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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Service Corp International Inc | NYSE:SCI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.20 | -1.65% | 71.71 | 72.92 | 71.70 | 72.67 | 635,685 | 22:46:58 |
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2017
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
__________
to
__________
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Texas
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74-1488375
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(State or other jurisdiction of incorporation or organization)
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(I. R. S. employer identification number)
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1929 Allen Parkway, Houston, Texas
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77019
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(Address of principal executive offices)
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(Zip code)
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713-522-5141
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(Registrant’s telephone number, including area code)
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||
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None
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(Former name, former address, or former fiscal year, if changed since last report)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(Do not check if smaller reporting company)
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Page
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
|
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September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Revenue
|
$
|
731,346
|
|
|
$
|
721,467
|
|
|
$
|
2,282,298
|
|
|
$
|
2,222,083
|
|
Costs and expenses
|
(581,644
|
)
|
|
(580,722
|
)
|
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(1,771,986
|
)
|
|
(1,756,425
|
)
|
||||
Operating profit
|
149,702
|
|
|
140,745
|
|
|
510,312
|
|
|
465,658
|
|
||||
General and administrative expenses
|
(39,213
|
)
|
|
(26,916
|
)
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(122,307
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)
|
|
(102,668
|
)
|
||||
(Losses) gains on divestitures and impairment charges, net
|
(143
|
)
|
|
557
|
|
|
5,545
|
|
|
(30,432
|
)
|
||||
Hurricane expenses, net of insurance proceeds
|
(1,290
|
)
|
|
—
|
|
|
(1,290
|
)
|
|
—
|
|
||||
Operating income
|
109,056
|
|
|
114,386
|
|
|
392,260
|
|
|
332,558
|
|
||||
Interest expense
|
(42,754
|
)
|
|
(39,508
|
)
|
|
(125,473
|
)
|
|
(121,988
|
)
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(22,503
|
)
|
||||
Other income (expense), net
|
276
|
|
|
110
|
|
|
(165
|
)
|
|
(697
|
)
|
||||
Income before income taxes
|
66,578
|
|
|
74,963
|
|
|
266,622
|
|
|
187,370
|
|
||||
(Provision for) benefit from income taxes
|
(10,437
|
)
|
|
(27,422
|
)
|
|
32,830
|
|
|
(76,482
|
)
|
||||
Net income
|
56,141
|
|
|
47,541
|
|
|
299,452
|
|
|
110,888
|
|
||||
Net income (loss) attributable to noncontrolling interests
|
23
|
|
|
186
|
|
|
(105
|
)
|
|
(96
|
)
|
||||
Net income attributable to common stockholders
|
$
|
56,164
|
|
|
$
|
47,727
|
|
|
$
|
299,347
|
|
|
$
|
110,792
|
|
Basic earnings per share:
|
|
|
|
|
|
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||||||||
Net income attributable to common stockholders
|
$
|
0.30
|
|
|
$
|
0.25
|
|
|
$
|
1.59
|
|
|
$
|
0.57
|
|
Basic weighted average number of shares
|
187,435
|
|
|
193,274
|
|
|
187,761
|
|
|
193,999
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|||||||
Net income attributable to common stockholders
|
$
|
0.29
|
|
|
$
|
0.24
|
|
|
$
|
1.56
|
|
|
$
|
0.56
|
|
Diluted weighted average number of shares
|
192,243
|
|
|
196,567
|
|
|
192,417
|
|
|
197,175
|
|
||||
Dividends declared per share
|
$
|
0.15
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|
|
$
|
0.13
|
|
|
$
|
0.43
|
|
|
$
|
0.38
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Net income
|
$
|
56,141
|
|
|
$
|
47,541
|
|
|
$
|
299,452
|
|
|
$
|
110,888
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
16,580
|
|
|
(5,018
|
)
|
|
30,185
|
|
|
18,116
|
|
||||
Total comprehensive income
|
72,721
|
|
|
42,523
|
|
|
329,637
|
|
|
129,004
|
|
||||
Total comprehensive income (loss) attributable to noncontrolling interests
|
14
|
|
|
189
|
|
|
(121
|
)
|
|
(102
|
)
|
||||
Total comprehensive income attributable to common stockholders
|
$
|
72,735
|
|
|
$
|
42,712
|
|
|
$
|
329,516
|
|
|
$
|
128,902
|
|
|
September 30, 2017
|
|
December 31, 2016
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||||
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(In thousands, except share amounts)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
267,956
|
|
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$
|
194,986
|
|
Receivables, net
|
77,426
|
|
|
98,455
|
|
||
Inventories
|
27,161
|
|
|
26,431
|
|
||
Other
|
32,340
|
|
|
34,524
|
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||
Total current assets
|
404,883
|
|
|
354,396
|
|
||
Preneed receivables, net and trust investments
|
4,677,585
|
|
|
4,305,165
|
|
||
Cemetery property
|
1,792,843
|
|
|
1,776,935
|
|
||
Property and equipment, net
|
1,859,408
|
|
|
1,827,587
|
|
||
Goodwill
|
1,807,816
|
|
|
1,799,081
|
|
||
Deferred charges and other assets
|
592,462
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|
|
567,520
|
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||
Cemetery perpetual care trust investments
|
1,490,201
|
|
|
1,407,465
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|
||
Total assets
|
$
|
12,625,198
|
|
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$
|
12,038,149
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|
|
|
|
|
||||
LIABILITIES & EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
494,020
|
|
|
$
|
439,936
|
|
Current maturities of long-term debt
|
76,314
|
|
|
89,974
|
|
||
Income taxes payable
|
9,395
|
|
|
7,960
|
|
||
Total current liabilities
|
579,729
|
|
|
537,870
|
|
||
Long-term debt
|
3,292,816
|
|
|
3,196,616
|
|
||
Deferred revenue
|
1,796,756
|
|
|
1,731,417
|
|
||
Deferred tax liability
|
451,273
|
|
|
454,638
|
|
||
Other liabilities
|
375,504
|
|
|
510,322
|
|
||
Deferred receipts held in trust
|
3,399,644
|
|
|
3,103,796
|
|
||
Care trusts’ corpus
|
1,490,525
|
|
|
1,408,243
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Common stock, $1 per share par value, 500,000,000 shares authorized, 198,538,478 and 195,403,644 shares issued, respectively, and 187,746,443 and 189,405,244 shares outstanding, respectively
|
187,746
|
|
|
189,405
|
|
||
Capital in excess of par value
|
971,131
|
|
|
990,203
|
|
||
Retained earnings (accumulated deficit)
|
33,140
|
|
|
(103,387
|
)
|
||
Accumulated other comprehensive income
|
46,661
|
|
|
16,492
|
|
||
Total common stockholders’ equity
|
1,238,678
|
|
|
1,092,713
|
|
||
Noncontrolling interests
|
273
|
|
|
2,534
|
|
||
Total equity
|
1,238,951
|
|
|
1,095,247
|
|
||
Total liabilities and equity
|
$
|
12,625,198
|
|
|
$
|
12,038,149
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
299,452
|
|
|
$
|
110,888
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
22,503
|
|
||
Premiums paid on early extinguishment of debt
|
—
|
|
|
(20,524
|
)
|
||
Depreciation and amortization
|
113,641
|
|
|
109,531
|
|
||
Amortization of intangibles
|
20,923
|
|
|
22,210
|
|
||
Amortization of cemetery property
|
46,533
|
|
|
42,573
|
|
||
Amortization of loan costs
|
4,344
|
|
|
4,406
|
|
||
Provision for doubtful accounts
|
6,846
|
|
|
4,048
|
|
||
Benefit from deferred income taxes
|
(148,465
|
)
|
|
(11,421
|
)
|
||
(Gains) losses on divestitures and impairment charges, net
|
(5,545
|
)
|
|
30,432
|
|
||
Share-based compensation
|
10,719
|
|
|
10,199
|
|
||
Excess tax benefits from share-based awards
|
—
|
|
|
(11,512
|
)
|
||
Change in assets and liabilities, net of effects from acquisitions and divestitures:
|
|
|
|
||||
Decrease in receivables
|
12,568
|
|
|
11,447
|
|
||
Increase in other assets
|
(15,683
|
)
|
|
(7,660
|
)
|
||
Increase in payables and other liabilities
|
66,455
|
|
|
37,565
|
|
||
Effect of preneed sales production and maturities:
|
|
|
|
||||
Increase in preneed receivables, net and trust investments
|
(58,631
|
)
|
|
(48,837
|
)
|
||
Increase in deferred revenue
|
37,438
|
|
|
67,977
|
|
||
Decrease in deferred receipts held in trust
|
(981
|
)
|
|
(15,315
|
)
|
||
Net cash provided by operating activities
|
389,614
|
|
|
358,510
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(141,652
|
)
|
|
(131,195
|
)
|
||
Acquisitions
|
(49,635
|
)
|
|
(66,109
|
)
|
||
Proceeds from divestitures and sales of property and equipment
|
12,547
|
|
|
13,044
|
|
||
Net withdrawals of restricted funds and other
|
175
|
|
|
5,120
|
|
||
Net cash used in investing activities
|
(178,565
|
)
|
|
(179,140
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
120,000
|
|
|
1,035,000
|
|
||
Debt issuance costs
|
—
|
|
|
(5,232
|
)
|
||
Payments of debt
|
(26,376
|
)
|
|
(27,632
|
)
|
||
Early extinguishment of debt
|
—
|
|
|
(875,110
|
)
|
||
Principal payments on capital leases
|
(40,509
|
)
|
|
(25,220
|
)
|
||
Proceeds from exercise of stock options
|
30,672
|
|
|
16,029
|
|
||
Excess tax benefits from share-based awards
|
—
|
|
|
11,512
|
|
||
Purchase of Company common stock
|
(148,818
|
)
|
|
(192,991
|
)
|
||
Payments of dividends
|
(80,711
|
)
|
|
(73,665
|
)
|
||
Purchase of noncontrolling interest
|
(4,580
|
)
|
|
(1,961
|
)
|
||
Bank overdrafts and other
|
2,790
|
|
|
(1,066
|
)
|
||
Net cash used in financing activities
|
(147,532
|
)
|
|
(140,336
|
)
|
||
Effect of foreign currency on cash and cash equivalents
|
9,453
|
|
|
3,938
|
|
||
Net increase in cash and cash equivalents
|
72,970
|
|
|
42,972
|
|
||
Cash and cash equivalents at beginning of period
|
194,986
|
|
|
134,599
|
|
||
Cash and cash equivalents at end of period
|
$
|
267,956
|
|
|
$
|
177,571
|
|
|
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, 2016
|
$
|
195,403
|
|
|
$
|
(5,998
|
)
|
|
$
|
990,203
|
|
|
$
|
(103,387
|
)
|
|
$
|
16,492
|
|
|
$
|
2,534
|
|
|
$
|
1,095,247
|
|
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
299,347
|
|
|
30,169
|
|
|
121
|
|
|
329,637
|
|
|||||||
Dividends declared on common stock ($0.43 per share)
|
—
|
|
|
—
|
|
|
(37,011
|
)
|
|
(43,700
|
)
|
|
—
|
|
|
—
|
|
|
(80,711
|
)
|
|||||||
Employee share-based compensation earned
|
—
|
|
|
—
|
|
|
10,719
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,719
|
|
|||||||
Stock option exercises
|
2,476
|
|
|
—
|
|
|
28,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,672
|
|
|||||||
Restricted stock awards, net of forfeitures
|
207
|
|
|
—
|
|
|
(207
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of Company common stock
|
—
|
|
|
(4,794
|
)
|
|
(24,904
|
)
|
|
(119,120
|
)
|
|
—
|
|
|
—
|
|
|
(148,818
|
)
|
|||||||
Noncontrolling interest payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
|
(60
|
)
|
|||||||
Noncontrolling interest purchases
|
—
|
|
|
—
|
|
|
(2,258
|
)
|
|
—
|
|
|
—
|
|
|
(2,322
|
)
|
|
(4,580
|
)
|
|||||||
Other
|
452
|
|
|
—
|
|
|
6,393
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,845
|
|
|||||||
Balance at September 30, 2017
|
$
|
198,538
|
|
|
$
|
(10,792
|
)
|
|
$
|
971,131
|
|
|
$
|
33,140
|
|
|
$
|
46,661
|
|
|
$
|
273
|
|
|
$
|
1,238,951
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Preneed funeral receivables
|
$
|
331,917
|
|
|
$
|
312,556
|
|
Preneed cemetery receivables
|
1,099,795
|
|
|
1,038,592
|
|
||
Preneed receivables from customers
|
1,431,712
|
|
|
1,351,148
|
|
||
Unearned finance charge
|
(45,751
|
)
|
|
(45,989
|
)
|
||
Allowance for cancellation
|
(108,635
|
)
|
|
(104,740
|
)
|
||
Preneed receivables, net
|
$
|
1,277,326
|
|
|
$
|
1,200,419
|
|
|
|
|
|
||||
Trust investments, at market
|
$
|
4,343,081
|
|
|
$
|
3,936,908
|
|
Cash held in trust
|
282,594
|
|
|
304,055
|
|
||
Assets associated with businesses held for sale
|
(2,680
|
)
|
|
—
|
|
||
Insurance-backed fixed income securities and other
|
267,465
|
|
|
271,248
|
|
||
Trust investments
|
4,890,460
|
|
|
4,512,211
|
|
||
Less: Cemetery perpetual care trust investments
|
(1,490,201
|
)
|
|
(1,407,465
|
)
|
||
Preneed trust investments
|
$
|
3,400,259
|
|
|
$
|
3,104,746
|
|
|
|
|
|
||||
Preneed receivables, net and trust investments
|
$
|
4,677,585
|
|
|
$
|
4,305,165
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Deposits
|
$
|
86,028
|
|
|
$
|
82,286
|
|
|
$
|
277,286
|
|
|
$
|
243,957
|
|
Withdrawals
|
$
|
99,872
|
|
|
$
|
90,156
|
|
|
$
|
297,595
|
|
|
$
|
260,199
|
|
Purchases of available-for-sale securities
|
$
|
886,732
|
|
|
$
|
500,577
|
|
|
$
|
1,792,190
|
|
|
$
|
1,142,873
|
|
Sales of available-for-sale securities
|
$
|
509,675
|
|
|
$
|
490,945
|
|
|
$
|
1,742,860
|
|
|
$
|
1,092,912
|
|
|
September 30, 2017
|
||||||||||||||||
|
Value Hierarchy Level
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Value
|
||||||||
|
|
|
|
|
(In thousands)
|
|
|
||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
2
|
|
$
|
24,704
|
|
|
$
|
25
|
|
|
$
|
(12
|
)
|
|
$
|
24,717
|
|
Canadian government
|
2
|
|
84,387
|
|
|
182
|
|
|
(904
|
)
|
|
83,665
|
|
||||
Corporate
|
2
|
|
16,720
|
|
|
374
|
|
|
(139
|
)
|
|
16,955
|
|
||||
Residential mortgage-backed
|
2
|
|
427
|
|
|
16
|
|
|
(1
|
)
|
|
442
|
|
||||
Asset-backed
|
2
|
|
317
|
|
|
18
|
|
|
(7
|
)
|
|
328
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Preferred stock
|
2
|
|
8,127
|
|
|
166
|
|
|
(159
|
)
|
|
8,134
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
|
|
||||||||
United States
|
1
|
|
1,184,510
|
|
|
213,024
|
|
|
(22,703
|
)
|
|
1,374,831
|
|
||||
Canada
|
1
|
|
33,167
|
|
|
11,612
|
|
|
(942
|
)
|
|
43,837
|
|
||||
Other international
|
1
|
|
57,114
|
|
|
13,546
|
|
|
(1,137
|
)
|
|
69,523
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity
|
1
|
|
607,088
|
|
|
56,277
|
|
|
(6,304
|
)
|
|
657,061
|
|
||||
Fixed income
|
1
|
|
1,218,188
|
|
|
17,273
|
|
|
(23,794
|
)
|
|
1,211,667
|
|
||||
Other
|
3
|
|
6,369
|
|
|
2,513
|
|
|
(47
|
)
|
|
8,835
|
|
||||
Trust investments, at fair value
|
|
|
3,241,118
|
|
|
315,026
|
|
|
(56,149
|
)
|
|
3,499,995
|
|
||||
Fixed income commingled funds
|
|
|
653,105
|
|
|
1,103
|
|
|
(6,095
|
)
|
|
648,113
|
|
||||
Private equity
|
|
|
191,815
|
|
|
16,009
|
|
|
(12,851
|
)
|
|
194,973
|
|
||||
Trust investments, at net asset value
|
|
|
844,920
|
|
|
17,112
|
|
|
(18,946
|
)
|
|
843,086
|
|
||||
Trust investments, at market
|
|
|
$
|
4,086,038
|
|
|
$
|
332,138
|
|
|
$
|
(75,095
|
)
|
|
$
|
4,343,081
|
|
|
December 31, 2016
|
||||||||||||||||
|
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
|
|
||||
Private equity
|
|
|
175,881
|
|
|
9,812
|
|
|
(15,217
|
)
|
|
170,476
|
|
||||
Trust investments, at net asset value
|
|
|
868,315
|
|
|
18,336
|
|
|
(27,451
|
)
|
|
859,200
|
|
||||
Trust investments, at market
|
|
|
$
|
3,900,728
|
|
|
$
|
214,828
|
|
|
$
|
(178,648
|
)
|
|
$
|
3,936,908
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Fair value, beginning balance
|
$
|
7,924
|
|
|
$
|
8,553
|
|
|
$
|
7,163
|
|
|
$
|
8,177
|
|
Net unrealized (loss) gain included in
Accumulated other comprehensive income
(1)
|
(116
|
)
|
|
117
|
|
|
694
|
|
|
486
|
|
||||
Purchases
|
1,881
|
|
|
36
|
|
|
1,909
|
|
|
61
|
|
||||
Sales
|
(854
|
)
|
|
(1,309
|
)
|
|
(931
|
)
|
|
(1,327
|
)
|
||||
Fair value, ending balance
|
$
|
8,835
|
|
|
$
|
7,397
|
|
|
$
|
8,835
|
|
|
$
|
7,397
|
|
(1)
|
All net unrealized (losses) gains recognized in
Accumulated other comprehensive income
for our trust investments are offset by a corresponding reclassification in
Accumulated other comprehensive income
to
Deferred receipts held in trust
and
Care trusts' corpus
.
|
|
Fair Value
|
||
|
(In thousands)
|
||
Due in one year or less
|
$
|
73,050
|
|
Due in one to five years
|
50,496
|
|
|
Due in five to ten years
|
2,175
|
|
|
Thereafter
|
386
|
|
|
|
$
|
126,107
|
|
|
September 30, 2017
|
||||||||||||||||||||||
|
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
|
$
|
5,372
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,372
|
|
|
$
|
(12
|
)
|
Canadian government
|
24,819
|
|
|
(596
|
)
|
|
3,536
|
|
|
(308
|
)
|
|
28,355
|
|
|
(904
|
)
|
||||||
Corporate
|
3,695
|
|
|
(49
|
)
|
|
3,676
|
|
|
(90
|
)
|
|
7,371
|
|
|
(139
|
)
|
||||||
Residential mortgage-backed
|
202
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
202
|
|
|
(1
|
)
|
||||||
Asset-backed
|
—
|
|
|
—
|
|
|
23
|
|
|
(7
|
)
|
|
23
|
|
|
(7
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred stock
|
2,936
|
|
|
(123
|
)
|
|
259
|
|
|
(36
|
)
|
|
3,195
|
|
|
(159
|
)
|
||||||
Common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
232,604
|
|
|
(22,023
|
)
|
|
23,507
|
|
|
(680
|
)
|
|
256,111
|
|
|
(22,703
|
)
|
||||||
Canada
|
4,345
|
|
|
(510
|
)
|
|
3,022
|
|
|
(432
|
)
|
|
7,367
|
|
|
(942
|
)
|
||||||
Other international
|
7,911
|
|
|
(494
|
)
|
|
5,700
|
|
|
(643
|
)
|
|
13,611
|
|
|
(1,137
|
)
|
||||||
Mutual funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
25,057
|
|
|
(2,402
|
)
|
|
17,439
|
|
|
(3,902
|
)
|
|
42,496
|
|
|
(6,304
|
)
|
||||||
Fixed income
|
79,805
|
|
|
(827
|
)
|
|
292,789
|
|
|
(22,967
|
)
|
|
372,594
|
|
|
(23,794
|
)
|
||||||
Other
|
190
|
|
|
(2
|
)
|
|
1,279
|
|
|
(45
|
)
|
|
1,469
|
|
|
(47
|
)
|
||||||
Trust investments, at fair value
|
386,936
|
|
|
(27,039
|
)
|
|
351,230
|
|
|
(29,110
|
)
|
|
738,166
|
|
|
(56,149
|
)
|
||||||
Fixed income commingled funds
|
347,260
|
|
|
(1,496
|
)
|
|
176,493
|
|
|
(4,599
|
)
|
|
523,753
|
|
|
(6,095
|
)
|
||||||
Private equity
|
4,067
|
|
|
(599
|
)
|
|
71,881
|
|
|
(12,252
|
)
|
|
75,948
|
|
|
(12,851
|
)
|
||||||
Trust investments, at net asset value
|
351,327
|
|
|
(2,095
|
)
|
|
248,374
|
|
|
(16,851
|
)
|
|
599,701
|
|
|
(18,946
|
)
|
||||||
Total temporarily impaired securities
|
$
|
738,263
|
|
|
$
|
(29,134
|
)
|
|
$
|
599,604
|
|
|
$
|
(45,961
|
)
|
|
$
|
1,337,867
|
|
|
$
|
(75,095
|
)
|
|
December 31, 2016
|
||||||||||||||||||||||
|
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
|
$
|
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
|
)
|
|
September 30, 2017
|
|
December 31, 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
|
|
||
Term Loan due March 2021
|
647,500
|
|
|
673,750
|
|
||
Bank Credit Facility due March 2021
|
470,000
|
|
|
350,000
|
|
||
Obligations under capital leases
|
191,627
|
|
|
208,758
|
|
||
Mortgage notes and other debt, maturities through 2050
|
6,134
|
|
|
3,753
|
|
||
Unamortized premiums, net
|
7,673
|
|
|
8,313
|
|
||
Unamortized debt issuance costs
|
(28,804
|
)
|
|
(32,984
|
)
|
||
Total debt
|
3,369,130
|
|
|
3,286,590
|
|
||
Less: Current maturities of long-term debt
|
(76,314
|
)
|
|
(89,974
|
)
|
||
Total long-term debt
|
$
|
3,292,816
|
|
|
$
|
3,196,616
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
7.625% Senior Notes due October 2018
|
$
|
264,375
|
|
|
$
|
272,353
|
|
4.5% Senior Notes due November 2020
|
202,750
|
|
|
205,000
|
|
||
8.0% Senior Notes due November 2021
|
177,563
|
|
|
175,500
|
|
||
5.375% Senior Notes due January 2022
|
436,726
|
|
|
444,614
|
|
||
5.375% Senior Notes due May 2024
|
907,205
|
|
|
884,000
|
|
||
7.5% Senior Notes due April 2027
|
240,200
|
|
|
231,590
|
|
||
Term Loan due March 2021
|
647,500
|
|
|
673,750
|
|
||
Bank Credit Facility due March 2021
|
470,000
|
|
|
350,000
|
|
||
Mortgage notes and other debt, maturities through 2050
|
6,134
|
|
|
3,753
|
|
||
Total fair value of debt instruments
|
$
|
3,352,453
|
|
|
$
|
3,240,560
|
|
|
Foreign
Currency
Translation
Adjustment
|
|
Unrealized
Gains and
Losses
|
|
Accumulated
Other
Comprehensive
Income
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Balance at December 31, 2016
|
$
|
16,492
|
|
|
$
|
—
|
|
|
$
|
16,492
|
|
Activity in 2017
|
30,169
|
|
|
—
|
|
|
30,169
|
|
|||
Net unrealized gains associated with available-for-sale securities of the trusts, net of taxes
|
—
|
|
|
142,958
|
|
|
142,958
|
|
|||
Reclassification of net unrealized gain activity attributable to the
Deferred receipts held in trust
and
Care trusts’ corpus,
net of taxes
|
—
|
|
|
(142,958
|
)
|
|
(142,958
|
)
|
|||
Balance at September 30, 2017
|
$
|
46,661
|
|
|
$
|
—
|
|
|
$
|
46,661
|
|
|
Funeral
|
|
Cemetery
|
|
Reportable
Segments
|
||||||
|
(In thousands)
|
||||||||||
Three months ended September 30,
|
|
|
|
|
|
||||||
Revenue from external customers:
|
|
|
|
|
|
||||||
2017
|
$
|
437,529
|
|
|
$
|
293,817
|
|
|
$
|
731,346
|
|
2016
|
$
|
445,501
|
|
|
$
|
275,966
|
|
|
$
|
721,467
|
|
Operating profit:
|
|
|
|
|
|
||||||
2017
|
$
|
70,118
|
|
|
$
|
79,584
|
|
|
$
|
149,702
|
|
2016
|
$
|
74,543
|
|
|
$
|
66,202
|
|
|
$
|
140,745
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
||||||
Revenue from external customers:
|
|
|
|
|
|
||||||
2017
|
$
|
1,395,167
|
|
|
$
|
887,131
|
|
|
$
|
2,282,298
|
|
2016
|
$
|
1,404,794
|
|
|
$
|
817,289
|
|
|
$
|
2,222,083
|
|
Operating profit:
|
|
|
|
|
|
||||||
2017
|
$
|
274,802
|
|
|
$
|
235,510
|
|
|
$
|
510,312
|
|
2016
|
$
|
271,186
|
|
|
$
|
194,472
|
|
|
$
|
465,658
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
||||||||||||||
Operating profit from reportable segments
|
$
|
149,702
|
|
|
$
|
140,745
|
|
|
$
|
510,312
|
|
|
$
|
465,658
|
|
General and administrative expenses
|
(39,213
|
)
|
|
(26,916
|
)
|
|
(122,307
|
)
|
|
(102,668
|
)
|
||||
(Losses) gains on divestitures and impairment charges, net
|
(143
|
)
|
|
557
|
|
|
5,545
|
|
|
(30,432
|
)
|
||||
Hurricane expense, net
|
(1,290
|
)
|
|
—
|
|
|
(1,290
|
)
|
|
—
|
|
||||
Operating income
|
109,056
|
|
|
114,386
|
|
|
392,260
|
|
|
332,558
|
|
||||
Interest expense
|
(42,754
|
)
|
|
(39,508
|
)
|
|
(125,473
|
)
|
|
(121,988
|
)
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(22,503
|
)
|
||||
Other expense, net
|
276
|
|
|
110
|
|
|
(165
|
)
|
|
(697
|
)
|
||||
Income before income taxes
|
$
|
66,578
|
|
|
$
|
74,963
|
|
|
$
|
266,622
|
|
|
$
|
187,370
|
|
|
United States
|
|
Canada
|
|
Total
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Three months ended September 30,
|
|
|
|
|
|
||||||
Revenue from external customers:
|
|
|
|
|
|
||||||
2017
|
$
|
685,186
|
|
|
$
|
46,160
|
|
|
$
|
731,346
|
|
2016
|
$
|
681,769
|
|
|
$
|
39,698
|
|
|
$
|
721,467
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
||||||
Revenue from external customers:
|
|
|
|
|
|
||||||
2017
|
$
|
2,140,796
|
|
|
$
|
141,502
|
|
|
$
|
2,282,298
|
|
2016
|
$
|
2,098,091
|
|
|
$
|
123,992
|
|
|
$
|
2,222,083
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Amounts attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Net income:
|
|
|
|
|
|
|
|
||||||||
Net income — basic
|
$
|
56,164
|
|
|
$
|
47,727
|
|
|
$
|
299,347
|
|
|
$
|
110,792
|
|
After tax interest on convertible debt
|
13
|
|
|
13
|
|
|
38
|
|
|
35
|
|
||||
Net income — diluted
|
$
|
56,177
|
|
|
$
|
47,740
|
|
|
$
|
299,385
|
|
|
$
|
110,827
|
|
Weighted average shares (denominator):
|
|
|
|
|
|
|
|
||||||||
Weighted average shares — basic
|
187,435
|
|
|
193,274
|
|
|
187,761
|
|
|
193,999
|
|
||||
Stock options
|
4,575
|
|
|
3,154
|
|
|
4,448
|
|
|
3,049
|
|
||||
Restricted stock units
|
112
|
|
|
18
|
|
|
87
|
|
|
6
|
|
||||
Convertible debt
|
121
|
|
|
121
|
|
|
121
|
|
|
121
|
|
||||
Weighted average shares — diluted
|
192,243
|
|
|
196,567
|
|
|
192,417
|
|
|
197,175
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.30
|
|
|
$
|
0.25
|
|
|
$
|
1.59
|
|
|
$
|
0.57
|
|
Diluted
|
$
|
0.29
|
|
|
$
|
0.24
|
|
|
$
|
1.56
|
|
|
$
|
0.56
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||||||
Antidilutive options
|
—
|
|
|
551
|
|
|
878
|
|
|
936
|
|
Antidilutive restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Total common stock equivalents excluded from computation
|
—
|
|
|
551
|
|
|
878
|
|
|
938
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
(Losses) gains on divestitures, net
|
$
|
(62
|
)
|
|
$
|
864
|
|
|
$
|
22,611
|
|
|
$
|
2,974
|
|
Impairment losses
|
(81
|
)
|
|
(307
|
)
|
|
(17,066
|
)
|
|
(33,406
|
)
|
||||
(Losses) gains on divestitures and impairment charges, net
|
$
|
(143
|
)
|
|
$
|
557
|
|
|
$
|
5,545
|
|
|
$
|
(30,432
|
)
|
|
Per Credit Agreement
|
|
Actual
|
Leverage ratio
|
4.25 (Max)
|
|
3.62
|
Interest coverage ratio
|
3.00 (Min)
|
|
5.39
|
•
|
a
$43.4 million
increase in cash receipts from customers;
|
•
|
a
$4.5 million
increase in insurance proceeds;
|
•
|
a
$13.6 million
decrease in cash tax payments due to the deferral of IRS permitted payments (excluding the March 2017 IRS tax settlement noted above), partially offset by
|
•
|
a
$12.5 million
increase in employee compensation;
|
•
|
a
$12.3 million
increase in vendor and other payments;
|
•
|
a
$2.9 million
increase in cash interest paid;
|
•
|
a
$0.4 million
increase in net trust deposits; and
|
•
|
a
$4.9 million
decrease in General Agency (GA) and other receipts.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Preneed funeral
|
$
|
112.7
|
|
|
$
|
118.6
|
|
Preneed cemetery:
|
|
|
|
||||
Merchandise and services
|
135.3
|
|
|
141.6
|
|
||
Pre-construction
|
11.9
|
|
|
7.8
|
|
||
Bonds supporting preneed obligations
|
259.9
|
|
|
268.0
|
|
||
Bonds supporting preneed business permits
|
4.6
|
|
|
4.5
|
|
||
Other bonds
|
18.0
|
|
|
18.4
|
|
||
Total surety bonds outstanding
|
$
|
282.5
|
|
|
$
|
290.9
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
|
(In millions)
|
||||||||||||
Funeral:
|
|
|
|
|
|
|
|
||||||||
Preneed trust-funded (including bonded):
|
|
|
|
|
|
|
|
||||||||
Sales production
|
$
|
76.6
|
|
|
$
|
72.5
|
|
|
$
|
241.1
|
|
|
$
|
216.4
|
|
Sales production (number of contracts)
|
22,451
|
|
|
22,549
|
|
|
72,112
|
|
|
68,562
|
|
||||
Maturities
|
$
|
64.0
|
|
|
$
|
58.1
|
|
|
$
|
195.7
|
|
|
$
|
177.2
|
|
Maturities (number of contracts)
|
16,065
|
|
|
15,295
|
|
|
50,897
|
|
|
48,417
|
|
||||
Cemetery:
|
|
|
|
|
|
|
|
||||||||
Sales production:
|
|
|
|
|
|
|
|
||||||||
Preneed
|
$
|
194.8
|
|
|
$
|
189.8
|
|
|
$
|
638.3
|
|
|
$
|
595.6
|
|
Atneed
|
74.6
|
|
|
72.6
|
|
|
237.8
|
|
|
230.1
|
|
||||
Total sales production
|
$
|
269.4
|
|
|
$
|
262.4
|
|
|
$
|
876.1
|
|
|
$
|
825.7
|
|
Sales production deferred to backlog:
|
|
|
|
|
|
|
|
||||||||
Preneed
|
$
|
91.5
|
|
|
$
|
93.9
|
|
|
$
|
292.2
|
|
|
$
|
283.8
|
|
Atneed
|
55.2
|
|
|
55.6
|
|
|
173.9
|
|
|
172.4
|
|
||||
Total sales production deferred to backlog
|
$
|
146.7
|
|
|
$
|
149.5
|
|
|
$
|
466.1
|
|
|
$
|
456.2
|
|
Revenue recognized from backlog:
|
|
|
|
|
|
|
|
||||||||
Preneed
|
$
|
79.9
|
|
|
$
|
73.4
|
|
|
$
|
210.6
|
|
|
$
|
187.1
|
|
Atneed
|
55.8
|
|
|
56.5
|
|
|
171.4
|
|
|
171.3
|
|
||||
Total revenue recognized from backlog
|
$
|
135.7
|
|
|
$
|
129.9
|
|
|
$
|
382.0
|
|
|
$
|
358.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
|
(In millions)
|
||||||||||||
Preneed insurance-funded:
|
|
|
|
|
|
|
|
||||||||
Sales production
(1)
|
$
|
124.9
|
|
|
$
|
131.9
|
|
|
$
|
386.2
|
|
|
$
|
422.4
|
|
Sales production (number of contracts)
(1)
|
21,297
|
|
|
21,434
|
|
|
64,305
|
|
|
69,156
|
|
||||
General agency revenue
|
$
|
29.1
|
|
|
$
|
32.1
|
|
|
$
|
90.9
|
|
|
$
|
105.4
|
|
Maturities
|
$
|
77.4
|
|
|
$
|
76.0
|
|
|
$
|
249.5
|
|
|
$
|
239.4
|
|
Maturities (number of contracts)
|
13,061
|
|
|
12,943
|
|
|
42,144
|
|
|
40,778
|
|
(1)
|
Amounts are not included in our unaudited condensed Consolidated Balance Sheet.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Fair Value
|
|
Cost
|
|
Fair Value
|
|
Cost
|
||||||||
|
|
|
(In billions)
|
|
|
||||||||||
Deferred revenue
|
$
|
1.80
|
|
|
$
|
1.80
|
|
|
$
|
1.73
|
|
|
$
|
1.73
|
|
Deferred receipts held in trust
|
3.40
|
|
|
3.18
|
|
|
3.10
|
|
|
3.05
|
|
||||
|
$
|
5.20
|
|
|
$
|
4.98
|
|
|
$
|
4.83
|
|
|
$
|
4.78
|
|
Allowance for cancellation on trust investments
|
(0.26
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
||||
Backlog of trust-funded deferred revenue
|
$
|
4.94
|
|
|
$
|
4.73
|
|
|
$
|
4.58
|
|
|
$
|
4.53
|
|
Backlog of insurance-funded deferred revenue
(1)
|
5.60
|
|
|
5.60
|
|
|
5.37
|
|
|
5.37
|
|
||||
Total backlog of deferred revenue
|
$
|
10.54
|
|
|
$
|
10.33
|
|
|
$
|
9.95
|
|
|
$
|
9.90
|
|
Preneed receivables, net and trust investments
|
$
|
4.68
|
|
|
$
|
4.46
|
|
|
$
|
4.31
|
|
|
$
|
4.26
|
|
Allowance for cancellation on trust investments
|
(0.26
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
||||
Assets associated with backlog of trust-funded deferred revenue, net of estimated allowance for cancellation
|
$
|
4.42
|
|
|
$
|
4.21
|
|
|
$
|
4.06
|
|
|
$
|
4.01
|
|
Insurance policies associated with insurance-funded deferred revenue, net of estimated allowance for cancellation
(1)
|
5.60
|
|
|
5.60
|
|
|
5.37
|
|
|
5.37
|
|
||||
Total assets associated with backlog of preneed deferred revenue, net of estimated allowance for cancellation
|
$
|
10.02
|
|
|
$
|
9.81
|
|
|
$
|
9.43
|
|
|
$
|
9.38
|
|
(1)
|
Amounts are not included in our unaudited condensed Consolidated Balance Sheet.
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Pre-tax (losses) gains from divestitures and impairment, net
|
$
|
(0.1
|
)
|
|
$
|
0.6
|
|
Pre-tax legal settlement
|
$
|
(11.5
|
)
|
|
$
|
—
|
|
Pre-tax expenses related to system transition costs
|
$
|
—
|
|
|
$
|
(2.3
|
)
|
Tax benefit from above items
|
$
|
4.0
|
|
|
$
|
(1.4
|
)
|
Change in certain tax reserves
|
$
|
0.8
|
|
|
$
|
(0.8
|
)
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in millions, except average revenue per service)
|
||||||
Consolidated funeral revenue
|
$
|
437.5
|
|
|
$
|
445.5
|
|
Less: Revenue associated with acquisitions/new construction
|
8.2
|
|
|
4.3
|
|
||
Less: Revenue associated with divestitures
|
0.2
|
|
|
9.4
|
|
||
Comparable
1
funeral revenue
|
429.1
|
|
|
431.8
|
|
||
Less: Comparable recognized preneed revenue
|
26.6
|
|
|
27.7
|
|
||
Less: Comparable general agency and other revenue
|
28.4
|
|
|
29.6
|
|
||
Adjusted comparable funeral revenue
|
$
|
374.1
|
|
|
$
|
374.5
|
|
Comparable services performed
|
70,974
|
|
|
70,929
|
|
||
Comparable average revenue per service
2
|
$
|
5,271
|
|
|
$
|
5,280
|
|
|
|
|
|
||||
Consolidated funeral operating profit
|
$
|
70.1
|
|
|
$
|
74.5
|
|
Less: Operating profit associated with acquisitions/new construction
|
1.1
|
|
|
0.8
|
|
||
Less: Operating (loss) profit associated with divestitures
|
(0.8
|
)
|
|
0.7
|
|
||
Comparable
funeral operating profit
|
$
|
69.8
|
|
|
$
|
73.0
|
|
(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
September 30, 2017
.
|
(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 is preneed sales of merchandise that are delivered at the time of sale, including memorial merchandise and travel protection, and is excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Consolidated cemetery revenue
|
$
|
293.8
|
|
|
$
|
276.0
|
|
Less: Revenue associated with acquisitions/new construction
|
1.6
|
|
|
—
|
|
||
Comparable
1
cemetery revenue
|
$
|
292.2
|
|
|
$
|
276.0
|
|
|
|
|
|
||||
Consolidated cemetery operating profit
|
$
|
79.6
|
|
|
$
|
66.2
|
|
Less: Operating profit associated with acquisitions/new construction
|
0.4
|
|
|
(0.1
|
)
|
||
Less: Operating profit associated with divestitures
|
(0.1
|
)
|
|
(0.2
|
)
|
||
Comparable cemetery operating profit
|
$
|
79.3
|
|
|
$
|
66.5
|
|
(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
September 30, 2017
.
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Pre-tax gains (losses) from divestitures and impairment, net
|
$
|
5.5
|
|
|
$
|
(30.4
|
)
|
Pre-tax losses from the early extinguishment of debt
|
$
|
—
|
|
|
$
|
(22.5
|
)
|
Pre-tax legal settlement
|
$
|
(11.5
|
)
|
|
$
|
—
|
|
Pre-tax acquisition and integration costs
|
$
|
—
|
|
|
$
|
(5.5
|
)
|
Pre-tax expenses related to system transition costs
|
$
|
—
|
|
|
$
|
(11.2
|
)
|
Pre-tax pension termination settlement
|
$
|
(12.8
|
)
|
|
$
|
—
|
|
Tax benefit from above items
|
$
|
6.6
|
|
|
$
|
21.1
|
|
Change in certain tax reserves and other
|
$
|
108.0
|
|
|
$
|
(3.4
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in millions, except average revenue per service)
|
||||||
Consolidated funeral revenue
|
$
|
1,395.2
|
|
|
$
|
1,404.8
|
|
Less: Revenue associated with acquisitions/new construction
|
21.9
|
|
|
5.3
|
|
||
Less: Revenue associated with divestitures
|
2.5
|
|
|
31.0
|
|
||
Comparable
1
funeral revenue
|
1,370.8
|
|
|
1,368.5
|
|
||
Less: Comparable recognized preneed revenue
|
88.8
|
|
|
85.6
|
|
||
Less: Comparable general agency and other revenue
|
87.8
|
|
|
97.6
|
|
||
Adjusted comparable funeral revenue
|
$
|
1,194.2
|
|
|
$
|
1,185.3
|
|
Comparable services performed
|
227,196
|
|
|
225,550
|
|
||
Comparable average revenue per service
2
|
$
|
5,256
|
|
|
$
|
5,255
|
|
|
|
|
|
||||
Consolidated funeral operating profit
|
$
|
274.8
|
|
|
$
|
271.2
|
|
Less: Operating profit associated with acquisitions/new construction
|
4.5
|
|
|
1.1
|
|
||
Less: Operating loss associated with divestitures
|
(3.0
|
)
|
|
2.7
|
|
||
Comparable
funeral operating profit
|
$
|
273.3
|
|
|
$
|
267.4
|
|
(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
September 30, 2017
.
|
(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, and are excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Consolidated cemetery revenue
|
$
|
887.1
|
|
|
$
|
817.3
|
|
Less: Revenue associated with acquisitions/new construction
|
4.0
|
|
|
—
|
|
||
Less: Revenue associated with divestitures
|
—
|
|
|
0.2
|
|
||
Comparable
1
cemetery revenue
|
$
|
883.1
|
|
|
$
|
817.1
|
|
|
|
|
|
||||
Consolidated cemetery operating profit
|
$
|
235.5
|
|
|
$
|
194.5
|
|
Less: Operating profit associated with acquisitions/new construction
|
0.5
|
|
|
(0.1
|
)
|
||
Less: Operating loss associated with divestitures
|
(0.1
|
)
|
|
(0.3
|
)
|
||
Comparable cemetery operating profit
|
$
|
235.1
|
|
|
$
|
194.9
|
|
(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
September 30, 2017
.
|
•
|
Our affiliated funeral and cemetery trust funds own investments in equity securities, fixed income securities, and mutual funds, 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 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 funeral 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 declines, our cash flows and revenue may decrease.
|
•
|
If we are not able to respond effectively to changing consumer preferences, our market share, revenue, and profitability could decrease.
|
•
|
The continuing upward trend in the number of cremations performed in North America could result in lower revenue, gross 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 legal 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; as such, we could be exposed to unexpected costs that could negatively affect our financial performance.
|
•
|
A number of years elapse before particular tax matters, for which we have established accruals, are audited and finally resolved.
|
•
|
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.
|
•
|
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 a key information technology system or process 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
|
||||||
July 1, 2017 - July 31, 2017
|
|
118,299
|
|
|
$
|
33.51
|
|
|
118,299
|
|
|
$
|
244,188,178
|
|
August 1, 2017 - August 31, 2017
|
|
258,300
|
|
|
$
|
35.33
|
|
|
258,300
|
|
|
$
|
235,062,389
|
|
September 1, 2017 - September 30, 2017
|
|
447,492
|
|
|
$
|
35.00
|
|
|
447,492
|
|
|
$
|
219,398,818
|
|
|
|
824,091
|
|
|
|
|
824,091
|
|
|
|
12.1
|
|
|
—
|
|
|
31.1
|
|
|
—
|
|
|
31.2
|
|
|
—
|
|
|
32.1
|
|
|
—
|
|
|
32.2
|
|
|
—
|
|
|
101
|
|
|
—
|
|
Interactive data file.
|
October 26, 2017
|
|
SERVICE CORPORATION INTERNATIONAL
|
|
By:
|
/s/ Tammy Moore
|
|
|
Tammy Moore
|
|
|
Vice President and Corporate Controller
(Principal Accounting Officer)
|
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