|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
|
OR
|
||
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
|
Texas
|
|
74-1488375
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. employer
identification no.)
|
1929 Allen Parkway
Houston, Texas
(Address of principal executive offices)
|
|
77019
(Zip code)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Stock ($1 par value)
|
|
New York Stock Exchange
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
(Do not check if smaller reporting company)
|
|
|
|
|
|
Page
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
Mine Safety Disclosures
|
||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
Item 1.
|
Business.
|
Country, State/Territory/Province
|
|
Number of Funeral Service Locations
|
|
Number of Cemeteries
|
|
Total
|
|||
United States
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
37
|
|
|
14
|
|
|
51
|
|
Arizona
|
|
33
|
|
|
11
|
|
|
44
|
|
Arkansas
|
|
12
|
|
|
3
|
|
|
15
|
|
California
|
|
163
|
|
|
38
|
|
|
201
|
|
Colorado
|
|
32
|
|
|
11
|
|
|
43
|
|
Connecticut
|
|
20
|
|
|
—
|
|
|
20
|
|
Delaware
|
|
—
|
|
|
1
|
|
|
1
|
|
District of Columbia
|
|
1
|
|
|
—
|
|
|
1
|
|
Florida
|
|
135
|
|
|
60
|
|
|
195
|
|
Georgia
|
|
34
|
|
|
18
|
|
|
52
|
|
Hawaii
|
|
2
|
|
|
2
|
|
|
4
|
|
Idaho
|
|
6
|
|
|
1
|
|
|
7
|
|
Illinois
|
|
43
|
|
|
24
|
|
|
67
|
|
Indiana
|
|
49
|
|
|
10
|
|
|
59
|
|
Iowa
|
|
5
|
|
|
2
|
|
|
7
|
|
Kansas
|
|
8
|
|
|
5
|
|
|
13
|
|
Kentucky
|
|
12
|
|
|
5
|
|
|
17
|
|
Louisiana
|
|
25
|
|
|
10
|
|
|
35
|
|
Maine
|
|
11
|
|
|
—
|
|
|
11
|
|
Maryland
|
|
16
|
|
|
13
|
|
|
29
|
|
Massachusetts
|
|
26
|
|
|
—
|
|
|
26
|
|
Michigan
|
|
35
|
|
|
—
|
|
|
35
|
|
Minnesota
|
|
11
|
|
|
2
|
|
|
13
|
|
Mississippi
|
|
12
|
|
|
3
|
|
|
15
|
|
Missouri
|
|
25
|
|
|
10
|
|
|
35
|
|
Nebraska
|
|
8
|
|
|
2
|
|
|
10
|
|
Nevada
|
|
15
|
|
|
6
|
|
|
21
|
|
New Hampshire
|
|
6
|
|
|
—
|
|
|
6
|
|
New Jersey
|
|
21
|
|
|
—
|
|
|
21
|
|
New Mexico
|
|
1
|
|
|
—
|
|
|
1
|
|
New York
|
|
66
|
|
|
—
|
|
|
66
|
|
North Carolina
|
|
55
|
|
|
17
|
|
|
72
|
|
Ohio
|
|
35
|
|
|
14
|
|
|
49
|
|
Oklahoma
|
|
13
|
|
|
7
|
|
|
20
|
|
Oregon
|
|
16
|
|
|
4
|
|
|
20
|
|
Pennsylvania
|
|
19
|
|
|
16
|
|
|
35
|
|
Puerto Rico
|
|
7
|
|
|
8
|
|
|
15
|
|
Rhode Island
|
|
4
|
|
|
—
|
|
|
4
|
|
South Carolina
|
|
12
|
|
|
9
|
|
|
21
|
|
Tennessee
|
|
39
|
|
|
18
|
|
|
57
|
|
Texas
|
|
172
|
|
|
63
|
|
|
235
|
|
Utah
|
|
4
|
|
|
3
|
|
|
7
|
|
Vermont
|
|
3
|
|
|
—
|
|
|
3
|
|
Virginia
|
|
37
|
|
|
23
|
|
|
60
|
|
Washington
|
|
35
|
|
|
13
|
|
|
48
|
|
West Virginia
|
|
8
|
|
|
10
|
|
|
18
|
|
Wisconsin
|
|
—
|
|
|
7
|
|
|
7
|
|
Canada
|
|
|
|
|
|
|
|
|
|
Alberta
|
|
9
|
|
|
—
|
|
|
9
|
|
British Columbia
|
|
37
|
|
|
7
|
|
|
44
|
|
Manitoba
|
|
4
|
|
|
3
|
|
|
7
|
|
New Brunswick
|
|
5
|
|
|
—
|
|
|
5
|
|
Nova Scotia
|
|
12
|
|
|
—
|
|
|
12
|
|
Ontario
|
|
39
|
|
|
—
|
|
|
39
|
|
Quebec
|
|
40
|
|
|
—
|
|
|
40
|
|
Saskatchewan
|
|
13
|
|
|
—
|
|
|
13
|
|
Total
(1)
|
|
1,488
|
|
|
473
|
|
|
1,961
|
|
(1)
|
Includes businesses held for sale at
December 31, 2017
.
|
|
2017
|
|
2016
|
|
2015
|
|||
Preneed funeral merchandise and service trust funds
|
16.1
|
%
|
|
7.1
|
%
|
|
(1.5
|
)%
|
Preneed cemetery merchandise and service trust funds
|
16.8
|
%
|
|
7.2
|
%
|
|
(1.0
|
)%
|
Cemetery perpetual care trust funds
|
9.5
|
%
|
|
9.1
|
%
|
|
(0.3
|
)%
|
•
|
Incur additional indebtedness (including guarantee obligations);
|
•
|
Create liens on assets;
|
•
|
Engage in certain transactions with affiliates;
|
•
|
Enter into sale-leaseback transactions;
|
•
|
Engage in mergers, liquidations, and dissolutions;
|
•
|
Sell assets;
|
•
|
Pay dividends, distributions, and other payments in respect of our capital stock;
|
•
|
Purchase our capital stock in the open market;
|
•
|
Make investments, loans, or advances;
|
•
|
Repay indebtedness or amend the agreements relating thereto;
|
•
|
Create restrictions on our ability to receive distributions from subsidiaries; and
|
•
|
Change our lines of business.
|
•
|
It may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, acquisitions, debt service requirements, and general corporate or other purposes.
|
•
|
A portion of our cash flows from operations will be dedicated to the payment of principal and interest on our indebtedness, including indebtedness we may incur in the future, and will not be available for other purposes, including to finance our working capital, capital expenditures, acquisitions, and general corporate costs or other purposes.
|
•
|
It could limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate and place us at a competitive disadvantage compared to our competitors that have less debt.
|
•
|
It could make us more vulnerable to downturns in general economic or industry conditions or in our business, or prevent us from carrying out activities that are important to our growth.
|
•
|
It could increase our interest expense if interest rates in general increase because a portion of our indebtedness, including all of our indebtedness under our senior credit facilities, bears interest at floating rates.
|
•
|
It could make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including any financial and other restrictive covenants, could result in an event of default under the agreements governing our other indebtedness which, if not cured or waived, could result in the acceleration of our indebtedness.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings.
|
Officer Name
|
|
Age
|
|
Position
|
|
Year First
Became Officer |
||
Thomas L. Ryan
|
|
52
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
1999
|
Michael R. Webb
|
|
59
|
|
|
President and Chief Operating Officer
|
|
|
1998
|
Eric D. Tanzberger
|
|
49
|
|
|
Senior Vice President, Chief Financial Officer
|
|
|
2000
|
Gregory T. Sangalis
|
|
62
|
|
|
Senior Vice President, General Counsel and Secretary
|
|
|
2007
|
Elisabeth G. Nash
|
|
56
|
|
|
Senior Vice President, Operations Services
|
|
|
2004
|
Sumner J. Waring, III
|
|
49
|
|
|
Senior Vice President, Operations
|
|
|
2002
|
Steven A. Tidwell
|
|
56
|
|
|
Senior Vice President, Sales and Merchandising
|
|
|
2010
|
Tammy R. Moore
|
|
50
|
|
|
Vice President and Corporate Controller
|
|
|
2010
|
R. L. Waltrip
|
|
87
|
|
|
Founder and Chairman Emeritus
|
|
|
1962
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
|
|
2017
|
|
2016
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First quarter
|
$
|
31.75
|
|
|
$
|
28.81
|
|
|
$
|
25.66
|
|
|
$
|
21.65
|
|
Second quarter
|
$
|
33.45
|
|
|
$
|
30.25
|
|
|
$
|
28.01
|
|
|
$
|
24.49
|
|
Third quarter
|
$
|
35.80
|
|
|
$
|
32.99
|
|
|
$
|
28.67
|
|
|
$
|
25.99
|
|
Fourth quarter
|
$
|
38.00
|
|
|
$
|
33.29
|
|
|
$
|
28.62
|
|
|
$
|
24.90
|
|
Period
|
|
Total Number of
Shares Purchased |
|
Average
Price Paid per Share |
|
Total Number
of Shares Purchased as Part of Publicly Announced Programs |
|
Dollar Value of
Shares That May Yet be Purchased Under the Program |
||||||
October 1, 2017 — October 31, 2017
|
|
476,613
|
|
|
$
|
34.41
|
|
|
476,613
|
|
|
$
|
202,998,778
|
|
November 1, 2017 — November 30, 2017
|
|
399,783
|
|
|
$
|
35.54
|
|
|
399,783
|
|
|
188,792,046
|
|
|
December 1, 2017 — December 31, 2017
|
|
540,575
|
|
|
$
|
37.39
|
|
|
540,575
|
|
|
168,578,718
|
|
|
|
|
1,416,971
|
|
|
|
|
1,416,971
|
|
|
|
Item 6.
|
Selected Financial Data.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Per Credit Agreement
|
|
Actual
|
|
Leverage ratio
|
4.50 (Max)
|
|
3.72
|
|
Interest coverage ratio
|
3.00 (Min)
|
|
5.22
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Excess tax benefits from share-based awards
(1)
|
$
|
—
|
|
|
$
|
(12.7
|
)
|
|
$
|
(18.1
|
)
|
Payments related to tax structure changes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10.5
|
)
|
Premiums paid on early extinguishment of debt
|
$
|
—
|
|
|
$
|
(20.5
|
)
|
|
$
|
(6.5
|
)
|
Acquisition, integration, and system transition costs
|
$
|
—
|
|
|
$
|
(11.7
|
)
|
|
$
|
(6.6
|
)
|
IRS tax settlement
(2)
|
$
|
(34.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension settlement payment
|
$
|
(6.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Legal settlement, net of insurance recoveries
|
$
|
(11.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
a $
74.4 million
increase in cash receipts from customers, and
|
•
|
a $
19.2 million
increase in net trust withdrawals, and
|
•
|
a
$6.3 million
increase in insurance proceeds; partially offset by
|
•
|
a
$5.3 million
decrease in General Agency (GA) and other receipts,
|
•
|
a $
23.4 million
increase in employee compensation,
|
•
|
a $
20.0 million
increase in cash tax payments primarily due to deferral from the previous quarter as part of hurricane relief (excluding the IRS tax settlement noted above),
|
•
|
a $
3.9 million
increase in cash interest paid, and
|
•
|
a
$1.5 million
increase in vendor and other payments.
|
•
|
a $15.9 million increase in employee compensation, and
|
•
|
a $21.9 million increase in net trust deposits; partially offset by
|
•
|
a $29.9 million decrease in vendor and other payments,
|
•
|
a $7.8 million decrease in cash interest paid, and
|
•
|
a $14.4 million increase in cash receipts from customers.
|
•
|
a
$12.9 million
decrease in cash receipts from divestitures and asset sales.
|
•
|
a
$42.5 million
increase in capital expenditures, primarily related to the development of contemporary cemetery property and the construction of new funeral homes,
|
•
|
a
$27.9 million
increase in cash spent on acquisitions; partially offset by
|
•
|
a
$24.5 million
increase in proceeds from divestitures and asset sales.
|
•
|
a
$28.3 million
decrease in purchase of Company common stock,
|
•
|
a
$26.8 million
increase in proceeds from the issuance of debt, net of payments, and
|
•
|
a
$15.9 million
increase in proceeds from exercises of stock options; partially offset by
|
•
|
a
$12.7 million
decrease in excess tax benefits from share-based awards (Part II, Item 8. Financial Statements, Note 2),
|
•
|
a
$10.3 million
increase in payments of dividends, and
|
•
|
a
$2.6 million
increase in purchases of noncontrolling interests to acquire the remaining 11% of the common stock of our consolidated subsidiary, Wilson Financial Group, Inc.
|
•
|
a
$117.3 million
decrease in purchase of Company common stock, and
|
•
|
a
$56.1 million
increase in proceeds from the issuance of debt, net of payments; partially offset by
|
•
|
a
$14.1 million
decrease in proceeds from exercises of stock options
|
•
|
a
$10.8 million
increase in payments of dividends, and
|
•
|
a
$5.4 million
decrease in excess tax benefits from share-based awards.
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
|
Total
|
||||||||||
|
|
|
|
(In millions)
|
|
|
||||||||||||||
Debt maturities (including capital leases)
(1) (2) (3)
|
|
$
|
342.8
|
|
|
$
|
335.1
|
|
|
$
|
1,193.1
|
|
|
$
|
1,632.3
|
|
|
$
|
3,503.3
|
|
Interest obligation on long-term debt
(4)
|
|
160.1
|
|
|
288.8
|
|
|
226.2
|
|
|
264.4
|
|
|
939.5
|
|
|||||
Operating lease agreements
(5)
|
|
13.7
|
|
|
20.3
|
|
|
16.1
|
|
|
59.5
|
|
|
109.6
|
|
|||||
Employment and management, consulting, and non-competition agreements
(6)
|
|
7.4
|
|
|
10.9
|
|
|
5.3
|
|
|
4.2
|
|
|
27.8
|
|
|||||
Benefit cost obligation
(7)
|
|
3.3
|
|
|
5.9
|
|
|
4.8
|
|
|
9.4
|
|
|
23.4
|
|
|||||
Total contractual obligations
|
|
$
|
527.3
|
|
|
$
|
661.0
|
|
|
$
|
1,445.5
|
|
|
$
|
1,969.8
|
|
|
$
|
4,603.6
|
|
(1)
|
Our outstanding indebtedness contains standard provisions, such as payment delinquency default clauses and change of control clauses. In addition, our Bank Credit Facility contains a maximum leverage ratio and a minimum interest coverage ratio. See “Capital Allocation Considerations” and Note 6 in Part II, Item 8. Financial Statements and Supplementary Data, for additional details related to our long-term debt.
|
(2)
|
Excludes non-cash net premiums and original issuance discounts recorded on the debt. The unamortized balance of the net premiums and original issuance discounts at
December 31, 2017
is $
7.5 million
.
|
(3)
|
Excludes non-cash debt issuance costs on the debt. The unamortized balance of debt issuance costs at
December 31, 2017
is $
38.1 million
.
|
(4)
|
Approximately
75%
of our total debt is fixed rate debt for which the interest obligation was calculated at the stated rate. Future interest obligations on our floating rate debt are based on the current forward rate curve of the underlying index. See Note 6 in Part II, Item 8. Financial Statements and Supplementary Data, for additional information related to our future interest obligations.
|
(5)
|
The majority of our lease arrangements contain options to i) purchase the property at fair value on the exercise date, ii) purchase the property for a value determined at the inception of the leases, or iii) renew for the fair rental value at the end of the primary lease term. Our operating leases primarily relate to funeral and cemetery operating and maintenance equipment. See Note 8 in Part II, Item 8. Financial Statements and Supplementary Data, for additional details related to our leases.
|
(6)
|
We have entered into employment and management, consulting, and non-competition agreements that require us to make cash payments over the contractual period. The agreements have been primarily entered into with certain officers and employees and former owners of businesses acquired. Agreements with contractual periods less than one year are excluded. See Note 8 in Part II, Item 8. Financial Statements and Supplementary Data, for additional details related to these agreements.
|
(7)
|
See Note 11 in Part II, Item 8. Financial Statements and Supplementary Data, for discussion of our pension plans.
|
|
|
Expiration by Period
|
||||||||||||||||||
Commercial and Contingent Obligations
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
|
Total
|
||||||||||
|
|
|
|
(In millions)
|
|
|
||||||||||||||
Surety obligations
(1)
|
|
$
|
166.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166.0
|
|
Long-term obligations related to uncertain tax positions
(2)
|
|
90.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.6
|
|
|||||
Letters of credit
(3)
|
|
33.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33.5
|
|
|||||
Total commercial and contingent obligations
|
|
$
|
290.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
290.1
|
|
(1)
|
Represents the aggregate funding obligation associated with our surety bond arrangements assuming our surety partners did not renew any of our surety obligations and we could not find replacement surety assurance. See the section titled “Financial Assurances” following this table in this Form 10-K for more information related to our surety bonds.
|
(2)
|
We have recorded a liability for unrecognized tax benefits and related interest and penalties of $
90.6 million
as of
December 31, 2017
. See Note 5 in Part II, Item 8. Financial Statements and Supplementary Data, for additional information related to our uncertain tax positions.
|
(3)
|
We are occasionally required to post letters of credit, issued by a financial institution, to secure certain insurance programs or other obligations. Letters of credit generally authorize the financial institution to make a payment to the beneficiary upon the satisfaction of a certain event or the failure to satisfy an obligation. The letters of credit are generally posted for one-year terms and are usually automatically renewed upon maturity until such time as we have satisfied the commitment secured by the letter of credit. We are
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Preneed funeral
|
$
|
109.8
|
|
|
$
|
118.6
|
|
Preneed cemetery:
|
|
|
|
|
|
||
Merchandise and services
|
132.2
|
|
|
141.6
|
|
||
Pre-construction
|
11.9
|
|
|
7.8
|
|
||
Bonds supporting preneed funeral and cemetery obligations
|
253.9
|
|
|
268.0
|
|
||
Bonds supporting preneed business permits
|
4.5
|
|
|
4.5
|
|
||
Other bonds
|
18.0
|
|
|
18.4
|
|
||
Total surety bonds outstanding
|
$
|
276.4
|
|
|
$
|
290.9
|
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in millions)
|
||||||
Funeral:
|
|
|
|
|
|
||
Preneed trust-funded (including bonded):
|
|
|
|
|
|
||
Sales production
|
$
|
319.3
|
|
|
$
|
285.5
|
|
Sales production (number of contracts)
|
94,603
|
|
|
89,529
|
|
||
Maturities
|
$
|
265.8
|
|
|
$
|
239.4
|
|
Maturities (number of contracts)
|
68,683
|
|
|
65,047
|
|
||
Cemetery:
|
|
|
|
|
|
||
Sales production:
|
|
|
|
|
|
||
Preneed
|
$
|
846.0
|
|
|
$
|
800.3
|
|
Atneed
|
316.6
|
|
|
305.7
|
|
||
Total sales production
|
$
|
1,162.6
|
|
|
$
|
1,106.0
|
|
Sales production deferred to backlog:
|
|
|
|
|
|
||
Preneed
|
$
|
380.8
|
|
|
$
|
369.3
|
|
Atneed
|
230.8
|
|
|
227.7
|
|
||
Total sales production deferred to backlog
|
$
|
611.6
|
|
|
$
|
597.0
|
|
Revenue recognized from backlog:
|
|
|
|
|
|
||
Preneed
|
$
|
305.1
|
|
|
$
|
294.6
|
|
Atneed
|
226.7
|
|
|
226.3
|
|
||
Total revenue recognized from backlog
|
$
|
531.8
|
|
|
$
|
520.9
|
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in millions)
|
||||||
Preneed insurance-funded:
|
|
|
|
|
|
||
Sales production
(1)
|
$
|
510.0
|
|
|
$
|
552.0
|
|
Sales production (number of contracts)
|
84,962
|
|
|
90,395
|
|
||
General agency revenue
|
$
|
121.0
|
|
|
$
|
135.8
|
|
Maturities
|
$
|
335.3
|
|
|
$
|
323.2
|
|
Maturities (number of contracts)
|
56,535
|
|
|
55,085
|
|
(1)
|
Amounts are not included in our Consolidated Balance Sheet.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Fair Value
|
|
Cost
|
|
Fair Value
|
|
Cost
|
||||||||
|
(In billions)
|
||||||||||||||
Deferred revenue
|
$
|
1.79
|
|
|
$
|
1.79
|
|
|
$
|
1.73
|
|
|
$
|
1.73
|
|
Deferred receipts held in trust
|
3.48
|
|
|
3.18
|
|
|
3.10
|
|
|
3.05
|
|
||||
|
5.27
|
|
|
4.97
|
|
|
4.83
|
|
|
4.78
|
|
||||
Allowance for cancellation on trust investments
|
(0.27
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
||||
Backlog of trust-funded deferred revenue
|
5.00
|
|
|
4.72
|
|
|
4.58
|
|
|
4.53
|
|
||||
Backlog of insurance-funded revenue
(1)
|
5.66
|
|
|
5.66
|
|
|
5.37
|
|
|
5.37
|
|
||||
Total backlog of deferred revenue
|
$
|
10.66
|
|
|
$
|
10.38
|
|
|
$
|
9.95
|
|
|
$
|
9.90
|
|
|
|
|
|
|
|
|
|
||||||||
Preneed receivables, net and trust investments
|
$
|
4.78
|
|
|
$
|
4.48
|
|
|
$
|
4.31
|
|
|
$
|
4.26
|
|
Allowance for cancellation on trust investments
|
(0.27
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
||||
Assets associated with backlog of trust-funded deferred revenue, net of estimated allowance for cancellation
|
4.51
|
|
|
4.23
|
|
|
4.06
|
|
|
4.01
|
|
||||
Insurance policies associated with insurance-funded deferred revenue, net of estimated allowance for cancellation
(1)
|
5.66
|
|
|
5.66
|
|
|
5.37
|
|
|
5.37
|
|
||||
Total assets associated with backlog of preneed revenue, net of estimated allowance for cancellation
|
$
|
10.17
|
|
|
$
|
9.89
|
|
|
$
|
9.43
|
|
|
$
|
9.38
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Pre-tax gains (losses) from divestitures and impairment, net
(1)
|
$
|
7.0
|
|
|
$
|
(26.8
|
)
|
|
$
|
6.0
|
|
Pre-tax losses from the early extinguishment of debt
|
$
|
(0.3
|
)
|
|
$
|
(22.5
|
)
|
|
$
|
(6.9
|
)
|
Pre-tax acquisition, integration, and system transition costs
|
$
|
—
|
|
|
$
|
(17.5
|
)
|
|
$
|
(6.8
|
)
|
Pre-tax pension termination settlement
|
$
|
(12.8
|
)
|
|
$
|
(5.6
|
)
|
|
$
|
—
|
|
Pre-tax legal settlement, net of insurance recoveries
|
$
|
(11.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Tax benefit from above items
|
$
|
5.7
|
|
|
$
|
17.2
|
|
|
$
|
2.3
|
|
Change in certain tax reserves and other
|
$
|
260.1
|
|
|
$
|
(20.9
|
)
|
|
$
|
(3.0
|
)
|
(1)
|
Includes
Net (loss) income from discontinued operations
and the portion of noncontrolling interest related to divestitures.
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Dollars in millions, except average revenue per service)
|
||||||||||
Consolidated funeral revenue
|
$
|
1,868.2
|
|
|
$
|
1,869.1
|
|
|
$
|
1,889.1
|
|
Less: revenue associated with acquisitions/new construction
|
31.9
|
|
|
9.9
|
|
|
—
|
|
|||
Less: revenue associated with divestitures
|
6.4
|
|
|
41.8
|
|
|
58.5
|
|
|||
Comparable
(1)
funeral revenue
|
1,829.9
|
|
|
1,817.4
|
|
|
1,830.6
|
|
|||
Less: comparable recognized preneed revenue
|
117.3
|
|
|
111.2
|
|
|
97.7
|
|
|||
Less: comparable general agency and other revenue
|
117.0
|
|
|
126.5
|
|
|
129.4
|
|
|||
Adjusted comparable funeral revenue
|
$
|
1,595.6
|
|
|
$
|
1,579.7
|
|
|
$
|
1,603.5
|
|
Comparable services performed
|
303,106
|
|
|
300,477
|
|
|
307,336
|
|
|||
Comparable average revenue per service
(2)
|
$
|
5,264
|
|
|
$
|
5,257
|
|
|
$
|
5,217
|
|
|
|
|
|
|
|
||||||
Consolidated funeral operating profit
|
$
|
371.9
|
|
|
$
|
361.0
|
|
|
$
|
390.1
|
|
Less: operating profit associated with acquisitions/new construction
|
5.8
|
|
|
2.4
|
|
|
—
|
|
|||
Less: operating (loss) profit associated with divestitures
|
(4.5
|
)
|
|
2.3
|
|
|
3.3
|
|
|||
Comparable
(1)
funeral operating profit
|
$
|
370.6
|
|
|
$
|
356.3
|
|
|
$
|
386.8
|
|
(1)
|
We define comparable (or same store) operations as those funeral locations owned by us for the entire period beginning
January 1, 2016
and ending
December 31, 2017
.
|
(2)
|
We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding general agency revenue, recognized preneed revenue, and other revenue to avoid distorting our average of normal funeral services revenue, by the comparable number of services performed during the period. Recognized preneed revenue is preneed sales of merchandise that is delivered at the time of sale, including memorial merchandise and travel protection, and excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Consolidated cemetery revenue
|
$
|
1,226.9
|
|
|
$
|
1,162.0
|
|
|
$
|
1,097.0
|
|
Less: revenue associated with acquisitions/new construction
|
6.2
|
|
|
0.3
|
|
|
—
|
|
|||
Less: revenue associated with divestitures
|
0.7
|
|
|
0.9
|
|
|
2.0
|
|
|||
Comparable
(1)
cemetery revenue
|
$
|
1,220.0
|
|
|
$
|
1,160.8
|
|
|
$
|
1,095.0
|
|
|
|
|
|
|
|
||||||
Consolidated cemetery operating profit
|
$
|
350.3
|
|
|
$
|
315.4
|
|
|
$
|
284.5
|
|
Less: operating profit associated with acquisitions/new construction
|
1.1
|
|
|
—
|
|
|
—
|
|
|||
Less: operating (loss) profit associated with divestitures
|
(0.2
|
)
|
|
(0.8
|
)
|
|
0.2
|
|
|||
Comparable
(1)
cemetery operating profit
|
$
|
349.4
|
|
|
$
|
316.2
|
|
|
$
|
284.3
|
|
(1)
|
We define comparable (or same store) operations as those cemetery locations owned by us for the entire period beginning
January 1, 2016
and ending
December 31, 2017
.
|
•
|
Where quoted prices are available in an active market, securities held by the trusts are classified as Level 1 investments.
|
•
|
Where quoted market prices are not available for the specific security, fair values are estimated by using either quoted prices of securities with similar characteristics or an income approach fair value model with observable inputs that include a combination of interest rates, yield curves, credit risks, prepayment speeds, ratings, and tax-exempt status. These securities are classified as Level 2 investments.
|
•
|
The valuation of other investments requires management judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. These securities are classified as Level 3 investments.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
Page
|
Financial Statements:
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statement of Operations for the years ended December 31, 2017, 2016, and 2015
|
|
Consolidated Statement of Comprehensive Income for the years ended December 31, 2017, 2016, and 2015
|
|
Consolidated Balance Sheet as of December 31, 2017 and 2016
|
|
Consolidated Statement of Cash Flows for the years ended December 31, 2017, 2016, and 2015
|
|
Consolidated Statement of Equity for the years ended December 31, 2017, 2016, and 2015
|
|
Notes to Consolidated Financial Statements
|
|
1. Nature of Operations
|
|
2. Summary of Significant Accounting Policies
|
|
3. Preneed Activities
|
|
4. Goodwill and Intangible Assets
|
|
5. Income Taxes
|
|
6. Debt
|
|
7. Credit Risk and Fair Value of Financial Instruments
|
|
8. Commitments and Contingencies
|
|
9. Equity
|
|
10. Share-Based Compensation
|
|
11. Retirement Plans
|
|
12. Segment Reporting
|
|
13. Supplementary Information
|
|
14. Earnings Per Share
|
|
15. Acquisitions
|
|
16. Divestiture-Related Activities
|
|
17. Quarterly Financial Data (Unaudited)
|
|
Financial Statement Schedule:
|
|
II — Valuation and Qualifying Accounts for the years ended December 31, 2017, 2016, and 2015
|
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENT OF OPERATIONS
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Revenue
|
$
|
3,095,031
|
|
|
$
|
3,031,137
|
|
|
$
|
2,986,041
|
|
Costs and expenses
|
(2,372,842
|
)
|
|
(2,354,703
|
)
|
|
(2,311,452
|
)
|
|||
Operating profit
|
722,189
|
|
|
676,434
|
|
|
674,589
|
|
|||
General and administrative expenses
|
(154,423
|
)
|
|
(137,730
|
)
|
|
(130,813
|
)
|
|||
Gains (losses) on divestitures and impairment charges, net
|
7,015
|
|
|
(26,819
|
)
|
|
6,522
|
|
|||
Hurricane expense, net
|
(5,584
|
)
|
|
—
|
|
|
—
|
|
|||
Operating income
|
569,197
|
|
|
511,885
|
|
|
550,298
|
|
|||
Interest expense
|
(169,125
|
)
|
|
(162,093
|
)
|
|
(172,897
|
)
|
|||
Losses on early extinguishment of debt, net
|
(274
|
)
|
|
(22,503
|
)
|
|
(6,918
|
)
|
|||
Other income (expense), net
|
460
|
|
|
(631
|
)
|
|
(132
|
)
|
|||
Income from continuing operations before income taxes
|
400,258
|
|
|
326,658
|
|
|
370,351
|
|
|||
Benefit from (provision for) income taxes
|
146,589
|
|
|
(149,353
|
)
|
|
(135,027
|
)
|
|||
Income from continuing operations
|
546,847
|
|
|
177,305
|
|
|
235,324
|
|
|||
Net loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(390
|
)
|
|||
Net income
|
546,847
|
|
|
177,305
|
|
|
234,934
|
|
|||
Net income attributable to noncontrolling interests
|
(184
|
)
|
|
(267
|
)
|
|
(1,162
|
)
|
|||
Net income attributable to common stockholders
|
$
|
546,663
|
|
|
$
|
177,038
|
|
|
$
|
233,772
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|||
Net income attributable to common stockholders
|
$
|
2.91
|
|
|
$
|
0.92
|
|
|
$
|
1.17
|
|
Basic weighted average number of shares
|
187,630
|
|
|
193,086
|
|
|
200,356
|
|
|||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|||
Net income attributable to common stockholders
|
$
|
2.84
|
|
|
$
|
0.90
|
|
|
$
|
1.14
|
|
Diluted weighted average number of shares
|
192,246
|
|
|
196,042
|
|
|
204,450
|
|
|||
Dividends declared per share
|
$
|
0.58
|
|
|
$
|
0.51
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net income
|
$
|
546,847
|
|
|
$
|
177,305
|
|
|
$
|
234,934
|
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
25,462
|
|
|
10,331
|
|
|
(53,283
|
)
|
|||
Total comprehensive income
|
572,309
|
|
|
187,636
|
|
|
181,651
|
|
|||
Total comprehensive income attributable to noncontrolling interests
|
(195
|
)
|
|
(270
|
)
|
|
(1,129
|
)
|
|||
Total comprehensive income attributable to common stockholders
|
$
|
572,114
|
|
|
$
|
187,366
|
|
|
$
|
180,522
|
|
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEET
|
|||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands, except share amounts)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
330,039
|
|
|
$
|
194,986
|
|
Receivables, net
|
90,304
|
|
|
98,455
|
|
||
Inventories
|
25,378
|
|
|
26,431
|
|
||
Other
|
35,575
|
|
|
34,524
|
|
||
Total current assets
|
481,296
|
|
|
354,396
|
|
||
Preneed receivables, net and trust investments
|
4,778,842
|
|
|
4,305,165
|
|
||
Cemetery property
|
1,791,989
|
|
|
1,776,935
|
|
||
Property and equipment, net
|
1,873,044
|
|
|
1,827,587
|
|
||
Goodwill
|
1,805,981
|
|
|
1,799,081
|
|
||
Deferred charges and other assets
|
601,184
|
|
|
567,520
|
|
||
Cemetery perpetual care trust investments
|
1,532,167
|
|
|
1,407,465
|
|
||
Total assets
|
$
|
12,864,503
|
|
|
$
|
12,038,149
|
|
|
|
|
|
||||
LIABILITIES & EQUITY
|
|||||||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
489,172
|
|
|
$
|
439,936
|
|
Current maturities of long-term debt
|
337,337
|
|
|
89,974
|
|
||
Income taxes payable
|
2,470
|
|
|
7,960
|
|
||
Total current liabilities
|
828,979
|
|
|
537,870
|
|
||
Long-term debt
|
3,135,316
|
|
|
3,196,616
|
|
||
Deferred revenue
|
1,789,776
|
|
|
1,731,417
|
|
||
Deferred tax liability
|
283,765
|
|
|
454,638
|
|
||
Other liabilities
|
410,982
|
|
|
510,322
|
|
||
Deferred receipts held in trust
|
3,475,430
|
|
|
3,103,796
|
|
||
Care trusts’ corpus
|
1,530,818
|
|
|
1,408,243
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Common stock, $1 per share par value, 500,000,000 shares authorized, 191,935,647 and 195,403,644 shares issued, respectively, and 186,614,747 and 189,405,244 shares outstanding, respectively
|
186,615
|
|
|
189,405
|
|
||
Capital in excess of par value
|
970,468
|
|
|
990,203
|
|
||
Retained earnings (accumulated deficit)
|
210,364
|
|
|
(103,387
|
)
|
||
Accumulated other comprehensive income
|
41,943
|
|
|
16,492
|
|
||
Total common stockholders’ equity
|
1,409,390
|
|
|
1,092,713
|
|
||
Noncontrolling interests
|
47
|
|
|
2,534
|
|
||
Total equity
|
1,409,437
|
|
|
1,095,247
|
|
||
Total liabilities and equity
|
$
|
12,864,503
|
|
|
$
|
12,038,149
|
|
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
(In thousands)
|
|
|
|
|||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
546,847
|
|
|
$
|
177,305
|
|
|
$
|
234,934
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
390
|
|
|||
Losses on early extinguishment of debt, net
|
274
|
|
|
22,503
|
|
|
6,918
|
|
|||
Premiums paid on early extinguishment of debt
|
—
|
|
|
(20,524
|
)
|
|
(6,549
|
)
|
|||
Depreciation and amortization
|
153,141
|
|
|
147,233
|
|
|
141,456
|
|
|||
Amortization of intangibles
|
27,650
|
|
|
30,956
|
|
|
31,459
|
|
|||
Amortization of cemetery property
|
68,102
|
|
|
66,745
|
|
|
62,407
|
|
|||
Amortization of loan costs
|
5,859
|
|
|
5,826
|
|
|
9,434
|
|
|||
Provision for doubtful accounts
|
9,980
|
|
|
10,776
|
|
|
6,083
|
|
|||
(Benefit) provision for deferred income taxes
|
(317,838
|
)
|
|
7,490
|
|
|
18,048
|
|
|||
(Gains) losses on divestitures and impairment charges, net
|
(7,015
|
)
|
|
26,819
|
|
|
(6,522
|
)
|
|||
Share-based compensation
|
14,788
|
|
|
14,056
|
|
|
13,843
|
|
|||
Excess tax benefits from share-based awards
|
—
|
|
|
(12,685
|
)
|
|
(18,123
|
)
|
|||
Change in assets and liabilities, net of effects from acquisitions and dispositions:
|
|
|
|
|
|
|
|
|
|||
(Increase) decrease in receivables
|
(9,740
|
)
|
|
(14,198
|
)
|
|
464
|
|
|||
(Increase) decrease in other assets
|
(15,385
|
)
|
|
17,855
|
|
|
2,457
|
|
|||
Increase in payables and other liabilities
|
81,763
|
|
|
47,888
|
|
|
20,567
|
|
|||
Effect of preneed sales production and maturities:
|
|
|
|
|
|
|
|
|
|||
Increase in preneed receivables, net and trust investments
|
(63,994
|
)
|
|
(73,394
|
)
|
|
(48,120
|
)
|
|||
Increase in deferred revenue
|
31,182
|
|
|
34,775
|
|
|
67,159
|
|
|||
Decrease in deferred receipts held in trust
|
(23,274
|
)
|
|
(25,831
|
)
|
|
(64,119
|
)
|
|||
Net cash provided by operating activities
|
502,340
|
|
|
463,595
|
|
|
472,186
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(214,501
|
)
|
|
(193,446
|
)
|
|
(150,986
|
)
|
|||
Acquisitions, net of cash acquired
|
(49,988
|
)
|
|
(69,146
|
)
|
|
(41,258
|
)
|
|||
Proceeds from divestitures and sales of property and equipment
|
28,429
|
|
|
41,310
|
|
|
16,772
|
|
|||
Net withdrawals of restricted funds and other
|
175
|
|
|
5,150
|
|
|
8,066
|
|
|||
Net cash used in investing activities from continuing operations
|
(235,885
|
)
|
|
(216,132
|
)
|
|
(167,406
|
)
|
|||
Net cash provided by investing activities from discontinued operations
|
—
|
|
|
—
|
|
|
987
|
|
|||
Net cash used in investing activities
|
(235,885
|
)
|
|
(216,132
|
)
|
|
(166,419
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
1,787,500
|
|
|
1,060,000
|
|
|
446,250
|
|
|||
Debt issuance costs
|
(12,939
|
)
|
|
(5,232
|
)
|
|
(6,025
|
)
|
|||
Scheduled payments of debt
|
(468,973
|
)
|
|
(36,414
|
)
|
|
(160,220
|
)
|
|||
Early payments of debt
|
(1,117,512
|
)
|
|
(875,110
|
)
|
|
(197,377
|
)
|
|||
Principal payments on capital leases
|
(51,106
|
)
|
|
(33,119
|
)
|
|
(28,601
|
)
|
|||
Proceeds from exercise of stock options
|
33,611
|
|
|
17,662
|
|
|
31,809
|
|
|||
Excess tax benefits from share-based awards
|
—
|
|
|
12,685
|
|
|
18,123
|
|
|||
Purchase of Company common stock
|
(199,637
|
)
|
|
(227,928
|
)
|
|
(345,261
|
)
|
|||
Payments of dividends
|
(108,750
|
)
|
|
(98,418
|
)
|
|
(87,570
|
)
|
|||
Purchase of noncontrolling interest
|
(4,580
|
)
|
|
(1,961
|
)
|
|
(2,075
|
)
|
|||
Bank overdrafts and other
|
5,959
|
|
|
(1,095
|
)
|
|
(7,531
|
)
|
|||
Net cash used in financing activities
|
(136,427
|
)
|
|
(188,930
|
)
|
|
(338,478
|
)
|
|||
Effect of foreign currency
|
5,025
|
|
|
1,854
|
|
|
(10,025
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
135,053
|
|
|
60,387
|
|
|
(42,736
|
)
|
|||
Cash and cash equivalents at beginning of period
|
194,986
|
|
|
134,599
|
|
|
177,335
|
|
|||
Cash and cash equivalents at end of period
|
$
|
330,039
|
|
|
$
|
194,986
|
|
|
$
|
134,599
|
|
|
Common
Stock
|
|
Treasury
Stock,
Par Value
|
|
Capital in
Excess of
Par Value
|
|
(Accumulated
Deficit) Retained Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Noncontrolling
Interest
|
|
Total
|
||||||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||||||
Balance at December 31, 2014
|
$
|
205,458
|
|
|
$
|
(591
|
)
|
|
$
|
1,186,304
|
|
|
$
|
(81,859
|
)
|
|
$
|
59,414
|
|
|
$
|
8,652
|
|
|
$
|
1,377,378
|
|
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
233,772
|
|
|
(53,250
|
)
|
|
1,129
|
|
|
181,651
|
|
|||||||
Dividends declared on common stock ($.44 per share)
|
—
|
|
|
—
|
|
|
(87,570
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,570
|
)
|
|||||||
Stock option exercises
|
3,054
|
|
|
—
|
|
|
28,877
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,931
|
|
|||||||
Restricted stock award, net of forfeitures and other
|
254
|
|
|
(9
|
)
|
|
(245
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
13,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,843
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(12,455
|
)
|
|
(71,664
|
)
|
|
(261,264
|
)
|
|
—
|
|
|
—
|
|
|
(345,383
|
)
|
|||||||
Tax benefits of share-based awards
|
—
|
|
|
—
|
|
|
18,123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,123
|
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
2,775
|
|
|
—
|
|
|
—
|
|
|
(4,850
|
)
|
|
(2,075
|
)
|
|||||||
Noncontrolling interest payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(222
|
)
|
|
(222
|
)
|
|||||||
Retirement of treasury shares
|
(7,969
|
)
|
|
7,969
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
62
|
|
|
—
|
|
|
1,663
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,725
|
|
|||||||
Balance at December 31, 2015
|
$
|
200,859
|
|
|
$
|
(5,086
|
)
|
|
$
|
1,092,106
|
|
|
$
|
(109,351
|
)
|
|
$
|
6,164
|
|
|
$
|
4,709
|
|
|
$
|
1,189,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
177,038
|
|
|
10,328
|
|
|
270
|
|
|
187,636
|
|
|||||||
Dividends declared on common stock ($.51 per share)
|
—
|
|
|
—
|
|
|
(98,418
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98,418
|
)
|
|||||||
Stock option exercises
|
2,108
|
|
|
—
|
|
|
15,554
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,662
|
|
|||||||
Restricted stock awards, net of forfeitures
|
241
|
|
|
(1
|
)
|
|
(240
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
14,056
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,056
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(8,812
|
)
|
|
(48,042
|
)
|
|
(171,074
|
)
|
|
—
|
|
|
—
|
|
|
(227,928
|
)
|
|||||||
Tax benefits related to share-based awards
|
—
|
|
|
—
|
|
|
12,685
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,685
|
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
364
|
|
|
—
|
|
|
—
|
|
|
(2,325
|
)
|
|
(1,961
|
)
|
|||||||
Noncontrolling interest payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
(120
|
)
|
|||||||
Retirement of treasury shares
|
(7,901
|
)
|
|
7,901
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
96
|
|
|
—
|
|
|
2,138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,234
|
|
|||||||
Balance at December 31, 2016
|
$
|
195,403
|
|
|
$
|
(5,998
|
)
|
|
$
|
990,203
|
|
|
$
|
(103,387
|
)
|
|
$
|
16,492
|
|
|
$
|
2,534
|
|
|
$
|
1,095,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
546,663
|
|
|
25,451
|
|
|
195
|
|
|
572,309
|
|
|||||||
Dividends declared on common stock ($.58 per share)
|
—
|
|
|
—
|
|
|
(37,011
|
)
|
|
(71,739
|
)
|
|
—
|
|
|
—
|
|
|
(108,750
|
)
|
|||||||
Stock option exercises
|
2,759
|
|
|
—
|
|
|
30,852
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,611
|
|
|||||||
Restricted stock awards, net of forfeitures
|
209
|
|
|
(2
|
)
|
|
(207
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
14,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,788
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(6,211
|
)
|
|
(32,253
|
)
|
|
(161,173
|
)
|
|
—
|
|
|
—
|
|
|
(199,637
|
)
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
(2,258
|
)
|
|
—
|
|
|
—
|
|
|
(2,322
|
)
|
|
(4,580
|
)
|
|||||||
Noncontrolling interest payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
(360
|
)
|
|||||||
Retirement of treasury shares
|
(6,890
|
)
|
|
6,890
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other
|
455
|
|
|
—
|
|
|
6,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,809
|
|
|||||||
Balance at December 31, 2017
|
$
|
191,936
|
|
|
$
|
(5,321
|
)
|
|
$
|
970,468
|
|
|
$
|
210,364
|
|
|
$
|
41,943
|
|
|
$
|
47
|
|
|
$
|
1,409,437
|
|
1.
|
Nature of Operations
|
2.
|
Summary of Significant Accounting Policies
|
•
|
Where quoted prices are available in an active market, securities held by the trusts are classified as Level 1 investments.
|
•
|
Where quoted market prices are not available for the specific security, fair values are estimated by using either quoted prices of securities with similar characteristics or an income approach fair value model with observable inputs that include a combination of interest rates, yield curves, credit risks, prepayment speeds, ratings, and tax-exempt status. These securities are classified as Level 2 investments.
|
•
|
The valuation of other investments requires management judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. These securities are classified as Level 3 investments.
|
3.
|
Preneed Activities
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Preneed funeral receivables
|
$
|
336,925
|
|
|
$
|
312,556
|
|
Preneed cemetery receivables
|
1,118,146
|
|
|
1,038,592
|
|
||
Preneed receivables from customers
|
1,455,071
|
|
|
1,351,148
|
|
||
Unearned finance charge
|
(45,515
|
)
|
|
(45,989
|
)
|
||
Allowance for cancellation
|
(107,749
|
)
|
|
(104,740
|
)
|
||
Preneed receivables, net
|
1,301,807
|
|
|
1,200,419
|
|
||
|
|
|
|
||||
Trust investments, at market
|
4,749,548
|
|
|
4,240,963
|
|
||
Assets associated with business held for sale
|
(5,660
|
)
|
|
—
|
|
||
Insurance-backed fixed income securities and other
|
265,314
|
|
|
271,248
|
|
||
Trust investments
|
5,009,202
|
|
|
4,512,211
|
|
||
Less: Cemetery perpetual care trust investments
|
(1,532,167
|
)
|
|
(1,407,465
|
)
|
||
Preneed trust investments
|
3,477,035
|
|
|
3,104,746
|
|
||
|
|
|
|
||||
Preneed receivables, net and trust investments
|
$
|
4,778,842
|
|
|
$
|
4,305,165
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Deposits
|
$
|
371,234
|
|
|
$
|
321,232
|
|
|
$
|
313,244
|
|
Withdrawals
|
$
|
415,283
|
|
|
$
|
350,379
|
|
|
$
|
364,314
|
|
Purchases of available-for-sale securities
|
$
|
2,057,348
|
|
|
$
|
1,462,900
|
|
|
$
|
1,326,398
|
|
Sales of available-for-sale securities
|
$
|
1,999,918
|
|
|
$
|
1,393,728
|
|
|
$
|
1,261,777
|
|
Realized gains from sales of available-for-sale securities
(1)(2)
|
$
|
256,413
|
|
|
$
|
100,284
|
|
|
$
|
100,477
|
|
Realized losses from sales of available-for-sale securities
(1)
|
$
|
(76,963
|
)
|
|
$
|
(113,806
|
)
|
|
$
|
(79,203
|
)
|
(1)
|
All realized gains and losses are recognized in
Other income (expense), net
for our trust investments and are offset by a corresponding reclassification in
Other income (expense), net
to
Deferred receipts held in trust
and
Care trusts’ corpus
|
(2)
|
Given the positive performance of the financial markets in 2017 and a significant realignment of certain portions of our trust portfolio, we experienced a substantial increase in our realized gains during the year.
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Beginning balance — Preneed receivables, net and trust investments
|
$
|
4,305,165
|
|
|
$
|
4,078,464
|
|
|
$
|
4,149,692
|
|
Net preneed contract sales
|
1,257,288
|
|
|
1,159,194
|
|
|
1,083,424
|
|
|||
Cash receipts from customers, net of refunds
|
(1,109,380
|
)
|
|
(1,030,703
|
)
|
|
(951,099
|
)
|
|||
Deposits to trust
|
328,241
|
|
|
279,782
|
|
|
274,361
|
|
|||
Acquisitions of businesses, net
|
8,153
|
|
|
1,477
|
|
|
5,804
|
|
|||
Net undistributed investment earnings (losses)
(1)
|
384,512
|
|
|
145,511
|
|
|
(80,699
|
)
|
|||
Maturities and distributed earnings
|
(411,452
|
)
|
|
(337,912
|
)
|
|
(364,367
|
)
|
|||
Change in cancellation allowance
|
(528
|
)
|
|
3,329
|
|
|
741
|
|
|||
Effect of foreign currency and other
|
16,843
|
|
|
6,023
|
|
|
(39,393
|
)
|
|||
Ending balance — Preneed receivables net, and trust investments
|
$
|
4,778,842
|
|
|
$
|
4,305,165
|
|
|
$
|
4,078,464
|
|
(1)
|
Includes both realized and unrealized investment earnings.
|
|
|
December 31, 2017
|
||||||||||||||
|
Fair Value Hierarchy Level
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Value
|
||||||||
|
|
|
|
(In thousands)
|
|
|
||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury
|
2
|
$
|
48,805
|
|
|
$
|
14
|
|
|
$
|
(117
|
)
|
|
$
|
48,702
|
|
Canadian government
|
2
|
81,500
|
|
|
160
|
|
|
(1,089
|
)
|
|
80,571
|
|
||||
Corporate
|
2
|
13,540
|
|
|
327
|
|
|
(170
|
)
|
|
13,697
|
|
||||
Residential mortgage-backed
|
2
|
3,279
|
|
|
16
|
|
|
(14
|
)
|
|
3,281
|
|
||||
Asset-backed
|
2
|
320
|
|
|
15
|
|
|
(10
|
)
|
|
325
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred stock
|
2
|
7,834
|
|
|
385
|
|
|
(139
|
)
|
|
8,080
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
|
|
|||||||
United States
|
1
|
1,161,015
|
|
|
266,822
|
|
|
(24,739
|
)
|
|
1,403,098
|
|
||||
Canada
|
1
|
30,762
|
|
|
12,545
|
|
|
(522
|
)
|
|
42,785
|
|
||||
Other international
|
1
|
63,510
|
|
|
13,174
|
|
|
(2,834
|
)
|
|
73,850
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|||||||
Equity
|
1
|
613,934
|
|
|
59,100
|
|
|
(4,312
|
)
|
|
668,722
|
|
||||
Fixed income
|
1
|
1,230,196
|
|
|
11,897
|
|
|
(23,943
|
)
|
|
1,218,150
|
|
||||
Other
|
3
|
5,953
|
|
|
3,114
|
|
|
—
|
|
|
9,067
|
|
||||
Trust investments, at fair value
|
|
3,260,648
|
|
|
367,569
|
|
|
(57,889
|
)
|
|
3,570,328
|
|
||||
Commingled funds
|
|
|
|
|
|
|
|
|
||||||||
Fixed income
|
|
454,242
|
|
|
235
|
|
|
(5,860
|
)
|
|
448,617
|
|
||||
Equity
|
|
214,000
|
|
|
12,826
|
|
|
—
|
|
|
226,826
|
|
||||
Money market funds
|
|
287,435
|
|
|
—
|
|
|
—
|
|
|
287,435
|
|
||||
Private equity
|
|
166,860
|
|
|
51,631
|
|
|
(2,149
|
)
|
|
216,342
|
|
||||
Trust investments, at net asset value
|
|
1,122,537
|
|
|
64,692
|
|
|
(8,009
|
)
|
|
1,179,220
|
|
||||
Trust investments, at market
|
|
$
|
4,383,185
|
|
|
$
|
432,261
|
|
|
$
|
(65,898
|
)
|
|
$
|
4,749,548
|
|
|
|
December 31, 2016
|
||||||||||||||
|
Fair Value Hierarchy Level
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Value
|
||||||||
|
|
|
|
(In thousands)
|
|
|
||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury
|
2
|
$
|
145,315
|
|
|
$
|
884
|
|
|
$
|
(838
|
)
|
|
$
|
145,361
|
|
Canadian government
|
2
|
79,141
|
|
|
409
|
|
|
(222
|
)
|
|
79,328
|
|
||||
Corporate
|
2
|
18,934
|
|
|
295
|
|
|
(227
|
)
|
|
19,002
|
|
||||
Residential mortgage-backed
|
2
|
333
|
|
|
1
|
|
|
(1
|
)
|
|
333
|
|
||||
Asset-backed
|
2
|
448
|
|
|
16
|
|
|
(31
|
)
|
|
433
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred stock
|
2
|
2,907
|
|
|
83
|
|
|
(156
|
)
|
|
2,834
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
|
|
|||||||
United States
|
1
|
1,107,942
|
|
|
151,146
|
|
|
(35,542
|
)
|
|
1,223,546
|
|
||||
Canada
|
1
|
25,708
|
|
|
10,030
|
|
|
(455
|
)
|
|
35,283
|
|
||||
Other international
|
1
|
83,238
|
|
|
4,995
|
|
|
(10,632
|
)
|
|
77,601
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|||||||
Equity
|
1
|
688,120
|
|
|
19,962
|
|
|
(56,857
|
)
|
|
651,225
|
|
||||
Fixed income
|
1
|
875,615
|
|
|
6,203
|
|
|
(46,219
|
)
|
|
835,599
|
|
||||
Other
|
3
|
4,712
|
|
|
2,468
|
|
|
(17
|
)
|
|
7,163
|
|
||||
Trust investments, at fair value
|
|
3,032,413
|
|
|
196,492
|
|
|
(151,197
|
)
|
|
3,077,708
|
|
||||
Fixed income commingled funds
|
|
692,434
|
|
|
8,524
|
|
|
(12,234
|
)
|
|
688,724
|
|
||||
Money market funds
|
|
304,055
|
|
|
—
|
|
|
—
|
|
|
304,055
|
|
||||
Private equity
|
|
175,881
|
|
|
9,812
|
|
|
(15,217
|
)
|
|
170,476
|
|
||||
Trust investments, at net asset value
|
|
1,172,370
|
|
|
18,336
|
|
|
(27,451
|
)
|
|
1,163,255
|
|
||||
Trust investments, at market
|
|
$
|
4,204,783
|
|
|
$
|
214,828
|
|
|
$
|
(178,648
|
)
|
|
$
|
4,240,963
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In thousands)
|
||||||||||
Fair value, beginning balance at January 1
|
|
$
|
7,163
|
|
|
$
|
8,162
|
|
|
$
|
6,650
|
|
Net unrealized gains included in
Accumulated other comprehensive income
(1)
|
|
912
|
|
|
463
|
|
|
152
|
|
|||
Net realized losses included in
Other income (expense), net
(2)
|
|
—
|
|
|
(212
|
)
|
|
—
|
|
|||
Purchases
|
|
1,945
|
|
|
89
|
|
|
1,360
|
|
|||
Sales
|
|
(953
|
)
|
|
(1,339
|
)
|
|
—
|
|
|||
Fair value, ending balance at December 31
|
|
$
|
9,067
|
|
|
$
|
7,163
|
|
|
$
|
8,162
|
|
(1)
|
All unrealized gains recognized in
Accumulated other comprehensive income
for our trust investments are attributable to our preneed customers and are offset by a corresponding reclassification in
Accumulated other comprehensive income
to
Deferred receipts held in trust
.
|
(2)
|
All losses recognized in
Other income (expense), net
for our trust investments are attributable to our preneed customers and are offset by a corresponding reclassification in
Other income (expense) income, net
to
Deferred receipts held in trust.
|
|
Fair Value
|
||
|
(In thousands)
|
||
Due in one year or less
|
$
|
75,831
|
|
Due in one to five years
|
61,283
|
|
|
Due in five to ten years
|
9,101
|
|
|
Thereafter
|
361
|
|
|
Total estimated maturities of fixed income securities
|
$
|
146,576
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
In Loss Position
Less Than 12 Months
|
|
In Loss Position
Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury
|
$
|
29,014
|
|
|
$
|
(115
|
)
|
|
$
|
106
|
|
|
$
|
(2
|
)
|
|
$
|
29,120
|
|
|
$
|
(117
|
)
|
Canadian government
|
20,947
|
|
|
(639
|
)
|
|
6,370
|
|
|
(450
|
)
|
|
27,317
|
|
|
(1,089
|
)
|
||||||
Corporate
|
2,423
|
|
|
(31
|
)
|
|
4,453
|
|
|
(139
|
)
|
|
6,876
|
|
|
(170
|
)
|
||||||
Residential mortgage-backed
|
2,880
|
|
|
(12
|
)
|
|
151
|
|
|
(2
|
)
|
|
3,031
|
|
|
(14
|
)
|
||||||
Asset-backed
|
—
|
|
|
—
|
|
|
74
|
|
|
(10
|
)
|
|
74
|
|
|
(10
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock
|
1,106
|
|
|
(92
|
)
|
|
248
|
|
|
(47
|
)
|
|
1,354
|
|
|
(139
|
)
|
||||||
Common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
184,973
|
|
|
(20,561
|
)
|
|
18,542
|
|
|
(4,178
|
)
|
|
203,515
|
|
|
(24,739
|
)
|
||||||
Canada
|
1,307
|
|
|
(224
|
)
|
|
1,314
|
|
|
(298
|
)
|
|
2,621
|
|
|
(522
|
)
|
||||||
Other international
|
19,070
|
|
|
(2,499
|
)
|
|
2,327
|
|
|
(335
|
)
|
|
21,397
|
|
|
(2,834
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity
|
32,348
|
|
|
(1,193
|
)
|
|
21,140
|
|
|
(3,119
|
)
|
|
53,488
|
|
|
(4,312
|
)
|
||||||
Fixed income
|
225,766
|
|
|
(1,402
|
)
|
|
294,980
|
|
|
(22,541
|
)
|
|
520,746
|
|
|
(23,943
|
)
|
||||||
Trust investments, at fair value
|
519,834
|
|
|
(26,768
|
)
|
|
349,705
|
|
|
(31,121
|
)
|
|
869,539
|
|
|
(57,889
|
)
|
||||||
Commingled funds
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed income
|
215,295
|
|
|
(988
|
)
|
|
181,358
|
|
|
(4,872
|
)
|
|
396,653
|
|
|
(5,860
|
)
|
||||||
Private equity
|
—
|
|
|
—
|
|
|
11,752
|
|
|
(2,149
|
)
|
|
11,752
|
|
|
(2,149
|
)
|
||||||
Trust investments, at net asset value
|
215,295
|
|
|
(988
|
)
|
|
193,110
|
|
|
(7,021
|
)
|
|
408,405
|
|
|
(8,009
|
)
|
||||||
Total temporarily impaired securities
|
$
|
735,129
|
|
|
$
|
(27,756
|
)
|
|
$
|
542,815
|
|
|
$
|
(38,142
|
)
|
|
$
|
1,277,944
|
|
|
$
|
(65,898
|
)
|
|
December 31, 2016
|
||||||||||||||||||||||
|
In Loss Position
Less Than 12 Months
|
|
In Loss Position
Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
|
Fair
Market
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury
|
$
|
41,409
|
|
|
$
|
(838
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41,409
|
|
|
$
|
(838
|
)
|
Canadian government
|
2,913
|
|
|
(31
|
)
|
|
3,344
|
|
|
(191
|
)
|
|
6,257
|
|
|
(222
|
)
|
||||||
Corporate
|
2,107
|
|
|
(22
|
)
|
|
6,162
|
|
|
(205
|
)
|
|
8,269
|
|
|
(227
|
)
|
||||||
Residential mortgage-backed
|
303
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
303
|
|
|
(1
|
)
|
||||||
Asset backed
|
28
|
|
|
(22
|
)
|
|
156
|
|
|
(9
|
)
|
|
184
|
|
|
(31
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock
|
971
|
|
|
(53
|
)
|
|
515
|
|
|
(103
|
)
|
|
1,486
|
|
|
(156
|
)
|
||||||
Common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
271,433
|
|
|
(23,168
|
)
|
|
50,923
|
|
|
(12,374
|
)
|
|
322,356
|
|
|
(35,542
|
)
|
||||||
Canada
|
3,318
|
|
|
(383
|
)
|
|
1,078
|
|
|
(72
|
)
|
|
4,396
|
|
|
(455
|
)
|
||||||
Other international
|
19,274
|
|
|
(4,139
|
)
|
|
24,525
|
|
|
(6,493
|
)
|
|
43,799
|
|
|
(10,632
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity
|
234,714
|
|
|
(9,825
|
)
|
|
276,504
|
|
|
(47,032
|
)
|
|
511,218
|
|
|
(56,857
|
)
|
||||||
Fixed income
|
323,917
|
|
|
(5,941
|
)
|
|
425,614
|
|
|
(40,278
|
)
|
|
749,531
|
|
|
(46,219
|
)
|
||||||
Other
|
26
|
|
|
(2
|
)
|
|
1,160
|
|
|
(15
|
)
|
|
1,186
|
|
|
(17
|
)
|
||||||
Trust investments, at fair value
|
900,413
|
|
|
(44,425
|
)
|
|
789,981
|
|
|
(106,772
|
)
|
|
1,690,394
|
|
|
(151,197
|
)
|
||||||
Fixed income commingled funds
|
473,550
|
|
|
(11,714
|
)
|
|
20,587
|
|
|
(520
|
)
|
|
494,137
|
|
|
(12,234
|
)
|
||||||
Private equity
|
22,677
|
|
|
(750
|
)
|
|
73,100
|
|
|
(14,467
|
)
|
|
95,777
|
|
|
(15,217
|
)
|
||||||
Trust investments, at net asset value
|
496,227
|
|
|
(12,464
|
)
|
|
93,687
|
|
|
(14,987
|
)
|
|
589,914
|
|
|
(27,451
|
)
|
||||||
Total temporarily impaired securities
|
$
|
1,396,640
|
|
|
$
|
(56,889
|
)
|
|
$
|
883,668
|
|
|
$
|
(121,759
|
)
|
|
$
|
2,280,308
|
|
|
$
|
(178,648
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Beginning balance — Deferred revenue
|
$
|
1,731,417
|
|
|
$
|
1,677,898
|
|
|
$
|
1,602,545
|
|
Net preneed contract sales
|
900,037
|
|
|
847,848
|
|
|
794,527
|
|
|||
Acquisitions (divestitures) of businesses, net
|
10,488
|
|
|
193
|
|
|
(538
|
)
|
|||
Net investment earnings (losses)
(1)
|
381,436
|
|
|
146,103
|
|
|
(80,014
|
)
|
|||
Recognized deferred revenue
|
(876,857
|
)
|
|
(823,319
|
)
|
|
(780,423
|
)
|
|||
Change in cancellation allowance
|
(165
|
)
|
|
5,396
|
|
|
3,627
|
|
|||
Change in deferred receipts held in trust
|
(361,499
|
)
|
|
(124,923
|
)
|
|
142,401
|
|
|||
Effect of foreign currency and other
|
4,919
|
|
|
2,221
|
|
|
(4,227
|
)
|
|||
Ending balance — Deferred revenue
|
$
|
1,789,776
|
|
|
$
|
1,731,417
|
|
|
$
|
1,677,898
|
|
(1)
|
Includes both realized and unrealized investment earnings.
|
4.
|
Goodwill and Intangible Assets
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
Funeral
|
|
Cemetery
|
|
Total
|
|
Funeral
|
|
Cemetery
|
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Balance as of January 1
|
$
|
1,493,655
|
|
|
$
|
305,426
|
|
|
$
|
1,799,081
|
|
|
$
|
1,490,502
|
|
|
$
|
305,838
|
|
|
$
|
1,796,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Increase (decrease) in goodwill related to acquisitions
|
8,013
|
|
|
1,215
|
|
|
9,228
|
|
|
26,809
|
|
|
(151
|
)
|
|
26,658
|
|
||||||
Reduction of goodwill related to divestitures
|
(5,413
|
)
|
|
(224
|
)
|
|
(5,637
|
)
|
|
(26,554
|
)
|
|
(270
|
)
|
|
(26,824
|
)
|
||||||
Held for sale
|
(3,082
|
)
|
|
(177
|
)
|
|
(3,259
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Effect of foreign currency
|
6,568
|
|
|
—
|
|
|
6,568
|
|
|
2,898
|
|
|
9
|
|
|
2,907
|
|
||||||
Activity
|
6,086
|
|
|
814
|
|
|
6,900
|
|
|
3,153
|
|
|
(412
|
)
|
|
2,741
|
|
||||||
Balance as of December 31
|
$
|
1,499,741
|
|
|
$
|
306,240
|
|
|
$
|
1,805,981
|
|
|
$
|
1,493,655
|
|
|
$
|
305,426
|
|
|
$
|
1,799,081
|
|
|
Useful Life
|
|
|
|
|
||||||
|
Minimum
|
|
Maximum
|
|
2017
|
|
2016
|
||||
|
(Years)
|
|
(In thousands)
|
||||||||
Amortizing intangibles:
|
|
|
|
|
|
|
|
||||
Covenants-not-to-compete
|
2
|
-
|
20
|
|
$
|
214,628
|
|
|
$
|
211,549
|
|
Customer relationships
|
10
|
-
|
20
|
|
129,516
|
|
|
146,876
|
|
||
Tradenames
|
5
|
-
|
5
|
|
9,150
|
|
|
9,150
|
|
||
Other
|
5
|
-
|
40
|
|
11,927
|
|
|
11,927
|
|
||
|
|
|
|
|
365,221
|
|
|
379,502
|
|
||
Less: accumulated amortization:
|
|
|
|
|
|
|
|
||||
Covenants-not-to-compete
|
|
|
|
|
192,296
|
|
|
186,430
|
|
||
Customer relationships
|
|
|
|
|
61,321
|
|
|
71,903
|
|
||
Tradenames
|
|
|
|
|
7,320
|
|
|
5,490
|
|
||
Other
|
|
|
|
|
4,830
|
|
|
4,238
|
|
||
|
|
|
|
|
265,767
|
|
|
268,061
|
|
||
|
|
|
|
|
|
|
|
||||
Amortizing intangibles, net
|
|
|
|
|
99,454
|
|
|
111,441
|
|
||
|
|
|
|
|
|
|
|
||||
Non-amortizing intangibles:
|
|
|
|
|
|
|
|
||||
Tradenames
|
|
|
Indefinite
|
|
263,880
|
|
|
245,984
|
|
||
Other
|
|
|
Indefinite
|
|
10,765
|
|
|
10,640
|
|
||
Non-amortizing intangibles
|
|
|
|
|
274,645
|
|
|
256,624
|
|
||
|
|
|
|
|
|
|
|
||||
Intangible assets, net
|
|
|
|
|
$
|
374,099
|
|
|
$
|
368,065
|
|
2018
|
$
|
11,718
|
|
2019
|
9,100
|
|
|
2020
|
7,371
|
|
|
2021
|
6,613
|
|
|
2022
|
5,554
|
|
|
Total estimated amortization expense
|
$
|
40,356
|
|
5.
|
Income Taxes
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
United States
|
$
|
347,680
|
|
|
$
|
287,946
|
|
|
$
|
331,622
|
|
Foreign
|
52,578
|
|
|
38,712
|
|
|
38,729
|
|
|||
|
$
|
400,258
|
|
|
$
|
326,658
|
|
|
$
|
370,351
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Current:
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
154,128
|
|
|
$
|
113,629
|
|
|
$
|
94,502
|
|
Foreign
|
12,187
|
|
|
12,084
|
|
|
9,270
|
|
|||
State
|
4,934
|
|
|
16,150
|
|
|
13,207
|
|
|||
Total current income taxes
|
171,249
|
|
|
141,863
|
|
|
116,979
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
(314,389
|
)
|
|
$
|
(19,496
|
)
|
|
$
|
15,918
|
|
Foreign
|
618
|
|
|
22,708
|
|
|
(878
|
)
|
|||
State
|
(4,067
|
)
|
|
4,278
|
|
|
3,008
|
|
|||
Total deferred income taxes
|
(317,838
|
)
|
|
7,490
|
|
|
18,048
|
|
|||
Total income taxes
|
$
|
(146,589
|
)
|
|
$
|
149,353
|
|
|
$
|
135,027
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Computed tax provision at the applicable federal statutory income tax rate
|
$
|
140,090
|
|
|
$
|
114,331
|
|
|
$
|
129,623
|
|
State and local taxes, net of federal income tax benefits
|
8,216
|
|
|
13,279
|
|
|
10,542
|
|
|||
Foreign jurisdiction differences
|
(6,782
|
)
|
|
(2,557
|
)
|
|
(5,183
|
)
|
|||
Permanent differences associated with divestitures
|
1,925
|
|
|
9,267
|
|
|
2,909
|
|
|||
Changes in uncertain tax positions and audit settlements
|
(105,821
|
)
|
|
5,669
|
|
|
4,046
|
|
|||
Foreign valuation allowance, net of federal income tax benefits
|
1,186
|
|
|
15,850
|
|
|
—
|
|
|||
Enactment of US Tax Reform
|
(146,160
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit from share-based compensation
|
(18,521
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(20,722
|
)
|
|
(6,486
|
)
|
|
(6,910
|
)
|
|||
(Benefit from) Provision for income taxes
|
$
|
(146,589
|
)
|
|
$
|
149,353
|
|
|
$
|
135,027
|
|
Total consolidated effective tax rate
|
(36.6
|
)%
|
|
45.7
|
%
|
|
36.5
|
%
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Inventories and cemetery property
|
$
|
(222,431
|
)
|
|
$
|
(335,795
|
)
|
Property and equipment
|
(109,631
|
)
|
|
(149,450
|
)
|
||
Intangibles
|
(194,159
|
)
|
|
(294,251
|
)
|
||
Other
|
(4,902
|
)
|
|
(6,980
|
)
|
||
Deferred tax liabilities
|
(531,123
|
)
|
|
(786,476
|
)
|
||
Loss and tax credit carryforwards
|
170,979
|
|
|
157,795
|
|
||
Deferred revenue on preneed funeral and cemetery contracts
|
155,679
|
|
|
223,174
|
|
||
Accrued liabilities
|
62,727
|
|
|
84,230
|
|
||
Deferred tax assets
|
389,385
|
|
|
465,199
|
|
||
Less: Valuation allowance
|
(141,154
|
)
|
|
(132,500
|
)
|
||
Net deferred income tax liability
|
$
|
(282,892
|
)
|
|
$
|
(453,777
|
)
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Non-current deferred tax assets
|
$
|
873
|
|
|
$
|
861
|
|
Non-current deferred tax liabilities
|
(283,765
|
)
|
|
(454,638
|
)
|
||
Net deferred income tax liability
|
$
|
(282,892
|
)
|
|
$
|
(453,777
|
)
|
|
Federal, State, and Foreign Tax
|
||
|
(In thousands)
|
||
Balance at December 31, 2014
|
$
|
191,680
|
|
Additions to tax positions related to the current year
|
3,235
|
|
|
Reductions to tax positions related to prior years
|
(12,370
|
)
|
|
Balance at December 31, 2015
|
$
|
182,545
|
|
Reduction to tax positions related to prior years
|
(4,219
|
)
|
|
Balance at December 31, 2016
|
$
|
178,326
|
|
Reductions to tax positions as a result of audit settlement
|
(30,333
|
)
|
|
Reductions to tax positions related to prior years
|
$
|
(68,538
|
)
|
Balance at December 31, 2017
|
$
|
79,455
|
|
|
Federal
|
|
State
|
|
Foreign
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
2018
|
$
|
—
|
|
|
$
|
108,312
|
|
|
$
|
—
|
|
|
$
|
108,312
|
|
2019
|
—
|
|
|
127,914
|
|
|
—
|
|
|
127,914
|
|
||||
2020
|
—
|
|
|
176,591
|
|
|
—
|
|
|
176,591
|
|
||||
2021
|
—
|
|
|
158,672
|
|
|
—
|
|
|
158,672
|
|
||||
Thereafter
|
—
|
|
|
3,232,606
|
|
|
7,151
|
|
|
3,239,757
|
|
||||
Total
|
$
|
—
|
|
|
$
|
3,804,095
|
|
|
$
|
7,151
|
|
|
$
|
3,811,246
|
|
|
Federal
|
|
State
|
|
Foreign
|
|
Total
|
||||||||
|
|
|
(In thousands)
|
|
|
||||||||||
Loss and tax credit carryforwards
|
$
|
—
|
|
|
$
|
150,031
|
|
|
$
|
20,948
|
|
|
$
|
170,979
|
|
Valuation allowance
|
$
|
—
|
|
|
$
|
104,637
|
|
|
$
|
36,517
|
|
|
$
|
141,154
|
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
7.625% Senior Notes due October 2018
|
250,000
|
|
|
250,000
|
|
||
4.5% Senior Notes due November 2020
|
200,000
|
|
|
200,000
|
|
||
8.0% Senior Notes due November 2021
|
150,000
|
|
|
150,000
|
|
||
5.375% Senior Notes due January 2022
|
425,000
|
|
|
425,000
|
|
||
5.375% Senior Notes due May 2024
|
850,000
|
|
|
850,000
|
|
||
7.5% Senior Notes due April 2027
|
200,000
|
|
|
200,000
|
|
||
4.625% Senior Notes due December 2027
|
550,000
|
|
|
—
|
|
||
Term Loan due December 2022
|
675,000
|
|
|
—
|
|
||
Term Loan due March 2021
|
—
|
|
|
673,750
|
|
||
Bank Credit Facility due March 2021
|
—
|
|
|
350,000
|
|
||
Obligations under capital leases
|
197,232
|
|
|
208,758
|
|
||
Mortgage notes and other debt, maturities through 2050
|
6,036
|
|
|
3,753
|
|
||
Unamortized premiums (discounts) and other, net
|
7,456
|
|
|
8,313
|
|
||
Unamortized debt issuance costs
|
(38,071
|
)
|
|
(32,984
|
)
|
||
Total debt
|
3,472,653
|
|
|
3,286,590
|
|
||
Less: Current maturities of long-term debt
|
(337,337
|
)
|
|
(89,974
|
)
|
||
Total long-term debt
|
$
|
3,135,316
|
|
|
$
|
3,196,616
|
|
2018
|
$
|
342,786
|
|
2019
|
64,665
|
|
|
2020
|
270,423
|
|
|
2021
|
216,731
|
|
|
2022
|
976,331
|
|
|
2023 and thereafter
|
1,632,332
|
|
|
Total debt maturities
|
$
|
3,503,268
|
|
•
|
$
647.5 million
in aggregate principal of our Term Loan due March 2021;
|
•
|
$
470.0 million
in aggregate principal of our Bank Credit Facility due March 2021;
|
•
|
$
442.5 million
in aggregate principal of our Bank Credit Facility due December 2022;
|
•
|
$
26.3 million
in aggregate principal of our Term Loan due March 2021 as a scheduled payment; and
|
•
|
$0.2 million
in other debt.
|
•
|
$310.0 million
in aggregate principal of our Term Loan due to July 2018;
|
•
|
$295.0 million
in aggregate principal of our 7.0% Senior Notes due 2017;
|
•
|
$280.0 million
in aggregate principal of our Bank Credit Facility due July 2018; and
|
•
|
$26.3 million
in aggregate principal of our Term Loan due March 2021.
|
•
|
$0.2 million
in other debt.
|
Payments in 2017
|
$
|
160,843
|
|
Payments in 2016
|
$
|
156,950
|
|
Payments in 2015
|
$
|
164,748
|
|
Payments in 2018
|
$
|
160,076
|
|
Payments in 2019
|
144,948
|
|
|
Payments in 2020
|
143,879
|
|
|
Payments in 2021
|
133,972
|
|
|
Payments in 2022
|
92,235
|
|
|
Payments in 2023 and thereafter
|
264,398
|
|
|
Total expected cash interest payments
|
$
|
939,508
|
|
7.
|
Credit Risk and Fair Value of Financial Instruments
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
7.625% Senior Notes due October 2018
|
$
|
259,563
|
|
|
$
|
272,353
|
|
4.5% Senior Notes due November 2020
|
199,590
|
|
|
205,000
|
|
||
8.0% Senior Notes due November 2021
|
175,313
|
|
|
175,500
|
|
||
5.375% Senior Notes due January 2022
|
436,178
|
|
|
444,614
|
|
||
5.375% Senior Notes due May 2024
|
892,118
|
|
|
884,000
|
|
||
4.625% Senior Notes due December 2027
|
558,250
|
|
|
—
|
|
||
7.5% Senior Notes due April 2027
|
238,004
|
|
|
231,590
|
|
||
Term Loan due March 2021
|
—
|
|
|
673,750
|
|
||
Bank Credit Facility due March 2021
|
—
|
|
|
350,000
|
|
||
Term Loan due December 2022
|
675,000
|
|
|
—
|
|
||
Mortgage notes and other debt, maturities through 2050
|
6,036
|
|
|
3,753
|
|
||
Total fair value of debt instruments
|
$
|
3,440,052
|
|
|
$
|
3,240,560
|
|
8.
|
Commitments and Contingencies
|
|
Operating
|
|
Capital
|
||||
|
(In thousands)
|
||||||
2018
|
$
|
13,683
|
|
|
$
|
58,678
|
|
2019
|
10,889
|
|
|
30,528
|
|
||
2020
|
9,461
|
|
|
36,344
|
|
||
2021
|
8,404
|
|
|
32,690
|
|
||
2022
|
7,739
|
|
|
11,044
|
|
||
2023 and thereafter
|
59,473
|
|
|
27,948
|
|
||
Total
|
$
|
109,649
|
|
|
$
|
197,232
|
|
Less: Interest on capital leases
|
|
|
(30,694
|
)
|
|||
Total principal payable on capital leases
|
|
|
|
$
|
166,538
|
|
|
Employment and Management
|
|
Consulting
|
|
Non-Competition
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
2018
|
$
|
1,796
|
|
|
$
|
412
|
|
|
$
|
5,230
|
|
|
$
|
7,438
|
|
2019
|
1,257
|
|
|
367
|
|
|
4,822
|
|
|
6,446
|
|
||||
2020
|
609
|
|
|
258
|
|
|
3,594
|
|
|
4,461
|
|
||||
2021
|
307
|
|
|
217
|
|
|
2,554
|
|
|
3,078
|
|
||||
2022
|
51
|
|
|
146
|
|
|
1,935
|
|
|
2,132
|
|
||||
2023 and thereafter
|
—
|
|
|
255
|
|
|
3,977
|
|
|
4,232
|
|
||||
Total
|
$
|
4,020
|
|
|
$
|
1,655
|
|
|
$
|
22,112
|
|
|
$
|
27,787
|
|
9.
|
Equity
|
|
Foreign
Currency
Translation
Adjustment
|
|
Unrealized
Gains and
Losses
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
||||||
|
(In thousands)
|
||||||||||
Balance at December 31, 2014
|
$
|
59,414
|
|
|
$
|
—
|
|
|
$
|
59,414
|
|
Activity in 2015
|
(53,250
|
)
|
|
—
|
|
|
(53,250
|
)
|
|||
Net unrealized losses associated with available-for-sale securities of the trusts, net of taxes
|
—
|
|
|
(85,140
|
)
|
|
(85,140
|
)
|
|||
Reclassification of net unrealized losses activity attributable to the
Deferred receipts held in trust and Care trusts’ corpus,
net of taxes
|
—
|
|
|
85,140
|
|
|
85,140
|
|
|||
Balance at December 31, 2015
|
$
|
6,164
|
|
|
$
|
—
|
|
|
$
|
6,164
|
|
Activity in 2016
|
10,328
|
|
|
—
|
|
|
10,328
|
|
|||
Net unrealized gains associated with available-for-sale securities of the trusts, net of taxes
|
|
|
|
120,573
|
|
|
120,573
|
|
|||
Reclassification of net unrealized gains activity attributable to the
Deferred receipts held in trust and Care trusts’ corpus,
net of taxes
|
—
|
|
|
(120,573
|
)
|
|
(120,573
|
)
|
|||
Balance at December 31, 2016
|
$
|
16,492
|
|
|
$
|
—
|
|
|
$
|
16,492
|
|
Activity in 2017
|
25,451
|
|
|
—
|
|
|
25,451
|
|
|||
Net unrealized gains associated with available-for-sale securities of the trusts, net of taxes
|
—
|
|
|
243,677
|
|
|
243,677
|
|
|||
Reclassification of net unrealized gains activity attributable to the
Deferred receipts held in trust
and
Care trusts’ corpus,
net of taxes
|
—
|
|
|
(243,677
|
)
|
|
(243,677
|
)
|
|||
Balance at December 31, 2017
|
$
|
41,943
|
|
|
$
|
—
|
|
|
$
|
41,943
|
|
10.
|
Share-Based Compensation
|
Assumptions
|
|
2017
|
|
2016
|
|
2015
|
Dividend yield
|
|
2.0%
|
|
2.0%
|
|
1.8%
|
Expected volatility
|
|
19.0%
|
|
19.7%
|
|
23.3%
|
Risk-free interest rate
|
|
1.6%
|
|
1.0%
|
|
1.3%
|
Expected holding period (years)
|
|
4.0
|
|
4.0
|
|
4.0
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Total pretax employee share-based compensation expense included in net income
|
$
|
14,788
|
|
|
$
|
14,056
|
|
|
$
|
13,843
|
|
Income tax benefit related to share-based compensation included in net income
|
$
|
5,416
|
|
|
$
|
6,427
|
|
|
$
|
5,068
|
|
|
Options
|
|
Weighted-Average
Exercise Price
|
|||
Outstanding at December 31, 2016
|
10,775,136
|
|
|
$
|
16.49
|
|
Granted
|
1,524,860
|
|
|
$
|
29.25
|
|
Exercised
|
(2,759,309
|
)
|
|
$
|
12.18
|
|
Canceled
|
(20,388
|
)
|
|
$
|
24.59
|
|
Outstanding at December 31, 2017
|
9,520,299
|
|
|
$
|
19.77
|
|
Exercisable at December 31, 2017
|
6,190,827
|
|
|
$
|
16.64
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Price
|
|
Number
Outstanding at
December 31, 2017
|
|
Weighted-Average Remaining Contractual Life
(in years)
|
|
Weighted-
Average Exercise Price
|
|
Number
Exercisable at
December 31, 2017
|
|
Weighted-
Average Exercise Price
|
||||||
$ 5.00 — 10.00
|
|
725,074
|
|
|
1.1
|
|
$
|
9.09
|
|
|
725,074
|
|
|
$
|
9.09
|
|
$10.01 — 15.00
|
|
938,630
|
|
|
2.1
|
|
$
|
11.18
|
|
|
938,630
|
|
|
$
|
11.18
|
|
$15.01 — 20.00
|
|
2,757,306
|
|
|
3.7
|
|
$
|
16.56
|
|
|
2,757,306
|
|
|
$
|
16.56
|
|
$20.01 — 25.00
|
|
3,580,379
|
|
|
5.6
|
|
$
|
22.63
|
|
|
1,769,817
|
|
|
$
|
22.75
|
|
$25.01 — 30.00
|
|
1,518,910
|
|
|
7.1
|
|
$
|
29.25
|
|
|
—
|
|
|
$
|
—
|
|
$ 5.00 — 30.00
|
|
9,520,299
|
|
|
4.6
|
|
$
|
19.77
|
|
|
6,190,827
|
|
|
$
|
16.64
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Weighted average grant-date fair value of stock options granted
|
$
|
3.90
|
|
|
$
|
4.01
|
|
|
$
|
3.79
|
|
Total fair value of stock options vested (in thousands)
|
$
|
7,425
|
|
|
$
|
7,690
|
|
|
$
|
7,973
|
|
Total intrinsic value of stock options exercised (in thousands)
|
$
|
56,946
|
|
|
$
|
37,284
|
|
|
$
|
52,513
|
|
|
Restricted
Share Awards
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Nonvested restricted share awards at December 31, 2016
|
500,744
|
|
|
$
|
21.48
|
|
Granted
|
208,933
|
|
|
$
|
29.28
|
|
Vested
|
(265,733
|
)
|
|
$
|
20.56
|
|
Forfeited and other
|
(2,133
|
)
|
|
$
|
25.04
|
|
Nonvested restricted share awards at December 31, 2017
|
441,811
|
|
|
$
|
25.70
|
|
|
Restricted
Share Units
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Nonvested restricted share units at December 31, 2016
|
123,510
|
|
|
$
|
25.72
|
|
Granted
|
95,780
|
|
|
$
|
27.94
|
|
Vested
|
(48,136
|
)
|
|
$
|
25.86
|
|
Forfeited and other
|
(4,124
|
)
|
|
$
|
27.01
|
|
Nonvested restricted share units at December 31, 2017
|
167,030
|
|
|
$
|
26.92
|
|
11.
|
Retirement Plans
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Interest cost on projected benefit obligation
|
$
|
1,067
|
|
|
$
|
1,179
|
|
|
$
|
1,198
|
|
Recognized net actuarial losses (gains)
|
879
|
|
|
259
|
|
|
(1,327
|
)
|
|||
Total net periodic benefit cost
|
$
|
1,946
|
|
|
$
|
1,438
|
|
|
$
|
(129
|
)
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Change in Benefit Obligation:
|
|
|
|
|
|
||
Benefit obligation at beginning of year
|
$
|
30,078
|
|
|
$
|
32,305
|
|
Interest cost
|
1,067
|
|
|
1,179
|
|
||
Actuarial gain
|
879
|
|
|
259
|
|
||
Benefits paid
|
(3,343
|
)
|
|
(3,665
|
)
|
||
Benefit obligation at end of year
|
$
|
28,681
|
|
|
$
|
30,078
|
|
Change in Plan Assets:
|
|
|
|
|
|
||
Fair value of plan assets at beginning of year
|
$
|
—
|
|
|
$
|
—
|
|
Employer contributions
|
3,343
|
|
|
3,665
|
|
||
Benefits paid, including expenses
|
(3,343
|
)
|
|
(3,665
|
)
|
||
Fair value of plan assets at end of year
|
$
|
—
|
|
|
$
|
—
|
|
Funded status of plan
|
$
|
(28,681
|
)
|
|
$
|
(30,078
|
)
|
|
|
|
|
||||
Funding Summary:
|
|
|
|
|
|
||
Projected benefit obligations
|
$
|
28,681
|
|
|
$
|
30,078
|
|
Accumulated benefit obligation
|
$
|
28,681
|
|
|
$
|
30,078
|
|
Amounts Recognized in the Consolidated Balance Sheet:
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
(3,265
|
)
|
|
$
|
(3,448
|
)
|
Accrued benefit costs - included in
Other liabilities
|
(25,416
|
)
|
|
(26,630
|
)
|
||
Total accrued benefit liability
|
$
|
(28,681
|
)
|
|
$
|
(30,078
|
)
|
|
2017
|
|
2016
|
|
2015
|
|||
Weighted-average discount rate used to determine obligations
|
3.41
|
%
|
|
3.76
|
%
|
|
3.86
|
%
|
Weighted-average discount rate used to determine net periodic pension cost
|
3.86
|
%
|
|
3.96
|
%
|
|
2.47
|
%
|
2018
|
$
|
3,265
|
|
2019
|
3,192
|
|
|
2020
|
2,760
|
|
|
2021
|
2,447
|
|
|
2022
|
2,369
|
|
|
Years 2023 through 2027
|
9,379
|
|
|
Total expected benefit payments
|
$
|
23,412
|
|
Years of Vesting Service
|
|
Percentage of Deferred Compensation
|
0 — 5 years
|
|
75% of the first 6% of deferred compensation
|
6 — 10 years
|
|
100% of the first 6% of deferred compensation
|
11 or more years
|
|
125% of the first 6% of deferred compensation
|
12.
|
Segment Reporting
|
|
Reportable Segments
|
|
|
|
|
||||||||||
|
Funeral
|
|
Cemetery
|
|
Corporate
|
|
Consolidated
|
||||||||
|
(In thousands)
|
|
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue from external customers
|
$
|
1,868,152
|
|
|
$
|
1,226,879
|
|
|
$
|
—
|
|
|
$
|
3,095,031
|
|
Interest expense
|
$
|
3,986
|
|
|
$
|
401
|
|
|
$
|
164,738
|
|
|
$
|
169,125
|
|
Depreciation and amortization
|
$
|
109,965
|
|
|
$
|
32,815
|
|
|
$
|
10,361
|
|
|
$
|
153,141
|
|
Amortization of intangibles
|
$
|
17,871
|
|
|
$
|
9,696
|
|
|
$
|
83
|
|
|
$
|
27,650
|
|
Operating profit
|
$
|
371,853
|
|
|
$
|
350,336
|
|
|
$
|
—
|
|
|
$
|
722,189
|
|
Amortization of cemetery property
|
$
|
—
|
|
|
$
|
68,102
|
|
|
$
|
—
|
|
|
$
|
68,102
|
|
Capital expenditures
|
$
|
83,241
|
|
|
$
|
118,699
|
|
|
$
|
12,561
|
|
|
$
|
214,501
|
|
Total assets
|
$
|
5,393,205
|
|
|
$
|
6,946,351
|
|
|
$
|
524,947
|
|
|
$
|
12,864,503
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from external customers
|
$
|
1,869,111
|
|
|
$
|
1,162,026
|
|
|
$
|
—
|
|
|
$
|
3,031,137
|
|
Interest expense
|
$
|
3,906
|
|
|
$
|
105
|
|
|
$
|
158,082
|
|
|
$
|
162,093
|
|
Depreciation and amortization
|
$
|
106,602
|
|
|
$
|
31,081
|
|
|
$
|
9,550
|
|
|
$
|
147,233
|
|
Amortization of intangibles
|
$
|
20,444
|
|
|
$
|
10,438
|
|
|
$
|
74
|
|
|
$
|
30,956
|
|
Operating profit
|
$
|
361,022
|
|
|
$
|
315,412
|
|
|
$
|
—
|
|
|
$
|
676,434
|
|
Amortization of cemetery property
|
$
|
—
|
|
|
$
|
66,745
|
|
|
$
|
—
|
|
|
$
|
66,745
|
|
Capital expenditures
|
$
|
68,666
|
|
|
$
|
113,163
|
|
|
$
|
11,617
|
|
|
$
|
193,446
|
|
Total assets
|
$
|
5,158,700
|
|
|
$
|
6,481,761
|
|
|
$
|
397,688
|
|
|
$
|
12,038,149
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from external customers
|
$
|
1,889,055
|
|
|
$
|
1,096,986
|
|
|
$
|
—
|
|
|
$
|
2,986,041
|
|
Interest expense
|
$
|
4,230
|
|
|
$
|
450
|
|
|
$
|
168,217
|
|
|
$
|
172,897
|
|
Depreciation and amortization
|
$
|
103,272
|
|
|
$
|
29,448
|
|
|
$
|
8,736
|
|
|
$
|
141,456
|
|
Amortization of intangibles
|
$
|
22,638
|
|
|
$
|
8,746
|
|
|
$
|
75
|
|
|
$
|
31,459
|
|
Operating profit
|
$
|
390,101
|
|
|
$
|
284,488
|
|
|
$
|
—
|
|
|
$
|
674,589
|
|
Amortization of cemetery property
|
$
|
—
|
|
|
$
|
62,407
|
|
|
$
|
—
|
|
|
$
|
62,407
|
|
Capital expenditures
|
$
|
53,422
|
|
|
$
|
83,803
|
|
|
$
|
13,761
|
|
|
$
|
150,986
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Operating profit from reportable segments
|
$
|
722,189
|
|
|
$
|
676,434
|
|
|
$
|
674,589
|
|
General and administrative expenses
|
(154,423
|
)
|
|
(137,730
|
)
|
|
(130,813
|
)
|
|||
Gains (losses) on divestitures and impairment charges, net
|
7,015
|
|
|
(26,819
|
)
|
|
6,522
|
|
|||
Hurricane expense, net
|
(5,584
|
)
|
|
—
|
|
|
—
|
|
|||
Operating income
|
569,197
|
|
|
511,885
|
|
|
550,298
|
|
|||
Interest expense
|
(169,125
|
)
|
|
(162,093
|
)
|
|
(172,897
|
)
|
|||
Losses on early extinguishment of debt, net
|
(274
|
)
|
|
(22,503
|
)
|
|
(6,918
|
)
|
|||
Other income (expense), net
|
460
|
|
|
(631
|
)
|
|
(132
|
)
|
|||
Income from continuing operations before income taxes
|
$
|
400,258
|
|
|
$
|
326,658
|
|
|
$
|
370,351
|
|
|
United States
|
|
Canada
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|||
Revenue from external customers
|
$
|
2,889,463
|
|
|
$
|
205,568
|
|
|
$
|
3,095,031
|
|
Interest expense
|
$
|
168,956
|
|
|
$
|
169
|
|
|
$
|
169,125
|
|
Depreciation and amortization
|
$
|
143,932
|
|
|
$
|
9,209
|
|
|
$
|
153,141
|
|
Amortization of intangibles
|
$
|
27,092
|
|
|
$
|
558
|
|
|
$
|
27,650
|
|
Amortization of cemetery property
|
$
|
61,307
|
|
|
$
|
6,795
|
|
|
$
|
68,102
|
|
Operating income
|
$
|
500,919
|
|
|
$
|
68,278
|
|
|
$
|
569,197
|
|
Gains on divestitures and impairment charges, net
|
$
|
61
|
|
|
$
|
6,954
|
|
|
$
|
7,015
|
|
Long-lived assets
|
$
|
5,786,063
|
|
|
$
|
286,135
|
|
|
$
|
6,072,198
|
|
2016
|
|
|
|
|
|
|
|
|
|||
Revenue from external customers
|
$
|
2,848,876
|
|
|
$
|
182,261
|
|
|
$
|
3,031,137
|
|
Interest expense (income)
|
$
|
162,341
|
|
|
$
|
(248
|
)
|
|
$
|
162,093
|
|
Depreciation and amortization
|
$
|
138,560
|
|
|
$
|
8,673
|
|
|
$
|
147,233
|
|
Amortization of intangibles
|
$
|
30,427
|
|
|
$
|
529
|
|
|
$
|
30,956
|
|
Amortization of cemetery property
|
$
|
61,449
|
|
|
$
|
5,296
|
|
|
$
|
66,745
|
|
Operating income
|
$
|
460,387
|
|
|
$
|
51,498
|
|
|
$
|
511,885
|
|
(Losses) gains on divestitures and impairment charges, net
|
$
|
(27,658
|
)
|
|
$
|
839
|
|
|
$
|
(26,819
|
)
|
Long-lived assets
|
$
|
5,705,070
|
|
|
$
|
266,053
|
|
|
$
|
5,971,123
|
|
2015
|
|
|
|
|
|
|
|
|
|||
Revenue from external customers
|
$
|
2,805,407
|
|
|
$
|
180,634
|
|
|
$
|
2,986,041
|
|
Interest expense
|
$
|
172,697
|
|
|
$
|
200
|
|
|
$
|
172,897
|
|
Depreciation and amortization
|
$
|
132,393
|
|
|
$
|
9,063
|
|
|
$
|
141,456
|
|
Amortization of intangibles
|
$
|
30,856
|
|
|
$
|
603
|
|
|
$
|
31,459
|
|
Amortization of cemetery property
|
$
|
58,429
|
|
|
$
|
3,978
|
|
|
$
|
62,407
|
|
Operating income
|
$
|
498,634
|
|
|
$
|
51,664
|
|
|
$
|
550,298
|
|
Gains on divestitures and impairment charges, net
|
$
|
1,778
|
|
|
$
|
4,744
|
|
|
$
|
6,522
|
|
13.
|
Supplementary Information
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
||
Cash
|
$
|
260,281
|
|
|
$
|
146,684
|
|
Commercial paper and temporary investments
|
69,758
|
|
|
48,302
|
|
||
|
$
|
330,039
|
|
|
$
|
194,986
|
|
Receivables, net:
|
|
|
|
|
|
||
Notes receivable
|
$
|
1,605
|
|
|
$
|
1,259
|
|
Atneed funeral receivables, net of allowances of
$1,845
and $1,881, respectively
|
44,536
|
|
|
46,917
|
|
||
Atneed cemetery receivables, net of allowances of
$245
and $1,514, respectively
|
16,556
|
|
|
17,765
|
|
||
Other
|
27,607
|
|
|
32,514
|
|
||
|
$
|
90,304
|
|
|
$
|
98,455
|
|
Other current assets:
|
|
|
|
|
|
||
Income tax receivable
|
$
|
8,576
|
|
|
$
|
3,609
|
|
Prepaid insurance
|
4,419
|
|
|
4,437
|
|
||
Restricted cash
(1)
|
8,625
|
|
|
11,978
|
|
||
Other
|
13,955
|
|
|
14,500
|
|
||
|
$
|
35,575
|
|
|
$
|
34,524
|
|
Cemetery property:
|
|
|
|
|
|
||
Undeveloped land
|
$
|
1,181,920
|
|
|
$
|
1,184,710
|
|
Developed lots, lawn crypts, mausoleum spaces, cremation niches, and cremation memorialization property
|
610,069
|
|
|
592,225
|
|
||
|
$
|
1,791,989
|
|
|
$
|
1,776,935
|
|
Property and equipment:
|
|
|
|
|
|
||
Land
|
$
|
605,735
|
|
|
$
|
595,096
|
|
Buildings and improvements
|
1,996,123
|
|
|
1,879,553
|
|
||
Operating equipment
|
557,278
|
|
|
549,879
|
|
||
Leasehold improvements
|
34,607
|
|
|
33,900
|
|
||
Capital leases
|
254,260
|
|
|
234,411
|
|
||
|
3,448,003
|
|
|
3,292,839
|
|
||
Less: Accumulated depreciation
|
(1,430,695
|
)
|
|
(1,328,262
|
)
|
||
Less: Accumulated amortization of capital leases
|
(144,264
|
)
|
|
(136,990
|
)
|
||
|
$
|
1,873,044
|
|
|
$
|
1,827,587
|
|
Deferred charges and other assets:
|
|
|
|
|
|
||
Intangible assets, net
|
$
|
374,099
|
|
|
$
|
368,065
|
|
Restricted cash
(1)
|
1,937
|
|
|
4,542
|
|
||
Deferred tax assets
|
873
|
|
|
861
|
|
||
Notes receivable, net of allowances of $10,946 and $11,334, respectively
|
9,624
|
|
|
9,598
|
|
||
Cash surrender value of insurance policies
|
139,494
|
|
|
119,819
|
|
||
Other
|
75,157
|
|
|
64,635
|
|
||
|
$
|
601,184
|
|
|
$
|
567,520
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
173,685
|
|
|
$
|
155,802
|
|
Accrued benefits
|
95,233
|
|
|
88,392
|
|
||
Accrued interest
|
30,415
|
|
|
27,991
|
|
||
Accrued property taxes
|
10,541
|
|
|
12,883
|
|
||
Self-insurance reserves
|
78,227
|
|
|
77,993
|
|
||
Bank overdrafts
|
27,243
|
|
|
20,927
|
|
||
Other accrued liabilities
|
73,828
|
|
|
55,948
|
|
||
|
$
|
489,172
|
|
|
$
|
439,936
|
|
Other liabilities:
|
|
|
|
|
|
||
Accrued benefit costs
|
$
|
25,416
|
|
|
$
|
26,630
|
|
Deferred compensation
|
120,782
|
|
|
105,013
|
|
||
Customer refund obligation reserve
|
51,767
|
|
|
52,068
|
|
||
Tax liability
|
111,000
|
|
|
235,625
|
|
||
Payable to perpetual care fund
|
83,015
|
|
|
77,148
|
|
||
Other
|
19,002
|
|
|
13,838
|
|
||
|
$
|
410,982
|
|
|
$
|
510,322
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Property and merchandise revenue:
|
|
|
|
|
|
|
|
|
|||
Funeral
|
$
|
619,804
|
|
|
$
|
611,440
|
|
|
$
|
608,266
|
|
Cemetery
|
968,828
|
|
|
912,778
|
|
|
849,250
|
|
|||
Total property and merchandise revenue
|
1,588,632
|
|
|
1,524,218
|
|
|
1,457,516
|
|
|||
Services revenue:
|
|
|
|
|
|
|
|
|
|||
Funeral
|
1,129,510
|
|
|
1,126,703
|
|
|
1,146,205
|
|
|||
Cemetery
|
227,155
|
|
|
218,825
|
|
|
217,240
|
|
|||
Total services revenue
|
1,356,665
|
|
|
1,345,528
|
|
|
1,363,445
|
|
|||
Other revenue
|
149,734
|
|
|
161,391
|
|
|
165,080
|
|
|||
Total revenue
|
$
|
3,095,031
|
|
|
$
|
3,031,137
|
|
|
$
|
2,986,041
|
|
Property and merchandise costs and expenses:
|
|
|
|
|
|
|
|
|
|||
Funeral
|
$
|
282,048
|
|
|
$
|
287,414
|
|
|
$
|
290,663
|
|
Cemetery
|
512,677
|
|
|
488,997
|
|
|
457,613
|
|
|||
Total cost of property and merchandise
|
794,725
|
|
|
776,411
|
|
|
748,276
|
|
|||
Services costs and expenses:
|
|
|
|
|
|
|
|
|
|||
Funeral
|
621,102
|
|
|
627,156
|
|
|
624,310
|
|
|||
Cemetery
|
108,102
|
|
|
106,534
|
|
|
105,038
|
|
|||
Total cost of services
|
729,204
|
|
|
733,690
|
|
|
729,348
|
|
|||
Overhead and other expenses
|
848,913
|
|
|
844,602
|
|
|
833,828
|
|
|||
Total cost and expenses
|
$
|
2,372,842
|
|
|
$
|
2,354,703
|
|
|
$
|
2,311,452
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net change in capital expenditure accrual
|
$
|
223
|
|
|
$
|
(1,435
|
)
|
|
$
|
5,571
|
|
Options exercised by attestation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
122
|
|
Shares repurchased
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(122
|
)
|
Non-cash acquisition of capital leases
|
$
|
54,087
|
|
|
$
|
41,609
|
|
|
$
|
55,941
|
|
14.
|
Earnings Per Share
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Amounts attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|||
Income from continuing operations — basic
|
$
|
546,663
|
|
|
$
|
177,038
|
|
|
$
|
234,162
|
|
After tax interest on convertible debt
|
52
|
|
|
43
|
|
|
50
|
|
|||
Income from continuing operations — diluted
|
$
|
546,715
|
|
|
$
|
177,081
|
|
|
$
|
234,212
|
|
|
|
|
|
|
|
||||||
Loss from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(390
|
)
|
|
|
|
|
|
|
||||||
Net income — basic
|
$
|
546,663
|
|
|
$
|
177,038
|
|
|
$
|
233,772
|
|
After tax interest on convertible debt
|
52
|
|
|
43
|
|
|
50
|
|
|||
Net income — diluted
|
$
|
546,715
|
|
|
$
|
177,081
|
|
|
$
|
233,822
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|||
Weighted average shares — basic
|
187,630
|
|
|
193,086
|
|
|
200,356
|
|
|||
Stock options
|
4,396
|
|
|
2,823
|
|
|
3,973
|
|
|||
Restricted share units
|
99
|
|
|
12
|
|
|
—
|
|
|||
Convertible debt
|
121
|
|
|
121
|
|
|
121
|
|
|||
Weighted average shares — diluted
|
192,246
|
|
|
196,042
|
|
|
204,450
|
|
|||
Amounts attributable to common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.91
|
|
|
$
|
0.92
|
|
|
$
|
1.17
|
|
Diluted
|
$
|
2.84
|
|
|
$
|
0.90
|
|
|
$
|
1.14
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
2.91
|
|
|
$
|
0.92
|
|
|
$
|
1.17
|
|
Diluted
|
$
|
2.84
|
|
|
$
|
0.90
|
|
|
$
|
1.14
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
(In thousands)
|
|||||||
Antidilutive options
|
911
|
|
|
982
|
|
|
3
|
|
15.
|
Acquisitions
|
16.
|
Divestiture-Related Activities
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Gains on divestitures, net
|
$
|
29,053
|
|
|
$
|
7,829
|
|
|
$
|
13,363
|
|
Impairment losses
|
(22,038
|
)
|
|
(34,648
|
)
|
|
(6,841
|
)
|
|||
Gains (losses) on divestitures and impairment charges, net
|
$
|
7,015
|
|
|
$
|
(26,819
|
)
|
|
$
|
6,522
|
|
17.
|
Quarterly Financial Data (Unaudited)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue
|
$
|
777,710
|
|
|
$
|
773,242
|
|
|
$
|
731,346
|
|
|
$
|
812,733
|
|
Costs and expenses
|
$
|
(600,545
|
)
|
|
$
|
(589,797
|
)
|
|
$
|
(581,644
|
)
|
|
$
|
(600,856
|
)
|
Operating profit
|
$
|
177,165
|
|
|
$
|
183,445
|
|
|
$
|
149,702
|
|
|
$
|
211,877
|
|
Operating income
|
$
|
139,596
|
|
|
$
|
143,608
|
|
|
$
|
109,056
|
|
|
$
|
176,937
|
|
Income from continuing operations before income taxes
(1)
|
$
|
98,526
|
|
|
$
|
101,518
|
|
|
$
|
66,578
|
|
|
$
|
133,636
|
|
Benefit from (provision for) income taxes
|
$
|
76,223
|
|
|
$
|
(32,956
|
)
|
|
$
|
(10,437
|
)
|
|
$
|
113,759
|
|
Net income
|
$
|
174,749
|
|
|
$
|
68,562
|
|
|
$
|
56,141
|
|
|
$
|
247,395
|
|
Net (income) loss attributable to noncontrolling interests
|
$
|
(47
|
)
|
|
$
|
(81
|
)
|
|
$
|
23
|
|
|
$
|
(79
|
)
|
Net income attributable to common stockholders
|
$
|
174,702
|
|
|
$
|
68,481
|
|
|
$
|
56,164
|
|
|
$
|
247,316
|
|
Net income attributable to common stockholders per share
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic — EPS
|
$
|
0.93
|
|
|
$
|
0.37
|
|
|
$
|
0.30
|
|
|
$
|
1.32
|
|
Diluted — EPS
|
$
|
0.91
|
|
|
$
|
0.36
|
|
|
$
|
0.29
|
|
|
$
|
1.29
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue
|
$
|
749,219
|
|
|
$
|
751,398
|
|
|
$
|
721,467
|
|
|
$
|
809,053
|
|
Costs and expenses
|
$
|
(586,296
|
)
|
|
$
|
(589,409
|
)
|
|
$
|
(580,722
|
)
|
|
$
|
(598,276
|
)
|
Operating profit
|
$
|
162,923
|
|
|
$
|
161,989
|
|
|
$
|
140,745
|
|
|
$
|
210,777
|
|
Operating income
|
$
|
123,672
|
|
|
$
|
94,498
|
|
|
$
|
114,386
|
|
|
$
|
179,329
|
|
Income from continuing operations before income taxes
(1)
|
$
|
79,767
|
|
|
$
|
32,639
|
|
|
$
|
74,963
|
|
|
$
|
139,289
|
|
Benefit from (provision for) income taxes
|
$
|
(32,313
|
)
|
|
$
|
(16,746
|
)
|
|
$
|
(27,422
|
)
|
|
$
|
(72,872
|
)
|
Net income
|
$
|
47,454
|
|
|
$
|
15,893
|
|
|
$
|
47,541
|
|
|
$
|
66,417
|
|
Net (income) loss attributable to noncontrolling interests
|
$
|
(9
|
)
|
|
$
|
(273
|
)
|
|
$
|
186
|
|
|
$
|
(171
|
)
|
Net income attributable to common stockholders
|
$
|
47,445
|
|
|
$
|
15,620
|
|
|
$
|
47,727
|
|
|
$
|
66,246
|
|
Net income attributable to common stockholders per share
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic — EPS
|
$
|
0.24
|
|
|
$
|
0.08
|
|
|
$
|
0.25
|
|
|
$
|
0.35
|
|
Diluted — EPS
|
$
|
0.24
|
|
|
$
|
0.08
|
|
|
$
|
0.24
|
|
|
$
|
0.34
|
|
(1)
|
Includes
Gains (losses) on divestitures and impairment charges, net
, as described in Note 16.
|
(2)
|
Net income per share is computed independently for each of the quarters presented. Therefore, the sum of the quarters’ net income per share may not equal the total computed for the year.
|
SERVICE CORPORATION INTERNATIONAL
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Three Years Ended December 31, 2017
|
||||||||||||||||
Description
|
|
Balance at
Beginning
of Period
|
|
Charged
(Credited) to
Costs and
Expenses
|
|
Charged
(Credited) to
Write-offs & Other
Accounts
|
|
Balance at
End of
Period
|
||||||||
|
|
|
||||||||||||||
Current Provision:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance For Doubtful Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2017
|
|
$
|
3,395
|
|
|
$
|
9,980
|
|
|
$
|
(11,285
|
)
|
|
$
|
2,090
|
|
Year Ended December 31, 2016
|
|
$
|
5,496
|
|
|
$
|
10,776
|
|
|
$
|
(12,877
|
)
|
|
$
|
3,395
|
|
Year Ended December 31, 2015
|
|
$
|
8,546
|
|
|
$
|
6,083
|
|
|
$
|
(9,133
|
)
|
|
$
|
5,496
|
|
Due After One Year:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance For Doubtful Accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2017
|
|
$
|
11,334
|
|
|
$
|
—
|
|
|
$
|
(388
|
)
|
|
$
|
10,946
|
|
Year Ended December 31, 2016
|
|
$
|
11,334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,334
|
|
Year Ended December 31, 2015
|
|
$
|
11,259
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
11,334
|
|
Preneed Receivables, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset Allowance For Cancellation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2017
|
|
$
|
104,740
|
|
|
$
|
1,105
|
|
|
$
|
1,904
|
|
|
$
|
107,749
|
|
Year Ended December 31, 2016
|
|
$
|
105,773
|
|
|
$
|
1,411
|
|
|
$
|
(2,444
|
)
|
|
$
|
104,740
|
|
Year Ended December 31, 2015
|
|
$
|
107,040
|
|
|
$
|
5,016
|
|
|
$
|
(6,283
|
)
|
|
$
|
105,773
|
|
Deferred Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue Allowance For Cancellation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2017
|
|
$
|
(116,913
|
)
|
|
$
|
—
|
|
|
$
|
(1,186
|
)
|
|
$
|
(118,099
|
)
|
Year Ended December 31, 2016
|
|
$
|
(121,548
|
)
|
|
$
|
—
|
|
|
$
|
4,635
|
|
|
$
|
(116,913
|
)
|
Year Ended December 31, 2015
|
|
$
|
(125,030
|
)
|
|
$
|
—
|
|
|
$
|
3,482
|
|
|
$
|
(121,548
|
)
|
Deferred Tax Valuation Allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2017
|
|
$
|
132,500
|
|
|
$
|
8,035
|
|
|
$
|
619
|
|
|
$
|
141,154
|
|
Year Ended December 31, 2016
|
|
$
|
126,654
|
|
|
$
|
6,336
|
|
|
$
|
(490
|
)
|
|
$
|
132,500
|
|
Year Ended December 31, 2015
|
|
$
|
134,201
|
|
|
$
|
(5,988
|
)
|
|
$
|
(1,559
|
)
|
|
$
|
126,654
|
|
Item 9.
|
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures.
|
Item 10.
|
Directors, Executive Officers, and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions
and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
|
|
Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants, and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants, and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
|
||||
Plan Category
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
|
9,520,299
|
|
|
$
|
19.77
|
|
|
10,125,235
|
|
Item 15.
|
Exhibits and Financial Statement Schedule
|
Exhibit Number
|
|
|
Description
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
101
|
|
|
—
|
|
Interactive data file.
|
Item 16.
|
Form 10-K Summary
|
|
|
SERVICE CORPORATION INTERNATIONAL
|
|
|
|
|
By:
|
/s/ GREGORY T. SANGALIS
|
|
|
(Gregory T. Sangalis,
Senior Vice President, General
Counsel, and Secretary ) |
Signature
|
|
Title
|
|
Date
|
||
|
|
|
|
|
||
/s/ THOMAS L. RYAN*
|
|
Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
|
|
February 14, 2018
|
||
(Thomas L. Ryan)
|
|
|
|
|||
|
|
|
|
|
||
/s/ ERIC D. TANZBERGER*
|
|
Senior Vice President, Chief Financial Officer (Principal Financial Officer)
|
|
February 14, 2018
|
||
(Eric D. Tanzberger)
|
|
|
|
|||
|
|
|
|
|
||
/s/ TAMMY R. MOORE*
|
|
Vice President and Corporate Controller (Principal Accounting Officer)
|
|
February 14, 2018
|
||
(Tammy R. Moore)
|
|
|
|
|||
|
|
|
|
|
||
/s/ R. L. WALTRIP*
|
|
Founder and Chairman Emeritus, Director
|
|
February 14, 2018
|
||
(R. L. Waltrip)
|
|
|
|
|||
|
|
|
|
|
||
/s/ ANTHONY L. COELHO*
|
|
Lead Director
|
|
February 14, 2018
|
||
(Anthony L. Coelho)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ ALAN R. BUCKWALTER, III*
|
|
Director
|
|
February 14, 2018
|
||
(Alan R. Buckwalter, III)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ VICTOR L. LUND*
|
|
Director
|
|
February 14, 2018
|
||
(Victor L. Lund)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ JOHN W. MECOM, JR.*
|
|
Director
|
|
February 14, 2018
|
||
(John W. Mecom, Jr.)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ CLIFTON H. MORRIS, JR.*
|
|
Director
|
|
February 14, 2018
|
||
(Clifton H. Morris, Jr.)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ ELLEN OCHOA*
|
|
Director
|
|
February 14, 2018
|
||
(Ellen Ochoa)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ W. BLAIR WALTRIP*
|
|
Director
|
|
February 14, 2018
|
||
(W. Blair Waltrip)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ MARCUS A. WATTS*
|
|
Director
|
|
February 14, 2018
|
||
(Marcus A. Watts)
|
|
|
|
|
||
|
|
|
|
|
||
/s/ EDWARD E. WILLIAMS*
|
|
Director
|
|
February 14, 2018
|
||
(Edward E. Williams)
|
|
|
|
|
||
|
|
|
|
|
||
*By
|
/s/ GREGORY T. SANGALIS
|
|
|
|
February 14, 2018
|
|
|
(Gregory T. Sangalis, as
Attorney-In-Fact for each of the Persons indicated) |
|
|
|
|
ARTICLE 1
|
DEFINITIONS.................................................................................................... 1
|
ARTICLE 2
|
SELECTION, ENROLLMENT, ELIGIBILITY............................................... 10
|
ARTICLE 3
|
DEFERRAL COMMITMENTS/COMPANY CONTRIBUTION AMOUNTS/COMPANY RESTORATION MATCHING AMOUNTS/ VESTING/CREDITING/TAXES..................................................................... 10
|
3.1
|
Annual Deferral Amount................................................................... 10
|
3.2
|
Timing of Deferral Elections; Effect of Election Form..................... 11
|
3.3
|
Withholding and Crediting of Annual Deferral Amounts................. 13
|
3.4
|
Company Contribution Amount........................................................ 13
|
3.5
|
Company Restoration Matching Amount.......................................... 13
|
3.6
|
Vesting............................................................................................... 14
|
3.7
|
Crediting/Debiting of Account Balances........................................... 15
|
3.8
|
FICA and Other Taxes....................................................................... 16
|
ARTICLE 4
|
SCHEDULED DISTRIBUTION; UNFORESEEABLE EMERGENCIES..... 17
|
4.1
|
Scheduled Distributions..................................................................... 17
|
4.2
|
Postponing Scheduled Distributions.................................................. 18
|
4.3
|
Other Benefits Take Precedence Over Scheduled Distributions........ 18
|
4.4
|
Unforeseeable Emergencies............................................................... 18
|
ARTICLE 5
|
CHANGE IN CONTROL BENEFIT................................................................ 19
|
5.1
|
Change in Control Benefit................................................................. 19
|
5.2
|
Payment of Change in Control Benefit.............................................. 19
|
ARTICLE 6
|
RETIREMENT BENEFIT................................................................................ 19
|
6.1
|
Retirement Benefit............................................................................. 19
|
6.2
|
Payment of Retirement Benefit.......................................................... 20
|
ARTICLE 7
|
TERMINATION BENEFIT.............................................................................. 21
|
7.1
|
Termination Benefit........................................................................... 21
|
7.2
|
Payment of Termination Benefit........................................................ 21
|
ARTICLE 8
|
DISABILITY BENEFIT................................................................................... 22
|
8.1
|
Disability Benefit............................................................................... 22
|
8.2
|
Payment of Disability Benefit............................................................ 22
|
ARTICLE 9
|
DEATH BENEFIT............................................................................................ 23
|
9.1
|
Death Benefit..................................................................................... 23
|
9.2
|
Payment of Death Benefit.................................................................. 23
|
ARTICLE 10
|
BENEFICIARY DESIGNATION..................................................................... 23
|
10.1
|
Beneficiary......................................................................................... 23
|
10.2
|
Beneficiary Designation; Change; Spousal Consent......................... 23
|
10.3
|
Acknowledgment............................................................................... 23
|
10.4
|
No Beneficiary Designation............................................................... 23
|
10.5
|
Doubt as to Beneficiary...................................................................... 24
|
10.6
|
Discharge of Obligations................................................................... 24
|
ARTICLE 11
|
LEAVE OF ABSENCE..................................................................................... 24
|
11.1
|
Paid Leave of Absence....................................................................... 24
|
11.2
|
Unpaid Leave of Absence.................................................................. 24
|
ARTICLE 12
|
TERMINATION OF PLAN, AMENDMENT OR MODIFICATION............. 24
|
12.1
|
Termination of Plan........................................................................... 24
|
12.2
|
Amendment....................................................................................... 25
|
12.3
|
Plan Agreement................................................................................. 25
|
12.4
|
Effect of Payment.............................................................................. 25
|
ARTICLE 13
|
ADMINISTRATION........................................................................................ 25
|
13.1
|
Committee Duties.............................................................................. 25
|
13.2
|
Administration Upon Change In Control.......................................... 26
|
13.3
|
Agents................................................................................................ 26
|
13.4
|
Binding Effect of Decisions............................................................... 26
|
13.5
|
Indemnity of Committee.................................................................... 26
|
13.6
|
Employer Information........................................................................ 26
|
ARTICLE 14
|
OTHER BENEFITS AND AGREEMENTS.................................................... 26
|
14.1
|
Coordination with Other Benefits...................................................... 26
|
ARTICLE 15
|
CLAIMS PROCEDURES................................................................................ 27
|
15.1
|
Presentation of Claim......................................................................... 27
|
15.2
|
Notification of Decision..................................................................... 27
|
15.3
|
Review of a Denied Claim................................................................. 28
|
15.4
|
Decision on Review........................................................................... 28
|
15.5
|
Legal Action....................................................................................... 28
|
ARTICLE 16
|
TRUST.............................................................................................................. 29
|
16.1
|
Establishment of the Trust................................................................. 29
|
16.2
|
Interrelationship of the Plan and the Trust......................................... 29
|
16.3
|
Distributions From the Trust.............................................................. 29
|
17.1
|
Status of Plan..................................................................................... 29
|
17.2
|
Unsecured General Creditor.............................................................. 29
|
17.3
|
Employer’s Liability.......................................................................... 29
|
17.4
|
Nonassignability................................................................................. 29
|
17.5
|
Not a Contract of Employment.......................................................... 30
|
17.6
|
Furnishing Information...................................................................... 30
|
17.7
|
Terms.................................................................................................. 30
|
17.8
|
Captions............................................................................................. 30
|
17.9
|
Governing Law................................................................................... 30
|
17.10
|
Notice................................................................................................. 30
|
17.11
|
Successors.......................................................................................... 31
|
17.12
|
Spouse’s Interest................................................................................ 31
|
17.13
|
Validity............................................................................................... 31
|
17.14
|
Incompetent........................................................................................ 31
|
17.15
|
Domestic Relations Orders................................................................ 31
|
17.16
|
Distribution in the Event of Income Inclusion Under Code Section 409A...................................................................................... 31
|
17.17
|
Deduction Limitation on Benefit Payments 31
|
ARTICLE 18
|
STOCK DEFERRALS...................................................................................... 32
|
18.1
|
Deferral of Share Awards................................................................... 32
|
18.2
|
Automatic Changes in Investment..................................................... 35
|
ARTICLE 19
|
DIRECTOR DEFERRED UNITS.................................................................... 35
|
19.1
|
General............................................................................................... 35
|
19.2
|
Deferral of Unit Awards..................................................................... 35
|
19.3
|
Automatic Changes in Investment..................................................... 37
|
1.1
|
“
Account Balance
” shall mean, with respect to a Participant, an entry on the records of the Employer equal to the sum of the Participant’s Annual Accounts. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
|
1.2
|
“
Annual Account
” shall mean, with respect to a Participant, an entry on the records of the Employer equal to (i) the sum of the Participant’s Annual Deferral Amount, Company Contribution Amount and Company Restoration Matching Amount for any one Plan Year, plus (ii) amounts credited or debited to such amounts pursuant to this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Annual Account for such Plan Year. The Annual Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan. The distribution elections made for a Participant’s Annual Account
|
1.3
|
“
Annual Deferral Amount
” shall mean that portion of a Participant’s Base Salary, Bonus, Director Fees and LTIP Amounts that a Participant defers in accordance with
Article 3
for any one Plan Year, without regard to whether such amounts are withheld and credited during such Plan Year.
|
1.4
|
“
Annual Installment Method
” shall mean the method used to determine the amount of each payment due to a Participant who has elected to receive a benefit over a period of years in accordance with the applicable provisions of the Plan. The amount of each annual payment due to the Participant shall be calculated by multiplying the balance of the Participant’s benefit by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due to the Participant. The amount of the first annual payment shall be calculated as of the close of business on or around the Participant’s Benefit Distribution Date, and the amount of each subsequent annual payment shall be calculated on or around each anniversary of such Benefit Distribution Date. For purposes of this Plan, the right to receive a benefit payment in annual installments shall be treated as the entitlement to a single payment.
|
1.5
|
“
Base Salary
” shall mean the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, director fees and other fees, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer;
provided, however,
that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee.
|
1.6
|
“
Beneficiary
” shall mean one or more persons, trusts, estates or other entities, designated in accordance with
Article 10
, that are entitled to receive benefits under this Plan upon the death of a Participant.
|
1.7
|
“
Beneficiary Designation Form
” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.
|
1.8
|
“
Benefit Distribution Date
” shall mean the date upon which all or an objectively determinable portion of a Participant’s vested benefits will become eligible for distribution. Except as otherwise provided in the Plan, a Participant’s Benefit Distribution Date shall be determined based on the earliest to occur of an event or scheduled date set forth in
Articles 4
through
9
, as applicable.
|
1.9
|
“
Board
” shall mean the board of directors of the Company.
|
1.10
|
“
Bonus
” shall mean any compensation, in addition to Base Salary, and LTIP Amounts, earned by a Participant under any Employer’s annual bonus and cash incentive plans.
|
1.11
|
“
Change in Control
” shall mean the occurrence of a “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of a corporation,
|
(a)
|
A “change in the ownership” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of such corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. § 1.409A-3(i)(5)(v). If a person or group is considered either to own more than 50% of the total fair market value or total voting power of the stock of such corporation, or to have effective control of such corporation within the meaning of Subsection (b), and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a “change in the ownership” of such corporation.
|
(b)
|
A “change in the effective control” of the applicable corporation shall occur on either of the following dates:
|
(i)
|
The date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of such corporation possessing 30% or more of the total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. § 1.409A-3(i)(5)(vi). If a person or group is considered to possess 30% or more of the total voting power of the stock of a corporation, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a “change in the effective control” of such corporation; or
|
(ii)
|
The date on which a majority of the members of the applicable corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such corporation’s board of directors before the date of the appointment or election, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi). In determining whether the event described in the preceding sentence has occurred, the applicable corporation to which the event must relate shall only include a corporation identified in accordance with Treas. Reg. §1.409A-3(i)(5)(ii) for which no other corporation is a majority shareholder.
|
(c)
|
A “change in the ownership of a substantial portion of the assets” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets
|
1.12
|
“
Code
” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.
|
1.13
|
“
Committee
” shall mean the committee described in
Article 13
.
|
1.14
|
“
Company
” shall mean Service Corporation International, a Texas corporation, and any successor to all or substantially all of the Company’s assets or business.
|
1.15
|
“
Company Contribution Amount
” shall mean, for any one Plan Year, the amount determined in accordance with
Section 3.4
.
|
1.16
|
“
Company Restoration Matching Amount
” shall mean, for any one Plan Year, the amount determined in accordance with
Section 3.5
.
|
1.17
|
“
Death Benefit
” shall have the meaning provided in
Section 9.1
.
|
1.18
|
“
Director
” shall mean any member of the board of directors of any Employer.
|
1.19
|
“
Director Deferred Units
” means such portion of a Unit Award to a Director that is timely elected to be deferred into a Director Unit Account under the Incentive Plan.
|
1.20
|
“
Director Fees
” shall mean the annual fees earned by a Director from any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors.
|
1.21
|
“
Director Plan
” shall mean the Service Corporation International Amended and Restated Director Fee Plan, which was combined with and into the Equity Plan effective August 1, 2017.
|
1.22
|
“
Director Unit Account
” means an account established with the Company in the name of such Director that will be credited with (i) the hypothetical number of Director Deferred Units deferred by the Director under Section 15.2 of the Incentive Plan, (ii) the hypothetical number of Director Deferred Units credited to the Director under Section 15.3 of the Incentive Plan, and (iii) dividend equivalent payments with respect to such Director Deferred Units.
|
1.23
|
“
Disability
” or “
Disabled
” shall mean that a Participant is either (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s Employer. For purposes of this Plan, a Participant shall be deemed Disabled if determined to be totally disabled by the Social Security Administration. A Participant shall also be deemed Disabled if determined to be disabled in accordance with the applicable disability insurance program of such Participant’s Employer, provided that the definition of “disability” applied under such disability insurance program complies with the requirements of this Section.
|
1.24
|
“
Dividend Equivalents
” means the amount credited to a Participant’s Dividend Equivalent Account as provided in
Sections 18.1(e)
or
19.2(d)
.
|
1.25
|
“
Election Form
” shall mean the form, which may be in paper or electronic format, established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan.
|
1.26
|
“
Employee
” shall mean a person who is an employee of an Employer.
|
1.27
|
“
Employer(s)
” shall be defined as follows:
|
(a)
|
Except as otherwise provided in Subsection (b), the term “Employer” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor.
|
(b)
|
For the purpose of determining whether a Participant has experienced a Separation from Service, the term “Employer” shall mean:
|
(i)
|
The entity for which the Participant performs services and with respect to which the legally binding right to compensation deferred or contributed under this Plan arises; and
|
(ii)
|
All other entities with which the entity described above would be aggregated and treated as a single employer under Code Section 414(b) (controlled group of corporations) and Code Section 414(c) (a group of trades or businesses, whether or not incorporated, under common control), as applicable. In order to identify the group of entities described in the preceding sentence, the Committee shall use an ownership threshold of at least 50% as a substitute for the 80% minimum ownership threshold that appears in, and otherwise must be used when applying, the applicable provisions of (A) Code Section 1563 for determining a controlled group of corporations under Code Section 414(b), and (B) Treas. Reg. §1.414(c)-2 for determining the trades or businesses that are under common control under Code Section 414(c).
|
1.28
|
“
ERISA
” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
|
1.29
|
“
401(k) Plan
” shall mean the SCI Retirement Savings Plan, as it may be amended from time to time, or any successor thereto.
|
1.30
|
“
Incentive Plan
” shall mean the Service Corporation International Amended and Restated 2016 Equity Incentive Plan, as such plan may be amended from time to time, and any successor equity incentive plan adopted by the Company at a future date.
|
1.31
|
“
Investment Selection Committee
” shall mean the Committee, the Investment Committee of Service Corporation International, and the Investment Operating Committee of Service Corporation International, which shall collectively be designated as the Investment Selection Committee for the Plan, and each such committee is empowered and authorized to act alone as the Investment Selection Committee.
|
1.32
|
“
LTIP Amounts
” shall mean any portion of the compensation attributable to a Plan Year that is earned by a Participant under the Company’s Performance Unit Plan or any other “performance-based compensation plan within the meaning of Code Section 409A and so designated by the Committee.
|
1.33
|
“
Participant
” shall mean any Employee or Director (i) who is selected to participate in the Plan, (ii) whose executed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, and (iii) whose Plan Agreement has not terminated.
|
1.34
|
“
Performance-Based Compensation
” shall mean compensation the entitlement to or amount of which is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(e).
|
1.35
|
“
Plan
” shall mean the Service Corporation International Deferred Compensation Plan, Amended and Restated effective January 1, 2017, which shall be evidenced by this instrument, as it may be amended from time to time, and by any other documents that together with this instrument define a Participant’s rights to amounts credited to his or her Account Balance.
|
1.36
|
“
Plan Agreement
” shall mean a written agreement in the form prescribed by or acceptable to the Committee that evidences a Participant’s agreement to the terms of the Plan and which may establish additional terms or conditions of Plan participation for a Participant. Unless otherwise determined by the Committee, the most recent Plan Agreement accepted with respect to a Participant shall supersede any prior Plan Agreements for such Participant. Plan Agreements may vary among Participants and may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan.
|
1.37
|
“
Plan Year
” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.
|
1.38
|
“
RSU Award
” shall mean any grant of Restricted Stock Units as defined in and pursuant to the Incentive Plan.
|
1.39
|
“
RSU Award Unit
” shall mean a nominal unit of the Company’s common stock that is credited to a Participant’s Stock Award Unit Account pursuant to Section 18.1(b) below.
|
1.40
|
“
Retirement
,” “
Retire(s)
” or “
Retired
” shall mean with respect to a Participant who is an Employee, a Separation from Service on or after the attainment of age sixty (60) with five (5) Years of Service, and shall mean with respect to a Participant who is a Director, a Separation from Service. If a Participant is both an Employee and a Director and participates in the Plan in each capacity, (i) the determination of whether the Participant qualifies for Retirement as an Employee shall be made when the Participant experiences a Separation from Service as an Employee and such determination shall only apply to the applicable Account Balance established in accordance with Section 1.1 for amounts deferred under the Plan as an Employee, and (ii) the determination of whether the Participant qualifies for Retirement as a Director shall be made at the time the Participant experiences a Separation from Service as a Director and such determination shall only apply to the applicable Account Balance established in accordance with
Section 1.1
for amounts deferred under the Plan as a Director.
|
1.41
|
“
Separation from Service
” shall mean a termination of services provided by a Participant to his or her Employer, whether voluntarily or involuntarily, other than by reason of death or Disability, as
|
(a)
|
For a Participant who provides services to an Employer as an Employee, except as otherwise provided in Subsection (c) below, a Separation from Service shall occur when such Participant has experienced a termination of employment with such Employer. A Participant shall be considered to have experienced a termination of employment when the facts and circumstances indicate that the Participant and his or her Employer reasonably anticipate that either (i) no further services will be performed for the Employer after a certain date, or (ii) that the level of bona fide services the Participant will perform for the Employer after such date (whether as an Employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an Employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Employer if the Participant has been providing services to the Employer less than 36 months).
|
(b)
|
For a Participant who provides services to an Employer as a Director, a Separation from Service shall occur on the date the Participant ceases to serve on the Board of Directors of the Employer and each of its subsidiaries and affiliates.
|
(c)
|
For a Participant who provides services to an Employer as both an Employee and a Director, a Separation from Service generally shall not occur until the Participant has ceased providing services for such Employer as both as an Employee and as a Director, as determined in accordance with the provisions set forth in Subsections (a) and (b) above, respectively. Notwithstanding the foregoing provisions in this Subsection (c), if a Participant provides services for an Employer as both an Employee and as a Director, to the extent permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such Participant as a Director shall not be taken into account in determining whether the Participant has experienced a Separation from Service as an Employee, and the services provided by such Participant as an Employee shall not be taken into account in determining whether the Participant has experienced a Separation from Service as a Director.
|
1.42
|
“
Specified Employee
” shall mean any Participant who is determined to be a “key employee” (as defined under Code Section 416(i) without regard to paragraph (5) thereof) for the applicable period, as determined annually by the Committee in accordance with Treas. Reg. §1.409A-1(i). In determining whether a Participant is a Specified Employee, the following provisions shall apply:
|
(a)
|
The Committee’s identification of the individuals who fall within the definition of “key employee” under Code Section 416(i) (without regard to paragraph (5) thereof) shall be based upon the 12-month period ending on each December 31
st
(referred to below as the “identification date”). In applying the applicable provisions of Code Section 416(i) to identify such individuals, “compensation” shall be determined in accordance with Treas. Reg. §1.415(c)-2(a) without regard to (i) any safe harbor provided in Treas. Reg. §1.415(c)-2(d), (ii) any of the special timing rules provided in Treas. Reg. §1.415(c)-2(e), and (iii) any of the special rules provided in Treas. Reg. §1.415(c)-2(g); and
|
(b)
|
Each Participant who is among the individuals identified as a “key employee” in accordance with Subsection (a) shall be treated as a Specified Employee for purposes of this Plan if such Participant experiences a Separation from Service during the 12-month period that begins on the April 1
st
following the applicable identification date.
|
1.43
|
“
Stock Award
” shall mean any grant of Restricted Stock as defined in and pursuant to the Incentive Plan.
|
1.44
|
“
Stock Award Unit
” shall mean a nominal unit of the Company’s common stock that is credited to a Participant’s Stock Award Unit Account pursuant to
Section 18.1(b)
below.
|
1.45
|
“
Termination Benefit
” shall have the meaning provided in
Section 7.1
.
|
1.46
|
“
Trust
” shall mean one or more trusts established by the Company in accordance with
Article 16
.
|
1.47
|
“
Unforeseeable Emergency
” shall mean a severe financial hardship of the Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary or the Participant’s dependent (as defined in Code Section 152 without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (ii) a loss of the Participant’s property due to casualty, or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined by the Committee based on the relevant facts and circumstances.
|
1.48
|
“
Unit Award
” means that portion of Director Fees awarded in shares of Company’s common stock.
|
1.49
|
“
Years of Service
” shall mean the total number of full years in which a Participant has been employed by one or more Employers. For purposes of this definition, a year of employment shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first year of employment, commences on the Employee’s date of hiring and that, for any subsequent year, commences on an anniversary of that hiring date. A partial year of employment shall not be treated as a Year of Service.
|
2.1
|
Selection by Committee
. Participation in the Plan shall be limited to Directors and, as determined by the Committee in its sole discretion, a select group of management or highly compensated Employees. From that group, the Committee shall select, in its sole discretion, those individuals who may actually participate in this Plan.
|
2.2
|
Enrollment and Eligibility Requirements; Commencement of Participation
.
|
(a)
|
As a condition to participation, each Director or selected Employee shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary
|
(b)
|
Each Director or selected Employee who is eligible to participate in the Plan shall commence participation in the Plan on the date that the Committee determines that the Director or Employee has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period.
|
(c)
|
If a Director or an Employee fails to meet all requirements established by the Committee within the period required, that Director or Employee shall not be eligible to participate in the Plan during such Plan Year.
|
3.1
|
Annual Deferral Amount
. For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Salary, Bonus, LTIP Amounts and/or Director Fees up to the following maximum percentages for each deferral elected:
|
Deferral
|
Maximum Percentage
|
Base Salary
|
80%
|
Bonus
|
90%
|
LTIP Amounts
|
90%
|
Director Fees
|
100%
|
3.2
|
Timing of Deferral Elections; Effect of Election Form
.
|
(a)
|
General Timing Rule for Deferral Elections
. Except as otherwise provided in this
Section 3.2
, in order for a Participant to make a valid election to defer Base Salary, Bonus, Director Fees and/or LTIP Amounts, the Participant must submit an Election Form on or before the deadline established by the Committee, which in no event shall be later than the December 31
st
preceding the Plan Year in which such compensation will be earned.
|
(b)
|
Timing of Deferral Elections for Newly Eligible Plan Participants
. A Director or selected Employee who first becomes eligible to participate in the Plan on or after the beginning of a Plan Year, as determined in accordance with Treas. Reg. §1.409A-2(a)(7)(ii) and the “plan aggregation” rules provided in Treas. Reg. §1.409A-1(c)(2), may be permitted to make an election to defer the portion of Base Salary, Bonus, Director Fees and/or LTIP Amounts attributable to services to be performed after such election, provided that the Participant submits an Election Form on or before the deadline established by the Committee, which in no event shall be later than 30 days after the Participant first becomes eligible to participate in the Plan.
|
(c)
|
Timing of Deferral Elections for Fiscal Year Compensation
. In the event that the fiscal year of an Employer is different than the taxable year of a Participant, the Committee may determine that a deferral election may be made for “fiscal year compensation” (as defined below), by submitting an Election Form on or before the deadline established by the Committee, which in no event shall be later than the last day of the Employer’s fiscal year immediately preceding the fiscal year in which the services related to such compensation will begin to be performed. For purposes of this Section, the term “fiscal year compensation” shall only include Bonus and LTIP Amounts relating to a service period coextensive with one or more consecutive fiscal years of the Employer, of which no amount is paid or payable during the Employer’s fiscal year(s) that constitute the service period.
|
(d)
|
Timing of Deferral Elections for Performance-Based Compensation
. Subject to the limitations described below, the Committee may determine that an irrevocable deferral election for an amount that qualifies as Performance-Based Compensation may be made by submitting an Election Form on or before the deadline established by the Committee, which in no event shall be later than 6 months before the end of the performance period.
|
(e)
|
Timing Rule for Deferral of Compensation Subject to Risk of Forfeiture
. With respect to compensation (i) to which a Participant has a legally binding right to payment in a subsequent year, and (ii) that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least 12 months from the date the Participant obtains the legally binding right, the Committee may determine that an irrevocable deferral election for such compensation may be made by timely delivering an Election Form to the Committee in accordance with its rules and procedures, no later than the 30
th
day after the Participant obtains the legally binding right to the compensation, provided that the election is made at least 12 months in advance of the earliest date at which the forfeiture condition could lapse, as determined in accordance with Treas. Reg. §1.409A-2(a)(5).
|
3.3
|
Withholding and Crediting of Annual Deferral Amounts
. For each Plan Year, the Base Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Salary. The Bonus, LTIP Amounts and/or Director Fees portion of the Annual Deferral Amount shall be withheld at the time the Bonus, LTIP Amounts or Director Fees are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself. Annual Deferral Amounts shall be credited to the Participant’s Annual Account for such Plan Year at the time such amounts would otherwise have been paid to the Participant.
|
3.4
|
Company Contribution Amount
.
|
(a)
|
For each Plan Year, an Employer may be required to credit amounts to a Participant’s Annual Account in accordance with employment or other agreements entered into between the Participant and the Employer, which amounts shall be part of the Participant’s Company Contribution Amount for that Plan Year. Such amounts shall be credited to the Participant’s Annual Account for the applicable Plan Year on the date or dates prescribed by such agreements.
|
(b)
|
For each Plan Year, an Employer, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant’s Annual Account under this Plan, which amount shall be part of the Participant’s Company Contribution Amount for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Company Contribution Amount for that Plan Year. The Company Contribution Amount described in this
Section 3.4(b)
, if any, shall be credited to the Participant’s Annual Account for the applicable Plan Year on a date or dates to be determined by the Committee.
|
(c)
|
If not otherwise specified in the Participant’s employment or other agreement entered into between the Participant and the Employer, the amount (or the method or formula for determining the amount) of a Participant’s Company Contribution Amount shall be set forth in writing in one or more documents, which shall be deemed to be incorporated into this Plan in accordance with
Section 1.35
, no later than the date on which such Company Contribution Amount is credited to the applicable Annual Account of the Participant.
|
3.5
|
Company Restoration Matching Amount
. A Participant’s Company Restoration Matching Amount for any Plan Year shall be an amount determined by the Committee to make up for certain limits applicable to the 401(k) Plan or other qualified plan for such Plan Year, as identified by the Committee, or for such other purposes as determined by the Committee in its sole discretion. The amount so credited to a Participant under this Plan for any Plan Year (i) may be smaller or larger than the amount credited to any other Participant, and (ii) may differ from the amount credited to such Participant in the preceding Plan Year. The Participant’s Company Restoration Matching Amount, if any, shall be credited to the Participant’s Annual Account for the applicable Plan Year on a date or dates to be determined by the Committee. The amount (or the method or formula for determining the amount) of a Participant’s Company Restoration Matching Amount shall be set forth in writing in one or more documents, which shall be deemed to be incorporated into this Plan in accordance with
Section 1.35
, no later than the date on which such Company Restoration Matching Amount is credited to the applicable Annual Account of the Participant.
|
3.6
|
Vesting
.
|
(a)
|
A Participant shall at all times be 100% vested in the portion of his or her Account Balance attributable to Annual Deferral Amounts, plus amounts credited or debited on such amounts pursuant to
Section 3.7
.
|
(b)
|
A Participant shall be vested in the portion of his or her Account Balance attributable to any Company Contribution Amounts, plus amounts credited or debited on such amounts pursuant to
Section 3.7
, in accordance with the vesting schedule(s) set forth in his or her Plan Agreement, employment agreement or any other agreement entered into between the Participant and his or her Employer. If not addressed in such agreements, a Participant shall vest in the portion of his or her Account Balance attributable to any Company Contribution Amounts as provided in Subsection (c) below.
|
(c)
|
A Participant shall be vested in the portion of his or her Account Balance attributable to any Company Restoration Matching Amounts, plus amounts credited or debited on such amounts pursuant to
Section 3.7
, only to the extent that the Participant would be vested in such amounts under the provisions of the 401(k) Plan, as determined by the Committee in its sole discretion.
|
(d)
|
Notwithstanding anything to the contrary contained in this
Section 3.6
, in the event of (i) a Change in Control, (ii) a Participant’s Disability, (iii) a Participant’s Separation from Service resulting from involuntary termination by the Company for any reason other than cause, or (iv) a Participant’s death prior to Separation from Service, any amounts that are not vested in accordance with
Sections 3.6(b)
or
3.6(c)
above, shall immediately become 100% vested.
|
(e)
|
Notwithstanding
Section 3.6(d)
above, the vesting schedules described in
Sections 3.6(b)
or
3.6(c)
above shall not be accelerated upon a Change in Control to the extent that the Committee determines that such acceleration would cause the deduction limitations of Section 280G of the Code to become effective. In the event of such a determination, the Participant may request
|
(f)
|
Section 3.6(e)
shall not prevent the acceleration of the vesting schedules described in
Sections 3.6(b)
and (c) if such Participant is entitled to a “gross-up” payment, to eliminate the effect of the Code section 4999 excise tax, pursuant to his or her employment agreement or other agreement entered into between such Participant and the Employer.
|
(g)
|
Notwithstanding anything to the contrary contained in this Section 3.6, in the event of a Participant’s Separation from Service resulting from (i) voluntary resignation on or after attainment of age 60 with 10 years of service or (ii) voluntary resignation on or after attainment of age 55 with 20 years of service, any amounts that are not vested in accordance with
Sections 3.6(b)
,
3.6(c)
or
3.6(d)
above, shall immediately become 100% vested if the Committee, in its sole discretion exercised during a meeting or by unanimous written consent prior to the date of retirement, causes such amounts to vest.
|
3.7
|
Crediting/Debiting of Account Balances
. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:
|
(a)
|
Measurement Funds
. The Participant may elect one or more of the measurement funds selected by the Investment Selection Committee, in its sole discretion, which are based on certain mutual funds (the “Measurement Funds”), for the purpose of crediting or debiting additional amounts to his or her Account Balance. As necessary, the Investment Selection Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund.
|
(b)
|
Election of Measurement Funds
. A Participant, in connection with his or her initial deferral election in accordance with
Section 3.2
above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in
Section 3.7(a)
above) to be used to determine the amounts to be credited or debited to his or her Account Balance. If a Participant does not elect any of the Measurement Funds as described in the previous sentence, the Participant’s Account Balance shall automatically be allocated into the lowest-risk Measurement Fund, as determined by the Investment Selection Committee, in its sole discretion. The Participant may (but is not required to) elect, by submitting an Election Form to the Committee that is accepted by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the amounts to be credited or debited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund. If an election is made in accordance with the previous sentence, it shall apply as of the first business day deemed reasonably practicable by the Committee, in its sole discretion, and shall continue thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the previous sentence. Notwithstanding the foregoing, the Investment Selection Committee may, in its sole discretion, may impose limitations on the frequency with which one or more of the Measurement Funds elected in accordance with this
Section 3.7(b)
may be added or deleted by such Participant; furthermore, the Investment Selection Committee, in its sole discretion, may impose
|
(c)
|
Proportionate Allocation
. In making any election described in
Section 3.7(b)
above, the Participant shall specify on the Election Form, in increments of one percent (1%), the percentage of his or her Account Balance or Measurement Fund, as applicable, to be allocated/reallocated.
|
(d)
|
Crediting or Debiting Method
. The performance of each Measurement Fund (either positive or negative) will be determined on a daily basis based on the manner in which such Participant’s Account Balance has been hypothetically allocated among the Measurement Funds by the Participant.
|
(e)
|
No Actual Investment
. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation of his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the investments on which the Measurement Funds are based, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company.
|
3.8
|
FICA and Other Taxes
.
|
(a)
|
Annual Deferral Amounts
. For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus, and/or LTIP Amounts that is not being deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount. If necessary, the Committee may reduce the Annual Deferral Amount in order to comply with applicable withholding requirements.
|
(b)
|
Company Restoration Matching Amounts and Company Contribution Amounts
. When a Participant becomes vested in a portion of his or her Account Balance attributable to any Company Restoration Matching Amounts and/or Company Contribution Amounts, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus, and/or LTIP Amounts that is not deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such amounts. If necessary, the Committee may reduce the vested portion of the Participant’s Company Restoration Matching Amount or Company Contribution Amount, as applicable, in order to comply with applicable withholding amounts.
|
(c)
|
Distributions
. The Participant’s Employer(s), or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer(s), or the trustee of the
|
(d)
|
Right to Offset Against Account Balance
. To the extent determined necessary by the Committee in its sole discretion, the Company reserves the right to direct that the Participant’s Account Balance be reduced to satisfy any and all federal, state and local income, employment and other taxes required to be paid in connection with earnings of the Measurement Funds hypothetically allocated to the Participant’s Account Balance.
|
4.1
|
Scheduled Distributions
. In connection with each election to defer an Annual Deferral Amount, a Participant may elect to receive all or a portion of such Annual Deferral Amount, plus amounts credited or debited on that amount pursuant to
Section 3.7
, in the form of a lump sum payment, calculated as of the close of business on or around the Benefit Distribution Date designated by the Participant in accordance with this Section (a “
Scheduled Distribution
”). The Benefit Distribution Date for the amount subject to a Scheduled Distribution election shall be the first day of any Plan Year designated by the Participant, which may be no sooner than three Plan Years after the end of the Plan Year to which the Participant’s deferral election relates, unless otherwise provided on an Election Form approved by the Committee.
|
4.2
|
Postponing Scheduled Distributions
. A Participant may elect to postpone a Scheduled Distribution described in
Section 4.1
above, and have such amount paid out during a 60 day period commencing immediately after an allowable alternative Benefit Distribution Date designated in accordance with this
Section 4.2
. In order to make such an election, the Participant must submit an Election Form to the Committee in accordance with the following criteria:
|
(a)
|
The election of the new Benefit Distribution Date shall have no effect until at least 12 months after the date on which the election is made;
|
(b)
|
The new Benefit Distribution Date selected by the Participant for such Scheduled Distribution must be the first day of a Plan Year that is no sooner than 5 years after the previously designated Benefit Distribution Date; and
|
(c)
|
The election must be made at least 12 months prior to the Participant’s previously designated Benefit Distribution Date for such Scheduled Distribution.
|
4.3
|
Other Benefits Take Precedence Over Scheduled Distributions
. Should an event occur prior to any Benefit Distribution Date designated for a Scheduled Distribution that would trigger a benefit under
Articles 5
through
9
, as applicable, all amounts subject to a Scheduled Distribution election shall be paid in accordance with the other applicable provisions of the Plan and not in accordance with this
Article 4
.
|
4.4
|
Unforeseeable Emergencies
.
|
(a)
|
If a Participant experiences an Unforeseeable Emergency prior to the occurrence of a distribution event described in
Articles 5
through
9
, as applicable, the Participant may petition the Committee to receive a partial or full payout from the Plan. The payout, if any, from the Plan shall not exceed the lesser of (i) the Participant’s vested Account Balance, calculated as of the close of business on or around the Benefit Distribution Date for such payout, as determined by the Committee in accordance with provisions set forth below, or (ii) the amount necessary to satisfy the Unforeseeable Emergency, plus amounts necessary to pay Federal, state, or local income taxes or penalties reasonably anticipated as a result of the distribution. A Participant shall not be eligible to receive a payout from the Plan to the extent that the Unforeseeable Emergency is or may be relieved (A) through reimbursement or compensation by insurance or otherwise, (B) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (C) by cessation of deferrals under this Plan.
|
(b)
|
A Participant’s deferral elections under this Plan shall also be cancelled to the extent the Committee determines that such action is required for the Participant to obtain a hardship distribution from an Employer’s 401(k) Plan pursuant to Treas. Reg. §1.401(k)-1(d)(3).
|
5.1
|
Change in Control Benefit
. A Participant, in connection with his or her commencement of participation in the Plan, shall have an opportunity to irrevocably elect to receive his or her vested Account Balance in the form of a lump sum payment in the event that a Change in Control occurs prior to the Participant’s Separation from Service, Disability or death (the “Change in Control Benefit”). The Benefit Distribution Date for the Change in Control Benefit, if any, shall be the date on which the Change in Control occurs.
|
5.2
|
Payment of Change in Control Benefit
. The Change in Control Benefit, if any, shall be calculated as of the close of business on or around the Participant’s Benefit Distribution Date, as determined by the Committee, and paid to the Participant no later than 60 days after the Participant’s Benefit Distribution Date.
|
6.1
|
Retirement Benefit
. If a Participant experiences a Separation from Service that qualifies as a Retirement, the Participant shall be eligible to receive his or her vested Account Balance in either a lump sum or annual installment payments, as elected by the Participant in accordance with
Section 6.2
(the “
Retirement Benefit
”). A Participant’s Retirement Benefit shall be calculated as of the close of business on or around the applicable Benefit Distribution Date for such benefit, which shall be (i) the first day after the end of the six-month period immediately following the date on which the Participant experiences such Separation from Service if the Participant is a Specified Employee, and (ii) for all other Participants, the date on which the Participant experiences a Separation from Service;
provided, however,
if a Participant changes the form of distribution for the Retirement Benefit in accordance with
Section 6.2(b)
, the Benefit Distribution Date for the Retirement Benefit shall be determined in accordance with such
Section 6.2(b)
.
|
6.2
|
Payment of Retirement Benefit
.
|
(a)
|
In connection with a Participant’s election to defer an Annual Deferral Amount, the Participant shall elect the form in which the Retirement Benefit from his or her Annual Account for such Plan Year will be paid. The Participant may elect to receive the Retirement Benefit paid from each Annual Account in the form of a lump sum or pursuant to an Annual Installment Method up to 15 years. If a Participant does not make any election with respect to the payment of an Annual Account, then the Participant shall be deemed to have elected to receive the Retirement Benefit paid from such Annual Account as a lump sum.
|
(b)
|
A Participant may change the form of payment for the Retirement Benefit by submitting an Election Form to the Committee in accordance with the following criteria:
|
(i)
|
The election shall not take effect until at least 12 months after the date on which the election is made;
|
(ii)
|
The new Benefit Distribution Date for the Participant’s Retirement Benefit shall be 5 years after the Benefit Distribution Date that would otherwise have been applicable to such benefit; and
|
(iii)
|
The election must be made at least 12 months prior to the Benefit Distribution Date that would otherwise have been applicable to the Participant’s Retirement Benefit.
|
(c)
|
The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the Participant’s Benefit Distribution Date. Remaining installments, if any, shall be paid no later than 60 days after each anniversary of the Participant’s Benefit Distribution Date.
|
7.1
|
Termination Benefit
. If a Participant experiences a Separation from Service that does not qualify as a Retirement, the Participant shall receive his or her vested Account Balance in the form of a lump sum payment or pursuant to an Annual Installment Method of up to five years (the “
Termination Benefit
”). A Participant’s Termination Benefit shall be calculated as of the close of business on or around the Benefit Distribution Date for such benefit, which shall be (i) the first day after the end of the six-month period immediately following the date on which the Participant experiences such Separation from Service if the Participant is a Specified Employee, and (ii) for all other Participants, the date on which the Participant experiences a Separation from Service;
provided, however,
if a Participant changes the form of distribution for the Termination Benefit in accordance with
Section 7.2(b)
, the Benefit Distribution Date for the Termination Benefit shall be determined in accordance with such
Section 7.2(b)
.
|
7.2
|
Payment of Termination Benefit
.
|
(a)
|
In connection with a Participant’s election to defer an Annual Deferral Amount, the Participant shall elect the form in which the Termination Benefit from his or her Annual Account for such Plan Year will be paid. The Participant may elect to receive the Termination Benefit paid from each Annual Account in the form of a lump sum or pursuant to an Annual Installment Method up to five years. If a Participant does not make any election with respect to the payment of the Termination Benefit, then such Participant shall be deemed to have elected to receive the Termination Benefit as a lump sum.
|
(b)
|
A Participant may change the form of payment for the Termination Benefit by submitting an Election Form to the Committee in accordance with the following criteria:
|
(i)
|
The election shall not take effect until at least 12 months after the date on which the election is made;
|
(ii)
|
The new Benefit Distribution Date for the Participant’s Termination Benefit shall be five years after the Benefit Distribution Date that would otherwise have been applicable to such benefit; and
|
(iii)
|
The election must be made at least 12 months prior to the Benefit Distribution Date that would otherwise have been applicable to the Participant’s Termination Benefit.
|
(c)
|
The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the Participant’s Benefit Distribution Date. Remaining installments, if any, shall be paid no later than 60 days after each anniversary of the Participant’s Benefit Distribution Date.
|
8.1
|
Disability Benefit
. If a Participant becomes Disabled prior to the occurrence of a distribution event described in
Articles 5
through
7
, as applicable, the Participant shall receive his or her vested Account Balance in the form of a lump sum or installment payment as provided in
Section 8.2
below (the “
Disability Benefit
”). The Disability Benefit shall be calculated as of the close of business on or around the Participant’s Benefit Distribution Date for such benefit, which shall be the date on which the Participant becomes Disabled.
|
8.2
|
Payment of Disability Benefit
. The Disability Benefit shall be paid to the Participant no later than 60 days after the Participant’s Benefit Distribution Date.
|
(a)
|
In connection with a Participant’s election to defer an Annual Deferral Amount, the Participant shall elect the form in which the Disability Benefit from his or her Annual Account for such Plan Year will be paid. The Participant may elect to receive the Disability Benefit paid from each Annual Account in the form of a lump sum or pursuant to an Annual Installment Method up to five years. If a Participant does not make any election with respect to the payment of the Disability Benefit, then such Participant shall be deemed to have elected to receive the Disability Benefit as a lump sum.
|
(b)
|
A Participant may change the form of payment for the Disability Benefit by submitting an Election Form to the Committee in accordance with the following criteria:
|
(i)
|
The election shall not take effect until at least 12 months after the date on which the election is made; and
|
(ii)
|
The election must be made at least 12 months prior to the Benefit Distribution Date that would otherwise have been applicable to the Participant’s Disability Benefit.
|
9.1
|
Death Benefit
. In the event of a Participant’s death prior to the complete distribution of his or her vested Account Balance, the Participant’s Beneficiary(ies) shall receive the Participant’s unpaid vested Account Balance in a lump sum payment (the “
Death Benefit
”). The Death Benefit shall be calculated as of the close of business on or around the Benefit Distribution Date for such benefit, which shall be the date of the Participant’s death.
|
9.2
|
Payment of Death Benefit
. The Death Benefit shall be paid to the Participant’s Beneficiary(ies) no later than 60 days after the Participant’s Benefit Distribution Date.
|
10.1
|
Beneficiary
. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.
|
10.2
|
Beneficiary Designation; Change; Spousal Consent
. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary, the Committee may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Committee, executed by such Participant’s spouse and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.
|
10.3
|
Acknowledgment
. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent.
|
10.4
|
No Beneficiary Designation
. If a Participant fails to designate a Beneficiary as provided in
Sections 10.1
,
10.2
and
10.3
above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant’s estate.
|
10.5
|
Doubt as to Beneficiary
. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant’s Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.
|
10.6
|
Discharge of Obligations
. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan
|
11.1
|
Paid Leave of Absence
. If a Participant is authorized by the Participant’s Employer to take a paid leave of absence from the employment of the Employer, and such leave of absence does not constitute a Separation from Service, (i) the Participant shall continue to be considered eligible for the benefits provided under the Plan, and (ii) the Annual Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with
Section 3.2
.
|
11.2
|
Unpaid Leave of Absence
. If a Participant is authorized by the Participant’s Employer to take an unpaid leave of absence from the employment of the Employer for any reason, and such leave of absence does not constitute a Separation from Service, such Participant shall continue to be eligible for the benefits provided under the Plan. During the unpaid leave of absence, the Participant shall not be allowed to make any additional deferral elections. However, if the Participant returns to employment, the Participant may elect to defer an Annual Deferral Amount for the Plan Year following his or her return to employment and for every Plan Year thereafter while a Participant in the Plan, provided such deferral elections are otherwise allowed and an Election Form is delivered to and accepted by the Committee for each such election in accordance with
Section 3.2
above.
|
12.1
|
Termination of Plan
. Although each Employer anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that any Employer will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer reserves the right to terminate the Plan with respect to all of its Participants. In the event of a Plan termination no new deferral elections shall be permitted for the affected Participants and such Participants shall no longer be eligible to receive new company contributions. However, after the Plan termination the Account Balances of such Participants shall continue to be credited with Annual Deferral Amounts attributable to a deferral election that was in effect prior to the Plan termination to the extent deemed necessary to comply with Code Section 409A and related Treasury Regulations, and additional amounts shall continue to credited or debited to such Participants’ Account Balances pursuant to
Section 3.7
. The Measurement Funds available to Participants following the termination of the Plan shall be comparable in number and type to those Measurement Funds available to Participants in the Plan Year preceding the Plan Year in which the Plan termination is effective. In addition, following a Plan termination, Participant Account Balances shall remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Employer may provide that upon termination of the Plan, all Account Balances of the Participants shall be distributed, subject to and in accordance with any rules established by such Employer deemed necessary to comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).
|
12.2
|
Amendment
. Any Employer may, at any time, amend or modify the Plan in whole or in part with respect to that Employer. Notwithstanding the foregoing, (i) no amendment or modification shall be effective to decrease the value of a Participant’s vested Account Balance in existence at the time the
|
12.3
|
Plan Agreement
. Despite the provisions of
Sections 12.1
and
12.2
above, if a Participant’s Plan Agreement contains benefits or limitations that are not in this Plan document, the Employer may only amend or terminate such provisions with the written consent of the Participant.
|
12.4
|
Effect of Payment
. The full payment of the Participant’s vested Account Balance in accordance with the applicable provisions of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan, and the Participant’s Plan Agreement shall terminate.
|
13.1
|
Committee Duties
. Except as otherwise provided in this Article 13, this Plan shall be administered by a Committee, which shall consist of the Board, or such committee as the Board shall appoint. Members of the Committee may be Participants under this Plan. The Committee shall also have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan, (ii) decide or resolve any and all questions, including benefit entitlement determinations and interpretations of this Plan, as may arise in connection with the Plan, and (iii) to delegate any or all of its authority to one or more individuals or committees from time to time. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Company.
|
13.2
|
Administration Upon Change In Control
. Within 120 days following a Change in Control, the individuals who comprised the Committee immediately prior to the Change in Control (whether or not such individuals are members of the Committee following the Change in Control) may, by written consent of the majority of such individuals, appoint an independent third party administrator (the “
Administrator
”) to perform any or all of the Committee’s duties described in
Section 13.1
above, including without limitation, the power to determine any questions arising in connection with the administration or interpretation of the Plan, and the power to make benefit entitlement determinations. Upon and after the effective date of such appointment, (i) the Company must pay all reasonable administrative expenses and fees of the Administrator, and (ii) the Administrator may only be terminated with the written consent of the majority of Participants with an Account Balance in the Plan as of the date of such proposed termination.
|
13.3
|
Agents
. In the administration of this Plan, the Committee or the Administrator, as applicable, may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel.
|
13.4
|
Binding Effect of Decisions
. The decision or action of the Committee or Administrator, as applicable, with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
|
13.5
|
Indemnity of Committee
. All Employers shall indemnify and hold harmless the members of the Committee, the Investment Selection Committee, any Employee to whom the duties of the Committee
|
13.6
|
Employer Information
. To enable the Committee and/or Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the compensation of its Participants, the date and circumstances of the Separation from Service, Disability or death of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require.
|
14.1
|
Coordination with Other Benefits
. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant’s Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.
|
15.1
|
Presentation of Claim
. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “
Claimant
”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.
|
15.2
|
Notification of Decision
. The Committee shall consider a Claimant’s claim within a reasonable time, but no later than 90 days after receiving the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90 day period. In no event shall such extension exceed a period of 90 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. The Committee shall notify the Claimant in writing:
|
(a)
|
that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or
|
(b)
|
that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:
|
(i)
|
the specific reason(s) for the denial of the claim, or any part of it;
|
(ii)
|
specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
|
(iii)
|
a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary;
|
(iv)
|
an explanation of the claim review procedure set forth in Section 15.3 below; and
|
(v)
|
a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.
|
15.3
|
Review of a Denied Claim
. On or before 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):
|
(a)
|
may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claim for benefits;
|
(b)
|
may submit written comments or other documents; and/or
|
(c)
|
may request a hearing, which the Committee, in its sole discretion, may grant.
|
15.4
|
Decision on Review
. The Committee shall render its decision on review promptly, and no later than 60 days after the Committee receives the Claimant’s written request for a review of the denial of the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 60 day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. In rendering its decision, the Committee shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The decision must be written in a manner calculated to be understood by the Claimant, and it must contain:
|
(a)
|
specific reasons for the decision;
|
(b)
|
specific reference(s) to the pertinent Plan provisions upon which the decision was based;
|
(c)
|
a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and
|
(d)
|
a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).
|
15.5
|
Legal Action
. A Claimant’s compliance with the foregoing provisions of this Article 15 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.
|
16.1
|
Establishment of the Trust
. In order to provide assets from which to fulfill its obligations to the Participants and their Beneficiaries under the Plan, the Company may establish a trust by a trust agreement with a third party, the trustee, to which each Employer may, in its discretion, contribute cash or other property, including securities issued by the Company, to provide for the benefit payments under the Plan (the “
Trust
”).
|
16.2
|
Interrelationship of the Plan and the Trust
. The provisions of the Plan and the Plan Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at all times remain liable to carry out its obligations under the Plan.
|
16.3
|
Distributions From the Trust
. Each Employer’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Employer’s obligations under this Plan.
|
17.1
|
Status of Plan
. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted (i) to the extent possible in a manner consistent with the intent described in the preceding sentence, and (ii) in accordance with Code Section 409A and related Treasury guidance and Regulations.
|
17.2
|
Unsecured General Creditor
. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of an Employer. For purposes of the payment of benefits under this Plan, any and all of an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of the Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.
|
17.3
|
Employer’s Liability
. An Employer’s liability for the payment of benefits shall be defined only by the Plan and the Plan Agreement, as entered into between the Employer and a Participant. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Plan Agreement.
|
17.4
|
Nonassignability
. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.
|
17.5
|
Not a Contract of Employment
. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, either as an Employee or a Director, or to interfere with the right of any Employer to discipline or discharge the Participant at any time.
|
17.6
|
Furnishing Information
. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.
|
17.7
|
Terms
. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.
|
17.8
|
Captions
. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
|
17.9
|
Governing Law
. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of Texas without regard to its conflicts of laws principles.
|
17.10
|
Notice
. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:
|
17.11
|
Successors
. The provisions of this Plan shall bind and inure to the benefit of the Participant’s Employer and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.
|
17.12
|
Spouse’s Interest
. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.
|
17.13
|
Validity
. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
|
17.14
|
Incompetent
. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.
|
17.15
|
Domestic Relations Orders
. If necessary to comply with a domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan, the Committee shall have the right to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to such spouse or former spouse.
|
17.16
|
Distribution in the Event of Income Inclusion Under Code Section 409A
. If any portion of a Participant’s Account Balance under this Plan is required to be included in income by the Participant prior to receipt due to a failure of this Plan to comply with the requirements of Code Section 409A and related Treasury Regulations, the Committee may determine that such Participant shall receive a distribution from the Plan in an amount equal to the lesser of (i) the portion of his or her Account Balance required to be included in income as a result of the failure of the Plan to comply with the requirements of Code Section 409A and related Treasury Regulations, or (ii) the unpaid vested Account Balance.
|
17.17
|
Deduction Limitation on Benefit Payments
. If an Employer reasonably anticipates that the Employer’s deduction with respect to any distribution from this Plan would be limited or eliminated by application of Code Section 162(m), then to the extent permitted by Treas. Reg. §1.409A-2(b)(7)(i), payment shall be delayed as deemed necessary to ensure that the entire amount of any distribution from this Plan is deductible. Any amounts for which distribution is delayed pursuant to this Section shall continue to be credited/debited with additional amounts in accordance with Section 3.7. The delayed amounts (and any amounts credited thereon) shall be distributed to the Participant (or his or her Beneficiary in the event of the Participant’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m). In the event that such date is determined to be after a Participant’s Separation from Service and the Participant to whom the payment relates is determined to be a Specified Employee, then to the extent deemed necessary to comply with Treas. Reg. §1.409A-3(i)(2), the delayed payment shall not be made before the end of the six-month period following such Participant’s Separation from Service.
|
18.1
|
Deferral of Share Awards
.
|
(a)
|
Annual Accounting
. For each Participant who elects to defer a portion of a Stock Award and/or RSU Award, a separate Stock Award Unit Account shall be established for each Plan Year to hold such Participant’s Stock Award Units and/or RSU Award Units, as applicable. In addition, a separate Dividend Equivalent Account shall be established for each Plan Year for each Participant who has elected to defer a portion of a Stock Award and/or RSU Award under this Plan’s terms. Earnings with respect to any Stock Award Unit Account which are
|
(b)
|
Stock Award/RSU Award Deferral Elections
. Subject to the limitations below, a Participant may elect to defer all or a portion of a Stock Award and/or RSU Award on such terms as the Committee (or its delegate) may permit by completing an Election Form and submitting it to the Committee (or its delegate) prior to the calendar year in which the Stock Award and/or RSU Award, as applicable, is made. The Participant’s deferral election shall be made pursuant to
Section 3.1
hereof, in accordance with the provisions thereof, and shall be submitted within the time period provided under
Section 3.2(a)
hereof. The Election Form shall designate the time and form of distribution for the Participant’s Stock Award Units and/or RSU Award Units, as applicable, in a manner consistent with the provisions of (i)
Article 4
, regarding Scheduled Distributions and Unforeseeable Emergencies, (ii)
Article 5
, regarding Change in Control Benefit distributions, (iii)
Article 6
, regarding Retirement Benefits distributions, (iv) Article 7, regarding Termination Benefit distributions and (v)
Article 8
, regarding Disability Benefits. The Committee (or its delegate) shall credit a Stock Award Unit and/or RSU Award Unit, as applicable, to a bookkeeping account (to be known as a “
Stock Award Unit Account
”) for the benefit of such Participant. Any Stock Awards or RSU Awards deferred pursuant to this
Section 18.1
shall be accounted for by the Employer on its books and records and the Employer may, in its discretion, transfer shares of the Company’s common stock to the Trustee at such times as the Employer shall, in its discretion, determine.
|
(c)
|
Dividend Equivalent Deferral Elections
. Subject to the limitations below, a Participant may elect to defer all or a portion of the Dividend Equivalent payments made with respect to a Stock Award deferred pursuant to Section 18.1(b) on such terms as the Committee (or its delegate) may permit by completing an Election Form and submitting it to the Committee (or its delegate) prior to the calendar year in which the Dividend Equivalents are paid by the Company. The Participant’s deferral election shall be made pursuant to
Section 3.1
hereof, in accordance with the provisions thereof, and shall be submitted within the time period provided under
Section 3.2(a)
hereof. The Election Form shall designate the time and form of distribution for the Participant’s Dividend Equivalents in a manner consistent with the provisions of (i)
Article 4
, regarding Scheduled Distributions and Unforeseeable Emergencies, (ii)
Article 5
, regarding Change in Control Benefit distributions, (iii)
Article 6
, regarding Retirement Benefits distributions, (iv)
Article 7
, regarding Termination Benefit distributions and (v)
Article 8
, regarding Disability Benefit distributions. The Committee (or its delegate) shall credit the Dividend Equivalents for the calendar year to a bookkeeping account (to be known as a “
Dividend Equivalent Account
”) for the benefit of such Participant. Any Dividend Equivalents deferred pursuant to this
Section 18.1(c)
shall be accounted for by the Employer on its books and records and if the dividend is paid as a stock dividend with respect to shares of the Company’s common stock, the Employer may, in its discretion, transfer shares of the Company’s common stock to the Trustee at such times as the Employer shall, in its discretion, determine. A Participant who has elected to defer an RSU Award may not make a separate deferral election or distribution election for Dividend Equivalents on RSU Awards. Any Dividend Equivalents paid with respect to RSU Awards shall be automatically deferred under the Plan’s terms and distributed based on the distribution election submitted for the corresponding RSU Awards. If a Participant does not make an election to defer some or all of the Dividend Equivalents on Stock Awards paid with respect to a calendar year, such amounts shall be paid to the Participant in a lump sum cash payment no later than 60 days following the Participant’s termination of employment. Further, following a Participant’s
|
(d)
|
Stock Award Unit Accounts
. A Participant’s Stock Award Units and/or RSU Award Units shall be subject to vesting and forfeiture at the same time and in the same manner as applicable to such Participant’s Stock Award and/or RSU Award, as applicable.
|
(i)
|
In addition to the applicable limitations of
Article 4
, no portion of a Stock Award Unit and/or RSU Award Unit may be distributed in a Scheduled Distribution until an annual distribution date which occurs following the date the Participant’s Stock Award and/or RSU Award, as applicable, would have been fully vested. By way of example, if a Stock Award Unit becomes fully vested on March 1, 2017, then such Stock Award Unit shall be eligible for distribution as part of a Scheduled Distribution during January 2018.
|
(ii)
|
Distributions from a Participant’s Stock Award Unit Account shall be made in the form of shares of the Company’s common stock for each Stock Award Unit or RSU Award Unit, as applicable, which shares shall be issued pursuant to the Incentive Plan’s terms.
|
(iii)
|
If the Company pays a stock dividend with respect to its shares of common stock, then the Committee (or its delegate) shall:
|
(A)
|
with respect to Stock Award Units, credit additional Stock Award Units to the Participant’s Stock Award Unit Account in an amount equal to the number of shares of common stock that would have been issued to the Participant if he or she had directly held one unit of the Company’s common stock for each Stock Award Unit credited to his Stock Award Unit Account; and
|
(B)
|
with respect to vested RSU Award Units only, credit additional vested RSU Award Units to the Participant’s Stock Award Unit Account in an amount equal to the number of shares of common stock that would have been issued to the Participant if he or she had directly held one unit of the Company’s common stock for each vested RSU Award Unit credited to his Stock Award Unit Account.
|
(e)
|
Dividend Equivalent Accounts
. If a Participant has made an election pursuant to
Section 18.1(b)
, the Committee (or its delegate) shall credit to the Dividend Equivalent Account established for the Participant for each calendar year an amount equal to the dividend that the Participant would have received if he or she had directly owned one share of the Company’s common stock for each Stock Award Unit and/or vested RSU Award Unit, as applicable, credited to any of the Participant’s Stock Award Unit Accounts.
|
(i)
|
Amounts credited to a Participant’s Dividend Equivalent Account shall be fully vested at all times.
|
(ii)
|
If any amount is earned on a Participant’s Dividend Equivalent Account for a Plan Year, such amount shall be credited to the Participant’s Dividend Equivalent Account for that Plan Year.
|
(iii)
|
Amounts credited to a Participant’s Dividend Equivalent Account shall initially be invested in the same manner as directed for the Participant’s Company Contributions.
|
18.2
|
Automatic Changes in Investment
.
|
(a)
|
If a Participant has elected to defer a portion of any Stock Award and/or RSU Award and to have his or her Stock Award Unit Account credited with Stock Award Units and/or RSU Award Units, as applicable, and such individual is required to divest himself or herself of any and all equity ownership in the Company to satisfy the requirements of a written agreement between the Company and the Federal Trade Commission, then any Stock Award Units and/or vested RSU Award Units credited to such Participant’s Account shall be automatically converted to cash as soon as administratively feasible following the Participant’s termination of employment. For purposes of such conversion, the price per Stock Award Unit or vested RSU Award Unit shall be the closing price of a share of the Company’s common stock on the date the Participant’s employment with the Company ceases.
|
(b)
|
Following the conversion of a Participant’s Stock Award Units and/or vested RSU Award Units, as applicable, to cash, the Participant shall be permitted to direct the investment of amounts credited to his Stock Award Unit Account among any investment options which are otherwise available under the Plan’s terms.
|
(c)
|
If this
Section 18.2
applies to a Participant’s Stock Award Unit Account, then any distributions from such account shall be made in the form of cash and shall not be paid as shares of the Company’s common stock.
|
(d)
|
Nothing in this
Section 18.2
shall be interpreted as changing the payment timing for any amounts credited to a Participant’s Stock Award Unit Account.
|
19.1
|
General
. As provided in
Section 14.2
of the Incentive Plan, the provisions of this
Article 19
shall govern the deferral and payment of Director Deferred Units pursuant to Article XIV of the Incentive Plan including, but not limited to, the administration of amounts deferred under the Director Plan for periods prior to August 1, 2017. The provisions of this Article 19 shall apply to Directors only and shall be effective as of the date of adoption of this restatement.
|
19.2
|
Deferral of Unit Awards
.
|
(a)
|
Annual Accounting
. For each Director who elects to defer a portion of a Unit Award, a separate Director Unit Account shall be established for each Plan Year to hold the Participant’s Director Deferred Units. In addition, a separate Dividend Equivalent Account shall be established for each Plan Year for each Director who has elected to defer a portion of a Unit Award under this Plan’s terms or, for periods prior to August 1, 2017, the terms of the Director Plan. Earnings with respect to any Director Unit Account which are paid during a calendar year shall be allocated the Dividend Equivalent Account established for such Plan Year.
|
(b)
|
Unit Award Deferral Elections
. Subject to the limitations below, a Participant may elect to defer all or a portion of a Unit Award on such terms as the Committee (or its delegate) may permit by completing an Election Form and submitting it to the Committee (or its delegate) prior to the calendar year in which the Unit Award is made. The Participant’s deferral election
|
(c)
|
Director Unit Accounts
. A Participant’s Director Deferred Units shall be fully vested at all times. Distributions from a Participant’s Director Unit Account shall be made in the form of shares of the Company’s common stock for each Director Deferred Unit, which shares shall be issued pursuant to the Incentive Plan’s terms.
|
(d)
|
Dividend Equivalent Accounts
. The Committee shall establish a Dividend Equivalent Account for each calendar year that a Participant has elected to defer shares pursuant to the Director Plan or
Section 19.2(b)
. The Committee (or its delegate) shall credit the Dividend Equivalent Account established for the Participant for each calendar year a cash equivalent amount equal to any dividend that the Participant would have received if he or she had directly owned one share of the Company’s common stock for each Director Deferred Unit credited to any of the Participant’s Director Unit Accounts.
|
(i)
|
Dividend Equivalents credited to a Participant’s Director Unit Account shall be fully vested at all times.
|
(ii)
|
Amounts credited to a Participant’s Director Unit Account shall be invested in the manner directed by the Participant. If no such election is provided, then such amounts shall be invested in a default investment fund as determined by the Committee.
|
(e)
|
Merged Accounts
. Any Unit Awards issued under the Director Plan for periods on or before August 1, 2017, including dividend equivalent payments credited as additional Director Deferred Units, have been incorporated into the Incentive Plan and shall be administered by the Company as provided in Incentive Plan. Each Unit Award incorporated into the Incentive Plan shall be separately accounted for in a Director Unit Account established under this Plan for each Participant for each applicable Plan Year. Any previously filed deferral elections made pursuant to the Director Plan’s terms shall be honored by the Incentive Plan and this Plan, and administered in accordance with their terms.
|
19.3
|
Automatic Changes in Investment
.
|
(a)
|
If a Participant has elected to defer a portion of any Unit Award and to have his or her Director Unit Account credited with Director Deferred Units and such individual is required to divest himself or herself of any and all equity ownership in the Company to satisfy the requirements of a written agreement between the Company and the Federal Trade Commission, then any Director Deferred Units credited to such Participant’s Account shall be automatically converted to cash as soon as administratively feasible following the Participant’s termination of services on the Board. For purposes of such conversion, the price per Director Deferred
|
(b)
|
Following the conversion of a Participant’s Director Deferred Units to cash, the Participant shall be permitted to direct the investment of amounts credited to his Director Unit Account among any investment options which are otherwise available under the Plan’s terms.
|
(c)
|
If this
Section 19.3
applies to a Participant’s Director Unit Account, then any distributions from such account shall be made in the form of cash and shall not be paid as shares of the Company’s common stock.
|
(d)
|
Nothing in this
Section 19.3
shall be interpreted as changing the payment timing for any amounts credited to a Participant’s Director Unit Account.
|
|
Twelve months ended December 31,
|
||||||||||||||
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||
Earnings:
|
|
|
|
|
|
||||||||||
Pretax income
|
$
|
400,258
|
|
$
|
326,658
|
|
$
|
370,351
|
|
402,600
|
|
245,206
|
|
||
Add fixed charges as adjusted (from below)
|
177,984
|
|
171,291
|
|
182,484
|
|
188,362
|
|
150,410
|
|
|||||
|
$
|
578,242
|
|
$
|
497,949
|
|
$
|
552,835
|
|
$
|
590,962
|
|
$
|
395,616
|
|
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest expense:
|
|
|
|
|
|
||||||||||
Corporate
|
163,266
|
|
156,267
|
|
163,463
|
|
168,746
|
|
136,917
|
|
|||||
Amortization of deferred financing costs
|
5,859
|
|
5,826
|
|
9,434
|
|
8,825
|
|
5,443
|
|
|||||
1/3 of rental expense
|
8,859
|
|
9,198
|
|
9,587
|
|
10,791
|
|
8,050
|
|
|||||
Fixed charges
|
$
|
177,984
|
|
$
|
171,291
|
|
$
|
182,484
|
|
$
|
188,362
|
|
$
|
150,410
|
|
Ratio (earnings divided by fixed charges)
|
3.25
|
|
2.91
|
|
3.03
|
|
3.14
|
|
2.63
|
|
SCI Capital Corporation (DE Corp)
|
|||||||||||
SCI Capital Holdings, Inc. (DE Corp)
|
|||||||||||
SCI Direct, Inc. (FL Corp) California subsidiaries
|
|||||||||||
Neptune Society of America, Inc.
|
100
|
%
|
|||||||||
Neptune Management Corp.
|
100
|
%
|
|||||||||
Trident Society, Inc.
|
100
|
%
|
|||||||||
Wilson Financial Group, Inc. (DE Corp)
|
|||||||||||
Wilson Holdings, Inc. (TX Corp) California subsidiaries
|
|||||||||||
Cooley & Riolo Mortuary, Inc.
|
100
|
%
|
|||||||||
Thompson Funeral Home, Inc.
|
100
|
%
|
|||||||||
WFG-Fuller Funerals, Inc.
|
100
|
%
|
|||||||||
Wilson-Bannon Mortuary, Inc.
|
100
|
%
|
|||||||||
Camellia Memorial Lawn, Inc.
|
100
|
%
|
|||||||||
Alderwoods Group, LLC (DE LLC) California subsidiaries
|
|||||||||||
Alderwoods Group (California), Inc.
|
100
|
%
|
|||||||||
Alderwoods (Texas), LLC.
|
100
|
%
|
|||||||||
Rose Hills Holdings Corp. (DE Corp)
|
|||||||||||
Rose Hills Company (DE Corp) California subsidiary
|
|||||||||||
RH Mortuary Corporation
|
100
|
%
|
|||||||||
RH Cemetery Corp. (DE Corp) California subsidiary
|
|||||||||||
Workman Mill Investment Company
|
100
|
%
|
|||||||||
DSP General Partner II, Inc.
|
100
|
%
|
|||||||||
S & H Properties and Enterprises, Inc. (WA Corp) California subsidiaries
|
|||||||||||
Universal Memorial Centers V, Inc.
|
100
|
%
|
|||||||||
Stewart Enterprises, Inc. (LA Corp) California Subsidiary
|
|||||||||||
S.E. Acquisition of California, Inc.
|
100
|
%
|
|||||||||
S.E. Combined Services of California, Inc.
|
100
|
%
|
|||||||||
S.E. Funeral Homes of California, Inc.
|
100
|
%
|
|||||||||
Simplicity Plan of California, Inc.
|
100
|
%
|
|||||||||
Stewart Pre-Need Services, Inc.
|
100
|
%
|
|||||||||
|
|||||||||||
COLORADO
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Colorado subsidiary
|
|||||||||||
SCI Colorado Funeral Services, LLC
|
100%
|
|
|||||||||
Allnut Funeral Homes, Inc.
|
100%
|
|
|||||||||
Allnut Funeral Service, Inc.
|
100%
|
|
|||||||||
Resthaven Colorado, LLC
|
100%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Colorado subsidiary
|
|||||||||||
Alderwoods (Colorado), Inc.
|
100%
|
|
|||||||||
|
|||||||||||
CONNECTICUT
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Connecticut subsidiary
|
|||||||||||
SCI Connecticut Funeral Services, LLC
|
100%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Connecticut subsidiary
|
|||||||||||
Alderwoods (Connecticut), Inc.
|
51.8%
|
|
|||||||||
Alderwoods (New York), LLC (NY LLC) Connecticut subsidiary
|
Alderwoods (Connecticut), Inc.
|
48.2%
|
|
|||||||||
|
|||||||||||
DELAWARE
|
|||||||||||
Christian Funeral Services, Inc.
|
100%
|
|
|||||||||
SCI Funeral Services, LLC (Iowa LLC)
|
|||||||||||
ECI Services of Maine, Inc.
|
100%
|
|
|||||||||
ECI Services of New Hampshire, Inc.
|
100%
|
|
|||||||||
Gracelawn Memorial Park, Inc
|
100%
|
|
|||||||||
LHT Consulting Group, LLC
|
100%
|
|
|||||||||
Maine Cremation Care, LLC
|
100%
|
|
|||||||||
MCH Wilson, Inc.
|
100%
|
|
|||||||||
Memorial Guardian Plans, Inc.
|
100%
|
|
|||||||||
New England Cremation Services, LLC
|
100%
|
|
|||||||||
SCI California Funeral Services, LLC (CA LLC) Delaware subsidiaries
|
|||||||||||
California Cemetery and Funeral Services, LLC
|
5%
|
|
|||||||||
ECI Capital, LLC
|
100%
|
|
|||||||||
California Cemetery and Funeral Services, LLC
|
95%
|
|
|||||||||
SCI Georgia Funeral Services, LLC
|
100%
|
|
|||||||||
SCI Services (Alabama), LLC
|
100%
|
|
|||||||||
SCI Indiana Funeral Services, Inc.
|
100%
|
|
|||||||||
SCI Iowa Funeral Services, Inc. (IA Corp) Delaware subsidiary
|
|||||||||||
SCI Iowa Finance Company
|
100%
|
|
|||||||||
SCI Maryland Funeral Services, Inc. (MD Corp) Delaware subsidiary
|
|||||||||||
ECI Cemetery Services of Maryland, LLC
|
100%
|
|
|||||||||
SCI Pennsylvania Funeral Services, Inc. (PA Corp) Delaware subsidiary
|
|||||||||||
Saul-Gabauer Funeral Home, Inc.
|
100%
|
|
|||||||||
SCI Texas Funeral Services, LLC
|
100%
|
|
|||||||||
CemCare, Inc.
|
100%
|
|
|||||||||
PSI Funding, Inc.
|
100%
|
|
|||||||||
SCI Virginia Funeral Services, Inc. (VA Corp) Delaware subsidiary
|
|||||||||||
SCI Loan Services, LLC
|
100%
|
|
|||||||||
Trust Advisors, Inc.
|
100%
|
|
|||||||||
Salvatore Air Transportation Corp.
|
100%
|
|
|||||||||
OFTC, Inc.
|
100%
|
|
|||||||||
SCI Financial Services, Inc.
|
100%
|
|
|||||||||
Making Everlasting Memories, L.L.C.
|
100%
|
|
|||||||||
SCI Investment Services, Inc.
|
100%
|
|
|||||||||
SCI International, LLC
|
100%
|
|
|||||||||
SCI Cerberus, Inc.
|
99.3%
|
|
|||||||||
SCI Parkway, LLC
|
100%
|
|
|||||||||
Keystone America, Inc.
|
100%
|
|
|||||||||
Keystone Indiana, Inc.
|
100%
|
|
|||||||||
Keystone Kentucky, Inc.
|
99%
|
|
|||||||||
Keystone Michigan, Inc.
|
100%
|
|
|||||||||
Healy-Hahn Funeral Properties, Inc.
|
100%
|
|
|||||||||
SCI Cerberus, Inc.
|
.07%
|
|
Keystone Advance Planning, Inc.
|
100%
|
|
|||||||||
SCI Shared Resources, LLC
|
100%
|
|
|||||||||
SCI Shared Services, Inc.
|
100%
|
|
|||||||||
SCI Special, LLC
|
100%
|
|
|||||||||
SCI Administrative Services, LLC -
General Partner of
|
100%
|
|
|||||||||
SCI Management L.P.
|
1%
|
|
|||||||||
Remembrance Memorial Traditions, LLC -
Limited Partner of
|
100%
|
|
|||||||||
SCI Management L.P.
|
99%
|
|
|||||||||
Dignity Memorial Network, Inc.
|
100%
|
|
|||||||||
SCI Capital Corporation
|
100%
|
|
|||||||||
CMSD, LLC
|
100%
|
|
|||||||||
FMSD, LLC
|
100%
|
|
|||||||||
SCI Capital Holdings, Inc.
|
100%
|
|
|||||||||
Wilson Financial Group, Inc.
|
100%
|
|
|||||||||
Wilson-Amistad Corporation
|
100%
|
|
|||||||||
Wilson Holdings, Inc. (TX Corp) Delaware subsidiary
|
|||||||||||
M.J. Edwards Hillside Chapel, Inc.
|
100%
|
|
|||||||||
SCI Direct, Inc. (FL Corp) Delaware subsidiary
|
|||||||||||
Neptune Reef Services, LLC
|
100%
|
|
|||||||||
Neptune Society of America, Inc. (CA Corp)
|
|||||||||||
Neptune Management Corp. (CA Corp)
|
|||||||||||
Neptune Management (KY), LLC
|
99%
|
|
|||||||||
Alderwoods Group, LLC
|
100%
|
|
|||||||||
American Burial and Cremation Centers, Inc.
|
100%
|
|
|||||||||
H. P. Brandt Funeral Home, Inc.
|
100%
|
|
|||||||||
Osiris Holding, LLC
|
100%
|
|
|||||||||
Rose Hills Holdings Corp.
|
100%
|
|
|||||||||
Rose Hills Company
|
100%
|
|
|||||||||
RH Cemetery Corp.
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp) Delaware subsidiaries
|
|||||||||||
Alderwoods (Mississippi), LLC
|
100%
|
|
|||||||||
Stewart International (Netherlands) LLC
|
100%
|
|
|||||||||
Stewart Cementerios Puerto Rico Holding II, LLC
|
100%
|
|
|||||||||
Stewart Cementerios Puerto Rico Holding I, LLC
|
100%
|
|
|||||||||
Stewart Funerarias Puerto Rico Holding II, LLC
|
100%
|
|
|||||||||
Stewart Funerarias Puerto Rico Holding I, LLC
|
100%
|
|
|||||||||
Stewart Simplicity Plan of Puerto Rico Holding II, LLC
|
100%
|
|
|||||||||
Stewart Simplicity Plan of Puerto Rico Holding I, LLC
|
100%
|
|
|||||||||
|
|||||||||||
DISTRICT OF COLUMBIA
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) DC subsidiaries
|
|||||||||||
Joseph Gawler’s Sons, LLC
|
99%
|
|
|||||||||
Witzke Funeral Homes, Inc.
|
100%
|
|
|||||||||
|
|
||||||||||
FLORIDA
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Florida subsidiary
|
Alderwoods (Idaho), Inc.
|
100%
|
|
|||||||||
|
|||||||||||
ILLINOIS
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Illinois subsidiary
|
|||||||||||
SCI Illinois Services, LLC
|
100%
|
|
|||||||||
Lake View Memorial Gardens, Inc.
|
100%
|
|
|||||||||
SCI Funeral Services of Florida, LLC (FL LLC), Illinois subsidiary
|
|||||||||||
Alderwoods (Chicago North), Inc.
|
56%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Illinois subsidiaries
|
|||||||||||
Alderwoods (Illinois), LLC
|
100%
|
|
|||||||||
Alderwoods (Chicago Central), Inc.
|
71%
|
|
|||||||||
Woodlawn Memorial Park, Inc.
|
100%
|
|
|||||||||
Chicago Cemetery Corporation
|
100%
|
|
|||||||||
Mount Auburn Memorial Park, Inc.
|
100%
|
|
|||||||||
Alderwoods (Chicago North), Inc.
|
1%
|
|
|||||||||
Alderwoods (Chicago North), Inc.
|
43%
|
|
|||||||||
Osiris Holding, LLC (DE LLC) Illinois subsidiary
|
|||||||||||
Alderwoods (Chicago Central), Inc.
|
29%
|
|
|||||||||
Elmwood Acquisition Corporation
|
100%
|
|
|||||||||
Oak Woods Cemetery Association
|
100%
|
|
|||||||||
Pineview Memorial Park, Inc.
|
100%
|
|
|||||||||
Ridgewood Cemetery Company, Inc.
|
100%
|
|
|||||||||
Ruzich Funeral Home, Inc.
|
100%
|
|
|||||||||
Woodlawn Cemetery of Chicago, Inc.
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp)
|
|||||||||||
S.E. South-Central, LLC (LA LLC)
|
|||||||||||
S.E. Funeral Homes of Illinois, Inc.
|
100%
|
|
|||||||||
|
|||||||||||
INDIANA
|
|||||||||||
Alderwoods Group, LLC (DE LLC) Indiana subsidiaries
|
|||||||||||
Advance Planning of America, Inc.
|
100%
|
|
|||||||||
Alderwoods (Indiana), Inc.
|
88.5%
|
|
|||||||||
Alderwoods (Tennessee), LLC (TN LLC) Indiana subsidiary
|
|||||||||||
Alderwoods (Indiana), Inc.
|
11.5%
|
|
|||||||||
SCI Special, LLC (DE LLC)
|
|||||||||||
SCI Capital Corporation (DE Corp)
|
|||||||||||
SCI Capital Holdings, Inc. (DE Corp)
|
|||||||||||
Wilson Financial Group, Inc. (DE Corp)
|
|||||||||||
Wilson Holdings, Inc. (TX Corp) Indiana subsidiary
|
|||||||||||
WFG-Williams & Bluitt Funeral Home, Inc.
|
100%
|
|
|||||||||
|
|||||||||||
IOWA
|
|||||||||||
SCI Funeral Services, LLC
|
100%
|
|
|||||||||
SCI Iowa Funeral Services, Inc.
|
100%
|
|
|||||||||
|
|||||||||||
KANSAS
|
of Catonsville, Inc.
|
100%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Maryland subsidiary
|
|||||||||||
Alderwoods (Maryland), Inc.
|
100%
|
|
|||||||||
SCI International, LLC (DE LLC)
|
|||||||||||
Keystone America, Inc. (DE Corp) Maryland subsidiaries
|
|||||||||||
Schimunek Funeral Home, Inc.
|
100%
|
|
|||||||||
The Schimunek Funeral Home of Bel Air, Inc.
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp) Maryland subsidiary
|
|||||||||||
S.E. Mid-Atlantic, LLC
|
100%
|
|
|||||||||
Bounds Funeral Home, Inc.
|
100%
|
|
|||||||||
Cedar Hill Cemetery Company, Inc.
|
100%
|
|
|||||||||
Crest Lawn Memorial Gardens, LLC
|
100%
|
|
|||||||||
Fort Lincoln Cemetery, LLC
|
100%
|
|
|||||||||
Fort Lincoln Funeral Home, Inc.
|
100%
|
|
|||||||||
Hillcrest Memorial Cemetery, Inc.
|
100%
|
|
|||||||||
Hines-Rinaldi Funeral Home, Inc.
|
100%
|
|
|||||||||
John M. Taylor Funeral Home, Inc.
|
100%
|
|
|||||||||
Parklawn, Inc.
|
100%
|
|
|||||||||
S.E. Cemeteries of Maryland, Inc.
|
100%
|
|
|||||||||
Nailknot ,LLC
|
100%
|
|
|||||||||
Simple Tribute of Maryland, Inc.
|
100%
|
|
|||||||||
The Parkwood Cemetery Company
|
100%
|
|
|||||||||
The Parkwood Management Company
|
100%
|
|
|||||||||
William W. Chambers, Inc.
|
100%
|
|
|||||||||
|
|||||||||||
MASSACHUSETTS
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Massachusetts subsidiaries
|
|||||||||||
Affiliated Family Funeral Service, Inc.
|
100%
|
|
|||||||||
AFFS Boston, Inc.
|
0.6%
|
|
|||||||||
AFFS Brookline, Inc
|
2.5%
|
|
|||||||||
AFFS North, Inc.
|
10%
|
|
|||||||||
AFFS Norwood, Inc.
|
6.675%
|
|
|||||||||
AFFS Quincy, Inc.
|
5%
|
|
|||||||||
AFFS Salem, Inc
|
10%
|
|
|||||||||
AFFS Southcoast East, Inc.
|
.06%
|
|
|||||||||
AFFS Southcoast West, Inc.
|
.06%
|
|
|||||||||
AFFS West, Inc.
|
10%
|
|
|||||||||
Stanetsky Memorial Chapels, Inc.
|
10%
|
|
|||||||||
Sullivan Funeral Homes, Inc.
|
10%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Massachusetts subsidiaries
|
|||||||||||
Cuffe-McGinn Funeral Home, Inc.
|
10%
|
|
|||||||||
Doane Beal & Ames, Inc.
|
10%
|
|
|||||||||
Ernest A. Richardson Funeral Home, Inc.
|
10%
|
|
|||||||||
Alderwoods (Massachusetts), LLC
|
100%
|
|
|||||||||
SCI International, LLC (DE LLC)
|
|||||||||||
Keystone America, Inc. (DE Corp) Mass. subsidiary
|
SCI Funeral Services, LLC (Iowa LLC) Oregon subsidiaries
|
|||||||||||
SCI Oregon Funeral Services, Inc.
|
100%
|
|
|||||||||
Uniservice Corporation
|
100%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Oregon subsidiary
|
|||||||||||
Alderwoods (Oregon), Inc.
|
100%
|
|
|||||||||
SCI Special, LLC (DE LLC)
|
|||||||||||
SCI Capital Corporation (DE Corp)
|
|||||||||||
SCI Capital Holdings, Inc. (DE Corp)
|
|||||||||||
SCI Direct, Inc. (FL Corp)
|
|||||||||||
Neptune Society of America, Inc. (CA Corp)
|
|||||||||||
Neptune Management Corp. (CA Corp) Oregon sub
|
|||||||||||
Wilhelm Mortuary, Inc.
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp) Oregon subsidiary
|
|||||||||||
S.E. Acquisition of Oregon, Inc.
|
100%
|
|
|||||||||
Chapel of the Roses, Inc.
|
100%
|
|
|||||||||
Chapel of the Valley Funeral Home, Inc.
|
100%
|
|
|||||||||
J.P. Finley and Son Mortuary, Inc.
|
100%
|
|
|||||||||
Sunset Hills Memorial Park
|
100%
|
|
|||||||||
|
|||||||||||
PENNSYLVANIA
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Pennsylvania subsidiaries
|
|||||||||||
SCI Pennsylvania Funeral Services, Inc.
|
100%
|
|
|||||||||
Auman Funeral Home, Inc.
|
100%
|
|
|||||||||
Ed Melenyzer Co.
|
100%
|
|
|||||||||
Funeral Service Pennsylvania, LLC
|
100%
|
|
|||||||||
Laughlin Funeral Home, Ltd.
|
100%
|
|
|||||||||
Robert L. Hendricks Funeral Home, Inc.
|
100%
|
|
|||||||||
Rohland Funeral Home
|
100%
|
|
|||||||||
Harold B. Mulligan Co., Inc.
|
100%
|
|
|||||||||
Theo. C. Auman, Inc.
|
100%
|
|
|||||||||
Auman's, Inc.
|
100%
|
|
|||||||||
Francis F. Seidel, Inc.
|
100%
|
|
|||||||||
Memorial Guardian Plans, Inc. (DE Corp) Pennsylvania subsidiary
|
|||||||||||
Ensure Agency of Pennsylvania, Inc.
|
100%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Pennsylvania subsidiaries
|
|||||||||||
Bright Undertaking Company
|
100%
|
|
|||||||||
H. Samson, Inc.
|
100%
|
|
|||||||||
Knee Funeral Home of Wilkinsburg, Inc.
|
100%
|
|
|||||||||
Nineteen Thirty-Five Holdings, Inc.
|
100%
|
|
|||||||||
Osiris Holding,LLC (DE LLC) Pennsylvania subsidiary
|
|||||||||||
Oak Woods Management Company
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp)
|
|||||||||||
S.E. Mid-Atlantic, LLC (MD LLC) Pennsylvania subsidiaries
|
|||||||||||
George Washington Memorial Park, Inc.
|
100%
|
|
|||||||||
S.E. Acquisition of Pennsylvania, Inc.
|
100%
|
|
|||||||||
Sunset Memorial Park Company, LLC
|
100%
|
|
|
|||||||||||
RHODE ISLAND
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Rhode Island subsidiary
|
|||||||||||
SCI Rhode Island Funeral Services, LLC
|
100%
|
|
|||||||||
|
|||||||||||
SOUTH CAROLINA
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) South Carolina subsidiary
|
|||||||||||
SCI South Carolina Funeral Services, Inc.
|
100%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC)
|
|||||||||||
Alderwoods (Georgia), Inc. (GA Corp) South Carolina subsidiary
|
|||||||||||
Graceland Cemetery Development Co.
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp)
|
|||||||||||
Alderwoods (South Carolina), Inc.
|
100%
|
|
|||||||||
S.E. Mid-Atlantic, LLC (MD LLC) South Carolina subsidiaries
|
|||||||||||
Dunbar Funeral Home
|
100%
|
|
|||||||||
S.E. Cemeteries of South Carolina, Inc.
|
100%
|
|
|||||||||
S.E. Combined Services of South Carolina, Inc.
|
100%
|
|
|||||||||
S.E. Funeral Homes of South Carolina, Inc.
|
100%
|
|
|||||||||
|
|||||||||||
TENNESSEE
|
|||||||||||
SCI Funeral Services, LLC (Iowa LLC) Tennessee subsidiaries
|
|||||||||||
SCI Tennessee Funeral Services, LLC
|
100%
|
|
|||||||||
SCI Special, LLC (DE LLC)
|
|||||||||||
SCI Capital Corporation (DE Corp)
|
|||||||||||
SCI Capital Holdings, Inc. (DE Corp)
|
|||||||||||
Wilson Financial Group, Inc. (DE Corp) Tennessee subsidiary
|
|||||||||||
Southern Funeral Home, Inc.
|
100%
|
|
|||||||||
Amistad Corporation (DE Corp) Tennessee subsidiary
|
|||||||||||
Franklin-Strickland Funeral Home, Inc.
|
100%
|
|
|||||||||
Wilson Holdings, Inc. (TX Corp) Tennessee subsidiaries
|
|||||||||||
M. J. Edwards & Sons Funeral Home, Inc.
|
100%
|
|
|||||||||
M. J. Edwards-Whitehaven Funeral Chapel, Inc.
|
100%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Tennessee subsidiaries
|
|||||||||||
Alderwoods (Tennessee), LLC
|
100%
|
|
|||||||||
Eagle Financial Associates, Inc.
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp)
|
|||||||||||
S.E. Mid-Atlantic, LLC (MD LLC) Tennessee subsidiaries
|
|||||||||||
Monte Vista Burial Park, LLC
|
100%
|
|
|||||||||
S.E. Combined Services of Tennessee, LLC
|
100%
|
|
|||||||||
S.E. South-Central, LLC (LA LLC) Tennessee subsidiary
|
|||||||||||
S.E. Funeral Homes of Tennessee, Inc.
|
100%
|
|
|||||||||
The Nashville Historic Cemetery Association, LLC
|
100%
|
|
|||||||||
|
|||||||||||
TEXAS
|
|||||||||||
Big Bend Insurance Company, Inc.
|
100%
|
|
|||||||||
SCI Funeral Services, LLC (Iowa LLC) Texas subsidiaries
|
TMJ Land, Inc.
|
100%
|
|
|||||||||
SCI Texas Funeral Services, LLC (DE LLC) Texas subsidiaries
|
|||||||||||
Dial Dunkin Enterprises, Inc.
|
100%
|
|
|||||||||
Eubank Funeral Home, Inc.
|
100%
|
|
|||||||||
FHC Realty, Inc.
|
100%
|
|
|||||||||
Pioneer Funeral Plans, Inc.
|
100%
|
|
|||||||||
WFG Liquidation Corporation
|
100%
|
|
|||||||||
Van Zandt County Haven of Memories, Inc.
|
100%
|
|
|||||||||
SCI Special, LLC (DE LLC)
|
|||||||||||
SCI Capital Corporation (DE Corp) Texas subsidiary
|
|||||||||||
SCI Capital Holdings, Inc. (DE Corp)
|
|||||||||||
Wilson Financial Group, Inc. (DE Corp) Texas subsidiary
|
|||||||||||
Wilson Holdings, Inc.
|
100%
|
|
|||||||||
Carl Barnes Funeral Home, Inc.
|
100%
|
|
|||||||||
Cedar Crest Funeral Home, Inc.
|
100%
|
|
|||||||||
Fuller-Sheffield Funeral Services, Inc.
|
100%
|
|
|||||||||
Lincoln Funeral Home, Inc.
|
100%
|
|
|||||||||
Mainland Funeral Home, Inc.
|
100%
|
|
|||||||||
Morris-Bates Funeral Home, Inc.
|
100%
|
|
|||||||||
Paradise Funeral Home, Inc.
|
100%
|
|
|||||||||
Paradise Investment Corporation
|
100%
|
|
|||||||||
Paradise Cemetery South, Inc.
|
100%
|
|
|||||||||
Warford-Walker Mortuary, Inc.
|
100%
|
|
|||||||||
WFG-Cristo Rey Funeral Home, Inc.
|
100%
|
|
|||||||||
WFG-Lockwood Funeral Home, Inc.
|
100%
|
|
|||||||||
WFG-Nat Clark, Inc.
|
100%
|
|
|||||||||
WFG-Gregory Spencer Funeral Home, Inc.
|
100%
|
|
|||||||||
Wilson-Lincoln Cemetery, Inc.
|
100%
|
|
|||||||||
Carver Memorial Park, Inc.
|
100%
|
|
|||||||||
Lincoln Memorial Park
|
100%
|
|
|||||||||
SCI Administrative Services, LLC (DE LLC)
|
|||||||||||
SCI Management L.P. (DE LP) -
Limited Partner of
|
|||||||||||
SCI Eastern Market Support Center, L.P.
|
99%
|
|
|||||||||
SCI Houston Market Support Center, L.P.
|
99%
|
|
|||||||||
SCI Management L.P. (DE LP)
|
|||||||||||
SCI Western Market Support Center, LLC (CA LLC) –
General Partner of
|
|||||||||||
SCI Eastern Market Support Center, L.P.
|
1%
|
|
|||||||||
SCI Houston Market Support Center, L.P.
|
1%
|
|
|||||||||
Alderwoods Group, LLC (DE LLC) Texas subsidiaries
|
|||||||||||
Dunwood Cemetery Service Company
|
80%
|
|
|||||||||
Earthman Holdings, Inc.
|
100%
|
|
|||||||||
Alderwoods (Texas), LLC (CA LLC) Texas subsidiary
|
|||||||||||
Funeral Service, Inc.
|
100%
|
|
|||||||||
Alderwoods (Georgia), Inc. (GA Corp) Texas subsidiary
|
|||||||||||
Waco Memorial Park, Inc.
|
100%
|
|
|||||||||
Stewart Enterprises, Inc. (LA Corp) Texas subsidiary
|
|
/s/ Thomas L. Ryan
|
|
Thomas L. Ryan
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
|
/s/ Eric D. Tanzberger
|
|
Eric D. Tanzberger
Senior Vice President Chief Financial Officer (Principal Financial Officer) |
|
/s/ Thomas L. Ryan
|
|
Thomas L. Ryan
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
|
/s/ Eric D. Tanzberger
|
|
Eric D. Tanzberger
Senior Vice President Chief Financial Officer (Principal Financial Officer) |