Exhibit 99.1
Service Corporation International Reports Third Quarter 2004 Earnings of $.04
Per Diluted Share, $.06 Per Diluted Share Before Special Items
- Conference call to be webcast today at 9:00 a.m. central time
HOUSTON, Nov. 8 /PRNewswire-FirstCall/ -- Service Corporation
International (NYSE: SCI), the world's largest funeral and cemetery company,
today reported net income for the third quarter 2004 of $12.6 million and
earnings per diluted share of $.04 compared to a net loss of $4.7 million or
$.02 per diluted share in the same period of 2003. These results included
litigation expenses, losses on dispositions, non-recurring other income and
discontinued operations.
SCI's third quarter earnings from continuing operations, excluding special
items, were $19.3 million, or $.06 per diluted share. This compares to
earnings of $12.7 million, or $.04 per diluted share in the third quarter of
2003. Earnings before special items in 2003 benefited from net income of
$9.0 million or $.03 per diluted share from our French operations which were
divested in March 2004. Improved profitability in North America was the
catalyst for earnings growth in 2004 compared to 2003. See a reconciliation
of earnings before special items to GAAP measures included in a separate
section later in this press release.
Gross profits from comparable North America funeral and cemetery
businesses rose 33.2% or $16.7 million driven by cost reductions. This
improvement was achieved despite a 2.6% decrease in revenues which were
impacted by declines in other funeral revenues and anticipated decreased
revenues associated with cemetery development projects.
At September 30, 2004, total debt was $1.29 billion and cash on hand was
$318.0 million. Total debt less cash on hand has been reduced by
$485.8 million or 33.2% since December 31, 2003. There were no meaningful
debt repayments during the third quarter of 2004. Free cash flow was down
$8.6 million in the third quarter of 2004 compared to the third quarter of
2003 mainly due to a decrease in accounts receivable collections and the
replacement of bonding with trust funding as our financial assurance mechanism
for new preneed sales in Florida. On a year-to-date basis, free cash flow was
$166.8 million, down $5.3 million from 2003, and on target to meet
management's guidance of $200 to $245 million for the year. See our
definition and calculation of free cash flow included in a separate section
later in this press release.
"I am pleased with our third quarter accomplishments," said Robert L.
Waltrip, Chairman and Chief Executive Officer. "Our operating results showed
significant gains from the prior period. These improved results reflect the
determination of our management team and the efforts of SCI employees
throughout the organization. We continue to generate substantial free cash
flow and our cash on hand exceeds $300 million. With less than $140 million
of debt maturing during the remainder of 2004 and 2005, we have significant
flexibility to consider investments or capital structure related transactions
that will create value for our share owners."
"SCI delivered a solid operating performance in the third quarter," added
Tom Ryan, President and Chief Operating Officer. "Both the funeral and
cemetery segments showed significant increases in profits and margin
expansion. We are especially pleased by the performance in our cemetery
segment during the quarter where gross profits nearly doubled those in the
year ago period. These improvements in North America are mainly the result of
the initiatives undertaken in 2003 to reduce our costs and to improve our
efficiency. We intend to maintain our focus on reducing our overall cost
structure while also growing profitable revenues as we move ahead."
North America Comparable Operating Results
Three Months Ended
September 30,
--------------------
Increase
2004 2003 (Decrease) Percentage
--------- --------- ---------- ----------
(Restated)
Funeral
-------
Revenues $262.0 $265.2 $(3.2) (1.2)%
Gross Profits $44.3 $38.6 $5.7 14.8%
Gross Margin 16.9% 14.6%
Funeral Services Performed 59,292 60,966 (1,674) (2.7)%
Average Revenue Per
Funeral Service $4,289 $4,174 $115 2.8%
Preneed funeral sales
production $89.4 $90.3 ($0.9) (1.0)%
Cemetery
--------
Revenues $127.7 $135.0 $(7.3) (5.4)%
Gross Profits $22.7 $11.7 $11.0 94.0%
Gross Margin 17.8% 8.7%
Preneed cemetery sales
production $66.4 $78.1 $(11.7) (15.0)%
In millions, except funeral services performed and average revenue per
funeral service. Comparable financial information excludes operations
that have been divested, acquired, or constructed during the period
January 1, 2003 to September 30, 2004, and are meant to be reflective of
"same store" results of operations.
-- Funeral gross profits increased 14.8% to $44.3 million.
- Funeral revenues were down $3.2 million or 1.2% predominantly due
to a decrease in other funeral service revenues. Revenues from
Kenyon, our disaster assistance subsidiary, declined $1.8 million,
and we also experienced a $1.2 million decline in general agency
revenues associated with insurance funded prearranged funeral
sales.
- Funeral gross profit improvement is primarily the result of
reduced overhead and pension expenses, partially offset by the
decline in the other funeral revenues described above. Funeral
gross margin rose to 16.9% compared to 14.6% in the prior period.
- Average revenue per funeral service grew 2.8%. We continue to see
a strong positive trend in average revenue which is mainly a
result of the expanded product and service offerings included in
our Dignity Memorial(R) funeral and cremation plans.
- The rate of selection of Dignity Memorial(R) plans increased to
17.2% compared to 16.6% in 2003.
- Funeral case volume declined 2.7%, and is down 0.7% on a
year-to-date basis which is consistent with management's guidance
for the year.
- Cremation rate increased to 39.8% versus 38.9% in the same period
of 2003.
- Preneed funeral sales production declined 1.0% to $89.4 million.
-- Cemetery gross profits nearly doubled, despite a 5.4% decline in
revenues.
- Cemetery gross profits increased $11.0 million and benefited from
reductions in overhead costs, selling costs, and maintenance
expenses. Cemetery gross margins climbed to 17.8% from 8.7%.
- Cemetery revenue decreased primarily due to lower levels of
revenues associated with cemetery development projects.
- Preneed cemetery sales production was down 15.0% to $66.4 million,
impacted by continued modifications to the sales compensation plan
and to a lesser extent the hurricane-related issues that have
plagued the Southeast where we have a significant presence.
-- Field overhead and home office overhead, which are allocated to
funeral and cemetery operations in North America, was reduced by
$10.7 million or 28.3% as a result of initiatives undertaken in
2003 to improve the management structure and to reduce our fixed
costs.
Other Income and Expenses
-- General and administrative expenses declined $27.5 million to
$25.3 million due to a decrease in litigation expenses and system
amortization costs.
- In the third quarter of 2004, we recognized legal expenses (net of
insurance recoveries) of $8.3 million compared to $32.0 million in
2003. Additionally, in 2003 we recognized $4.6 million of
accelerated system amortization expense that is not included in
2004. Excluding these items in both periods, general and
administrative expenses increased less than $1 million.
- During the quarter we experienced increased professional fees of
$1.8 million associated with Sarbanes-Oxley compliance and
$1.3 million of increased non-cash long-term compensation
expenses; however, these expenses were offset primarily by
reductions in information technology and other expenses.
-- Gains and impairment (losses) on dispositions, net was a net pretax
loss of $3.3 million compared to a net pretax loss of $1.5 million
in 2003. These net pretax losses in both periods are primarily
associated with various dispositions in North America.
-- Interest expense was $6.9 million lower in the third quarter of 2004
compared to the third quarter of 2003 primarily due to the debt
extinguishments in the second quarter of 2004, including the early
retirement of 6% notes due 2005, the repayment of 7.375% notes due
2004, and the conversion and redemption of 6.75 % convertible notes
due 2008.
-- Other income declined $6.6 million in the third quarter of 2004
compared to 2003. Contributing to this decrease was a decline of
$2.8 million in interest income and a decline of $1.1 million in net
foreign currency and other gains. Also, included in 2003 was a
$2.6 million net gain from corporate investments.
-- The effective tax rate in the quarter was 24.9% and was favorably
impacted by a $2.4 million benefit resulting from a change in
estimated 2003 federal tax liabilities. Due to this benefit and tax
benefits realized from certain international dispositions, we expect
the effective tax rate for the year will be 11% to 15%.
-- The diluted weighted average number of shares increased by
approximately 40 million shares in the third quarter of 2004 compared
to 2003 mainly due to the conversion in June 2004 of our convertible
senior notes which resulted in the issuance of approximately 32
million shares. The remaining share increase is related to dilutive
outstanding stock options and our contribution of common stock to our
401 (k) retirement plan, partially offset by share repurchases.
Share Repurchase Program
In August 2004, we announced a share repurchase program authorizing the
investment of up to $100 million to repurchase our common stock. As of
October 31, 2004, we had repurchased approximately 9.5 million shares at a
total cost of approximately $59.4 million. We plan to make purchases from
time to time in the open market or through privately negotiated transactions,
subject to acceptable market conditions and normal trading restrictions.
NON-GAAP FINANCIAL MEASURES
Free Cash Flow
Free cash flow is a non-GAAP financial measure. We define free cash flow
as cash flows from operating activities (adjusted for certain unusual items
described below) less capital improvements deemed reasonably necessary to
maintain our existing facilities in a condition consistent with company
standards and to extend their useful lives. We believe that free cash flow
provides useful information to investors regarding our financial condition and
liquidity as well as our ability to generate cash for purposes such as
reducing debt, expanding through strategic investments and repurchasing stock
or paying dividends. Free cash flow is not reduced by capital expenditures
intended to grow revenues and profits such as the acquisition of funeral
service locations or cemeteries in large or strategic North America markets,
construction of high-end cemetery property inventory or the construction of
funeral home facilities on SCI-owned cemeteries. Growth-oriented capital
spending was $20.4 million in the nine months ended September 30, 2004
compared to $17.7 million in the same period of 2003.
While we believe free cash flow, as defined, is helpful in managing our
business and provides useful information to investors, certain events may
arise, financial or otherwise, which could require the use of free cash flow
so that it would not be available for the purposes described above, as more
fully described in our public filings with the Securities and Exchange
Commission. Furthermore, free cash flow should be reviewed in addition to,
but not as a substitute for, the data provided in our consolidated statement
of cash flows attached to this press release.
The following table provides a reconciliation between cash flows from
operations and free cash flow, as defined.
(In millions) Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2004 2003 2004 2003
-------- ------- ------- ------
Cash Flows from Operations $50.4 $59.9 $183.2 $303.6
Less: Unusual Tax Refund --- --- --- (94.5)
Add: Settlement of Significant
Legal Matters, Net of
Insurance Recoveries (0.7) 21.1 (0.7) 25.1
Add: Repayment of Insurance
Policy Loan from
Retirement Program 11.4 --- 11.4 ---
Add: Frozen Cash Balance
Pension Plan Contribution --- --- 20.0 ---
-------- ------- ------- ------
Adjusted Cash Flows from
Operations $61.1 $81.0 $213.9 $234.2
Less: Capital Improvements
to Maintain Existing
Facilities (14.8) (26.1) (47.1) (62.1)
-------- ------- ------- ------
Free Cash Flow $46.3 $54.9 $166.8 $172.1
======== ======= ======= ======
-- Free cash flow in the quarter was down $8.6 million.
- We did not own our former business in France in the third quarter
of 2004. Free cash flow from French operations in the third
quarter of 2003 was a use of cash of $3.5 million, consisting of
$7.9 million in cash flows from operations less $11.4 million in
maintenance capital improvement spending.
- Free cash flow excluding our French operations was $46.3 million
compared to $58.4 million. This decline of $12.1 million was due
to a decrease in accounts receivable collections and increased
trust deposits in Florida. In February 2004, we began to trust
monies associated with new preneed contracts in Florida in lieu of
surety bonding. Net deposits to preneed funeral and cemetery
trusts for new sales in Florida were $5.8 million
in the third quarter of 2004. No deposits to preneed funeral and
cemetery trusts were made in 2003, as we used surety bonding as
our financial assurance mechanism in that year.
-- Free cash flow in the first nine months was down $5.3 million.
- We owned our business in France from January 1, 2004 through
March 11, 2004. Cash flow from these French operations for the
partial period of our ownership in 2004 was $18.3 million compared
to $26.1 million in the first nine months of 2003. Maintenance
capital improvements related to our French business were
$2.8 million in the partial period of 2004 compared to
$19.7 million in 2003.
- Free cash flow excluding our French businesses was $151.3 million
compared to $165.7 million. This decline of $14.4 million is
mainly due to net deposits to preneed funeral and cemetery trusts
for new sales in Florida of $11.9 million in 2004 compared to no
trust deposits in 2003. Also, maintenance capital spending
increased $1.9 million in 2004. Reductions in interest and tax
payments helped to offset other working capital declines primarily
associated with a decrease in accounts receivable collections.
- Based on our year-to-date performance, we believe we are on pace
to achieve targeted 2004 free cash flow of $200 to $245 million.
Pro forma Net Income and Diluted Earnings Per Share
Earnings before special items is a non-GAAP financial measure. We believe
this non-GAAP measure provides a consistent basis for comparison between
quarters and better reflects the performance of our core operations, as it is
not influenced by certain non-recurring expenses. We also believe this
measure helps facilitate comparisons to competitors' operating results.
Set forth below is a reconciliation of non-GAAP financial measures to the
most directly comparable GAAP financial measures. We do not intend for the
information to be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP.
Three Months Ended
-------------------------------------------------------
September 30, 2004 September 30, 2003 (Restated)
------------------------- -----------------------------
(In Millions) Operating Net Diluted Operating Net Diluted
Income Income EPS Income Income EPS
------------------------- -----------------------------
As Reported $39.7 $12.6 $.04 $14.7 $(4.7) $(.02)
Settlement of
significant legal
matters 8.3 5.2 .02 32.0 19.8 .07
Gains and impairment
losses on
dispositions 3.3 1.8 .00 1.5 0.9 .00
Other income/expense
Net gain on
corporate
investments --- --- --- --- (2.6) (.01)
Foreign currency
transaction loss --- --- --- --- --- ---
Discontinued
operations --- (0.3) (.00) --- (0.7) (.00)
------------------------- -----------------------------
Pro forma $51.3 $19.3 $.06 $48.2 $12.7 $.04
Diluted weighted
average shares 340,215 300,507
Interest add back $--- $---
Nine Months Ended
-------------------------------------------------------
September 30, 2004 September 30, 2003 (Restated)
------------------------- -----------------------------
(In Millions) Operating Net Diluted Operating Net Diluted
Income Income EPS Income Income EPS
------------------------- -----------------------------
As Reported $194.4 $87.5 $.27 $171.8 $54.7 $.18
Settlement of
significant legal
matters 48.3 30.6 .09 47.0 29.1 .09
Gains and impairment
losses on
dispositions (33.1) (58.5) (.18) (5.4) (3.4) (.01)
Other operating
income/expense (6.9) (4.7) (.01) 1.7 1.1 .00
Loss/gain on early
extinguishment of
debt --- 10.5 .03 --- (1.2) (.00)
Other income/expense
Interest
income-United
Kingdom note
receivable --- (2.7) (.01) --- --- ---
Net gain on
corporate
investments --- --- --- --- (2.6) (.01)
Foreign currency
transaction loss --- 2.3 .01 --- --- ---
Discontinued
operations --- (35.4) (.10) --- (2.0) (.00)
Cumulative effect
of accounting
changes --- 48.1 .14 --- --- ---
------------------------- -----------------------------
Pro forma $202.7 $77.7 $.24 $215.1 $75.7 $.25
Diluted weighted
average shares 348,894 299,842
Interest add back $6.4 $---
Conference Call and Webcast
We will host a conference call on Monday, November 8, 2004, at 9:00 a.m.
Central time. A question and answer session will follow a brief presentation
made by management. The conference call dial-in number is (719) 457-2683.
The conference call will also be broadcast live via the Internet and can be
accessed through our website at http://www.sci-corp.com . A replay of the
conference call will be available through November 22, 2004 and can be
accessed at (719) 457-0820 with the confirmation code of 831966.
Additionally, a replay of the conference call will be available on our website
for approximately ninety days on the Investors page under the subheading
"Conference Calls" at http://www.sci-corp.com/ConfCalls.html . This earnings
release will also be available on our website on the Investor Relations page
under the subheading "News" at http://www.sci-corp.com/InvestorsMenu.html .
Cautionary Statement on Forward-Looking Statements
The statements in this press release that are not historical facts are
forward-looking statements made in reliance on the "safe harbor" protections
provided under the Private Securities Litigation Reform Act of 1995. These
statements may be accompanied by words such as "believe," "estimate,"
"project," "expect," "anticipate" or "predict," that convey the uncertainty of
future events or outcomes. These statements are based on assumptions that we
believe are reasonable; however, many important factors could cause our actual
results in the future to differ materially from the forward-looking statements
made herein and in any other documents or oral presentations made by us, or on
our behalf. Important factors, which could cause actual results to differ
materially from those in forward-looking statements include, among others, the
following:
-- Changes in general economic conditions, both domestically and
internationally, impacting financial markets (e.g., marketable
security values, as well as currency and interest rate fluctuations)
that could negatively affect us, particularly, but not limited to,
levels of trust fund income, interest expense, pension expense and
negative currency translation effects.
-- The outcomes of pending lawsuits and proceedings against us involving
alleged violations of securities laws and the possibility that
insurance coverage is deemed not to apply to these matters or that an
insurance carrier is unable to pay any covered amounts to us.
-- Our ability to consummate the previously disclosed proposed
settlement of our Consolidated Lawsuit (as defined within our Form
10-Q) involving allegations of violations of federal securities laws,
which is subject to court approval.
-- Our ability to consummate the settlement of lawsuits in Florida as
described in the agreement in principle with respect thereto, and the
possibility that insurance coverage is deemed not to apply to these
matters or that an insurance carrier is unable to pay any covered
amounts to us.
-- Amounts payable by us with respect to our outstanding legal matters
exceeding our established reserves.
-- We maintain accruals for tax liabilities which relate to uncertain
tax matters. If these tax matters are unfavorably resolved, we will
make any required payments to tax authorities. If these tax matters
are favorably resolved, the accruals maintained by us will no longer
be required and these amounts will be reversed through the tax
provision at the time of resolution.
-- Our ability to successfully implement our strategic plan related to
producing operating improvements, strong cash flows and further
deleveraging.
-- Our ability to successfully implement our plan to reduce costs and
increase cash flows associated with significant changes being made to
our organization structure, process and quality of our sales efforts.
-- Changes to net income as a result of our ongoing reconciliation
processes regarding our trust assets and preneed backlogs.
-- Changes in consumer demand and/or pricing for our products and
services due to several factors, such as changes in numbers of
deaths, cremation rates, competitive pressures and local economic
conditions.
-- Changes in domestic and international political and/or regulatory
environments in which we operate, including potential changes in tax,
accounting and trusting policies.
-- Changes in credit relationships impacting the availability of credit
and the general availability of credit in the marketplace.
-- Our ability to successfully complete our ongoing process improvement
and system implementation projects, including our replacement of our
North America point-of-sale information technology systems.
-- Our ability to successfully access surety and insurance markets at a
reasonable cost.
-- Our ability to successfully exploit our substantial purchasing power
with certain of our vendors.
-- The outcome of a pending Internal Revenue Service audit and future
tax deductions resulting from potential asset sales.
-- The effectiveness of our internal controls over financial reporting,
and our ability to certify the effectiveness of the internal controls
and to obtain a favorable attestation report of our auditors
regarding our assessment of our internal controls.
For further information on these and other risks and uncertainties, see
our Securities and Exchange Commission filings, including our 2003 Annual
Report on Form 10-K. Copies of this document as well as other SEC filings can
be obtained from our website at http://www.sci-corp.com . We assume no
obligation to publicly update or revise any forward-looking statements made
herein or any other forward-looking statements made by us, whether as a result
of new information, future events or otherwise.
Service Corporation International, headquartered in Houston, Texas, is the
leading provider of funeral and cemetery services in the world. We have an
extensive network of businesses including 1,218 funeral service locations and
402 cemeteries in North America as of September 30, 2004. For more
information about Service Corporation International, please visit our website
at http://www.sci-corp.com .
For additional information contact:
Investors: Debbie Young - Director of Investor Relations
(713) 525-9088
Media: Terry Hemeyer - Managing Director / Corporate Communications
(713) 525-5497
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
------------------- ------------------------
2004 2003 2004 2003
-------- -------- ---------- ----------
Revenues $403,352 $566,461 $1,421,526 $1,729,337
Costs and expenses 335,083 497,515 1,166,776 1,450,801
-------- -------- ---------- ----------
Gross profit 68,269 68,946 254,750 278,536
-------- -------- ---------- ----------
General and
administrative expenses (25,298) (52,775) (100,347) (110,454)
Gains and impairment
(losses) on dispositions,
net (3,281) (1,452) 33,018 5,413
Other operating income
(expense) --- --- 6,932 (1,724)
-------- -------- ---------- ----------
Operating income 39,690 14,719 194,353 171,771
Interest expense (27,888) (34,835) (94,668) (107,968)
Gain (loss) on early
extinguishment of debt --- 176 (16,770) 2,079
Other income, net 4,569 11,218 12,758 16,590
-------- -------- ---------- ----------
(23,319) (23,441) (98,680) (89,299)
-------- -------- ---------- ----------
Income (loss) from
continuing operations
before income taxes and
cumulative effects of
accounting changes 16,371 (8,722) 95,673 82,472
Provision (benefit) for
income taxes 4,079 (3,331) (4,468) 29,815
-------- -------- ---------- ----------
Income (loss) from
continuing operations
before cumulative effects
of accounting changes $12,292 $(5,391) $100,141 $52,657
Income from discontinued
operations (net of income
tax expense (benefit)
of $141, $112, ($48,815)
and $336, respectively) 284 659 35,375 2,005
Cumulative effects of
accounting changes (net
of income tax benefit
of $21,274) --- --- (48,061) ---
-------- -------- ---------- ----------
Net income (loss) $12,576 $(4,732) $87,455 $54,662
======== ======== ========== ==========
Basic earnings (loss)
per share:
Income (loss) from
continuing operations
before cumulative
effects of accounting
changes $.04 $(.02) $.32 $.18
Income from discontinued
operations, net of tax --- --- .11 ---
Cumulative effects of
accounting changes, net
of tax --- --- (.15) ---
-------- -------- ---------- ----------
Net income (loss) $.04 $(.02) $.28 $.18
======== ======== ========== ==========
Diluted earnings (loss)
per share:
Income (loss) from
continuing operations
before cumulative effects
of accounting changes $.04 $(.02) $.31 $.18
Income from discontinued
operations, net of tax --- --- .10 ---
Cumulative effects of
accounting changes,
net of tax --- --- (.14) ---
-------- -------- ---------- ----------
Net income (loss) $.04 $(.02) $.27 $.18
======== ======== ========== ==========
Basic weighted average
number of shares 336,590 300,507 315,656 299,221
======== ======== ========== ==========
Diluted weighted average
number of shares 340,215 300,507 348,894 299,842
======== ======== ========== ==========
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In thousands, except share amounts)
September 30, December 31,
2004 2003
----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $318,045 $239,431
Receivables, net 118,414 229,839
Inventories 86,951 136,807
Current assets of discontinued
operations 5,808 6,101
Other 171,957 61,146
---------- ----------
Total current assets 701,175 673,324
---------- ----------
Preneed funeral receivables and trust
investments 1,192,619 1,229,765
Preneed cemetery receivables and trust
investments 1,370,412 1,083,035
Cemetery property, at cost 1,534,642 1,524,847
Property, plant and equipment,
at cost, net 969,849 1,277,583
Non-current assets of discontinued
operations 4,340 3,217
Deferred charges and other assets 668,151 738,011
Goodwill 1,167,092 1,195,422
Cemetery perpetual care trust
investments 699,888 ---
---------- ----------
$8,308,168 $7,725,204
========== ==========
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $369,608 $449,497
Current maturities of long-term debt 59,025 182,682
Current liabilities of discontinued
operations 9,187 7,600
Income taxes 7,466 29,576
---------- ----------
Total current liabilities 445,286 669,355
---------- ----------
Long-term debt 1,235,691 1,519,189
Deferred preneed funeral revenues 480,514 1,612,347
Deferred preneed cemetery revenues 874,298 1,575,352
Deferred income taxes 311,583 418,375
Non-current liabilities of discontinued
operations 69,647 53,930
Other liabilities 361,360 349,698
Non-controlling interest in funeral and
cemetery trusts 1,977,856 ---
Non-controlling interest in perpetual
care trusts 675,140 ---
Stockholders' equity:
Common stock, $1 per share par value,
500,000,000 shares authorized,
332,658,017 and 302,039,871, issued
and outstanding (net of 7,970,268 and
2,469,445 treasury shares, at par) 332,658 302,040
Capital in excess of par value 2,451,512 2,274,664
Unearned compensation (2,264) ---
Accumulated deficit (850,608) (938,063)
Accumulated other comprehensive loss (54,505) (111,683)
---------- ----------
Total stockholders' equity 1,876,793 1,526,958
---------- ----------
$8,308,168 $7,725,204
=========== ==========
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In thousands)
Nine months ended
September 30,
-------------------------
2004 2003
-------- --------
Cash flows from operating activities:
Net income $87,455 $54,662
Adjustments to reconcile net income
to net cash provided by operating
activities:
Net income from discontinued
operations (35,375) (2,005)
Loss (gains) on early
extinguishments of debt 16,770 (2,079)
Cumulative effects of accounting
changes, net of tax 48,061 ---
Depreciation and amortization 103,607 122,120
(Benefit) provision for deferred
income taxes (6,507) 7,635
(Gains) and impairment losses on
dispositions, net (33,018) (5,413)
Other operating (income) expense (6,932) 1,724
Change in assets and liabilities,
net of effects from acquisitions
and dispositions:
Decrease in receivables 20,213 52,291
Decrease in other assets 964 32,617
Increase in payables and other
liabilities 19,757 33,080
Net effect of preneed funeral
production and maturities (30,461) 1,289
Net effect of cemetery production
and deliveries (4,159) (1,876)
Other 348 10,468
-------- --------
Net cash provided by operating activities
from continuing operations 180,723 304,513
Net cash provided by (used in) operating
activities from discontinued operations 2,503 (925)
-------- --------
Net cash provided by operating activities 183,226 303,588
Cash flows from investing activities:
Capital expenditures (67,495) (79,864)
Proceeds from divestitures and sales
of property and equipment 30,326 52,186
Proceeds and distributions from joint
ventures and equity investments, net
of cash retained 330,789 30,802
Acquisitions, net of cash acquired (1,818) ---
Payment of purchase obligations to
former owners of acquired business (51,749) ---
Net deposits of restricted funds and
other (119,085) (56,230)
-------- --------
Net cash provided by (used in)
investing activities from continuing
operations 120,968 (53,106)
Net cash used in investing activities
from discontinued operations (132) (373)
-------- --------
Net cash provided by (used in) investing
activities 120,836 (53,479)
Cash flows from financing activities:
Proceeds from issuance of long-term
debt 241,237 ---
Payments of debt (124,752) (86,604)
Early extinguishments of debt (313,778) (194,019)
Proceeds from exercise of stock options 6,040 ---
Purchase of Company common stock (34,812) ---
Bank overdrafts and other --- (10,349)
-------- --------
Net cash used in financing activities (226,065) (290,972)
Effect of foreign currency 617 4,158
-------- --------
Net increase (decrease) in cash and
cash equivalents 78,614 (36,705)
Cash and cash equivalents at
beginning of period 239,431 200,625
-------- --------
Cash and cash equivalents at
end of period $318,045 $163,920
======== ========
SOURCE Service Corporation International
-0- 11/08/2004
/CONTACT: investors, Debbie Young, Director of Investor Relations,
+1-713-525-9088, or media, Terry Hemeyer, Managing Director - Corporate
Communications, +1-713-525-5497, both of Service Corporation International/
/Web site: http://www.sci-corp.com
http://www.sci-corp.com/ConfCalls.html
http://www.sci-corp.com/InvestorsMenu.html /
(SCI)
CO: Service Corporation International
ST: Texas
IN:
SU: ERN CCA MAV