not to apply to these matters or that
an insurance carrier is unable to pay any covered amounts to us. --
Allegations regarding compliance with laws, regulations, industry
standards, and customs regarding funeral or burial procedures and
practices. -- The amounts payable by us with respect to our
outstanding legal matters exceeding our established reserves. --
Amounts that we may be required to replenish into our affiliated
funeral and cemetery trust funds in order to meet minimal funding
requirements. -- The outcome of pending Internal Revenue Service
audits. We maintain accruals for tax liabilities which relate to
uncertain tax matters. If these tax matters are unfavorably
resolved, we will make any required payments to tax authorities. 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. 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
http://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,
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 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
http://www.sci-corp.com/. For more information about Dignity
Memorial , please visit http://www.dignitymemorial.com/ . For
additional information contact: Investors: Debbie Young - Director
/ Investor Relations (713) 525-9088 Media: Lisa Marshall - Managing
Director / Corporate (713) 525-3066 Communications 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 ========
======== ======== ======== 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 ========== ========== 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 ======== ========
DATASOURCE: Service Corporation International CONTACT: Investors,
Debbie Young, Director, Investor Relations, +1-713-525-9088, or
Media, Lisa Marshall, Managing Director, Corporate Communications,
+1-713-525-3066, both of Service Corporation International Web
Site: http://www.sci-corp.com/
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