|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
For the quarterly period ended
|
June 30, 2019
|
☐
|
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 number)
|
|||
|
|
|
|
|
1929 Allen Parkway
|
|
|
77019
|
|
Houston
|
|
|
(Zip code)
|
|
Texas
|
|
(713)
|
522-5141
|
|
(Address of principal executive offices)
|
|
(Registrant’s telephone number, including area code)
|
|
|
|
|
|
||
|
None
|
|
|
|
(Former name, former address, or former fiscal year, if changed since last report)
|
Title of Each Class
|
|
Trading Symbol(s)
|
|
Name of Each Exchange on Which Registered
|
Common Stock ($1 par value)
|
|
SCI
|
|
New York Stock Exchange
|
☒
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
|
|
|
|
|
(Do not check if smaller reporting company)
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Property and merchandise revenue
|
$
|
415,492
|
|
|
$
|
397,600
|
|
|
$
|
796,701
|
|
|
$
|
765,814
|
|
Service revenue
|
339,090
|
|
|
334,450
|
|
|
694,461
|
|
|
712,548
|
|
||||
Other revenue
|
57,990
|
|
|
64,042
|
|
|
119,622
|
|
|
112,212
|
|
||||
Total revenue
|
812,572
|
|
|
796,092
|
|
|
1,610,784
|
|
|
1,590,574
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Cost of property and merchandise
|
(213,635
|
)
|
|
(209,925
|
)
|
|
(411,529
|
)
|
|
(397,648
|
)
|
||||
Cost of service
|
(193,378
|
)
|
|
(188,293
|
)
|
|
(384,191
|
)
|
|
(379,141
|
)
|
||||
Overhead and other expenses
|
(214,413
|
)
|
|
(209,747
|
)
|
|
(432,084
|
)
|
|
(429,896
|
)
|
||||
Total costs and expenses
|
(621,426
|
)
|
|
(607,965
|
)
|
|
(1,227,804
|
)
|
|
(1,206,685
|
)
|
||||
Operating profit
|
191,146
|
|
|
188,127
|
|
|
382,980
|
|
|
383,889
|
|
||||
General and administrative expenses
|
(29,370
|
)
|
|
(31,136
|
)
|
|
(71,900
|
)
|
|
(65,920
|
)
|
||||
(Losses) gains on divestitures and impairment charges, net
|
(11,823
|
)
|
|
6,865
|
|
|
(13,701
|
)
|
|
7,347
|
|
||||
Hurricane recoveries (expenses), net
|
152
|
|
|
(1,902
|
)
|
|
(296
|
)
|
|
330
|
|
||||
Operating income
|
150,105
|
|
|
161,954
|
|
|
297,083
|
|
|
325,646
|
|
||||
Interest expense
|
(47,317
|
)
|
|
(44,519
|
)
|
|
(94,707
|
)
|
|
(88,095
|
)
|
||||
Loss on early extinguishment of debt, net
|
(7,579
|
)
|
|
—
|
|
|
(7,579
|
)
|
|
(10,131
|
)
|
||||
Other income, net
|
874
|
|
|
1,880
|
|
|
1,594
|
|
|
2,264
|
|
||||
Income before income taxes
|
96,083
|
|
|
119,315
|
|
|
196,391
|
|
|
229,684
|
|
||||
Provision for income taxes
|
(23,570
|
)
|
|
(16,034
|
)
|
|
(44,665
|
)
|
|
(44,355
|
)
|
||||
Net income
|
72,513
|
|
|
103,281
|
|
|
151,726
|
|
|
185,329
|
|
||||
Net income attributable to noncontrolling interests
|
(184
|
)
|
|
(42
|
)
|
|
(74
|
)
|
|
(102
|
)
|
||||
Net income attributable to common stockholders
|
$
|
72,329
|
|
|
$
|
103,239
|
|
|
$
|
151,652
|
|
|
$
|
185,227
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common stockholders
|
$
|
0.40
|
|
|
$
|
0.57
|
|
|
$
|
0.83
|
|
|
$
|
1.01
|
|
Basic weighted average number of shares
|
182,369
|
|
|
182,637
|
|
|
182,048
|
|
|
183,877
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common stockholders
|
$
|
0.39
|
|
|
$
|
0.55
|
|
|
$
|
0.82
|
|
|
$
|
0.98
|
|
Diluted weighted average number of shares
|
185,690
|
|
|
187,188
|
|
|
185,517
|
|
|
188,547
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands)
|
||||||||||||||
Net income
|
$
|
72,513
|
|
|
$
|
103,281
|
|
|
$
|
151,726
|
|
|
$
|
185,329
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
6,998
|
|
|
(5,909
|
)
|
|
14,399
|
|
|
(15,501
|
)
|
||||
Total comprehensive income
|
79,511
|
|
|
97,372
|
|
|
166,125
|
|
|
169,828
|
|
||||
Total comprehensive income attributable to noncontrolling interests
|
(36
|
)
|
|
(41
|
)
|
|
(76
|
)
|
|
(98
|
)
|
||||
Total comprehensive income attributable to common stockholders
|
$
|
79,475
|
|
|
$
|
97,331
|
|
|
$
|
166,049
|
|
|
$
|
169,730
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In thousands, except share amounts)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
243,684
|
|
|
$
|
198,850
|
|
Receivables, net
|
82,261
|
|
|
73,825
|
|
||
Inventories
|
25,669
|
|
|
24,950
|
|
||
Other
|
42,603
|
|
|
33,607
|
|
||
Total current assets
|
394,217
|
|
|
331,232
|
|
||
Preneed receivables, net and trust investments
|
4,613,523
|
|
|
4,271,392
|
|
||
Cemetery property
|
1,834,745
|
|
|
1,837,464
|
|
||
Property and equipment, net
|
2,027,417
|
|
|
1,977,364
|
|
||
Goodwill
|
1,846,627
|
|
|
1,863,842
|
|
||
Deferred charges and other assets
|
1,019,105
|
|
|
934,151
|
|
||
Cemetery perpetual care trust investments
|
1,624,709
|
|
|
1,477,798
|
|
||
Total assets
|
$
|
13,360,343
|
|
|
$
|
12,693,243
|
|
|
|
|
|
||||
LIABILITIES & EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
447,388
|
|
|
$
|
479,768
|
|
Current maturities of long-term debt
|
167,084
|
|
|
69,896
|
|
||
Income taxes payable
|
—
|
|
|
5,936
|
|
||
Total current liabilities
|
614,472
|
|
|
555,600
|
|
||
Long-term debt
|
3,464,902
|
|
|
3,532,182
|
|
||
Deferred revenue, net
|
1,444,564
|
|
|
1,418,814
|
|
||
Deferred tax liability
|
404,230
|
|
|
404,627
|
|
||
Other liabilities
|
370,507
|
|
|
297,302
|
|
||
Deferred receipts held in trust
|
3,693,355
|
|
|
3,371,738
|
|
||
Care trusts’ corpus
|
1,624,097
|
|
|
1,471,165
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Common stock, $1 per share par value, 500,000,000 shares authorized, 186,411,295 and 184,720,582 shares issued, respectively, and 182,468,970 and 181,470,582 shares outstanding, respectively
|
182,469
|
|
|
181,471
|
|
||
Capital in excess of par value
|
998,794
|
|
|
972,710
|
|
||
Retained earnings
|
535,173
|
|
|
474,327
|
|
||
Accumulated other comprehensive income
|
27,792
|
|
|
13,395
|
|
||
Total common stockholders’ equity
|
1,744,228
|
|
|
1,641,903
|
|
||
Noncontrolling interests
|
(12
|
)
|
|
(88
|
)
|
||
Total equity
|
1,744,216
|
|
|
1,641,815
|
|
||
Total liabilities and equity
|
$
|
13,360,343
|
|
|
$
|
12,693,243
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
151,726
|
|
|
$
|
185,329
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Loss on early extinguishment of debt
|
7,579
|
|
|
10,131
|
|
||
Depreciation and amortization
|
74,244
|
|
|
78,069
|
|
||
Amortization of intangibles
|
13,653
|
|
|
13,645
|
|
||
Amortization of cemetery property
|
33,523
|
|
|
29,813
|
|
||
Amortization of loan costs
|
2,989
|
|
|
3,017
|
|
||
Provision for doubtful accounts
|
4,273
|
|
|
4,494
|
|
||
Provision for deferred income taxes
|
6,090
|
|
|
22,011
|
|
||
Losses (gains) on divestitures and impairment charges, net
|
13,701
|
|
|
(7,347
|
)
|
||
Gain on sale of investments
|
—
|
|
|
(2,636
|
)
|
||
Share-based compensation
|
8,013
|
|
|
7,544
|
|
||
Change in assets and liabilities, net of effects from acquisitions and divestitures:
|
|
|
|
||||
(Increase) decrease in receivables
|
(11,608
|
)
|
|
965
|
|
||
Increase in other assets
|
(18,643
|
)
|
|
(10,635
|
)
|
||
Decrease in payables and other liabilities
|
(55,148
|
)
|
|
(37,817
|
)
|
||
Effect of preneed sales production and maturities:
|
|
|
|
||||
Increase in preneed receivables, net and trust investments
|
(1,594
|
)
|
|
(23,494
|
)
|
||
Increase in deferred revenue, net
|
55,441
|
|
|
56,342
|
|
||
Decrease in deferred receipts held in trust
|
(21,346
|
)
|
|
(14,055
|
)
|
||
Net cash provided by operating activities
|
262,893
|
|
|
315,376
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(112,714
|
)
|
|
(102,890
|
)
|
||
Acquisitions, net of cash acquired
|
(32,755
|
)
|
|
(167,622
|
)
|
||
Proceeds from divestitures and sales of property and equipment
|
11,380
|
|
|
18,305
|
|
||
Proceeds from sale of investments
|
—
|
|
|
2,900
|
|
||
Payments on Company-owned life insurance policies
|
(8,586
|
)
|
|
(11,733
|
)
|
||
Proceeds from Company-owned life insurance policies
|
—
|
|
|
2,810
|
|
||
Other
|
—
|
|
|
(14,525
|
)
|
||
Net cash used in investing activities
|
(142,675
|
)
|
|
(272,755
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
854,263
|
|
|
370,000
|
|
||
Debt issuance costs
|
(15,536
|
)
|
|
—
|
|
||
Scheduled payments of debt
|
(8,712
|
)
|
|
(8,631
|
)
|
||
Early payments of debt
|
(828,121
|
)
|
|
(259,590
|
)
|
||
Principal payments on finance leases
|
(21,807
|
)
|
|
(19,270
|
)
|
||
Proceeds from exercise of stock options
|
23,101
|
|
|
7,302
|
|
||
Purchase of Company common stock
|
(29,574
|
)
|
|
(228,866
|
)
|
||
Payments of dividends
|
(65,691
|
)
|
|
(62,241
|
)
|
||
Bank overdrafts and other
|
12,307
|
|
|
(8,820
|
)
|
||
Net cash used in financing activities
|
(79,770
|
)
|
|
(210,116
|
)
|
||
Effect of foreign currency on cash, cash equivalents, and restricted cash
|
3,113
|
|
|
(2,133
|
)
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
43,561
|
|
|
(169,628
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
207,584
|
|
|
340,601
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
251,145
|
|
|
$
|
170,973
|
|
|
Common
Stock
|
|
Treasury Stock
|
|
Capital in
Excess of
Par Value
|
|
Retained Earnings (Accumulated
Deficit)
|
|
Accumulated
Other
Comprehensive
Income
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||
Balance at December 31, 2018
|
$
|
184,721
|
|
|
$
|
(3,250
|
)
|
|
$
|
972,710
|
|
|
$
|
474,327
|
|
|
$
|
13,395
|
|
|
$
|
(88
|
)
|
|
$
|
1,641,815
|
|
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
79,323
|
|
|
7,251
|
|
|
40
|
|
|
86,614
|
|
|||||||
Dividends declared on common stock ($0.18 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,820
|
)
|
|
—
|
|
|
—
|
|
|
(32,820
|
)
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
4,568
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,568
|
|
|||||||
Stock option exercises
|
950
|
|
|
—
|
|
|
15,012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,962
|
|
|||||||
Restricted stock awards, net of forfeitures
|
126
|
|
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(355
|
)
|
|
(1,935
|
)
|
|
(12,252
|
)
|
|
—
|
|
|
—
|
|
|
(14,542
|
)
|
|||||||
Other
|
59
|
|
|
—
|
|
|
(1,251
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,192
|
)
|
|||||||
Balance at March 31, 2019
|
185,856
|
|
|
(3,605
|
)
|
|
988,978
|
|
|
508,578
|
|
|
20,646
|
|
|
(48
|
)
|
|
1,700,405
|
|
|||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
72,329
|
|
|
7,146
|
|
|
36
|
|
|
79,511
|
|
|||||||
Dividends declared on common stock ($0.18 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,871
|
)
|
|
—
|
|
|
—
|
|
|
(32,871
|
)
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
3,445
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,445
|
|
|||||||
Stock option exercises
|
513
|
|
|
—
|
|
|
6,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,139
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(337
|
)
|
|
(1,832
|
)
|
|
(12,863
|
)
|
|
—
|
|
|
—
|
|
|
(15,032
|
)
|
|||||||
Other
|
42
|
|
|
—
|
|
|
1,577
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,619
|
|
|||||||
Balance at June 30, 2019
|
$
|
186,411
|
|
|
$
|
(3,942
|
)
|
|
$
|
998,794
|
|
|
$
|
535,173
|
|
|
$
|
27,792
|
|
|
$
|
(12
|
)
|
|
$
|
1,744,216
|
|
|
Common
Stock
|
|
Treasury Stock
|
|
Capital in
Excess of
Par Value
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||
Balance at December 31, 2017
|
$
|
191,936
|
|
|
$
|
(5,321
|
)
|
|
$
|
970,468
|
|
|
$
|
210,364
|
|
|
$
|
41,943
|
|
|
$
|
47
|
|
|
$
|
1,409,437
|
|
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
—
|
|
|
172,461
|
|
|
(229
|
)
|
|
—
|
|
|
172,232
|
|
|||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
81,988
|
|
|
(9,589
|
)
|
|
57
|
|
|
72,456
|
|
|||||||
Dividends declared on common stock ($0.17 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,348
|
)
|
|
—
|
|
|
—
|
|
|
(31,348
|
)
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
3,699
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,699
|
|
|||||||
Stock option exercises
|
282
|
|
|
—
|
|
|
4,707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,989
|
|
|||||||
Restricted stock awards, net of forfeitures
|
163
|
|
|
—
|
|
|
(163
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(3,095
|
)
|
|
(16,101
|
)
|
|
(99,601
|
)
|
|
—
|
|
|
—
|
|
|
(118,797
|
)
|
|||||||
Other
|
47
|
|
|
—
|
|
|
(866
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(819
|
)
|
|||||||
Balance at March 31, 2018
|
$
|
192,428
|
|
|
$
|
(8,416
|
)
|
|
$
|
961,744
|
|
|
$
|
333,864
|
|
|
$
|
32,125
|
|
|
$
|
104
|
|
|
$
|
1,511,849
|
|
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
103,239
|
|
|
(5,908
|
)
|
|
41
|
|
|
97,372
|
|
|||||||
Dividends declared on common stock ($0.17 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,893
|
)
|
|
—
|
|
|
—
|
|
|
(30,893
|
)
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
3,845
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,845
|
|
|||||||
Stock option exercises
|
129
|
|
|
—
|
|
|
2,184
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,313
|
|
|||||||
Restricted stock awards, net of forfeitures
|
15
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(2,971
|
)
|
|
(15,557
|
)
|
|
(91,541
|
)
|
|
—
|
|
|
—
|
|
|
(110,069
|
)
|
|||||||
Other
|
53
|
|
|
—
|
|
|
1,927
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,980
|
|
|||||||
Balance at June 30, 2018
|
$
|
192,625
|
|
|
$
|
(11,387
|
)
|
|
$
|
954,128
|
|
|
$
|
314,669
|
|
|
$
|
26,217
|
|
|
$
|
145
|
|
|
$
|
1,476,397
|
|
1.
|
Nature of Operations
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
243,684
|
|
|
$
|
198,850
|
|
Restricted cash(1):
|
|
|
|
||||
Included in Other current assets
|
5,716
|
|
|
7,007
|
|
||
Included in Deferred charges and other assets
|
1,745
|
|
|
1,727
|
|
||
Total restricted cash
|
7,461
|
|
|
8,734
|
|
||
Total cash, cash equivalents, and restricted cash
|
$
|
251,145
|
|
|
$
|
207,584
|
|
(1)
|
Restricted cash in both periods primarily consists of proceeds from divestitures deposited into escrow accounts under IRS code section 1031 and collateralized obligations under certain insurance policies.
|
•
|
a $0.7 million reclass from Other current assets to Accounts payable and accrued liabilities for prepaid operating lease expenses,
|
•
|
a $2.7 million reclass from Accounts payable and accrued liabilities to Deferred charges and other assets for accrued operating lease expenses,
|
•
|
a $62.6 million increase to Deferred charges and other assets for operating lease right-of-use assets, and
|
•
|
a $9.4 million and $53.2 million increase to Accounts payable and accrued liabilities and Other liabilities, respectively, for operating lease liabilities.
|
•
|
whether a contract is or contains a lease,
|
•
|
lease classification, or
|
•
|
initial direct costs.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In thousands)
|
||||||
Preneed funeral receivables
|
$
|
120,424
|
|
|
$
|
107,612
|
|
Preneed cemetery receivables
|
896,550
|
|
|
883,432
|
|
||
Preneed receivables from customers
|
1,016,974
|
|
|
991,044
|
|
||
Unearned finance charge
|
(50,402
|
)
|
|
(44,981
|
)
|
||
Allowance for cancellation
|
(50,520
|
)
|
|
(48,380
|
)
|
||
Preneed receivables, net
|
$
|
916,052
|
|
|
$
|
897,683
|
|
|
|
|
|
||||
Trust investments, at market
|
$
|
5,058,591
|
|
|
$
|
4,585,720
|
|
Insurance-backed fixed income securities and other
|
263,589
|
|
|
265,787
|
|
||
Trust investments
|
5,322,180
|
|
|
4,851,507
|
|
||
Less: Cemetery perpetual care trust investments
|
(1,624,709
|
)
|
|
(1,477,798
|
)
|
||
Preneed trust investments
|
$
|
3,697,471
|
|
|
$
|
3,373,709
|
|
|
|
|
|
||||
Preneed receivables, net and trust investments
|
$
|
4,613,523
|
|
|
$
|
4,271,392
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands)
|
||||||||||||||
Deposits
|
$
|
112,905
|
|
|
$
|
106,843
|
|
|
$
|
213,357
|
|
|
$
|
200,112
|
|
Withdrawals
|
$
|
116,680
|
|
|
$
|
114,524
|
|
|
$
|
224,036
|
|
|
$
|
221,293
|
|
Purchases of securities
|
$
|
240,376
|
|
|
$
|
407,859
|
|
|
$
|
689,534
|
|
|
$
|
1,007,748
|
|
Sales of securities
|
$
|
240,599
|
|
|
$
|
419,357
|
|
|
$
|
562,390
|
|
|
$
|
1,035,357
|
|
Realized gains (1)
|
$
|
54,756
|
|
|
$
|
87,840
|
|
|
$
|
98,281
|
|
|
$
|
146,146
|
|
Realized losses (1)
|
$
|
(16,251
|
)
|
|
$
|
(17,552
|
)
|
|
$
|
(48,882
|
)
|
|
$
|
(29,852
|
)
|
(1)
|
All realized gains and losses are recognized in Other income, net for our trust investments and are offset by a corresponding reclassification in Other income, net to Deferred receipts held in trust and Care trusts' corpus.
|
|
June 30, 2019
|
||||||||||||||||
|
Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Value
|
||||||||
|
|
|
|
|
(In thousands)
|
|
|
||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
2
|
|
$
|
49,425
|
|
|
$
|
666
|
|
|
$
|
(141
|
)
|
|
$
|
49,950
|
|
Canadian government
|
2
|
|
49,627
|
|
|
118
|
|
|
(1,196
|
)
|
|
48,549
|
|
||||
Corporate
|
2
|
|
13,194
|
|
|
53
|
|
|
(233
|
)
|
|
13,014
|
|
||||
Residential mortgage-backed
|
2
|
|
3,311
|
|
|
48
|
|
|
(1
|
)
|
|
3,358
|
|
||||
Asset-backed
|
2
|
|
134
|
|
|
3
|
|
|
(7
|
)
|
|
130
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Preferred stock
|
2
|
|
6,114
|
|
|
498
|
|
|
(116
|
)
|
|
6,496
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
|
|
||||||||
United States
|
1
|
|
1,280,063
|
|
|
272,490
|
|
|
(60,342
|
)
|
|
1,492,211
|
|
||||
Canada
|
1
|
|
38,568
|
|
|
10,489
|
|
|
(1,824
|
)
|
|
47,233
|
|
||||
Other international
|
1
|
|
83,107
|
|
|
14,817
|
|
|
(2,952
|
)
|
|
94,972
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
1
|
|
842,772
|
|
|
27,898
|
|
|
(82,654
|
)
|
|
788,016
|
|
||||
Fixed income
|
1
|
|
1,235,660
|
|
|
12,608
|
|
|
(38,365
|
)
|
|
1,209,903
|
|
||||
Other
|
3
|
|
6,010
|
|
|
578
|
|
|
—
|
|
|
6,588
|
|
||||
Trust investments, at fair value
|
|
|
3,607,985
|
|
|
340,266
|
|
|
(187,831
|
)
|
|
3,760,420
|
|
||||
Commingled funds
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income
|
|
|
432,113
|
|
|
5,185
|
|
|
(3,083
|
)
|
|
434,215
|
|
||||
Equity
|
|
|
209,194
|
|
|
48,175
|
|
|
—
|
|
|
257,369
|
|
||||
Money market funds
|
|
|
343,467
|
|
|
—
|
|
|
—
|
|
|
343,467
|
|
||||
Private equity
|
|
|
189,107
|
|
|
74,110
|
|
|
(97
|
)
|
|
263,120
|
|
||||
Trust investments, at net asset value
|
|
|
1,173,881
|
|
|
127,470
|
|
|
(3,180
|
)
|
|
1,298,171
|
|
||||
Trust investments, at market
|
|
|
$
|
4,781,866
|
|
|
$
|
467,736
|
|
|
$
|
(191,011
|
)
|
|
$
|
5,058,591
|
|
|
December 31, 2018
|
||||||||||||||||
|
Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Value
|
||||||||
|
|
|
|
|
(In thousands)
|
|
|
||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
2
|
|
$
|
49,187
|
|
|
$
|
153
|
|
|
$
|
(448
|
)
|
|
$
|
48,892
|
|
Canadian government
|
2
|
|
56,343
|
|
|
23
|
|
|
(1,797
|
)
|
|
54,569
|
|
||||
Corporate
|
2
|
|
19,869
|
|
|
13
|
|
|
(516
|
)
|
|
19,366
|
|
||||
Residential mortgage-backed
|
2
|
|
3,611
|
|
|
10
|
|
|
(50
|
)
|
|
3,571
|
|
||||
Asset-backed
|
2
|
|
142
|
|
|
2
|
|
|
(11
|
)
|
|
133
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Preferred stock
|
2
|
|
9,058
|
|
|
180
|
|
|
(412
|
)
|
|
8,826
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
|
|
||||||||
United States
|
1
|
|
1,236,513
|
|
|
149,233
|
|
|
(138,141
|
)
|
|
1,247,605
|
|
||||
Canada
|
1
|
|
34,821
|
|
|
9,082
|
|
|
(3,026
|
)
|
|
40,877
|
|
||||
Other international
|
1
|
|
77,676
|
|
|
6,057
|
|
|
(10,275
|
)
|
|
73,458
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
1
|
|
760,887
|
|
|
7,104
|
|
|
(151,853
|
)
|
|
616,138
|
|
||||
Fixed income
|
1
|
|
1,180,325
|
|
|
800
|
|
|
(89,179
|
)
|
|
1,091,946
|
|
||||
Other
|
3
|
|
6,548
|
|
|
3,210
|
|
|
(3
|
)
|
|
9,755
|
|
||||
Trust investments, at fair value
|
|
|
3,434,980
|
|
|
175,867
|
|
|
(395,711
|
)
|
|
3,215,136
|
|
||||
Commingled funds
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income
|
|
|
419,206
|
|
|
2,419
|
|
|
(18,981
|
)
|
|
402,644
|
|
||||
Equity
|
|
|
205,789
|
|
|
19,567
|
|
|
(11,723
|
)
|
|
213,633
|
|
||||
Money market funds
|
|
|
466,429
|
|
|
—
|
|
|
—
|
|
|
466,429
|
|
||||
Private equity
|
|
|
215,618
|
|
|
72,897
|
|
|
(637
|
)
|
|
287,878
|
|
||||
Trust investments, at net asset value
|
|
|
1,307,042
|
|
|
94,883
|
|
|
(31,341
|
)
|
|
1,370,584
|
|
||||
Trust investments, at market
|
|
|
$
|
4,742,022
|
|
|
$
|
270,750
|
|
|
$
|
(427,052
|
)
|
|
$
|
4,585,720
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands)
|
||||||||||||||
Fair value, beginning balance
|
$
|
7,108
|
|
|
$
|
8,533
|
|
|
$
|
9,755
|
|
|
$
|
9,067
|
|
Net unrealized (losses) gains included in Other income, net(1)
|
(322
|
)
|
|
264
|
|
|
(1,464
|
)
|
|
(270
|
)
|
||||
Purchases
|
5
|
|
|
7
|
|
|
5
|
|
|
7
|
|
||||
Sales
|
(203
|
)
|
|
—
|
|
|
(1,708
|
)
|
|
—
|
|
||||
Acquisitions
|
—
|
|
|
11,390
|
|
|
—
|
|
|
11,390
|
|
||||
Fair value, ending balance
|
$
|
6,588
|
|
|
$
|
20,194
|
|
|
$
|
6,588
|
|
|
$
|
20,194
|
|
(1)
|
All net unrealized gains (losses) recognized in Other income, net for our trust investments are offset by a corresponding reclassification in Other income, net to Deferred receipts held in trust and Care trusts' corpus.
|
|
Fair Value
|
||
|
(In thousands)
|
||
Due in one year or less
|
$
|
53,448
|
|
Due in one to five years
|
52,187
|
|
|
Due in five to ten years
|
9,253
|
|
|
Thereafter
|
113
|
|
|
Total estimated maturities of fixed income securities
|
$
|
115,001
|
|
|
June 30, 2019
|
||||||||||||||||||||||
|
In Loss Position
Less Than 12 Months
|
|
In Loss Position
Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Value
|
|
Unrealized
Losses
|
|
Value
|
|
Unrealized
Losses
|
|
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
2,898
|
|
|
$
|
(113
|
)
|
|
$
|
4,830
|
|
|
$
|
(28
|
)
|
|
$
|
7,728
|
|
|
$
|
(141
|
)
|
Canadian government
|
—
|
|
|
—
|
|
|
18,246
|
|
|
(1,196
|
)
|
|
18,246
|
|
|
(1,196
|
)
|
||||||
Corporate
|
979
|
|
|
(2
|
)
|
|
7,384
|
|
|
(231
|
)
|
|
8,363
|
|
|
(233
|
)
|
||||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
50
|
|
|
(1
|
)
|
|
50
|
|
|
(1
|
)
|
||||||
Asset-backed
|
—
|
|
|
—
|
|
|
24
|
|
|
(7
|
)
|
|
24
|
|
|
(7
|
)
|
||||||
Total temporarily impaired fixed income securities
|
$
|
3,877
|
|
|
$
|
(115
|
)
|
|
$
|
30,534
|
|
|
$
|
(1,463
|
)
|
|
$
|
34,411
|
|
|
$
|
(1,578
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
In Loss Position
Less Than 12 Months
|
|
In Loss Position
Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Value
|
|
Unrealized
Losses
|
|
Value
|
|
Unrealized
Losses
|
|
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury
|
$
|
6,899
|
|
|
$
|
(226
|
)
|
|
$
|
16,374
|
|
|
$
|
(222
|
)
|
|
$
|
23,273
|
|
|
$
|
(448
|
)
|
Canadian government
|
2,254
|
|
|
(9
|
)
|
|
25,330
|
|
|
(1,788
|
)
|
|
27,584
|
|
|
(1,797
|
)
|
||||||
Corporate
|
11,579
|
|
|
(206
|
)
|
|
6,563
|
|
|
(310
|
)
|
|
18,142
|
|
|
(516
|
)
|
||||||
Residential mortgage-backed
|
351
|
|
|
(4
|
)
|
|
3,010
|
|
|
(46
|
)
|
|
3,361
|
|
|
(50
|
)
|
||||||
Asset-backed
|
—
|
|
|
—
|
|
|
79
|
|
|
(11
|
)
|
|
79
|
|
|
(11
|
)
|
||||||
Total temporarily impaired fixed income securities
|
$
|
21,083
|
|
|
$
|
(445
|
)
|
|
$
|
51,356
|
|
|
$
|
(2,377
|
)
|
|
$
|
72,439
|
|
|
$
|
(2,822
|
)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In thousands)
|
||||||
Deferred revenue
|
$
|
2,020,663
|
|
|
$
|
1,989,232
|
|
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts
|
(576,099
|
)
|
|
(570,418
|
)
|
||
Deferred revenue, net
|
$
|
1,444,564
|
|
|
$
|
1,418,814
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Beginning balance — Deferred revenue, net and Deferred receipts held in trust
|
$
|
4,790,552
|
|
|
$
|
5,265,206
|
|
Cumulative effect of accounting changes
|
—
|
|
|
37,991
|
|
||
Net preneed contract sales
|
496,842
|
|
|
505,146
|
|
||
(Divestitures) acquisitions of businesses, net
|
(29,665
|
)
|
|
148,048
|
|
||
Net investment gains (1)
|
327,819
|
|
|
20,720
|
|
||
Recognized revenue from backlog (2)
|
(212,912
|
)
|
|
(212,195
|
)
|
||
Recognized revenue from current period sales
|
(241,589
|
)
|
|
(242,438
|
)
|
||
Change in amounts due on unfulfilled performance obligations
|
(3,770
|
)
|
|
(551,092
|
)
|
||
Change in cancellation reserve
|
(206
|
)
|
|
62,147
|
|
||
Effect of foreign currency and other
|
10,848
|
|
|
(12,554
|
)
|
||
Ending balance — Deferred revenue, net and Deferred receipts held in trust
|
$
|
5,137,919
|
|
|
$
|
5,020,979
|
|
(1)
|
Includes both realized and unrealized investment earnings.
|
(2)
|
Includes current year trust fund income through the date of performance.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In thousands)
|
||||||
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
|
98,906
|
|
|
425,000
|
|
||
5.375% Senior Notes due May 2024
|
850,000
|
|
|
850,000
|
|
||
7.5% Senior Notes due April 2027
|
184,350
|
|
|
200,000
|
|
||
4.625% Senior Notes due December 2027
|
550,000
|
|
|
550,000
|
|
||
5.125% Senior Notes due June 2029
|
750,000
|
|
|
—
|
|
||
Term Loan due December 2022
|
—
|
|
|
641,250
|
|
||
Term Loan due May 2024
|
650,000
|
|
|
—
|
|
||
Bank Credit Facility due December 2022
|
—
|
|
|
395,000
|
|
||
Obligations under finance leases
|
197,230
|
|
|
211,952
|
|
||
Mortgage notes and other debt, maturities through 2050
|
34,825
|
|
|
4,076
|
|
||
Unamortized premiums, net
|
6,103
|
|
|
6,562
|
|
||
Unamortized debt issuance costs
|
(39,428
|
)
|
|
(31,762
|
)
|
||
Total debt
|
3,631,986
|
|
|
3,602,078
|
|
||
Less: Current maturities of long-term debt
|
(167,084
|
)
|
|
(69,896
|
)
|
||
Total long-term debt
|
$
|
3,464,902
|
|
|
$
|
3,532,182
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In thousands)
|
||||||
4.5% Senior Notes due November 2020
|
$
|
200,376
|
|
|
$
|
198,930
|
|
8.0% Senior Notes due November 2021
|
164,437
|
|
|
160,800
|
|
||
5.375% Senior Notes due January 2022
|
99,212
|
|
|
428,188
|
|
||
5.375% Senior Notes due May 2024
|
876,724
|
|
|
851,275
|
|
||
7.5% Senior Notes due April 2027
|
221,275
|
|
|
214,940
|
|
||
4.625% Senior Notes due December 2027
|
566,671
|
|
|
517,077
|
|
||
5.125% Senior Notes due June 2029
|
793,125
|
|
|
—
|
|
||
Term Loan due December 2022
|
—
|
|
|
629,579
|
|
||
Term Loan due May 2024
|
650,000
|
|
|
—
|
|
||
Bank Credit Facility due December 2022
|
—
|
|
|
387,061
|
|
||
Mortgage notes and other debt, maturities through 2050
|
34,824
|
|
|
4,076
|
|
||
Total fair value of debt instruments
|
$
|
3,606,644
|
|
|
$
|
3,391,926
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenue from customers:
|
|
|
|
|
|
|
|
||||||||
Funeral revenue:
|
|
|
|
|
|
|
|
||||||||
Atneed revenue
|
$
|
245,418
|
|
|
$
|
243,013
|
|
|
$
|
504,148
|
|
|
$
|
517,512
|
|
Matured preneed revenue
|
148,584
|
|
|
146,045
|
|
|
305,034
|
|
|
311,374
|
|
||||
Core funeral revenue
|
394,002
|
|
|
389,058
|
|
|
809,182
|
|
|
828,886
|
|
||||
Non-funeral home revenue
|
13,121
|
|
|
11,836
|
|
|
26,094
|
|
|
25,513
|
|
||||
Recognized preneed revenue
|
39,728
|
|
|
33,919
|
|
|
71,053
|
|
|
66,379
|
|
||||
Other revenue
|
32,127
|
|
|
33,835
|
|
|
65,443
|
|
|
62,235
|
|
||||
Total funeral revenue
|
478,978
|
|
|
468,648
|
|
|
971,772
|
|
|
983,013
|
|
||||
Cemetery revenue:
|
|
|
|
|
|
|
|
||||||||
Atneed revenue
|
82,286
|
|
|
80,941
|
|
|
163,737
|
|
|
163,985
|
|
||||
Recognized preneed property revenue
|
151,875
|
|
|
143,166
|
|
|
280,487
|
|
|
252,106
|
|
||||
Recognized preneed merchandise and service revenue
|
73,570
|
|
|
73,130
|
|
|
140,609
|
|
|
141,493
|
|
||||
Core revenue
|
307,731
|
|
|
297,237
|
|
|
584,833
|
|
|
557,584
|
|
||||
Other revenue
|
25,863
|
|
|
30,207
|
|
|
54,179
|
|
|
49,977
|
|
||||
Total cemetery revenue
|
333,594
|
|
|
327,444
|
|
|
639,012
|
|
|
607,561
|
|
||||
Total revenue from customers
|
$
|
812,572
|
|
|
$
|
796,092
|
|
|
$
|
1,610,784
|
|
|
$
|
1,590,574
|
|
Operating profit:
|
|
|
|
|
|
|
|
||||||||
Funeral operating profit
|
$
|
90,590
|
|
|
$
|
90,421
|
|
|
$
|
196,008
|
|
|
$
|
210,876
|
|
Cemetery operating profit
|
100,556
|
|
|
97,706
|
|
|
186,972
|
|
|
173,013
|
|
||||
Operating profit from reportable segments
|
191,146
|
|
|
188,127
|
|
|
382,980
|
|
|
383,889
|
|
||||
General and administrative expenses
|
(29,370
|
)
|
|
(31,136
|
)
|
|
(71,900
|
)
|
|
(65,920
|
)
|
||||
(Losses) gains on divestitures and impairment charges, net
|
(11,823
|
)
|
|
6,865
|
|
|
(13,701
|
)
|
|
7,347
|
|
||||
Hurricane recoveries (expenses), net
|
152
|
|
|
(1,902
|
)
|
|
(296
|
)
|
|
330
|
|
||||
Operating income
|
150,105
|
|
|
161,954
|
|
|
297,083
|
|
|
325,646
|
|
||||
Interest expense
|
(47,317
|
)
|
|
(44,519
|
)
|
|
(94,707
|
)
|
|
(88,095
|
)
|
||||
Loss on early extinguishment of debt, net
|
(7,579
|
)
|
|
—
|
|
|
(7,579
|
)
|
|
(10,131
|
)
|
||||
Other income, net
|
874
|
|
|
1,880
|
|
|
1,594
|
|
|
2,264
|
|
||||
Income before income taxes
|
$
|
96,083
|
|
|
$
|
119,315
|
|
|
$
|
196,391
|
|
|
$
|
229,684
|
|
|
United States
|
|
Canada
|
|
Total
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Three Months Ended June 30,
|
|
|
|
|
|
||||||
Revenue from external customers:
|
|
|
|
|
|
||||||
2019
|
$
|
767,394
|
|
|
$
|
45,178
|
|
|
$
|
812,572
|
|
2018
|
$
|
750,445
|
|
|
$
|
45,647
|
|
|
$
|
796,092
|
|
Six Months Ended June 30,
|
|
|
|
|
|
||||||
Revenue from external customers:
|
|
|
|
|
|
||||||
2019
|
$
|
1,521,474
|
|
|
$
|
89,310
|
|
|
$
|
1,610,784
|
|
2018
|
$
|
1,494,558
|
|
|
$
|
96,016
|
|
|
$
|
1,590,574
|
|
|
Operating
|
|
Finance
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
2019 (excluding the six months ended June 30, 2019)
|
$
|
5,408
|
|
|
$
|
23,722
|
|
|
$
|
29,130
|
|
2020
|
11,343
|
|
|
43,681
|
|
|
55,024
|
|
|||
2021
|
10,056
|
|
|
61,946
|
|
|
72,002
|
|
|||
2022
|
8,928
|
|
|
25,721
|
|
|
34,649
|
|
|||
2023
|
6,759
|
|
|
18,614
|
|
|
25,373
|
|
|||
Thereafter
|
45,164
|
|
|
47,754
|
|
|
92,918
|
|
|||
Total lease payments
|
$
|
87,658
|
|
|
$
|
221,438
|
|
|
$
|
309,096
|
|
Less: Interest
|
(23,051
|
)
|
|
(24,208
|
)
|
|
(47,259
|
)
|
|||
Present value of lease liabilities
|
$
|
64,607
|
|
|
$
|
197,230
|
|
|
$
|
261,837
|
|
|
Operating
|
|
Finance
|
||||
|
(In thousands)
|
||||||
2019
|
$
|
11,295
|
|
|
$
|
46,998
|
|
2020
|
9,550
|
|
|
51,943
|
|
||
2021
|
8,251
|
|
|
57,881
|
|
||
2022
|
7,282
|
|
|
21,842
|
|
||
2023
|
5,397
|
|
|
15,587
|
|
||
2024 and thereafter
|
37,841
|
|
|
40,447
|
|
||
Total
|
$
|
79,616
|
|
|
$
|
234,698
|
|
Less: Interest on finance leases
|
|
|
(22,746
|
)
|
|||
Total principal payable on finance leases
|
|
|
$
|
211,952
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
|
(In thousands)
|
||||||
Amortization of leased assets
|
$
|
10,348
|
|
|
$
|
21,312
|
|
Interest on lease liabilities
|
1,453
|
|
|
3,284
|
|
||
Total finance lease cost
|
11,801
|
|
|
24,596
|
|
||
Operating lease cost
|
3,074
|
|
|
6,268
|
|
||
Variable lease cost
|
420
|
|
|
792
|
|
||
Total lease cost
|
$
|
15,295
|
|
|
$
|
31,656
|
|
Lease Type
|
|
Balance Sheet Classification
|
|
June 30, 2019
|
||
|
|
|
|
(In thousands)
|
||
Operating lease right-of-use assets (1)
|
|
Deferred charges and other assets
|
|
$
|
62,383
|
|
Finance lease right-of-use assets (1)
|
|
Property and equipment, net
|
|
190,889
|
|
|
Total right-of-use assets (1)
|
|
|
|
$
|
253,272
|
|
|
|
|
|
|
||
Operating
|
|
Accounts payable and accrued liabilities
|
|
$
|
8,472
|
|
Finance
|
|
Current maturities of long-term debt
|
|
39,940
|
|
|
Total current lease liabilities
|
|
|
|
48,412
|
|
|
Operating
|
|
Other liabilities
|
|
56,135
|
|
|
Finance
|
|
Long-term debt
|
|
157,290
|
|
|
Total non-current lease liabilities
|
|
|
|
213,425
|
|
|
Total lease liabilities
|
|
|
|
$
|
261,837
|
|
(1)
|
Right-of-use assets are presented net of accumulated amortization.
|
|
Operating
|
|
Finance
|
||
Weighted-average remaining lease term (years)
|
12.2
|
|
|
5.2
|
|
Weighted-average discount rate
|
4.7
|
%
|
|
3.5
|
%
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
|
(In thousands)
|
||||||
Cash paid for amounts in the measurement of lease liabilities
|
|
|
|
||||
Operating cash flows for operating leases
|
$
|
3,124
|
|
|
$
|
6,217
|
|
Operating cash flows for finance leases
|
1,773
|
|
|
3,721
|
|
||
Financing cash flows for finance leases
|
11,163
|
|
|
21,820
|
|
||
Total cash paid for amounts included in the measurement of lease liabilities
|
$
|
16,060
|
|
|
$
|
31,758
|
|
|
|
|
|
||||
Right-of-use assets obtained in exchange for new finance lease liabilities
|
$
|
15,308
|
|
|
$
|
34,474
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
2,125
|
|
|
$
|
6,365
|
|
2019 (excluding the six months ended June 30, 2019)
|
$
|
1,341
|
|
2020
|
1,772
|
|
|
2021
|
1,417
|
|
|
2022
|
1,092
|
|
|
2023
|
504
|
|
|
Thereafter
|
243
|
|
|
Total cash receipts
|
$
|
6,369
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Amounts attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Net income:
|
|
|
|
|
|
|
|
||||||||
Net income — basic
|
$
|
72,329
|
|
|
$
|
103,239
|
|
|
$
|
151,652
|
|
|
$
|
185,227
|
|
After tax interest on convertible debt
|
—
|
|
|
15
|
|
|
—
|
|
|
30
|
|
||||
Net income — diluted
|
$
|
72,329
|
|
|
$
|
103,254
|
|
|
$
|
151,652
|
|
|
$
|
185,257
|
|
Weighted average shares (denominator):
|
|
|
|
|
|
|
|
||||||||
Weighted average shares — basic
|
182,369
|
|
|
182,637
|
|
|
182,048
|
|
|
183,877
|
|
||||
Stock options
|
3,278
|
|
|
4,265
|
|
|
3,418
|
|
|
4,391
|
|
||||
Restricted stock units
|
43
|
|
|
165
|
|
|
51
|
|
|
158
|
|
||||
Convertible debt
|
—
|
|
|
121
|
|
|
—
|
|
|
121
|
|
||||
Weighted average shares — diluted
|
185,690
|
|
|
187,188
|
|
|
185,517
|
|
|
188,547
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.40
|
|
|
$
|
0.57
|
|
|
$
|
0.83
|
|
|
$
|
1.01
|
|
Diluted
|
$
|
0.39
|
|
|
$
|
0.55
|
|
|
$
|
0.82
|
|
|
$
|
0.98
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||||||
Antidilutive options
|
105
|
|
|
1,155
|
|
|
—
|
|
|
868
|
|
Increase in the fair value of preneed receivables, net and trust investments
|
|
$
|
(3,056
|
)
|
Increase in the fair value of cemetery property
|
|
(3,511
|
)
|
|
Decrease in the fair value of preneed customer relationship intangible assets
|
|
11,996
|
|
|
Increase in the fair value of current liabilities
|
|
3,019
|
|
|
Decrease in the fair value of deferred revenue and deferred receipts held in trust
|
|
(14,156
|
)
|
|
Decrease in the fair value of deferred income taxes
|
|
(6,883
|
)
|
|
Other
|
|
(191
|
)
|
|
Total adjustment to goodwill
|
|
$
|
(12,782
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands)
|
||||||||||||||
(Losses) gains on divestitures, net
|
$
|
(9,643
|
)
|
|
$
|
6,865
|
|
|
$
|
(9,097
|
)
|
|
$
|
8,141
|
|
Impairment losses
|
(2,180
|
)
|
|
—
|
|
|
(4,604
|
)
|
|
(794
|
)
|
||||
(Losses) gains on divestitures and impairment charges, net
|
$
|
(11,823
|
)
|
|
$
|
6,865
|
|
|
$
|
(13,701
|
)
|
|
$
|
7,347
|
|
|
Per Credit Agreement
|
|
Actual
|
Leverage ratio
|
4.75 (Max)
|
|
3.89
|
Interest coverage ratio
|
3.00 (Min)
|
|
4.83
|
•
|
a $22.4 million increase in vendor and other payments,
|
•
|
a $21.1 million increase in employee compensation,
|
•
|
a $18.7 million increase in cash tax recurring payments,
|
•
|
a $11.8 million increase in net trust deposits, and
|
•
|
a $8.2 million increase in cash interest paid, partially offset by
|
•
|
a $31.0 million increase in cash receipts from customers, and
|
•
|
a $10.7 million increase in General Agency (GA) and other receipts.
|
•
|
a $9.8 million increase in capital expenditures primarily due to improvements at existing funeral homes,
|
•
|
a $6.9 million decrease in cash receipts from divestitures and asset sales, and
|
•
|
a $2.9 million decrease in proceeds from sale of other investments.
|
•
|
a $102.4 million decrease in proceeds from the issuance of debt, net of payments, and
|
•
|
a $3.5 million increase in payments of dividends.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Preneed funeral
|
$
|
91.9
|
|
|
$
|
106.9
|
|
Preneed cemetery:
|
|
|
|
||||
Merchandise and services
|
143.6
|
|
|
137.9
|
|
||
Pre-construction
|
16.4
|
|
|
15.4
|
|
||
Bonds supporting preneed obligations
|
251.9
|
|
|
260.2
|
|
||
Bonds supporting preneed business permits
|
4.7
|
|
|
4.2
|
|
||
Other bonds
|
18.8
|
|
|
18.9
|
|
||
Total surety bonds outstanding
|
$
|
275.4
|
|
|
$
|
283.3
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Preneed insurance-funded:
|
|
|
|
|
|
|
|
||||||||
Sales production (1)
|
$
|
149.5
|
|
|
$
|
148.1
|
|
|
$
|
285.6
|
|
|
$
|
274.7
|
|
Sales production (number of contracts) (1)
|
26,215
|
|
|
25,232
|
|
|
50,127
|
|
|
46,821
|
|
||||
General agency revenue
|
$
|
34.2
|
|
|
$
|
36.1
|
|
|
$
|
70.2
|
|
|
$
|
67.6
|
|
Maturities
|
$
|
84.2
|
|
|
$
|
82.7
|
|
|
$
|
175.3
|
|
|
$
|
179.1
|
|
Maturities (number of contracts)
|
14,365
|
|
|
14,020
|
|
|
29,978
|
|
|
30,251
|
|
(1)
|
Amounts are not included in our unaudited Condensed Consolidated Balance Sheet.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Funeral:
|
|
|
|
|
|
|
|
||||||||
Preneed trust-funded (including bonded):
|
|
|
|
|
|
|
|
||||||||
Sales production
|
$
|
102.9
|
|
|
$
|
92.3
|
|
|
$
|
196.1
|
|
|
$
|
185.0
|
|
Sales production (number of contracts)
|
28,257
|
|
|
25,123
|
|
|
53,349
|
|
|
50,996
|
|
||||
Maturities
|
$
|
72.4
|
|
|
$
|
70.5
|
|
|
$
|
145.5
|
|
|
$
|
147.6
|
|
Maturities (number of contracts)
|
18,140
|
|
|
17,182
|
|
|
36,843
|
|
|
36,843
|
|
||||
Cemetery:
|
|
|
|
|
|
|
|
||||||||
Sales production:
|
|
|
|
|
|
|
|
||||||||
Preneed
|
$
|
240.5
|
|
|
$
|
245.6
|
|
|
$
|
457.2
|
|
|
$
|
447.1
|
|
Atneed
|
83.5
|
|
|
79.9
|
|
|
165.5
|
|
|
165.0
|
|
||||
Total sales production
|
$
|
324.0
|
|
|
$
|
325.5
|
|
|
$
|
622.7
|
|
|
$
|
612.1
|
|
Sales production deferred to backlog:
|
|
|
|
|
|
|
|
||||||||
Preneed
|
$
|
102.3
|
|
|
$
|
120.2
|
|
|
$
|
196.2
|
|
|
$
|
217.4
|
|
Atneed
|
61.5
|
|
|
59.4
|
|
|
122.3
|
|
|
122.7
|
|
||||
Total sales production deferred to backlog
|
$
|
163.8
|
|
|
$
|
179.6
|
|
|
$
|
318.5
|
|
|
$
|
340.1
|
|
Revenue recognized from backlog:
|
|
|
|
|
|
|
|
||||||||
Preneed
|
$
|
74.3
|
|
|
$
|
81.2
|
|
|
$
|
137.5
|
|
|
$
|
138.2
|
|
Atneed
|
59.4
|
|
|
59.5
|
|
|
119.0
|
|
|
120.4
|
|
||||
Total revenue recognized from backlog
|
$
|
133.7
|
|
|
$
|
140.7
|
|
|
$
|
256.5
|
|
|
$
|
258.6
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Cost
|
|
Fair Value
|
|
Cost
|
||||||||
|
|
|
(In billions)
|
|
|
||||||||||
Deferred revenue, net
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.42
|
|
|
$
|
1.42
|
|
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts
|
0.58
|
|
|
0.58
|
|
|
0.57
|
|
|
0.57
|
|
||||
Deferred receipts held in trust
|
3.69
|
|
|
3.49
|
|
|
3.37
|
|
|
3.47
|
|
||||
Allowance for cancellation
|
(0.27
|
)
|
|
(0.25
|
)
|
|
(0.24
|
)
|
|
(0.25
|
)
|
||||
Backlog of trust-funded deferred revenue, net of estimated allowance for cancellation
|
$
|
5.44
|
|
|
$
|
5.26
|
|
|
$
|
5.12
|
|
|
$
|
5.21
|
|
Backlog of insurance-funded deferred revenue(1)
|
6.16
|
|
|
6.16
|
|
|
5.97
|
|
|
5.97
|
|
||||
Total backlog of deferred revenue
|
$
|
11.60
|
|
|
$
|
11.42
|
|
|
$
|
11.09
|
|
|
$
|
11.18
|
|
Preneed receivables, net and trust investments
|
$
|
4.61
|
|
|
$
|
4.41
|
|
|
$
|
4.27
|
|
|
$
|
4.37
|
|
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts
|
0.58
|
|
|
0.58
|
|
|
0.57
|
|
|
0.57
|
|
||||
Allowance for cancellation on trust investments
|
(0.27
|
)
|
|
(0.25
|
)
|
|
(0.24
|
)
|
|
(0.25
|
)
|
||||
Assets associated with backlog of trust-funded deferred revenue, net of estimated allowance for cancellation
|
$
|
4.92
|
|
|
$
|
4.74
|
|
|
$
|
4.60
|
|
|
$
|
4.69
|
|
Insurance policies associated with insurance-funded deferred revenue(1)
|
6.16
|
|
|
6.16
|
|
|
5.97
|
|
|
5.97
|
|
||||
Total assets associated with backlog of preneed deferred revenue
|
$
|
11.08
|
|
|
$
|
10.90
|
|
|
$
|
10.57
|
|
|
$
|
10.66
|
|
(1)
|
Amounts are not included in our unaudited Condensed Consolidated Balance Sheet.
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Pre-tax (losses) gains from divestitures and impairment, net
|
$
|
(11.8
|
)
|
|
$
|
6.9
|
|
Pre-tax loss from the early extinguishment of debt
|
$
|
(7.6
|
)
|
|
$
|
—
|
|
Pre-tax legal settlement
|
$
|
1.6
|
|
|
$
|
—
|
|
Tax effect from above items
|
$
|
4.2
|
|
|
$
|
(2.2
|
)
|
Change in certain tax reserves
|
$
|
(1.2
|
)
|
|
$
|
16.1
|
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in millions, except average revenue per service)
|
||||||
Consolidated funeral revenue
|
$
|
479.0
|
|
|
$
|
468.6
|
|
Less: Revenue associated with acquisitions/new construction
|
9.2
|
|
|
2.6
|
|
||
Less: Revenue associated with divestitures
|
0.3
|
|
|
1.7
|
|
||
Comparable (1) funeral revenue
|
469.5
|
|
|
464.3
|
|
||
Less: Comparable recognized preneed revenue
|
39.1
|
|
|
33.8
|
|
||
Less: Comparable general agency and other revenue
|
31.6
|
|
|
33.9
|
|
||
Adjusted comparable funeral revenue
|
$
|
398.8
|
|
|
$
|
396.6
|
|
Comparable services performed
|
76,439
|
|
|
74,913
|
|
||
Comparable average revenue per service(2)
|
$
|
5,217
|
|
|
$
|
5,294
|
|
|
|
|
|
||||
Consolidated funeral operating profit
|
$
|
90.6
|
|
|
$
|
90.4
|
|
Less: Operating loss associated with acquisitions/new construction
|
(0.6
|
)
|
|
0.1
|
|
||
Less: Operating loss associated with divestitures
|
(0.2
|
)
|
|
(1.5
|
)
|
||
Comparable funeral operating profit
|
$
|
91.4
|
|
|
$
|
91.8
|
|
(1)
|
We define comparable (or same store) operations as those funeral locations owned by us for the entire period beginning January 1, 2018 and ending June 30, 2019.
|
(2)
|
We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding recognized preneed revenue, general agency 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 are preneed sales of merchandise that are delivered at the time of sale, including memorial merchandise and travel protection, net and are excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Consolidated cemetery revenue
|
$
|
333.6
|
|
|
$
|
327.4
|
|
Less: Revenue associated with acquisitions/new construction
|
5.3
|
|
|
1.3
|
|
||
Less: Revenue associated with divestitures
|
0.3
|
|
|
0.5
|
|
||
Comparable (1) cemetery revenue
|
$
|
328.0
|
|
|
$
|
325.6
|
|
|
|
|
|
||||
Consolidated cemetery operating profit
|
$
|
100.6
|
|
|
$
|
97.7
|
|
Less: Operating profit associated with acquisitions/new construction
|
0.9
|
|
|
0.3
|
|
||
Less: Operating profit associated with divestitures
|
0.1
|
|
|
0.1
|
|
||
Comparable cemetery operating profit
|
$
|
99.6
|
|
|
$
|
97.3
|
|
(1)
|
We define comparable (or same store) operations as those cemetery locations owned by us for the entire period beginning January 1, 2018 and ending June 30, 2019.
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Pre-tax (losses) gains from divestitures and impairment charges, net
|
$
|
(13.7
|
)
|
|
$
|
7.3
|
|
Pre-tax losses from the early extinguishment of debt, net
|
$
|
(7.6
|
)
|
|
$
|
(10.1
|
)
|
Pre-tax legal settlements
|
$
|
(6.4
|
)
|
|
$
|
—
|
|
Tax benefit from above items
|
$
|
6.8
|
|
|
$
|
(0.6
|
)
|
Change in certain tax reserves and other
|
$
|
(1.2
|
)
|
|
$
|
17.3
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in millions, except average revenue per service)
|
||||||
Consolidated funeral revenue
|
$
|
971.8
|
|
|
$
|
983.0
|
|
Less: revenue associated with acquisitions/new construction
|
17.7
|
|
|
2.9
|
|
||
Less: revenue associated with divestitures
|
1.1
|
|
|
4.2
|
|
||
Comparable (1) funeral revenue
|
953.0
|
|
|
975.9
|
|
||
Less: comparable recognized preneed revenue
|
69.9
|
|
|
66.3
|
|
||
Less: comparable general agency and other revenue
|
64.7
|
|
|
62.1
|
|
||
Adjusted comparable funeral revenue
|
$
|
818.4
|
|
|
$
|
847.5
|
|
Comparable services performed
|
157,460
|
|
|
160,796
|
|
||
Comparable average revenue per service(2)
|
$
|
5,198
|
|
|
$
|
5,271
|
|
|
|
|
|
||||
Consolidated funeral operating profit
|
$
|
196.0
|
|
|
$
|
210.9
|
|
Less: operating profit (loss) associated with acquisitions/new construction
|
0.1
|
|
|
(0.2
|
)
|
||
Less: operating loss associated with divestitures
|
(0.6
|
)
|
|
(2.4
|
)
|
||
Comparable funeral operating profit
|
$
|
196.5
|
|
|
$
|
213.5
|
|
(1)
|
We define comparable (or same store) operations as those funeral service locations owned by us for the entire period beginning January 1, 2018 and ending June 30, 2019.
|
(2)
|
We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding recognized preneed revenue, general agency 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 are preneed sales of merchandise that are delivered at the time of sale, including memorial merchandise and travel protection, net and are excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Consolidated cemetery revenue
|
$
|
639.0
|
|
|
$
|
607.6
|
|
Less: revenue associated with acquisitions
|
9.8
|
|
|
1.4
|
|
||
Less: revenue associated with divestitures
|
0.6
|
|
|
1.0
|
|
||
Comparable (1) cemetery revenue
|
$
|
628.6
|
|
|
$
|
605.2
|
|
|
|
|
|
||||
Consolidated cemetery operating profit
|
$
|
187.0
|
|
|
$
|
173.0
|
|
Less: operating profit associated with acquisitions
|
0.8
|
|
|
0.4
|
|
||
Less: operating profit associated with divestitures
|
0.2
|
|
|
—
|
|
||
Comparable cemetery operating profit
|
$
|
186.0
|
|
|
$
|
172.6
|
|
(1)
|
We define comparable (or same store) operations as those cemetery locations owned by us for the entire period beginning January 1, 2018 and ending June 30, 2019.
|
•
|
Our affiliated funeral and cemetery trust funds own investments in securities, which are affected by market conditions that are beyond our control.
|
•
|
We may be required to replenish our affiliated funeral and cemetery trust funds to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow.
|
•
|
Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.
|
•
|
Our credit agreements contain covenants that may prevent us from engaging in certain transactions.
|
•
|
If we lost the ability to use surety bonding to support our preneed funeral and preneed cemetery activities, we may be required to make material cash payments to fund certain trust funds.
|
•
|
The funeral and cemetery industry is competitive.
|
•
|
Increasing death benefits related to preneed contracts funded through life insurance or annuity contracts may not cover future increases in the cost of providing a price-guaranteed service.
|
•
|
The financial condition of third-party insurance companies that fund our preneed contracts may impact our future revenue.
|
•
|
Unfavorable results of litigation could have a material adverse impact on our financial statements.
|
•
|
Unfavorable publicity could affect our reputation and business.
|
•
|
If the number of deaths in our markets decline, our cash flows and revenue may decrease.
|
•
|
If we are not able to respond effectively to changing consumer preferences, our market share, revenue, cash flows, and/or profitability could decrease.
|
•
|
The continuing upward trend in the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows.
|
•
|
Our funeral home and cemetery businesses are high fixed-cost businesses.
|
•
|
Regulation and compliance could have a material adverse impact on our financial results.
|
•
|
Cemetery burial practice claims could have a material adverse impact on our financial results.
|
•
|
We use a combination of insurance, self-insurance, and large deductibles in managing our exposure to certain inherent risks; therefore, we could be exposed to unexpected costs that could negatively affect our financial performance.
|
•
|
A number of years may elapse before particular tax matters, for which we have established accruals, are audited and finally resolved.
|
•
|
Changes in taxation as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows.
|
•
|
Declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future impairments to goodwill and/or other intangible assets.
|
•
|
Any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results, financial condition, or cash flow.
|
•
|
Our Canadian business exposes us to operational, economic, and currency risks.
|
•
|
Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness.
|
•
|
A failure of key information technology systems or processes could disrupt and adversely affect our business.
|
•
|
Failure to maintain effective internal control over financial reporting could adversely affect our results of operations, investor confidence, and our stock price.
|
•
|
The application of unclaimed property laws by certain states to our preneed funeral and cemetery backlog could have a material adverse impact on our liquidity, cash flows, and our financial results.
|
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
|
||||||
April 1, 2019 - April 30, 2019
|
|
12,486
|
|
|
$
|
39.91
|
|
|
12,486
|
|
|
$
|
180,167,864
|
|
May 1, 2019 - May 31, 2019
|
|
104,539
|
|
|
$
|
42.99
|
|
|
104,539
|
|
|
$
|
175,673,783
|
|
June 1, 2019 - June 30, 2019
|
|
220,403
|
|
|
$
|
45.36
|
|
|
220,403
|
|
|
$
|
165,676,767
|
|
|
|
337,428
|
|
|
|
|
337,428
|
|
|
|
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
|
|
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
|
|
—
|
|
||
101
|
|
|
—
|
|
Interactive data file.
|
July 30, 2019
|
|
SERVICE CORPORATION INTERNATIONAL
|
|
By:
|
/s/ Tammy Moore
|
|
|
Tammy Moore
|
|
|
Vice President and Corporate Controller
(Principal Accounting Officer)
|
(1)
|
any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such person shall be deemed to have “beneficial ownership” of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Issuer;
|
(2)
|
individuals who on the Issue Date constituted the board of directors (together with any new directors whose election by such board of directors or whose nomination for election by the shareholders of the Issuer was approved by a vote of at least a majority of the directors of the Issuer then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors then in office;
|
(3)
|
the Issuer is liquidated or dissolved or adopts a plan of liquidation or dissolution; or
|
(4)
|
the merger or consolidation of the Issuer with or into another Person or the merger of another Person with or into the Issuer, or the sale of all or substantially all the assets of the Issuer (determined on a consolidated basis) to another Person, other than a transaction following which (i) in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the Issuer immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction and (ii) in the case of a sale of assets transaction, each transferee becomes an obligor in respect of the Notes and a subsidiary of the transferor of such assets.
|
(1)
|
that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);
|
(2)
|
the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow and capitalization, in each case after giving effect to such Change of Control);
|
(3)
|
the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and
|
(4)
|
the instructions, as determined by the Issuer, consistent with this Section 8.03, that a Holder must follow in order to have its Notes purchased.
|
By: /s/ Eric D. Tanzberger
Name: |
Eric D. Tanzberger
Title: Senior Vice President and Chief Financial Officer |
By: /s/ Karen Yu
Name: |
Karen Yu
Title: Vice President |
By: /s/ Mary Jo Wagener
Name: |
Mary Jo Wagener
Title: Vice President |
By
|
Name: |
By
|
Authorized Signatory |
1.
|
Interest
|
2.
|
Method of Payment
|
3.
|
Paying Agent and Registrar
|
4.
|
Indenture
|
5.
|
Optional Redemption
|
Period
|
Redemption Price
|
|
2024
|
102.563
|
%
|
2025
|
101.708
|
%
|
2026
|
100.854
|
%
|
2027 and thereafter
|
100.000
|
%
|
6.
|
Put Provisions
|
7.
|
Denominations; Transfer; Exchange
|
8.
|
Persons Deemed Owners
|
9.
|
Unclaimed Money
|
10.
|
Discharge and Defeasance
|
11.
|
Amendment; Waiver
|
12.
|
Defaults and Remedies
|
13.
|
Trustee Dealings with the Issuer
|
14.
|
No Recourse Against Others
|
15.
|
Authentication
|
16.
|
Abbreviations
|
17.
|
CUSIP Numbers
|
18.
|
Governing Law
|
Dated:
|
|
Your Signature:
|
|
|
(Sign exactly as your name appears on the other side of this Security.)
|
Signature Guarantee:
|
(Signature must be guaranteed)
|
Date of Exchange
|
Amount of decrease in Principal amount of this Global Security
|
Amount of increase in Principal amount of this Global Security
|
Principal amount of this Global Security following such decrease or increase)
|
Signature of authorized officer of Trustee or Securities Custodian
|
|
|
|
|
|
1.
|
Section 3.3(a) of the Plan is amended to read as follows (bold/underline showing additions):
|
2.
|
In all other respects, the terms of this Plan are hereby ratified and confirmed.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Service Corporation International, a Texas corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
July 30, 2019
|
/s/ Thomas L. Ryan
|
|
|
Thomas L. Ryan
President, Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Service Corporation International, a Texas corporation (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
July 30, 2019
|
/s/ Eric D. Tanzberger
|
|
|
Eric D. Tanzberger
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Service Corporation International.
|
Dated:
|
July 30, 2019
|
/s/ Thomas L. Ryan
|
|
|
Thomas L. Ryan
President, Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
|
(1)
|
the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Service Corporation International.
|
Dated:
|
July 30, 2019
|
/s/ Eric D. Tanzberger
|
|
|
Eric D. Tanzberger
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|