Service Corporation International Announces Second Quarter 2013 Financial Results And Raises 2013 Guidance

  Service Corporation International Announces Second Quarter 2013 Financial
                       Results And Raises 2013 Guidance

- Conference call on Thursday, July 25, 2013, at 9:00 a.m. Central Time.

PR Newswire

HOUSTON, July 24, 2013

HOUSTON, July 24, 2013 /PRNewswire/ -- Service Corporation International
(NYSE: SCI), the largest provider of deathcare products and services in North
America, today reported results for the second quarter 2013. Our unaudited
condensed consolidated financial statements can be found at the end of this
press release. The table below summarizes our key financial results:

(In millions, except for                                Six Months Ended
per share amounts)         Three Months Ended June 30,
                                                        June 30,
                           2013            2012         2013        2012
Revenues                   $   625.5       $  597.4     $ 1,277.9   $ 1,199.9
Operating income           $   89.1        $  99.7      $ 216.9     $ 200.8
Net income attributable    $   33.6        $  37.1      $ 91.2      $ 85.1
to common stockholders
Diluted earnings per       $   0.16        $  0.17      $ 0.42      $ 0.39
share
Earnings from continuing
operations excluding       $   40.9        $  39.9      $ 101.5     $ 85.0
special items^(1)
Diluted earnings per
share from continuing      $   0.19        $  0.18      $ 0.48      $ 0.38
operations excluding
special items^(1)
Diluted weighted average   215.9           218.9        215.6       221.1
shares outstanding
Net cash provided by       $   75.8        $  62.6      $ 226.9     $ 158.4
operating activities
Net cash provided by
operating activities       $   78.2        $  69.6      $ 232.2     $ 165.4
excluding special
items^(1)



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



Quarterly Highlights:

  oOn May 29, 2013 we announced an agreement to acquire Stewart Enterprises,
    Inc. which would further strengthen and complement our North American
    presence.
  oDiluted earnings per share from continuing operations excluding special
    items increased 5.6% to $0.19 in the second quarter 2013 compared to $0.18
    in the prior year second quarter.
  oFuneral gross profit decreased by $1.5 million, or 1.8%, and funeral gross
    margin percentage decreased to 19.3% from 20.6% due primarily to higher
    selling-related costs resulting from increased preneed funeral sales
    production.
  oCemetery gross profit decreased $0.9 million, or 1.9%, and cemetery gross
    margin percentage decreased to 21.7% from 23.1% due primarily to higher
    selling-related costs associated with increased preneed cemetery sales
    production that was partially offset by higher trust fund income.
  oNet cash provided by operating activities excluding special items
    increased to $78.2 million compared to $69.6 million in 2012, primarily as
    a result of timing differences in working capital.

Tom Ryan, the Company's President and Chief Executive Officer, commented on
the second quarter of 2013:
"We are very pleased to have announced during this quarter our agreement to
acquire Stewart Enterprises which we believe will meaningfully expand our
scale while delivering on our commitment to increase shareholder value through
prudent capital deployment. We are excited about adding Stewart's great
businesses and their very talented people to our organization. The planning
for integration is ongoing with the Stewart team and we believe we are on
track to close the transaction in late 2013 or early 2014.

"We are also pleased to report another successful quarter where both earnings
and cash flow exceeded our internal expectations. Based on our strong results
in the first half of the year, we are increasing both our earnings per share
and cash flow guidance for the full year 2013. We continue to be optimistic
about our opportunities for growth enhanced by the Stewart acquisition and our
preneed sales strategies that are strengthened by an aging demographic."

REVIEW OF RESULTS FOR SECOND QUARTER AND FIRST HALF OF 2013

Consolidated Segment Results

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

(In millions, except funeral        Three Months Ended    Six Months Ended
services performed and average
revenue per funeral service)        June 30,              June 30,
                                    2013       2012       2013       2012
Funeral
Funeral atneed revenue              $ 236.6    $ 234.5    $ 503.6    $ 487.2
Funeral matured preneed revenue     130.3      120.2      276.7      252.0
Funeral recognized preneed revenue  18.1       14.1       36.9       27.8
Other funeral revenue               30.8       27.6       60.7       53.7
Total funeral revenues              $ 415.8    $ 396.4    $ 877.9    $ 820.7
Gross profit                        $ 80.2     $ 81.7     $ 200.3    $ 181.8
Gross margin percentage             19.3    %  20.6    %  22.8    %  22.2    %
Funeral services performed          70,043     68,851     149,831    143,557
Average revenue per funeral service $ 5,238    $ 5,152    $ 5,208    $ 5,149
Cemetery
Cemetery atneed revenue             $ 61.6     $ 58.9     $ 122.5    $ 117.3
Cemetery recognized preneed revenue 120.2      118.1      224.2      214.7
Other cemetery revenue              27.9       24.0       53.3       47.2
Total cemetery revenues             $ 209.7    $ 201.0    $ 400.0    $ 379.2
Gross profit                        $ 45.6     $ 46.5     $ 85.1     $ 74.0
Gross margin percentage             21.7    %  23.1    %  21.3    %  19.5    %

Comparable Funeral Results

The table below details comparable funeral results of operations ("same
store") for the three months ended June 30, 2013 and 2012, including the
results of the Neptune Society for both periods. We consider comparable
operations to be those owned for the entire period beginning January1, 2012
and ending June 30, 2013.

(Dollars in millions, except average revenue per funeral  Three Months Ended
service and average revenue per contract sold)
                                                          June 30,
                                                          2013       2012
Comparable funeral revenue:
Atneed revenue^(1)                                        230.8      233.4
Matured preneed revenue^(2)                               129.1      119.7
Recognized preneed revenue^(3)                            16.9       13.9
Other funeral revenue^(4)                                 30.5       27.5
Total comparable funeral revenues                         $ 407.3    $ 394.5
Comparable gross profit                                   $ 79.1     $ 81.5
Comparable gross margin percentage                        19.4    %  20.7    %
Comparable funeral services performed                     68,037     68,477
Comparable average revenue per funeral service            $ 5,290    $ 5,156
Comparable preneed funeral sales production:
Sales                                                     $ 188.3    $ 169.7
Preneed funeral contracts sold - SCI (excluding Neptune   28,207     26,367
Society)
Preneed funeral contracts sold - Neptune Society          11,769     9,675
Average revenue per contract sold - SCI (excluding        $ 5,853    $ 5,780
Neptune Society)
Average revenue per contract sold - Neptune Society       $ 1,968    $ 1,787

(1) Funeral atneed revenue represents merchandise and funeral services sold
    after a death has occurred.
    Funeral matured preneed revenue represents merchandise and services sold
(2) on a preneed contract but delivered and/or performed after a death has
    occurred.
    Funeral recognized preneed revenue represents merchandise and products
(3) sold on a preneed contract and delivered before a death has occurred,
    including funeral merchandise and travel protection insurance, which
    primarily represent sales by the Neptune Society.
    Other funeral revenue consists primarily of General Agency revenues, which
(4) are commissions we receive from third-party insurance companies for life
    insurance policies or annuities sold to preneed customers for the purpose
    of funding preneed funeral arrangements.

  oComparable funeral revenues increased by $12.8 million, reflecting an
    increase in the average revenue per funeral service as well as increases
    in recognized preneed revenues and general agency revenue.
  oThe comparable average revenue per funeral service (which includes atneed
    and matured preneed revenue) grew 2.6% over the prior year quarter which
    helped to offset a 0.6% decline in funeral services performed. Excluding
    an unfavorable Canadian currency impact and a benefit from higher trust
    fund income, the average revenue per funeral service grew approximately
    2.0%. This was achieved despite a 160 basis point increase in the
    cremation rate to 50.0% in the second quarter of 2013.
  oComparable funeral gross profit decreased $2.4 million, or 2.9%, compared
    to the prior year quarter, while the gross margin percentage decreased 130
    basis points to 19.4%. Higher revenues were offset primarily by higher
    selling-related expenses associated with an 11% growth in preneed sales
    production. Additionally, we also experienced higher levels of expenses
    primarily related to workers' compensation claims and incentive
    compensation. Finally, we have begun to experience increased costs
    associated with growing our salesforce and related support infrastructure.
  oComparable preneed funeral sales production increased $18.6 million, or
    11.0%, compared to the prior year. This was positively impacted by a 21.6%
    increase in Neptune funeral contracts sold with a sales average increase
    of 10.1%. Excluding Neptune, SCI's number of preneed funeral contracts
    sold also increased 7.0%. Preneed funeral sales are deferred and
    recognized as revenues in future periods when the funeral service is
    performed, unless the corresponding merchandise or product is delivered
    before death has occurred.

Comparable Cemetery Results

The table below details comparable cemetery results of operations ("same
store") for the three months ended June 30, 2013 and 2012. We consider
comparable operations to be those owned for the entire period beginning
January1, 2012 and ending June 30, 2013.

                                                          Three Months Ended
(Dollars in millions)
                                                          June 30,
                                                          2013       2012
Comparable cemetery revenue:
Atneed revenue^(1)                                        $ 61.6     $ 58.9
Recognized preneed revenue^(2)                            120.2      118.1
Other cemetery revenue^(3)                                27.9       23.9
Total comparable cemetery revenues                        $ 209.7    $ 200.9
Comparable gross profit                                   $ 45.7     $ 46.7
Comparable gross margin percentage                        21.8    %  23.2    %
Comparable preneed and atneed cemetery sales production:
Property                                                  $ 131.0    $ 123.7
Merchandise and services                                  104.4      99.5
Discounts                                                 (27.4)     (24.2)
Preneed and atneed cemetery sales production              $ 208.0    $ 199.0
 Recognition rate ^(4)                                  87      %  89      %

(1) Cemetery atneed revenue represents property, merchandise and services sold
    after a death has occurred
    Cemetery recognized preneed revenue represents property sold on a preneed
(2) contract and merchandise and services sold on a preneed contract that have
    been delivered or performed.
    Other cemetery revenue is primarily related to cemetery merchandise and
(3) service trust fund income, endowment care trust fund income, royalty
    income, and interest and finance charges earned from customer receivables
    on preneed installment contracts.
(4) Represents the ratio of current period revenue recognition stated as a
    percentage of current period sales production.

  oComparable cemetery revenues increased $8.8 million, or 4.4%, generally as
    a result of higher preneed and atneed sales production as well as an
    increase in trust fund income during the quarter.
  oComparable cemetery gross profit decreased $1.0 million and the gross
    margin percentage decreased to 21.8% compared to 23.2%. Comparable margins
    were temporarily reduced as the timing of cemetery property revenue
    recognition differed from the associated selling expenses. Additionally,
    we experienced higher levels of expenses primarily related to workers'
    compensation claims and incentive compensation. Finally, we have begun to
    experience increased costs associated with growing our salesforce and
    related support infrastructure.
  oIncluded in the preneed and atneed cemetery sales production above is an
    increase of $7.5 million, or 5.4%, in preneed cemetery sales production
    for the current quarter.

Other Financial Results

  oGeneral and administrative expenses increased $1.6 million to $31.2
    million. The current quarter included $3.2 million of costs related to the
    pending acquisition of Stewart Enterprises and $1.7 million of other
    system integration costs, whereas the same period of 2012 included $2.2
    million of system integration costs.

Cash Flow and Capital Spending 

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

                                        Three Months Ended  Six Months Ended
(In millions)
                                        June 30,            June 30,
                                        2013       2012     2013      2012
Net cash provided by operating          $  75.8    $ 62.6   $ 226.9   $ 158.4
activities, as reported
System and Process Transition Costs     0.1        0.4      1.6       0.4
Acquisition Costs                       1.4                 1.5
Legal Defense Fees                      0.9                 2.2
IRS Audit Payment                                  6.6                6.6
Net cash provided by operating          $  78.2    $ 69.6   $ 232.2   $ 165.4
activities excluding special items

  oNet cash provided by operating activities excluding special items
    increased $8.6 million to $78.2 million compared to $69.6 million in 2012.
    This increase was primarily related to the timing of cash receipts
    associated with preneed sales of cemetery property. We also had better
    collections, which were somewhat offset by the timing of cash outflows
    related to vendor payments.
  oA summary of our capital expenditures is set forth below:

                                          Three Months Ended  Six Months Ended
 Capital Expenditures (In millions)
                                          June 30,           June 30,
                                          2013       2012     2013     2012
Capital improvements at existing          $  17.7    $ 18.0   $ 32.5   $ 31.8
locations
Development of cemetery property          7.8        9.6      14.0     17.6
Construction of new funeral home          2.7        1.0      4.3      2.6
facilities
Total capital expenditures                $  28.2    $ 28.6   $ 50.8   $ 52.0



TRUST FUND RETURNS

Total trust fund returns include realized and unrealized gains and losses and
dividends. A summary of our consolidated trust fund returns for the three and
six months ended June 30, 2013 is set forth below:

                         Three Months  Six Months
Preneed Funeral          (0.7)%        5.5%
Preneed Cemetery         (0.2)%        6.5%
Cemetery Perpetual Care  (1.3)%        2.7%
Combined Trust Funds     (0.7)%        4.9%



OUTLOOK FOR 2013

Our current outlook for potential earnings and cash flow in 2013 is as
follows:

                                                               Updated 2013
(In millions except per share amounts)
                                                               Annual Guidance
Diluted earnings per share from continuing operations          $.87 to $.93
excluding special items ^ (1)
Net cash provided by operating activities excluding special    $410 to $435
items ^(1)
Capital improvements at existing facilities and cemetery       $105 to $115
development expenditures



    Diluted earnings per share from continuing operations excluding special
    items and Net cash provided by operating activities excluding special
    items are non-GAAP financial measures. We normally reconcile these
    non-GAAP financial measures to diluted earnings per share and net cash
    provided by operating activities, however, diluted earnings per share and
    net cash provided by operating activities calculated in accordance with
    GAAP are not currently accessible on a forward-looking basis. Our guidance
    for 2013 excludes the following because this information is not currently
    available for 2013: Gains or losses associated with asset divestitures,
(1) gains or losses associated with the early extinguishment of debt,
    potential tax reserve adjustments, acquisition and transition costs, and
    potential costs associated with settlements of litigation or the
    recognition of receivables for insurance recoveries associated with
    litigation. The foregoing items, especially gains or losses associated
    with asset divestitures, could materially impact our forward-looking
    diluted EPS and net cash provided by operating activities calculated in
    accordance with GAAP, consistent with the historical disclosures found in
    this press release under the headings "Cash Flow and Capital Spending" and
    "Non-GAAP financial measures".



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

NON-GAAP FINANCIAL MEASURES

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

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

(In millions, except diluted EPS)         Three Months Ended June 30,
                                          2013               2012
                                          Net      Diluted   Net      Diluted

                                          Income   EPS       Income   EPS
Net income attributable to common         $ 33.6   $  0.16   $ 37.1   $  0.17
stockholders, as reported
After-tax reconciling items:
Impact of divestitures and impairment     3.3      0.01      —        —
charges, net
System and process transition costs       1.1      0.01      1.4      —
Acquisition and transition costs          2.5      0.01      —        —
Gain on early extinguishment of debt, net (0.3)    —         —        —
Legal defense fees                        0.6      —         —        —
Change in certain tax reserves            0.1      —         1.4      0.01
Earnings from continuing operations and
diluted earnings per share excluding      $ 40.9   $  0.19   $ 39.9   $  0.18
special items
Diluted weighted average shares                    215,946            218,906
outstanding (in thousands)



(In millions, except diluted EPS)        Six Months Ended June 30,
                                         2013                2012
                                         Net       Diluted   Net      Diluted

                                         Income    EPS       Income   EPS
Net income attributable to common        $ 91.2    $  0.42   $ 85.1   $  0.39
stockholders, as reported
After-tax reconciling items:
Impact of divestitures and impairment    4.0       0.02      0.3      —
charges, net
System and process transition costs      1.6       0.01      1.4      0.01
Acquisition and transition costs         2.6       0.02      0.1      —
Gain on early extinguishment of debt,    (0.3)     —         —        —
net
Legal defense fees                       1.4       0.01      —        —
Change in certain tax reserves           1.0       —         (1.9)    (0.02)
Earnings from continuing operations and
diluted earnings per share excluding     $ 101.5   $  0.48   $ 85.0   $  0.38
special items
Diluted weighted average shares                    215,603            221,058
outstanding (in thousands)



Conference Call and Webcast

We will host a conference call on Thursday, July 25, 2013, at 9:00 a.m.
Central Time. A question and answer session will follow a brief presentation
made by management.The conference call dial-in number is (630) 691-2761 with
the passcode of 35291650. The conference call will also be broadcast live via
the Internet and can be accessed through our website at www.sci-corp.com.A
replay of the conference call will be available through August 24, 2013 and
can be accessed at (630) 652-3042 with the passcode of
35291650#.Additionally, a replay of the conference call will be available on
our website for approximately ninety days.

Cautionary Statement on Forward-Looking Statements

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

  oOur 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.
  oWe 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.
  oOur ability to execute our strategic plan depends on many factors, some of
    which are beyond our control.
  oOur credit agreements contain covenants that may prevent us from engaging
    in certain transactions.
  oIf 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 fund.
  oThe funeral home and cemetery industry continues to be increasingly
    competitive.
  oIncreasing 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.
  oThe financial condition of third-party insurance companies that fund our
    preneed funeral contracts may impact our future revenues.
  oUnfavorable results of litigation, including currently pending class
    action cases concerning cemetery or burial practices, could have a
    material adverse impact on our financial statements.
  oUnfavorable publicity could affect our reputation and business.
  oIf the number of deaths in our markets declines, our cash flows and
    revenues may decrease.
  oIf we are not able to respond effectively to changing consumer
    preferences, our market share, revenues and profitability could decrease.
  oThe continuing upward trend in the number of cremations performed in North
    America could result in lower revenues and gross profit.
  oOur funeral home and cemetery businesses are high fixed-cost businesses.
  oRegulation and compliance could have a material adverse impact on our
    financial results.
  oIncreased costs, including potential increased health care costs, may have
    a negative impact on earnings and cash flows.
  oCemetery burial practice claims could have a material adverse impact on
    our financial results.
  oA number of years may elapse before particular tax matters, for which we
    have established accruals, are audited and finally resolved.
  oDeclines 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.
  oAny failure to maintain the security of the information relating to our
    customers, their loved ones, our associates, and our vendors could damage
    our reputation, could cause us to incur substantial additional costs and
    to become subject to litigation, and could adversely affect our operating
    results.
  oThe acquisition of Stewart Enterprises, Inc. is subject to certain closing
    conditions that, if not satisfied or waived, will result in the
    acquisition not being completed, which may cause the market price of SCI
    common stock to decline.
  oWe may fail to realize the anticipated benefits of the acquisition of
    Stewart Enterprises.
  oThe acquisition of Stewart Enterprises may result in unexpected
    consequences to our business and results of operations.
  oOur level of indebtedness following the completion of the acquisition of
    Stewart Enterprises could adversely affect our ability to raise additional
    capital to fund our operations, limit our ability to react to changes in
    the economy or our industry and prevent us from fulfilling our obligations
    under our indebtedness.

For further information on these and other risks and uncertainties, see our
Securities and Exchange Commission filings included in our 2012 Annual Report
on Form 10-K, which was filed February 13, 2013. Copies of this document as
well as other SEC filings can be obtained from our website at
www.sci-corp.com. We assume no obligation to publicly update or revise any
forward-looking statements made herein or any other forward-looking statements
made by us, whether as a result of new information, future events or
otherwise.

About Service Corporation International

Service Corporation International (NYSE: SCI), headquartered in Houston,
Texas, is North America's leading provider of deathcare products and
services. At June 30, 2013, we owned and operated 1,435 funeral homes and 374
cemeteries (of which 213 are combination locations) in 43 states, eight
Canadian provinces and the District of Columbia. Through our businesses, we
market the Dignity Memorial® brand which offers assurance of quality, value,
caring service, and exceptional customer satisfaction. For more information
about Service Corporation International, please visit our website at
www.sci-corp.com. For more information about Dignity Memorial®, please visit
www.dignitymemorial.com.

For additional information contact:
Investors:  Debbie Young - Director / Investor Relations        (713) 525-9088
Media:      Lisa Marshall - Managing Director / Corporate       (713) 525-3066
            Communications





SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)
                            Three Months Ended      Six Months Ended

                            June 30,               June 30,
                            2013        2012        2013          2012
Revenues                    $ 625,505   $ 597,372   $ 1,277,857   $ 1,199,878
Costs and expenses          (499,684)   (469,183)   (992,436)     (944,122)
Gross profit                125,821     128,189     285,421       255,756
General and administrative  (31,162)    (29,558)    (62,028)      (55,517)
expenses
(Losses) gains on
divestitures and impairment (5,545)     1,058       (6,514)       568
charges, net
Operating income            89,114      99,689      216,879       200,807
Interest expense            (32,740)    (33,894)    (65,509)      (67,482)
Gains on early              468         —           468           —
extinguishment of debt, net
Other (expense) income, net (699)       (2,221)     (1,683)       1,684
Income from continuing
operations before income    56,143      63,574      150,155       135,009
taxes
Provision for income taxes  (21,708)    (25,935)    (56,997)      (49,055)
Net income                  34,435      37,639      93,158        85,954
Net (income) loss
attributable to             (820)       (563)       (1,922)       (853)
noncontrolling interests
Net income attributable to  $ 33,615    $ 37,076    $ 91,236      $ 85,101
common stockholders
Basic earnings per share    $ 0.16      $ 0.17      $ 0.43        $ 0.39
Diluted earnings per share  $ 0.16      $ 0.17      $ 0.42        $ 0.39
Basic weighted average      211,821     215,898     211,602       218,015
number of shares
Diluted weighted average    215,946     218,906     215,603       221,058
number of shares



SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED BALANCE SHEET

(In thousands, except share amounts)
                                              June 30, 2013  December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents                     $  221,086     $   92,708
Receivables, net                              90,678         101,817
Deferred tax asset                            42,782         42,864
Inventories, net                              24,280         24,560
Other                                         25,221         20,546
Total current assets                          404,047        282,495
Preneed funeral receivables, net and trust    1,535,244      1,535,932
investments
Preneed cemetery receivables, net and trust   1,904,140      1,826,835
investments
Cemetery property, at cost                    1,483,138      1,489,948
Property and equipment, net                   1,623,701      1,641,101
Goodwill                                      1,374,374      1,382,410
Deferred charges and other assets             421,156        425,267
Cemetery perpetual care trust investments     1,109,249      1,099,580
                                              $  9,855,049   $   9,683,568
LIABILITIES & EQUITY
Current liabilities:
Accounts payable and accrued liabilities      $  356,602     $   373,783
Current maturities of long-term debt          36,412         31,429
Income taxes                                  1,714          6,892
Total current liabilities                     394,728        412,104
Long-term debt                                1,920,383      1,916,621
Deferred preneed funeral revenues             526,489        536,647
Deferred preneed cemetery revenues            899,846        861,148
Deferred tax liability                        517,583        471,198
Other liabilities                             399,406        399,950
Deferred preneed funeral and cemetery         2,670,395      2,624,321
receipts held in trust
Care trusts' corpus                           1,108,358      1,098,752
Stockholders' Equity:
Common stock, $1 per share par value,
500,000,000 shares authorized, 212,063,882
and 211,056,501 shares issued, respectively,  211,942        211,047
and 211,941,935 and 211,046,501 shares
outstanding, respectively
Capital in excess of par value                1,293,863      1,307,058
Accumulated deficit                           (196,576)      (286,795)
Accumulated other comprehensive income        94,457         111,717
Total common stockholders' equity             1,403,686      1,343,027
Noncontrolling interests                      14,175         19,800
Total Equity                                  1,417,861      1,362,827
                                              $  9,855,049   $   9,683,568



SERVICE CORPORATION INTERNATIONAL

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)
                                                        Six Months Ended

                                                        June 30,
                                                        2013        2012
Cash flows from operating activities:
Net income                                              $ 93,158    $ 85,954
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on early extinguishment of debt, net         (468)       —
Depreciation and amortization                      61,247      59,111
Amortization of intangible assets                  11,412      12,157
Amortization of cemetery property                  19,588      21,004
Amortization of loan costs                         2,486       2,406
Provision for doubtful accounts                    3,132       5,039
Provision for deferred income taxes                42,103      39,933
Losses(gains) on divestitures and impairment       6,514       (568)
charges, net
Share-based compensation                           5,850       4,969
Excess tax benefits from share-based awards        (5,558)     —
Change in assets and liabilities, net of effects from
acquisitions and divestitures:
Decrease in receivables                            4,586       3,486
Increase in other assets                           (4,840)     (7,540)
Decrease in payables and other liabilities         (7,073)     (27,734)
Effect of preneed funeral production and
maturities:
Decrease in preneed funeral receivables, net  28,170      26,991
and trust investments
Decrease in deferred preneed funeral revenue  (4,231)     (18,805)
Decrease in deferred preneed funeral receipts (28,576)    (15,693)
held in trust
Effect of preneed cemetery production and
deliveries:
Increase in preneed cemetery receivables, net (32,380)    (60,056)
and trust investments
Increase in deferred preneed cemetery revenue 40,733      25,416
(Decrease) increase in deferred preneed       (8,969)     4,032
cemetery receipts held in trust
Other                                              62          (1,719)
Net cash provided by operating activities               226,946     158,383
Cash flows from investing activities:
Capital expenditures                                    (50,762)    (52,062)
Acquisitions                                            (3,606)     (10,550)
Proceeds from divestitures and sales of property and    5,550       7,135
equipment, net
Net withdrawals of restricted funds and other           341         (4,514)
Net cash used in investing activities                   (48,477)    (59,991)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt            —           12,907
Payments of debt                                        (4,695)     (829)
Principal payments on capital leases                    (12,967)    (12,823)
Proceeds from exercise of stock options                 4,856       3,793
Excess tax benefit from share-based awards              5,558       —
Purchase of Company common stock                        (1,708)     (104,700)
Payments of dividends                                   (27,553)    (21,959)
Purchase of Neptune Society non-controlling interest    (8,333)     —
Bank overdrafts and other                               (3,681)     1,074
Net cash used in by financing activities                (48,523)    (122,537)
Effect of foreign currency                              (1,568)     919
Net increase (decrease) in cash and cash equivalents    128,378     (23,226)
Cash and cash equivalents at beginning of period        92,708      128,569
Cash and cash equivalents at end of period              $ 221,086   $ 105,343

SOURCE Service Corporation International

Website: http://www.sci-corp.com