21. Condensed Consolidating Financial Statements of Guarantors of Senior Notes and Senior Convertible Notes

In conjunction with the Stewart acquisition, we assumed $200.0 million, $85.3 million, and $46.3 million in aggregate principle amount of 6.5% senior notes due 2019, 3.125% convertible senior notes due 2014, and 3.375% convertible seniors notes due 2016, respectively, that were originally issued by Stewart Enterprises, Inc. ('Subsidiary Issuer') and issued a parent guarantee of the 6.5% senior notes due 2019.

The following tables present the condensed consolidating historical financial statements as of December 31, 2013 and December 31, 2012 and for the fiscal years ended December 31, 2013, 2012 and 2011, for SCI ('Parent') on a parent only basis; the Subsidiary Issuer on a parent only basis; the Guarantor subsidiaries, which serve as guarantors for all three notes, on a combined basis; all other non-guarantor subsidiaries on a combined basis; the eliminations necessary to arrive at the information for the Company on a consolidated basis; and the Company on a consolidated basis.

Non-guarantor subsidiaries of the three notes include the Puerto Rican subsidiaries of the Subsidiary Issuer; Investors Trust, Inc.; certain immaterial domestic subsidiaries of the Subsidiary Issuer, which are not 100 percent-owned, or are prohibited by law from guaranteeing the notes; and all subsidiaries of the Parent that are not subsidiaries of Stewart Enterprises, Inc. The guarantor subsidiaries of the notes are 100 percent-owned directly or indirectly by the Parent and the Subsidiary Issuer. The guarantees are full and unconditional and joint and several. Statement of Operations, Comprehensive Income, and Cash Flows information for the Subsidiary Issuer and Guarantor Subsidiaries below is from the date of acquisition, December 23, 2013.

Condensed Consolidating Statements of Operations



	Year Ended December 31, 2013
	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	—		$	11,349		$	2,545,033		$	—		$	2,556,382
Costs and expenses	—			—			(9,648		)	(1,997,165		)	—			(2,006,813		)
Gross profits	—			—			1,701			547,868			—			549,569
General and administrative expenses	(30,492		)	(451		)	—			(124,193		)	—			(155,136		)
Losses on divestitures and impairment charges, net	—			—			—			(6,263		)	—			(6,263		)
Operating income	$	(30,492	)	$	(451	)	$	1,701		$	417,412		$	—		$	388,170
Interest expense	(135,362		)	(472		)	—			(6,526		)	—			(142,360		)
Gains on early extinguishment of debt, net	—			—			—			468			—			468
Equity in subsidiaries	248,784			1,068			—			—			(249,852		)	—
Other (expense) income, net	—			—			(20		)	(539		)	—			(559		)
Income from continuing operations before income taxes	$	82,930		$	145		$	1,681		$	410,815		$	(249,852	)	$	245,719
Benefit (provision) for income taxes	60,918			360			(656		)	(157,237		)	—			(96,615		)
Net income	143,848			505			1,025			253,578			(249,852		)	149,104
Net income attributable to noncontrolling interests	$	—		$	—		$	—		$	—		$	(5,256	)	$	(5,256	)
Net income attributable to common stockholders	$	143,848		$	505		$	1,025		$	253,578		$	(255,108	)	$	143,848

Condensed Consolidating Statements of Operations



	Year Ended December 31, 2012
	Parent			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	2,410,481		$	—		$	2,410,481
Costs and expenses	—			(1,887,268		)	—			(1,887,268		)
Gross profits	—			523,213			—			523,213
General and administrative expenses	(2,062		)	(119,829		)	—			(121,891		)
Losses on divestitures and impairment charges, net	—			(1,533		)	—			(1,533		)
Operating income	$	(2,062	)	$	401,851		$	—		$	399,789
Interest expense	(128,950		)	(6,118		)	—			(135,068		)
Losses on early extinguishment of debt, net	(22,706		)	—			—			(22,706		)
Equity in subsidiaries	249,803			—			(249,803		)	—
Other income (expense), net	—			3,668			—			3,668
Income from continuing operations before income taxes	$	96,085		$	399,401		$	(249,803	)	$	245,683
Benefit (provision) for income taxes	56,461			(148,009		)	—			(91,548		)
Net income	152,546			251,392			(249,803		)	154,135
Net income attributable to noncontrolling interests	$	—		$	—		$	(1,589	)	$	(1,589	)
Net income attributable to common stockholders	$	152,546		$	251,392		$	(251,392	)	$	152,546

Condensed Consolidating Statements of Operations



	Year Ended December 31, 2011
	Parent			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	2,316,040		$	—		$	2,316,040
Costs and expenses	—			(1,839,538		)	—			(1,839,538		)
Gross profits	—			476,502			—			476,502
General and administrative expenses	(1,940		)	(99,886		)	—			(101,826		)
Losses on divestitures and impairment charges, net	—			(10,977		)	—			(10,977		)
Operating income	$	(1,940	)	$	365,639		$	—		$	363,699
Interest expense	(128,315		)	(5,467		)	—			(133,782		)
Losses on early extinguishment of debt, net	(3,509		)	—			—			(3,509		)
Equity in subsidiaries	229,536			—			(229,536		)	—
Other income (expense), net	—			(772		)	—			(772		)
Income from continuing operations before income taxes	$	95,772		$	359,400		$	(229,536	)	$	225,636
Benefit (provision) for income taxes	49,131			(128,535		)	—			(79,404		)
Net income	144,903			230,865			(229,536		)	146,232
Net income attributable to noncontrolling interests	$	—		$	—		$	(1,329	)	$	(1,329	)
Net income attributable to common stockholders	$	144,903		$	230,865		$	(230,865	)	$	144,903

Condensed Consolidating Statements of Comprehensive Income



	Year Ended December 31, 2013
	Parent			Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	143,848		$	505	$	1,025	$	253,578		$	(249,852	)	$	149,104
Other comprehensive income	(23,276		)	—		—		(23,276		)	18,020			(28,532		)
Total comprehensive income attributable to common stockholders	$	120,572		$	505	$	1,025	$	230,302		$	(231,832	)	$	120,572

Condensed Consolidating Statements of Comprehensive Income



	Year Ended December 31, 2012
	Parent		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	152,546	$	251,392	$	(249,803	)	$	154,135
Other comprehensive income	5,865		5,865		(7,454		)	4,276
Total comprehensive income attributable to common stockholders	$	158,411	$	257,257	$	(257,257	)	$	158,411

Condensed Consolidating Statements of Comprehensive Income



	Year Ended December 31, 2011
	Parent			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	144,903		$	230,865		$	(229,536	)	$	146,232
Other comprehensive income	(6,916		)	(6,916		)	5,587			(8,245		)
Total comprehensive income attributable to common stockholders	$	137,987		$	223,949		$	(223,949	)	$	137,987

Condensed Consolidating Balance Sheets



	Year Ended December 31, 2013
	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	53,543	$	1,898	$	89,432	$	—		$	144,873
Receivables, net	—		442		23,908		81,549		—			105,899
Inventories, net	—		—		10,822		23,743		—			34,565
Current assets held for sale	—		—		3,333		1,236		—			4,569
Other	9,083		29,133		34,611		31,014		—			103,841
Total current assets	$	9,083	$	83,118	$	74,572	$	226,974	$	—		$	393,747
Equity in subsidiaries	4,132,098		874,590		4,546		—		(5,011,234		)	—
Preneed funeral receivables, net and trust investments	—		—		358,567		1,512,307		—			1,870,874
Preneed cemetery receivables, net and trust investments	—		—		265,346		2,035,565		—			2,300,911
Cemetery property, at cost	—		—		266,168		1,482,899		—			1,749,067
Property and equipment, net	—		15,243		308,267		1,599,451		—			1,922,961
Non-current assets held for sale	—		—		434,248		303,304		—			737,552
Deferred charges and other assets	42,068		31,807		179,811		407,548		—			661,234
Goodwill, net	—		578,578		—		1,343,524		—			1,922,102
Cemetery perpetual care trust investments	—		—		223,903		1,123,719		—			1,347,622
Total assets	$	4,183,249	$	1,583,336	$	2,115,428	$	10,035,291	$	(5,011,234	)	$	12,906,070
LIABILITIES & EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	31,914	$	46,020	$	43,706	$	365,008	$	—		$	486,648
Current maturities of long-term debt	—		106,939		—		39,423		—			146,362
Current liabilities held for sale	—		—		1,647		1,536		—			3,183
Income taxes	—		560		1,427		4,404		—			6,391
Total current liabilities	31,914		153,519		46,780		410,371		—			642,584
Long-term debt	2,731,611		270,578		89		153,270					3,155,548
Deferred preneed funeral revenues	$	—	$	—	$	177,097	$	509,202	$	—		$	686,299
Deferred preneed cemetery revenues	—		—		33,561		889,594		—			923,155
Deferred tax liability	1,092		—		99,595		518,513		—			619,200
Non-current liabilities held for sale	—		—		153,637		274,416		—			428,053
Other liabilities	4,402		29,944		11,116		384,931		—			430,393
Deferred preneed funeral and cemetery receipts held in trust	—		—		503,667		2,746,919		—			3,250,586
Care trusts’ corpus	—		—		223,903		1,121,971		—			1,345,874
Equity:
Common stock	212,317		85,175		102		25		(85,302		)	212,317
Other equity	1,113,472		1,044,120		865,881		2,937,638		(4,847,639		)	1,113,472
Accumulated other comprehensive income	88,441		—		—		88,441		(88,441		)	88,441
Total common stockholders’ equity	1,414,230		1,129,295		865,983		3,026,104		(5,021,382		)	1,414,230
Noncontrolling interests	—		—		—		—		10,148			10,148
Total equity	1,414,230		1,129,295		865,983		3,026,104		(5,011,234		)	1,424,378
Total liabilities and equity	4,183,249		1,583,336		2,115,428		10,035,291		(5,011,234		)	12,906,070

Condensed Consolidating Balance Sheets



	Year Ended December 31, 2012
	Parent		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	92,708	$	—		$	92,708
Receivables, net	—		101,817		—			101,817
Inventories, net	—		24,560		—			24,560
Other	4,393		59,017		—			63,410
Total current assets	$	4,393	$	278,102	$	—		$	282,495
Equity in subsidiaries	3,108,856		—		(3,108,856		)	—
Preneed funeral receivables, net and trust investments	—		1,535,932		—			1,535,932
Preneed cemetery receivables, net and trust investments	—		1,826,835		—			1,826,835
Cemetery property, at cost	—		1,489,948		—			1,489,948
Property and equipment, net	—		1,641,101		—			1,641,101
Goodwill, net	—		1,382,410		—			1,382,410
Deferred charges and other assets	23,357		401,910		—			425,267
Cemetery perpetual care trust investments	—		1,099,580		—			1,099,580
Total assets	$	3,136,606	$	9,655,818	$	(3,108,856	)	$	9,683,568
LIABILITIES & EQUITY
Current liabilities:
Accounts payable and accrued liabilities	20,761		353,022		—			373,783
Current maturities of long-term debt	4,757		26,672		—			31,429
Income taxes	—		6,892		—			6,892
Total current liabilities	$	25,518	$	386,586	$	—		$	412,104
Long-term debt	1,762,725		153,896		—			1,916,621
Deferred preneed funeral revenues	—		536,647		—			536,647
Deferred preneed cemetery revenues	—		861,148		—			861,148
Deferred tax liability	1,175		470,023		—			471,198
Other liabilities	4,161		395,789		—			399,950
Deferred preneed funeral and cemetery receipts held in trust	—		2,624,321		—			2,624,321
Care trusts’ corpus	—		1,098,752		—			1,098,752
Equity:
Common stock	211,047		24		(24		)	211,047
Other equity	1,020,263		3,016,915		(3,016,915		)	1,020,263
Accumulated other comprehensive income	111,717		111,717		(111,717		)	111,717
Total common stockholders’ equity	$	1,343,027	$	3,128,656	$	(3,128,656	)	$	1,343,027
Noncontrolling interests	—		—		19,800			19,800
Total equity	1,343,027		3,128,656		(3,108,856		)	1,362,827
Total liabilities and equity	$	3,136,606	$	9,655,818	$	(3,108,856	)	$	9,683,568

Condensed Consolidating Statements of Cash Flows



	Year Ended December 31, 2013
	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Net cash provided by operating activities	$	(147,355	)	$	(25,024	)	$	1,737		$	555,351		$	—		$	384,709
Cash flows from investing activities:
Capital expenditures	—			—			—			(113,084		)	—			(113,084		)
Acquisitions, net of cash acquired	(1,165,350		)	114,875			1,898			(8,545		)	—			(1,057,122		)
Proceeds from divestitures and sales of property and equipment	—			—			—			13,072			—			13,072
Other	—			—			—			341			—			341
Distributions from subsidiaries	437,742			—			—			—			(437,742		)	—
Net cash used in investing activities	(727,608		)	114,875			1,898			(108,216		)	(437,742		)	(1,156,793		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	1,055,000			—			—			—			—			1,055,000
Debt issuance costs	(36,064		)	—			—			—			—			(36,064		)
Payments of debt	(91,265		)	—			—			(571		)	—			(91,836		)
Early extinguishment of debt	(80		)	—			—			—			—			(80		)
Principal payments on capital leases	—			—			—			(26,280		)	—			(26,280		)
Proceeds from exercise of stock options	6,309			—			—			—			—			6,309
Purchase of Company common stock	(1,708		)	—			—			—			—			(1,708		)
Payments of dividends	(57,229		)	—			—			—			—			(57,229		)
Purchase of noncontrolling interest	—			—			—			(23,333		)	—			(23,333		)
Other	—			—			—			336			—			336
Distributions to parent	—			(36,308		)	(1,737		)	(399,697		)	437,742			—
Net cash provided by (used in) financing activities	874,963			(36,308		)	(1,737		)	(449,545		)	437,742			825,115
Effect of foreign currency	—			—			—			(866		)	—			(866		)
Net decrease in cash and cash equivalents	—			53,543			1,898			(3,276		)	—			52,165
Cash and cash equivalents at beginning of period	—			—			—			92,708			—			92,708
Cash and cash equivalents at end of period	$	—		$	53,543		$	1,898		$	89,432		$	—		$	144,873

Condensed Consolidating Statements of Cash Flows



	Year Ended December 31, 2012
	Parent			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Net cash provided by operating activities	$	(126,547	)	$	495,793		$	—		$	369,246
Cash flows from investing activities:
Capital expenditures	—			(115,628		)	—			(115,628		)
Acquisitions, net of cash acquired	—			(65,463		)	—			(65,463		)
Proceeds from divestitures and sales of property and equipment	—			9,953			—			9,953
Other	—			(3,816		)	—			(3,816		)
Distributions from subsidiaries	340,260			—			(340,260		)	—
Net cash used in investing activities	340,260			(174,954		)	(340,260		)	(174,954		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	221,600			5,907			—			227,507
Debt issuance costs	(4,500		)	—			—			(4,500		)
Payments of debt	—			(1,145		)	—			(1,145		)
Early extinguishment of debt	(202,140		)	—			—			(202,140		)
Principal payments on capital leases	—			(25,760		)	—			(25,760		)
Proceeds from exercise of stock options	18,389			—			—			18,389
Purchase of Company common stock	(186,766		)	—			—			(186,766		)
Payments of dividends	(60,296		)	—			—			(60,296		)
Purchase of noncontrolling interest	—			(3,000		)	—			(3,000		)
Bank overdrafts and other	—			6,199			—			6,199
Distributions to parent	—			(340,260		)	340,260			—
Net cash provided by (used in) financing activities	(213,713		)	(358,059		)	340,260			(231,512		)
Effect of foreign currency				1,359						1,359
Net decrease in cash and cash equivalents	—			(35,861		)	—			(35,861		)
Cash and cash equivalents at beginning of period	—			128,569			—			128,569
Cash and cash equivalents at end of period	$	—		$	92,708		$	—		$	92,708

Condensed Consolidating Statements of Cash Flows



	Year Ended December 31, 2011
	Parent			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Net cash provided by operating activities	$	(125,067	)	$	513,179		$	—		$	388,112
Cash flows from investing activities:
Capital expenditures	—			(118,375		)	—			(118,375		)
Acquisitions	—			(99,570		)	—			(99,570		)
Proceeds from divestitures and sales of property and equipment	—			24,529			—			24,529
Other	—			3,159			—			3,159
Distributions from subsidiaries	337,131			—			(337,131		)	—
Net cash used in investing activities	337,131			(190,257		)	(337,131		)	(190,257		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	85,000			—			—			85,000
Debt issuance costs	—			—			—			—
Payments of debt	(20,000		)	(2,774		)	—			(22,774		)
Early extinguishment of debt	(43,194		)	—			—			(43,194		)
Principal payments on capital leases	—			(23,030		)	—			(23,030		)
Proceeds from exercise of stock options	8,227			—			—			8,227
Purchase of Company common stock	(197,302		)	—			—			(197,302		)
Payments of dividends	(44,795		)	—			—			(44,795		)
Bank overdrafts and other	—			(798		)	—			(798		)
Distributions to parent	—			(337,131		)	337,131			—
Net cash provided by (used in) financing activities	(212,064		)	(363,733		)	337,131			(238,666		)
Effect of foreign currency	—			(1,466		)	—			(1,466		)
Net decrease in cash and cash equivalents	—			(42,277		)	—			(42,277		)
Cash and cash equivalents at beginning of period	—			170,846			—			170,846
Cash and cash equivalents at end of period	$	—		$	128,569		$	—		$	128,569