-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TSIS4vBGKRni/PPFNV4i9l7hQ3unweNzRmOjdi4lKkZjmzEKVQLk03LF4PVhfGiY DBarPLi6rccwdQBIzFq2wA== 0001275287-05-004166.txt : 20051027 0001275287-05-004166.hdr.sgml : 20051027 20051027101353 ACCESSION NUMBER: 0001275287-05-004166 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051027 DATE AS OF CHANGE: 20051027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SERVICE CORPORATION INTERNATIONAL CENTRAL INDEX KEY: 0000089089 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PERSONAL SERVICES [7200] IRS NUMBER: 741488375 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06402 FILM NUMBER: 051158793 BUSINESS ADDRESS: STREET 1: 1929 ALLEN PKWY STREET 2: P O BOX 130548 CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135225141 MAIL ADDRESS: STREET 1: P O BOX 130548 CITY: HOUSTON STATE: TX ZIP: 77219-0548 8-K 1 sc3894.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 27, 2005 SERVICE CORPORATION INTERNATIONAL ------------------------------------------------------ (Exact name of registrant as specified in its charter) Texas 1-6402-1 74-1488375 ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 1929 Allen Parkway Houston, Texas 77019 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (713) 522-5141 -------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On October 27, 2005, Service Corporation International issued a press release announcing the filing of its second quarter form 10-Q and confirming its financial results for the second quarter of 2005. A copy of this press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference. The information in this Current Report on Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibit 99.1 Press Release dated October 27, 2005 reporting second quarter 2005 financial results. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 27, 2005 SERVICE CORPORATION INTERNATIONAL By: /s/ Eric D. Tanzberger --------------------------- Name: Eric D. Tanzberger Title: Vice President and Corporate Controller EX-99.1 2 sc3894ex991.txt EXHIBIT 99.1 Exhibit 99.1 SERVICE CORPORATION INTERNATIONAL ANNOUNCES THE FILING OF ITS SECOND QUARTER FORM 10-Q AND ANNOUNCES SECOND QUARTER 2005 EARNINGS OF $.04 PER DILUTED SHARE AND $.07 BEFORE SPECIAL ITEMS HOUSTON, Oct. 27 /PRNewswire-FirstCall/ -- Service Corporation International (NYSE: SCI), which owns and operates funeral service locations and cemeteries, announced today that the Company has filed its Form 10-Q for the quarterly period ended June 30, 2005 with the Securities and Exchange Commission. The Company, in an August 29, 2005 press release, announced preliminary second quarter 2005 earnings and the delay in filing its June 30, 2005 Form 10-Q pending completion of the Company's review of reconciliations being performed related to its preneed funeral and cemetery reconciliation and verification projects and other preneed trust accounts. In its Form 10-Q filed today, SCI reported net income for the second quarter of 2005 of $13.7 million or earnings per diluted share of $.04, which compared to net income of $43.0 million or $.14 per diluted share in the same period of 2004. The Company previously reported, in the preliminary earnings press release dated August 29, 2005, earnings of $14.0 million or earnings per diluted share of $.05 for the second quarter of 2005. The $0.3 million decrease in net income includes a $1.0 million increase in general and administrative expense related to a litigation accrual, a decrease in gross profit of $0.5 million, an increase in a gain on disposition of $0.8 million and a decrease in income tax expense of $0.4 million. The variances in gains on dispositions and gross profit (and associated income taxes) are both related to the Company's completion of its review of the reconciliations described above. For the first six months of 2005, the Company reported a net loss of $141.2 million or a loss of $.45 per diluted share which compared to net income of $73.1 million or $.23 per diluted share in the same period of 2004. The above results reflect certain income and expense items not affecting continuing operations including litigation expenses, gains and impairment losses on dispositions, early extinguishments of debt, discontinued operations and cumulative effects of accounting changes. The Company also today confirmed second quarter 2005 earnings from continuing operations excluding special items of $.07 per diluted share. Net income from continuing operations excluding special items was $21.1 million which compared to $16.4 million or $.05 per diluted share in the second quarter of 2004. The Company previously reported, in its August 29, 2005 preliminary earnings press release, earnings from continuing operations excluding special items of $22.1 million or $.07 per diluted share for the second quarter of 2005. The $1.0 million decrease in net income from continuing operations excluding special items resulted from a $1.0 million increase in general and administrative expense related to a litigation accrual, a decrease in gross profit of $0.5 million related to the Company's completion of its review of the reconciliations described above, and a decrease in income tax expense of $0.5 million. Earnings from continuing operations excluding special items in the first half of 2005 were $58.8 million or $.19 per diluted share which compared to $61.7 million or $.19 per diluted share in the first half of 2004. Earnings from continuing operations excluding special items in the first half of 2005 were negatively impacted by $.02 per diluted share as a result of the Company's first quarter 2005 change in accounting to expense direct preneed selling costs as they are incurred. Earnings from continuing operations excluding special items is a non-GAAP financial measure. See a reconciliation of earnings from continuing operations excluding special items to GAAP measures later in this press release. The Company today also confirmed free cash flow of $62.0 million for the second quarter of 2005, an increase of $36.6 million over the same period of 2004. In the first half of 2005, free cash flow was $146.9 million compared to $120.5 million in the same period of 2004. Free cash flow is a non-GAAP financial measure. See our definition of free cash flow and reconciliation of cash flows from operating activities to free cash flow included in a separate section later in this press release. North America Comparable Operating Results We regard comparable results of operations as analogous to our "same store" results of operations. For purposes of the following presentation, we consider comparable operations as operations that were not acquired or constructed after January 1, 2004 or divested prior to June 30, 2005. Therefore, in the following presentation, we are providing results of operations for the same funeral and cemetery locations in each of the periods presented. We believe this presentation provides greater clarity for comparison purposes of our results of operations for each of the periods presented. The Company previously reported preliminary North America comparable operating results for the three and six months ended June 30, 2005 in a preliminary earnings release dated August 29, 2005. The Company's final results as shown below did not change materially from the preliminary results released on August 29, 2005. The Company's final results of operations can be found in the Company's second quarter 2005 Form 10-Q filing which has been filed with the Securities and Exchange Commission today. Copies of this document as well as other SEC filings can be obtained from our website at http://www.sci-corp.com .
Three Months Ended Six Months Ended (In millions, except funeral June 30, June 30, services performed, average ------------------------ ------------------------ revenue per funeral service Pro forma Pro forma and gross margin percentage) 2005 2004 2005 2004 - ----------------------------- ---------- ---------- ---------- ---------- (Restated) (Restated) Funeral Funeral atneed revenue $ 180.7 $ 169.9 $ 380.8 $ 363.8 Funeral recognized preneed revenue 85.0 88.7 181.5 179.8 General agency revenue (A) 7.5 8.0 14.2 15.8 Kenyon revenue (B) 5.3 1.5 13.4 2.5 Total funeral revenues $ 278.5 $ 268.1 $ 589.9 $ 561.9 Gross profits $ 49.6 $ 47.0 $ 128.9 $ 120.5 Gross margin percentage 17.8% 17.5% 21.8% 21.4% Total funeral services performed 61,537 60,095 130,633 128,703 Average revenue per funeral service (C) $ 4,318 $ 4,303 $ 4,304 $ 4,224 Cemetery Cemetery atneed revenue $ 53.3 $ 48.1 $ 103.9 $ 90.6 Cemetery recognized preneed revenue 74.0 79.6 132.3 161.0 Other revenue (D) 18.6 16.5 38.6 37.7 Total cemetery revenues $ 145.9 $ 144.2 $ 274.8 $ 289.3 Gross profits $ 20.2 $ 16.9 $ 40.4 $ 40.5 Gross margin percentage 13.8% 11.7% 14.7% 14.0%
(A) General Agency ("GA") revenue is commissions we receive from third party insurance companies when customers purchase insurance contracts from such third-party insurance companies to fund funeral services and merchandise at a future date. (B) Kenyon International Emergency Services ("Kenyon") is our disaster response subsidiary that engages in mass fatality and emergency response services. Revenues and gross profits associated with Kenyon are subject to significant variation due to the nature of their operations. (C) Average revenue per funeral service is calculated as total funeral revenues (less GA revenue and Kenyon revenue) divided by total funeral services performed. In the calculation of average revenue per funeral service, GA revenue and Kenyon revenue are excluded from total funeral revenues to avoid distorting our averages of normal funeral services performed. (D) Other cemetery revenue is primarily related to endowment care trust fund income and interest and finance charges earned from customer receivables on preneed installments contracts. Disposition Activities During October 2005, the Company entered into an agreement with StoneMor Partners LP to sell 22 cemeteries and six funeral homes for $12.7 million. As a result, the Company will classify these properties as held for sale in its September 2005 consolidated financial statements and will record an estimated loss on disposition of approximately $28.0 million in its consolidated statement of operations for the three months ended September 30, 2005. This transaction is expected to close in November 2005. Restatement of Previously Issued Financial Statements The Company has completed its review of its preneed funeral and cemetery reconciliation and verification projects and has identified adjustments to previously issued financial statements as announced in its preliminary earnings release dated August 29, 2005. The Company's August 29, 2005 preliminary earnings release was furnished to the Securities and Exchange Commission on a Form 8-K and can be found on the Company's website at http://www.sci-corp.com . As a result of these adjustments, we are restating our financial results for the first interim period of 2005, each of the five years ended December 31, 2004, and each of the interim periods of 2004 and 2003. This restatement includes adjustments related to 1) the Company's recognition of income related to its preneed funeral and cemetery trust accounts; 2) preneed funeral trust income that was previously understated as a result of a point-of-sale system error; and 3) the computation of gains or losses on asset divestiture activities. Adjustments to gains and losses on asset divestiture activities include the write off of certain covenant-not-to-compete agreements which should have been recognized in the Company's 2002 consolidated financial statements and a loss on a property disposition recorded in April 2005 which should have been recorded in the Company's first quarter 2005 consolidated financial statements. Also included in this restatement are previously reflected adjustments to our consolidated financial statements issued prior to January 1, 2004, which related to the recognition of deferred preneed cemetery contract revenues, operating leases, and other verification matters. As a result of this restatement and as previously disclosed, the Company concluded that these previously issued financial statements described above should no longer be relied upon. The Company has also identified additional material weaknesses in its internal control over financial reporting. For more information related to the restatement and the material weaknesses mentioned above, please see the Company's December 31, 2004 Form 10-K/A (Amendment No. 2), the Company's March 31, 2005 Form 10-Q/A (Amendment No. 1) and the Company's June 30, 2005 Form 10-Q filed with the Securities and Exchange Commission today. These documents are available on our website at http://www.sci-corp.com . The impact of the restatement to pretax income (an aggregate charge of $5.2 million for all periods presented) is summarized below for the first quarter of 2005 and each of the five fiscal years ended December 31, 2004. The Company previously announced in its press release dated August 29, 2005 that the estimated impact of the restatement would be approximately $10.0 million, which was prior to the finalization of the projects described herein. (Table in thousands)
Year ended Year ended Year ended Increase (decrease) to December 31, December 31, December 31, pretax income Q1 2005 2004 2003 2002 - ---------------------------------- ------------ ------------ ------------ ------------ Effect of preneed funeral and cemetery trust verification and reconciliation projects $ 1,897 $ (430) $ (8,177) $ (1,492) Effect of understated funeral trust income 2,700 1,570 --- --- Effect of disposition related activities (1,740) 325 807 (1,667) Effect of other trust adjustments (1,049) --- (1,012) --- Cemetery deferred revenue adjustments --- --- 2,132 1,410 Effect of operating lease adjustments --- --- (201) (282) Effect of other verification matters --- --- 6,406 (1,421) Total $ 1,808 $ 1,465 $ (45) $ (3,452)
(Table in thousands)
Year ended Year ended Increase (decrease) to December 31, December 31, Pre- pretax income 2001 2000 2000 Total - ---------------------------------- ------------ ------------ ------------ ------------ Effect of preneed funeral and cemetery trust verification and reconciliation projects $ (660) $ (666) $ (13,652) $ (23,180) Effect of understated funeral trust income --- --- --- 4,270 Effect of disposition related activities 2,260 (34) (486) (535) Effect of other trust adjustments (511) --- 1,160 (1,412) Cemetery deferred revenue adjustments 1,345 2,888 13,021 20,796 Effect of operating lease adjustments (313) (315) (2,667) (3,778) Effect of other verification matters (122) (188) (6,028) (1,353) Total $ 1,999 $ 1,685 $ (8,652) $ (5,192)
NON-GAAP FINANCIAL MEASURES Earnings from continuing operations excluding special items and earnings per share from continuing operations excluding special items are non-GAAP financial measures. We believe these non-GAAP financial measures provide a consistent basis for comparison between quarters and better reflect the performance of our core operations, as they are not influenced by certain income and expenses not affecting continuing operations. We also believe these measures help facilitate comparisons to competitors' operating results. Set forth below is a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. We do not intend for the information to be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Certain periods in this section have been previously restated for adjustments related to certain reconciliations and verifications of our funeral and cemetery trust assets and deferred revenue, operating leases, and other adjustments. See the Company's 2004 Form 10-K/A (Amendment No. 2) for details related to these adjustments. The caption "As Restated" reflects the Company's currently announced restatement presented in this press release related to the adjustments described herein.
Three Months Ended ------------------------------------------------------------ June 30, 2005 June 30, 2004 ---------------------------- ---------------------------- (As Restated) Net Net Income Diluted Income Diluted (In millions, except diluted EPS) (Loss) EPS (Loss) EPS - ---------------------------------- ------------ ------------ ------------ ------------ Net income reported $ 13.7 $ .04 $ 43.0 $ .14 Settlement of significant legal matters --- --- 3.1 .01 (Gains) and impairment losses on dispositions, net (1.1) --- (8.2) (.02) Loss on early extinguishment of debt 8.5 .03 10.5 .03 Other income/expense, net Foreign currency transaction loss --- --- 2.3 --- Discontinued operations --- --- (34.3) (.11) Earnings from continuing operations excluding special items $ 21.1 $ .07 $ 16.4 $ .05 Diluted weighted average shares outstanding (in thousands) 306,404 312,725 Interest add back $ --- $ ---
Six Months Ended ------------------------------------------------------------ June 30, 2005 June 30, 2004 ---------------------------- ---------------------------- (As Restated) Net Net Income Diluted Income Diluted (In millions, except diluted EPS) (Loss) EPS (Loss) EPS - ---------------------------------- ------------ ------------ ------------ ------------ Net (loss) income reported $ (141.2) $ (.45) $ 73.1 $ .23 Settlement of significant legal matters --- --- 25.2 .07 (Gains) and impairment losses on dispositions, net 2.5 .01 (59.2) (.17) Loss on early extinguishment of debt 9.3 .03 10.5 .03 Other income/expense, net Interest income - United Kingdom note receivable --- --- (2.7) (.01) Foreign currency transaction loss --- --- 2.3 .01 Discontinued operations 0.7 --- (35.1) (.10) Cumulative effect of accounting changes 187.5 .60 47.6 .13 Earnings from continuing operations excluding special items $ 58.8 $ .19 $ 61.7 $ .19 Diluted weighted average shares outstanding (in thousands) 311,986 353,438 Interest add back $ --- $ 6.4
Free Cash Flow Free cash flow is a non-GAAP financial measure. We define free cash flow as cash flows from operating activities (excluding certain special items such as any possible payments that could be made associated with the settlement of litigation matters, any potential tax refunds, or potential contributions to our frozen cash balance pension plan, etc) less capital improvements at our existing facilities. The Company defines capital improvements at existing facilities as capital improvements deemed reasonably necessary to maintain our existing facilities in a condition consistent with Company standards and extend their useful lives. Free cash flow is not reduced by mandatory debt service requirements or by growth-oriented capital expenditures. The Company defines growth-oriented capital expenditures as capital expenditures intended to grow revenues and profits such as the acquisition of funeral service locations or cemeteries in large or strategic North America markets, construction of high-end cemetery property (such as private family estates) or the construction of funeral home facilities on Company-owned cemeteries, and the investment in contemporary merchandising displays in our funeral homes. We believe that free cash flow provides useful information to investors regarding our financial condition and liquidity as well as our ability to generate cash for purposes such as reducing debt, growing our business through strategic investments and repurchasing stock or paying dividends. While we believe free cash flow, as defined, is helpful in managing our business and provides useful information to investors, certain events may arise, financial or otherwise, which could require the use of free cash flow so that it would not be available for the purposes described above, or as more fully described in our public filings with the Securities and Exchange Commission. Furthermore, free cash flow should be reviewed in addition to, but not as a substitute for, the information provided in our consolidated statement of cash flows. The following table provides a reconciliation between cash flows from operating activities and free cash flow, as defined. Free cash flow has not changed since the Company's preliminary earnings release was issued on August 29, 2005.
Three Months Ended Six Months Ended June 30, June 30, -------------------- -------------------- (In millions) 2005 2004 2005 2004 - ------------------------------- -------- -------- -------- -------- Cash Flows from Operating Activities $ 74.9 $ 44.2 $ 202.5 $ 132.8 Less: Unusual Tax Refund --- --- (29.0) --- Add: Cash Balance Pension Plan Contribution --- --- --- 20.0 Adjusted Cash Flows from Operating Activities $ 74.9 $ 44.2 $ 173.5 $ 152.8 Less: Capital Improvements to Maintain Existing Facilities (12.9) (18.8) (26.6) (32.3) Free Cash Flow $ 62.0 $ 25.4 $ 146.9 $ 120.5
Cautionary Statement on Forward-Looking Statements The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate" or "predict," that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by us, or on our behalf. Important factors, which could cause actual results to differ materially from those in forward-looking statements include, among others, the following: * Our ability to successfully complete our ongoing process improvement projects, particularly related to the implementation of new processes and internal controls. * The possibility of material legal and regulatory matters arising from our restatement. * Any further changes to our financial results upon our review and our independent auditor's review. * The possibility that the Company will identify and report additional material weaknesses in its internal control over financial reporting. * The effectiveness of our internal controls over financial reporting, and our ability to certify the effectiveness of the internal controls and to obtain a favorable attestation report of our auditors regarding our assessment of our internal controls. * Any further adjustments arising from the material weaknesses previously identified. For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2004 Annual Report on Form 10-K/A (Amendment No. 2). Copies of this document as well as other SEC filings can be obtained from our website at http://www.sci-corp.com. We assume no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us, whether as a result of new information, future events or otherwise. Service Corporation International, headquartered in Houston, Texas, owns and operates funeral service locations and cemeteries. We have an extensive network of businesses including 1,126 funeral service locations and 388 cemeteries in North America as of June 30, 2005. For more information about Service Corporation International, please visit our website at http://www.sci-corp.com . SERVICE CORPORATION INTERNATIONAL CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, ---------------------------- ---------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ (Restated) (Restated) Revenues: Funeral $ 284,457 $ 279,491 $ 603,908 $ 714,012 Cemetery 155,779 152,877 291,199 307,055 440,236 432,368 895,107 1,021,067 Gross profit: Funeral 50,077 50,309 129,699 136,868 Cemetery 25,310 23,040 45,462 52,110 75,387 73,349 175,161 188,978 General and administrative expenses (22,494) (24,028) (42,210) (75,049) Gains and impairment (losses) on dispositions, net 4,528 1,517 (1,213) 36,302 Operating income 57,421 50,838 131,738 150,231 Interest expense (25,875) (31,843) (50,531) (64,501) Loss on early extinguishment of debt (13,051) (16,770) (14,258) (16,770) Other income (expense), net 5,360 (514) 8,047 5,910 (33,566) (49,127) (56,742) (75,361) Income from continuing operations before income taxes and cumulative effects of accounting changes 23,855 1,711 74,996 74,870 Provision (benefit) for income taxes 10,150 (6,904) 28,049 (10,683) Income from continuing operations before cumulative effects of accounting changes 13,705 8,615 46,947 85,553 Income (loss) from discontinued operations (net of income tax (benefit) provision of ($49,097), $594, and ($48,956), respectively) --- 34,337 (650) 35,091 Cumulative effects of accounting changes (net of income tax benefits of $117,428 and $20,983, respectively) --- --- (187,538) (47,556) Net income (loss) $ 13,705 $ 42,952 $ (141,241) $ 73,088 Basic earnings (loss) per share: Income from continuing operations before cumulative effects of accounting changes $ .05 $ .03 $ .15 $ .28 Income from discontinued operations, net of tax --- .11 --- .12 Cumulative effects of accounting changes, net of tax --- --- (.61) (.16) Net income (loss) $ .05 $ .14 $ (.46) $ .24 Diluted earnings (loss) per share: Income from continuing operations before cumulative effects of accounting changes $ .04 $ .03 $ .15 $ .26 Income from discontinued operations, net of tax --- .11 --- .10 Cumulative effects of accounting changes, net of tax --- --- (.60) (.13) Net income (loss) $ .04 $ .14 $ (.45) $ .23 Basic weighted average number of shares 302,363 307,988 307,896 305,290 Diluted weighted average number of shares 306,404 312,725 311,986 353,438 Dividends declared per share $ .025 $ --- $ .050 $ ---
SERVICE CORPORATION INTERNATIONAL CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (In thousands, except share amounts) June 30, December 31, 2005 2004 ------------ ------------ (Restated) Assets Current assets: Cash and cash equivalents $ 319,955 $ 287,785 Receivables, net 115,034 102,622 Inventories 82,987 81,526 Current assets of discontinued operations --- 11,085 Other 39,616 50,945 Total current assets 557,592 533,963 Preneed funeral receivables and trust investments 1,253,322 1,267,784 Preneed cemetery receivables and trust investments 1,344,843 1,399,778 Cemetery property, at cost 1,484,019 1,509,599 Property and equipment, at cost, net 947,450 970,547 Non-current assets of discontinued operations --- 4,367 Deferred charges and other assets 281,764 621,561 Goodwill 1,150,143 1,169,040 Cemetery perpetual care trust investments 722,947 729,048 Total assets $ 7,742,080 $ 8,205,687 Liabilities & Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 219,925 $ 221,877 Current maturities of long-term debt 90,770 75,075 Current liabilities of discontinued operations --- 7,111 Income taxes 2,948 7,850 Total current liabilities 313,643 311,913 Long-term debt 1,172,525 1,178,885 Deferred preneed funeral revenues 519,795 498,571 Deferred preneed cemetery revenues 839,679 803,144 Deferred income taxes 201,278 276,572 Non-current liabilities of discontinued operations --- 58,225 Other liabilities 418,232 431,917 Non-controlling interest in funeral and cemetery trusts 2,003,544 2,092,881 Non-controlling interest in perpetual care trusts 699,958 704,912 Stockholders' equity: Common stock, $1 per share par value, 500,000,000 shares authorized, 298,148,521 and 323,225,352, issued and outstanding (net of 44,747,591 and 18,502,478 treasury shares, at par) 298,149 323,225 Capital in excess of par value 2,224,940 2,395,057 Unearned compensation (4,702) (2,022) Accumulated deficit (970,485) (829,244) Accumulated other comprehensive income (loss) 25,524 (38,349) Total stockholders' equity 1,573,426 1,848,667 Total liabilities and stockholders equity $ 7,742,080 $ 8,205,687 SERVICE CORPORATION INTERNATIONAL CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In thousands) Six months ended June 30, ---------------------------- 2005 2004 ------------ ------------ (Restated) Cash flows from operating activities: Net (loss) income $ (141,241) $ 73,088 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Net loss (income) from discontinued operations 650 (35,091) Loss on early extinguishment of debt 14,258 16,770 Cumulative effects of accounting changes, net of tax 187,538 47,556 Depreciation and amortization 42,395 71,344 Provision (benefit) for deferred income taxes 26,283 (12,110) (Gains) and impairment losses on dispositions, net 1,213 (36,302) Other non-cash adjustments --- 273 Change in assets and liabilities, net of effects from acquisitions and dispositions: Decrease in receivables 14,442 25,370 Decrease in other assets 29,441 4,774 Decrease in payables and other liabilities (13,626) (2,944) Net effect of preneed funeral production and maturities (3,054) (9,770) Net effect of cemetery production and deliveries 44,676 (14,094) Other (217) 1,654 Net cash provided by operating activities from continuing operations 202,758 130,518 Net cash (used in) provided by operating activities from discontinued operations (241) 2,278 Net cash provided by operating activities 202,517 132,796 Cash flows from investing activities: Capital expenditures (43,907) (41,289) Proceeds from divestitures and sales of property and equipment 34,463 19,477 Proceeds and distributions from dispositions of businesses, net of cash retained 21,597 337,049 Proceeds from equity investments 32,070 --- Indemnity payments related to the joint venture of French operations (1,602) --- Net (deposits) withdrawals of restricted funds and other (9,026) (158,632) Net cash provided by investing activities from continuing operations 33,595 156,605 Net cash used in investing activities from discontinued operations --- (117) Net cash provided by investing activities 33,595 156,488 Cash flows from financing activities: Proceeds from issuance of long-term debt 291,472 242,850 Payments of debt (3,047) (121,139) Early extinguishments of debt (298,401) (313,527) Proceeds from exercise of stock options 4,556 5,254 Purchase of Company common stock (189,809) --- Payments of dividends (7,729) --- Purchase of subsidiary stock (844) --- Net cash used in financing activities (203,802) (186,562) Effect of foreign currency (140) (1,269) Net increase in cash and cash equivalents 32,170 101,453 Cash and cash equivalents at beginning of period 287,785 239,431 Cash and cash equivalents at end of period $ 319,955 $ 340,884 For additional information contact: Investors: Debbie Young - Director/Investor Relations (713) 525-9088 Media: Terry Hemeyer - Managing Director / Corporate Communications (713) 525-5497 SOURCE Service Corporation International -0- 10/27/2005 /CONTACT: investors, Debbie Young, Director - Investor Relations, +1-713-525-9088, or media, Terry Hemeyer, Managing Director - Corporate Communications, +1-713-525-5497, both of Service Corporation International/ /Web site: http://www.sci-corp.com / (SCI) -----END PRIVACY-ENHANCED MESSAGE-----