News Release

SCI Corporate Communications
Phone: 1-844-220-4408
Email: Press.Room@sci-us.com
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Service Corporation International Announces Second Quarter 2015 Financial Results And Updates 2015 Financial Guidance
- Conference call on Thursday, July 30, 2015, at 9:00 a.m. Central Time.

HOUSTON, July 29, 2015 /PRNewswire/ -- Service Corporation International (NYSE: SCI), the largest provider of deathcare products and services in North America, today reported results for the second quarter 2015. Our unaudited consolidated financial statements can be found at the end of this press release. The table below summarizes our key financial results:

(In millions, except for per share amounts)


Three Months Ended
June 30,


Six Months Ended
June 30,



2015


2014


2015


2014

Revenues


$

754.4



$

746.8



$

1,502.5



$

1,492.3


Operating income


$

127.6



$

144.7



$

268.7



$

252.1


Net income attributable to common stockholders


$

52.6



$

25.9



$

114.0



$

67.0


Diluted earnings per share


$

0.25



$

0.12



$

0.55



$

0.31


Earnings from continuing operations excluding special items(1)


$

57.1



$

49.6



$

122.8



$

110.3


Diluted earnings per share from continuing operations excluding special items(1)


$

0.28



$

0.23



$

0.59



$

0.51


Diluted weighted average shares outstanding


206.7



216.0



207.2



216.6


Net cash provided by operating activities


$

93.7



$

42.9



$

282.5



$

170.8


Net cash provided by operating activities excluding special items(1)


$

101.9



$

98.4



$

299.7



$

262.1




(1)

Earnings from continuing operations excluding special items, diluted earnings per share from continuing operations excluding special items, and net cash provided by operating activities excluding special items are non-GAAP financial measures. A reconciliation to net income, diluted earnings per share, and net cash provided by operating activities computed in accordance with generally accepted accounting principles in the United States (GAAP) can be found later in this press release under the headings "Cash Flow and Capital Spending" and "Non-GAAP Financial Measures".

 

Quarterly Highlights:

  • Diluted earnings per share from continuing operations excluding special items grew 21.7% to $0.28 in the second quarter of 2015 over the same period in 2014 primarily driven by strong performance from our cemetery segment, which more than offset the loss of earnings from properties that have been subsequently divested in connection with the Stewart acquisition.
  • Consolidated funeral gross profit declined $6.1 million in the second quarter of 2015 compared to the second quarter of 2014. However, comparable funeral gross profits grew $1.6 million which helped offset the loss of $7.7 million in gross profits contributed in the prior year quarter by properties that have been subsequently divested.
  • Consolidated cemetery gross profit increased $16.8 million in the second quarter of 2015 over the prior year quarter and the gross margin percentage increased 470 basis points to 26.5%. Higher gross profits driven by a double-digit percentage increase in preneed cemetery property sales more than offset the loss of $2.5 million in gross profits contributed in the prior year quarter by properties that have been subsequently divested.
  • Net cash provided by operating activities excluding special items increased 3.6% to $101.9 million in the second quarter of 2015 compared to $98.4 million in the prior year quarter due primarily to higher cash receipts associated with an increase in cemetery preneed sales production.
  • During the second quarter, we returned $98.6 million to our shareholders through a combination of share repurchases and dividends.

Tom Ryan, the Company's President and Chief Executive Officer, commented on the second quarter of 2015:
"We are very proud of the operating performance during the second quarter, which resulted in a 22% improvement in normalized earnings per share. This represents our fifth consecutive quarter of double-digit percentage growth in normalized earnings per share. Robust preneed cemetery sales production continues to be the primary factor driving our earnings ahead of our expectations. Through six months, normalized earnings per share has increased 16% and adjusted operating cash flows has also increased 14%. Coming off of this performance, we have revised upwards the midpoint of our annual earnings and cash flow guidance and we expect to continue to deploy capital strategically to increase shareholder value in the back half of 2015."

 

REVIEW OF RESULTS FOR SECOND QUARTER AND FIRST HALF OF 2015


Consolidated Segment Results

 (See definitions of revenue line items later in this earnings release.)


(In millions, except funeral services performed and average revenue per service)

Three Months Ended June 30,


Six Months Ended June 30,


2015


2014


2015


2014

Funeral:








Atneed revenue

$

269.8



$

273.6



$

566.0



$

565.9


Matured preneed revenue

136.6



151.4



291.9



313.8


Core revenue

406.4



425.0



857.9



879.7


Recognized preneed revenue

25.4



20.8



48.5



42.5


Other revenue

39.7



33.7



72.8



66.4


 Total revenue

$

471.5



$

479.5



$

979.2



$

988.6










Gross profit

$

91.7



$

97.8



$

216.4



$

217.0


Gross margin percentage

19.4

%


20.4

%


22.1

%


22.0

%









Funeral services performed

77,969



80,846



165,279



168,910


Average revenue per service

$

5,212



$

5,257



$

5,191



$

5,208










Cemetery:








Atneed revenue

$

75.7



$

77.6



$

151.2



$

154.0


Recognized preneed revenue

167.2



153.6



299.1



280.0


Core revenue

242.9



231.2



450.3



434.0


Other revenue

40.0



36.0



73.0



69.7


 Total revenue

$

282.9



$

267.2



$

523.3



$

503.7










Gross profit

$

75.0



$

58.2



$

128.3



$

105.1


Gross margin percentage

26.5

%


21.8

%


24.5

%


20.9

%

 

Comparable Funeral Results

The table below details comparable funeral results of operations ("same store") for the three months ended June 30, 2015 and 2014. We consider comparable operations to be those owned for the entire period beginning January 1, 2014 and ending June 30, 2015.

 

(Dollars in millions, except average revenue per service and average revenue per contract sold)


Three Months Ended June 30,



2015


2014

Comparable revenue:





Atneed revenue(1)


$

267.5



$

262.0


Matured preneed revenue(2)


136.3



143.0


Core revenue(3)


403.8



405.0


Recognized preneed revenue(4)


24.9



20.7


Other revenue(5)


39.7



32.8


Total comparable revenue


$

468.4



$

458.5







Comparable gross profit


$

92.7



$

91.1


Comparable gross margin percentage


19.8

%


19.9

%






Comparable funeral services performed


77,172



77,198


Comparable average revenue per service


$

5,233



$

5,246


Comparable average revenue per service, excluding the impact of foreign currency fluctuations


$

5,330



$

5,289







Comparable preneed sales production:





Sales excluding terminally imminent contracts


$

193.3



$

186.9


Sales of terminally imminent contracts


16.9



24.0


Total preneed sales


$

210.2



$

210.9







Total preneed contracts sold


44,894



44,590


Average revenue per contract sold


$

4,682



$

4,731


Average revenue per contract sold, excluding the impact of foreign currency fluctuations


$

4,757



$

4,766




(1)

Atneed revenue represents merchandise and services sold once death has occurred.

(2)

Matured preneed revenue represents merchandise and services primarily sold on a preneed contract but delivered and/or performed once death has occurred.

(3)

Core revenue represents merchandise and services recognized once death has occurred.

(4)

Recognized preneed revenue represents merchandise and travel protection sold on a preneed contract and delivered before death has occurred

(5)

Other revenue consists primarily of General Agency revenue, which are commissions we receive from third-party insurance companies for life insurance policies sold to preneed customers for the purpose of funding preneed arrangements.

 

  • Comparable funeral revenue increased by $9.9 million in the second quarter of 2015 compared to 2014 mainly driven by an increase in recognized preneed revenue and higher General Agency revenue.
  • Comparable average revenue per service decreased by 0.2%. Excluding an unfavorable Canadian currency impact, the average revenue per service grew 0.8%. Our comparable cremation rate increased to 51.3% in the second quarter of 2015 compared to 50.7% in the second quarter of 2014.
  • Comparable gross profit increased $1.6 million, or 1.8%, compared to the prior year quarter while the gross margin percentage remained relatively flat compared to the prior year quarter. The improvement was led by the revenue increases described above.
  • Preneed funeral sales production, excluding terminally imminent contracts in both periods, increased $6.4 million for the quarter or 3.4%. A terminally imminent contract is used when a family chooses to make arrangements several weeks or a few months in advance of need. In mid-2014, we began to record more of these sales directly into atneed sales instead of recording them as preneed sales that quickly convert into atneed business.

Comparable Cemetery Results

The table below details comparable cemetery results of operations ("same store") for the three months ended June 30, 2015 and 2014. We consider comparable operations to be those owned for the entire period beginning January 1, 2014 and ending June 30, 2015.

 

(Dollars in millions)


Three Months Ended June 30,



2015


2014

Comparable revenue:





Atneed revenue(1)


$

74.7



$

72.3


Recognized preneed revenue(2)


166.3



147.6


Core revenue(3)


241.0



219.9


Other revenue(4)


39.7



34.5


Total comparable revenue


$

280.7



$

254.4







Comparable gross profit


$

74.6



$

56.2


Comparable gross margin percentage


26.6

%


22.1

%






Comparable preneed and atneed sales production:





Property


$

190.6



$

167.8


Merchandise and services


140.7



127.9


Discounts


(37.7)



(34.2)


Preneed and atneed sales production


$

293.6



$

261.5


 Recognition rate(5)


82

%


84

%



(1)

Atneed revenue represents property, merchandise, and services sold once death has occurred.

(2)

Recognized preneed revenue represents property sold on a preneed contract and merchandise and services sold on a preneed contract that have been delivered or performed.

(3)

Core revenue represents property, merchandise, and services that have been delivered or performed.

(4)

Other revenue is primarily related to merchandise and service trust fund income, endowment care trust fund income, royalty income, and interest and finance charges earned from customer receivables on preneed installment contracts.

(5)

Represents the ratio of current period core revenue recognition stated as a percentage of current period sales production.

 

  • Comparable cemetery revenue grew $26.3 million, or 10.3%, in the second quarter of 2015 compared to 2014 primarily from an increase in preneed cemetery property sales production and higher trust fund income.
  • Preneed cemetery sales production increased $31.6 million, or 16.9%, in the current quarter compared to same period last year. This increase was driven by strong growth in the number of preneed property contracts sold as well as a healthy increase in the average sale, which was partially offset by an unfavorable Canadian currency impact.
  • Comparable cemetery gross profit increased $18.4 million and the adjusted gross margin percentage increased 450 basis points to 26.6% in the current quarter. The gross profit improvement was driven by the increases in cemetery property sales stated above as well as a $5.0 million increase in trust fund income. This increase was partially offset by higher selling costs associated with the higher preneed sales production.

Other Financial Results

  • General and administrative expenses decreased $12.7 million to $33.6 million. The prior year included $14.1 million of costs related to the integration of Stewart and $3.9 million of system integration and other costs. Excluding these one-time costs, general and administrative expenses increased $5.3 million over the prior year, which is primarily due to the permanent costs associated with the increased scale of the combined SCI and Stewart entity.

Cash Flow and Capital Spending

Set forth below is a reconciliation of our reported net cash provided by operating activities prepared in accordance with GAAP to net cash provided by operating activities excluding special items (or sometimes referred to as adjusted operating cash flow). We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.

 

(In millions)

Three Months Ended
June 30,


Six Months Ended
June 30,


2015


2014


2015


2014

Net cash provided by operating activities, as reported

$

93.7



$

42.9



$

282.5



$

170.8


Premiums paid on early extinguishment



24.8





24.8


Stewart acquisition and transition costs



18.4





47.0


Legal defense fees and other matters



10.0





10.3


Excess tax benefits from share-based awards

7.5



5.8



13.0



12.5


Other

0.7



(3.5)



4.2



(3.3)


Net cash provided by operating activities excluding special items

$

101.9



$

98.4



$

299.7



$

262.1


 

  • Net cash provided by operating activities excluding special items increased $3.5 million to $101.9 million for the second quarter compared to $98.4 million in the prior year quarter due primarily to higher cash receipts associated with the increase in cemetery comparable preneed sales production, an increase in net trust fund withdrawals, and a $9.1 million decrease in cash interest paid. These increases were partially offset by an increase in payroll funding as a result of the timing of the Independence Day holiday and anticipated higher cash tax payments.
  • A summary of our capital expenditures is set forth below:

 


(In millions)

Three Months Ended
June 30,


Six Months Ended
June 30,


2015


2014


2015


2014

Capital improvements at existing locations

$

23.1



$

17.5



$

40.3



$

29.3


Development of cemetery property

12.5



10.4



21.9



20.7


Construction of new funeral home facilities

0.8



4.6



2.5



7.4


Total capital expenditures

$

36.4



$

32.5



$

64.7



$

57.4


 

TRUST FUND RETURNS
Total trust fund returns include realized and unrealized gains and losses and dividends. A summary of our consolidated trust fund returns for the three and six months ended June 30, 2015 is set forth below:

 



Three Months


Six Months

Preneed funeral


0.3%


2.5%

Preneed cemetery


0.3%


2.8%

Cemetery perpetual care


(0.2)%


1.6%

Combined trust funds


0.1%


2.3%

 

OUTLOOK FOR 2015

Our updated outlook for potential earnings and cash flow in 2015 is as follows:

 

(In millions except per share amounts)


Previous 2015
Outlook


Updated 2015
Annual Guidance

Diluted earnings per share from continuing operations excluding special items (1)


$1.16 to $1.28


$1.22 to $1.28

Net cash provided by operating activities excluding special items (1)


$450 to $500


$475 to $500

Capital improvements at existing facilities and cemetery development expenditures


$130 to $140


$130 to $140



(1)

Diluted earnings per share from continuing operations excluding special items and net cash provided by operating activities excluding special items are non-GAAP financial measures. We historically reconcile these non-GAAP financial measures to diluted earnings per share and net cash provided by operating activities, however, diluted earnings per share and net cash provided by operating activities calculated in accordance with GAAP are not currently accessible on a forward-looking basis. Our guidance for 2015 excludes the following because this information is not currently available for 2015: Gains or losses associated with asset divestitures, gains or losses associated with the early extinguishment of debt, potential tax reserve adjustments, acquisition and transition costs, and potential costs associated with settlements of litigation or the recognition of receivables for insurance recoveries associated with litigation. The foregoing items could materially impact our forward-looking diluted EPS and net cash provided by operating activities calculated in accordance with GAAP, consistent with the historical disclosures found in this press release under the headings "Cash Flow and Capital Spending" and "Non-GAAP financial measures".

 

This outlook reflects management's current views and estimates regarding future economic and financial market conditions, company performance and financial results, business prospects, the competitive environment, and other events. This outlook is subject to a number of risks and uncertainties, many of which are beyond the control of SCI, that could cause actual results to differ materially from the potential results highlighted above. A further list and description of these risks and uncertainties and other matters can be found later in this press release under "Cautionary Statement on Forward-Looking Statements".

NON-GAAP FINANCIAL MEASURES
Earnings from continuing operations excluding special items and diluted earnings per share from continuing operations excluding special items (or sometimes referred to as normalized earnings per share) shown above are non-GAAP financial measures. We believe these non-GAAP financial measures provide a consistent basis for comparison between quarters and better reflect the performance of our core operations, as they are not influenced by certain income or expense items not affecting continuing operations. We also believe these measures help facilitate comparisons to our competitors' operating results.

Set forth below is a reconciliation of our reported net income attributable to common stockholders to earnings from continuing operations excluding special items and our GAAP diluted earnings per share to diluted earnings per share from continuing operations excluding special items. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.

 

(In millions, except diluted EPS)

Three Months Ended June 30,


2015


2014


Net

Income


Diluted

EPS


Net

Income


Diluted

EPS

Net income attributable to common stockholders, as reported

$

52.6



$

0.25



$

25.9



$

0.12


After-tax reconciling items:








Losses (gains) on divestitures and impairment charges, net

4.6



0.03



(7.0)



(0.05)


Acquisition and transition costs





9.1



0.05


Loss on early extinguishment of debt





18.4



0.09


Other

(0.1)





3.2



0.02


Earnings from continuing operations and diluted earnings per share excluding special items

$

57.1



$

0.28



$

49.6



$

0.23










Diluted weighted average shares outstanding (in thousands)



206,746





215,989




(In millions, except diluted EPS)

Six Months Ended June 30,


2015


2014


Net

Income


Diluted

EPS


Net

Income


Diluted

EPS

Net income attributable to common stockholders, as reported

$

114.0



$

0.55



$

67.0



$

0.31


After-tax reconciling items:








Losses (gains) on divestitures and impairment charges, net

5.7



0.03



(5.8)



(0.03)


Acquisition and transition costs

1.8



0.01



19.2



0.09


Loss on early extinguishment of debt





18.4



0.08


Legal defense fees and other matters





7.7



0.04


Other

1.3





3.8



0.02


Earnings from continuing operations and diluted earnings per share excluding special items

$

122.8



$

0.59



$

110.3



$

0.51










Diluted weighted average shares outstanding (in thousands)



207,221





216,593


 

Conference Call and Webcast

We will host a conference call on Thursday, July 30, 2015, at 9:00 a.m. Central Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in number is (847) 619-6441 with the passcode of 40238041. The conference call will also be broadcast live via the Internet and can be accessed through our website at www.sci-corp.com. A replay of the conference call will be available through August 13, 2015 and can be accessed at (630) 652-3042 with the passcode of 40238041#. Additionally, a replay of the conference call will be available on our website for approximately ninety days.

Cautionary Statement on Forward-Looking Statements
The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate," or "predict," that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by us, or on our behalf. Important factors, which could cause actual results to differ materially from those in forward-looking statements include, among others, the following:

  • 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 in order 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 home and cemetery industry is competitive.
  • Increasing death benefits related to preneed funeral contracts funded through life insurance or annuity contracts may not cover future increases in the cost of providing a price-guaranteed funeral service.
  • The financial condition of third-party insurance companies that fund our preneed funeral contracts may impact our future revenues.
  • 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 revenues may decrease.
  • If we are not able to respond effectively to changing consumer preferences, our market share, revenues, and profitability could decrease.
  • The continuing upward trend in the number of cremations performed in North America could result in lower revenues and gross profit.
  • 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.
  • A number of years may 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 prevent us from fulfilling our obligations under our indebtedness.
  • Failure to maintain effective internal control over financial reporting could adversely affect our results of operations, investor confidence, and our stock price.

For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2014 Annual Report on Form 10-K. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. We assume no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us, whether as a result of new information, future events or otherwise.

About Service Corporation International

Service Corporation International (NYSE: SCI), headquartered in Houston, Texas, is North America's leading provider of deathcare products and services. At June 30, 2015, we owned and operated 1,550 funeral homes and 467 cemeteries (of which 262 are combination locations) in 45 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. Through our businesses, we market the Dignity Memorial® brand which offers assurance of quality, value, caring service, and exceptional customer satisfaction. For more information about Service Corporation International, please visit our website at www.sci-corp.com. For more information about Dignity Memorial®, please visit www.dignitymemorial.com.

 

For additional information contact:



Investors:


Debbie Young - Director / Investor Relations


(713) 525-9088

Media:


Marianne Gooch- Managing Director/ Corporate Communications


(713) 525-9167

 

SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED STATEMENT OF OPERATIONS


(In thousands, except per share amounts)



Three Months Ended

June 30,


Six Months Ended

June 30,


2015


2014


2015


2014

Revenues

$

754,354



$

746,760



$

1,502,471



$

1,492,255


Costs and expenses

(587,624)



(590,716)



(1,157,792)



(1,170,151)


Gross profit

166,730



156,044



344,679



322,104


General and administrative expenses

(33,568)



(46,307)



(68,623)



(102,137)


(Losses) gains on divestitures and impairment charges, net

(5,582)



34,994



(7,361)



32,182


Operating income

127,580



144,731



268,695



252,149


Interest expense

(42,982)



(46,307)



(85,921)



(91,303)


Loss on early extinguishment of debt



(29,158)





(29,158)


Other (expense) income, net

(109)



50



(167)



1,586


Income from continuing operations before income taxes

84,489



69,316



182,607



133,274


Provision for income taxes

(31,007)



(37,357)



(67,660)



(60,064)


Net income from continuing operations

53,482



31,959



114,947



73,210


Net losses from discontinued operations, net of tax

(390)



(178)



(390)



(38)


Net income

53,092



31,781



114,557



73,172


Net income attributable to noncontrolling interests

(497)



(5,859)



(587)



(6,148)


Net income attributable to common stockholders

$

52,595



$

25,922



$

113,970



$

67,024


Basic earnings per share:








Net income attributable to common stockholders

$

0.26



$

0.12



$

0.56



$

0.32


Basic weighted average number of shares

202,466



212,390



202,966



212,613


Diluted earnings per share:








Net income attributable to common stockholders

$

0.25



$

0.12



$

0.55



$

0.31


Diluted weighted average number of shares

206,746



215,989



207,221



216,593


Dividends declared per share

$

0.10



$

0.08



$

0.20



$

0.16


 

SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED BALANCE SHEET


(In thousands, except share amounts)



June 30, 2015


December 31, 2014

ASSETS




Current assets:




Cash and cash equivalents

$

199,096



$

177,335


Receivables, net

92,192



109,050


Inventories

29,846



29,697


Other

40,036



80,774


Total current assets

361,170



396,856


Preneed funeral receivables, net and trust investments

1,829,071



1,843,023


Preneed cemetery receivables, net and trust investments

2,355,034



2,306,669


Cemetery property

1,743,950



1,739,216


Property and equipment, net

1,846,579



1,861,403


Goodwill

1,811,842



1,810,853


Deferred charges and other assets

629,436



624,248


Cemetery perpetual care trust investments

1,347,753



1,341,376



$

11,924,835



$

11,923,644


LIABILITIES & EQUITY




Current liabilities:




Accounts payable and accrued liabilities

$

420,926



$

453,042


Current maturities of long-term debt

290,016



90,931


Income taxes

14,323



8,035


Total current liabilities

725,265



552,008


Long-term debt

2,769,861



2,963,794


Deferred preneed funeral revenues

550,663



540,164


Deferred preneed cemetery revenues

1,123,686



1,062,381


Deferred tax liability

436,602



448,824


Other liabilities

502,130



502,553


Deferred preneed receipts held in trust

3,137,017



3,148,884


Care trusts' corpus

1,345,876



1,327,658






Stockholders' equity:




Common stock, $1 per share par value, 500,000,000 shares authorized, 208,205,991 and 205,458,331 shares issued, respectively, and 201,751,035 and 204,866,770 shares outstanding, respectively

201,751



204,867


Capital in excess of par value

1,158,121



1,186,304


Accumulated deficit

(79,971)



(81,859)


Accumulated other comprehensive income

44,668



59,414


Total common stockholders' equity

1,324,569



1,368,726


Noncontrolling interests

9,166



8,652


Total Equity

1,333,735



1,377,378



$

11,924,835



$

11,923,644


 

SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED STATEMENT OF CASH FLOWS


(In thousands)



Six Months Ended

December 31,


2015


2014

Cash flows from operating activities:




Net income

$

114,557



$

73,172


Adjustments to reconcile net income to net cash provided by operating activities:




Loss from discontinued operations, net of tax

390



38


Losses on early extinguishment of debt



29,158


Premiums paid on early extinguishment of debt



(24,804)


Depreciation and amortization

68,899



70,595


Amortization of intangible assets

15,983



19,346


Amortization of cemetery property

26,027



25,790


Amortization of loan costs

4,865



4,048


Provision for doubtful accounts

3,431



4,541


(Benefit) provision for deferred income taxes

(8,466)



26,484


Losses (gains) on divestitures and impairment charges, net

7,361



(32,182)


Share-based compensation

7,284



6,423


Excess tax benefits from share-based awards

(13,003)



(12,521)


Change in assets and liabilities, net of effects from acquisitions and divestitures:




Decrease (increase) in receivables

2,276



(7,241)


Increase in other assets

(761)



(22,351)


Increase in payables and other liabilities

33,932



9,437


Effect of preneed funeral production and maturities:




Decrease in preneed funeral receivables, net and trust investments

16,144



23,963


Increase (decrease) in deferred preneed funeral revenue

14,247



(11,965)


Decrease in deferred preneed funeral receipts held in trust

(37,366)



(22,550)


Effect of cemetery production and deliveries:




Increase in preneed cemetery receivables, net and trust investments

(28,272)



(31,736)


Increase in deferred preneed cemetery revenue

62,482



43,478


Decrease in deferred preneed cemetery receipts held in trust

(7,506)



(1,323)


Other

3



2,017


Net cash provided by operating activities from continuing operations

282,507



171,817


Net cash used in operating activities from discontinued operations



(1,000)


Net cash provided by operating activities

 

282,507



170,817


Cash flows from investing activities:




Capital expenditures

(64,724)



(57,379)


Acquisitions

(36,726)



(7,575)


Proceeds from divestitures and sales of property and equipment, net

8,268



154,893


Net withdrawals (deposits) of restricted funds and other

8,066



(12,225)


Net cash (used in) by provided investing activities from continuing operations

(85,116)



77,714


Net cash provided by (used in) investing activities from discontinued operations

987



(361)


Net cash (used in) provided by investing activities

(84,129)



77,353


Cash flows from financing activities:




Proceeds from the issuance of long-term debt

30,000



755,000


Debt issuance costs



(10,500)


Payments of debt

(30,121)



(135,371)


Early extinguishment of debt



(762,782)


Principal payments on capital leases

(15,257)



(14,491)


Proceeds from exercise of stock options

26,799



14,791


Excess tax benefit from share-based awards

13,003



12,521


Purchase of Company common stock

(151,795)



(60,425)


Payments of dividends

(40,398)



(34,024)


Purchase of noncontrolling interest



(15,000)


Bank overdrafts and other

(7,533)



115


Net cash used in financing activities

(175,302)



(250,166)


Net change in cash of discontinued operations



1,323


Effect of foreign currency on cash and cash equivalents

(1,315)



(392)


Net increase (decrease) in cash and cash equivalents

21,761



(1,065)


Cash and cash equivalents at beginning of period

177,335



141,580


Cash and cash equivalents at end of period

$

199,096



$

140,515


 

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SOURCE Service Corporation International