Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 06, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Entity Registrant Name | STONEMOR PARTNERS LP | |
Entity Central Index Key | 0001286131 | |
Trading Symbol | STON | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 42,636,311 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-32270 | |
Entity Tax Identification Number | 80-0103159 | |
Entity Address, Address Line One | 3600 Horizon Boulevard | |
Entity Address, City or Town | Trevose | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19053 | |
City Area Code | 215 | |
Local Phone Number | 826-2800 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common units | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents, excluding restricted cash | $ 43,515 | $ 18,147 |
Restricted cash | 20,580 | |
Accounts receivable, net of allowance | 61,470 | 57,928 |
Prepaid expenses | 5,630 | 4,475 |
Other current assets | 18,148 | 17,766 |
Total current assets | 149,343 | 98,316 |
Long-term accounts receivable, net of allowance | 78,138 | 87,148 |
Cemetery property | 328,612 | 330,841 |
Property and equipment, net of accumulated depreciation | 108,992 | 112,716 |
Merchandise trusts, restricted, at fair value | 519,529 | 488,248 |
Perpetual care trusts, restricted, at fair value | 343,028 | 330,562 |
Deferred selling and obtaining costs | 113,601 | 112,660 |
Deferred tax assets | 55 | 86 |
Goodwill | 24,862 | |
Intangible assets | 56,562 | 61,421 |
Other assets | 32,663 | 22,241 |
Total assets | 1,730,523 | 1,669,101 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 64,585 | 59,035 |
Accrued interest | 1,967 | |
Current portion, long-term debt | 503 | 798 |
Total current liabilities | 65,088 | 61,800 |
Long-term debt, net of deferred financing costs | 362,173 | 320,248 |
Deferred revenues | 943,555 | 914,286 |
Deferred tax liabilities | 11,264 | 6,675 |
Perpetual care trust corpus | 343,028 | 330,562 |
Other long-term liabilities | 51,940 | 42,108 |
Total liabilities | 1,777,048 | 1,675,679 |
Commitments and contingencies | ||
Redeemable convertible preferred units: | ||
Total redeemable convertible preferred units | 57,500 | |
Partners’ deficit : | ||
General partner interest | (5,026) | (4,008) |
Common limited partners’ interest | (98,999) | (2,570) |
Total partners’ deficit | (104,025) | (6,578) |
Total liabilities, redeemable convertible preferred units and partners’ deficit | 1,730,523 | $ 1,669,101 |
Series A Preferred Units | ||
Redeemable convertible preferred units: | ||
Total redeemable convertible preferred units | $ 57,500 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Revenues | $ 73,151 | $ 73,185 | $ 223,115 | $ 232,701 |
Costs and Expenses: | ||||
Cost of goods sold | 10,677 | 12,866 | 31,263 | 39,387 |
Cemetery expense | 18,362 | 19,407 | 57,245 | 57,828 |
Selling expense | 14,609 | 14,251 | 44,839 | 47,673 |
General and administrative expense | 11,033 | 10,916 | 33,430 | 32,037 |
Corporate overhead | 11,595 | 12,876 | 38,145 | 39,868 |
Depreciation and amortization | 2,647 | 2,737 | 8,120 | 8,853 |
Total costs and expenses | 79,592 | 83,201 | 245,678 | 259,481 |
Other gains (losses), net | (129) | 702 | (3,558) | (4,503) |
Operating loss | (6,570) | (9,314) | (26,121) | (31,283) |
Interest expense | (12,765) | (7,638) | (35,282) | (22,858) |
Loss on debt extinguishment | (8,478) | |||
Loss on impairment of goodwill | (24,862) | (24,862) | ||
Loss from operations before income taxes | (44,197) | (16,952) | (94,743) | (54,141) |
Income tax benefit (expense) | 1,545 | (273) | (4,841) | 1,976 |
Net loss | (42,652) | (17,225) | (99,584) | (52,165) |
General partner’s interest | (426) | (179) | (1,018) | (543) |
Limited partners’ interest | $ (42,226) | $ (17,046) | $ (98,566) | $ (51,622) |
Net loss per limited partner unit (basic and diluted) | $ (1.09) | $ (0.45) | $ (2.56) | $ (1.36) |
Weighted average number of limited partners’ units outstanding (basic and diluted) | 38,916 | 37,959 | 38,438 | 37,959 |
Cemetery | ||||
Revenues: | ||||
Revenues | $ 60,750 | $ 61,405 | $ 184,288 | $ 191,328 |
Costs and Expenses: | ||||
Depreciation and amortization | 1,853 | 1,858 | 5,735 | 6,043 |
Operating costs and expenses | 54,681 | 57,440 | 166,777 | 176,925 |
Cemetery | Interments | ||||
Revenues: | ||||
Revenues | 15,605 | 17,716 | 52,544 | 58,130 |
Cemetery | Merchandise | ||||
Revenues: | ||||
Revenues | 18,014 | 18,023 | 51,870 | 51,766 |
Cemetery | Services | ||||
Revenues: | ||||
Revenues | 17,068 | 16,419 | 50,400 | 50,647 |
Cemetery | Investment and other | ||||
Revenues: | ||||
Revenues | 10,063 | 9,247 | 29,474 | 30,785 |
Funeral Home | ||||
Revenues: | ||||
Revenues | 12,401 | 11,780 | 38,827 | 41,373 |
Costs and Expenses: | ||||
Depreciation and amortization | 602 | 652 | 1,788 | 2,066 |
Operating costs and expenses | 10,669 | 10,148 | 32,636 | 33,835 |
Funeral Home | Merchandise | ||||
Revenues: | ||||
Revenues | 5,572 | 5,581 | 17,920 | 19,532 |
Costs and Expenses: | ||||
Operating costs and expenses | 1,896 | 1,341 | 5,227 | 4,927 |
Funeral Home | Services | ||||
Revenues: | ||||
Revenues | 6,829 | 6,199 | 20,907 | 21,841 |
Costs and Expenses: | ||||
Operating costs and expenses | 5,351 | 5,493 | 16,363 | 16,593 |
Funeral Home | Investment and other | ||||
Costs and Expenses: | ||||
Operating costs and expenses | $ 3,422 | $ 3,314 | $ 11,046 | $ 12,315 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF PREFERRED UNITS AND PARTNERS EARNINGS (DEFICIT) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Beginning Balance | $ (3,444) | $ (28,835) | $ (6,578) | $ 30,572 | $ 45,834 | $ 91,696 | $ (6,578) | $ 91,696 |
Cumulative effect of accounting change | (28,097) | |||||||
Beginning Balance, Adjusted | 63,599 | 63,599 | ||||||
Common unit awards under incentive plans | 248 | 2,289 | 277 | 113 | 1,755 | 158 | ||
Units repurchased and retired related to unit-based compensation | (677) | |||||||
Issuance of Series A convertible preferred units, net of issuance | 57,500 | |||||||
Net loss | (42,652) | (34,398) | (22,534) | (17,225) | (17,017) | (17,923) | (99,584) | (52,165) |
Ending Balance | (46,525) | (3,444) | $ (28,835) | $ 13,460 | $ 30,572 | $ 45,834 | (46,525) | $ 13,460 |
Outstanding Preferred Units | Redeemable Convertible Preferred Unit | ||||||||
Beginning Balance | $ 57,500 | |||||||
Beginning Balance (in units) | 52,083,333 | |||||||
Issuance of Series A convertible preferred units, net of issuance | $ 57,500 | |||||||
Issuance of Series A convertible preferred units, net of issuance (in units) | 52,083,333 | |||||||
Ending Balance | $ 57,500 | $ 57,500 | $ 57,500 | |||||
Ending Balance (in units) | 52,083,333 | 52,083,333 | 52,083,333 | |||||
Outstanding Common Units | ||||||||
Beginning Balance (in units) | 39,533,847 | 38,260,471 | 37,958,645 | 37,958,645 | 37,958,645 | 37,957,936 | 37,958,645 | 37,957,936 |
Common unit awards under incentive plans | $ 31,983 | |||||||
Common unit awards under incentive plans (in units) | 1,273,376 | 301,826 | 709 | |||||
Units repurchased and retired related to unit-based compensation ( in units) | (376) | |||||||
Ending Balance (in units) | 39,565,454 | 39,533,847 | 38,260,471 | 37,958,645 | 37,958,645 | 37,958,645 | 39,565,454 | 37,958,645 |
Common Limited Partners | ||||||||
Beginning Balance | $ (56,347) | $ (24,593) | $ (2,570) | $ 34,187 | $ 49,272 | $ 94,655 | $ (2,570) | $ 94,655 |
Cumulative effect of accounting change | (27,805) | |||||||
Beginning Balance, Adjusted | 66,850 | 66,850 | ||||||
Common unit awards under incentive plans | 250 | 2,287 | 277 | 113 | 1,755 | 158 | ||
Units repurchased and retired related to unit-based compensation | (677) | |||||||
Net loss | (42,225) | (34,041) | (22,300) | (17,046) | (16,840) | (17,736) | ||
Ending Balance | (98,999) | (56,347) | (24,593) | 17,254 | 34,187 | 49,272 | (98,999) | 17,254 |
General Partner | ||||||||
Beginning Balance | (4,597) | (4,242) | (4,008) | (3,615) | (3,438) | (2,959) | (4,008) | (2,959) |
Cumulative effect of accounting change | (292) | |||||||
Beginning Balance, Adjusted | (3,251) | (3,251) | ||||||
Common unit awards under incentive plans | (2) | 2 | ||||||
Net loss | (427) | (357) | (234) | (179) | (177) | (187) | ||
Ending Balance | $ (5,026) | $ (4,597) | $ (4,242) | $ (3,794) | $ (3,615) | $ (3,438) | $ (5,026) | $ (3,794) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (99,584) | $ (52,165) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Cost of lots sold | 5,339 | 5,850 |
Depreciation and amortization | 8,120 | 8,853 |
Provision for bad debt | 5,380 | 3,776 |
Non-cash compensation expense | 2,814 | 2,026 |
Loss on debt extinguishment | 8,478 | |
Loss on impairment of goodwill | 24,862 | |
Non-cash interest expense | 12,435 | 4,576 |
Non-cash impairment charge and other losses, net | 3,558 | 4,503 |
Changes in assets and liabilities: | ||
Accounts receivable, net of allowance | (14,305) | 5,574 |
Merchandise trust fund | (11,137) | (6,917) |
Other assets | (1,339) | (2,047) |
Deferred selling and obtaining costs | (1,850) | (4,780) |
Deferred revenues | 23,860 | 40,361 |
Deferred taxes, net | 4,620 | (2,545) |
Payables and other liabilities | 1,994 | 12,346 |
Net cash (used in) provided by operating activities | (26,755) | 19,411 |
Cash Flows From Investing Activities: | ||
Cash paid for capital expenditures | (5,743) | (10,164) |
Cash paid for acquisitions | (1,667) | |
Proceeds from divestitures | 1,250 | |
Proceeds from asset sales | 954 | |
Net cash used in investing activities | (4,493) | (10,877) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of redeemable convertible preferred units, net | 57,500 | |
Proceeds from borrowings | 406,087 | 23,880 |
Repayments of debt | (366,644) | (27,924) |
Principal payment on finance leases | (1,098) | |
Cost of financing activities | (17,972) | (3,268) |
Units repurchased and retired related to unit-based compensation | (677) | |
Net cash provided by (used in) financing activities | 77,196 | (7,312) |
Net increase in cash, cash equivalents and restricted cash | 45,948 | 1,222 |
Cash, cash equivalents and restricted cash—Beginning of period | 18,147 | 6,821 |
Cash, cash equivalents and restricted cash—End of period | 64,095 | 8,043 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 24,444 | 15,809 |
Cash paid during the period for income taxes | 1,470 | 1,517 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 2,759 | |
Operating cash flows from finance leases | 370 | |
Financing cash flows from finance leases | 1,098 | |
Non-cash investing and financing activities: | ||
Acquisition of assets by financing | $ 2,234 | 1,620 |
Classification of assets as held for sale | $ 543 |
GENERAL
GENERAL | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
GENERAL | 1. GENERAL Nature of Operations StoneMor Partners L.P. (the "Partnership") is a provider of funeral and cemetery products and services in the death care industry in the United States. As of September 30, 2019, the Partnership operated 321 cemeteries in 27 states and Puerto Rico, of which 291 were owned and 30 were operated under lease, management or operating agreements. The Partnership also owned and operated 89 funeral homes, including 42 located on the grounds of cemetery properties that the Partnership owns, in 17 states and Puerto Rico. The Partnership’s cemeteries provide cemetery property interment rights, such as burial lots, lawn and mausoleum crypts, and cremation niches. Cemetery merchandise is comprised of burial vaults, caskets, grave markers and memorials and cemetery services, which include the installation of this merchandise and other service items. The Partnership sells these products and services both at the time of death, which is referred to as at-need, and prior to the time of death, which is referred to as pre-need. The Partnership’s funeral home services include family consultation, the removal and preparation of remains, insurance products and the use of funeral home facilities for visitation and memorial services. Basis of Presentation The accompanying condensed consolidated financial statements, which are unaudited have been prepared in accordance with the requirements of the Quarterly Report on Form 10-Q and accounting principles generally accepted in the United States (“GAAP”) for interim reporting. They do not include all disclosures normally made in financial statements contained in Annual Reports on Form 10-K. In management’s opinion, all adjustments necessary for a fair presentation of the Partnership’s financial position, results of operations and cash flows for the periods disclosed have been made. The balance sheet at December 31, 2018 has been derived from the audited consolidated financial statement as of December 31, 2018, as presented in the Partnership’s Amendment No. 1 to Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of each of the Partnership’s 100% owned subsidiaries. These statements also include the accounts of the merchandise and perpetual care trusts in which the Partnership has a variable interest and is the primary beneficiary. The Partnership operates 30 cemeteries under long-term leases, operating agreements and management agreements. The operations of 16 of these managed cemeteries have been consolidated . On May 10, 2019, the Partnership terminated one of the management agreements and recorded a $2.1 million loss upon the termination, which is included in Other losses, net in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2019. The Partnership operates 14 cemeteries under long-term leases and other agreements that do not qualify as acquisitions for accounting purposes. As a result, the Partnership did not consolidate all of the existing assets and liabilities related to these cemeteries. The Partnership has consolidated the existing assets and liabilities of the merchandise and perpetual care trusts associated with these cemeteries as variable interest entities, since the Partnership controls and receives the benefits and absorbs any losses from operating these trusts. Under the long-term leases, and other agreements associated with these properties, which are subject to certain termination provisions, the Partnership is the exclusive operator of these cemeteries and earns revenues related to sales of merchandise, services and interment rights and incurs expenses related to such sales, including the maintenance and upkeep of these cemeteries. Upon termination of these agreements, the Partnership will retain all of the benefits and related contractual obligations incurred from sales generated during the agreement period. The Partnership has also recognized the existing customer contract-related performance obligations that it assumed as part of these agreements. Recapitalization Transactions Series A Preferred Offering On June 27, 2019, funds and accounts affiliated with Axar Capital, a related party and the largest holder of the Partnership’s outstanding common units of record, and certain other investors (individually a “Purchaser” and collectively the “Purchasers”) and the Partnership entered into the Series A Preferred Unit Purchase Agreement (the “Series A Purchase Agreement” and the transactions contemplated thereby, the “Preferred Offering”) pursuant to which the Partnership sold to the Purchasers an aggregate of 52,083,333 of the Partnership’s Series A Preferred Units (the “preferred units”) representing limited partner interests in the Partnership with certain rights, preferences and privileges as are set forth in the Partnership’s Third Amended and Restated Agreement of Limited Partnership dated as of June 27, 2019 (the “Third Amended Partnership Agreement”). The purchase price for the preferred units sold pursuant to the Series A Purchase Agreement was $1.1040 per preferred unit, reflecting an 8% discount to the liquidation preference of each preferred unit, for an aggregate purchase price of $57.5 million. Senior Secured Notes Concurrently with the closing of the Preferred Offering, discussed above, the Partnership completed a private placement of $385.0 million of 9.875%/11.500% Senior Secured PIK Toggle Notes due 2024 (the “Senior Secured Notes”) of the Partnership to certain financial institutions (the “Notes Offering,” and collectively with the Preferred Offering, the “Recapitalization Transactions”) pursuant to the terms of an indenture dated June 27, 2019 by and among the Partnership, Cornerstone Family Services of West Virginia Subsidiary, Inc. (“Cornerstone” and, collectively with the Partnership, the “Issuers”), certain direct and indirect subsidiaries of the Partnership (the “Guarantors”), the initial purchasers party thereto and Wilmington Trust, National Association, as trustee (the “Indenture”). The net proceeds of the Recapitalization Transactions were used to fully repay the then-outstanding senior notes due in June 2021, retire the Partnership’s revolving credit facility due in May 2020 and pay the associated transaction expenses, with the remaining balance reserved for general corporate purposes. The Partnership is to pay quarterly interest at either a fixed rate of 9.875% per annum in cash or, at their periodic option through January 30, 2022, a fixed rate of 7.50% per annum in cash plus a The Senior Secured Notes will require cash interest payments at 9.875% for all interest periods after January 30, 2022. Proposed C-Corporation Conversion On September 27, 2018, StoneMor GP LLC (the “general partner”) and the Partnership publicly announced a plan to convert from a master limited partnership structure to a more traditional C-Corporation structure. Accordingly, the general partner and the Partnership entered into a Merger and Reorganization Agreement (as amended to date, the “Merger Agreement”) with StoneMor GP Holdings and Hans Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the general partner, providing for a series of transactions and resulting in (i) the general partner converting into a Delaware corporation to be named “StoneMor Inc.” and (ii) Hans Merger Sub merging with and into the Partnership (the “Merger”) with the Partnership surviving and with StoneMor Inc. as its sole general partner, in each case, pursuant to the terms of the Merger Agreement (collectively, the “C-Corporation Conversion”). At the consummation of the Merger, which is anticipated to be no later than the end of the fourth quarter of 2019, the general partner will complete its transition to a new publicly traded Delaware corporation, StoneMor Inc. Going Concern and Uses and Sources of Liquidity The Partnership’s primary sources of liquidity are cash generated from operations and the remaining balance of the proceeds from the sale of the Senior Secured Notes. As a master limited partnership (“MLP”), the Partnership's primary cash requirements, in addition to normal operating expenses, are for capital expenditures, net contributions to the merchandise and perpetual care trust funds, debt service and cash distributions. In general, as part of its operating strategy, the Partnership expects to fund: • working capital deficits through available cash, including the remaining balance of the proceeds from the sale of the Senior Secured Notes, cash generated from operations and divestitures of non-core assets; • expansion capital expenditures, net contributions to the merchandise and perpetual care trust funds and debt service obligations through available cash, cash generated from operations or asset sales. Amounts contributed to the merchandise trust funds will be withdrawn at the time of the delivery of the product or service sold to which the contribution relates (see "Summary of Significant Accounting Policies" section below regarding revenue recognition), which will reduce the amount of additional borrowings or asset sales needed; and • any cash distributions the Partnership is permitted and determines to pay in accordance with its partnership agreement and maintenance capital expenditures through available cash and cash flows from operating activities. While the Partnership relies heavily on its available cash and cash flows from operating activities to execute its operational strategy and meet its financial commitments and other short-term financial needs, the Partnership cannot be certain that sufficient capital will be generated through operations or be available to the Partnership to the extent required and on acceptable terms. The Partnership has experienced negative financial trends, including use of cash in operating activities, which, when considered in the aggregate, raise substantial doubt about the Partnership’s ability to continue as a going concern. These negative financial trends include: • the Partnership has continued to incur net losses for the nine months ended September 30, 2019 and has an accumulated deficit and negative cash flows from operating activities as of September 30, 2019, due to an increased competitive environment, increased expenses due to the proposed C-Corporation Conversion and increases in professional fees and compliance costs; and • a decline in billings coupled with the increase in professional, compliance and consulting expenses tightened the Partnership's liquidity position and increased reliance on long-term financial obligations, which, in turn, eliminated the Partnership's ability to pay distributions. During 2018 and 2019, the Partnership implemented (and will continue to implement) various actions to improve profitability and cash flows to fund operations. A summary of these actions is as follows: • sold an aggregate of 52,083,333 of the Partnership’s preferred units, representing limited partner interests in the Partnership, for an aggregate purchase price of $57.5 million and completed a private placement of $385.0 million of the Senior Secured Notes ; • continue to manage recurring operating expenses and seek to limit non-recurring operating expenses over the next twelve-month period; and • identify and complete sales of select assets to provide supplemental liquidity. Based on the Partnership's forecasted operating performance, planned actions to improve profitability, cash flows and projected plans to file financial statements on a timely basis consistent with the debt covenants, the Partnership does not believe it is probable that the Partnership will breach the covenants under the Indenture for the next twelve-month period. However, there is no certainty that the Partnership's actual operating performance and cash flows will not be substantially different from forecasted results and no certainty the Partnership will not need amendments to the Indenture in the future and such amendments will be granted. Factors that could impact the significant assumptions used by the Partnership in assessing its ability to satisfy its financial covenants include the following: • operating performance not meeting reasonably expected forecasts; • failing to generate profitable sales; • failing to achieve cost reduction targets; • inability to achieve and capitalize on its divestiture strategy; • investments in the Partnership's trust funds experiencing significant declines due to factors outside its control; • inability to compete successfully with other cemeteries and funeral homes in the Partnership's markets; • the number of deaths in the Partnership's markets declining; and • the mix of funeral and cemetery revenues between burials and cremations. If the Partnership's planned, implemented and not yet implemented actions are not completed or implemented and cash savings are not realized, or the Partnership fails to improve its operating performance and cash flows or the Partnership is not able to comply with the covenants under the Indenture, the Partnership may be forced to limit its business activities, limit its ability to implement further modifications to its operations or limit the effectiveness of some actions that are included in its forecasts, amend its Indenture and/or seek other sources of capital, and the Partnership may be unable to continue as a going concern. Additionally, a failure to generate additional liquidity could negatively impact the Partnership's access to inventory or services that are important to the operation of the Partnership's business. Given the Partnership's level of cash and cash equivalents, to preserve capital resources and liquidity, the Board of Directors of the General Partner concluded that it was not in the best interest of unitholders to pay distributions to unitholders after the first quarter of 2017. In addition, the Indenture effectively prohibits the Partnership from making distributions to unitholders. Any of these events may have a material adverse effect on the Partnership's results of operations and financial condition. The ability of the Partnership to continue as a going concern is dependent upon achieving the action plans noted above. The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2019 were prepared on the basis of a going concern, which contemplates that the Partnership will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments, if any, that would be necessary should the Partnership be required to liquidate its assets. Summary of Significant Accounting Policies Refer to Note 1 to the Partnership’s audited consolidated financial statements included in Item 8 of its Amended Annual Report Use of Estimates The preparation of the Partnership’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions as described in its Amended Annual Report. These estimates and assumptions may affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could differ from those estimates. Cash and Cash Equivalents The Partnership considers all highly liquid investments purchased with an original maturity of three months or less from the time they are acquired to be cash equivalents. Cash and Cash Equivalents was $43.5 million and $18.1 million as of September 30, 2019 and December 31, 2018, respectively. Restricted Cash Cash that is restricted from withdrawal or use under the terms of certain contractual agreement is recorded as restricted cash. Restricted cash was $20.6 million as of September 30, 2019, primarily related to cash collateralization of the Partnership’s letters of credit and surety bonds. There was no restricted cash as of December 31, 2018. Revenues The Partnership's revenues are derived from contracts with customers through sale and delivery of death care products and services. Primary sources of revenue are derived from (1) cemetery and funeral home operations generated both at the time of death (“at-need”) and prior to the time of death (“pre-need”), which are classified on the unaudited condensed consolidated statements of operations as Interments, Merchandise and Services, (2) investment income, which includes income earned on assets maintained in perpetual care and merchandise trusts related to sales of cemetery and funeral home merchandise and services occurring prior to the time of death that are required to be maintained in the trust by state law and (3) interest earned on pre-need installment contracts. Investment income is presented within Investment and other for Cemetery revenue and Services for Funeral home revenue. Revenue is measured based on the consideration specified in a contract with a customer and is net of any sales incentives and amounts collected on behalf of third parties. Pre-need contracts are price guaranteed, providing for future merchandise and services at prices prevailing when the agreements are signed. The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Sales taxes assessed by a governmental authority are excluded from revenue. Deferred Revenues Revenues from the sale of services and merchandise as well as any investment income from the merchandise trusts is deferred until such time that the services are performed or the merchandise is delivered. In addition, for amounts deferred on new contracts and investment income and unrealized gains on our merchandise trusts, deferred revenues include deferred revenues from pre-need sales that were entered into by entities prior to the Partnership’s acquisition of those entities or the assets of those entities. The Partnership provides for a profit margin for these deferred revenues to account for the projected future costs of delivering products and providing services on pre-need contracts that the Partnership acquired through acquisition. These revenues and their associated costs are recognized when the related merchandise is delivered or services are performed and are presented on a gross basis on the unaudited condensed consolidated statements of operations. Accounts Receivable, Net of Allowance The Partnership sells pre-need cemetery contracts whereby the customer enters into arrangements for future merchandise and services prior to the time of need. These sales are usually made using interest-bearing installment contracts not to exceed 60 months. The interest income is recorded as revenue when the interest amount is considered realizable and collectible, which typically coincides with cash payment. Interest income is not recognized until payments are collected in accordance with the contract. At the time of a pre-need sale, the Partnership records an account receivable in an amount equal to the total contract value less unearned finance income and any cash deposit paid, net of an estimated allowance for customer cancellations. The Partnership recognizes an allowance for cancellation of these receivables based upon its historical experience, which is recorded as a reduction in accounts receivable and a corresponding offset to deferred revenues. The Partnership recognizes an allowance for cancellation of receivables related to recognized contracts as an offset to revenue. Management evaluates customer receivables for impairment based upon its historical experience, including the age of the receivables and the customers’ payment histories Leases The Partnership leases a variety of assets throughout its organization, such as office space, funeral homes, warehouses and equipment. The Partnership has both operating and finance leases. The Partnership’s operating leases primarily include office space, funeral homes and equipment. The Partnership’s finance leases primarily consist of vehicles and certain IT equipment. The Partnership determines whether an arrangement is or contains a lease at the inception of the arrangement based on the facts and circumstances in each contract. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Partnership recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements with an initial term in excess of 12 months, the Partnership records the lease liability and Right of Use (“ROU”) asset at commencement date based upon the present value of the sum of the remaining minimum rental payments, which exclude executory costs. Certain adjustments to the ROU asset may be required for items such as initial direct costs paid or incentives received. Certain leases provide the Partnership with the option to renew for additional periods , with renewal terms that can extend the lease term for periods ranging from 1 to 30 years. The exercise of lease renewal options is at the Partnership’s sole discretion, and the Partnership is only including the renewal option in the lease term when the Partnership can be reasonably certain that the Partnership will exercise the additional options. As most of the Partnership’s leases do not provide an implicit rate, the Partnership uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Partnership evaluates the term of the lease, type of asset and its weighted average cost of capital to determine its incremental borrowing rate used to measure the ROU asset and lease liability . The Partnership calculates operating lease expense ratably over the lease term plus any reasonably assured renewal periods. The Partnership considers reasonably assured renewal options, fixed escalation provisions and residual value guarantees in its calculation. Leasehold improvements are amortized over the shorter of the lease term or asset life, which may include renewal periods where the renewal is reasonably assured, and are included in the determination of straight-line rent expense. The depreciable life of assets and leasehold improvements are generally limited by the expected lease term. The Partnership’s leases also typically have lease and non-lease components, which are generally accounted for separately and not included in the measurement of the ROU asset and lease liability. Net Loss per Common Unit Basic net loss attributable to common limited partners per unit is computed by dividing net loss attributable to common limited partners, which is determined after the deduction of the general partner’s interest, by the weighted average number of common limited partner units outstanding during the period. Net loss attributable to common limited partners is determined by deducting net loss attributable to participating securities, if applicable, and net loss attributable to the general partner’s units. The general partner’s interest in net loss is calculated on a quarterly basis based upon its units and incentive distributions to be distributed for the quarter, with a priority allocation of net income to the general partner’s incentive distributions, if any, in accordance with the partnership agreement and the remaining net loss allocated with respect to the general partner’s and limited partners’ ownership interests. The Partnership presents net loss per unit under the two-class method for MLP, which considers whether the incentive distributions of an MLP represent a participating security when considered in the calculation of earnings per unit under the two-class method. The two-class method considers whether the partnership agreement contains any contractual limitations concerning distributions to the incentive distribution rights that would impact the amount of earnings to allocate to the incentive distribution rights for each reporting period. If distributions are contractually limited to the incentive distribution rights’ share of currently designated available cash for distributions, as defined under the partnership agreement, undistributed earnings in excess of available cash should not be allocated to the incentive distribution rights. Under the two-class method, management believes the partnership agreement contractually limits cash distributions to available cash; therefore, undistributed earnings in excess of available cash are not allocated to the incentive distribution rights. The following is a reconciliation of net loss allocated to the common limited partners for purposes of calculating net loss attributable to common limited partners per unit (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net loss $ (42,652 ) $ (17,225 ) $ (99,584 ) $ (52,165 ) Less: Incentive distribution right (“IDR”) payments to general partner — — — — Net loss to allocate to general and limited partners (42,652 ) (17,225 ) (99,584 ) (52,165 ) General partner’s interest excluding IDRs (426 ) (179 ) (1,018 ) (543 ) Net loss attributable to common limited partners $ (42,226 ) $ (17,046 ) $ (98,566 ) $ (51,622 ) Diluted net loss attributable to common limited partners per unit is calculated by dividing net loss attributable to common limited partners, less income allocable to participating securities, by the sum of the weighted average number of common limited partner units outstanding and the dilutive effect of unit awards, as calculated by the treasury stock or if converted methods, as applicable. These awards consist of common units that are contingently issuable upon the satisfaction of certain vesting conditions and common units issuable upon the exercise of certain unit appreciation rights awards under the terms of the Partnership’s long-term incentive plans. The following table sets forth the reconciliation of the Partnership’s weighted average number of common limited partner units used to compute basic net loss attributable to common limited partners per unit with those used to compute diluted net loss attributable to common limited partners per unit (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Weighted average number of common limited partner units—basic 38,916 37,959 38,438 37,959 Effect of dilutive incentive awards ( 1) — — — — Weighted average number of common limited partner units—diluted 38,916 37,959 38,438 37,959 (1) For the three and nine months ended September 30, 2019, the diluted weighted average number of limited partner units outstanding presented on the unaudited condensed consolidated statement of operations does not include 563,183 units as their effects would be anti-dilutive. In addition, all outstanding Preferred Units are exempt for purposes of calculating the diluted weighted average number of common limited partner units, as their conversion is not based on meeting a contingency derived from the Partnership’s unit price. The Preferred Units are convertible upon the completion of the Rights Offering (defined herein), which occurred early in the fourth quarter of 2019. For further detail on the Rights Offering, see Note 17 Subsequent Events. For the three and nine months ended September 30, 2018, the diluted weighted average number of limited partner units outstanding presented on the unaudited condensed consolidated statement of operations does not include 560,839 units, as their effects would be anti-dilutive. Recently Adopted Accounting Standards Leases The Partnership adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) ASU 2016-02 provides for certain practical expedients when adopting the guidance. The Partnership elected the package of practical expedients allowing the Partnership to not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases or initial direct costs for any expired or existing leases. The Partnership did not apply the hindsight practical expedient. The Partnership applied the land easements practical expedient allowing the Partnership to not assess whether any expired or existing land easements are or contain leases, if they were not previously accounted for as leases under the existing leasing guidance. Instead, the Partnership will continue to apply its existing accounting policies to historical land easements. The Partnership elected to apply the short-term lease exception; therefore, the Partnership did not record a ROU asset or corresponding lease liability for leases with a term of twelve months or less and instead recognized a single lease cost allocated over the lease term, generally on a straight-line basis. The Partnership is separating lease components from non-lease components, as it did not elect the applicable practical expedient. The Partnership has excluded maintenance, taxes and insurance costs from the calculation of the initial lease liability in the transition. Non-lease components are accounted for separately from the lease, recorded as maintenance, taxes and insurance and expensed as incurred. The Partnership adopted the new guidance on January 1, 2019 and as a result of the adoption, the Partnership recorded: • a $1.1 million reclassification from Intangible assets to Other assets for below market lease intangibles; • a $0.1 million and $0.2 million reclassification from Accounts payable and accrued liabilities and Other long-term liabilities, respectively, to Other assets for a deferred gain on a sale leaseback transaction; • a $0.3 million and $3.5 million reclassification from Accounts payable and accrued liabilities and Other long-term liabilities, respectively, to Other assets for a rent incentive; • a $15.3 million increase to Other assets for operating lease right-of-use assets; and • a $2.2 million and $13.1 million increase to Accounts payable and accrued liabilities and Other long-term liabilities, respectively, for operating lease liabilities. The foregoing adjustments r esulted in the creation of a net ROU asset of $12.3 million and operating lease liability of $15.3 million as of the adoption date. In connection with the adoption of these new lease standards, the Partnership implemented internal controls to ensure that its contracts are properly evaluated to determine applicability under ASU 2016-02 and that the Partnership properly applies ASU 2016-02 in accounting for and reporting on all its qualifying leases. Stock Compensation In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, Presentation In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of partners’ deficit for interim financial statements. Under the amendments, an analysis of changes in each caption of shareholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule was effective on November 5, 2018; as such, the Partnership used the new presentation of a condensed consolidated statement of Partners' deficit within its interim financial statements in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2019. Recently Issued Accounting Standard Updates - Not Yet Effective Credit Losses In June 2016, FASB issued ASU No. 2016-13, Credit Losses (Topic 326) Codification Improvements to Topic 326, Financial Instruments-Credit Losses , Financial Instruments-Credit Losses-Measured at Amortized Cost Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Financial Instruments-Credit Losses (Topic 326), Financial Instruments Variable Interest Entities In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Intere |
IMPAIRMENT & OTHER LOSSES
IMPAIRMENT & OTHER LOSSES | 9 Months Ended |
Sep. 30, 2019 | |
Production Related Impairments Or Charges [Abstract] | |
IMPAIRMENT & OTHER LOSSES | 2. IMPAIRMENT & OTHER LOSSES Goodwill Impairment Assessment Due to a decline in the market value of the Partnership’s unit values and the Partnership’s significant under-performance relative to historical or projected future operating results noted during the nine months ended September 30, 2019, management conducted an interim goodwill impairment assessment as of September 30, 2019. As a result of such assessment, management concluded on November 4, 2019 that the carrying value of its Cemetery Operations reporting unit exceeded its fair value, and the Partnership’s goodwill was fully impaired as of September 30, 2019. The Partnership recognized a $24.9 million impairment charge included in Loss on impairment of goodwill in the accompanying unaudited condensed consolidated statement of operations during the three and nine months ended September 30, 2019. Impairment of Long-Lived Assets The Partnership recorded an impairment of cemetery property due to circumstances that indicated the assets’ carrying value may not be recovered. The Partnership recorded a $1.5 million impairment charge included in Other losses, net on the accompanying unaudited condensed consolidated statement of operations during the nine months ended September 30, 2019, as the sum of future undiscounted cash flows was less than the carrying value of the assets. Termination of Management Agreement The Partnership operates certain of its cemeteries under long-term leases, operating agreements and management agreements . On May 10, 2019, the Partnership terminated one of the management agreements and recorded a $2.1 million loss, which is included in Other losses, net on the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2019. |
ACCOUNTS RECEIVABLE, NET OF ALL
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE | 3. ACCOUNTS RECEIVABLE, NET OF ALLOWANCE Long-term accounts receivable, net, consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Customer receivables $ 162,967 $ 167,017 Unearned finance income (17,254 ) (17,000 ) Allowance for bad debt (6,105 ) (4,941 ) Accounts receivable, net of allowance 139,608 145,076 Less: Current portion, net of allowance 61,470 57,928 Long-term portion, net of allowance $ 78,138 $ 87,148 Activity in the allowance for bad debt was as follows (in thousands): September 30, 2019 December 31, 2018 Balance, beginning of period $ 4,941 $ 19,795 Cumulative effect of accounting changes — (12,876 ) Provision for bad debt 5,380 7,358 Charge-offs, net (4,216 ) (9,336 ) Balance, end of period $ 6,105 $ 4,941 Management evaluates customer receivables for impairment based upon its historical experience, including the age of the receivables and the customers’ payment histories. |
CEMETERY PROPERTY
CEMETERY PROPERTY | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
CEMETERY PROPERTY | 4. CEMETERY PROPERTY Cemetery property consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Cemetery land $ 255,624 $ 255,708 Mausoleum crypts and lawn crypts 72,988 75,133 Cemetery property (1) $ 328,612 $ 330,841 (1) |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Buildings and improvements $ 130,181 $ 129,971 Furniture and equipment 59,883 58,706 Funeral home land 14,185 14,185 Property and equipment, gross 204,249 202,862 Less: Accumulated depreciation (95,257 ) (90,146 ) Property and equipment, net of accumulated depreciation $ 108,992 $ 112,716 Depreciation expense was $2.3 million for the three months ended September 30, 2019 and 2018 and $7.1 million and $7.5 million for the nine months ended September 30, 2019 and , respectively. |
MERCHANDISE TRUSTS
MERCHANDISE TRUSTS | 9 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
MERCHANDISE TRUSTS | 6. MERCHANDISE TRUSTS At September 30, 2019 and December 31, 2018, the Partnership’s merchandise trusts consisted of investments in debt and equity marketable securities and cash equivalents, both directly and through mutual and investment funds. All of these investments are carried at fair value. All of these investments are subject to the fair value hierarchy and considered either Level 1 or Level 2 assets pursuant to the three-level hierarchy described in Note 13 Fair Value of Financial Instruments. There were no Level 3 assets. When the Partnership receives a payment from a pre-need customer, the Partnership deposits the amount required by law into the merchandise trusts that may be subject to cancellation on demand by the pre-need customer. The Partnership’s merchandise trusts related to states in which pre-need customers may cancel contracts with the Partnership comprises 53.6% of the total merchandise trust as of September 30, 2019. The merchandise trusts are variable interest entities (“VIE”) of which the Partnership is deemed the primary beneficiary. The assets held in the merchandise trusts are required to be used to purchase the merchandise and provide the services to which they relate. If the value of these assets falls below the cost of purchasing such merchandise and providing such services, the Partnership may be required to fund this shortfall. The Partnership included $9.3 million and $8.7 million of investments held in trust as required by law by the West Virginia Funeral Directors Association at September 30, 2019 and December 31, 2018 respectively, in its merchandise trust assets. These trusts are recognized at their account value, which approximates fair value. A reconciliation of the Partnership’s merchandise trust activities for the nine months ended September 30, 2019 and 2018 is presented below (in thousands): Nine months ended September 30, 2019 2018 Balance—beginning of period $ 488,248 $ 515,456 Contributions 40,440 49,762 Distributions (45,256 ) (53,321 ) Interest and dividends 22,537 20,486 Capital gain distributions 363 405 Realized gains and losses, net 2,063 (258 ) Other than temporary impairment (2,816 ) (11,977 ) Taxes (655 ) (337 ) Fees (3,206 ) (3,049 ) Unrealized change in fair value 17,811 2,860 Balance—end of period $ 519,529 $ 520,027 During the nine months ended September 30, 2019 and 2018, purchases of available for sale securities were approximately $42.2 million and $78.3 million, respectively. During the nine months ended September 30, 2019 and 2018, sales, maturities and paydowns of available for sale securities were approximately $30.7 million and $66.6 million, respectively. Cash flows from pre-need contracts are presented as operating cash flows in the Partnership’s unaudited condensed consolidated statement of cash flows. The cost and market value associated with the assets held in the merchandise trusts as of September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 182,560 $ — $ — $ 182,560 Fixed maturities: U.S. governmental securities 2 488 10 (95 ) 403 Corporate debt securities 2 816 13 (116 ) 713 Total fixed maturities 1,304 23 (211 ) 1,116 Mutual funds—debt securities 1 117,566 4,937 (79 ) 122,424 Mutual funds—equity securities 1 47,346 3,035 (1 ) 50,380 Other investment funds ( 1) 130,952 2,410 (2,524 ) 130,838 Equity securities 1 13,293 1,175 (4 ) 14,464 Other invested assets 2 8,403 16 — 8,419 Total investments $ 501,424 $ 11,596 $ (2,819 ) $ 510,201 West Virginia Trust Receivable 9,328 — — 9,328 Total $ 510,752 $ 11,596 $ (2,819 ) $ 519,529 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have redemption periods ranging from 1 to 30 days, and private credit funds, which have lockup periods of one to seven years with three potential one year extensions at the discretion of the funds’ general partners. As of September 30, 2019, there were $63.3 million in unfunded investment commitments to the private credit funds, which are callable at any time. December 31, 2018 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 16,903 $ — $ — $ 16,903 Fixed maturities: U.S. governmental securities 2 392 — (147 ) 245 Corporate debt securities 2 1,311 29 (328 ) 1,012 Total fixed maturities 1,703 29 (475 ) 1,257 Mutual funds—debt securities 1 187,840 262 (2,645 ) 185,457 Mutual funds—equity securities 1 45,023 110 (18 ) 45,115 Other investment funds ( 1) 210,655 388 (7,784 ) 203,259 Equity securities 1 18,097 1,327 (213 ) 19,211 Other invested assets 2 8,398 2 (17 ) 8,383 Total investments $ 488,619 $ 2,118 $ (11,152 ) $ 479,585 West Virginia Trust Receivable 8,663 — — 8,663 Total $ 497,282 $ 2,118 $ (11,152 ) $ 488,248 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have redemption periods ranging from 1 to 30 days, and private credit funds, which have lockup periods of two to seven years with three potential one year extensions at the discretion of the funds’ general partners. As of December 31, 2018, there were $71.0 million in unfunded investment commitments to the private credit funds, which are callable at any time. The contractual maturities of debt securities as of September 30, 2019 and December 31, 2018 were as follows below (in thousands): September 30, 2019 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ 112 $ 30 $ 246 $ 16 Corporate debt securities 96 598 18 — Total fixed maturities $ 208 $ 628 $ 264 $ 16 December 31, 2018 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ — $ 137 $ 108 $ — Corporate debt securities 68 873 55 16 Total fixed maturities $ 68 $ 1,010 $ 163 $ 16 Temporary Declines in Fair Value The Partnership evaluates declines in fair value below cost for each asset held in the merchandise trusts on a quarterly basis. An aging of unrealized losses on the Partnership’s investments in debt and equity securities within the merchandise trusts as of September 30, 2019 and December 31, 2018 is presented below (in thousands): Less than 12 months 12 months or more Total September 30, 2019 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ 110 $ — $ 397 $ 95 $ 507 $ 95 Corporate debt securities 75 6 424 110 499 116 Total fixed maturities 185 6 821 205 1,006 211 Mutual funds—debt securities 15,178 79 — — 15,178 79 Mutual funds—equity securities 242 1 — — 242 1 Other investment funds 69,464 2,524 — — 69,464 2,524 Equity securities 5 4 — — 5 4 Other invested assets — — — — — — Total $ 85,074 $ 2,614 $ 821 $ 205 $ 85,895 $ 2,819 Less than 12 months 12 months or more Total December 31, 2018 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ — $ — $ 243 $ 147 $ 243 $ 147 Corporate debt securities 103 2 549 326 652 328 Total fixed maturities 103 2 792 473 895 475 Mutual funds—debt securities 46,005 2,011 1,195 634 47,200 2,645 Mutual funds—equity securities 131 18 — — 131 18 Other investment funds 169,929 7,784 — — 169,929 7,784 Equity securities — — 597 213 597 213 Other invested assets — 4 790 13 790 17 Total $ 216,168 $ 9,819 $ 3,374 $ 1,333 $ 219,542 $ 11,152 For all securities in an unrealized loss position, the Partnership evaluated the severity of the impairment and length of time that a security has been in a loss position and concluded the decline in fair value below the asset’s cost was temporary in nature. In addition, the Partnership is not aware of any circumstances that would prevent the future market value recovery for these securities. Other-Than-Temporary Impairment of Trust Assets The Partnership assesses its merchandise trust assets for other-than-temporary declines in fair value on a quarterly basis. During the three months ended September 30, 2019, resulting in an impairment of $0.5 million, with such impairment considered to be other-than-temporary. During the three months ended September 30, 2018, resulting in an impairment of $0.8 million, with such impairment considered to be other-than-temporary. with an aggregate cost basis of approximately $96.7 million and an aggregate fair value of approximatel y $93.9 million , resulting in an impairment of $2.8 million, with such impairment considered to be other-than-temporary. based on its review, that there were 122 securities with an aggregate cost basis of approximately $227.9 million and an aggregate fair value of approximately $215.9 million, resulting in an impairment of $12.0 million, with such impairment considered to be other-than-temporary due to credit indicators. Accordingly, the Partnership adjusted the cost basis of these assets to their current value and offset these changes against deferred merchandise trust revenue. |
PERPETUAL CARE TRUSTS
PERPETUAL CARE TRUSTS | 9 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
PERPETUAL CARE TRUSTS | 7 . PERPETUAL CARE TRUSTS At September 30, 2019 and December 31, 2018, the Partnership’s perpetual care trusts consisted of investments in debt and equity marketable securities and cash equivalents, both directly as well as through mutual and investment funds. All of these investments are carried at fair value A reconciliation of the Partnership’s perpetual care trust activities for the nine months ended September 30, 2019 and 2018 is presented below (in thousands): Nine months ended September 30, 2019 2018 Balance—beginning of period $ 330,562 $ 339,928 Contributions 5,520 10,795 Distributions (16,709 ) (13,790 ) Interest and dividends 15,621 17,416 Capital gain distributions 1,134 612 Realized gains and losses, net 2,303 353 Other than temporary impairment (1,297 ) (7,449 ) Taxes (634 ) (292 ) Fees (2,388 ) (4,087 ) Unrealized change in fair value 8,916 1,536 Balance—end of period $ 343,028 $ 345,022 During the nine months ended September 30, 2019 and 2018, purchases of available for sale securities were approximately $42.5 million and $56.4 million, respectively. During the nine months ended September 30, 2019 and 2018, sales, maturities and paydowns of available for sale securities were approximately $28.1 million and $49.4 million, respectively. Cash flows from perpetual care trust related contracts are presented as operating cash flows in Partnership’s unaudited condensed consolidated statements of cash flows. The cost and market value associated with the assets held in the perpetual care trusts as of September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 87,453 $ — $ — $ 87,453 Fixed maturities: U.S. governmental securities 2 1,081 44 (54 ) 1,071 Corporate debt securities 2 2,025 21 (145 ) 1,901 Total fixed maturities 3,106 65 (199 ) 2,972 Mutual funds—debt securities 1 70,425 2,730 (59 ) 73,096 Mutual funds—equity securities 1 16,685 1,528 (18 ) 18,195 Other investment funds ( 1) 143,050 7,143 (5,024 ) 145,169 Equity securities 1 14,968 1,177 (18 ) 16,127 Other invested assets 2 16 — — 16 Total investments $ 335,703 $ 12,643 $ (5,318 ) $ 343,028 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have a redemption period ranging from 1 to 30 days, and private credit funds, which have lockup periods ranging from one to seven years with three potential one year extensions at the discretion of the funds’ general partners. As of September 30, 2019 there were $41.2 million in unfunded investment commitments to the private credit funds, which are callable at any time. December 31, 2018 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 12,835 $ — $ — $ 12,835 Fixed maturities: U.S. governmental securities 2 960 4 (121 ) 843 Corporate debt securities 2 4,883 161 (321 ) 4,723 Total fixed maturities 5,843 165 (442 ) 5,566 Mutual funds—debt securities 1 108,451 227 (837 ) 107,841 Mutual funds—equity securities 1 19,660 304 (142 ) 19,822 Other investment funds ( 1) 165,284 3,039 (4,607 ) 163,716 Equity securities 1 20,025 826 (145 ) 20,706 Other invested assets 2 56 20 — 76 Total investments $ 332,154 $ 4,581 $ (6,173 ) $ 330,562 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have a redemption period ranging from 1 to 30 days, and private credit funds, which have lockup periods ranging from two to eight years with three potential one year extensions at the discretion of the funds’ general partners. As of December 31, 2018 there were $94.5 million in unfunded investment commitments to the private credit funds, which are callable at any time. The contractual maturities of debt securities as of September 30, 2019 and December 31, 2018, were as follows below (in thousands): September 30, 2019 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ 60 $ 70 $ 821 $ 119 Corporate debt securities 203 1,536 163 — Total fixed maturities $ 263 $ 1,606 $ 984 $ 119 December 31, 2018 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ — $ 416 $ 395 $ 32 Corporate debt securities 705 3,702 265 51 Total fixed maturities $ 705 $ 4,118 $ 660 $ 83 Temporary Declines in Fair Value The Partnership evaluates declines in fair value below cost of each individual asset held in the perpetual care trusts on a quarterly basis. An aging of unrealized losses on the Partnership’s investments in debt and equity securities within the perpetual care trusts as of September 30, 2019 and December 31, 2018 is presented below (in thousands): Less than 12 months 12 months or more Total September 30, 2019 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ — $ — $ 1,021 $ 54 $ 1,021 $ 54 Corporate debt securities 76 45 1,889 100 1,965 145 Total fixed maturities 76 45 2,910 154 2,986 199 Mutual funds—debt securities 11,348 59 3 — 11,351 59 Mutual funds—equity securities 505 18 — — 505 18 Other investment funds 67,147 5,024 — — 67,147 5,024 Equity securities 176 18 — — 176 18 Total $ 79,252 $ 5,164 $ 2,913 $ 154 $ 82,165 $ 5,318 Less than 12 months 12 months or more Total December 31, 2018 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ — $ — $ 790 $ 121 $ 790 $ 121 Corporate debt securities 405 15 2,902 306 3,307 321 Total fixed maturities 405 15 3,692 427 4,097 442 Mutual funds—debt securities 21,867 591 2,814 246 24,681 837 Mutual funds—equity securities 1,382 141 — 1 1,382 142 Other investment funds 101,536 4,607 — — 101,536 4,607 Equity securities 241 16 583 129 824 145 Total $ 125,431 $ 5,370 $ 7,089 $ 803 $ 132,520 $ 6,173 For all securities in an unrealized loss position, the Partnership evaluated the severity of the impairment and length of time that a security has been in a loss position and concluded the decline in fair value below the asset’s cost was temporary in nature. In addition, the Partnership is not aware of any circumstances that would prevent the future market value recovery for these securities. Other-Than-Temporary Impairment of Trust Assets The Partnership assesses its perpetual care trust assets for other-than-temporary declines in fair value on a quarterly basis. During the three months ended September 30, 2019, with an aggregate cost basis of approximately $6.6 million and an aggregate fair value of approximately $6.0 million, resulting in an impairment of $0.6 million, with such impairment considered to be other-than-temporary. During the three months ended September 30, 2018, t with an aggregate cost basis of approximately $40.0 million and an aggregate fair value of approximately $39.4 million, resulting in an impairment of $0.6 million, with such impairment considered to be other-than-temporary. with an aggregate cost basis of approximately $35.8 million and an aggregate fair value of approximately $34.5 million, resulting in an impairment of $1.3 million, with such impairment considered to be other-than-temporary. 116 Accordingly, the Partnership adjusted the cost basis of these assets to their current value with the offset going against the liability for perpetual care trust corpus. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 8. LONG-TERM DEBT Total debt consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 9.875%/11.500% Senior Secured PIK Toggle Notes, due June 2024 376,166 $ — 7.875% Senior Notes, due June 2021 — 173,613 Credit facility — 155,739 Notes payable—acquisition debt — 92 Insurance and vehicle financing 790 1,294 Less deferred financing costs, net of accumulated amortization (14,280 ) (9,692 ) Total debt 362,676 321,046 Less current maturities (503 ) (798 ) Total long-term debt $ 362,173 $ 320,248 Senior Secured Notes On June 27, 2019, StoneMor Partners L.P. (the “Partnership”), Cornerstone Family Services of West Virginia Subsidiary, Inc. (“Cornerstone” and, collectively with the Partnership, the “Issuers”), certain direct and indirect subsidiaries of the Partnership (the “Guarantors”), the initial purchasers party thereto (the “Initial Purchasers”) and Wilmington Trust, National Association, as trustee (in such capacity, the “Trustee”) and as collateral agent (in such capacity, the “Collateral Agent”) entered into an indenture (the “Indenture”) with respect to the 9.875%/11.500% Senior Secured PIK Toggle Notes due 2024. Pursuant to the terms of the Indenture, the Initial Purchasers purchased Senior Secured Notes in the aggregate principal amount of $385.0 million in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 4(a)(2) thereof. The gross proceeds from the sale of the Senior Secured Notes was $371.5 million, less advisor fees (including a placement agent fee of approximately $7.0 million), legal fees, mortgage costs and other closing expenses, as well as cash funds for collateralization of existing letters of credit and credit card needs under the former credit facility. The Issuers can elect to pay interest at either a fixed rate of 9.875% per annum in cash or, at their option through January 30, 2022, a fixed rate of 7.50% per annum in cash plus a fixed rate of 4.00% per annum payable in kind by increasing the principal amount of the Senior Secured Notes or by issuing additional Senior Secured Notes. The Senior Secured Notes will require cash interest payments at 9.875% for all interest periods after January 30, 2022. Interest is payable quarterly in arrears on the 30th day of each March, June, September and December, commencing September 30, 2019. The Partnership elected the cash plus payable in kind option to pay its September 30, 2019 interest payment, resulting in a $4.0 million increase in the outstanding principal amount of the Senior Secured Notes. The Senior Secured Notes mature on June 30, 2024. The Senior Secured Notes are senior secured obligations of the Issuers. The Issuers’ joint and several obligations under the Senior Secured Notes and the Indenture are jointly and severally guaranteed (the “Note Guarantees”) by each subsidiary of the Partnership (other than Cornerstone) that the Partnership has caused or will cause to become a Guarantor pursuant to the terms of the Indenture. In addition, the Issuers, the Guarantors and the Collateral Agent entered into a Collateral Agreement (the “Collateral Agreement”). Pursuant to the Indenture and the Collateral Agreement, the Issuers’ obligations under the Indenture and the Senior Secured Notes and the Guarantors’ Note Guarantees are secured by a first priority lien and security interest (subject to permitted liens and security interests) in substantially all of the Issuers’ and the Guarantors’ assets, whether now owned or hereafter acquired, excluding certain assets which include, among others: (a) trust and other fiduciary accounts and amounts required to be deposited or held therein and (b) unless encumbered by a mortgage existing on the date of the Indenture, owned and leased real property that (i) may not be pledged as a matter of law or without governmental approvals, (ii) is not operated or intended to be operated as a cemetery, crematory or funeral home or (iii) is the subject of specified immaterial leases. The Issuers may redeem the Senior Secured Notes at their option, in whole or in part, at any time for a redemption price equal to the principal balance thereof, accrued and unpaid interest thereon and, if applicable, a premium (the “Applicable Premium”) calculated as follows: • If redeemed before June 27, 2021, the sum of 4% of the principal amount so redeemed plus the excess of (i) the interest that would have accrued on the principal amount of the redeemed Senior Secured Notes from the redemption date through June 27, 2021 assuming an interest rate of 11.500% per annum over (ii) the interest that would have accrued on the principal amount of the redeemed Senior Secured Notes from the redemption date through June 27, 2021 at an interest rate equal to the then-applicable rate on United States Treasury securities for the period most nearly equaling that time period plus 0.50%; • If redeemed on or after June 27, 2021 and before June 27, 2022, 4% of the principal amount so redeemed; • If redeemed on or after June 27, 2022 and before June 27, 2023, 2% of the principal amount so redeemed; and • If redeemed on or after June 27, 2023, no premium will be payable. The Issuers are obligated to redeem the Senior Secured Notes with the net cash proceeds of certain dispositions described in the Indenture, tax refunds, insurance or condemnation proceeds and certain other extraordinary receipts. The redemption price for such redemptions is the principal balance of the Senior Secured Notes being redeemed, all accrued and unpaid interest thereon plus, with respect to redemptions from asset dispositions with net proceeds in excess of $55.0 million, an Applicable Premium of 2% of the principal amount so redeemed. The Issuers are also obligated to use 75% of any Excess Cash Flow, less any amount paid in any voluntary redemption of the Senior Secured Notes during the applicable period or subsequent thereto and prior to the applicable redemption date, to redeem the Senior Secured Notes at a redemption price equal to the principal balance thereof and all accrued and unpaid interest thereon. All interest payable in connection with the redemption of any the Senior Secured Notes is payable in cash. The Indenture requires the Issuers and the Guarantors, as applicable, to comply with various affirmative covenants regarding, among other matters, delivery to the Trustee of financial statements and certain other information or reports filed with the SEC and the maintenance and investment of trust funds and trust accounts into which certain sales proceeds are required by law to be deposited. The Indenture includes financial covenants pursuant to which the Issuers will not permit: • the Operating Cash Flow Amount for the six months ending December 31, 2019 to be less than $20.0 million; • the ratio of the sum of the Operating Cash Flow Amount plus Cash Interest Expense to Cash Interest Expense, or the Consolidated Interest Coverage Ratio, for the nine months ended March 31, 2020 and the twelve months ending as of each date from June 30, 2020 onwards, as set forth below, to be less than: March 31, 2020 0.40x June 30, 2020 0.75x September 30, 2020 1.00x December 31, 2020 1.15x March 31, 2021 1.25x June 30, 2021 1.30x September 30, 2021 1.35x December 31, 2021 1.45x March 31, 2022 and each quarter end thereafter 1.50x • the aggregate amount of Capital Expenditures for the prior four fiscal quarters as of the last day of any fiscal quarter beginning with the fiscal quarter ended September 30, 2019 to be more than $20.0 million; • the average daily balance of Unrestricted Cash and unrestricted Permitted Investments of the Partnership and its subsidiaries as of the end of any day for any 10-business day period to be less than $20.0 million during the quarter ended September 30, 2019, $15.0 million during the quarter ending December 31, 2019 and $12.5 million during any subsequent quarter; or • the ratio of the (a) the sum of Unrestricted Cash, accounts receivable and merchandise trust account balances to (b) the aggregate principal or face amount of Consolidated Funded Indebtedness, or Asset Coverage Test, for the applicable measurement period as of the last day of any fiscal quarter beginning with the fiscal quarter ended September 30, 2019, to be less than 1.60:1.00. The Indenture requires the Issuers and the Guarantors, as applicable, to comply with certain other covenants including, but not limited to, covenants that, subject to certain exceptions, limit the Issuers’ and the Guarantors’ ability to: (i) incur additional indebtedness; (ii) grant liens; (iii) engage in certain sale/leaseback, merger, consolidation or asset sale transactions; (iv) make certain investments; (v) pay dividends or make distributions; (vi) engage in affiliate transactions and (vii) amend its organizational documents. The Indenture provides for certain events of default, the occurrence and continuation of which could, subject to certain conditions, cause all amounts owing under the Senior Secured Notes to become due and payable, including but not limited to the following: • failure by the Issuers to pay any interest on any Senior Secured Note when it becomes due and payable that remains uncured for five business days; • failure by the Issuers to pay the principal on any of the Senior Secured Notes when it becomes due and payable, whether at the due date thereof, at a date fixed for redemption, by acceleration or otherwise; • failure by the Issuers to comply with the agreement and covenants relating to maintenance of its legal existence, providing notice of any default or event of default or use of proceeds from the sale of the Senior Secured Notes or any of the negative covenants in the Indenture; • failure by the Issuers to comply with any other agreement or covenant contained in the Indenture, the Collateral Agreement or any other Note Document that remains uncured for a period of 15 days after the earlier of written notice and request for cure from the Trustee or holders of at least 25% of the aggregate principal amount of the Senior Secured Notes; • the acceleration of or the failure to pay at final maturity indebtedness (other than the Senior Secured Notes) in a principal amount exceeding $5.0 million; • the occurrence of a Change in Control; • certain bankruptcy or insolvency proceedings involving an Issuer or any subsidiary; • the C-Corporation Conversion shall not have occurred on or before March 31, 2020 and such default remains uncured for a period of five business days; and • failure by the Partnership or any subsidiary to maintain one or more licenses, permits or similar approvals for the conduct of its business where the sum of the revenue associated therewith represents the lesser of (i) 15% of the Partnership’s and its Subsidiaries’ consolidated revenue and (ii) $30.0 million, and such breach is not cured within 30 days. At the option of holders holding a majority of the outstanding principal amount of the Senior Secured Notes (and automatically upon any default for failure to pay principal of the Senior Secured Notes when due and payable or certain bankruptcy or insolvency proceedings involving an Issuer), the interest rate on the Senior Secured Notes will increase to 13.50% per annum, payable in cash. Registration Rights Agreement In connection with the sale of the Senior Secured Notes, on June 27, 2019, the Issuers, the Guarantors party thereto and the Initial Purchasers entered into a Registration Rights Agreement (the “Notes Registration Rights Agreement”), pursuant to which the Issuers and the Guarantors agreed, for the benefit of the holders of the Notes, to use their commercially reasonable efforts to file a registration statement with the SEC with respect to a registered offer to exchange the Senior Secured Notes for new “exchange” notes having terms substantially identical in all material respects to the Senior Secured Notes, with certain exceptions (the “Exchange Offer”). The Issuers have agreed to use their commercially reasonable efforts (i) to consummate the Exchange Offer on or before July 14, 2020 (the “Exchange Date”) and (ii) upon the occurrence of certain events described in the Notes Registration Rights Agreement which result in the inability to consummate the Exchange Offer, to cause a shelf registration statement covering resales of the Notes to be declared effective . If the Issuers fail to comply with their obligations under the Notes Registration Rights Agreement, additional interest will accrue on the Notes at a rate of 0.25% per annum (increasing by an additional 0.25% per annum with respect to each subsequent 90-day period that occurs after the date on which such default occurs, up to a maximum additional interest rate of 1.00%) from and including the date on which any such default shall occur to but excluding the earlier of (x) the date on which all such defaults have been cured and (y) the date on which the Notes are freely tradeable by persons other than affiliates of the Issuers pursuant to Rule 144 under the Securities Act. Deferred Financing Costs In connection with the Tranche B revolving credit facility established in February 2019, the Partnership incurred debt issuance costs and fees of approximately $3.0 million during the three months ended March 31, 2019, which was being amortized over the life of the Tranche B revolving credit facility, using the straight-line method. In connection with the issuance of its Senior Secured Notes, the Partnership incurred debt issuance costs and fees of approximately $14.3 million during nine months ended September 30, 2019 In connection with the retirement of its revolving credit facilities and its $175.0 million, 7.875% senior notes due 2021, the Partnership wrote-off unamortized deferred financing fees of $6.9 million, during the nine months ended September 30, 2019 which is presented in loss on debt extinguishment in the accompanying unaudited condensed consolidated statement of operations. |
REDEEMABLE CONVERTIBLE PREFERRE
REDEEMABLE CONVERTIBLE PREFERRED UNITS AND PARTNERS’ DEFICIT | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
REDEEMABLE CONVERTIBLE PREFERRED UNITS AND PARTNERS’ DEFICIT | 9. REDEEMABLE CONVERTIBLE PREFERRED UNITS AND PARTNERS’ DEFICIT Redeemable Convertible Preferred Units On June 27, 2019, funds and accounts affiliated with Axar Capital Management LP (“Axar”) and certain other investors (individually a “Purchaser” and collectively the “Purchasers”) and the Partnership entered into the Series A Preferred Unit Purchase Agreement (the “Series A Purchase Agreement”) pursuant to which the Partnership sold to the Purchasers an aggregate of 52,083,333 of the Partnership’s Series A Preferred Units (the “Preferred Units”) representing limited partner interests in the Partnership with certain rights, preferences and privileges as are set forth in the Partnership’s Third Amended and Restated Agreement of Limited Partnership dated as of June 27, 2019 (the “Third Amended Partnership Agreement”). The purchase price for the Preferred Units sold pursuant to the Series A Purchase Agreement (the “Purchased Units”) was $1.1040 per Purchased Unit, reflecting an 8% discount to the liquidation preference of each Preferred Unit, for an aggregate purchase price of $57.5 million. Pursuant to the Series A Purchase Agreement, the Partnership agreed to file a registration statement on Form S-1 with the SEC as promptly as practicable to effect a $40.2 million rights offering of common units representing limited partnership interests in the Partnership (“Common Units”) to all holders of Common Units (other than the Purchasers, American Infrastructure Funds LP and their respective affiliates) with a purchase price of $1.20 per Common Unit (the “Rights Offering”), and agreed to use its reasonable best efforts to complete the Rights Offering within 100 days after the Closing Date. The Rights Offering occurred early in the fourth quarter of 2019, and the proceeds from the Rights Offering were used to redeem certain of the Preferred Units as described below. For further detail on the Rights Offering and the related redemption of certain Preferred Units, see Note 17 Subsequent Events. Under the Series A Purchase Agreement, the Partnership also granted the Purchasers a preemptive right to purchase a pro rata share of any subsequent issuance of Common Units or shares of common stock of the corporation (“Common Stock”) into which the General Partner is converted in the C-Corporation Conversion or rights to acquire any such securities, for so long as the Purchaser continues to hold any Preferred Units, any Common Units or Common Stock issued upon conversion thereof. The Preferred Units have the following rights, preferences and privileges, among others as set forth in the Third Amended Partnership Agreement: • Conversion: The Preferred Units are convertible at the option of the holders thereof at any time beginning 10 days after completion of the Rights Offering and shall automatically be converted upon consummation of the C-Corporation Conversion, in each case at an initial conversion rate of one Common Unit or one share of Common Stock, as applicable, for each Preferred Unit. Subject to customary exceptions, the conversion rate for each Preferred Unit is subject to adjustment (a) proportionately, in the event of distributions made in the form of interests in the Partnership, any split, combination or similar recapitalization of Common Units and certain other specified transactions with respect to interests in the Partnership, (b) upon any issuance or deemed issuance by the Partnership prior to consummation of the Rights Offering of Common Units for a price per Common Unit less than the Series A Liquidation Preference (as defined below), to the rate determined by dividing the Series A Liquidation Preference by the price per Common Unit in such issuance or deemed issuance and (c) upon any issuance or deemed issuance by the Partnership after consummation of the Rights Offering of Common Units for a price per Common Unit less than the Series A Liquidation Preference, to a rate determined on a weighted average anti-dilution adjustment basis. • Voting: The holder of a Preferred Unit is entitled to one vote for each Common Unit into which such Preferred Unit is convertible (whether or not such right to convert is exercisable at such time). The holders of Preferred Units are entitled to vote as a single class with the holders of Common Units on all matters submitted to the limited partners for a vote. In addition, the affirmative vote of the holders of at least 60% of the outstanding Preferred Units is required to: o Amend the Third Amended Partnership Agreement or the Partnership’s Certificate of Limited Partnership if such amendment would be adverse (other than in a de minimus manner) to any of the rights, preferences or privileges of the Preferred Units; o Pay any distribution from Capital Surplus (as defined in the Third Amended Partnership Agreement); or o Issue any class or series of interest in the Partnership that, with respect to distributions, is senior to or pari passu with the Preferred Units, or modify the terms of any existing class or series of interest in the Partnership to so provide. • Distributions: Holders of Preferred Units are entitled to participate in any distributions made to holders of Common Units on an as-converted basis (whether or not such right to convert is exercisable at such time), and any such distributions with respect to Preferred Units shall be excluded in calculating the distributions or allocations of income or gain to holders of incentive distribution rights under the Third Amended Partnership Agreement. • Redemption: Upon completion of the Rights Offering, the Partnership is obligated to use 100% of the net proceeds thereof to redeem up to 33,487,904 Preferred Units held by Axar and the other Purchasers at a redemption price of $1.20 per Preferred Unit. • Liquidation: Upon any liquidation, dissolution or winding up of the Partnership, holders of Preferred Units are entitled to receive a payment of $1.20 per Preferred Unit (the “Series A Liquidation Preference”) before payments are made to any other class or series of interest in the Partnership ranking junior to the Preferred Units, including Common Units. • Restrictions on Transfer: Holders of Preferred Units may not transfer such Preferred Units other than to one or more affiliates without the approval of the Partnership. The Series A Purchase Agreement included various representations, warranties, covenants, indemnification and other provisions which are customary for a transaction of this nature. The Partnership offered and sold the Purchased Units in reliance upon the exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof. The Partnership relied on this exemption from registration based in part on representations made by the Purchasers in the Series A Purchase Agreement. Contingent Beneficial Conversion Feature The Partnership accounts for potential beneficial conversion features under FASB ASC Topic 470-20, Debt – Debt with conversion and Other Options its commitment in connection with the sale of the Preferred Units to use its best efforts to complete the Rights Offering . The Partnership has the obligation to redeem a portion of the Series A Preferred from the net proceeds of the Rights Offering. Upon exercise of the redemption right, any previously recognized accretion of deemed dividends will be reversed in the period of redemption and reflected as income attributable to common unitholders in the Partnership’s consolidated statements of operations, along with the related per unit amounts . For further detail on the Rights Offering, see Note 17 Subsequent Events. |
DEFERRED REVENUES AND COSTS
DEFERRED REVENUES AND COSTS | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
DEFERRED REVENUES AND COSTS | 10. DEFERRED REVENUES AND COSTS The Partnership defers revenues and all direct costs associated with the sale of pre-need cemetery merchandise and services until the merchandise is delivered or the services are performed. The Partnership recognizes deferred merchandise and service revenues as customer contract liabilities within long-term liabilities on its consolidated balance sheets. The Partnership recognizes deferred direct costs associated with pre-need cemetery merchandise and service revenues as deferred selling and obtaining costs within long-term assets on its consolidated balance sheets. The Partnership also defers the costs to obtain new pre-need cemetery and new prearranged funeral business as well as the investment earnings on the prearranged services and merchandise trusts. Such costs are recognized when the associated performance obligation is fulfilled based upon the net change in the customer contract liabilities. All other selling costs are expensed as incurred. Additionally, the Partnership has elected the practical expedient of not recognizing incremental costs to obtain as incurred when the amortization period otherwise would have been one year or less Deferred revenues and related costs consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Deferred contract revenues $ 830,038 $ 830,602 Deferred merchandise trust revenue 104,740 92,718 Deferred merchandise trust unrealized gains (losses) 8,777 (9,034 ) Deferred revenues $ 943,555 $ 914,286 Deferred selling and obtaining costs $ 113,601 $ 112,660 For the three and nine months ended September 30, 2019, the Partnership recognized $13.7 million and $54.7 million, The components of the customer contract liabilities, net in the Partnership’s consolidated balance sheets at September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 December 31, 2018 Customer contract liabilities $ 972,767 $ 937,708 Amounts due from customers for unfulfilled performance obligations on cancellable pre-need contracts (29,212 ) (23,422 ) Customer contract liabilities, net $ 943,555 $ 914,286 The Partnership expects to service 55% of its deferred revenue in the first 4-5 years and approximately 80% of its deferred |
LONG-TERM INCENTIVE PLAN
LONG-TERM INCENTIVE PLAN | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
LONG-TERM INCENTIVE PLAN | 11. LON On April 15, 2019, the Compensation and Nominating and Governance Committee (the “Committee”) of the Board approved the award of 1,015,047 phantom unit awards consisting of 494,421 phantom units subject to time-based vesting (“TVUs”) and 520,626 phantom units subject to performance-based vesting (“PVUs”) to certain members of the general partner’s senior management. The awards of phantom units were made under the Partnership’s Amended and Restated 2019 Long-Term Incentive Plan (“LTIP”). The TVUs shall vest, if at all, in three equal annual installments on each April 3 (or first business day thereafter) commencing on April 3, 2020. The PVUs shall vest based on the extent, if any, to which the Committee determines that the performance conditions established by the Committee for calendar years 2019, 2020 and 2021 have been achieved or waived in writing, as follows: • if the “threshold” performance condition with respect to a calendar year has been achieved or waived but not the “target” condition, then 25% of the PVUs subject to vesting with respect to such year (rounded down to the nearest whole phantom unit) shall vest; • if the “target” performance condition with respect to a calendar year has been achieved or waived, then 50% of the PVUs subject to vesting with respect to such year shall vest; and • if the “maximum” performance condition with respect to a calendar year has been achieved or waived, then 100% of the PVUs subject to vesting with respect to such year shall vest. Also on April 15, 2019, an additional 275,000 restricted units were awarded to an officer of the general partner pursuant to his employment agreement, which units vest in equal quarterly installments over a four year period commencing July 15, 2019, the three month anniversary of the grant date. The Recapitalization Transactions, described in Note 1 General, resulted in a Change of Control as defined in the LTIP. The Change of Control accelerated the vesting of certain awards, resulting in the immediate vesting of 1,351,493 phantom and restricted units. These awards were net settled with 376,351 units withheld to satisfy the participants’ tax withholding obligations, resulting in a net number of 975,142 common units being issued. The Partnership recognized $2.2 million in unit-based compensation expense related to this accelerated vesting. These units were delivered in the third quarter of 2019. An aggregate of 238,553 phantom units issued under the LTIP and held in deferred compensation accounts for certain directors that either became payable as a result of the Recapitalization Transactions or had previously become payable were issued in the third quarter of 2019. An aggregate of 48,924 restricted units vested in the second quarter of 2019 in accordance with the awards’ contractual vesting schedule, which were net settled with 17,629 units withheld to satisfy the participants’ tax withholding obligations, resulting in a net number of 31,295 common units being issued. In addition, 49,379 restricted units vested in the third quarter of 2019 in accordance with the awards’ contractual vesting schedule, which were net settled with 17,772 units withheld to satisfy the participants’ tax withholding obligations, resulting in a net number of 31,607 common units being issued. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Legal The Partnership is currently subject to class or collective actions under the Securities Exchange Act of 1934 and for related state law claims that certain of our officers and directors breached their fiduciary duty to the Partnership and its unitholders. The Partnership could also become subject to additional claims and legal proceedings relating to the factual allegations made in these actions. While management cannot reasonably estimate the potential exposure in these matters at this time, if the Partnership does not prevail in any such proceedings, the Partnership could be required to pay substantial damages or settlement costs, subject to certain insurance coverages. Management has determined that, based on the status of the claims and legal proceedings against us, the amount of the potential losses cannot be reasonably estimated at this time. These actions are summarized below. • Anderson v. StoneMor Partners, LP, et al., No. 2:16-cv-6111, filed on November 21, 2016, in the United States District Court for the Eastern District of Pennsylvania. The plaintiffs in this case (as well as Klein v. StoneMor Partners, LP, et al., No. 2:16-cv-6275, filed in the United States District Court for the Eastern District of Pennsylvania on December 2, 2016, which has been consolidated with this case) brought an action on behalf of a putative class of the holders of Partnership units and allege that the Partnership made misrepresentations to investors in violation of Section 10(b) of the Securities Exchange Act of 1934 by, among other things and in general, failing to clearly disclose the use of proceeds from debt and equity offerings by making allegedly false or misleading statements concerning (a) the Partnership’s strength or health in connection with a particular quarter’s distribution announcement, (b) the connection between operations and distributions and (c) the Partnership’s use of cash from equity offerings and its credit facility. Plaintiffs sought damages from the Partnership and certain of its officers and directors on behalf of the class of Partnership unitholders, as well as costs and attorneys' fees. Lead plaintiffs have been appointed in this case, and filed a Consolidated Amended Class Action Complaint on April 24, 2017. Defendants filed a motion to dismiss that Consolidated Amended Complaint on June 8, 2017. The motion was granted on October 31, 2017, and the court entered judgment dismissing the case on November 30, 2017. Plaintiffs filed a notice of appeal on December 29, 2017. Oral argument was held before the United States Court of Appeals for the Third Circuit on November 1, 2018. On June 20, 2019, the Third Circuit affirmed the dismissal of plaintiffs’ case. On July 11, 2019, the plaintiffs filed a petition to have the appeal reheard by the entire Third Circuit, which the Third Circuit denied on September 16, 2019. Plaintiffs have 90 days from that date to file a petition for certiorari with the United States Supreme Court to seek discretionary review of the Third Circuit’s decision. • Bunim v. Miller, et al., No. 2:17-cv-519-ER, pending in the United States District Court for the Eastern District of Pennsylvania, and filed on February 6, 2017. The plaintiff in this case brought, derivatively on behalf of the Partnership, claims that the officers and directors of the Partnership’s general partner aided and abetted in breaches of the general partner’s purported fiduciary duties by, among other things and in general, allegedly making misrepresentations through the use of non-GAAP accounting standards in its public filings, by allegedly failing to clearly disclose the use of proceeds from debt and equity offerings, and by allegedly approving unsustainable distributions. The plaintiff also claims that these actions and misrepresentations give rise to causes of action for gross mismanagement, unjust enrichment, and (in connection with a purportedly misleading proxy statement filed in 2014) violations of Section 14(a) of the Securities Exchange Act of 1934. The derivative plaintiff seeks an award of damages, attorneys’ fees and costs in favor of the Partnership as nominal plaintiff, as well as general compliance and governance changes. This case has been stayed, by the agreement of the parties, pending final resolution of the motion to dismiss filed in the Anderson case, provided that either party may terminate the stay on 30 days' notice. • Muth v. StoneMor G.P. LLC, et al., December Term, 2016, No. 1196 and Binder v. StoneMor G.P. LLC, et al., January Term, 2017, No. 4872, both pending in the Court of Common Pleas for Philadelphia County, Pennsylvania, and filed on December 20, 2016 and February 3, 2017, respectively. In these cases, the plaintiffs brought, derivatively on behalf of the Partnership, claims that the officers and directors of the Partnership’s general partner aided and abetted in breaches of the general partner’s purported fiduciary duties by, among other things and in general, allegedly making misrepresentations through the use of non-GAAP accounting standards in its public filings and by failing to clearly disclose the use of proceeds from debt and equity offerings, as well as approving unsustainable distributions. The plaintiffs also claim that these actions and misrepresentations give rise to a cause of action for unjust enrichment. The derivative plaintiffs seek an award of damages, attorneys’ fees and costs in favor of the Partnership as nominal plaintiff, as well as alterations to the procedures for electing members to the board of the Partnership’s general partner, and other compliance and governance changes. These cases have been consolidated and stayed, by the agreement of the parties, pending final resolution of the motion to dismiss filed in the Anderson case, provided that either party may terminate the stay on 30 days' notice. The Philadelphia Regional Office of the SEC, Enforcement Division, is continuing its investigation of the Partnership as to whether violations of federal securities laws have occurred. The investigation relates to, among other things, our prior restatements, financial statements, internal control over financial reporting, public disclosures, use of non-GAAP financial measures, matters pertaining to unitholder distributions and the sources of funds therefor and information relating to protection of our confidential information and our policies regarding insider trading. We are continuing to cooperate with the SEC staff. The Partnership is party to other legal proceedings in the ordinary course of its business, but does not expect the outcome of any proceedings, individually or in the aggregate, to have a material adverse effect on its financial position, results of operations or cash flows. The Partnership carries insurance with coverage and coverage limits that it believes to be customary in the cemetery and funeral home industry. Although there can be no assurance that such insurance will be sufficient to protect the Partnership against all contingencies, management believes that the insurance protection is reasonable in view of the nature and scope of the operations. Other In connection with the Partnership’s 2014 lease and management agreements with the Archdiocese of Philadelphia, it has committed to pay aggregate fixed rent of $36.0 million in the following amounts: Lease Years 1-5 (May 28, 2014-May 31, 2019) None Lease Years 6-20 (June 1, 2019-May 31, 2034) $1,000,000 per Lease Year Lease Years 21-25 (June 1, 2034-May 31, 2039) $1,200,000 per Lease Year Lease Years 26-35 (June 1, 2039-May 31, 2049) $1,500,000 per Lease Year Lease Years 36-60 (June 1, 2049-May 31, 2074) None The fixed rent for lease years 6 through 11, an aggregate of $6.0 million, is deferred. If prior to May 31, 2024, the Archdiocese terminates the agreements pursuant to a lease year 11 termination or the Partnership terminates the agreements as a result of a default by the Archdiocese, the Partnership is entitled to retain the deferred fixed rent. If the agreements are not terminated, the deferred fixed rent will become due and payable on or before June 30, 2024. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | 13. LEASES The Partnership leases a variety of assets throughout its organization, such as office space, funeral homes, warehouses and equipment. In addition the Partnership has a sale-leaseback related to one of its warehouses. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and the Partnership recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements with an initial term of more than 12 months, the Partnership measures the lease liability at the present value of the sum of the remaining minimum rental payments, which exclude executory costs Certain leases provide the Partnership with the option to renew for additional periods , with renewal terms that can extend the lease term for periods ranging from 1 to years Certain of the Partnership’s leases have variable payments with annual escalations based on the proportion by which the consumer price index (“CPI”) for all urban consumers increased over the CPI index for the prior comparative year. The Partnership has the following balances recorded on its unaudited condensed consolidated balance sheet related to leases: September 30, 2019 Operating $ 11,321 Finance 6,211 Total ROU assets ( 1) $ 17,532 Liabilities: Current Operating $ 2,080 Finance 1,236 Long-term Operating 12,246 Finance 4,656 Total lease liabilities ( 2) $ 20,218 (1) (2) The Partnership’s current lease liabilities and long-term are presented within Accounts payable and accrued liabilities and Other long-term liabilities, respectively in its unaudited condensed consolidated balance sheet. As most of the Partnership’s leases do not provide an implicit rate, the Partnership uses its incremental borrowing rate, based on the information available at commencement date, in determining the present value of lease payments. The Partnership used the incremental borrowing rate on January 1, 2019 for operating leases that commenced prior to that date . The weighted average borrowing rates for operating and finance leases were 9.9% and 8.4%, respectively as of . The components of lease expense were as follows: Nine months ended September 30, 2019 Lease cost Classification Operating lease costs General and administrative expense $ 2,687 Finance lease costs Amortization of leased assets Depreciation and Amortization 899 Interest on lease liabilities Interest expense 370 Variable lease costs General and administrative expense — Short-term lease costs General and administrative expense — Net Lease costs $ 3,956 (1) The Partnership does not have any short-term leases with lease terms greater than one month. Maturities of the Partnership’s lease labilities as of September 30, 2019, per ASC 842, Leases, Year ending December 31, Operating Finance 2019 $ 867 $ 484 2020 3,320 1,761 2021 2,830 1,922 2022 2,532 1,978 2023 2,279 763 Thereafter 8,495 43 Total $ 20,323 $ 6,951 Less: Interest 5,997 1,059 Present value of lease liabilities $ 14,326 $ 5,892 Minimum lease commitments remaining under the Partnership’s operating leases and capital leases, per ASC 840, Leases, Year ending December 31, Operating Capital 2019 $ 4,349 $ 1,499 2020 2,765 1,196 2021 2,130 949 2022 1,539 558 2023 1,184 89 Thereafter 5,737 — Total $ 17,704 $ 4,291 Less: Interest (875 ) Present value of lease liabilities $ 3,416 Operating and finance lease payments include $3.3 million related to options to extend lease terms that are reasonably certain of being exercised and $2.0 million related to residual value guarantees. The weighted average remaining lease term for operating and finance leases was 7.2 years and 3.0 years, respectively as of September 30, 2019 As of September 30, 2019, the Partnership does not have additional operating and finance leases that have not yet commenced nor any lease transactions with its related parties. In addition, as of September 30, 2019, the Partnership has not entered into any new sale-leaseback arrangements. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 14. FAIR VALUE OF FINANCIAL INSTRUMENTS Management has established a hierarchy to classify the inputs used to measure the Partnership’s financial instruments at fair value, pursuant to which the Partnership is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs represent market data obtained from independent sources; whereas, unobservable inputs reflect the Partnership’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. The hierarchy defines three levels of inputs that may be used to measure fair value: • Level 1 – Unadjusted quoted market prices in active markets for identical, unrestricted assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the same contractual term of the asset or liability. • Level 3 – Unobservable inputs based on the entity’s own assumptions about the assumptions market participants would use in the pricing of the asset or liability and are consequently not based on market activity but rather through particular valuation techniques. The carrying value of the Partnership’s current assets and current liabilities on its consolidated balance sheets approximated or equaled their estimated fair values due to their short-term nature or imputed interest rates. Recurring Fair Value Measurement At September 30, 2019 and December 31, 2018, the two financial instruments measured by the Partnership at fair value on a recurring basis were its merchandise and perpetual care trusts, which consist of investments in debt and equity marketable securities and cash equivalents that are carried at fair value and are classified as either Level 1 or Level 2 (see Note 7 Merchandise Trusts and Note 8 Perpetual Care Trusts). Where quoted prices are available in an active market, securities are classified as Level 1 investments pursuant to the fair value measurement hierarchy. 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 securities are classified as Level 2 investments pursuant to the fair value measurements hierarchy. Certain investments in the merchandise and perpetual care trusts are excluded from the fair value leveling hierarchy in accordance with GAAP. These funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. Non-Recurring Fair Value Measurement The Partnership may be required to measure certain assets and liabilities at fair value, such as its indefinite-lived assets and long-lived assets, on a nonrecurring basis in accordance with GAAP from time to time. These adjustments to fair value usually result from impairment charges. Other Financial Instruments The Partnership’s other financial instruments at September 30, 2019 consisted of its Senior Secured Notes (see Note 8 Long-Term Debt) and at December 31, 2018 consisted of its Senior Notes and outstanding borrowings under its revolving credit facility. • At September 30, 2019, the estimated fair value of the Partnership’s Senior Secured Notes was $386.5 million, based on trades made on that date, compared with the carrying amount of $376.2 million. • At December 31, 2018, the estimated fair value of the Partnership’s Senior Notes was $162.5 million, based on trades made on that date, compared with the carrying amount of $173.6 million. |
SUPPLEMENTAL CONDENSED CONSOLID
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | 15. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION The Partnership’s Senior Secured Notes are guaranteed by the Partnership’s 100% owned subsidiaries, other than the co-issuer, as described in Note 8 Long-Term Debt. The guarantees are full, unconditional, joint and several. The Partnership, or the "Parent," and its 100% owned subsidiary, Cornerstone Family Services of West Virginia Subsidiary Inc., are the co-issuers of the Senior Secured Notes. The Partnership’s unaudited condensed consolidated financial statements as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and 2018 include the accounts of cemeteries operated under long-term leases, operating agreements and management agreements. For the purposes of this note, these entities are deemed non-guarantor subsidiaries, as they are not 100% owned by the Partnership. The Partnership’s unaudited condensed consolidated financial statements also contain merchandise and perpetual care trusts that are also non-guarantor subsidiaries for the purposes of this note. The financial information presented below reflects the Partnership’s standalone accounts, the combined accounts of the subsidiary co-issuer, the combined accounts of the guarantor subsidiaries, the combined accounts of the non-guarantor subsidiaries, the consolidating adjustments and eliminations and the Partnership’s consolidated accounts as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and 2018. For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their respective subsidiaries are presented in accordance with the equity method of accounting (in thousands): CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED) September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents, excluding restricted cash $ — $ — $ 42,066 $ 1,449 $ — $ 43,515 Restricted cash — — 20,580 — — 20,580 Other current assets — 3,470 69,812 11,966 — 85,248 Total current assets — 3,470 132,458 13,415 — 149,343 Long-term accounts receivable — 2,906 64,918 10,314 — 78,138 Cemetery and funeral home property and equipment — 696 404,948 31,960 — 437,604 Merchandise trusts — — — 519,529 — 519,529 Perpetual care trusts — — — 343,028 — 343,028 Deferred selling and obtaining costs — 5,580 90,236 17,785 — 113,601 Intangible assets — — 187 56,375 — 56,562 Other assets — — 29,939 2,779 — 32,718 Investments in and amounts due from affiliates eliminated upon consolidation — — 649,920 — (649,920 ) — Total assets $ — $ 12,652 $ 1,372,606 $ 995,185 $ (649,920 ) $ 1,730,523 Liabilities, Redeemable Convertible Preferred Units and Partners’ Capital (Deficit) Current liabilities — 150 63,418 1,520 — 65,088 Long-term debt, net of deferred financing costs — — 362,173 — — 362,173 Deferred revenues — 32,926 797,538 113,091 — 943,555 Perpetual care trust corpus — — — 343,028 — 343,028 Other long-term liabilities — — 46,820 16,384 — 63,204 Investments in and amounts due to affiliates eliminated upon consolidation 46,525 259,737 — 570,954 (877,216 ) — Total liabilities 46,525 292,813 1,269,949 1,044,977 (877,216 ) 1,777,048 Redeemable convertible preferred units 57,500 — — — — 57,500 Partners’ capital (deficit) (104,025 ) (280,161 ) 102,657 (49,792 ) 227,296 (104,025 ) Total liabilities, redeemable convertible preferred units and partners’ capital (deficit) $ — $ 12,652 $ 1,372,606 $ 995,185 $ (649,920 ) $ 1,730,523 CONSOLIDATING BALANCE SHEET December 31, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents, excluding restricted cash $ — $ — $ 16,298 $ 1,849 $ — $ 18,147 Restricted cash — — — — — — Other current assets — 3,718 64,924 11,527 — 80,169 Total current assets — 3,718 81,222 13,376 — 98,316 Long-term accounts receivable — 3,118 71,708 12,322 — 87,148 Cemetery and funeral home property and equipment — 806 409,201 33,550 — 443,557 Merchandise trusts — — — 488,248 — 488,248 Perpetual care trusts — — — 330,562 — 330,562 Deferred selling and obtaining costs — 5,511 88,705 18,444 — 112,660 Goodwill and intangible assets — — 25,676 60,607 — 86,283 Other assets — — 19,403 2,924 — 22,327 Investments in and amounts due from affiliates eliminated upon consolidation 61,875 (586 ) 539,997 — (601,286 ) — Total assets $ 61,875 $ 12,567 $ 1,235,912 $ 960,033 $ (601,286 ) $ 1,669,101 Liabilities, Redeemable Convertible Preferred Units and Partners’ Capital (Deficit) Current liabilities $ — $ 184 $ 60,216 $ 1,400 $ — $ 61,800 Long-term debt, net of deferred financing costs 68,453 105,160 146,635 — — 320,248 Deferred revenues — 32,147 770,337 111,802 — 914,286 Perpetual care trust corpus — — — 330,562 — 330,562 Other long-term liabilities — — 33,553 15,230 — 48,783 Due to affiliates — — 173,613 543,543 (717,156 ) — Total liabilities 68,453 137,491 1,184,354 1,002,537 (717,156 ) 1,675,679 Redeemable convertible preferred units — — — — — — Partners’ capital (deficit) (6,578 ) (124,924 ) 51,556 (42,502 ) 115,870 (6,578 ) Total liabilities, redeemable convertible preferred units and partners’ capital (deficit) $ 61,875 $ 12,567 $ 1,235,910 $ 960,035 $ (601,286 ) $ 1,669,101 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 1,257 $ 61,520 $ 12,154 $ (1,780 ) $ 73,151 Total costs and expenses — (3,336 ) (64,596 ) (13,440 ) 1,780 (79,592 ) Other loss — — (129 ) — — (129 ) Net loss from equity investment in subsidiaries (42,652 ) (33,050 ) — . 75,702 — Interest expense — — (12,486 ) (279 ) — (12,765 ) Loss on debt extinguishment — — — — — — Loss on impairment of goodwill — — (24,206 ) (656 ) — (24,862 ) Income (loss) from continuing operations before income taxes (42,652 ) (35,129 ) (39,897 ) (2,221 ) 75,702 (44,197 ) Income tax benefit — — 1,545 — — 1,545 Net income (loss) $ (42,652 ) $ (35,129 ) $ (38,352 ) $ (2,221 ) $ 75,702 $ (42,652 ) Three Months Ended September 30, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 1,513 $ 61,254 $ 12,116 $ (1,698 ) 73,185 Total costs and expenses — (3,192 ) (68,979 ) (12,728 ) 1,698 (83,201 ) Other income — — 702 — — 702 Net loss from equity investment in subsidiaries (15,867 ) (13,280 ) — — 29,147 — Interest expense (1,358 ) (2,087 ) (3,935 ) (258 ) (7,638 ) Income (loss) from continuing operations before income taxes (17,225 ) (17,046 ) (10,958 ) (870 ) 29,147 (16,952 ) Income tax expense — — (273 ) — — (273 ) Net income (loss) $ (17,225 ) $ (17,046 ) $ (11,231 ) $ (870 ) $ 29,147 $ (17,225 ) Nine Months Ended September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 4,260 $ 187,021 $ 36,354 $ (4,520 ) $ 223,115 Total costs and expenses — (11,894 ) (197,511 ) (40,793 ) 4,520 (245,678 ) Other loss — — (1,475 ) (2,083 ) — (3,558 ) Net loss from equity investment in subsidiaries (94,405 ) (74,333 ) — — 168,738 — Interest expense (4,241 ) (5,909 ) (24,311 ) (821 ) — (35,282 ) Loss on debt extinguishment (938 ) (1,441 ) (6,099 ) — — (8,478 ) Loss on impairment of goodwill — — (24,206 ) (656 ) — (24,862 ) Income (loss) from continuing operations before income taxes (99,584 ) (89,317 ) (66,581 ) (7,999 ) 168,738 (94,743 ) Income tax expense — — (4,841 ) — — (4,841 ) Net income (loss) $ (99,584 ) $ (89,317 ) $ (71,422 ) $ (7,999 ) $ 168,738 $ (99,584 ) Nine Months Ended September 30, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 4,563 $ 196,638 $ 38,390 $ (6,890 ) $ 232,701 Total costs and expenses — (10,278 ) (214,804 ) (41,289 ) 6,890 (259,481 ) Other loss — — (4,503 ) — — (4,503 ) Net loss from equity investment in subsidiaries (48,090 ) (40,382 ) — — 88,472 — Interest expense (4,075 ) (6,261 ) (11,755 ) (767 ) — (22,858 ) Income (loss) from continuing operations before income taxes (52,165 ) (52,358 ) (34,424 ) (3,666 ) 88,472 (54,141 ) Income tax benefit — — 1,976 — — 1,976 Net income (loss) $ (52,165 ) $ (52,358 ) $ (32,448 ) $ (3,666 ) $ 88,472 $ (52,165 ) CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net cash used in (provided by) operating activities $ — $ 212 $ (16,712 ) $ (105 ) $ (10,150 ) $ (26,755 ) Cash Flows From Investing Activities: Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales — (188 ) (4,158 ) (147 ) — (4,493 ) Payments to affiliates (57,500 ) — — — 57,500 — Net cash used in investing activities (57,500 ) (188 ) (4,158 ) (147 ) 57,500 (4,493 ) Cash Flows From Financing Activities: Cash distributions — — — — — — Payments from affiliates — — 47,350 — (47,350 ) — Proceeds from issuance of redeemable convertible preferred units, net 57,500 — — — — 57,500 Net borrowings and repayments of debt — (24 ) 38,517 (148 ) — 38,345 Other financing activities — — (18,649 ) — — (18,649 ) Net cash provided by (used in) financing activities 57,500 (24 ) 67,218 (148 ) (47,350 ) 77,196 Net increase (decrease) in cash and cash equivalents and restricted cash — — 46,348 (400 ) — 45,948 Cash and cash equivalents and restricted cash— Beginning of period — — 16,298 1,849 — 18,147 Cash and cash equivalents and restricted cash— End of period $ — $ — $ 62,646 $ 1,449 $ — $ 64,095 Nine Months Ended September 30, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ — $ 363 $ 29,462 $ (78 ) $ (10,336 ) $ 19,411 Cash Flows From Investing Activities: Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales — (363 ) (9,888 ) (626 ) — (10,877 ) Net cash used in investing activities — (363 ) (9,888 ) (626 ) — (10,877 ) Cash Flows From Financing Activities: Cash distributions — — — — — — Payments to affiliates — — (10,336 ) — 10,336 — Proceeds from issuance of redeemable convertible preferred units, net — — — — — — Net borrowings and repayments of debt — — (4,044 ) — — (4,044 ) Other financing activities — — (3,268 ) — — (3,268 ) Net cash (used in) provided by financing activities — — (17,648 ) — 10,336 (7,312 ) Net increase (decrease) in cash and cash equivalents and restricted cash — — 1,926 (704 ) — 1,222 Cash and cash equivalents and restricted cash—Beginning of period — — 4,216 2,605 — 6,821 Cash and cash equivalents and restricted cash—End of period $ — $ — $ 6,142 $ 1,901 $ — $ 8,043 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 16. SEGMENT INFORMATION Management operates the Partnership’s in two reportable operating segments: Cemetery Operations and Funeral Home Operations. These operating segments reflect the way the Partnership manages its operations and makes business decisions. Management evaluates the performance of these operating segments based on interments performed, interment rights sold, pre-need cemetery and at-need cemetery contracts written, revenue and segment profit (loss). As a percentage of revenue and assets, the Partnership’s major operations consist of its cemetery operations. The following tables present financial information with respect to the Partnership’s segments (in thousands). Corporate costs represent those not directly associated with an operating segment, such as corporate overhead, interest expense and income taxes. Corporate assets primarily consist of cash and cash equivalents and restricted cash . Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 STATEMENT OF OPERATIONS DATA: Cemetery Operations: Revenues $ 60,750 $ 61,405 $ 184,288 $ 191,328 Operating costs and expenses (54,681 ) (57,440 ) (166,777 ) (176,925 ) Depreciation and amortization (1,853 ) (1,858 ) (5,735 ) (6,043 ) Segment operating profit $ 4,216 $ 2,107 $ 11,776 $ 8,360 Funeral Home Operations: Revenues 12,401 11,780 38,827 41,373 Operating costs and expenses (10,669 ) (10,148 ) (32,636 ) (33,835 ) Depreciation and amortization (602 ) (652 ) (1,788 ) (2,066 ) Segment operating profit $ 1,130 $ 980 $ 4,403 $ 5,472 Reconciliation of segment operating profit to net loss: Cemetery Operations 4,216 2,107 11,776 8,360 Funeral Home Operations 1,130 980 4,403 5,472 Total segment profit 5,346 3,087 16,179 13,832 Corporate overhead (11,595 ) (12,876 ) (38,145 ) (39,868 ) Corporate depreciation and amortization (192 ) (227 ) (597 ) (744 ) Other gains (losses), net (129 ) 702 (3,558 ) (4,503 ) Loss on debt extinguishment — — (8,478 ) — Loss on impairment of goodwill (24,862 ) — (24,862 ) Interest expense (12,765 ) (7,638 ) (35,282 ) (22,858 ) Income tax benefit (expense) 1,545 (273 ) (4,841 ) 1,976 Net loss $ (42,652 ) $ (17,225 ) $ (99,584 ) $ (52,165 ) CASH FLOW DATA: Capital expenditures: Cemetery Operations $ 411 $ 2,105 $ 4,222 $ 9,378 Funeral Home Operations 465 246 1,447 465 Corporate 29 187 74 321 Total capital expenditures $ 905 $ 2,538 $ 5,743 $ 10,164 September 30, 2019 December 31, 2018 BALANCE SHEET DATA: Assets: Cemetery Operations $ 1,507,873 $ 1,508,667 Funeral Home Operations 146,708 136,064 Corporate 75,942 24,370 Total assets $ 1,730,523 $ 1,669,101 Goodwill: Cemetery Operations $ — $ 24,862 |
SUPPLEMENTAL CONSOLIDATED CASH
SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION | 17. SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION The tables presented below provide supplemental information to the unaudited condensed consolidated statements of cash flows regarding contract origination and maturity activity included in the pertinent captions on the Partnership’s unaudited condensed consolidated statements of cash flows (in thousands): Nine months ended September 30, 2019 2018 Accounts Receivable Pre-need/at-need contract originations (sales on credit) (88,296 ) $ (95,267 ) Cash receipts from sales on credit (post-origination) 73,991 100,841 Changes in accounts receivable, net of allowance $ (14,305 ) $ 5,574 Customer Contract Liabilities Deferrals: Cash receipts from customer deposits at origination, net of refunds $ 107,847 $ 114,132 Withdrawals of realized income from merchandise trusts during the period 6,699 13,815 Pre-need/at-need contract originations (sales on credit) 88,296 95,267 Undistributed merchandise trust investment earnings, net 8,367 357 Recognition: Merchandise trust investment income, net withdrawn as of end of period (6,985 ) (7,211 ) Recognized maturities of customer contracts collected as of end of period (155,915 ) (137,265 ) Recognized maturities of customer contracts uncollected as of end of period (24,449 ) (38,734 ) Changes in customer contract liabilities $ 23,860 $ 40,361 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS Rights Offering On September 25, 2019, the Partnership commenced its Rights Offering that entitled each unitholder of record (the “unitholder”) on September 26, 2019 (the “Record Date”) one non-transferable subscription right for each common unit held by the unitholder on the Record Date. Each subscription right entitled the unitholder to purchase 1.24 common units for each common unit held by the unitholder at a subscription price of $1.20 per common unit. Through the Rights Offering, which expired on October 25, 2019, 3,039,380 common units were purchased for a total of $3.6 million. The gross proceeds from the Rights Offering were used to redeem 3,039,380 of the Partnership’s outstanding Preferred Units on October 25, 2019 at a price of $1.20 per Preferred Unit. Divestitures As part of the Partnership’s recently launched asset sale program in the fourth quarter of 2019, the Partnership signed a non-binding letter of intent on one of its properties in October 2019 and received a $5.0 million refundable deposit. This asset sale is expected to be consummated in the first quarter of 2020. |
GENERAL (Policies)
GENERAL (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations StoneMor Partners L.P. (the "Partnership") is a provider of funeral and cemetery products and services in the death care industry in the United States. As of September 30, 2019, the Partnership operated 321 cemeteries in 27 states and Puerto Rico, of which 291 were owned and 30 were operated under lease, management or operating agreements. The Partnership also owned and operated 89 funeral homes, including 42 located on the grounds of cemetery properties that the Partnership owns, in 17 states and Puerto Rico. The Partnership’s cemeteries provide cemetery property interment rights, such as burial lots, lawn and mausoleum crypts, and cremation niches. Cemetery merchandise is comprised of burial vaults, caskets, grave markers and memorials and cemetery services, which include the installation of this merchandise and other service items. The Partnership sells these products and services both at the time of death, which is referred to as at-need, and prior to the time of death, which is referred to as pre-need. The Partnership’s funeral home services include family consultation, the removal and preparation of remains, insurance products and the use of funeral home facilities for visitation and memorial services. |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements, which are unaudited have been prepared in accordance with the requirements of the Quarterly Report on Form 10-Q and accounting principles generally accepted in the United States (“GAAP”) for interim reporting. They do not include all disclosures normally made in financial statements contained in Annual Reports on Form 10-K. In management’s opinion, all adjustments necessary for a fair presentation of the Partnership’s financial position, results of operations and cash flows for the periods disclosed have been made. The balance sheet at December 31, 2018 has been derived from the audited consolidated financial statement as of December 31, 2018, as presented in the Partnership’s Amendment No. 1 to Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of each of the Partnership’s 100% owned subsidiaries. These statements also include the accounts of the merchandise and perpetual care trusts in which the Partnership has a variable interest and is the primary beneficiary. The Partnership operates 30 cemeteries under long-term leases, operating agreements and management agreements. The operations of 16 of these managed cemeteries have been consolidated . On May 10, 2019, the Partnership terminated one of the management agreements and recorded a $2.1 million loss upon the termination, which is included in Other losses, net in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2019. The Partnership operates 14 cemeteries under long-term leases and other agreements that do not qualify as acquisitions for accounting purposes. As a result, the Partnership did not consolidate all of the existing assets and liabilities related to these cemeteries. The Partnership has consolidated the existing assets and liabilities of the merchandise and perpetual care trusts associated with these cemeteries as variable interest entities, since the Partnership controls and receives the benefits and absorbs any losses from operating these trusts. Under the long-term leases, and other agreements associated with these properties, which are subject to certain termination provisions, the Partnership is the exclusive operator of these cemeteries and earns revenues related to sales of merchandise, services and interment rights and incurs expenses related to such sales, including the maintenance and upkeep of these cemeteries. Upon termination of these agreements, the Partnership will retain all of the benefits and related contractual obligations incurred from sales generated during the agreement period. The Partnership has also recognized the existing customer contract-related performance obligations that it assumed as part of these agreements. |
Recapitalization Transactions | Recapitalization Transactions Series A Preferred Offering On June 27, 2019, funds and accounts affiliated with Axar Capital, a related party and the largest holder of the Partnership’s outstanding common units of record, and certain other investors (individually a “Purchaser” and collectively the “Purchasers”) and the Partnership entered into the Series A Preferred Unit Purchase Agreement (the “Series A Purchase Agreement” and the transactions contemplated thereby, the “Preferred Offering”) pursuant to which the Partnership sold to the Purchasers an aggregate of 52,083,333 of the Partnership’s Series A Preferred Units (the “preferred units”) representing limited partner interests in the Partnership with certain rights, preferences and privileges as are set forth in the Partnership’s Third Amended and Restated Agreement of Limited Partnership dated as of June 27, 2019 (the “Third Amended Partnership Agreement”). The purchase price for the preferred units sold pursuant to the Series A Purchase Agreement was $1.1040 per preferred unit, reflecting an 8% discount to the liquidation preference of each preferred unit, for an aggregate purchase price of $57.5 million. Senior Secured Notes Concurrently with the closing of the Preferred Offering, discussed above, the Partnership completed a private placement of $385.0 million of 9.875%/11.500% Senior Secured PIK Toggle Notes due 2024 (the “Senior Secured Notes”) of the Partnership to certain financial institutions (the “Notes Offering,” and collectively with the Preferred Offering, the “Recapitalization Transactions”) pursuant to the terms of an indenture dated June 27, 2019 by and among the Partnership, Cornerstone Family Services of West Virginia Subsidiary, Inc. (“Cornerstone” and, collectively with the Partnership, the “Issuers”), certain direct and indirect subsidiaries of the Partnership (the “Guarantors”), the initial purchasers party thereto and Wilmington Trust, National Association, as trustee (the “Indenture”). The net proceeds of the Recapitalization Transactions were used to fully repay the then-outstanding senior notes due in June 2021, retire the Partnership’s revolving credit facility due in May 2020 and pay the associated transaction expenses, with the remaining balance reserved for general corporate purposes. The Partnership is to pay quarterly interest at either a fixed rate of 9.875% per annum in cash or, at their periodic option through January 30, 2022, a fixed rate of 7.50% per annum in cash plus a The Senior Secured Notes will require cash interest payments at 9.875% for all interest periods after January 30, 2022. |
Proposed C-Corporation Conversion | Proposed C-Corporation Conversion On September 27, 2018, StoneMor GP LLC (the “general partner”) and the Partnership publicly announced a plan to convert from a master limited partnership structure to a more traditional C-Corporation structure. Accordingly, the general partner and the Partnership entered into a Merger and Reorganization Agreement (as amended to date, the “Merger Agreement”) with StoneMor GP Holdings and Hans Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the general partner, providing for a series of transactions and resulting in (i) the general partner converting into a Delaware corporation to be named “StoneMor Inc.” and (ii) Hans Merger Sub merging with and into the Partnership (the “Merger”) with the Partnership surviving and with StoneMor Inc. as its sole general partner, in each case, pursuant to the terms of the Merger Agreement (collectively, the “C-Corporation Conversion”). At the consummation of the Merger, which is anticipated to be no later than the end of the fourth quarter of 2019, the general partner will complete its transition to a new publicly traded Delaware corporation, StoneMor Inc. |
Going Concern and Uses and Sources of Liquidity | Going Concern and Uses and Sources of Liquidity The Partnership’s primary sources of liquidity are cash generated from operations and the remaining balance of the proceeds from the sale of the Senior Secured Notes. As a master limited partnership (“MLP”), the Partnership's primary cash requirements, in addition to normal operating expenses, are for capital expenditures, net contributions to the merchandise and perpetual care trust funds, debt service and cash distributions. In general, as part of its operating strategy, the Partnership expects to fund: • working capital deficits through available cash, including the remaining balance of the proceeds from the sale of the Senior Secured Notes, cash generated from operations and divestitures of non-core assets; • expansion capital expenditures, net contributions to the merchandise and perpetual care trust funds and debt service obligations through available cash, cash generated from operations or asset sales. Amounts contributed to the merchandise trust funds will be withdrawn at the time of the delivery of the product or service sold to which the contribution relates (see "Summary of Significant Accounting Policies" section below regarding revenue recognition), which will reduce the amount of additional borrowings or asset sales needed; and • any cash distributions the Partnership is permitted and determines to pay in accordance with its partnership agreement and maintenance capital expenditures through available cash and cash flows from operating activities. While the Partnership relies heavily on its available cash and cash flows from operating activities to execute its operational strategy and meet its financial commitments and other short-term financial needs, the Partnership cannot be certain that sufficient capital will be generated through operations or be available to the Partnership to the extent required and on acceptable terms. The Partnership has experienced negative financial trends, including use of cash in operating activities, which, when considered in the aggregate, raise substantial doubt about the Partnership’s ability to continue as a going concern. These negative financial trends include: • the Partnership has continued to incur net losses for the nine months ended September 30, 2019 and has an accumulated deficit and negative cash flows from operating activities as of September 30, 2019, due to an increased competitive environment, increased expenses due to the proposed C-Corporation Conversion and increases in professional fees and compliance costs; and • a decline in billings coupled with the increase in professional, compliance and consulting expenses tightened the Partnership's liquidity position and increased reliance on long-term financial obligations, which, in turn, eliminated the Partnership's ability to pay distributions. During 2018 and 2019, the Partnership implemented (and will continue to implement) various actions to improve profitability and cash flows to fund operations. A summary of these actions is as follows: • sold an aggregate of 52,083,333 of the Partnership’s preferred units, representing limited partner interests in the Partnership, for an aggregate purchase price of $57.5 million and completed a private placement of $385.0 million of the Senior Secured Notes ; • continue to manage recurring operating expenses and seek to limit non-recurring operating expenses over the next twelve-month period; and • identify and complete sales of select assets to provide supplemental liquidity. Based on the Partnership's forecasted operating performance, planned actions to improve profitability, cash flows and projected plans to file financial statements on a timely basis consistent with the debt covenants, the Partnership does not believe it is probable that the Partnership will breach the covenants under the Indenture for the next twelve-month period. However, there is no certainty that the Partnership's actual operating performance and cash flows will not be substantially different from forecasted results and no certainty the Partnership will not need amendments to the Indenture in the future and such amendments will be granted. Factors that could impact the significant assumptions used by the Partnership in assessing its ability to satisfy its financial covenants include the following: • operating performance not meeting reasonably expected forecasts; • failing to generate profitable sales; • failing to achieve cost reduction targets; • inability to achieve and capitalize on its divestiture strategy; • investments in the Partnership's trust funds experiencing significant declines due to factors outside its control; • inability to compete successfully with other cemeteries and funeral homes in the Partnership's markets; • the number of deaths in the Partnership's markets declining; and • the mix of funeral and cemetery revenues between burials and cremations. If the Partnership's planned, implemented and not yet implemented actions are not completed or implemented and cash savings are not realized, or the Partnership fails to improve its operating performance and cash flows or the Partnership is not able to comply with the covenants under the Indenture, the Partnership may be forced to limit its business activities, limit its ability to implement further modifications to its operations or limit the effectiveness of some actions that are included in its forecasts, amend its Indenture and/or seek other sources of capital, and the Partnership may be unable to continue as a going concern. Additionally, a failure to generate additional liquidity could negatively impact the Partnership's access to inventory or services that are important to the operation of the Partnership's business. Given the Partnership's level of cash and cash equivalents, to preserve capital resources and liquidity, the Board of Directors of the General Partner concluded that it was not in the best interest of unitholders to pay distributions to unitholders after the first quarter of 2017. In addition, the Indenture effectively prohibits the Partnership from making distributions to unitholders. Any of these events may have a material adverse effect on the Partnership's results of operations and financial condition. The ability of the Partnership to continue as a going concern is dependent upon achieving the action plans noted above. The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2019 were prepared on the basis of a going concern, which contemplates that the Partnership will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments, if any, that would be necessary should the Partnership be required to liquidate its assets. |
Use of Estimates | Use of Estimates The preparation of the Partnership’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions as described in its Amended Annual Report. These estimates and assumptions may affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Partnership considers all highly liquid investments purchased with an original maturity of three months or less from the time they are acquired to be cash equivalents. Cash and Cash Equivalents was $43.5 million and $18.1 million as of September 30, 2019 and December 31, 2018, respectively. |
Restricted Cash | Restricted Cash Cash that is restricted from withdrawal or use under the terms of certain contractual agreement is recorded as restricted cash. Restricted cash was $20.6 million as of September 30, 2019, primarily related to cash collateralization of the Partnership’s letters of credit and surety bonds. There was no restricted cash as of December 31, 2018. |
Revenues and Deferred Revenues | Revenues The Partnership's revenues are derived from contracts with customers through sale and delivery of death care products and services. Primary sources of revenue are derived from (1) cemetery and funeral home operations generated both at the time of death (“at-need”) and prior to the time of death (“pre-need”), which are classified on the unaudited condensed consolidated statements of operations as Interments, Merchandise and Services, (2) investment income, which includes income earned on assets maintained in perpetual care and merchandise trusts related to sales of cemetery and funeral home merchandise and services occurring prior to the time of death that are required to be maintained in the trust by state law and (3) interest earned on pre-need installment contracts. Investment income is presented within Investment and other for Cemetery revenue and Services for Funeral home revenue. Revenue is measured based on the consideration specified in a contract with a customer and is net of any sales incentives and amounts collected on behalf of third parties. Pre-need contracts are price guaranteed, providing for future merchandise and services at prices prevailing when the agreements are signed. The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Sales taxes assessed by a governmental authority are excluded from revenue. Deferred Revenues Revenues from the sale of services and merchandise as well as any investment income from the merchandise trusts is deferred until such time that the services are performed or the merchandise is delivered. In addition, for amounts deferred on new contracts and investment income and unrealized gains on our merchandise trusts, deferred revenues include deferred revenues from pre-need sales that were entered into by entities prior to the Partnership’s acquisition of those entities or the assets of those entities. The Partnership provides for a profit margin for these deferred revenues to account for the projected future costs of delivering products and providing services on pre-need contracts that the Partnership acquired through acquisition. These revenues and their associated costs are recognized when the related merchandise is delivered or services are performed and are presented on a gross basis on the unaudited condensed consolidated statements of operations. |
Accounts Receivable, Net of Allowance | Accounts Receivable, Net of Allowance The Partnership sells pre-need cemetery contracts whereby the customer enters into arrangements for future merchandise and services prior to the time of need. These sales are usually made using interest-bearing installment contracts not to exceed 60 months. The interest income is recorded as revenue when the interest amount is considered realizable and collectible, which typically coincides with cash payment. Interest income is not recognized until payments are collected in accordance with the contract. At the time of a pre-need sale, the Partnership records an account receivable in an amount equal to the total contract value less unearned finance income and any cash deposit paid, net of an estimated allowance for customer cancellations. The Partnership recognizes an allowance for cancellation of these receivables based upon its historical experience, which is recorded as a reduction in accounts receivable and a corresponding offset to deferred revenues. The Partnership recognizes an allowance for cancellation of receivables related to recognized contracts as an offset to revenue. Management evaluates customer receivables for impairment based upon its historical experience, including the age of the receivables and the customers’ payment histories |
Leases | Leases The Partnership leases a variety of assets throughout its organization, such as office space, funeral homes, warehouses and equipment. The Partnership has both operating and finance leases. The Partnership’s operating leases primarily include office space, funeral homes and equipment. The Partnership’s finance leases primarily consist of vehicles and certain IT equipment. The Partnership determines whether an arrangement is or contains a lease at the inception of the arrangement based on the facts and circumstances in each contract. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Partnership recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements with an initial term in excess of 12 months, the Partnership records the lease liability and Right of Use (“ROU”) asset at commencement date based upon the present value of the sum of the remaining minimum rental payments, which exclude executory costs. Certain adjustments to the ROU asset may be required for items such as initial direct costs paid or incentives received. Certain leases provide the Partnership with the option to renew for additional periods , with renewal terms that can extend the lease term for periods ranging from 1 to 30 years. The exercise of lease renewal options is at the Partnership’s sole discretion, and the Partnership is only including the renewal option in the lease term when the Partnership can be reasonably certain that the Partnership will exercise the additional options. As most of the Partnership’s leases do not provide an implicit rate, the Partnership uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Partnership evaluates the term of the lease, type of asset and its weighted average cost of capital to determine its incremental borrowing rate used to measure the ROU asset and lease liability . The Partnership calculates operating lease expense ratably over the lease term plus any reasonably assured renewal periods. The Partnership considers reasonably assured renewal options, fixed escalation provisions and residual value guarantees in its calculation. Leasehold improvements are amortized over the shorter of the lease term or asset life, which may include renewal periods where the renewal is reasonably assured, and are included in the determination of straight-line rent expense. The depreciable life of assets and leasehold improvements are generally limited by the expected lease term. The Partnership’s leases also typically have lease and non-lease components, which are generally accounted for separately and not included in the measurement of the ROU asset and lease liability. |
Net Loss per Common Unit | Net Loss per Common Unit Basic net loss attributable to common limited partners per unit is computed by dividing net loss attributable to common limited partners, which is determined after the deduction of the general partner’s interest, by the weighted average number of common limited partner units outstanding during the period. Net loss attributable to common limited partners is determined by deducting net loss attributable to participating securities, if applicable, and net loss attributable to the general partner’s units. The general partner’s interest in net loss is calculated on a quarterly basis based upon its units and incentive distributions to be distributed for the quarter, with a priority allocation of net income to the general partner’s incentive distributions, if any, in accordance with the partnership agreement and the remaining net loss allocated with respect to the general partner’s and limited partners’ ownership interests. The Partnership presents net loss per unit under the two-class method for MLP, which considers whether the incentive distributions of an MLP represent a participating security when considered in the calculation of earnings per unit under the two-class method. The two-class method considers whether the partnership agreement contains any contractual limitations concerning distributions to the incentive distribution rights that would impact the amount of earnings to allocate to the incentive distribution rights for each reporting period. If distributions are contractually limited to the incentive distribution rights’ share of currently designated available cash for distributions, as defined under the partnership agreement, undistributed earnings in excess of available cash should not be allocated to the incentive distribution rights. Under the two-class method, management believes the partnership agreement contractually limits cash distributions to available cash; therefore, undistributed earnings in excess of available cash are not allocated to the incentive distribution rights. The following is a reconciliation of net loss allocated to the common limited partners for purposes of calculating net loss attributable to common limited partners per unit (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net loss $ (42,652 ) $ (17,225 ) $ (99,584 ) $ (52,165 ) Less: Incentive distribution right (“IDR”) payments to general partner — — — — Net loss to allocate to general and limited partners (42,652 ) (17,225 ) (99,584 ) (52,165 ) General partner’s interest excluding IDRs (426 ) (179 ) (1,018 ) (543 ) Net loss attributable to common limited partners $ (42,226 ) $ (17,046 ) $ (98,566 ) $ (51,622 ) Diluted net loss attributable to common limited partners per unit is calculated by dividing net loss attributable to common limited partners, less income allocable to participating securities, by the sum of the weighted average number of common limited partner units outstanding and the dilutive effect of unit awards, as calculated by the treasury stock or if converted methods, as applicable. These awards consist of common units that are contingently issuable upon the satisfaction of certain vesting conditions and common units issuable upon the exercise of certain unit appreciation rights awards under the terms of the Partnership’s long-term incentive plans. The following table sets forth the reconciliation of the Partnership’s weighted average number of common limited partner units used to compute basic net loss attributable to common limited partners per unit with those used to compute diluted net loss attributable to common limited partners per unit (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Weighted average number of common limited partner units—basic 38,916 37,959 38,438 37,959 Effect of dilutive incentive awards ( 1) — — — — Weighted average number of common limited partner units—diluted 38,916 37,959 38,438 37,959 (1) For the three and nine months ended September 30, 2019, the diluted weighted average number of limited partner units outstanding presented on the unaudited condensed consolidated statement of operations does not include 563,183 units as their effects would be anti-dilutive. In addition, all outstanding Preferred Units are exempt for purposes of calculating the diluted weighted average number of common limited partner units, as their conversion is not based on meeting a contingency derived from the Partnership’s unit price. The Preferred Units are convertible upon the completion of the Rights Offering (defined herein), which occurred early in the fourth quarter of 2019. For further detail on the Rights Offering, see Note 17 Subsequent Events. For the three and nine months ended September 30, 2018, the diluted weighted average number of limited partner units outstanding presented on the unaudited condensed consolidated statement of operations does not include 560,839 units, as their effects would be anti-dilutive. |
Recently Issued Accounting Standard Updates | Recently Adopted Accounting Standards Leases The Partnership adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) ASU 2016-02 provides for certain practical expedients when adopting the guidance. The Partnership elected the package of practical expedients allowing the Partnership to not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases or initial direct costs for any expired or existing leases. The Partnership did not apply the hindsight practical expedient. The Partnership applied the land easements practical expedient allowing the Partnership to not assess whether any expired or existing land easements are or contain leases, if they were not previously accounted for as leases under the existing leasing guidance. Instead, the Partnership will continue to apply its existing accounting policies to historical land easements. The Partnership elected to apply the short-term lease exception; therefore, the Partnership did not record a ROU asset or corresponding lease liability for leases with a term of twelve months or less and instead recognized a single lease cost allocated over the lease term, generally on a straight-line basis. The Partnership is separating lease components from non-lease components, as it did not elect the applicable practical expedient. The Partnership has excluded maintenance, taxes and insurance costs from the calculation of the initial lease liability in the transition. Non-lease components are accounted for separately from the lease, recorded as maintenance, taxes and insurance and expensed as incurred. The Partnership adopted the new guidance on January 1, 2019 and as a result of the adoption, the Partnership recorded: • a $1.1 million reclassification from Intangible assets to Other assets for below market lease intangibles; • a $0.1 million and $0.2 million reclassification from Accounts payable and accrued liabilities and Other long-term liabilities, respectively, to Other assets for a deferred gain on a sale leaseback transaction; • a $0.3 million and $3.5 million reclassification from Accounts payable and accrued liabilities and Other long-term liabilities, respectively, to Other assets for a rent incentive; • a $15.3 million increase to Other assets for operating lease right-of-use assets; and • a $2.2 million and $13.1 million increase to Accounts payable and accrued liabilities and Other long-term liabilities, respectively, for operating lease liabilities. The foregoing adjustments r esulted in the creation of a net ROU asset of $12.3 million and operating lease liability of $15.3 million as of the adoption date. In connection with the adoption of these new lease standards, the Partnership implemented internal controls to ensure that its contracts are properly evaluated to determine applicability under ASU 2016-02 and that the Partnership properly applies ASU 2016-02 in accounting for and reporting on all its qualifying leases. Stock Compensation In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, Presentation In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of partners’ deficit for interim financial statements. Under the amendments, an analysis of changes in each caption of shareholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule was effective on November 5, 2018; as such, the Partnership used the new presentation of a condensed consolidated statement of Partners' deficit within its interim financial statements in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2019. Recently Issued Accounting Standard Updates - Not Yet Effective Credit Losses In June 2016, FASB issued ASU No. 2016-13, Credit Losses (Topic 326) Codification Improvements to Topic 326, Financial Instruments-Credit Losses , Financial Instruments-Credit Losses-Measured at Amortized Cost Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Financial Instruments-Credit Losses (Topic 326), Financial Instruments Variable Interest Entities In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement Fair Value Measurements Internal-Use Software In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract |
GENERAL (Tables)
GENERAL (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Reconciliation of Net Income (Loss) Allocated to Common Limited Partners | The following is a reconciliation of net loss allocated to the common limited partners for purposes of calculating net loss attributable to common limited partners per unit (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net loss $ (42,652 ) $ (17,225 ) $ (99,584 ) $ (52,165 ) Less: Incentive distribution right (“IDR”) payments to general partner — — — — Net loss to allocate to general and limited partners (42,652 ) (17,225 ) (99,584 ) (52,165 ) General partner’s interest excluding IDRs (426 ) (179 ) (1,018 ) (543 ) Net loss attributable to common limited partners $ (42,226 ) $ (17,046 ) $ (98,566 ) $ (51,622 ) |
Reconciliation of Partnership's Weighted Average Number of Common Limited Partner Units | The following table sets forth the reconciliation of the Partnership’s weighted average number of common limited partner units used to compute basic net loss attributable to common limited partners per unit with those used to compute diluted net loss attributable to common limited partners per unit (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Weighted average number of common limited partner units—basic 38,916 37,959 38,438 37,959 Effect of dilutive incentive awards ( 1) — — — — Weighted average number of common limited partner units—diluted 38,916 37,959 38,438 37,959 (1) For the three and nine months ended September 30, 2019, the diluted weighted average number of limited partner units outstanding presented on the unaudited condensed consolidated statement of operations does not include 563,183 units as their effects would be anti-dilutive. In addition, all outstanding Preferred Units are exempt for purposes of calculating the diluted weighted average number of common limited partner units, as their conversion is not based on meeting a contingency derived from the Partnership’s unit price. The Preferred Units are convertible upon the completion of the Rights Offering (defined herein), which occurred early in the fourth quarter of 2019. For further detail on the Rights Offering, see Note 17 Subsequent Events. For the three and nine months ended September 30, 2018, the diluted weighted average number of limited partner units outstanding presented on the unaudited condensed consolidated statement of operations does not include 560,839 units, as their effects would be anti-dilutive. |
ACCOUNTS RECEIVABLE, NET OF A_2
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Long Term Accounts Receivable, Net of Allowance | Long-term accounts receivable, net, consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Customer receivables $ 162,967 $ 167,017 Unearned finance income (17,254 ) (17,000 ) Allowance for bad debt (6,105 ) (4,941 ) Accounts receivable, net of allowance 139,608 145,076 Less: Current portion, net of allowance 61,470 57,928 Long-term portion, net of allowance $ 78,138 $ 87,148 |
Activity in Allowance for Bad Debt | Activity in the allowance for bad debt was as follows (in thousands): September 30, 2019 December 31, 2018 Balance, beginning of period $ 4,941 $ 19,795 Cumulative effect of accounting changes — (12,876 ) Provision for bad debt 5,380 7,358 Charge-offs, net (4,216 ) (9,336 ) Balance, end of period $ 6,105 $ 4,941 |
CEMETERY PROPERTY (Tables)
CEMETERY PROPERTY (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Schedule of Cemetery Property | Cemetery property consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Cemetery land $ 255,624 $ 255,708 Mausoleum crypts and lawn crypts 72,988 75,133 Cemetery property (1) $ 328,612 $ 330,841 (1) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Buildings and improvements $ 130,181 $ 129,971 Furniture and equipment 59,883 58,706 Funeral home land 14,185 14,185 Property and equipment, gross 204,249 202,862 Less: Accumulated depreciation (95,257 ) (90,146 ) Property and equipment, net of accumulated depreciation $ 108,992 $ 112,716 |
MERCHANDISE TRUSTS (Tables)
MERCHANDISE TRUSTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Reconciliation of Trust Activities | A reconciliation of the Partnership’s merchandise trust activities for the nine months ended September 30, 2019 and 2018 is presented below (in thousands): Nine months ended September 30, 2019 2018 Balance—beginning of period $ 488,248 $ 515,456 Contributions 40,440 49,762 Distributions (45,256 ) (53,321 ) Interest and dividends 22,537 20,486 Capital gain distributions 363 405 Realized gains and losses, net 2,063 (258 ) Other than temporary impairment (2,816 ) (11,977 ) Taxes (655 ) (337 ) Fees (3,206 ) (3,049 ) Unrealized change in fair value 17,811 2,860 Balance—end of period $ 519,529 $ 520,027 |
Cost and Market Value Associated with Assets Held in Trusts | The cost and market value associated with the assets held in the merchandise trusts as of September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 182,560 $ — $ — $ 182,560 Fixed maturities: U.S. governmental securities 2 488 10 (95 ) 403 Corporate debt securities 2 816 13 (116 ) 713 Total fixed maturities 1,304 23 (211 ) 1,116 Mutual funds—debt securities 1 117,566 4,937 (79 ) 122,424 Mutual funds—equity securities 1 47,346 3,035 (1 ) 50,380 Other investment funds ( 1) 130,952 2,410 (2,524 ) 130,838 Equity securities 1 13,293 1,175 (4 ) 14,464 Other invested assets 2 8,403 16 — 8,419 Total investments $ 501,424 $ 11,596 $ (2,819 ) $ 510,201 West Virginia Trust Receivable 9,328 — — 9,328 Total $ 510,752 $ 11,596 $ (2,819 ) $ 519,529 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have redemption periods ranging from 1 to 30 days, and private credit funds, which have lockup periods of one to seven years with three potential one year extensions at the discretion of the funds’ general partners. As of September 30, 2019, there were $63.3 million in unfunded investment commitments to the private credit funds, which are callable at any time. December 31, 2018 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 16,903 $ — $ — $ 16,903 Fixed maturities: U.S. governmental securities 2 392 — (147 ) 245 Corporate debt securities 2 1,311 29 (328 ) 1,012 Total fixed maturities 1,703 29 (475 ) 1,257 Mutual funds—debt securities 1 187,840 262 (2,645 ) 185,457 Mutual funds—equity securities 1 45,023 110 (18 ) 45,115 Other investment funds ( 1) 210,655 388 (7,784 ) 203,259 Equity securities 1 18,097 1,327 (213 ) 19,211 Other invested assets 2 8,398 2 (17 ) 8,383 Total investments $ 488,619 $ 2,118 $ (11,152 ) $ 479,585 West Virginia Trust Receivable 8,663 — — 8,663 Total $ 497,282 $ 2,118 $ (11,152 ) $ 488,248 |
Contractual Maturities of Debt Securities Held in Trusts | The contractual maturities of debt securities as of September 30, 2019 and December 31, 2018 were as follows below (in thousands): September 30, 2019 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ 112 $ 30 $ 246 $ 16 Corporate debt securities 96 598 18 — Total fixed maturities $ 208 $ 628 $ 264 $ 16 December 31, 2018 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ — $ 137 $ 108 $ — Corporate debt securities 68 873 55 16 Total fixed maturities $ 68 $ 1,010 $ 163 $ 16 |
Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Trusts | An aging of unrealized losses on the Partnership’s investments in debt and equity securities within the merchandise trusts as of September 30, 2019 and December 31, 2018 is presented below (in thousands): Less than 12 months 12 months or more Total September 30, 2019 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ 110 $ — $ 397 $ 95 $ 507 $ 95 Corporate debt securities 75 6 424 110 499 116 Total fixed maturities 185 6 821 205 1,006 211 Mutual funds—debt securities 15,178 79 — — 15,178 79 Mutual funds—equity securities 242 1 — — 242 1 Other investment funds 69,464 2,524 — — 69,464 2,524 Equity securities 5 4 — — 5 4 Other invested assets — — — — — — Total $ 85,074 $ 2,614 $ 821 $ 205 $ 85,895 $ 2,819 Less than 12 months 12 months or more Total December 31, 2018 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ — $ — $ 243 $ 147 $ 243 $ 147 Corporate debt securities 103 2 549 326 652 328 Total fixed maturities 103 2 792 473 895 475 Mutual funds—debt securities 46,005 2,011 1,195 634 47,200 2,645 Mutual funds—equity securities 131 18 — — 131 18 Other investment funds 169,929 7,784 — — 169,929 7,784 Equity securities — — 597 213 597 213 Other invested assets — 4 790 13 790 17 Total $ 216,168 $ 9,819 $ 3,374 $ 1,333 $ 219,542 $ 11,152 |
PERPETUAL CARE TRUSTS (Tables)
PERPETUAL CARE TRUSTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule Of Available For Sale Securities [Line Items] | |
Reconciliation of Trust Activities | A reconciliation of the Partnership’s merchandise trust activities for the nine months ended September 30, 2019 and 2018 is presented below (in thousands): Nine months ended September 30, 2019 2018 Balance—beginning of period $ 488,248 $ 515,456 Contributions 40,440 49,762 Distributions (45,256 ) (53,321 ) Interest and dividends 22,537 20,486 Capital gain distributions 363 405 Realized gains and losses, net 2,063 (258 ) Other than temporary impairment (2,816 ) (11,977 ) Taxes (655 ) (337 ) Fees (3,206 ) (3,049 ) Unrealized change in fair value 17,811 2,860 Balance—end of period $ 519,529 $ 520,027 |
Cost and Market Value Associated with Assets Held in Trusts | The cost and market value associated with the assets held in the merchandise trusts as of September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 182,560 $ — $ — $ 182,560 Fixed maturities: U.S. governmental securities 2 488 10 (95 ) 403 Corporate debt securities 2 816 13 (116 ) 713 Total fixed maturities 1,304 23 (211 ) 1,116 Mutual funds—debt securities 1 117,566 4,937 (79 ) 122,424 Mutual funds—equity securities 1 47,346 3,035 (1 ) 50,380 Other investment funds ( 1) 130,952 2,410 (2,524 ) 130,838 Equity securities 1 13,293 1,175 (4 ) 14,464 Other invested assets 2 8,403 16 — 8,419 Total investments $ 501,424 $ 11,596 $ (2,819 ) $ 510,201 West Virginia Trust Receivable 9,328 — — 9,328 Total $ 510,752 $ 11,596 $ (2,819 ) $ 519,529 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have redemption periods ranging from 1 to 30 days, and private credit funds, which have lockup periods of one to seven years with three potential one year extensions at the discretion of the funds’ general partners. As of September 30, 2019, there were $63.3 million in unfunded investment commitments to the private credit funds, which are callable at any time. December 31, 2018 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 16,903 $ — $ — $ 16,903 Fixed maturities: U.S. governmental securities 2 392 — (147 ) 245 Corporate debt securities 2 1,311 29 (328 ) 1,012 Total fixed maturities 1,703 29 (475 ) 1,257 Mutual funds—debt securities 1 187,840 262 (2,645 ) 185,457 Mutual funds—equity securities 1 45,023 110 (18 ) 45,115 Other investment funds ( 1) 210,655 388 (7,784 ) 203,259 Equity securities 1 18,097 1,327 (213 ) 19,211 Other invested assets 2 8,398 2 (17 ) 8,383 Total investments $ 488,619 $ 2,118 $ (11,152 ) $ 479,585 West Virginia Trust Receivable 8,663 — — 8,663 Total $ 497,282 $ 2,118 $ (11,152 ) $ 488,248 |
Contractual Maturities of Debt Securities Held in Trusts | The contractual maturities of debt securities as of September 30, 2019 and December 31, 2018 were as follows below (in thousands): September 30, 2019 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ 112 $ 30 $ 246 $ 16 Corporate debt securities 96 598 18 — Total fixed maturities $ 208 $ 628 $ 264 $ 16 December 31, 2018 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ — $ 137 $ 108 $ — Corporate debt securities 68 873 55 16 Total fixed maturities $ 68 $ 1,010 $ 163 $ 16 |
Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Trusts | An aging of unrealized losses on the Partnership’s investments in debt and equity securities within the merchandise trusts as of September 30, 2019 and December 31, 2018 is presented below (in thousands): Less than 12 months 12 months or more Total September 30, 2019 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ 110 $ — $ 397 $ 95 $ 507 $ 95 Corporate debt securities 75 6 424 110 499 116 Total fixed maturities 185 6 821 205 1,006 211 Mutual funds—debt securities 15,178 79 — — 15,178 79 Mutual funds—equity securities 242 1 — — 242 1 Other investment funds 69,464 2,524 — — 69,464 2,524 Equity securities 5 4 — — 5 4 Other invested assets — — — — — — Total $ 85,074 $ 2,614 $ 821 $ 205 $ 85,895 $ 2,819 Less than 12 months 12 months or more Total December 31, 2018 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ — $ — $ 243 $ 147 $ 243 $ 147 Corporate debt securities 103 2 549 326 652 328 Total fixed maturities 103 2 792 473 895 475 Mutual funds—debt securities 46,005 2,011 1,195 634 47,200 2,645 Mutual funds—equity securities 131 18 — — 131 18 Other investment funds 169,929 7,784 — — 169,929 7,784 Equity securities — — 597 213 597 213 Other invested assets — 4 790 13 790 17 Total $ 216,168 $ 9,819 $ 3,374 $ 1,333 $ 219,542 $ 11,152 |
Variable Interest Entity, Primary Beneficiary | Perpetual care trusts | |
Schedule Of Available For Sale Securities [Line Items] | |
Reconciliation of Trust Activities | A reconciliation of the Partnership’s perpetual care trust activities for the nine months ended September 30, 2019 and 2018 is presented below (in thousands): Nine months ended September 30, 2019 2018 Balance—beginning of period $ 330,562 $ 339,928 Contributions 5,520 10,795 Distributions (16,709 ) (13,790 ) Interest and dividends 15,621 17,416 Capital gain distributions 1,134 612 Realized gains and losses, net 2,303 353 Other than temporary impairment (1,297 ) (7,449 ) Taxes (634 ) (292 ) Fees (2,388 ) (4,087 ) Unrealized change in fair value 8,916 1,536 Balance—end of period $ 343,028 $ 345,022 |
Cost and Market Value Associated with Assets Held in Trusts | The cost and market value associated with the assets held in the perpetual care trusts as of September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 87,453 $ — $ — $ 87,453 Fixed maturities: U.S. governmental securities 2 1,081 44 (54 ) 1,071 Corporate debt securities 2 2,025 21 (145 ) 1,901 Total fixed maturities 3,106 65 (199 ) 2,972 Mutual funds—debt securities 1 70,425 2,730 (59 ) 73,096 Mutual funds—equity securities 1 16,685 1,528 (18 ) 18,195 Other investment funds ( 1) 143,050 7,143 (5,024 ) 145,169 Equity securities 1 14,968 1,177 (18 ) 16,127 Other invested assets 2 16 — — 16 Total investments $ 335,703 $ 12,643 $ (5,318 ) $ 343,028 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have a redemption period ranging from 1 to 30 days, and private credit funds, which have lockup periods ranging from one to seven years with three potential one year extensions at the discretion of the funds’ general partners. As of September 30, 2019 there were $41.2 million in unfunded investment commitments to the private credit funds, which are callable at any time. December 31, 2018 Fair Value Hierarchy Level Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments 1 $ 12,835 $ — $ — $ 12,835 Fixed maturities: U.S. governmental securities 2 960 4 (121 ) 843 Corporate debt securities 2 4,883 161 (321 ) 4,723 Total fixed maturities 5,843 165 (442 ) 5,566 Mutual funds—debt securities 1 108,451 227 (837 ) 107,841 Mutual funds—equity securities 1 19,660 304 (142 ) 19,822 Other investment funds ( 1) 165,284 3,039 (4,607 ) 163,716 Equity securities 1 20,025 826 (145 ) 20,706 Other invested assets 2 56 20 — 76 Total investments $ 332,154 $ 4,581 $ (6,173 ) $ 330,562 (1) Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have a redemption period ranging from 1 to 30 days, and private credit funds, which have lockup periods ranging from two to eight years with three potential one year extensions at the discretion of the funds’ general partners. As of December 31, 2018 there were $94.5 million in unfunded investment commitments to the private credit funds, which are callable at any time. |
Contractual Maturities of Debt Securities Held in Trusts | The contractual maturities of debt securities as of September 30, 2019 and December 31, 2018, were as follows below (in thousands): September 30, 2019 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ 60 $ 70 $ 821 $ 119 Corporate debt securities 203 1,536 163 — Total fixed maturities $ 263 $ 1,606 $ 984 $ 119 December 31, 2018 Less than 1 year 1 year through 5 years 6 years through 10 years More than 10 years U.S. governmental securities $ — $ 416 $ 395 $ 32 Corporate debt securities 705 3,702 265 51 Total fixed maturities $ 705 $ 4,118 $ 660 $ 83 |
Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Trusts | An aging of unrealized losses on the Partnership’s investments in debt and equity securities within the perpetual care trusts as of September 30, 2019 and December 31, 2018 is presented below (in thousands): Less than 12 months 12 months or more Total September 30, 2019 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ — $ — $ 1,021 $ 54 $ 1,021 $ 54 Corporate debt securities 76 45 1,889 100 1,965 145 Total fixed maturities 76 45 2,910 154 2,986 199 Mutual funds—debt securities 11,348 59 3 — 11,351 59 Mutual funds—equity securities 505 18 — — 505 18 Other investment funds 67,147 5,024 — — 67,147 5,024 Equity securities 176 18 — — 176 18 Total $ 79,252 $ 5,164 $ 2,913 $ 154 $ 82,165 $ 5,318 Less than 12 months 12 months or more Total December 31, 2018 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturities: U.S. governmental securities $ — $ — $ 790 $ 121 $ 790 $ 121 Corporate debt securities 405 15 2,902 306 3,307 321 Total fixed maturities 405 15 3,692 427 4,097 442 Mutual funds—debt securities 21,867 591 2,814 246 24,681 837 Mutual funds—equity securities 1,382 141 — 1 1,382 142 Other investment funds 101,536 4,607 — — 101,536 4,607 Equity securities 241 16 583 129 824 145 Total $ 125,431 $ 5,370 $ 7,089 $ 803 $ 132,520 $ 6,173 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Outstanding Debt | Total debt consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 9.875%/11.500% Senior Secured PIK Toggle Notes, due June 2024 376,166 $ — 7.875% Senior Notes, due June 2021 — 173,613 Credit facility — 155,739 Notes payable—acquisition debt — 92 Insurance and vehicle financing 790 1,294 Less deferred financing costs, net of accumulated amortization (14,280 ) (9,692 ) Total debt 362,676 321,046 Less current maturities (503 ) (798 ) Total long-term debt $ 362,173 $ 320,248 |
Schedule of Consolidated Interest Coverage Ratio | The Indenture includes financial covenants pursuant to which the Issuers will not permit: • the Operating Cash Flow Amount for the six months ending December 31, 2019 to be less than $20.0 million; • the ratio of the sum of the Operating Cash Flow Amount plus Cash Interest Expense to Cash Interest Expense, or the Consolidated Interest Coverage Ratio, for the nine months ended March 31, 2020 and the twelve months ending as of each date from June 30, 2020 onwards, as set forth below, to be less than: March 31, 2020 0.40x June 30, 2020 0.75x September 30, 2020 1.00x December 31, 2020 1.15x March 31, 2021 1.25x June 30, 2021 1.30x September 30, 2021 1.35x December 31, 2021 1.45x March 31, 2022 and each quarter end thereafter 1.50x |
DEFERRED REVENUES AND COSTS (Ta
DEFERRED REVENUES AND COSTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Deferred Revenues and Related Costs | Deferred revenues and related costs consisted of the following at the dates indicated (in thousands): September 30, 2019 December 31, 2018 Deferred contract revenues $ 830,038 $ 830,602 Deferred merchandise trust revenue 104,740 92,718 Deferred merchandise trust unrealized gains (losses) 8,777 (9,034 ) Deferred revenues $ 943,555 $ 914,286 Deferred selling and obtaining costs $ 113,601 $ 112,660 |
Schedule of Customer Contract Liabilities, Net | The components of the customer contract liabilities, net in the Partnership’s consolidated balance sheets at September 30, 2019 and December 31, 2018 were as follows (in thousands): September 30, 2019 December 31, 2018 Customer contract liabilities $ 972,767 $ 937,708 Amounts due from customers for unfulfilled performance obligations on cancellable pre-need contracts (29,212 ) (23,422 ) Customer contract liabilities, net $ 943,555 $ 914,286 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Fixed Rent for Cemeteries | In connection with the Partnership’s 2014 lease and management agreements with the Archdiocese of Philadelphia, it has committed to pay aggregate fixed rent of $36.0 million in the following amounts: Lease Years 1-5 (May 28, 2014-May 31, 2019) None Lease Years 6-20 (June 1, 2019-May 31, 2034) $1,000,000 per Lease Year Lease Years 21-25 (June 1, 2034-May 31, 2039) $1,200,000 per Lease Year Lease Years 26-35 (June 1, 2039-May 31, 2049) $1,500,000 per Lease Year Lease Years 36-60 (June 1, 2049-May 31, 2074) None |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule of Components of Leases | The Partnership has the following balances recorded on its unaudited condensed consolidated balance sheet related to leases: September 30, 2019 Operating $ 11,321 Finance 6,211 Total ROU assets ( 1) $ 17,532 Liabilities: Current Operating $ 2,080 Finance 1,236 Long-term Operating 12,246 Finance 4,656 Total lease liabilities ( 2) $ 20,218 (1) (2) The Partnership’s current lease liabilities and long-term are presented within Accounts payable and accrued liabilities and Other long-term liabilities, respectively in its unaudited condensed consolidated balance sheet. |
Components of Lease Expense | The components of lease expense were as follows: Nine months ended September 30, 2019 Lease cost Classification Operating lease costs General and administrative expense $ 2,687 Finance lease costs Amortization of leased assets Depreciation and Amortization 899 Interest on lease liabilities Interest expense 370 Variable lease costs General and administrative expense — Short-term lease costs General and administrative expense — Net Lease costs $ 3,956 (1) The Partnership does not have any short-term leases with lease terms greater than one month. |
Schedule of Minimum Lease Commitments Remaining Under the Partnerships Operating Lease and Capital Lease, per ASC 840 | Minimum lease commitments remaining under the Partnership’s operating leases and capital leases, per ASC 840, Leases, Year ending December 31, Operating Capital 2019 $ 4,349 $ 1,499 2020 2,765 1,196 2021 2,130 949 2022 1,539 558 2023 1,184 89 Thereafter 5,737 — Total $ 17,704 $ 4,291 Less: Interest (875 ) Present value of lease liabilities $ 3,416 |
ASC 842 | |
Schedule of Maturities the Partnership's of Lease liabilities, per ASC 842 | Maturities of the Partnership’s lease labilities as of September 30, 2019, per ASC 842, Leases, Year ending December 31, Operating Finance 2019 $ 867 $ 484 2020 3,320 1,761 2021 2,830 1,922 2022 2,532 1,978 2023 2,279 763 Thereafter 8,495 43 Total $ 20,323 $ 6,951 Less: Interest 5,997 1,059 Present value of lease liabilities $ 14,326 $ 5,892 |
SUPPLEMENTAL CONDENSED CONSOL_2
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Balance Sheets | CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED) September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents, excluding restricted cash $ — $ — $ 42,066 $ 1,449 $ — $ 43,515 Restricted cash — — 20,580 — — 20,580 Other current assets — 3,470 69,812 11,966 — 85,248 Total current assets — 3,470 132,458 13,415 — 149,343 Long-term accounts receivable — 2,906 64,918 10,314 — 78,138 Cemetery and funeral home property and equipment — 696 404,948 31,960 — 437,604 Merchandise trusts — — — 519,529 — 519,529 Perpetual care trusts — — — 343,028 — 343,028 Deferred selling and obtaining costs — 5,580 90,236 17,785 — 113,601 Intangible assets — — 187 56,375 — 56,562 Other assets — — 29,939 2,779 — 32,718 Investments in and amounts due from affiliates eliminated upon consolidation — — 649,920 — (649,920 ) — Total assets $ — $ 12,652 $ 1,372,606 $ 995,185 $ (649,920 ) $ 1,730,523 Liabilities, Redeemable Convertible Preferred Units and Partners’ Capital (Deficit) Current liabilities — 150 63,418 1,520 — 65,088 Long-term debt, net of deferred financing costs — — 362,173 — — 362,173 Deferred revenues — 32,926 797,538 113,091 — 943,555 Perpetual care trust corpus — — — 343,028 — 343,028 Other long-term liabilities — — 46,820 16,384 — 63,204 Investments in and amounts due to affiliates eliminated upon consolidation 46,525 259,737 — 570,954 (877,216 ) — Total liabilities 46,525 292,813 1,269,949 1,044,977 (877,216 ) 1,777,048 Redeemable convertible preferred units 57,500 — — — — 57,500 Partners’ capital (deficit) (104,025 ) (280,161 ) 102,657 (49,792 ) 227,296 (104,025 ) Total liabilities, redeemable convertible preferred units and partners’ capital (deficit) $ — $ 12,652 $ 1,372,606 $ 995,185 $ (649,920 ) $ 1,730,523 CONSOLIDATING BALANCE SHEET December 31, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents, excluding restricted cash $ — $ — $ 16,298 $ 1,849 $ — $ 18,147 Restricted cash — — — — — — Other current assets — 3,718 64,924 11,527 — 80,169 Total current assets — 3,718 81,222 13,376 — 98,316 Long-term accounts receivable — 3,118 71,708 12,322 — 87,148 Cemetery and funeral home property and equipment — 806 409,201 33,550 — 443,557 Merchandise trusts — — — 488,248 — 488,248 Perpetual care trusts — — — 330,562 — 330,562 Deferred selling and obtaining costs — 5,511 88,705 18,444 — 112,660 Goodwill and intangible assets — — 25,676 60,607 — 86,283 Other assets — — 19,403 2,924 — 22,327 Investments in and amounts due from affiliates eliminated upon consolidation 61,875 (586 ) 539,997 — (601,286 ) — Total assets $ 61,875 $ 12,567 $ 1,235,912 $ 960,033 $ (601,286 ) $ 1,669,101 Liabilities, Redeemable Convertible Preferred Units and Partners’ Capital (Deficit) Current liabilities $ — $ 184 $ 60,216 $ 1,400 $ — $ 61,800 Long-term debt, net of deferred financing costs 68,453 105,160 146,635 — — 320,248 Deferred revenues — 32,147 770,337 111,802 — 914,286 Perpetual care trust corpus — — — 330,562 — 330,562 Other long-term liabilities — — 33,553 15,230 — 48,783 Due to affiliates — — 173,613 543,543 (717,156 ) — Total liabilities 68,453 137,491 1,184,354 1,002,537 (717,156 ) 1,675,679 Redeemable convertible preferred units — — — — — — Partners’ capital (deficit) (6,578 ) (124,924 ) 51,556 (42,502 ) 115,870 (6,578 ) Total liabilities, redeemable convertible preferred units and partners’ capital (deficit) $ 61,875 $ 12,567 $ 1,235,910 $ 960,035 $ (601,286 ) $ 1,669,101 |
Condensed Consolidating Statements of Operations | CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 1,257 $ 61,520 $ 12,154 $ (1,780 ) $ 73,151 Total costs and expenses — (3,336 ) (64,596 ) (13,440 ) 1,780 (79,592 ) Other loss — — (129 ) — — (129 ) Net loss from equity investment in subsidiaries (42,652 ) (33,050 ) — . 75,702 — Interest expense — — (12,486 ) (279 ) — (12,765 ) Loss on debt extinguishment — — — — — — Loss on impairment of goodwill — — (24,206 ) (656 ) — (24,862 ) Income (loss) from continuing operations before income taxes (42,652 ) (35,129 ) (39,897 ) (2,221 ) 75,702 (44,197 ) Income tax benefit — — 1,545 — — 1,545 Net income (loss) $ (42,652 ) $ (35,129 ) $ (38,352 ) $ (2,221 ) $ 75,702 $ (42,652 ) Three Months Ended September 30, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 1,513 $ 61,254 $ 12,116 $ (1,698 ) 73,185 Total costs and expenses — (3,192 ) (68,979 ) (12,728 ) 1,698 (83,201 ) Other income — — 702 — — 702 Net loss from equity investment in subsidiaries (15,867 ) (13,280 ) — — 29,147 — Interest expense (1,358 ) (2,087 ) (3,935 ) (258 ) (7,638 ) Income (loss) from continuing operations before income taxes (17,225 ) (17,046 ) (10,958 ) (870 ) 29,147 (16,952 ) Income tax expense — — (273 ) — — (273 ) Net income (loss) $ (17,225 ) $ (17,046 ) $ (11,231 ) $ (870 ) $ 29,147 $ (17,225 ) Nine Months Ended September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 4,260 $ 187,021 $ 36,354 $ (4,520 ) $ 223,115 Total costs and expenses — (11,894 ) (197,511 ) (40,793 ) 4,520 (245,678 ) Other loss — — (1,475 ) (2,083 ) — (3,558 ) Net loss from equity investment in subsidiaries (94,405 ) (74,333 ) — — 168,738 — Interest expense (4,241 ) (5,909 ) (24,311 ) (821 ) — (35,282 ) Loss on debt extinguishment (938 ) (1,441 ) (6,099 ) — — (8,478 ) Loss on impairment of goodwill — — (24,206 ) (656 ) — (24,862 ) Income (loss) from continuing operations before income taxes (99,584 ) (89,317 ) (66,581 ) (7,999 ) 168,738 (94,743 ) Income tax expense — — (4,841 ) — — (4,841 ) Net income (loss) $ (99,584 ) $ (89,317 ) $ (71,422 ) $ (7,999 ) $ 168,738 $ (99,584 ) Nine Months Ended September 30, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Total revenues $ — $ 4,563 $ 196,638 $ 38,390 $ (6,890 ) $ 232,701 Total costs and expenses — (10,278 ) (214,804 ) (41,289 ) 6,890 (259,481 ) Other loss — — (4,503 ) — — (4,503 ) Net loss from equity investment in subsidiaries (48,090 ) (40,382 ) — — 88,472 — Interest expense (4,075 ) (6,261 ) (11,755 ) (767 ) — (22,858 ) Income (loss) from continuing operations before income taxes (52,165 ) (52,358 ) (34,424 ) (3,666 ) 88,472 (54,141 ) Income tax benefit — — 1,976 — — 1,976 Net income (loss) $ (52,165 ) $ (52,358 ) $ (32,448 ) $ (3,666 ) $ 88,472 $ (52,165 ) |
Condensed Consolidating Statement of Cash Flows | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, 2019 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net cash used in (provided by) operating activities $ — $ 212 $ (16,712 ) $ (105 ) $ (10,150 ) $ (26,755 ) Cash Flows From Investing Activities: Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales — (188 ) (4,158 ) (147 ) — (4,493 ) Payments to affiliates (57,500 ) — — — 57,500 — Net cash used in investing activities (57,500 ) (188 ) (4,158 ) (147 ) 57,500 (4,493 ) Cash Flows From Financing Activities: Cash distributions — — — — — — Payments from affiliates — — 47,350 — (47,350 ) — Proceeds from issuance of redeemable convertible preferred units, net 57,500 — — — — 57,500 Net borrowings and repayments of debt — (24 ) 38,517 (148 ) — 38,345 Other financing activities — — (18,649 ) — — (18,649 ) Net cash provided by (used in) financing activities 57,500 (24 ) 67,218 (148 ) (47,350 ) 77,196 Net increase (decrease) in cash and cash equivalents and restricted cash — — 46,348 (400 ) — 45,948 Cash and cash equivalents and restricted cash— Beginning of period — — 16,298 1,849 — 18,147 Cash and cash equivalents and restricted cash— End of period $ — $ — $ 62,646 $ 1,449 $ — $ 64,095 Nine Months Ended September 30, 2018 Parent Subsidiary Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ — $ 363 $ 29,462 $ (78 ) $ (10,336 ) $ 19,411 Cash Flows From Investing Activities: Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales — (363 ) (9,888 ) (626 ) — (10,877 ) Net cash used in investing activities — (363 ) (9,888 ) (626 ) — (10,877 ) Cash Flows From Financing Activities: Cash distributions — — — — — — Payments to affiliates — — (10,336 ) — 10,336 — Proceeds from issuance of redeemable convertible preferred units, net — — — — — — Net borrowings and repayments of debt — — (4,044 ) — — (4,044 ) Other financing activities — — (3,268 ) — — (3,268 ) Net cash (used in) provided by financing activities — — (17,648 ) — 10,336 (7,312 ) Net increase (decrease) in cash and cash equivalents and restricted cash — — 1,926 (704 ) — 1,222 Cash and cash equivalents and restricted cash—Beginning of period — — 4,216 2,605 — 6,821 Cash and cash equivalents and restricted cash—End of period $ — $ — $ 6,142 $ 1,901 $ — $ 8,043 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | The following tables present financial information with respect to the Partnership’s segments (in thousands). Corporate costs represent those not directly associated with an operating segment, such as corporate overhead, interest expense and income taxes. Corporate assets primarily consist of cash and cash equivalents and restricted cash . Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 STATEMENT OF OPERATIONS DATA: Cemetery Operations: Revenues $ 60,750 $ 61,405 $ 184,288 $ 191,328 Operating costs and expenses (54,681 ) (57,440 ) (166,777 ) (176,925 ) Depreciation and amortization (1,853 ) (1,858 ) (5,735 ) (6,043 ) Segment operating profit $ 4,216 $ 2,107 $ 11,776 $ 8,360 Funeral Home Operations: Revenues 12,401 11,780 38,827 41,373 Operating costs and expenses (10,669 ) (10,148 ) (32,636 ) (33,835 ) Depreciation and amortization (602 ) (652 ) (1,788 ) (2,066 ) Segment operating profit $ 1,130 $ 980 $ 4,403 $ 5,472 Reconciliation of segment operating profit to net loss: Cemetery Operations 4,216 2,107 11,776 8,360 Funeral Home Operations 1,130 980 4,403 5,472 Total segment profit 5,346 3,087 16,179 13,832 Corporate overhead (11,595 ) (12,876 ) (38,145 ) (39,868 ) Corporate depreciation and amortization (192 ) (227 ) (597 ) (744 ) Other gains (losses), net (129 ) 702 (3,558 ) (4,503 ) Loss on debt extinguishment — — (8,478 ) — Loss on impairment of goodwill (24,862 ) — (24,862 ) Interest expense (12,765 ) (7,638 ) (35,282 ) (22,858 ) Income tax benefit (expense) 1,545 (273 ) (4,841 ) 1,976 Net loss $ (42,652 ) $ (17,225 ) $ (99,584 ) $ (52,165 ) CASH FLOW DATA: Capital expenditures: Cemetery Operations $ 411 $ 2,105 $ 4,222 $ 9,378 Funeral Home Operations 465 246 1,447 465 Corporate 29 187 74 321 Total capital expenditures $ 905 $ 2,538 $ 5,743 $ 10,164 September 30, 2019 December 31, 2018 BALANCE SHEET DATA: Assets: Cemetery Operations $ 1,507,873 $ 1,508,667 Funeral Home Operations 146,708 136,064 Corporate 75,942 24,370 Total assets $ 1,730,523 $ 1,669,101 Goodwill: Cemetery Operations $ — $ 24,862 |
SUPPLEMENTAL CONSOLIDATED CAS_2
SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The tables presented below provide supplemental information to the unaudited condensed consolidated statements of cash flows regarding contract origination and maturity activity included in the pertinent captions on the Partnership’s unaudited condensed consolidated statements of cash flows (in thousands): Nine months ended September 30, 2019 2018 Accounts Receivable Pre-need/at-need contract originations (sales on credit) (88,296 ) $ (95,267 ) Cash receipts from sales on credit (post-origination) 73,991 100,841 Changes in accounts receivable, net of allowance $ (14,305 ) $ 5,574 Customer Contract Liabilities Deferrals: Cash receipts from customer deposits at origination, net of refunds $ 107,847 $ 114,132 Withdrawals of realized income from merchandise trusts during the period 6,699 13,815 Pre-need/at-need contract originations (sales on credit) 88,296 95,267 Undistributed merchandise trust investment earnings, net 8,367 357 Recognition: Merchandise trust investment income, net withdrawn as of end of period (6,985 ) (7,211 ) Recognized maturities of customer contracts collected as of end of period (155,915 ) (137,265 ) Recognized maturities of customer contracts uncollected as of end of period (24,449 ) (38,734 ) Changes in customer contract liabilities $ 23,860 $ 40,361 |
GENERAL - Additional Informatio
GENERAL - Additional Information (Detail) $ / shares in Units, $ in Thousands | May 10, 2019USD ($) | Sep. 30, 2019USD ($)PropertyStateshares | Jun. 27, 2019USD ($)$ / sharesshares | Mar. 31, 2019 | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Management lease loss | $ (2,100) | |||||
Preferred unit, aggregate purchase price | 57,500 | |||||
Cash and cash equivalents | 43,515 | $ 18,147 | ||||
Restricted cash | $ 20,600 | $ 0 | ||||
Lease renewal term description | Certain leases provide the Partnership with the option to renew for additional periods, with renewal terms that can extend the lease term for periods ranging from 1 to 30 years. | |||||
Operating lease ROU asset | $ 11,321 | |||||
ASC 842 | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Reclassification from Intangible assets to other assets for below market lease intangibles | $ 1,100 | |||||
Reclassification from accounts payable and accrued liabilities to other assets for deferred gain on sale leaseback transaction | 100 | |||||
Reclassification from other long term liabilities to other assets for deferred gain on sale leaseback transaction | 200 | |||||
Reclassification from accounts payable and accrued liabilities to other assets for rent | 300 | |||||
Reclassification from other long term Liabilities to other assets for rent | 3,500 | |||||
Increase in other assets for operating lease right of use assets | 15,300 | |||||
Increase in accounts payable and accrued liabilities for operating lease liabilities | 2,200 | |||||
Increase in other long term liabilities for operating lease liabilities. | 13,100 | |||||
Operating lease ROU asset | 12,300 | |||||
Operating lease liability | $ 14,326 | $ 15,300 | ||||
Minimum | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Lease renewal term | 1 year | |||||
Maximum | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Liquid investments purchased with an original maturity | 3 months | |||||
Product sales, payment term | 60 months | |||||
Lease renewal term | 30 years | |||||
Senior Secured Notes | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Long-term debt, gross | $ 376,166 | |||||
Fixed interest rate to be paid per annum in cash plus | 9.875% | |||||
Senior Secured Notes | Option Through January 30, 2022 - Payable in Kind | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Debt instrument | 4.00% | 4.00% | ||||
Senior Secured Notes | Private Placement | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Long-term debt, gross | $ 385,000 | |||||
Senior Secured Notes | Private Placement | 9.875% notes, due 2024 | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Debt instrument | 9.875% | |||||
Senior Secured Notes | Private Placement | 11.500% notes, due 2024 | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Debt instrument | 11.50% | |||||
Senior Notes | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Preferred units, sold | shares | 52,083,333 | |||||
Preferred unit, aggregate purchase price | $ 57,500 | |||||
Senior Notes | Private Placement | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Long-term debt, gross | $ 385,000 | |||||
Series A Purchase Agreement | Series A Redeemable Convertible Preferred Unit | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Preferred units, sold | shares | 52,083,333 | |||||
Preferred unit sold, price per share | $ / shares | $ 1.1040 | |||||
Preferred unit, liquidation preference discount percentage | 8.00% | |||||
Preferred unit, aggregate purchase price | $ 57,500 | |||||
Other Losses, Net | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Management lease loss | $ 2,100 | |||||
StoneMor Operating LLC | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Ownership percentage subsidiaries by the parent | 100.00% | 100.00% | ||||
Cemetery | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 30 | |||||
Cemetery | Consolidated Properties | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 16 | |||||
Cemetery | Unconsolidated Properties | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 14 | |||||
US and Puerto Rico | Cemetery | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 321 | |||||
Number of states | State | 27 | |||||
US and Puerto Rico | Cemetery | Wholly Owned Properties | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 291 | |||||
US and Puerto Rico | Cemetery | Managed Properties | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 30 | |||||
US and Puerto Rico | Funeral Home | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 89 | |||||
Number of states | State | 17 | |||||
US and Puerto Rico | Funeral Home | Cemetery Property | ||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||||
Number of operating locations | Property | 42 |
GENERAL - Reconciliation of Net
GENERAL - Reconciliation of Net Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||||||
Net loss | $ (42,652) | $ (34,398) | $ (22,534) | $ (17,225) | $ (17,017) | $ (17,923) | $ (99,584) | $ (52,165) |
Less: Incentive distribution right (“IDR”) payments to general partner | 0 | 0 | ||||||
Net loss to allocate to general and limited partners | (42,652) | (17,225) | (99,584) | (52,165) | ||||
General partner’s interest excluding IDRs | (426) | (179) | (1,018) | (543) | ||||
Limited partners' interest | $ (42,226) | $ (17,046) | $ (98,566) | $ (51,622) |
GENERAL - Reconciliation of Par
GENERAL - Reconciliation of Partnership's Weighted Average Number of Common Limited Partner Units (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Weighted average number of common limited partner units—basic | 38,916 | 37,959 | 38,438 | 37,959 |
Weighted average number of common limited partner units—diluted | 38,916 | 37,959 | 38,438 | 37,959 |
GENERAL - Reconciliation of P_2
GENERAL - Reconciliation of Partnership's Weighted Average Number of Common Limited Partner Units (Parenthetical) (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Units excluded from the calculation of diluted weighted average number of limited partners' units, because of their anti-dilutive effect | 563,183 | 560,839 | 563,183 | 560,839 |
IMPAIRMENT & OTHER LOSSES - Add
IMPAIRMENT & OTHER LOSSES - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Impairment And Other Losses [Abstract] | ||
Goodwill impairment charge | $ 24,862 | $ 24,862 |
Impairment of cemetery property | 1,500 | |
Loss on management agreement | $ 2,100 |
ACCOUNTS RECEIVABLE, NET OF A_3
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE - Long Term Accounts Receivable, Net of Allowance (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Customer receivables | $ 162,967 | $ 167,017 |
Unearned finance income | (17,254) | (17,000) |
Allowance for bad debt | (6,105) | (4,941) |
Accounts receivable, net of allowance | 139,608 | 145,076 |
Less: Current portion, net of allowance | 61,470 | 57,928 |
Long-term portion, net of allowance | $ 78,138 | $ 87,148 |
ACCOUNTS RECEIVABLE, NET OF A_4
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE - Activity in Allowance for Bad Debt (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance, beginning of period | $ 4,941 | ||
Provision for bad debt | 5,380 | $ 3,776 | |
Balance, end of period | 6,105 | $ 4,941 | |
Contract Cancellations | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance, beginning of period | 4,941 | $ 19,795 | 19,795 |
Cumulative effect of accounting changes | (12,876) | ||
Provision for bad debt | 5,380 | 7,358 | |
Charge-offs, net | (4,216) | (9,336) | |
Balance, end of period | $ 6,105 | $ 4,941 |
CEMETERY PROPERTY - Schedule of
CEMETERY PROPERTY - Schedule of Cemetery Property (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Abstract] | ||
Cemetery land | $ 255,624 | $ 255,708 |
Mausoleum crypts and lawn crypts | 72,988 | 75,133 |
Cemetery property | $ 328,612 | $ 330,841 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Abstract] | ||
Buildings and improvements | $ 130,181 | $ 129,971 |
Furniture and equipment | 59,883 | 58,706 |
Funeral home land | 14,185 | 14,185 |
Property and equipment, gross | 204,249 | 202,862 |
Less: Accumulated depreciation | (95,257) | (90,146) |
Property and equipment, net of accumulated depreciation | $ 108,992 | $ 112,716 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation expense | $ 2.3 | $ 2.3 | $ 7.1 | $ 7.5 |
MERCHANDISE TRUSTS - Additional
MERCHANDISE TRUSTS - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)security | Sep. 30, 2018USD ($)security | Sep. 30, 2019USD ($)security | Sep. 30, 2018USD ($)security | Dec. 31, 2018USD ($) | |
West Virginia Trust Receivable | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Trust assets, fair value | $ 9,300 | $ 9,300 | $ 8,700 | ||
Merchandise Trusts | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Percentage of VIE for cancellable state | 53.60% | 53.60% | |||
Merchandise Trusts | Variable Interest Entity, Primary Beneficiary | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Trust assets, fair value | $ 519,529 | $ 519,529 | 488,248 | ||
Purchases of available for sale securities | 42,200 | $ 78,300 | |||
Sales, maturities and paydowns of available for sale securities | 30,700 | 66,600 | |||
Other than temporary impairments loss | $ 2,816 | $ 11,977 | |||
Merchandise Trusts | Variable Interest Entity, Primary Beneficiary | Other Than Temporarily Impaired Securities | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Number of securities that incurred other than temporary impairment losses | security | 62 | 37 | 87 | 122 | |
Trust assets, cost | $ 4,800 | $ 62,100 | $ 96,700 | $ 227,900 | |
Trust assets, fair value | 4,300 | 61,300 | 93,900 | 215,900 | |
Other than temporary impairments loss | 500 | $ 800 | 2,800 | $ 12,000 | |
Merchandise Trusts | West Virginia Trust Receivable | Variable Interest Entity, Primary Beneficiary | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Trust assets, fair value | $ 9,328 | $ 9,328 | $ 8,663 |
MERCHANDISE TRUSTS - Reconcilia
MERCHANDISE TRUSTS - Reconciliation of Merchandise Trust Activities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Balance, beginning of period | $ 488,248 | |
Balance, end of period | 519,529 | |
Variable Interest Entity, Primary Beneficiary | Merchandise Trusts | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Balance, beginning of period | 488,248 | $ 515,456 |
Contributions | 40,440 | 49,762 |
Distributions | (45,256) | (53,321) |
Interest and dividends | 22,537 | 20,486 |
Capital gain distributions | 363 | 405 |
Realized gains and losses, net | 2,063 | (258) |
Other than temporary impairment | (2,816) | (11,977) |
Taxes | (655) | (337) |
Fees | (3,206) | (3,049) |
Unrealized change in fair value | 17,811 | 2,860 |
Balance, end of period | $ 519,529 | $ 520,027 |
MERCHANDISE TRUSTS - Cost and M
MERCHANDISE TRUSTS - Cost and Market Value Associated with Assets Held in Merchandise Trusts (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
West Virginia Trust Receivable | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value | $ 9,300 | $ 8,700 |
Variable Interest Entity, Primary Beneficiary | Merchandise Trusts | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 510,752 | 497,282 |
Gross Unrealized Gains | 11,596 | 2,118 |
Gross Unrealized Losses | (2,819) | (11,152) |
Fair Value | 519,529 | 488,248 |
Variable Interest Entity, Primary Beneficiary | Short-term investments | Merchandise Trusts | Level 1 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 182,560 | 16,903 |
Fair Value | 182,560 | 16,903 |
Variable Interest Entity, Primary Beneficiary | Fixed maturities | Merchandise Trusts | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 1,304 | 1,703 |
Gross Unrealized Gains | 23 | 29 |
Gross Unrealized Losses | (211) | (475) |
Fair Value | 1,116 | 1,257 |
Variable Interest Entity, Primary Beneficiary | Fixed maturities | Merchandise Trusts | U.S. governmental securities | Level 2 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 488 | 392 |
Gross Unrealized Gains | 10 | |
Gross Unrealized Losses | (95) | (147) |
Fair Value | 403 | 245 |
Variable Interest Entity, Primary Beneficiary | Fixed maturities | Merchandise Trusts | Corporate debt securities | Level 2 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 816 | 1,311 |
Gross Unrealized Gains | 13 | 29 |
Gross Unrealized Losses | (116) | (328) |
Fair Value | 713 | 1,012 |
Variable Interest Entity, Primary Beneficiary | Mutual funds - debt securities | Merchandise Trusts | Level 1 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 117,566 | 187,840 |
Gross Unrealized Gains | 4,937 | 262 |
Gross Unrealized Losses | (79) | (2,645) |
Fair Value | 122,424 | 185,457 |
Variable Interest Entity, Primary Beneficiary | Mutual funds - equity securities | Merchandise Trusts | Level 1 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 47,346 | 45,023 |
Gross Unrealized Gains | 3,035 | 110 |
Gross Unrealized Losses | (1) | (18) |
Fair Value | 50,380 | 45,115 |
Variable Interest Entity, Primary Beneficiary | Other investment funds | Merchandise Trusts | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 130,952 | 210,655 |
Gross Unrealized Gains | 2,410 | 388 |
Gross Unrealized Losses | (2,524) | (7,784) |
Fair Value | 130,838 | 203,259 |
Variable Interest Entity, Primary Beneficiary | Equity securities | Merchandise Trusts | Level 1 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 13,293 | 18,097 |
Gross Unrealized Gains | 1,175 | 1,327 |
Gross Unrealized Losses | (4) | (213) |
Fair Value | 14,464 | 19,211 |
Variable Interest Entity, Primary Beneficiary | Other invested assets | Merchandise Trusts | Level 2 | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 8,403 | 8,398 |
Gross Unrealized Gains | 16 | 2 |
Gross Unrealized Losses | (17) | |
Fair Value | 8,419 | 8,383 |
Variable Interest Entity, Primary Beneficiary | Total investments | Merchandise Trusts | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 501,424 | 488,619 |
Gross Unrealized Gains | 11,596 | 2,118 |
Gross Unrealized Losses | (2,819) | (11,152) |
Fair Value | 510,201 | 479,585 |
Variable Interest Entity, Primary Beneficiary | West Virginia Trust Receivable | Merchandise Trusts | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 9,328 | 8,663 |
Fair Value | $ 9,328 | $ 8,663 |
MERCHANDISE TRUSTS - Cost and_2
MERCHANDISE TRUSTS - Cost and Market Value Associated with Assets Held in Merchandise Trusts (Parenthetical) (Detail) - Merchandise Trusts - Variable Interest Entity, Primary Beneficiary $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)Extension | Dec. 31, 2018USD ($)Extension | |
Schedule Of Available For Sale Securities [Line Items] | ||
Number of potential lockup period extensions | Extension | 3 | 3 |
Lockup extension period | 1 year | 1 year |
Unfunded investment commitments to private credit funds, callable at any time | $ | $ 63.3 | $ 71 |
Minimum | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fixed income funds and equity funds, redemption period | 1 day | 1 day |
Private credit funds, lockup periods | 1 year | 2 years |
Maximum | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fixed income funds and equity funds, redemption period | 30 days | 30 days |
Private credit funds, lockup periods | 7 years | 7 years |
MERCHANDISE TRUSTS - Contractua
MERCHANDISE TRUSTS - Contractual Maturities of Debt Securities Held in Merchandise Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Merchandise Trusts - Fixed maturities - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investments Classified by Contractual Maturity Date [Line Items] | ||
Less than 1 year | $ 208 | $ 68 |
1 year through 5 years | 628 | 1,010 |
6 years through 10 years | 264 | 163 |
More than 10 years | 16 | 16 |
U.S. governmental securities | ||
Investments Classified by Contractual Maturity Date [Line Items] | ||
Less than 1 year | 112 | |
1 year through 5 years | 30 | 137 |
6 years through 10 years | 246 | 108 |
More than 10 years | 16 | |
Corporate debt securities | ||
Investments Classified by Contractual Maturity Date [Line Items] | ||
Less than 1 year | 96 | 68 |
1 year through 5 years | 598 | 873 |
6 years through 10 years | $ 18 | 55 |
More than 10 years | $ 16 |
MERCHANDISE TRUSTS - Aging of U
MERCHANDISE TRUSTS - Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Merchandise Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Merchandise Trusts - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | $ 2,614 | $ 9,819 |
12 Months or more Unrealized Losses | 205 | 1,333 |
Total Unrealized Losses | 2,819 | 11,152 |
Less than 12 months Fair Value | 85,074 | 216,168 |
12 Months or more Fair Value | 821 | 3,374 |
Total Fair Value | 85,895 | 219,542 |
Fixed maturities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | 6 | 2 |
12 Months or more Unrealized Losses | 205 | 473 |
Total Unrealized Losses | 211 | 475 |
Less than 12 months Fair Value | 185 | 103 |
12 Months or more Fair Value | 821 | 792 |
Total Fair Value | 1,006 | 895 |
Fixed maturities | U.S. governmental securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
12 Months or more Unrealized Losses | 95 | 147 |
Total Unrealized Losses | 95 | 147 |
Less than 12 months Fair Value | 110 | |
12 Months or more Fair Value | 397 | 243 |
Total Fair Value | 507 | 243 |
Fixed maturities | Corporate debt securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | 6 | 2 |
12 Months or more Unrealized Losses | 110 | 326 |
Total Unrealized Losses | 116 | 328 |
Less than 12 months Fair Value | 75 | 103 |
12 Months or more Fair Value | 424 | 549 |
Total Fair Value | 499 | 652 |
Mutual funds - debt securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | 79 | 2,011 |
12 Months or more Unrealized Losses | 634 | |
Total Unrealized Losses | 79 | 2,645 |
Less than 12 months Fair Value | 15,178 | 46,005 |
12 Months or more Fair Value | 1,195 | |
Total Fair Value | 15,178 | 47,200 |
Mutual funds - equity securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | 1 | 18 |
Total Unrealized Losses | 1 | 18 |
Less than 12 months Fair Value | 242 | 131 |
Total Fair Value | 242 | 131 |
Other investment funds | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | 2,524 | 7,784 |
Total Unrealized Losses | 2,524 | 7,784 |
Less than 12 months Fair Value | 69,464 | 169,929 |
Total Fair Value | 69,464 | 169,929 |
Equity securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | 4 | |
12 Months or more Unrealized Losses | 213 | |
Total Unrealized Losses | 4 | 213 |
Less than 12 months Fair Value | 5 | |
12 Months or more Fair Value | 597 | |
Total Fair Value | $ 5 | 597 |
Other invested assets | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Unrealized Losses | 4 | |
12 Months or more Unrealized Losses | 13 | |
Total Unrealized Losses | 17 | |
12 Months or more Fair Value | 790 | |
Total Fair Value | $ 790 |
PERPETUAL CARE TRUSTS - Reconci
PERPETUAL CARE TRUSTS - Reconciliation of Perpetual Care Trust Activities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||
Balance, beginning of period | $ 330,562 | |
Balance, end of period | 343,028 | |
Variable Interest Entity, Primary Beneficiary | Perpetual care trusts | ||
Debt Securities, Available-for-sale [Line Items] | ||
Balance, beginning of period | 330,562 | $ 339,928 |
Contributions | 5,520 | 10,795 |
Distributions | (16,709) | (13,790) |
Interest and dividends | 15,621 | 17,416 |
Capital gain distributions | 1,134 | 612 |
Realized gains and losses, net | 2,303 | 353 |
Other than temporary impairment | (1,297) | (7,449) |
Taxes | (634) | (292) |
Fees | (2,388) | (4,087) |
Unrealized change in fair value | 8,916 | 1,536 |
Balance, end of period | $ 343,028 | $ 345,022 |
PERPETUAL CARE TRUSTS - Additio
PERPETUAL CARE TRUSTS - Additional Information (Detail) - Variable Interest Entity, Primary Beneficiary - Perpetual care trusts $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)security | Sep. 30, 2018USD ($)security | Sep. 30, 2019USD ($)security | Sep. 30, 2018USD ($)security | |
Debt Securities, Available-for-sale [Line Items] | ||||
Purchases of available for sale securities | $ 42,500 | $ 56,400 | ||
Sales, maturities and paydowns of available for sale securities | 28,100 | 49,400 | ||
Other than temporary impairments loss | $ 1,297 | $ 7,449 | ||
Other Than Temporarily Impaired Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Number of securities that incurred other than temporary impairment losses | security | 49 | 49 | 68 | 116 |
Trust assets, cost | $ 6,600 | $ 40,000 | $ 35,800 | $ 158,000 |
Trust assets, fair value | 6,000 | 39,400 | 34,500 | 150,600 |
Other than temporary impairments loss | $ 600 | $ 600 | $ 1,300 | $ 7,400 |
PERPETUAL CARE TRUSTS - Cost an
PERPETUAL CARE TRUSTS - Cost and Market Value Associated with Assets Held in Perpetual Care Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Perpetual care trusts - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Short-term investments | Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | $ 87,453 | $ 12,835 |
Fair Value | 87,453 | 12,835 |
Fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 3,106 | 5,843 |
Gross Unrealized Gains | 65 | 165 |
Gross Unrealized Losses | (199) | (442) |
Fair Value | 2,972 | 5,566 |
Fixed maturities | Level 2 | U.S. governmental securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 1,081 | 960 |
Gross Unrealized Gains | 44 | 4 |
Gross Unrealized Losses | (54) | (121) |
Fair Value | 1,071 | 843 |
Fixed maturities | Level 2 | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,025 | 4,883 |
Gross Unrealized Gains | 21 | 161 |
Gross Unrealized Losses | (145) | (321) |
Fair Value | 1,901 | 4,723 |
Mutual funds - debt securities | Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 70,425 | 108,451 |
Gross Unrealized Gains | 2,730 | 227 |
Gross Unrealized Losses | (59) | (837) |
Fair Value | 73,096 | 107,841 |
Mutual funds - equity securities | Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 16,685 | 19,660 |
Gross Unrealized Gains | 1,528 | 304 |
Gross Unrealized Losses | (18) | (142) |
Fair Value | 18,195 | 19,822 |
Other investment funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 143,050 | 165,284 |
Gross Unrealized Gains | 7,143 | 3,039 |
Gross Unrealized Losses | (5,024) | (4,607) |
Fair Value | 145,169 | 163,716 |
Equity securities | Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 14,968 | 20,025 |
Gross Unrealized Gains | 1,177 | 826 |
Gross Unrealized Losses | (18) | (145) |
Fair Value | 16,127 | 20,706 |
Other invested assets | Level 2 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 16 | 56 |
Gross Unrealized Gains | 20 | |
Fair Value | 16 | 76 |
Total Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 335,703 | 332,154 |
Gross Unrealized Gains | 12,643 | 4,581 |
Gross Unrealized Losses | (5,318) | (6,173) |
Fair Value | $ 343,028 | $ 330,562 |
PERPETUAL CARE TRUSTS - Cost _2
PERPETUAL CARE TRUSTS - Cost and Market Value Associated with Assets Held in Perpetual Care Trusts (Parenthetical) (Detail) - Perpetual care trusts - Variable Interest Entity, Primary Beneficiary $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)Extension | Dec. 31, 2018USD ($)Extension | |
Debt Securities, Available-for-sale [Line Items] | ||
Number of potential lockup period extensions | Extension | 3 | 3 |
Lockup extension period | 1 year | 1 year |
Unfunded investment commitments to private credit funds, callable at any time | $ | $ 41.2 | $ 94.5 |
Minimum | ||
Debt Securities, Available-for-sale [Line Items] | ||
Private credit funds, lockup periods | 2 years | 4 years |
Fixed income funds and equity funds, redemption period | 1 day | 1 day |
Maximum | ||
Debt Securities, Available-for-sale [Line Items] | ||
Private credit funds, lockup periods | 7 years | 8 years |
Fixed income funds and equity funds, redemption period | 30 days | 30 days |
PERPETUAL CARE TRUSTS - Contrac
PERPETUAL CARE TRUSTS - Contractual Maturities of Debt Securities Held in Perpetual Care Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Perpetual care trusts - Fixed maturities - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investments Classified by Contractual Maturity Date [Line Items] | ||
Less than 1 year | $ 263 | $ 705 |
1 year through 5 years | 1,606 | 4,118 |
6 years through 10 years | 984 | 660 |
More than 10 years | 119 | 83 |
U.S. governmental securities | ||
Investments Classified by Contractual Maturity Date [Line Items] | ||
Less than 1 year | 60 | |
1 year through 5 years | 70 | 416 |
6 years through 10 years | 821 | 395 |
More than 10 years | 119 | 32 |
Corporate debt securities | ||
Investments Classified by Contractual Maturity Date [Line Items] | ||
Less than 1 year | 203 | 705 |
1 year through 5 years | 1,536 | 3,702 |
6 years through 10 years | $ 163 | 265 |
More than 10 years | $ 51 |
PERPETUAL CARE TRUSTS - Aging o
PERPETUAL CARE TRUSTS - Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Perpetual Care Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Perpetual care trusts - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | $ 79,252 | $ 125,431 |
12 Months or more Fair Value | 2,913 | 7,089 |
Total Fair Value | 82,165 | 132,520 |
Less than 12 months Unrealized Losses | 5,164 | 5,370 |
12 Months or more Unrealized Losses | 154 | 803 |
Total Unrealized Losses | 5,318 | 6,173 |
Fixed maturities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 76 | 405 |
12 Months or more Fair Value | 2,910 | 3,692 |
Total Fair Value | 2,986 | 4,097 |
Less than 12 months Unrealized Losses | 45 | 15 |
12 Months or more Unrealized Losses | 154 | 427 |
Total Unrealized Losses | 199 | 442 |
Fixed maturities | U.S. governmental securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
12 Months or more Fair Value | 1,021 | 790 |
Total Fair Value | 1,021 | 790 |
12 Months or more Unrealized Losses | 54 | 121 |
Total Unrealized Losses | 54 | 121 |
Fixed maturities | Corporate debt securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 76 | 405 |
12 Months or more Fair Value | 1,889 | 2,902 |
Total Fair Value | 1,965 | 3,307 |
Less than 12 months Unrealized Losses | 45 | 15 |
12 Months or more Unrealized Losses | 100 | 306 |
Total Unrealized Losses | 145 | 321 |
Mutual funds - debt securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 11,348 | 21,867 |
12 Months or more Fair Value | 3 | 2,814 |
Total Fair Value | 11,351 | 24,681 |
Less than 12 months Unrealized Losses | 59 | 591 |
12 Months or more Unrealized Losses | 246 | |
Total Unrealized Losses | 59 | 837 |
Mutual funds - equity securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 505 | 1,382 |
Total Fair Value | 505 | 1,382 |
Less than 12 months Unrealized Losses | 18 | 141 |
12 Months or more Unrealized Losses | 1 | |
Total Unrealized Losses | 18 | 142 |
Other investment funds | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 67,147 | 101,536 |
Total Fair Value | 67,147 | 101,536 |
Less than 12 months Unrealized Losses | 5,024 | 4,607 |
Total Unrealized Losses | 5,024 | 4,607 |
Equity securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair Value | 176 | 241 |
12 Months or more Fair Value | 583 | |
Total Fair Value | 176 | 824 |
Less than 12 months Unrealized Losses | 18 | 16 |
12 Months or more Unrealized Losses | 129 | |
Total Unrealized Losses | $ 18 | $ 145 |
LONG-TERM DEBT - Outstanding De
LONG-TERM DEBT - Outstanding Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Less deferred financing costs, net of accumulated amortization | $ (14,280) | $ (9,692) |
Total debt | 362,676 | 321,046 |
Less current maturities | (503) | (798) |
Total long-term debt | 362,173 | 320,248 |
9.875%/11.500% Senior Secured PIK Toggle Notes, due June 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 376,166 | |
Credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 155,739 | |
Senior Notes | 7.875% notes, due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 173,613 | |
Notes Payable, other Payables | Acquisitions Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 92 | |
Insurance and vehicle financing | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 790 | $ 1,294 |
LONG-TERM DEBT - Additional Inf
LONG-TERM DEBT - Additional Information (Detail) - USD ($) | Jun. 27, 2019 | Sep. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Line Items] | |||||||||
Long-term debt, debt issuance costs | $ 0 | ||||||||
Long term debt, outstanding | $ 362,676,000 | $ 362,676,000 | $ 362,676,000 | $ 321,046,000 | |||||
Write off unamortized deferred financing fees | $ 6,900,000 | ||||||||
Tranche B Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, debt issuance costs | $ 3,000,000 | ||||||||
Notes Registration Rights Agreement | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt instrument additional interest accrue percentage | 0.25% | ||||||||
Debt instrument default to be charged for period | 0.25% | ||||||||
Notes Registration Rights Agreement | Maximum | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt instrument additional interest accrue percentage | 1.00% | ||||||||
7.875% notes, due 2021 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, interest rate | 7.875% | 7.875% | 7.875% | ||||||
Long term debt, outstanding | $ 175,000,000 | $ 175,000,000 | $ 175,000,000 | ||||||
9.875% notes, due 2024 | Private Placement | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, interest rate | 9.875% | ||||||||
11.500% notes, due 2024 | Private Placement | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, interest rate | 11.50% | ||||||||
Senior Secured Notes | |||||||||
Debt Disclosure [Line Items] | |||||||||
Interest payable, Description | Interest is payable quarterly in arrears on the 30th day of each March, June, September and December, commencing September 30, 2019. | ||||||||
Increase in outstanding principal amount | $ 4,000,000 | ||||||||
Maturity date | Jun. 30, 2024 | ||||||||
Interest payable option, Description | The Senior Secured Notes will require cash interest payments at 9.875% for all interest periods after January 30, 2022. | ||||||||
Applicable interest rate on united states treasury securities | 0.50% | ||||||||
Redemptions from asset dispositions | $ 55,000,000 | ||||||||
Percentage of principal amount of debt redeemed | 2.00% | ||||||||
Percentage of excess cash flow | 75.00% | ||||||||
Debt covenant, aggregate amount of capital expenditures | 20,000,000 | ||||||||
Debt covenant, unrestricted cash and unrestricted permitted investments | $ 20,000,000 | ||||||||
Debt covenant, consolidated asset coverage ratio | 1.60 | 1.60 | 1.60 | ||||||
Uncured period | 15 days | ||||||||
Covenant compliance, percentage | 25.00% | ||||||||
C-Corporation conversion uncured period | 5 days | ||||||||
Percentage of consolidated revenue | 15.00% | ||||||||
Debt instrument, revenue covenant | $ 30,000,000 | ||||||||
Revenue - cure period | 30 days | ||||||||
Interest rate increase percentage | 13.50% | ||||||||
Senior Secured Notes | Scenario, Forecast | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt covenant, unrestricted cash and unrestricted permitted investments | $ 12,500,000 | $ 15,000,000 | |||||||
Senior Secured Notes | Maximum | Scenario, Forecast | |||||||||
Debt Disclosure [Line Items] | |||||||||
Unpermitted operating cash flow amount | $ 20,000,000 | ||||||||
Senior Secured Notes | Minimum | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt instrument, acceleration of or failure to pay | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | ||||||
Senior Secured Notes | Redeemed Before June 27, 2021 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt instrument redemption price percentage | 4.00% | ||||||||
Senior Secured Notes | Redemption Date Through June 27, 2021 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt instrument redemption price percentage | 11.50% | ||||||||
Senior Secured Notes | Redeemed On Or After June 27, 2021 and Before June 27, 2022 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt instrument redemption price percentage | 4.00% | ||||||||
Senior Secured Notes | Redeemed On Or After June 27, 2022 and Before June 27, 2023 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt instrument redemption price percentage | 2.00% | ||||||||
Senior Secured Notes | Redeemed On Or After June 27, 2023 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt premium percentage | 0.00% | ||||||||
Senior Secured Notes | In Cash | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, interest rate | 9.875% | ||||||||
Senior Secured Notes | Option Through January 30, 2022 - In Cash | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, interest rate | 7.50% | ||||||||
Senior Secured Notes | Option Through January 30, 2022 - Payable in Kind | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, interest rate | 4.00% | 4.00% | 4.00% | 4.00% | |||||
Senior Secured Notes | Private Placement | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, principal amount | $ 385,000,000 | ||||||||
Gross proceeds from the sale of the senior secured notes | 371,500,000 | ||||||||
Long-term debt, debt issuance costs | $ 7,000,000 | ||||||||
Senior Secured Notes | |||||||||
Debt Disclosure [Line Items] | |||||||||
Long-term debt, debt issuance costs | $ 14,300,000 |
LONG-TERM DEBT - Schedule of Co
LONG-TERM DEBT - Schedule of Consolidated Interest Coverage Ratio (Detail) - Senior Secured Notes - Maximum | Sep. 30, 2019 |
March 31, 2020 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 0.40 |
June 30, 2020 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 0.75 |
September 30, 2020 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 1 |
December 31, 2020 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 1.15 |
March 31, 2021 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 1.25 |
June 30, 2021 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 1.30 |
September 30, 2021 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 1.35 |
December 31, 2021 | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 1.45 |
March 31, 2022 and each quarter end thereafter | |
Debt Instrument [Line Items] | |
Consolidated interest coverage ratio | 1.50 |
REDEEMABLE CONVERTIBLE PREFER_2
REDEEMABLE CONVERTIBLE PREFERRED UNITS AND PARTNERS' DEFICIT - Additional Information (Detail) $ / shares in Units, $ in Thousands | Jun. 27, 2019USD ($)Vote$ / sharesshares | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 25, 2019$ / sharesshares |
Temporary Equity [Line Items] | ||||
Total redeemable convertible preferred units | $ | $ 57,500 | |||
Shares of common unit sold | $ | $ 57,500 | |||
Outstanding Common Units | Rights Offering | ||||
Temporary Equity [Line Items] | ||||
Preferred units, sold | shares | 1.24 | |||
Unit sold, price per share | $ 1.20 | |||
Series A Redeemable Convertible Preferred Unit | ||||
Temporary Equity [Line Items] | ||||
Conversion of stock, description | The Preferred Units are convertible at the option of the holders thereof at any time beginning 10 days after completion of the Rights Offering and shall automatically be converted upon consummation of the C-Corporation Conversion, in each case at an initial conversion rate of one Common Unit or one share of Common Stock, as applicable, for each Preferred Unit. Subject to customary exceptions, the conversion rate for each Preferred Unit is subject to adjustment (a) proportionately, in the event of distributions made in the form of interests in the Partnership, any split, combination or similar recapitalization of Common Units and certain other specified transactions with respect to interests in the Partnership, (b) upon any issuance or deemed issuance by the Partnership prior to consummation of the Rights Offering of Common Units for a price per Common Unit less than the Series A Liquidation Preference (as defined below), to the rate determined by dividing the Series A Liquidation Preference by the price per Common Unit in such issuance or deemed issuance and (c) upon any issuance or deemed issuance by the Partnership after consummation of the Rights Offering of Common Units for a price per Common Unit less than the Series A Liquidation Preference, to a rate determined on a weighted average anti-dilution adjustment basis. | |||
Right to voting | The holder of a Preferred Unit is entitled to one vote for each Common Unit into which such Preferred Unit is convertible (whether or not such right to convert is exercisable at such time). | |||
Number of votes entitled to stockholders per share | Vote | 1 | |||
Percentage of net proceeds to be utilized for redemption of preferred units | 100.00% | |||
Preferred unit, liquidation preference price per share | $ 1.20 | |||
Series A Redeemable Convertible Preferred Unit | Axar and Other Purchasers | ||||
Temporary Equity [Line Items] | ||||
Preferred unit, shares redemption | shares | 33,487,904 | |||
Preferred unit, redemption price per share | $ 1.20 | |||
Series A Redeemable Convertible Preferred Unit | Minimum | ||||
Temporary Equity [Line Items] | ||||
Percentage of affirmative vote of outstanding shareholders | 60.00% | |||
Series A Purchase Agreement | Outstanding Common Units | Rights Offering | ||||
Temporary Equity [Line Items] | ||||
Shares of common unit sold | $ | $ 40,200 | |||
Unit sold, price per share | $ 1.20 | |||
Maximum period to complete right offering | 100 days | |||
Series A Purchase Agreement | Series A Redeemable Convertible Preferred Unit | ||||
Temporary Equity [Line Items] | ||||
Preferred units, sold | shares | 52,083,333 | |||
Contractual conversion price, per share | $ 1.1040 | |||
Preferred unit, liquidation preference discount percentage | 8.00% | |||
Total redeemable convertible preferred units | $ | $ 57,500 |
DEFERRED REVENUES AND COSTS - A
DEFERRED REVENUES AND COSTS - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | ||
Revenue, practical expedient, incremental cost of obtaining contract [true false] | false | |
Customer contract liabilities, revenue recognized | $ 13.7 | $ 54.7 |
DEFERRED REVENUES AND COSTS - S
DEFERRED REVENUES AND COSTS - Schedule of Deferred Revenue and Other Costs (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Revenue From Contract With Customer [Abstract] | ||
Deferred contract revenues | $ 830,038 | $ 830,602 |
Deferred merchandise trust revenue | 104,740 | 92,718 |
Deferred merchandise trust unrealized gains (losses) | 8,777 | (9,034) |
Deferred revenues | 943,555 | 914,286 |
Deferred selling and obtaining costs | $ 113,601 | $ 112,660 |
DEFERRED REVENUES AND COSTS -_2
DEFERRED REVENUES AND COSTS - Schedule of Customer Contract Liabilities, Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Revenue From Contract With Customer [Abstract] | ||
Customer contract liabilities | $ 972,767 | $ 937,708 |
Amounts due from customers for unfulfilled performance obligations on cancellable pre-need contracts | (29,212) | (23,422) |
Customer contract liabilities, net | $ 943,555 | $ 914,286 |
DEFERRED REVENUES AND COSTS - R
DEFERRED REVENUES AND COSTS - Revenue, Remaining Performance Obligation (Detail) | Sep. 30, 2019 |
First 4-5years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 55.00% |
Within 18 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 80.00% |
LONG-TERM INCENTIVE PLAN - Addi
LONG-TERM INCENTIVE PLAN - Additional Information (Detail) $ in Millions | Jun. 27, 2019USD ($)shares | Apr. 15, 2019Installmentshares | Sep. 30, 2019shares | Jun. 30, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting commencing date | Jul. 15, 2019 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 4 years | |||
Share-based compensation arrangement by share-based payment award,vesting period grant date | 3 months | |||
Threshold Performance Condition, For Year 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Target Performance Condition, For Year 2020 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% | |||
Maximum Performance Condition, For Year 2021 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 100.00% | |||
Phantom Unit Awards | Amended and Restated 2019 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in Period | 238,553 | 1,015,047 | ||
Phantom Units Subject to Time-based Vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of equal annual installments | Installment | 3 | |||
Share-based compensation arrangement by share-based payment award, award vesting commencing date | Apr. 3, 2020 | |||
Phantom Units Subject to Time-based Vesting | Amended and Restated 2019 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in Period | 494,421 | |||
Phantom Units Subject to Performance-based Vesting | Amended and Restated 2019 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in Period | 520,626 | |||
Restricted Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in Period | 31,607 | 31,295 | ||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period | 49,379 | 48,924 | ||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, settled in period | 17,772 | 17,629 | ||
Restricted Units | Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in Period | 275,000 | |||
Phantom and Restricted Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in Period | 975,142 | |||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period | 1,351,493 | |||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, settled in period | 376,351 | |||
Unit-based compensation expense recognized | $ | $ 2.2 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Commitments And Contingencies [Line Items] | |
Aggregate fixed rent payment to landlord | $ 17,704 |
Second Quarter Twenty Fourteen Acquisition | |
Commitments And Contingencies [Line Items] | |
Aggregate fixed rent payment to landlord | 36,000 |
Deferred fixed rent | $ 6,000 |
Second Quarter Twenty Fourteen Acquisition | Minimum | |
Commitments And Contingencies [Line Items] | |
Fixed rent for lease term deferred | 6 years |
Second Quarter Twenty Fourteen Acquisition | Maximum | |
Commitments And Contingencies [Line Items] | |
Fixed rent for lease term deferred | 11 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Fixed Rent for Cemeteries (Detail) - Two Thousand Fourteen Acquisitions Member $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Lease Years 1-5 | |
Management Agreement Future Minimum Payments Due [Line Items] | |
Ground Lease Payments Per Year | $ 0 |
Lease Years 6-20 | |
Management Agreement Future Minimum Payments Due [Line Items] | |
Ground Lease Payments Per Year | 1,000,000 |
Lease Years 21-25 | |
Management Agreement Future Minimum Payments Due [Line Items] | |
Ground Lease Payments Per Year | 1,200,000 |
Lease Years 26- 35 | |
Management Agreement Future Minimum Payments Due [Line Items] | |
Ground Lease Payments Per Year | 1,500,000 |
Lease Years 36-60 | |
Management Agreement Future Minimum Payments Due [Line Items] | |
Ground Lease Payments Per Year | $ 0 |
LEASES - Additional Information
LEASES - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Lessee Lease Description [Line Items] | |
Number of sale-leaseback related to warehouses | one |
Lease renewal term description | Certain leases provide the Partnership with the option to renew for additional periods, with renewal terms that can extend the lease term for periods ranging from 1 to 30 years. |
Operating lease weighted-average discount rate | 9.90% |
Finance lease weighted-average discount rate | 8.40% |
Operating lease payments | $ 3.3 |
Residual value guarantees | $ 2 |
Operating lease, weighted average remaining lease term | 7 years 2 months 12 days |
Finance lease, weighted average remaining lease term | 3 years |
Minimum | |
Lessee Lease Description [Line Items] | |
Lease renewal term | 1 year |
Maximum | |
Lessee Lease Description [Line Items] | |
Lease renewal term | 30 years |
LEASES - Schedule of Components
LEASES - Schedule of Components of Leases (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Assets: | |
Operating | $ 11,321 |
Finance | 6,211 |
Total ROU assets | 17,532 |
Current Liabilities: | |
Operating | 2,080 |
Finance | 1,236 |
Long-term | |
Operating | 12,246 |
Finance | 4,656 |
Total lease liabilities | $ 20,218 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Finance lease costs | |
Net Lease costs | $ 3,956 |
Depreciation and Amortization | |
Finance lease costs | |
Amortization of leased assets | 899 |
General and Administrative Expense | |
Lease cost | |
Operating lease costs | 2,687 |
Interest Expense | |
Finance lease costs | |
Interest on lease liabilities | $ 370 |
LEASES - Components of Lease _2
LEASES - Components of Lease Expense (Parenthetical) (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Maximum | |
Lessee Lease Description [Line Items] | |
Term of short term lease | one month |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities the Partnership's of Lease liabilities, per ASC 842 (Detail) - ASC 842 - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Operating | ||
2019 | $ 867 | |
2020 | 3,320 | |
2021 | 2,830 | |
2022 | 2,532 | |
2023 | 2,279 | |
Thereafter | 8,495 | |
Total | 20,323 | |
Less: Interest | 5,997 | |
Present value of lease liabilities | 14,326 | $ 15,300 |
Finance | ||
2019 | 484 | |
2020 | 1,761 | |
2021 | 1,922 | |
2022 | 1,978 | |
2023 | 763 | |
Thereafter | 43 | |
Total | 6,951 | |
Less: Interest | 1,059 | |
Present value of lease liabilities | $ 5,892 |
LEASES - Schedule of Minimum Le
LEASES - Schedule of Minimum Lease Commitments Remaining Under the Partnerships Operating Lease and Capital Lease, per ASC 840 (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Operating | |
Financing | $ 4,349 |
2020 | 2,765 |
2021 | 2,130 |
2022 | 1,539 |
2023 | 1,184 |
Thereafter | 5,737 |
Total | 17,704 |
Capital | |
2019 | 1,499 |
2020 | 1,196 |
2021 | 949 |
2022 | 558 |
2023 | 89 |
Total | 4,291 |
Less: Interest | (875) |
Present value of lease liabilities | $ 3,416 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Senior Secured Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable, fair value | $ 386.5 | |
Notes payable, carrying value | $ 376.2 | |
Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable, fair value | $ 162.5 | |
Notes payable, carrying value | $ 173.6 |
SUPPLEMENTAL CONDENSED CONSOL_3
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Additional Information (Detail) | Sep. 30, 2019 | Mar. 31, 2019 |
StoneMor Operating LLC | ||
Schedule Of Condensed Financial Information Of Subsidiaries [Line Items] | ||
Ownership percentage subsidiaries by the parent | 100.00% | 100.00% |
SUPPLEMENTAL CONDENSED CONSOL_4
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents, excluding restricted cash | $ 43,515 | $ 18,147 |
Restricted cash | 20,580 | |
Other current assets | 85,248 | 80,169 |
Total current assets | 149,343 | 98,316 |
Long-term accounts receivable | 78,138 | 87,148 |
Cemetery and funeral home property and equipment | 437,604 | 443,557 |
Merchandise trusts | 519,529 | 488,248 |
Perpetual care trusts | 343,028 | 330,562 |
Deferred selling and obtaining costs | 113,601 | 112,660 |
Intangible assets | 56,562 | 61,421 |
Goodwill and intangible assets | 86,283 | |
Other assets | 32,718 | 22,327 |
Total assets | 1,730,523 | 1,669,101 |
Liabilities, Redeemable Convertible Preferred Units and Partners’ Deficit | ||
Current liabilities | 65,088 | 61,800 |
Long-term debt, net of deferred financing costs | 362,173 | 320,248 |
Deferred revenues | 943,555 | 914,286 |
Perpetual care trust corpus | 343,028 | 330,562 |
Other long-term liabilities | 63,204 | 48,783 |
Total liabilities | 1,777,048 | 1,675,679 |
Preferred unit, aggregate purchase price | 57,500 | |
Partners’ capital (deficit) | (104,025) | (6,578) |
Total liabilities, redeemable convertible preferred units and partners’ deficit | 1,730,523 | 1,669,101 |
Parent | ||
Current assets: | ||
Investments in and amounts due from affiliates eliminated upon consolidation | 61,875 | |
Total assets | 61,875 | |
Liabilities, Redeemable Convertible Preferred Units and Partners’ Deficit | ||
Long-term debt, net of deferred financing costs | 68,453 | |
Investments in and amounts due to affiliates eliminated upon consolidation | 46,525 | |
Total liabilities | 46,525 | 68,453 |
Preferred unit, aggregate purchase price | 57,500 | |
Partners’ capital (deficit) | (104,025) | (6,578) |
Total liabilities, redeemable convertible preferred units and partners’ deficit | 61,875 | |
Subsidiary Issuer | ||
Current assets: | ||
Other current assets | 3,470 | 3,718 |
Total current assets | 3,470 | 3,718 |
Long-term accounts receivable | 2,906 | 3,118 |
Cemetery and funeral home property and equipment | 696 | 806 |
Deferred selling and obtaining costs | 5,580 | 5,511 |
Investments in and amounts due from affiliates eliminated upon consolidation | (586) | |
Total assets | 12,652 | 12,567 |
Liabilities, Redeemable Convertible Preferred Units and Partners’ Deficit | ||
Current liabilities | 150 | 184 |
Long-term debt, net of deferred financing costs | 105,160 | |
Deferred revenues | 32,926 | 32,147 |
Investments in and amounts due to affiliates eliminated upon consolidation | 259,737 | |
Total liabilities | 292,813 | 137,491 |
Partners’ capital (deficit) | (280,161) | (124,924) |
Total liabilities, redeemable convertible preferred units and partners’ deficit | 12,652 | 12,567 |
Guarantor Subsidiaries | ||
Current assets: | ||
Cash and cash equivalents, excluding restricted cash | 42,066 | 16,298 |
Restricted cash | 20,580 | |
Other current assets | 69,812 | 64,924 |
Total current assets | 132,458 | 81,222 |
Long-term accounts receivable | 64,918 | 71,708 |
Cemetery and funeral home property and equipment | 404,948 | 409,201 |
Deferred selling and obtaining costs | 90,236 | 88,705 |
Intangible assets | 187 | |
Goodwill and intangible assets | 25,676 | |
Other assets | 29,939 | 19,403 |
Investments in and amounts due from affiliates eliminated upon consolidation | 649,920 | 539,997 |
Total assets | 1,372,606 | 1,235,912 |
Liabilities, Redeemable Convertible Preferred Units and Partners’ Deficit | ||
Current liabilities | 63,418 | 60,216 |
Long-term debt, net of deferred financing costs | 362,173 | 146,635 |
Deferred revenues | 797,538 | 770,337 |
Other long-term liabilities | 46,820 | 33,553 |
Due to affiliates | 173,613 | |
Total liabilities | 1,269,949 | 1,184,354 |
Partners’ capital (deficit) | 102,657 | 51,556 |
Total liabilities, redeemable convertible preferred units and partners’ deficit | 1,372,606 | 1,235,910 |
Non-Guarantor Subsidiaries | ||
Current assets: | ||
Cash and cash equivalents, excluding restricted cash | 1,449 | 1,849 |
Other current assets | 11,966 | 11,527 |
Total current assets | 13,415 | 13,376 |
Long-term accounts receivable | 10,314 | 12,322 |
Cemetery and funeral home property and equipment | 31,960 | 33,550 |
Merchandise trusts | 519,529 | 488,248 |
Perpetual care trusts | 343,028 | 330,562 |
Deferred selling and obtaining costs | 17,785 | 18,444 |
Intangible assets | 56,375 | |
Goodwill and intangible assets | 60,607 | |
Other assets | 2,779 | 2,924 |
Total assets | 995,185 | 960,033 |
Liabilities, Redeemable Convertible Preferred Units and Partners’ Deficit | ||
Current liabilities | 1,520 | 1,400 |
Deferred revenues | 113,091 | 111,802 |
Perpetual care trust corpus | 343,028 | 330,562 |
Other long-term liabilities | 16,384 | 15,230 |
Investments in and amounts due to affiliates eliminated upon consolidation | 570,954 | |
Due to affiliates | 543,543 | |
Total liabilities | 1,044,977 | 1,002,537 |
Partners’ capital (deficit) | (49,792) | (42,502) |
Total liabilities, redeemable convertible preferred units and partners’ deficit | 995,185 | 960,035 |
Eliminations | ||
Current assets: | ||
Investments in and amounts due from affiliates eliminated upon consolidation | (649,920) | (601,286) |
Total assets | (649,920) | (601,286) |
Liabilities, Redeemable Convertible Preferred Units and Partners’ Deficit | ||
Investments in and amounts due to affiliates eliminated upon consolidation | (877,216) | |
Due to affiliates | (717,156) | |
Total liabilities | (877,216) | (717,156) |
Partners’ capital (deficit) | 227,296 | 115,870 |
Total liabilities, redeemable convertible preferred units and partners’ deficit | $ (649,920) | $ (601,286) |
SUPPLEMENTAL CONDENSED CONSOL_5
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Condensed Consolidating Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Financial Statements Captions [Line Items] | ||||||||
Revenues | $ 73,151 | $ 73,185 | $ 223,115 | $ 232,701 | ||||
Total costs and expenses | (79,592) | (83,201) | (245,678) | (259,481) | ||||
Other income (loss) | (129) | 702 | (3,558) | (4,503) | ||||
Interest expense | (12,765) | (7,638) | (35,282) | (22,858) | ||||
Loss on debt extinguishment | (8,478) | |||||||
Loss on impairment of goodwill | (24,862) | (24,862) | ||||||
Loss from operations before income taxes | (44,197) | (16,952) | (94,743) | (54,141) | ||||
Income tax benefit (expense) | 1,545 | (273) | (4,841) | 1,976 | ||||
Net loss | (42,652) | $ (34,398) | $ (22,534) | (17,225) | $ (17,017) | $ (17,923) | (99,584) | (52,165) |
Parent | ||||||||
Condensed Financial Statements Captions [Line Items] | ||||||||
Net loss from equity investment in subsidiaries | (42,652) | (15,867) | (94,405) | (48,090) | ||||
Interest expense | (1,358) | (4,241) | (4,075) | |||||
Loss on debt extinguishment | (938) | |||||||
Loss from operations before income taxes | (42,652) | (17,225) | (99,584) | (52,165) | ||||
Net loss | (42,652) | (17,225) | (99,584) | (52,165) | ||||
Subsidiary Issuer | ||||||||
Condensed Financial Statements Captions [Line Items] | ||||||||
Revenues | 1,257 | 1,513 | 4,260 | 4,563 | ||||
Total costs and expenses | (3,336) | (3,192) | (11,894) | (10,278) | ||||
Net loss from equity investment in subsidiaries | (33,050) | (13,280) | (74,333) | (40,382) | ||||
Interest expense | (2,087) | (5,909) | (6,261) | |||||
Loss on debt extinguishment | (1,441) | |||||||
Loss from operations before income taxes | (35,129) | (17,046) | (89,317) | (52,358) | ||||
Net loss | (35,129) | (17,046) | (89,317) | (52,358) | ||||
Guarantor Subsidiaries | ||||||||
Condensed Financial Statements Captions [Line Items] | ||||||||
Revenues | 61,520 | 61,254 | 187,021 | 196,638 | ||||
Total costs and expenses | (64,596) | (68,979) | (197,511) | (214,804) | ||||
Other income (loss) | (129) | 702 | (1,475) | (4,503) | ||||
Interest expense | (12,486) | (3,935) | (24,311) | (11,755) | ||||
Loss on debt extinguishment | (6,099) | |||||||
Loss on impairment of goodwill | (24,206) | (24,206) | ||||||
Loss from operations before income taxes | (39,897) | (10,958) | (66,581) | (34,424) | ||||
Income tax benefit (expense) | 1,545 | (273) | (4,841) | 1,976 | ||||
Net loss | (38,352) | (11,231) | (71,422) | (32,448) | ||||
Non-Guarantor Subsidiaries | ||||||||
Condensed Financial Statements Captions [Line Items] | ||||||||
Revenues | 12,154 | 12,116 | 36,354 | 38,390 | ||||
Total costs and expenses | (13,440) | (12,728) | (40,793) | (41,289) | ||||
Other income (loss) | (2,083) | |||||||
Interest expense | (279) | (258) | (821) | (767) | ||||
Loss on impairment of goodwill | (656) | (656) | ||||||
Loss from operations before income taxes | (2,221) | (870) | (7,999) | (3,666) | ||||
Net loss | (2,221) | (870) | (7,999) | (3,666) | ||||
Eliminations | ||||||||
Condensed Financial Statements Captions [Line Items] | ||||||||
Revenues | (1,780) | (1,698) | (4,520) | (6,890) | ||||
Total costs and expenses | 1,780 | 1,698 | 4,520 | 6,890 | ||||
Net loss from equity investment in subsidiaries | 75,702 | 29,147 | 168,738 | 88,472 | ||||
Loss from operations before income taxes | 75,702 | 29,147 | 168,738 | 88,472 | ||||
Net loss | $ 75,702 | $ 29,147 | $ 168,738 | $ 88,472 |
SUPPLEMENTAL CONDENSED CONSOL_6
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Financial Statements Captions [Line Items] | ||
Net cash used in (provided by) operating activities | $ (26,755) | $ 19,411 |
Cash Flows From Investing Activities: | ||
Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales | (4,493) | (10,877) |
Net cash used in investing activities | (4,493) | (10,877) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of redeemable convertible preferred units, net | 57,500 | |
Net borrowings and repayments of debt | 38,345 | (4,044) |
Other financing activities | (18,649) | (3,268) |
Net cash provided by (used in) financing activities | 77,196 | (7,312) |
Net increase in cash, cash equivalents and restricted cash | 45,948 | 1,222 |
Cash, cash equivalents and restricted cash—Beginning of period | 18,147 | 6,821 |
Cash, cash equivalents and restricted cash—End of period | 64,095 | 8,043 |
Parent | ||
Cash Flows From Investing Activities: | ||
Payments to affiliates | (57,500) | |
Net cash used in investing activities | (57,500) | |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of redeemable convertible preferred units, net | 57,500 | |
Net cash provided by (used in) financing activities | 57,500 | |
Subsidiary Issuer | ||
Condensed Financial Statements Captions [Line Items] | ||
Net cash used in (provided by) operating activities | 212 | 363 |
Cash Flows From Investing Activities: | ||
Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales | (188) | (363) |
Net cash used in investing activities | (188) | (363) |
Cash Flows From Financing Activities: | ||
Net borrowings and repayments of debt | (24) | |
Net cash provided by (used in) financing activities | (24) | |
Guarantor Subsidiaries | ||
Condensed Financial Statements Captions [Line Items] | ||
Net cash used in (provided by) operating activities | (16,712) | 29,462 |
Cash Flows From Investing Activities: | ||
Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales | (4,158) | (9,888) |
Net cash used in investing activities | (4,158) | (9,888) |
Cash Flows From Financing Activities: | ||
Payments from (to) affiliates | 47,350 | (10,336) |
Net borrowings and repayments of debt | 38,517 | (4,044) |
Other financing activities | (18,649) | (3,268) |
Net cash provided by (used in) financing activities | 67,218 | (17,648) |
Net increase in cash, cash equivalents and restricted cash | 46,348 | 1,926 |
Cash, cash equivalents and restricted cash—Beginning of period | 16,298 | 4,216 |
Cash, cash equivalents and restricted cash—End of period | 62,646 | 6,142 |
Non-Guarantor Subsidiaries | ||
Condensed Financial Statements Captions [Line Items] | ||
Net cash used in (provided by) operating activities | (105) | (78) |
Cash Flows From Investing Activities: | ||
Cash paid for acquisitions and capital expenditures, net of proceeds from divestitures and asset sales | (147) | (626) |
Net cash used in investing activities | (147) | (626) |
Cash Flows From Financing Activities: | ||
Net borrowings and repayments of debt | (148) | |
Net cash provided by (used in) financing activities | (148) | |
Net increase in cash, cash equivalents and restricted cash | (400) | (704) |
Cash, cash equivalents and restricted cash—Beginning of period | 1,849 | 2,605 |
Cash, cash equivalents and restricted cash—End of period | 1,449 | 1,901 |
Eliminations | ||
Condensed Financial Statements Captions [Line Items] | ||
Net cash used in (provided by) operating activities | (10,150) | (10,336) |
Cash Flows From Investing Activities: | ||
Payments to affiliates | 57,500 | |
Net cash used in investing activities | 57,500 | |
Cash Flows From Financing Activities: | ||
Payments from (to) affiliates | (47,350) | 10,336 |
Net cash provided by (used in) financing activities | $ (47,350) | $ 10,336 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Segment I
SEGMENT INFORMATION - Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||
Revenues | $ 73,151 | $ 73,185 | $ 223,115 | $ 232,701 | |||||
Depreciation and amortization | (2,647) | (2,737) | (8,120) | (8,853) | |||||
Segment profit | 5,346 | 3,087 | 16,179 | 13,832 | |||||
Corporate overhead | (11,595) | (12,876) | (38,145) | (39,868) | |||||
Corporate depreciation and amortization | (192) | (227) | (597) | (744) | |||||
Other gains (losses), net | (129) | 702 | (3,558) | (4,503) | |||||
Loss on debt extinguishment | (8,478) | ||||||||
Loss on impairment of goodwill | (24,862) | (24,862) | |||||||
Interest expense | (12,765) | (7,638) | (35,282) | (22,858) | |||||
Income tax benefit (expense) | 1,545 | (273) | (4,841) | 1,976 | |||||
Net loss | (42,652) | $ (34,398) | $ (22,534) | (17,225) | $ (17,017) | $ (17,923) | (99,584) | (52,165) | |
Capital expenditures | 905 | 2,538 | 5,743 | 10,164 | |||||
Total assets | 1,730,523 | 1,730,523 | $ 1,669,101 | ||||||
Goodwill | 24,862 | ||||||||
Cemetery | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | 60,750 | 61,405 | 184,288 | 191,328 | |||||
Operating costs and expenses | (54,681) | (57,440) | (166,777) | (176,925) | |||||
Depreciation and amortization | (1,853) | (1,858) | (5,735) | (6,043) | |||||
Goodwill | 24,862 | ||||||||
Funeral Home | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | 12,401 | 11,780 | 38,827 | 41,373 | |||||
Operating costs and expenses | (10,669) | (10,148) | (32,636) | (33,835) | |||||
Depreciation and amortization | (602) | (652) | (1,788) | (2,066) | |||||
Operating | Cemetery | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Segment profit | 4,216 | 2,107 | 11,776 | 8,360 | |||||
Capital expenditures | 411 | 2,105 | 4,222 | 9,378 | |||||
Total assets | 1,507,873 | 1,507,873 | 1,508,667 | ||||||
Operating | Funeral Home | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Segment profit | 1,130 | 980 | 4,403 | 5,472 | |||||
Capital expenditures | 465 | 246 | 1,447 | 465 | |||||
Total assets | 146,708 | 146,708 | 136,064 | ||||||
Corporate | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Capital expenditures | 29 | $ 187 | 74 | $ 321 | |||||
Total assets | $ 75,942 | $ 75,942 | $ 24,370 |
SUPPLEMENTAL CONSOLIDATED CAS_3
SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION - Schedule of Cash Flow, Supplemental Disclosures (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Accounts Receivable | ||
Pre-need/at-need contract originations (sales on credit) | $ (88,296) | $ (95,267) |
Cash receipts from sales on credit (post-origination) | 73,991 | 100,841 |
Changes in accounts receivable, net of allowance | (14,305) | 5,574 |
Deferrals: | ||
Cash receipts from customer deposits at origination, net of refunds | 107,847 | 114,132 |
Withdrawals of realized income from merchandise trusts during the period | 6,699 | 13,815 |
Pre-need/at-need contract originations (sales on credit) | 88,296 | 95,267 |
Undistributed merchandise trust investment earnings, net | 8,367 | 357 |
Recognition: | ||
Merchandise trust investment income, net withdrawn as of end of period | (6,985) | (7,211) |
Recognized maturities of customer contracts collected as of end of period | (155,915) | (137,265) |
Recognized maturities of customer contracts uncollected as of end of period | (24,449) | (38,734) |
Changes in customer contract liabilities | $ 23,860 | $ 40,361 |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional Information (Detail) $ / shares in Units, $ in Thousands | Oct. 25, 2019USD ($)$ / sharesshares | Sep. 25, 2019$ / sharesshares | Oct. 31, 2019USD ($)Property | Jun. 30, 2019USD ($) | Sep. 30, 2019 |
Subsequent Event [Line Items] | |||||
Issuance of Series A convertible preferred units, net of issuance | $ | $ 57,500 | ||||
Subsequent Events | |||||
Subsequent Event [Line Items] | |||||
Refundable deposit received for divestitures of property. | $ | $ 5,000 | ||||
Divestiture, number of property in non-binding letter | Property | 1 | ||||
Rights Offering | |||||
Subsequent Event [Line Items] | |||||
Rights offering commenced date | Sep. 25, 2019 | ||||
Rights offering record date | Sep. 26, 2019 | ||||
Rights offering expired date | Oct. 25, 2019 | ||||
Outstanding Common Units | Rights Offering | |||||
Subsequent Event [Line Items] | |||||
Preferred units, sold | shares | 1.24 | ||||
Unit sold, subscription price per share | $ / shares | $ 1.20 | ||||
Outstanding Common Units | Rights Offering | Subsequent Events | |||||
Subsequent Event [Line Items] | |||||
Issuance of Series A convertible preferred units, net of issuance (in units) | shares | 3,039,380 | ||||
Issuance of Series A convertible preferred units, net of issuance | $ | $ 3,600 | ||||
Outstanding Preferred Units | Rights Offering | Subsequent Events | |||||
Subsequent Event [Line Items] | |||||
Preferred unit, shares redemption | shares | 3,039,380 | ||||
Preferred unit, redemption price per share | $ / shares | $ 1.20 |