R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2013 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Texas | 74-1488375 | |
(State or other jurisdiction of incorporation or organization) | (I. R. S. employer identification number) | |
1929 Allen Parkway, Houston, Texas | 77019 | |
(Address of principal executive offices) | (Zip code) | |
713-522-5141 | ||
(Registrant’s telephone number, including area code) | ||
None | ||
(Former name, former address, or former fiscal year, if changed since last report) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
(Do not check if smaller reporting company) |
Page | |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands, except per share amounts) | |||||||
Revenues | $ | 652,352 | $ | 602,506 | |||
Costs and expenses | (492,752 | ) | (474,939 | ) | |||
Gross profits | 159,600 | 127,567 | |||||
General and administrative expenses | (30,866 | ) | (25,959 | ) | |||
Losses on divestitures and impairment charges, net | (969 | ) | (490 | ) | |||
Operating income | 127,765 | 101,118 | |||||
Interest expense | (32,769 | ) | (33,588 | ) | |||
Other (expense) income, net | (984 | ) | 3,905 | ||||
Income before income taxes | 94,012 | 71,435 | |||||
Provision for income taxes | (35,290 | ) | (23,120 | ) | |||
Net income | 58,722 | 48,315 | |||||
Net income attributable to noncontrolling interests | (1,102 | ) | (290 | ) | |||
Net income attributable to common stockholders | $ | 57,620 | $ | 48,025 | |||
Basic earnings per share: | |||||||
Net income attributable to common stockholders | $ | 0.27 | $ | 0.22 | |||
Basic weighted average number of shares | 211,380 | 220,132 | |||||
Diluted earnings per share: | |||||||
Net income attributable to common stockholders | $ | 0.27 | $ | 0.22 | |||
Diluted weighted average number of shares | 215,208 | 223,212 | |||||
Dividends declared per share | $ | 0.06 | $ | 0.05 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Net income | $ | 58,722 | $ | 48,315 | |||
Other comprehensive income: | |||||||
Foreign currency translation adjustments | (5,516 | ) | 5,745 | ||||
Total comprehensive income | 53,206 | 54,060 | |||||
Total comprehensive income attributable to noncontrolling interests | (1,098 | ) | (275 | ) | |||
Total comprehensive income attributable to common stockholders | $ | 52,108 | $ | 53,785 |
March 31, 2013 | December 31, 2012 | ||||||
(In thousands, except share amounts) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 188,546 | $ | 92,708 | |||
Receivables, net | 92,955 | 101,817 | |||||
Deferred tax assets | 42,833 | 42,864 | |||||
Inventories, net | 25,556 | 24,560 | |||||
Other | 24,858 | 20,546 | |||||
Total current assets | 374,748 | 282,495 | |||||
Preneed funeral receivables, net and trust investments | 1,558,994 | 1,535,932 | |||||
Preneed cemetery receivables, net and trust investments | 1,897,314 | 1,826,835 | |||||
Cemetery property, at cost | 1,486,646 | 1,489,948 | |||||
Property and equipment, net | 1,635,118 | 1,641,101 | |||||
Goodwill, net | 1,379,303 | 1,382,410 | |||||
Deferred charges and other assets | 421,646 | 425,267 | |||||
Cemetery perpetual care trust investments | 1,128,284 | 1,099,580 | |||||
Total assets | $ | 9,882,053 | $ | 9,683,568 | |||
LIABILITIES & EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 378,844 | $ | 373,783 | |||
Current maturities of long-term debt | 37,315 | 31,429 | |||||
Income taxes | 9,373 | 6,892 | |||||
Total current liabilities | 425,532 | 412,104 | |||||
Long-term debt | 1,913,382 | 1,916,621 | |||||
Deferred preneed funeral revenues | 525,933 | 536,647 | |||||
Deferred preneed cemetery revenues | 876,553 | 861,148 | |||||
Deferred tax liability | 507,091 | 471,198 | |||||
Other liabilities | 392,369 | 399,950 | |||||
Deferred preneed funeral and cemetery receipts held in trust | 2,714,633 | 2,624,321 | |||||
Care trusts’ corpus | 1,127,479 | 1,098,752 | |||||
Commitments and contingencies (Note 15) | |||||||
Equity: | |||||||
Common stock, $1 per share par value, 500,000,000 shares authorized, 211,785,586 and 211,056,501 shares issued, respectively, and 211,663,639 and 211,046,501 shares outstanding, respectively | 211,664 | 211,047 | |||||
Capital in excess of par value | 1,297,949 | 1,307,058 | |||||
Accumulated deficit | (230,098 | ) | (286,795 | ) | |||
Accumulated other comprehensive income | 106,205 | 111,717 | |||||
Total common stockholders’ equity | 1,385,720 | 1,343,027 | |||||
Noncontrolling interests | 13,361 | 19,800 | |||||
Total equity | 1,399,081 | 1,362,827 | |||||
Total liabilities and equity | $ | 9,882,053 | $ | 9,683,568 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 58,722 | $ | 48,315 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 30,447 | 29,541 | |||||
Amortization of intangible assets | 5,808 | 6,149 | |||||
Amortization of cemetery property | 8,975 | 9,569 | |||||
Amortization of loan costs | 1,235 | 1,194 | |||||
Provision for doubtful accounts | 1,720 | 2,842 | |||||
Provision for deferred income taxes | 26,134 | 18,479 | |||||
Losses on divestitures and impairment charges, net | 969 | 490 | |||||
Share-based compensation | 2,830 | 2,574 | |||||
Excess tax benefits from share based awards | (772 | ) | — | ||||
Change in assets and liabilities, net of effects from acquisitions and divestitures: | |||||||
Decrease in receivables | 5,962 | 4,471 | |||||
Increase in other assets | (5,882 | ) | (5,352 | ) | |||
Increase (decrease) in payables and other liabilities | 12,215 | (7,888 | ) | ||||
Effect of preneed funeral production and maturities: | |||||||
Decrease in preneed funeral receivables, net and trust investments | 13,738 | 16,066 | |||||
Decrease in deferred preneed funeral revenue | (4,000 | ) | (7,735 | ) | |||
Decrease in deferred preneed funeral receipts held in trust | (14,176 | ) | (10,069 | ) | |||
Effect of cemetery production and deliveries: | |||||||
Increase in preneed cemetery receivables, net and trust investments | (6,359 | ) | (26,238 | ) | |||
Increase in deferred preneed cemetery revenue | 15,912 | 15,948 | |||||
(Decrease) increase in deferred preneed cemetery receipts held in trust | (3,419 | ) | 642 | ||||
Other | 1,065 | (3,214 | ) | ||||
Net cash provided by operating activities | 151,124 | 95,784 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (22,569 | ) | (23,378 | ) | |||
Acquisitions | — | (804 | ) | ||||
Proceeds from divestitures and sales of property and equipment | 1,816 | 264 | |||||
Other | 339 | 1,176 | |||||
Net cash used in investing activities | (20,414 | ) | (22,742 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | — | 907 | |||||
Payments of debt | (4,948 | ) | (497 | ) | |||
Principal payments on capital leases | (6,468 | ) | (6,084 | ) | |||
Proceeds from exercise of stock options | 3,094 | 2,323 | |||||
Excess tax benefits from share based awards | 772 | — | |||||
Purchase of Company common stock | (1,708 | ) | (75,106 | ) | |||
Payments of dividends | (12,698 | ) | (11,104 | ) | |||
Purchase of Neptune Society noncontrolling interest | (8,333 | ) | — | ||||
Bank overdrafts and other | (4,004 | ) | 433 | ||||
Net cash used in financing activities | (34,293 | ) | (89,128 | ) | |||
Effect of foreign currency on cash and cash equivalents | (579 | ) | 1,348 | ||||
Net increase (decrease) in cash and cash equivalents | 95,838 | (14,738 | ) | ||||
Cash and cash equivalents at beginning of period | 92,708 | 128,569 | |||||
Cash and cash equivalents at end of period | $ | 188,546 | $ | 113,831 |
Common Stock | Treasury Stock | Capital in Excess of Par Value | Accumulated Deficit | Accumulated Other Comprehensive Income | Noncontrolling Interests | Total | |||||||||||||||||||||
Balance at December 31, 2011 | $ | 224,666 | $ | (1,710 | ) | $ | 1,430,330 | $ | (367,044 | ) | $ | 105,852 | $ | 20,101 | $ | 1,412,195 | |||||||||||
Comprehensive income | — | — | — | 48,025 | 5,760 | 275 | 54,060 | ||||||||||||||||||||
Dividends declared on common stock ($.05 per share) | — | — | (10,960 | ) | — | — | — | (10,960 | ) | ||||||||||||||||||
Employee share-based compensation earned | — | — | 2,574 | — | — | — | 2,574 | ||||||||||||||||||||
Stock option exercises | 422 | — | 1,901 | — | — | — | 2,323 | ||||||||||||||||||||
Restricted stock awards, net of forfeitures | 483 | — | (483 | ) | — | — | — | — | |||||||||||||||||||
Purchase of Company common stock | — | (6,765 | ) | (44,781 | ) | (23,560 | ) | — | — | (75,106 | ) | ||||||||||||||||
Other | 1 | — | 8 | — | — | — | 9 | ||||||||||||||||||||
Balance at March 31, 2012 | $ | 225,572 | $ | (8,475 | ) | $ | 1,378,589 | $ | (342,579 | ) | $ | 111,612 | $ | 20,376 | $ | 1,385,095 | |||||||||||
Balance at December 31, 2012 | 211,057 | (10 | ) | 1,307,058 | (286,795 | ) | 111,717 | 19,800 | 1,362,827 | ||||||||||||||||||
Comprehensive income | — | — | — | 57,620 | (5,512 | ) | 1,098 | 53,206 | |||||||||||||||||||
Dividends declared on common stock ($.06 per share) | — | — | (12,698 | ) | — | — | — | (12,698 | ) | ||||||||||||||||||
Employee share-based compensation earned | — | — | 2,830 | — | — | — | 2,830 | ||||||||||||||||||||
Stock option exercises | 350 | — | 2,744 | — | — | — | 3,094 | ||||||||||||||||||||
Restricted stock awards, net of forfeitures | 378 | (3 | ) | (375 | ) | — | — | — | — | ||||||||||||||||||
Purchase of Company common stock | — | (109 | ) | (676 | ) | (923 | ) | — | — | (1,708 | ) | ||||||||||||||||
Tax Benefits Related to Share-Based Awards | — | — | 772 | — | — | — | 772 | ||||||||||||||||||||
Purchase of Neptune Society noncontrolling interest | — | — | (1,696 | ) | — | — | (6,637 | ) | (8,333 | ) | |||||||||||||||||
Noncontrolling interest payment | — | — | — | — | — | (900 | ) | (900 | ) | ||||||||||||||||||
Other | 1 | — | (10 | ) | — | — | — | (9 | ) | ||||||||||||||||||
Balance at March 31, 2013 | $ | 211,786 | $ | (122 | ) | $ | 1,297,949 | $ | (230,098 | ) | $ | 106,205 | $ | 13,361 | $ | 1,399,081 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Deposits | $ | 22,199 | $ | 22,178 | |||
Withdrawals | 32,705 | 30,912 | |||||
Purchases of available-for-sale securities | 60,979 | 188,059 | |||||
Sales of available-for-sale securities | 96,704 | 184,902 | |||||
Realized gains from sales of available-for-sale securities | 11,371 | 26,011 | |||||
Realized losses from sales of available-for-sale securities | (1,721 | ) | (9,748 | ) |
March 31, 2013 | December 31, 2012 | ||||||
(In thousands) | |||||||
Trust investments, at fair value | $ | 995,437 | $ | 977,973 | |||
Cash and cash equivalents | 93,932 | 85,943 | |||||
Insurance-backed fixed income securities | 274,998 | 273,098 | |||||
Trust investments | 1,364,367 | 1,337,014 | |||||
Receivables from customers | 242,355 | 241,896 | |||||
Unearned finance charge | (8,996 | ) | (8,645 | ) | |||
1,597,726 | 1,570,265 | ||||||
Allowance for cancellation | (38,732 | ) | (34,333 | ) | |||
Preneed funeral receivables, net and trust investments | $ | 1,558,994 | $ | 1,535,932 |
March 31, 2013 | |||||||||||||||||
Fair Value Hierarchy Level | Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In thousands) | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. Treasury | 2 | $ | 105,942 | $ | 3,663 | $ | (1,357 | ) | $ | 108,248 | |||||||
Canadian government | 2 | 104,544 | 326 | (546 | ) | 104,324 | |||||||||||
Corporate | 2 | 48,721 | 2,949 | (605 | ) | 51,065 | |||||||||||
Residential mortgage-backed | 2 | 2,908 | 48 | (12 | ) | 2,944 | |||||||||||
Asset-backed | 2 | 128 | 2 | — | 130 | ||||||||||||
Equity securities: | |||||||||||||||||
Preferred stock | 2 | 4,935 | 446 | (81 | ) | 5,300 | |||||||||||
Common stock: | |||||||||||||||||
United States | 1 | 226,328 | 52,323 | (4,808 | ) | 273,843 | |||||||||||
Canada | 1 | 22,115 | 3,078 | (1,147 | ) | 24,046 | |||||||||||
Other international | 1 | 20,096 | 2,837 | (433 | ) | 22,500 | |||||||||||
Mutual funds: | |||||||||||||||||
Equity | 1 | 143,054 | 15,359 | (5,249 | ) | 153,164 | |||||||||||
Fixed income | 1 | 227,300 | 6,714 | (11,124 | ) | 222,890 | |||||||||||
Private equity | 3 | 32,830 | 2,329 | (9,428 | ) | 25,731 | |||||||||||
Other | 3 | 990 | 262 | — | 1,252 | ||||||||||||
Trust investments | $ | 939,891 | $ | 90,336 | $ | (34,790 | ) | $ | 995,437 |
December 31, 2012 | |||||||||||||||||
Fair Value Hierarchy Level | Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In thousands) | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. Treasury | 2 | $ | 105,594 | $ | 5,072 | $ | (880 | ) | $ | 109,786 | |||||||
Canadian government | 2 | 110,399 | 861 | (113 | ) | 111,147 | |||||||||||
Corporate | 2 | 51,611 | 2,531 | (623 | ) | 53,519 | |||||||||||
Residential mortgage-backed | 2 | 3,123 | 57 | (8 | ) | 3,172 | |||||||||||
Asset-backed | 2 | 129 | 3 | — | 132 | ||||||||||||
Equity securities: | |||||||||||||||||
Preferred stock | 2 | 3,603 | 211 | (103 | ) | 3,711 | |||||||||||
Common stock: | |||||||||||||||||
United States | 1 | 230,971 | 38,514 | (6,903 | ) | 262,582 | |||||||||||
Canada | 1 | 23,284 | 2,598 | (1,271 | ) | 24,611 | |||||||||||
Other international | 1 | 18,089 | 1,874 | (658 | ) | 19,305 | |||||||||||
Mutual funds: | |||||||||||||||||
Equity | 1 | 145,589 | 10,097 | (6,728 | ) | 148,958 | |||||||||||
Fixed income | 1 | 225,365 | 7,314 | (10,252 | ) | 222,427 | |||||||||||
Private equity | 3 | 36,626 | 221 | (18,968 | ) | 17,879 | |||||||||||
Other | 3 | 542 | 202 | — | 744 | ||||||||||||
Trust investments | $ | 954,925 | $ | 69,555 | $ | (46,507 | ) | $ | 977,973 |
Three Months Ended | |||||||||||||||
March 31, 2013 | March 31, 2012 | ||||||||||||||
Private Equity | Other | Private Equity | Other | ||||||||||||
Fair value, beginning balance | $ | 17,879 | $ | 744 | $ | 15,986 | $ | 912 | |||||||
Net unrealized gains (losses) included in Accumulated other comprehensive income(1) | 10,850 | 509 | (1,307 | ) | 7 | ||||||||||
Net realized losses included in Other income, net(2) | (5 | ) | (1 | ) | (10 | ) | — | ||||||||
Sales | — | — | (9 | ) | — | ||||||||||
Contributions | 637 | — | 1,278 | — | |||||||||||
Distributions and other | (3,630 | ) | — | (254 | ) | — | |||||||||
Fair value, ending balance | $ | 25,731 | $ | 1,252 | $ | 15,684 | $ | 919 |
(1) | All unrealized gains (losses) recognized in Accumulated other comprehensive income for our funeral merchandise and service trust investments are attributable to our preneed customers and are offset by a corresponding reclassification in Accumulated other comprehensive income to Deferred preneed funeral and cemetery receipts held in trust. See Note 7 for further information related to our Deferred preneed funeral and cemetery receipts held in trust. |
(2) | All losses recognized in Other income, net for our funeral merchandise and service trust investments are attributable to our preneed customers and are offset by a corresponding reclassification in Other income, net to Deferred preneed funeral and cemetery receipts held in trust. See Note 7 for further information related to our Deferred preneed funeral and cemetery receipts held in trust. |
Fair Value | |||
(In thousands) | |||
Due in one year or less | $ | 132,475 | |
Due in one to five years | 53,406 | ||
Due in five to ten years | 48,265 | ||
Thereafter | 32,565 | ||
$ | 266,711 |
March 31, 2013 | |||||||||||||||||||||||
In Loss Position Less Than 12 Months | In Loss Position Greater Than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. Treasury | $ | 22,192 | $ | (610 | ) | $ | 18,638 | $ | (746 | ) | $ | 40,830 | $ | (1,356 | ) | ||||||||
Canadian government | 10,080 | (264 | ) | 9,546 | (282 | ) | 19,626 | (546 | ) | ||||||||||||||
Corporate | 5,617 | (254 | ) | 4,632 | (351 | ) | 10,249 | (605 | ) | ||||||||||||||
Residential mortgage-backed | 919 | (11 | ) | 30 | (1 | ) | 949 | (12 | ) | ||||||||||||||
Equity securities: | |||||||||||||||||||||||
Preferred stock | 1,397 | (74 | ) | 22 | (7 | ) | 1,419 | (81 | ) | ||||||||||||||
Common stock: | |||||||||||||||||||||||
United States | 35,099 | (3,138 | ) | 6,049 | (1,670 | ) | 41,148 | (4,808 | ) | ||||||||||||||
Canada | 6,486 | (824 | ) | 1,497 | (323 | ) | 7,983 | (1,147 | ) | ||||||||||||||
Other international | 5,516 | (288 | ) | 759 | (145 | ) | 6,275 | (433 | ) | ||||||||||||||
Mutual funds: | |||||||||||||||||||||||
Equity | 1,183 | (28 | ) | 23,745 | (5,222 | ) | 24,928 | (5,250 | ) | ||||||||||||||
Fixed income | 59,546 | (1,402 | ) | 52,484 | (9,722 | ) | 112,030 | (11,124 | ) | ||||||||||||||
Private equity | — | — | 13,498 | (9,428 | ) | 13,498 | (9,428 | ) | |||||||||||||||
Total temporarily impaired securities | $ | 148,035 | $ | (6,893 | ) | $ | 130,900 | $ | (27,897 | ) | $ | 278,935 | $ | (34,790 | ) |
December 31, 2012 | |||||||||||||||||||||||
In Loss Position Less Than 12 Months | In Loss Position Greater Than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. Treasury | $ | 22,357 | $ | (803 | ) | $ | 6,741 | $ | (77 | ) | $ | 29,098 | $ | (880 | ) | ||||||||
Canadian government | 7,912 | (113 | ) | — | — | 7,912 | (113 | ) | |||||||||||||||
Corporate | 7,809 | (347 | ) | 4,283 | (276 | ) | 12,092 | (623 | ) | ||||||||||||||
Residential mortgage-backed | 956 | (8 | ) | — | — | 956 | (8 | ) | |||||||||||||||
Equity securities: | |||||||||||||||||||||||
Preferred stock | 1,220 | (93 | ) | 52 | (10 | ) | 1,272 | (103 | ) | ||||||||||||||
Common stock: | |||||||||||||||||||||||
United States | 70,752 | (4,694 | ) | 9,089 | (2,209 | ) | 79,841 | (6,903 | ) | ||||||||||||||
Canada | 6,592 | (652 | ) | 2,516 | (619 | ) | 9,108 | (1,271 | ) | ||||||||||||||
Other international | 7,606 | (521 | ) | 608 | (137 | ) | 8,214 | (658 | ) | ||||||||||||||
Mutual funds: | |||||||||||||||||||||||
Equity | 6,779 | (126 | ) | 26,340 | (6,602 | ) | 33,119 | (6,728 | ) | ||||||||||||||
Fixed income | 38,686 | (1,021 | ) | 24,131 | (9,231 | ) | 62,817 | (10,252 | ) | ||||||||||||||
Private equity | — | — | 17,389 | (18,968 | ) | 17,389 | (18,968 | ) | |||||||||||||||
Total temporarily impaired securities | $ | 170,669 | $ | (8,378 | ) | $ | 91,149 | $ | (38,129 | ) | $ | 261,818 | $ | (46,507 | ) |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Deposits | $ | 25,268 | $ | 25,195 | |||
Withdrawals | 29,881 | 24,733 | |||||
Purchases of available-for-sale securities | 105,722 | 270,083 | |||||
Sales of available-for-sale securities | 125,743 | 255,417 | |||||
Realized gains from sales of available-for-sale securities | 16,576 | 39,272 | |||||
Realized losses from sales of available-for-sale securities | (2,170 | ) | (13,770 | ) |
March 31, 2013 | December 31, 2012 | ||||||
(In thousands) | |||||||
Trust investments, at fair value | $ | 1,258,886 | $ | 1,204,084 | |||
Cash and cash equivalents | 94,565 | 86,923 | |||||
Insurance-backed fixed income securities | 12 | 9 | |||||
Trust investments | 1,353,463 | 1,291,016 | |||||
Receivables from customers | 623,371 | 614,599 | |||||
Unearned finance charges | (28,876 | ) | (29,471 | ) | |||
1,947,958 | 1,876,144 | ||||||
Allowance for cancellation | (50,644 | ) | (49,309 | ) | |||
Preneed cemetery receivables, net and trust investments | $ | 1,897,314 | $ | 1,826,835 |
March 31, 2013 | |||||||||||||||||
Fair Value Hierarchy Level | Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In thousands) | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. Treasury | 2 | $ | 101,171 | $ | 5,384 | $ | (1,345 | ) | $ | 105,210 | |||||||
Canadian government | 2 | 17,150 | 361 | (116 | ) | 17,395 | |||||||||||
Corporate | 2 | 42,021 | 3,343 | (700 | ) | 44,664 | |||||||||||
Residential mortgage-backed | 2 | 143 | 3 | — | 146 | ||||||||||||
Equity securities: | |||||||||||||||||
Preferred stock | 2 | 8,182 | 702 | (137 | ) | 8,747 | |||||||||||
Common stock: | |||||||||||||||||
United States | 1 | 359,882 | 96,774 | (5,512 | ) | 451,144 | |||||||||||
Canada | 1 | 15,156 | 3,692 | (1,006 | ) | 17,842 | |||||||||||
Other international | 1 | 33,912 | 5,384 | (533 | ) | 38,763 | |||||||||||
Mutual funds: | |||||||||||||||||
Equity | 1 | 277,324 | 31,539 | (6,859 | ) | 302,004 | |||||||||||
Fixed income | 1 | 255,802 | 10,207 | (20,030 | ) | 245,979 | |||||||||||
Private equity | 3 | 28,863 | 2,446 | (5,352 | ) | 25,957 | |||||||||||
Other | 3 | 870 | 165 | — | 1,035 | ||||||||||||
Trust investments | $ | 1,140,476 | $ | 160,000 | $ | (41,590 | ) | $ | 1,258,886 |
December 31, 2012 | |||||||||||||||||
Fair Value Hierarchy Level | Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In thousands) | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. Treasury | 2 | $ | 99,630 | $ | 7,925 | $ | (841 | ) | $ | 106,714 | |||||||
Canadian government | 2 | 17,562 | 402 | (83 | ) | 17,881 | |||||||||||
Corporate | 2 | 43,515 | 2,456 | (775 | ) | 45,196 | |||||||||||
Residential mortgage-backed | 2 | 150 | 4 | — | 154 | ||||||||||||
Equity securities: | |||||||||||||||||
Preferred stock | 2 | 5,840 | 334 | (196 | ) | 5,978 | |||||||||||
Common stock: | |||||||||||||||||
United States | 1 | 363,190 | 71,613 | (7,716 | ) | 427,087 | |||||||||||
Canada | 1 | 16,026 | 2,862 | (846 | ) | 18,042 | |||||||||||
Other international | 1 | 29,889 | 3,687 | (857 | ) | 32,719 | |||||||||||
Mutual funds: | |||||||||||||||||
Equity | 1 | 279,265 | 19,520 | (9,921 | ) | 288,864 | |||||||||||
Fixed income | 1 | 251,687 | 10,975 | (19,350 | ) | 243,312 | |||||||||||
Private equity | 3 | 32,785 | 77 | (15,175 | ) | 17,687 | |||||||||||
Other | 3 | 407 | 44 | (1 | ) | 450 | |||||||||||
Trust investments | $ | 1,139,946 | $ | 119,899 | $ | (55,761 | ) | $ | 1,204,084 |
Three Months Ended | |||||||||||||||
March 31, 2013 | March 31, 2012 | ||||||||||||||
Private Equity | Other | Private Equity | Other | ||||||||||||
Fair value, beginning balance | $ | 17,687 | $ | 450 | $ | 15,219 | $ | 436 | |||||||
Net unrealized gains (losses) included in Accumulated other comprehensive income(1) | 11,400 | 587 | (1,353 | ) | 8 | ||||||||||
Net realized losses included in Other (expense) income, net(2) | (7 | ) | (2 | ) | (11 | ) | (1 | ) | |||||||
Contributions | 662 | — | 1,356 | — | |||||||||||
Distributions and other | (3,785 | ) | — | (276 | ) | — | |||||||||
Fair value, ending balance | $ | 25,957 | $ | 1,035 | $ | 14,935 | $ | 443 |
(1) | All unrealized gains (losses) recognized in Accumulated other comprehensive income for our cemetery merchandise and service trust investments are attributable to our preneed customers and are offset by a corresponding reclassification in Accumulated other comprehensive income to Deferred preneed funeral and cemetery receipts held in trust. See Note 7 for further information related to our Deferred preneed funeral and cemetery receipts held in trust. |
(2) | All losses recognized in Other income, net for our cemetery merchandise and service trust investments are attributable to our preneed customers and are offset by a corresponding reclassification in Other income, net to Deferred preneed funeral and cemetery receipts held in trust. See Note 7 for further information related to our Deferred preneed funeral and cemetery receipts held in trust. |
Fair Value | |||
(In thousands) | |||
Due in one year or less | $ | 19,832 | |
Due in one to five years | 56,472 | ||
Due in five to ten years | 42,361 | ||
Thereafter | 48,750 | ||
$ | 167,415 |
March 31, 2013 | |||||||||||||||||||||||
In Loss Position Less Than 12 Months | In Loss Position Greater Than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. Treasury | $ | 18,714 | $ | (500 | ) | $ | 19,448 | $ | (845 | ) | $ | 38,162 | $ | (1,345 | ) | ||||||||
Canadian government | 5,501 | (96 | ) | 987 | (20 | ) | 6,488 | (116 | ) | ||||||||||||||
Corporate | 9,400 | (428 | ) | 3,323 | (272 | ) | 12,723 | (700 | ) | ||||||||||||||
Equity securities: | |||||||||||||||||||||||
Preferred stock | 2,250 | (87 | ) | 163 | (50 | ) | 2,413 | (137 | ) | ||||||||||||||
Common stock: | |||||||||||||||||||||||
United States | 44,001 | (4,114 | ) | 7,199 | (1,398 | ) | 51,200 | (5,512 | ) | ||||||||||||||
Canada | 2,792 | (545 | ) | 1,005 | (461 | ) | 3,797 | (1,006 | ) | ||||||||||||||
Other international | 6,637 | (339 | ) | 988 | (194 | ) | 7,625 | (533 | ) | ||||||||||||||
Mutual funds: | |||||||||||||||||||||||
Equity | 6,029 | (79 | ) | 40,107 | (6,780 | ) | 46,136 | (6,859 | ) | ||||||||||||||
Fixed income | 60,403 | (1,783 | ) | 50,259 | (18,247 | ) | 110,662 | (20,030 | ) | ||||||||||||||
Private equity | — | — | 7,564 | (5,352 | ) | 7,564 | (5,352 | ) | |||||||||||||||
Total temporarily impaired securities | $ | 155,727 | $ | (7,971 | ) | $ | 131,043 | $ | (33,619 | ) | $ | 286,770 | $ | (41,590 | ) |
December 31, 2012 | |||||||||||||||||||||||
In Loss Position Less Than 12 Months | In Loss Position Greater Than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. Treasury | $ | 28,626 | $ | (841 | ) | $ | — | $ | — | $ | 28,626 | $ | (841 | ) | |||||||||
Canadian government | 5,319 | (83 | ) | — | — | 5,319 | (83 | ) | |||||||||||||||
Corporate | 14,060 | (571 | ) | 2,137 | (204 | ) | 16,197 | (775 | ) | ||||||||||||||
Equity securities: | |||||||||||||||||||||||
Preferred stock | 1,497 | (143 | ) | 126 | (53 | ) | 1,623 | (196 | ) | ||||||||||||||
Common stock: | |||||||||||||||||||||||
United States | 82,989 | (5,624 | ) | 11,131 | (2,092 | ) | 94,120 | (7,716 | ) | ||||||||||||||
Canada | 3,114 | (461 | ) | 1,115 | (385 | ) | 4,229 | (846 | ) | ||||||||||||||
Other international | 9,056 | (655 | ) | 741 | (202 | ) | 9,797 | (857 | ) | ||||||||||||||
Mutual funds: | |||||||||||||||||||||||
Equity | 28,132 | (1,427 | ) | 43,172 | (8,494 | ) | 71,304 | (9,921 | ) | ||||||||||||||
Fixed income | 54,533 | (2,205 | ) | 29,104 | (17,145 | ) | 83,637 | (19,350 | ) | ||||||||||||||
Private equity | 46 | (17 | ) | 17,136 | (15,158 | ) | 17,182 | (15,175 | ) | ||||||||||||||
Other | 8 | — | 378 | (1 | ) | 386 | (1 | ) | |||||||||||||||
Total temporarily impaired securities | $ | 227,380 | $ | (12,027 | ) | $ | 105,040 | $ | (43,734 | ) | $ | 332,420 | $ | (55,761 | ) |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Deposits | $ | 8,228 | $ | 6,544 | |||
Withdrawals | 9,569 | 8,252 | |||||
Purchases of available-for-sale securities | 35,052 | 70,127 | |||||
Sales of available-for-sale securities | 27,490 | 52,886 | |||||
Realized gains from sales of available-for-sale securities | 3,782 | 2,162 | |||||
Realized losses from sales of available-for-sale securities | (322 | ) | (2,215 | ) |
March 31, 2013 | December 31, 2012 | ||||||
(In thousands) | |||||||
Trust investments, at fair value | $ | 1,074,974 | $ | 1,045,568 | |||
Cash and cash equivalents | 53,310 | 54,012 | |||||
Cemetery perpetual care trust investments | $ | 1,128,284 | $ | 1,099,580 |
March 31, 2013 | |||||||||||||||||
Fair Value Hierarchy Level | Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In thousands) | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. Treasury | 2 | $ | 820 | $ | 42 | $ | (1 | ) | $ | 861 | |||||||
Canadian government | 2 | 29,194 | 638 | (198 | ) | 29,634 | |||||||||||
Corporate | 2 | 22,203 | 517 | (78 | ) | 22,642 | |||||||||||
Residential mortgage-backed | 2 | 1,466 | 33 | (3 | ) | 1,496 | |||||||||||
Asset-backed | 2 | 161 | 9 | — | 170 | ||||||||||||
Equity securities: | |||||||||||||||||
Preferred stock | 2 | 5,563 | 42 | (1,033 | ) | 4,572 | |||||||||||
Common stock: | |||||||||||||||||
United States | 1 | 166,134 | 34,797 | (1,547 | ) | 199,384 | |||||||||||
Canada | 1 | 8,745 | 2,032 | (757 | ) | 10,020 | |||||||||||
Other international | 1 | 11,696 | 606 | (457 | ) | 11,845 | |||||||||||
Mutual funds: | |||||||||||||||||
Equity | 1 | 15,674 | 3,891 | (70 | ) | 19,495 | |||||||||||
Fixed income | 1 | 689,835 | 58,531 | (307 | ) | 748,059 | |||||||||||
Private equity | 3 | 24,689 | 455 | (8,690 | ) | 16,454 | |||||||||||
Other | 3 | 9,173 | 1,169 | — | 10,342 | ||||||||||||
Cemetery perpetual care trust investments | $ | 985,353 | $ | 102,762 | $ | (13,141 | ) | $ | 1,074,974 |
December 31, 2012 | |||||||||||||||||
Fair Value Hierarchy Level | Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In thousands) | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. Treasury | 2 | $ | 820 | $ | 45 | $ | (1 | ) | $ | 864 | |||||||
Canadian government | 2 | 30,159 | 709 | (140 | ) | 30,728 | |||||||||||
Corporate | 2 | 22,877 | 537 | (51 | ) | 23,363 | |||||||||||
Residential mortgage-backed | 2 | 1,498 | 41 | (2 | ) | 1,537 | |||||||||||
Asset-backed | 2 | 161 | 10 | — | 171 | ||||||||||||
Equity securities: | |||||||||||||||||
Preferred stock | 2 | 5,637 | 61 | (938 | ) | 4,760 | |||||||||||
Common stock: | |||||||||||||||||
United States | 1 | 163,173 | 19,609 | (3,389 | ) | 179,393 | |||||||||||
Canada | 1 | 8,954 | 1,568 | (731 | ) | 9,791 | |||||||||||
Other international | 1 | 14,693 | 1,392 | (447 | ) | 15,638 | |||||||||||
Mutual funds: | |||||||||||||||||
Equity | 1 | 16,999 | 2,102 | (211 | ) | 18,890 | |||||||||||
Fixed income | 1 | 680,921 | 61,172 | (441 | ) | 741,652 | |||||||||||
Private equity | 3 | 24,727 | 338 | (13,943 | ) | 11,122 | |||||||||||
Other | 3 | 9,653 | 1,110 | (3,104 | ) | 7,659 | |||||||||||
Cemetery perpetual care trust investments | $ | 980,272 | $ | 88,694 | $ | (23,398 | ) | $ | 1,045,568 |
Three Months Ended | |||||||||||||||
March 31, 2013 | March 31, 2012 | ||||||||||||||
Private Equity | Other | Private Equity | Other | ||||||||||||
Fair value, beginning balance | $ | 11,122 | $ | 7,659 | $ | 10,849 | $ | 6,890 | |||||||
Net unrealized gains included in Accumulated other comprehensive income(1) | 6,069 | 2,729 | 444 | 395 | |||||||||||
Net realized losses included in Other income, net(2) | (82 | ) | (46 | ) | (46 | ) | (11 | ) | |||||||
Sales | — | — | (26 | ) | — | ||||||||||
Contributions | 1 | — | 1,390 | — | |||||||||||
Distributions and other | (656 | ) | — | (634 | ) | — | |||||||||
Fair value, ending balance | $ | 16,454 | $ | 10,342 | $ | 11,977 | $ | 7,274 |
(1) | All unrealized gains recognized in Accumulated other comprehensive income for our cemetery perpetual care trust investments are offset by a corresponding reclassification in Accumulated other comprehensive income to Care trusts’ corpus. See Note 7 for further information related to our Care trusts’ corpus. |
(2) | All losses recognized in Other income, net for our cemetery perpetual care trust investments are offset by a corresponding reclassification in Other income, net to Care trusts’ corpus. See Note 7 for further information related to our Care trusts’ corpus. |
Fair Value | |||
(In thousands) | |||
Due in one year or less | $ | 9,355 | |
Due in one to five years | 23,976 | ||
Due in five to ten years | 20,297 | ||
Thereafter | 1,175 | ||
$ | 54,803 |
March 31, 2013 | |||||||||||||||||||||||
In Loss Position Less Than 12 Months | In Loss Position Greater Than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. Treasury | $ | 414 | $ | (1 | ) | $ | — | $ | — | $ | 414 | $ | (1 | ) | |||||||||
Canadian government | 9,077 | (151 | ) | 1,986 | (47 | ) | 11,063 | (198 | ) | ||||||||||||||
Corporate | 5,335 | (56 | ) | 1,858 | (22 | ) | 7,193 | (78 | ) | ||||||||||||||
Residential mortgage-backed | 244 | (3 | ) | — | — | 244 | (3 | ) | |||||||||||||||
Equity securities: | |||||||||||||||||||||||
Preferred stock | 1,429 | (244 | ) | 2,502 | (789 | ) | 3,931 | (1,033 | ) | ||||||||||||||
Common stock: | |||||||||||||||||||||||
United States | 14,161 | (1,004 | ) | 4,238 | (543 | ) | 18,399 | (1,547 | ) | ||||||||||||||
Canada | 1,415 | (304 | ) | 1,010 | (453 | ) | 2,425 | (757 | ) | ||||||||||||||
Other international | 5,150 | (344 | ) | 570 | (113 | ) | 5,720 | (457 | ) | ||||||||||||||
Mutual funds: | |||||||||||||||||||||||
Equity | 47 | (1 | ) | 269 | (69 | ) | 316 | (70 | ) | ||||||||||||||
Fixed income | 17,645 | (93 | ) | 30,701 | (214 | ) | 48,346 | (307 | ) | ||||||||||||||
Private equity | — | — | 15,969 | (8,690 | ) | 15,969 | (8,690 | ) | |||||||||||||||
Total temporarily impaired securities | $ | 54,917 | $ | (2,201 | ) | $ | 59,103 | $ | (10,940 | ) | $ | 114,020 | $ | (13,141 | ) |
December 31, 2012 | |||||||||||||||||||||||
In Loss Position Less Than 12 Months | In Loss Position Greater Than 12 Months | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
U.S. Treasury | $ | 373 | $ | (1 | ) | $ | — | $ | — | $ | 373 | $ | (1 | ) | |||||||||
Canadian government | 9,145 | (140 | ) | — | — | 9,145 | (140 | ) | |||||||||||||||
Corporate | 5,439 | (33 | ) | 1,886 | (18 | ) | 7,325 | (51 | ) | ||||||||||||||
Residential mortgage-backed | 183 | (2 | ) | — | — | 183 | (2 | ) | |||||||||||||||
Equity securities: | |||||||||||||||||||||||
Preferred stock | 3,115 | (639 | ) | 973 | (299 | ) | 4,088 | (938 | ) | ||||||||||||||
Common stock: | |||||||||||||||||||||||
United States | 38,323 | (2,403 | ) | 7,495 | (986 | ) | 45,818 | (3,389 | ) | ||||||||||||||
Canada | 1,246 | (281 | ) | 1,055 | (450 | ) | 2,301 | (731 | ) | ||||||||||||||
Other international | 4,712 | (389 | ) | 696 | (58 | ) | 5,408 | (447 | ) | ||||||||||||||
Mutual funds: | |||||||||||||||||||||||
Equity | 2,654 | (127 | ) | 404 | (84 | ) | 3,058 | (211 | ) | ||||||||||||||
Fixed income | 10,552 | (37 | ) | 31,837 | (404 | ) | 42,389 | (441 | ) | ||||||||||||||
Private equity | — | — | 10,752 | (13,943 | ) | 10,752 | (13,943 | ) | |||||||||||||||
Other | — | — | 6,308 | (3,104 | ) | 6,308 | (3,104 | ) | |||||||||||||||
Total temporarily impaired securities | $ | 75,742 | $ | (4,052 | ) | $ | 61,406 | $ | (19,346 | ) | $ | 137,148 | $ | (23,398 | ) |
March 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Preneed Funeral | Preneed Cemetery | Total | Preneed Funeral | Preneed Cemetery | Total | ||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||
Trust investments | $ | 1,364,367 | $ | 1,353,463 | $ | 2,717,830 | $ | 1,337,014 | $ | 1,291,016 | $ | 2,628,030 | |||||||||||
Accrued trust operating payables and other | (1,229 | ) | (1,968 | ) | (3,197 | ) | (1,827 | ) | (1,882 | ) | (3,709 | ) | |||||||||||
Deferred preneed funeral and cemetery receipts held in trust | $ | 1,363,138 | $ | 1,351,495 | $ | 2,714,633 | $ | 1,335,187 | $ | 1,289,134 | $ | 2,624,321 |
March 31, 2013 | December 31, 2012 | ||||||
(In thousands) | |||||||
Cemetery perpetual care trust investments | $ | 1,128,284 | $ | 1,099,580 | |||
Accrued trust operating payables and other | (805 | ) | (828 | ) | |||
Care trusts’ corpus | $ | 1,127,479 | $ | 1,098,752 |
Three Months Ended March 31, 2013 | |||||||||||||||||||
Funeral Trusts | Cemetery Trusts | Cemetery Perpetual Care Trusts | Other, Net | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Realized gains | $ | 11,371 | $ | 16,576 | $ | 3,782 | $ | — | $ | 31,729 | |||||||||
Realized losses | (1,721 | ) | (2,170 | ) | (322 | ) | — | (4,213 | ) | ||||||||||
Impairment charges | (200 | ) | (357 | ) | (63 | ) | — | (620 | ) | ||||||||||
Interest, dividend, and other ordinary income | 1,817 | 1,529 | 6,089 | — | 9,435 | ||||||||||||||
Trust expenses and income taxes | (2,381 | ) | (3,669 | ) | (575 | ) | — | (6,625 | ) | ||||||||||
Net trust investment income | 8,886 | 11,909 | 8,911 | — | 29,706 | ||||||||||||||
Reclassification to deferred preneed funeral and cemetery receipts held in trust and care trusts’ corpus | (8,886 | ) | (11,909 | ) | (8,911 | ) | — | (29,706 | ) | ||||||||||
Other income, net | — | — | — | (984 | ) | (984 | ) | ||||||||||||
Total other income, net | $ | — | $ | — | $ | — | $ | (984 | ) | $ | (984 | ) |
Three Months Ended March 31, 2012 | |||||||||||||||||||
Funeral Trusts | Cemetery Trusts | Cemetery Perpetual Care Trusts | Other, Net | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Realized gains | $ | 26,011 | $ | 39,272 | $ | 2,162 | $ | — | $ | 67,445 | |||||||||
Realized losses | (9,748 | ) | (13,770 | ) | (2,215 | ) | — | (25,733 | ) | ||||||||||
Impairment charges | (344 | ) | (305 | ) | (1 | ) | — | (650 | ) | ||||||||||
Interest, dividend, and other ordinary income | 2,200 | 2,276 | 5,723 | — | 10,199 | ||||||||||||||
Trust expenses and income taxes | (2,569 | ) | (3,185 | ) | (385 | ) | — | (6,139 | ) | ||||||||||
Net trust investment income | 15,550 | 24,288 | 5,284 | — | 45,122 | ||||||||||||||
Reclassification to deferred preneed funeral and cemetery receipts held in trust and care trusts’ corpus | (15,550 | ) | (24,288 | ) | (5,284 | ) | — | (45,122 | ) | ||||||||||
Other income, net | — | — | — | 3,905 | 3,905 | ||||||||||||||
Total other income, net | $ | — | $ | — | $ | — | $ | 3,905 | $ | 3,905 |
March 31, 2013 | December 31, 2012 | ||||||
(In thousands) | |||||||
7.875% Debentures due February 2013 | $ | — | $ | 4,757 | |||
6.75% Senior Notes due April 2015 | 136,465 | 136,465 | |||||
6.75% Senior Notes due April 2016 | 197,377 | 197,377 | |||||
7.0% Senior Notes due June 2017 | 295,000 | 295,000 | |||||
7.625% Senior Notes due October 2018 | 250,000 | 250,000 | |||||
7.0% Senior Notes due May 2019 | 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 | |||||
7.5% Senior Notes due April 2027 | 200,000 | 200,000 | |||||
Bank credit facility due March 2016 | 86,600 | 86,600 | |||||
Obligations under capital leases | 183,883 | 176,445 | |||||
Mortgage notes and other debt, maturities through 2047 | 5,507 | 5,698 | |||||
Unamortized pricing discounts | (4,135 | ) | (4,292 | ) | |||
Total debt | 1,950,697 | 1,948,050 | |||||
Less current maturities | (37,315 | ) | (31,429 | ) | |||
Total long-term debt | $ | 1,913,382 | $ | 1,916,621 |
March 31, 2013 | December 31, 2012 | ||||||
(In thousands) | |||||||
7.875% Debentures due February 2013 | $ | — | $ | 4,786 | |||
6.75% Senior Notes due April 2015 | 148,713 | 150,112 | |||||
6.75% Senior Notes due April 2016 | 218,102 | 222,049 | |||||
7.0% Senior Notes due June 2017 | 333,017 | 341,094 | |||||
7.625% Senior Notes due October 2018 | 293,750 | 298,750 | |||||
7.0% Senior Notes due May 2019 | 271,875 | 276,250 | |||||
4.5% Senior Notes due November 2020 | 201,500 | 204,500 | |||||
8.0% Senior Notes due November 2021 | 180,000 | 186,000 | |||||
7.5% Senior Notes due April 2027 | 223,000 | 215,500 | |||||
Bank credit facility due March 2016 | 86,600 | 86,600 | |||||
Mortgage notes and other debt, maturities through 2047 | 5,507 | 5,698 | |||||
Total fair value of debt instruments | $ | 1,962,064 | $ | 1,991,339 |
Three Months Ended | |||
Assumptions | March 31, 2013 | ||
Dividend yield | 1.9 | % | |
Expected volatility | 35.2 | % | |
Risk-free interest rate | 0.7 | % | |
Expected holding period (in years) | 4.0 |
Options | Weighted-Average Exercise Price | |||||
Outstanding at December 31, 2012 | 12,401,970 | $ | 8.84 | |||
Granted | 2,041,330 | $ | 15.26 | |||
Exercised | (349,663 | ) | $ | 8.85 | ||
Cancelled | (36,397 | ) | $ | 10.31 | ||
Outstanding at March 31, 2013 | 14,057,240 | $ | 9.77 | |||
Exercisable at March 31, 2013 | 9,939,390 | $ | 8.51 |
Restricted shares | Weighted-Average Grant-Date Fair Value | |||||
Nonvested restricted shares at December 31, 2012 | 1,104,579 | $ | 9.78 | |||
Granted | 378,280 | $ | 15.26 | |||
Vested | (296,886 | ) | $ | 8.63 | ||
Cancelled | (2,744 | ) | $ | 10.32 | ||
Nonvested restricted shares at March 31, 2013 | 1,183,229 | $ | 11.81 |
Foreign Currency Translation Adjustment | Unrealized Gains and Losses | Accumulated Other Comprehensive Income | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2012 | $ | 111,717 | $ | — | $ | 111,717 | |||||
Activity in 2013 | (6,804 | ) | — | (6,804 | ) | ||||||
Reclassification of currency translation adjustment to Losses on divestitures and impairment charges, net | 1,292 | — | 1,292 | ||||||||
Increase in net unrealized gains associated with available-for-sale securities of the trusts, net of taxes | — | 69,478 | 69,478 | ||||||||
Reclassification of net unrealized gain activity attributable to the Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus’, net of taxes | — | (69,478 | ) | (69,478 | ) | ||||||
Balance at March 31, 2013 | $ | 106,205 | $ | — | $ | 106,205 |
Funeral | Cemetery | Reportable Segments | |||||||||
(In thousands) | |||||||||||
Three Months Ended March 31, | |||||||||||
Revenues from external customers: | |||||||||||
2013 | $ | 462,019 | $ | 190,333 | $ | 652,352 | |||||
2012 | $ | 424,281 | $ | 178,225 | $ | 602,506 | |||||
Gross profits: | |||||||||||
2013 | $ | 120,147 | $ | 39,453 | $ | 159,600 | |||||
2012 | $ | 100,024 | $ | 27,543 | $ | 127,567 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Gross profits from reportable segments | $ | 159,600 | $ | 127,567 | |||
General and administrative expenses | (30,866 | ) | (25,959 | ) | |||
Losses on divestitures and impairment charges, net | (969 | ) | (490 | ) | |||
Operating income | 127,765 | 101,118 | |||||
Interest expense | (32,769 | ) | (33,588 | ) | |||
Other (expense) income, net | (984 | ) | 3,905 | ||||
Income before income taxes | $ | 94,012 | $ | 71,435 |
United States | Canada | Germany | Total | ||||||||||||
(In thousands) | |||||||||||||||
Three Months Ended March 31, | |||||||||||||||
Revenues from external customers: | |||||||||||||||
2013 | $ | 595,437 | $ | 54,981 | $ | 1,934 | $ | 652,352 | |||||||
2012 | $ | 547,176 | $ | 53,541 | $ | 1,789 | $ | 602,506 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Merchandise revenues: | |||||||
Funeral | $ | 153,832 | $ | 140,153 | |||
Cemetery | 129,492 | 121,834 | |||||
Total merchandise revenues | 283,324 | 261,987 | |||||
Services revenues: | |||||||
Funeral | 280,325 | 259,779 | |||||
Cemetery | 54,550 | 49,672 | |||||
Total services revenues | 334,875 | 309,451 | |||||
Other revenues | 34,153 | 31,068 | |||||
Total revenues | $ | 652,352 | $ | 602,506 | |||
Merchandise costs and expenses: | |||||||
Funeral | $ | 77,510 | $ | 72,125 | |||
Cemetery | 56,529 | 55,686 | |||||
Total cost of merchandise | 134,039 | 127,811 | |||||
Services costs and expenses: | |||||||
Funeral | 134,326 | 127,260 | |||||
Cemetery | 26,356 | 25,821 | |||||
Total cost of services | 160,682 | 153,081 | |||||
Overhead and other expenses | 198,031 | 194,047 | |||||
Total costs and expenses | $ | 492,752 | $ | 474,939 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(In thousands, except per share amounts) | |||||||
Amounts attributable to common stockholders: | |||||||
Net income: | |||||||
Net income — basic | $ | 57,620 | $ | 48,025 | |||
After tax interest on convertible debt | 13 | 13 | |||||
Net income — diluted | $ | 57,633 | $ | 48,038 | |||
Weighted average shares (denominator): | |||||||
Weighted average shares — basic | 211,380 | 220,132 | |||||
Stock options | 3,707 | 2,959 | |||||
Convertible debt | 121 | 121 | |||||
Weighted average shares — diluted | 215,208 | 223,212 | |||||
Net income per share: | |||||||
Basic | $ | 0.27 | $ | 0.22 | |||
Diluted | $ | 0.27 | $ | 0.22 |
Per Credit Agreement | Actual | ||
Leverage ratio | 4.00 (Max) | 2.82 | |
Interest coverage ratio | 3.00 (Min) | 4.88 |
• | a $64.7 million increase in cash receipts from customers as a result of higher atneed and preneed sales; |
• | a $9.6 million increase in net trust fund withdrawals; partially offset by, |
• | a $7.5 million increase in vendor payments; |
• | a $4.6 million increase in payroll; |
• | a $3.9 million increase in cash tax payments; and |
• | a $1.3 million decrease in General Agency (GA) receipts. |
March 31, 2013 | December 31, 2012 | ||||||
(Dollars in millions) | |||||||
Preneed funeral | $ | 104.5 | $ | 110.1 | |||
Preneed cemetery: | |||||||
Merchandise and services | 110.6 | 114.6 | |||||
Pre-construction | 4.2 | 7.2 | |||||
Bonds supporting preneed funeral and cemetery obligations | 219.3 | 231.9 | |||||
Bonds supporting preneed business permits | 3.0 | 2.9 | |||||
Other bonds | 18.1 | 17.2 | |||||
Total surety bonds outstanding | $ | 240.4 | $ | 252.0 |
North America | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(Dollars in millions) | |||||||
Funeral: | |||||||
Preneed trust-funded (including bonded): | |||||||
Sales production | $ | 46.3 | $ | 37.7 | |||
Sales production (number of contracts) | 17,253 | 14,077 | |||||
Maturities | $ | 50.9 | $ | 56.1 | |||
Maturities (number of contracts) | 14,636 | 14,235 | |||||
Cemetery: | |||||||
Sales production: | |||||||
Preneed | $ | 133.2 | $ | 124.5 | |||
Atneed | 63.3 | 59.4 | |||||
Total sales production | $ | 196.5 | $ | 183.9 | |||
Sales production deferred to backlog: | |||||||
Preneed | $ | 49.2 | $ | 55.2 | |||
Atneed | 47.7 | 45.4 | |||||
Total sales production deferred to backlog | $ | 96.9 | $ | 100.6 | |||
Revenue recognized from backlog: | |||||||
Preneed | $ | 35.9 | $ | 32.3 | |||
Atneed | 45.5 | 44.0 | |||||
Total revenue recognized from backlog | $ | 81.4 | $ | 76.3 |
North America | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(Dollars in millions) | |||||||
Preneed funeral insurance-funded: | |||||||
Sales production (1) | $ | 137.9 | $ | 134.4 | |||
Sales production (number of contracts) (1) | 24,134 | 22,776 | |||||
General Agency revenue | $ | 25.2 | $ | 23.3 | |||
Maturities | $ | 92.7 | $ | 83.1 | |||
Maturities (number of contracts) | 16,305 | 14,672 |
(1) | Amounts are not included in our unaudited condensed consolidated balance sheet. |
March 31, 2013 | December 31, 2012 | ||||||||||||||
Fair Value | Cost | Fair Value | Cost | ||||||||||||
(Dollars in billions) | |||||||||||||||
Deferred preneed funeral revenues | $ | 0.52 | $ | 0.52 | $ | 0.53 | $ | 0.53 | |||||||
Deferred preneed funeral receipts held in trust | 1.36 | 1.30 | 1.34 | 1.32 | |||||||||||
$ | 1.88 | $ | 1.82 | $ | 1.87 | $ | 1.85 | ||||||||
Allowance for cancellation on trust investments | (0.16 | ) | (0.15 | ) | (0.15 | ) | (0.15 | ) | |||||||
Backlog of trust-funded preneed funeral revenues | $ | 1.72 | $ | 1.67 | $ | 1.72 | $ | 1.70 | |||||||
Backlog of insurance-funded preneed funeral revenues (1) | 3.71 | 3.71 | 3.68 | 3.68 | |||||||||||
Total backlog of preneed funeral revenues | $ | 5.43 | $ | 5.38 | $ | 5.40 | $ | 5.38 | |||||||
Preneed funeral receivables, net and trust investments | $ | 1.56 | $ | 1.56 | $ | 1.54 | $ | 1.52 | |||||||
Allowance for cancellation on trust investments | (0.15 | ) | (0.15 | ) | (0.14 | ) | (0.14 | ) | |||||||
Assets associated with backlog of trust-funded deferred preneed funeral revenues, net of estimated allowance for cancellation | $ | 1.41 | $ | 1.41 | $ | 1.40 | $ | 1.38 | |||||||
Insurance policies associated with insurance-funded deferred preneed funeral revenues, net of estimated allowance for cancellation (1) | 3.71 | 3.71 | 3.68 | 3.68 | |||||||||||
Total assets associated with backlog of preneed funeral revenues, net of estimated allowance for cancellation | $ | 5.12 | $ | 5.12 | $ | 5.08 | $ | 5.06 | |||||||
Deferred preneed cemetery revenues | $ | 0.88 | $ | 0.88 | $ | 0.86 | $ | 0.86 | |||||||
Deferred preneed cemetery receipts held in trust | 1.35 | 1.23 | 1.29 | 1.23 | |||||||||||
$ | 2.23 | $ | 2.11 | $ | 2.15 | $ | 2.09 | ||||||||
Allowance for cancellation on trust investments | (0.15 | ) | (0.15 | ) | (0.15 | ) | (0.15 | ) | |||||||
Total backlog of deferred cemetery revenues | $ | 2.08 | $ | 1.96 | $ | 2.00 | $ | 1.94 | |||||||
Preneed cemetery receivables, net and trust investments | $ | 1.89 | $ | 1.77 | $ | 1.82 | $ | 1.76 | |||||||
Allowance for cancellation on trust investments | (0.16 | ) | (0.16 | ) | (0.16 | ) | (0.16 | ) | |||||||
Total assets associated with backlog of deferred cemetery revenues, net of estimated allowance for cancellation | $ | 1.73 | $ | 1.61 | $ | 1.66 | $ | 1.60 |
(1) | Amounts are not included in our unaudited condensed consolidated balance sheet. |
• | Funeral gross profit increased $20.1 million, or 20.1%, primarily due to higher funeral services performed and average revenue per funeral service, along with an increase in preneed revenues for items that are delivered at the the time of sale; and |
• | Cemetery gross profit increased $11.9 million, or 43.1%, primarily due to an increase in cemetery preneed sales and an increase in trust fund income. |
2013 | 2012 | ||||||
(Dollars in thousands) | |||||||
Net after-tax losses from the sale of assets | $ | (573 | ) | $ | (354 | ) | |
After-tax expenses related to system and process transition costs | $ | (695 | ) | $ | (35 | ) | |
After-tax expenses related to legal defense fees | $ | (804 | ) | $ | — | ||
Change in certain tax reserves and other | $ | (890 | ) | $ | 3,326 |
Three Months Ended March 31, 2013 | Consolidated | Less: Results Associated with Acquisition/New Construction | Less: Results Associated with Divestitures | Comparable | ||||||||||||
(Dollars in millions) | ||||||||||||||||
North America Revenue | ||||||||||||||||
Funeral revenue | $ | 460.2 | $ | 8.5 | $ | 0.2 | $ | 451.5 | ||||||||
Cemetery revenue | 190.3 | — | (0.1 | ) | 190.4 | |||||||||||
650.5 | 8.5 | 0.1 | 641.9 | |||||||||||||
Germany revenue | 1.9 | — | — | 1.9 | ||||||||||||
Total revenue | $ | 652.4 | $ | 8.5 | $ | 0.1 | $ | 643.8 | ||||||||
North America Gross Profits | ||||||||||||||||
Funeral gross profits (losses) | $ | 119.8 | $ | 1.5 | $ | (0.3 | ) | $ | 118.6 | |||||||
Cemetery gross profits (losses) | 39.5 | — | (0.4 | ) | 39.9 | |||||||||||
159.3 | 1.5 | (0.7 | ) | 158.5 | ||||||||||||
Germany gross profits | 0.3 | — | — | 0.3 | ||||||||||||
Total gross profits (losses) | $ | 159.6 | $ | 1.5 | $ | (0.7 | ) | $ | 158.8 |
Three Months Ended March 31, 2012 | Consolidated | Less: Results Associated with Acquisition/New Construction | Less: Results Associated with Divestitures | Comparable | ||||||||||||
(Dollars in millions) | ||||||||||||||||
North America Revenue | ||||||||||||||||
Funeral revenue | $ | 422.5 | $ | 0.1 | $ | 1.2 | $ | 421.2 | ||||||||
Cemetery revenue | 178.2 | — | 0.3 | 177.9 | ||||||||||||
600.7 | 0.1 | 1.5 | 599.1 | |||||||||||||
Germany revenue | 1.8 | — | — | 1.8 | ||||||||||||
Total revenue | $ | 602.5 | $ | 0.1 | $ | 1.5 | $ | 600.9 | ||||||||
North America Gross Profits | ||||||||||||||||
Funeral gross profits (losses) | $ | 100.2 | $ | (0.1 | ) | $ | (0.8 | ) | $ | 101.1 | ||||||
Cemetery gross profits | 27.6 | — | 0.2 | 27.4 | ||||||||||||
127.8 | (0.1 | ) | (0.6 | ) | 128.5 | |||||||||||
Germany gross losses | (0.2 | ) | — | — | (0.2 | ) | ||||||||||
Total gross profits (losses) | $ | 127.6 | $ | (0.1 | ) | $ | (0.6 | ) | $ | 128.3 |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(Dollars in millions, except average revenue per funeral service) | |||||||
Consolidated funeral revenue | $ | 462.1 | $ | 424.3 | |||
Less: Funeral consolidated recognized preneed revenue(1) | 18.9 | 13.7 | |||||
Less: Consolidated GA revenue | 25.2 | 23.3 | |||||
Less: Other revenue | 4.6 | 2.8 | |||||
Adjusted consolidated funeral revenue | $ | 413.4 | $ | 384.5 | |||
Consolidated funeral services performed | 79,788 | 74,706 | |||||
Consolidated average revenue per funeral service | $ | 5,181 | $ | 5,147 |
(1) | Recognized preneed revenue represents preneed sales of items that are delivered at the time of sale, including memorial merchandise and travel protection insurance. |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
(Dollars in millions, except average revenue per funeral service) | |||||||
Comparable funeral revenue | $ | 453.4 | $ | 423.0 | |||
Less: Funeral comparable recognized preneed revenue(1) | 17.9 | 13.6 | |||||
Less: Comparable GA revenue | 25.0 | 23.3 | |||||
Less: Other revenue | 4.5 | 3.0 | |||||
Adjusted comparable funeral revenue | $ | 406.0 | $ | 383.1 | |||
Comparable funeral services performed | 77,716 | 74,518 | |||||
Comparable average revenue per funeral service | $ | 5,224 | $ | 5,141 |
(1) | Recognized preneed revenue represents preneed sales of items that are delivered at the time of sale, including memorial merchandise and travel protection insurance. |
• | a $4.8 million increase in direct costs of services performed as a result of the increase in funeral revenue described above; |
• | a $4.1 million increase in selling costs as a result of higher production; |
• | a $1.8 million increase in general and administrative expense; and |
• | a $1.2 million increase in facility expense driven by the increase in funeral services performed described above. |
• | 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 continues to be increasingly 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, including currently pending class action cases concerning cemetery or burial practices, 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. |
• | Increased costs, including potential increased health care costs, may have a negative impact on earnings and cash flows. |
• | 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 goodwill impairments and /or other intangible assets. |
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 programs | |||||||||
January 1, 2013 - January 31, 2013 | — | $ | — | — | $ | 190,132,279 | |||||||
February 1, 2013 - February 28, 2013 | — | $ | — | — | $ | 190,132,279 | |||||||
March 1, 2013 - March 31, 2013(1) | 109,203 | $ | 15.65 | — | $ | 190,132,279 | |||||||
109,203 | — |
12.1 | Ratio of earnings to fixed charges for the three months ended March 31, 2013 and 2012. | |
31.1 | Certification of Thomas L. Ryan as Chief Executive Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Periodic Financial Reports by Thomas L. Ryan as Chief Executive Officer in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Periodic Financial Reports by Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | Interactive data file. |
April 25, 2013 | SERVICE CORPORATION INTERNATIONAL | |
By: | /s/ Tammy Moore | |
Tammy Moore | ||
Vice President and Corporate Controller (Principal Accounting Officer) |
12.1 | Ratio of earnings to fixed charges for the three months ended March 31, 2013 and 2012. |
31.1 | Certification of Thomas L. Ryan as Chief Executive Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certification of Periodic Financial Reports by Thomas L. Ryan as Chief Executive Officer in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Periodic Financial Reports by Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | Interactive data file. |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Earnings: | ||||||
Pretax income | $ | 94,012 | $ | 71,435 | ||
Add fixed charges as adjusted (from below) | 34,828 | 35,490 | ||||
$ | 128,840 | $ | 106,925 | |||
Fixed charges: | ||||||
Interest expense: | ||||||
Corporate | $ | 31,534 | $ | 32,394 | ||
Amortization of deferred financing costs | 1,235 | 1,194 | ||||
1/3 of rental expense | 2,059 | 1,902 | ||||
Fixed charges | $ | 34,828 | $ | 35,490 | ||
Ratio (earnings divided by fixed charges) | 3.70 | 3.01 |
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 we 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. |
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 registrant’s board of directors (or persons performing the equivalent function): |
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: | April 25, 2013 | /s/ Thomas L. Ryan |
Thomas L. Ryan | ||
President and Chief Executive Officer (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 we 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. |
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 registrant’s board of directors (or persons performing the equivalent function): |
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: | April 25, 2013 | /s/ Eric D. Tranzberger |
Eric D. Tranzberger | ||
Chief Financial Officer and Treasurer (Principal Financial Officer) |
(1) | the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013 (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: | April 25, 2013 | /s/ Thomas L. Ryan |
Thomas L. Ryan | ||
President and Chief Executive Officer (Principal Executive Officer) |
(1) | the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013 (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: | April 25, 2013 | /s/ Eric D. Tanzberger |
Eric D. Tanzberger | ||
Chief Financial Officer and Treasurer (Principal Financial Officer) |
Cemetery Perpetual Care Trusts Level 3 Activities (Details) (Cemetery Perpetual Care [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|||||||
Private Equity Funds [Member]
|
||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Fair market value, beginning balance | $ 11,122 | $ 10,849 | ||||||
Net unrealized (losses) gains included in Accumulated other comprehensive income | 6,069 | [1] | 444 | [1] | ||||
Net realized gains (losses) included in Other income, net(2) | (82) | [2] | (46) | [2] | ||||
Sales | 0 | (26) | ||||||
Contributions | 1 | 1,390 | ||||||
Distributions and other | (656) | (634) | ||||||
Fair market value, ending balance | 16,454 | 11,977 | ||||||
Other Investments [Member]
|
||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Fair market value, beginning balance | 7,659 | 6,890 | ||||||
Net unrealized (losses) gains included in Accumulated other comprehensive income | 2,729 | [1] | 395 | [1] | ||||
Net realized gains (losses) included in Other income, net(2) | (46) | [2] | (11) | [2] | ||||
Sales | 0 | 0 | ||||||
Contributions | 0 | 0 | ||||||
Distributions and other | 0 | 0 | ||||||
Fair market value, ending balance | $ 10,342 | $ 7,274 | ||||||
|
Preneed Cemetery Activities Investments Classified by Contractual Maturity Date (Details) (Cemetery [Member], USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
---|---|
Cemetery [Member]
|
|
Investments Classified By Contractual Maturity Date [Line Items] | |
Available-for-sale Securities, Debt Maturities, within One Year, Fair Value | $ 19,832 |
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Fair Value | 56,472 |
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Fair Value | 42,361 |
Available-for-sale Securities, Debt Maturities, after Ten Years, Fair Value | 48,750 |
Available-for-sale Securities, Debt Maturities, Total, Fair Value | $ 167,415 |
Earnings Per Share Level 4 (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income attributable to common stockholders | $ 57,620 | $ 48,025 |
After tax interest on convertible debt | 13 | 13 |
Net income — diluted | $ 57,633 | $ 48,038 |
Weighted average shares — basic | (211,380) | (220,132) |
Stock options | 3,707 | 2,959 |
Convertible debt | 121 | 121 |
Weighted average shares — diluted | 215,208 | 223,212 |
Net income attributable to common stockholders, basic | $ 0.27 | $ 0.22 |
Net income attributable to common stockholders, diluted | $ 0.27 | $ 0.22 |
Cemetery Perpetual Care Trusts Investments Classifed by Contractual Maturity Date (Details) (Cemetery Perpetual Care [Member], USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
---|---|
Cemetery Perpetual Care [Member]
|
|
Investments Classified By Contractual Maturity Date [Line Items] | |
Available-for-sale Securities, Debt Maturities, within One Year, Fair Value | $ 9,355 |
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Fair Value | 23,976 |
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Fair Value | 20,297 |
Available-for-sale Securities, Debt Maturities, after Ten Years, Fair Value | 1,175 |
Available-for-sale Securities, Debt Maturities, Total, Fair Value | $ 54,803 |
Equity Level 3 (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Our components of Accumulated other comprehensive income are as follows:
|
Earnings Per Share Earnings Per Share, Textuals (Details)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1.1 | 4.3 |
Summary of Significant Accounting Policies Policies
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Summary of Significant Accounting Policies [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | The computation of diluted EPS excludes outstanding stock options and convertible debt in certain periods in which the inclusion of such options and debt would be anti-dilutive in the periods presented. Basic earnings per common share (EPS) excludes dilution and is computed by dividing Net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other obligations to issue common stock were exercised or converted into common stock or resulted in the issuance of common shares that then shared in our earnings. |
Segment Reporting, Policy [Policy Text Block] | Our operations are both product based and geographically based, and the reportable operating segments presented below include our funeral and cemetery operations. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | We utilize the Black-Scholes option valuation model for estimating the fair value of our stock options. |
Revenue Recognition, Policy [Policy Text Block] | Earnings from all our funeral merchandise and service trust investments are recognized in funeral revenues when a service is performed or merchandise is delivered. Fees charged by our wholly-owned registered investment advisor are also included in current revenues in the period in which they are earned. In addition, we are entitled to retain, in certain jurisdictions, a portion of collected customer payments when a customer cancels a preneed contract; these amounts are also recognized in current revenues Earnings from all our cemetery merchandise and service trust investments are recognized in current cemetery revenues when a service is performed or merchandise is delivered. Fees charged by our wholly-owned registered investment advisor are also included in current revenues in the period in which they are earned. In addition, we are entitled to retain, in certain jurisdictions, a portion of collected customer payments when a customer cancels a preneed contract; these amounts are also recognized in current revenues. Distributable earnings from these cemetery perpetual care trust investments are recognized in current cemetery revenues to the extent we incur qualifying cemetery maintenance costs. Fees charged by our wholly-owned registered investment advisor are also included in current revenues in the period in which they are earned. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Where quoted prices are available in an active market, securities held by the common trust funds and mutual funds are classified as Level 1 investments pursuant to the three-level valuation hierarchy as required by the Fair Value Measurements and Disclosure (FVM&D) Topic of the ASC. Where quoted market prices are not available for the specific security, fair values are estimated by using either quoted prices of securities with similar characteristics or an income approach fair value model with observable inputs that include a combination of interest rates, yield curves, credit risks, prepayment speeds, rating, and tax-exempt status. These funds are classified as Level 2 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. The valuation of private equity and other alternative investments requires management judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. The fair value of these investments is estimated based on the market value of the underlying real estate and private equity investments. The underlying real estate value is determined using the most recent available appraisals. As of March 31, 2013, private equity instruments are valued based on reported net asset values discounted by 0% to 20% for risk and 0% to 10% for liquidity. As of December 31, 2012, private equity instruments were valued based on reported net asset values discounted by 0% to 60% for risk and 0% to 25% for liquidity. A significant increase (decrease) in the discounts results in a directionally opposite change in the fair value of the instruments. Valuation policies and procedures are determined by our Trust Services department, which reports to our Chief Financial Officer. Additionally, valuations are reviewed by our investment committee quarterly. These funds are classified as Level 3 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. Where quoted prices are available in an active market, securities held by the common trust funds and mutual funds are classified as Level 1 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. Where quoted market prices are not available for the specific security, fair values are estimated by using either quoted prices of securities with similar characteristics or an income approach fair value model with observable inputs that include a combination of interest rates, yield curves, credit risks, prepayment speeds, rating, and tax-exempt status. These funds are classified as Level 2 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. The valuation of private equity and other alternative investments requires management judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. The fair value of these investments is estimated based on the market value of the underlying real estate and private equity investments. The underlying real estate value is determined using the most recent available appraisals. As of March 31, 2013, private equity instruments are valued based on reported net asset values discounted by 0% to 20% for risk and 0% to 10% for liquidity. As of December 31, 2012, private equity instruments were valued based on reported net asset values discounted by 0% to 60% for risk and 0% to 25% for liquidity. A significant increase (decrease) in the discounts results in a directionally opposite change in the fair value of the instruments. Valuation policies and procedures are determined by our Trust Services department, which reports to our Chief Financial Officer. Additionally, valuations are reviewed by our investment committee quarterly. These funds are classified as Level 3 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. Where quoted prices are available in an active market, securities held by the common trust funds and mutual funds are classified as Level 1 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. Where quoted market prices are not available for the specific security, fair values are estimated by using either quoted prices of securities with similar characteristics or an income approach fair value model with observable inputs that include a combination of interest rates, yield curves, credit risks, prepayment speeds, rating, and tax-exempt status. These funds are classified as Level 2 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. The valuation of private equity and other alternative investments requires management judgment due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. The fair value of these investments is estimated based on the market value of the underlying real estate and private equity investments. The underlying real estate value is determined using the most recent available appraisals. As of March 31, 2013, private equity instruments are valued based on reported net asset values discounted by 0% to 20% for risk and 0% to 10% for liquidity. As of December 31, 2012, private equity instruments were valued based on reported net asset values discounted by 0% to 60% for risk and 0% to 25% for liquidity. A significant increase (decrease) in the discounts results in a directionally opposite change in the fair value of the instruments.Valuation policies and procedures are determined by our Trust Services department, which reports to our Chief Financial Officer. Additionally, valuations are reviewed by our investment committee quarterly. These funds are classified as Level 3 investments pursuant to the three-level valuation hierarchy as required by the FVM&D Topic of the ASC. The fair values of our long-term, fixed rate loans were estimated using market prices for those loans, and therefore they are classified within Level 1 of the Fair Value Measurements hierarchy as required by the FVM&D Topic of the ASC. The bank credit agreement and the mortgage and other debt are classified within Level 3 of the Fair Value Measurements hierarchy. The fair values of these instruments have been estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | Our funeral merchandise and service trusts are variable interest entities as defined in the Consolidation Topic of the ASC. In accordance with this guidance, we have determined that we are the primary beneficiary of these trusts, as we absorb a majority of the losses and returns associated with these trusts. Our cemetery trust investments detailed in Notes 5 and 6 are also accounted for as variable interest entities. Our cemetery merchandise and service trusts are variable interest entities as defined in the Consolidation Topic of the ASC. In accordance with this guidance, we have determined that we are the primary beneficiary of these trusts, as we absorb a majority of the losses and returns associated with these trusts. The trust investments detailed in Notes 4 and 6 are also accounted for as variable interest entities. Our cemetery perpetual care trusts are variable interest entities as defined in the Consolidation Topic of the ASC. In accordance with this guidance, we have determined that we are the primary beneficiary of these trusts, as we absorb a majority of the losses and returns associated with these trusts. The merchandise and service trust investments detailed in Notes 4 and 5 are also accounted for as variable interest entities. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation and Basis of Presentation Our unaudited condensed consolidated financial statements include the accounts of Service Corporation International (SCI) and all subsidiaries in which we hold a controlling financial interest. Our financial statements also include the accounts of the funeral merchandise and service trusts, cemetery merchandise and service trusts, and cemetery perpetual care trusts in which we have a variable interest and are the primary beneficiary. Our interim condensed consolidated financial statements are unaudited but include all adjustments, consisting of normal recurring accruals and any other adjustments, which management considers necessary for a fair statement of our results for these periods. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2012, unless otherwise disclosed herein, and should be read in conjunction therewith. The accompanying year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation with no effect on our previously reported results of operations, consolidated financial position, or cash flows. |
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation Our unaudited condensed consolidated financial statements include the accounts of Service Corporation International (SCI) and all subsidiaries in which we hold a controlling financial interest. Our financial statements also include the accounts of the funeral merchandise and service trusts, cemetery merchandise and service trusts, and cemetery perpetual care trusts in which we have a variable interest and are the primary beneficiary. Our interim condensed consolidated financial statements are unaudited but include all adjustments, consisting of normal recurring accruals and any other adjustments, which management considers necessary for a fair statement of our results for these periods. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2012, unless otherwise disclosed herein, and should be read in conjunction therewith. The accompanying year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation with no effect on our previously reported results of operations, consolidated financial position, or cash flows. Use of Estimates in the Preparation of Financial Statements The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions as described in our Annual Report on Form 10-K for the year ended December 31, 2012. These estimates and assumptions may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a result, actual results could differ from these estimates. Preneed Funeral and Cemetery Receivables We sell preneed funeral and cemetery contracts whereby the customer enters into arrangements for future merchandise and services prior to the time of need. As these contracts are entered into prior to the delivery of the related goods and services, the preneed funeral and cemetery receivables are offset by a comparable deferred revenue amount. These receivables generally have an interest component for which interest income is recorded when the interest amount is considered collectible and realizable, which typically coincides with cash payment. We do not accrue interest on financing receivables that are not paid in accordance with the contractual payment date given the nature of our goods and services, the nature of our contracts with customers, and the timing of the delivery of our services. We do not consider receivables to be past due until the service or goods are required to be delivered at which time the preneed receivable is paid or reclassified as a trade receivable with payment terms of less than 30 days. As the preneed funeral and cemetery receivables are offset by comparable deferred revenue amounts, we have no risk of loss related to these receivables. If a preneed contract is canceled prior to delivery, state or provincial law governs the amount of the refund owed to the customer, if any, including the amount of the attributed investment earnings. Upon cancellation, we receive the amount of principal deposited to the trust and previously undistributed net investment earnings and, where required, issue a refund to the customer. We retain excess funds, if any, and recognize the attributed investment earnings (net of any investment earnings payable to the customer) as revenue in the consolidated statement of operations. In certain jurisdictions, we may be obligated to fund any shortfall if the amount deposited by the customers exceed the funds in trust. Based on our historical experience, we have provided an allowance for cancellation of these receivables, which is recorded as a reduction in receivables with a corresponding offset to deferred revenue. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates in the Preparation of Financial Statements The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions as described in our Annual Report on Form 10-K for the year ended December 31, 2012. These estimates and assumptions may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a result, actual results could differ from these estimates. |
Finance, Loans and Leases Receivable, Policy [Policy Text Block] | Preneed Funeral and Cemetery Receivables We sell preneed funeral and cemetery contracts whereby the customer enters into arrangements for future merchandise and services prior to the time of need. As these contracts are entered into prior to the delivery of the related goods and services, the preneed funeral and cemetery receivables are offset by a comparable deferred revenue amount. These receivables generally have an interest component for which interest income is recorded when the interest amount is considered collectible and realizable, which typically coincides with cash payment. We do not accrue interest on financing receivables that are not paid in accordance with the contractual payment date given the nature of our goods and services, the nature of our contracts with customers, and the timing of the delivery of our services. We do not consider receivables to be past due until the service or goods are required to be delivered at which time the preneed receivable is paid or reclassified as a trade receivable with payment terms of less than 30 days. As the preneed funeral and cemetery receivables are offset by comparable deferred revenue amounts, we have no risk of loss related to these receivables. If a preneed contract is canceled prior to delivery, state or provincial law governs the amount of the refund owed to the customer, if any, including the amount of the attributed investment earnings. Upon cancellation, we receive the amount of principal deposited to the trust and previously undistributed net investment earnings and, where required, issue a refund to the customer. We retain excess funds, if any, and recognize the attributed investment earnings (net of any investment earnings payable to the customer) as revenue in the consolidated statement of operations. In certain jurisdictions, we may be obligated to fund any shortfall if the amount deposited by the customers exceed the funds in trust. Based on our historical experience, we have provided an allowance for cancellation of these receivables, which is recorded as a reduction in receivables with a corresponding offset to deferred revenue. |
Funeral and Cemetery cash flow [Policy Text Block] | Cash flows from preneed funeral contracts are presented as operating cash flows in our unaudited condensed consolidated statement of cash flows. Cash flows from preneed cemetery contracts are presented as operating cash flows in our unaudited condensed consolidated statement of cash flows. Cash flows from cemetery perpetual care trusts are presented as operating cash flows in our unaudited condensed consolidated statement of cash flows. |
Revenue Recognition, Deferred Revenue [Policy Text Block] | These earnings are recorded in Deferred preneed funeral revenues until the service is performed or the merchandise is delivered. These earnings are recorded in Deferred preneed cemetery revenues until the service is performed or the merchandise is delivered. |
Marketable Securities, Available-for-sale Securities, Policy [Policy Text Block] | We assess our trust investments for other-than-temporary declines in fair value on a quarterly basis. Impairment charges resulting from this assessment are recognized as investment losses in Other income, net and a decrease to Preneed funeral receivables, net and trust investments. These investment losses, if any, are offset by the corresponding reclassification in Other income, net, which reduces Deferred preneed funeral receipts held in trust. We assess our trust investments for other-than-temporary declines in fair value on a quarterly basis. Impairment charges resulting from this assessment are recognized as investment losses in Other income, net and a decrease to Preneed cemetery receivables, net and trust investments. These investment losses, if any, are offset by the corresponding reclassification in Other income, net, which reduces Deferred preneed cemetery receipts held in trust. See Note 7 for further information related to our Deferred preneed cemetery receipts held in trust We assess our trust investments for other-than-temporary declines in fair value on a quarterly basis. Impairment charges resulting from this assessment are recognized as investment losses in Other income, net and a decrease to Cemetery perpetual care trust investments. These investment losses, if any, are offset by the corresponding reclassification in Other income, net, which reduces Care trusts’ corpus. |
Preneed Funeral Activities Investment Related Activities (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Investment related activities [Line Items] | ||
Realized gains from sales of available-for-sale securities | $ 31,729 | $ 67,445 |
Realized losses from sales of available-for-sale securities | (4,213) | (25,733) |
Funeral [Member]
|
||
Investment related activities [Line Items] | ||
Deposits | 22,199 | 22,178 |
Withdrawals | 32,705 | 30,912 |
Purchases of available-for-sale securities | 60,979 | 188,059 |
Sales of available-for-sale securities | 96,704 | 184,902 |
Realized gains from sales of available-for-sale securities | 11,371 | 26,011 |
Realized losses from sales of available-for-sale securities | $ (1,721) | $ (9,748) |
Cemetery Perpetual Care Trusts Long-term Receivable and Investment (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Long-term receivable and investment components [Line Items] | ||
Cemetery perpetual care trust investments | $ 1,128,284 | $ 1,099,580 |
Cemetery Perpetual Care [Member]
|
||
Long-term receivable and investment components [Line Items] | ||
Trust investments, at market | 1,074,974 | 1,045,568 |
Restricted Cash and Cash Equivalents | 53,310 | 54,012 |
Cemetery perpetual care trust investments | $ 1,128,284 | $ 1,099,580 |
Debt Debt, Textuals (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|
Debt Instrument [Line Items] | |||
Debt, Weighted Average Interest Rate | 6.27% | 6.28% | |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 87.00% | 87.00% | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 500 | ||
Letters of Credit, Maximum Borrowing Capacity | 175 | ||
Letters of Credit Outstanding, Amount | 31.7 | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.35% | ||
Line of Credit Facility, Remaining Borrowing Capacity | 381.7 | ||
Repayments of Debt and Capital Lease Obligations | 11.4 | 6.6 | |
Capital Lease Obligations Incurred | $ 14.9 | $ 38.3 | |
February 2013 [Member]
|
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Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% |
Preneed Cemetery Activities Level 3 Activities (Details) (Cemetery [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
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Private Equity Funds [Member]
|
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Fair market value, beginning balance | $ 17,687 | $ 15,219 | ||||||
Net unrealized losses included in Accumulated other comprehensive income | 11,400 | [1] | (1,353) | [1] | ||||
Net realized losses included in Other income, net(2) | (7) | [2] | (11) | [2] | ||||
Contributions | 662 | 1,356 | ||||||
Distributions and other | (3,785) | (276) | ||||||
Fair market value, ending balance | 25,957 | 14,935 | ||||||
Other Investments [Member]
|
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Fair market value, beginning balance | 450 | 436 | ||||||
Net unrealized losses included in Accumulated other comprehensive income | 587 | [1] | 8 | [1] | ||||
Net realized losses included in Other income, net(2) | (2) | [2] | (1) | [2] | ||||
Contributions | 0 | 0 | ||||||
Distributions and other | 0 | 0 | ||||||
Fair market value, ending balance | $ 1,035 | $ 443 | ||||||
|
Nature of Operations Level 1 (Notes)
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
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Nature of Operations [Abstract] | |
Nature of Operations [Text Block] | Nature of Operations We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries primarily operating in the United States and Canada. Our operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and related businesses. Funeral service locations provide all professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles and preparation and embalming services. Funeral-related merchandise, including caskets, casket memorialization products, burial vaults, cremation receptacles, cremation memorial products, flowers, and other ancillary products and services, is sold at funeral service locations. Cemeteries provide cemetery property interment rights, including developed lots, lawn crypts, and mausoleum spaces and sell cemetery-related merchandise and services, including stone and bronze memorials, markers, merchandise installations, and burial openings and closings. We also sell preneed funeral and cemetery merchandise and services whereby a customer contractually agrees to the terms of certain merchandise and services to be provided in the future. |