Exhibit 99.1
Service Corporation International
Reports First Quarter 2005 Loss Of $.49 Per Diluted Share;
Earnings Of $.12 Per Diluted Share Before Special Items
- CONFERENCE CALL TO BE WEBCAST TODAY AT 10:00 A.M. CENTRAL TIME
HOUSTON, May 16 /PRNewswire-FirstCall/ -- Service Corporation International
(NYSE: SCI), which owns and operates funeral service locations and cemeteries,
today reported a net loss for the first quarter 2005 of $156.1 million or $.49
per diluted share compared to net income of $31.3 million or $.10 per diluted
share in the same period of 2004. These results included litigation expenses,
gains and losses on dispositions, early extinguishment of debt, non-recurring
other income, discontinued operations and cumulative effects of accounting
changes. Losses due to cumulative effects of accounting changes, net of tax in
the first quarter of 2005 and 2004 totaled $187.5 million or $.59 per diluted
share and $47.1 million or $.13 per diluted share, respectively.
SCI's first quarter diluted earnings from continuing operations excluding
special items were $36.6 million, or $.12 per share. This compares to earnings
of $45.8 million, or $.14 per diluted share in the first quarter of 2004.
Earnings before special items in 2004 benefited from net income of $8.1 million
or $.02 per diluted share from our French operations which were divested in
March 2004. Diluted earnings from continuing operations excluding special items
is a non-GAAP financial measure. See a reconciliation of diluted earnings from
continuing operations excluding special items to GAAP measures included in a
separate section later in this press release.
At March 31, 2005, total debt was $1.25 billion and cash on hand was $320.5
million. Total debt less cash and cash equivalents decreased by $38.6 million
during the quarter. Cash flows from operations were $127.6 million in the first
quarter of 2005 compared to $88.6 million in the first quarter of 2004. Free
cash flow in the first quarter of 2005 was $84.9 million, compared to $95.1
million in the first quarter of 2004. Free cash flow in the first quarter of
2004 benefited from $15.5 million from our French operations which were divested
in March 2004. Excluding cash flow from our French operations, free cash flow
grew $5.3 million or 6.6%. Free cash flow is a non-GAAP financial measure. See
our definition and calculation of free cash flow included in a separate section
later in this press release.
Commenting on first quarter 2005 results, Tom Ryan, President and Chief
Executive Officer said, "We are encouraged about our strong operating
performance in the first quarter of 2005, particularly in our funeral segment
where funeral volumes were above expectations. Once again, we are seeing
improvements in the average revenue per service, which is positively impacted by
our Dignity Memorial(R) packaged plans. Additionally, our cash generation and
liquidity allowed us to reinvest in our businesses and to advance our share
repurchase program. Our focus remains on the execution of our business plan and
building a solid platform for the future."
North America Comparable Operating Results
We regard comparable results of operations as analogous to our "same store"
results of operations. For purposes of the following presentation, we consider
comparable operations as operations that were not acquired or constructed after
January 1, 2004 or divested prior to March 31, 2005. Therefore, in the following
presentation, we are providing results of operations for the same funeral and
cemetery locations in each of the periods presented.
At December 31, 2004, we restated results for the first three interim
periods of 2004. Restated amounts related to deferred preneed cemetery contract
revenues, certain reconciliations of our funeral and cemetery trust assets and
deferred revenues and operating leases.
Effective January 1, 2005, we began expensing direct preneed selling costs
in the period incurred. Comparable results of operations from 2004 as shown
below are on a pro forma basis as if $0.5 million of additional direct selling
costs in our funeral segment and $3.9 million of additional direct selling costs
in our cemetery segment were expensed during the period.
(In millions, except funeral services performed, average revenue per funeral
service and gross margin percentage)
Three Months Ended
March 31,
-----------------------
Proforma Increase
2005 2004 (Decrease) Percentage
---------- ---------- ---------- ----------
(Restated)
Funeral
Funeral atneed revenue $ 202.7 $ 196.1 $ 6.6 3.4%
Funeral recognized
preneed revenue 95.2 93.5 1.7 1.8%
General agency revenue (1) 6.6 8.0 (1.4) (17.5)%
Kenyon revenue (2) 8.1 1.0 7.1 710.0%
---------- ---------- ---------- ----------
Total funeral revenues $ 312.6 $ 298.6 $ 14.0 4.7%
Gross profits $ 77.9 $ 75.7 $ 2.2 2.9%
Gross margin percentage 24.9% 25.4%
Total funeral services
performed 69,842 69,368 474 0.7%
Average revenue per
funeral service (3) $ 4,264 $ 4,176 $ 88 2.1%
Cemetery
Cemetery atneed revenue $ 50.7 $ 42.6 $ 8.1 19.0%
Cemetery recognized
preneed revenue 61.5 83.0 (21.5) (25.9)%
Other revenue (4) 17.1 19.0 (1.9) (10.0)%
---------- ---------- ---------- ----------
Total cemetery revenues $ 129.3 $ 144.6 $ (15.3) (10.6)%
Gross profits $ 20.6 $ 22.8 $ (2.2) (9.6)%
Gross margin percentage 15.9% 15.8%
(1) General Agency ("GA") revenues are commissions we receive from third-
party insurance companies when customers purchase insurance contracts
from such third-party insurance companies to fund funeral services and
merchandise at a future date.
(2) Kenyon International Emergency Services ("Kenyon") is our disaster
response subsidiary that engages in mass fatality and emergency response
services. Revenues and gross profits associated with Kenyon are subject
to significant variation due to the nature of their operations.
(3) Average revenue per funeral service is calculated as total funeral
revenues (less GA revenue and Kenyon revenue) divided by total funeral
services performed. In the calculation of average revenue per funeral
service, GA revenue and Kenyon revenue are excluded from total funeral
revenues to avoid distorting our averages of normal funeral case volume.
(4) Other cemetery revenue is primarily related to endowment care trust
income, interest and finance charges earned on preneed installments
contracts.
- Funeral gross profits increased 2.9% to $77.9 million.
- Funeral revenues were up $14.0 million or 4.7% due to increases in funeral
volume and average revenue per funeral service. Also, revenues from
Kenyon, our disaster assistance subsidiary, increased $7.1 million due to
its involvement with the tsunami disaster that occurred in Asia at the end
of 2004.
- Funeral gross profits increased $2.2 million to $77.9 million compared to
the same period last year. The increase in revenues described above and
continued reduction in overhead expenses was partially offset by a decline
in GA revenue and an increase of approximately $7.0 million of expenses
related to Kenyon.
- The number of funeral services performed increased 0.7% primarily
attributable to increased volumes in February and March related to a late
2005 influenza season.
- Average revenue per funeral service grew 2.1%. 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 cremation rate increased to 40.2% versus 39.6% in the same period of
2004.
- Cemetery gross profits declined 9.6% to $20.6 million.
- Cemetery revenue decreased from the first quarter in 2004 primarily due to
lower levels of revenues associated with preneed sales production and
expected declines in legacy revenues associated with constructed property
as we are shifting our focus on shortening the time between when property
is sold and when it is constructed. This decline in recognized preneed
revenue was partially offset by a 19.0% increase in atneed sales of
property, merchandise and services.
- Cemetery gross profits decreased $2.2 million from the prior period
predominantly due to the decline in revenues. Reductions in overhead
costs, selling costs, and maintenance expenses helped to offset the
decline in revenue.
- Overhead expenses from our field management, market support centers and
corporate office, which are allocated to funeral and cemetery operations
in North America, were reduced by $3.9 million or 12.7% in the first
quarter of 2005 compared to 2004 primarily as a result of continued
improvement in management structure and reduction of fixed costs.
Other Consolidated Results
- General and administrative expenses were $19.7 million in the three months
ended March 31, 2005 compared to $51.0 million in the same period of 2004.
- In the first quarter of 2004, we recognized $35.0 million in litigation
expense associated with the settlement of the securities class action
lawsuit.
- Excluding the $35.0 million of 2004 litigation expense, general and
administrative expenses were $19.7 million in 2005 compared to $16.0
million in the same period of 2004. This increase is primarily related to
increased professional fees of $3.5 million associated with Sarbanes-Oxley
compliance and costs of our funeral and cemetery verification projects.
- Gains and impairment (losses) on dispositions, net was a pretax loss of
$4.0 million in the first quarter of 2005 compared to a net pretax gain of
$34.8 million in the first quarter of 2004. The net pretax loss in the
first quarter of 2005 is primarily associated with various dispositions in
North America. The 2004 net pretax gain includes a $27.2 million
adjustment to a note receivable associated with a United Kingdom company
and a $12.6 million gain on the sale of our funeral operations in France,
partially offset by net losses associated with certain dispositions in
North America.
- Interest expense was $8.0 million lower in the first quarter of 2005
compared to the first quarter of 2004 primarily due to retirement of debt
during 2004.
- Other income declined $3.7 million from $6.4 million in the first quarter
of 2004 to $2.7 million in the first quarter of 2005. The components of
other income for the periods presented were as follows:
- Interest income was $4.1 million and $6.3 million in the first quarter of
2005 and 2004, respectively. Included in 2005 was $2.4 million of interest
income from our French operations for preferred equity certificates and
convertible preferred equity certificates. The first quarter of 2004
included the receipt of $4.5 million of interest income related to a note
receivable collected from a United Kingdom company.
- Cash overrides received from a third party insurance provider related to
the sale of insurance funded preneed funeral contracts were $1.6 million
in the first quarter of 2005 and the first quarter of 2004.
- Surety bond premium costs were $1.0 million in the first quarter of 2005
compared to $1.1 million in the first quarter of 2004.
- The remaining expense of $2.0 million in the first quarter of 2005 and
expense of $0.4 million in the first quarter of 2004 is primarily related
to net losses from foreign currency transactions.
- Cumulative effects of accounting changes, net of tax in the first quarter
of 2005 of $187.5 million was related to the change in accounting method
for preneed direct selling expenses discussed in a separate section later
in this press release. In the first quarter of 2004, we recognized $47.1
million for the cumulative effects of accounting changes related to
changes in pension accounting and the implementation of FIN46R.
- The consolidated effective tax rate in the quarter was 35% compared to a
benefit of 4.5% in 2004. The tax rate in 2004 was favorably impacted by
tax benefits realized from the disposition of our funeral operations in
France and a minority interest in our former United Kingdom company.
Share Repurchase Program
In February 2005, we announced an increase of $100 million in our
authorization to repurchase our common stock, which was in addition to the $200
million in authorizations previously announced in August and November of 2004.
As of today, we have repurchased 36.9 million shares at a total cost of $253.4
million under these programs and the remaining dollar value of shares that may
be purchased under our share repurchase programs is approximately $46.6 million.
We have made and intend 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. There can be no assurance
that we will buy our common stock under our share repurchase programs. Important
factors that could cause us not to repurchase our shares include, among others,
unfavorable market conditions, the market price of our common stock, the nature
of other investment opportunities presented to us from time to time, and the
availability of funds necessary to continue purchasing common stock.
Quarterly Cash Dividend
In February 2005, we announced the initiation of a quarterly cash dividend
of two and one-half cents per share of common stock. The first quarter cash
dividend totaling $7.7 million was paid on April 29, 2005 to shareholders of
record at the close of business on April 15, 2005.
On May 11, 2005, our Board of Directors approved a cash dividend of two and
one-half cents payable on July 29, 2005 to shareholders of record at the close
of business on July 15, 2005. While we intend to pay regular quarterly cash
dividends for the foreseeable future, all subsequent dividends, and the
establishment of record and payment dates, are subject to final determination by
the Board of Directors each quarter after its review of our financial
performance.
Direct Selling Costs
Effective January 1, 2005, we changed our method of accounting for direct
selling costs related to the acquisition of preneed funeral and preneed cemetery
contracts. Prior to this change, we capitalized such direct selling costs. As
contracts were delivered, we amortized these deferred selling costs in
proportion to the revenue recognized. Under the new method of accounting, we
expense these direct selling costs as incurred. As of January 1, 2005, we
recorded a cumulative effect of $187.5 million net of tax of $117.4 million.
This amount represents the cumulative balance of deferred selling costs recorded
on the Company's consolidated balance sheet in Deferred charges and other assets
at the time the accounting change was adopted. For further information related
to this change in accounting, please see the Company's Form 10-Q for the first
quarter of 2005 expected to be filed later today.
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 (excluding certain special items such as
any possible payments that could be made associated with the settlement of
litigation matters or related insurance recoveries, any potential tax returns,
or potential contributions to our frozen cash balance pension plan) less capital
improvements at our existing facilities. Free cash flow is not reduced by
mandatory debt service requirements or 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 (such as private family estates) or the construction of
funeral home facilities on SCI-owned cemeteries, and the investment in
contemporary merchandising displays in our funeral homes. Growth-oriented
capital spending was $6.9 million in the first quarter of 2005 compared to $4.2
million in the first quarter of 2004.
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. 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. The following table provides a
reconciliation between cash flows from operations and free cash flow, as
defined.
(In millions)
Three Months Ended
March 31,
-----------------------
2005 2004
---------- ----------
Cash Flows from Operations $ 127.6 $ 88.6
Less: Tax Refund (29.0) -
Add: Frozen Cash Balance Pension
Plan Contribution - 20.0
Adjusted Cash Flows from Operations $ 98.6 $ 108.6
Less: Capital Improvements at Existing
Facilities (13.7) (13.5)
---------- ----------
Free Cash Flow $ 84.9 $ 95.1
========== ==========
Cash flows from operations increased by $39.0 million compared to the first
quarter of 2004. The first quarter of 2005 included a $29.0 million unusual tax
refund. Included in the first quarter of 2004 was a $20.0 million voluntary cash
contribution to our pension plan and $18.3 million in operating cash flows
provided by our French operations for the period January 1, 2004 through March
11, 2004. Positively affecting cash flows from operations in the first quarter
of 2005 compared to the first quarter of 2004 was an approximate $32 million
decrease in payroll and bonus payments and approximately $8 million more in net
trust fund withdrawals. Negatively affecting cash flows from operations in the
first quarter of 2005 compared to the first quarter of 2004 was $3.9 million of
cash outflows for funding the matching contribution of our 401(k) plan with
cash, an approximate $6 million increase in cash outflows for professional fees
associated with Sarbanes-Oxley compliance and our preneed cemetery backlog
verification project, an approximate $7 million increase in operating expense
associated with Kenyon, and an approximate $15 million of other working capital
declines primarily associated with increased activity late in the quarter and
decreases in accounts receivable collections.
Diluted Earnings From Continuing Operations Excluding Special Items
Diluted earnings from continuing operations excluding 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 income and 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.
(In millions, except
diluted EPS)
Three Months Ended
---------------------------------------------------------------------------
March 31, 2005 March 31, 2004 (Restated)
------------------------------------ ------------------------------------
Operating Net Diluted Operating Net Diluted
Income Income EPS Income Income EPS
---------- ---------- ---------- ---------- ---------- ----------
As Reported $ 72.5 $ (156.1) $ (.49) $ 100.5 $ 31.3 $ .10
Settlement of
significant
legal matters - - - 35.0 22.5 .06
Gains and impairment
losses on
dispositions 4.0 2.7 .02 (34.8) (51.4) (.14)
Other operating
expense (income) 1.6 1.0 .00 (0.4) (0.2) (.00)
Loss on early
extinguishment of debt - 0.8 .00 - - -
Other income/expense
Interest income-United
Kingdom note
receivable - - - - (2.7) (.01)
Discontinued operations - 0.7 .00 - (0.8) (.00)
Cumulative effect of
accounting changes - 187.5 .59 - 47.1 .13
---------- ---------- ---------- ---------- ---------- ----------
Diluted earnings from
continuing operations
excluding special
items $ 78.1 $ 36.6 $ .12 $ 100.3 $ 45.8 $ .14
========== ========== ========== ========== ========== ==========
Diluted weighted
average shares
outstanding
(in thousands) 317,751 353,088
Conference Call and Webcast
We will host a conference call today at 10:00 a.m. central time. A question
and answer session will follow a brief presentation made by management. The
conference call dial-in number is (913) 981-5532. 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 May 30, 2005 and can be accessed at (719) 457-0820 with the confirmation
code of 4912661. 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 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 and strong cash flows.
-- 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 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
projects, particularly related to the implementation of new processes
and internal controls.
-- 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.
-- 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 2004 Annual Report on
Form 10-K, as amended. 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 (NYSE: SCI), headquartered in Houston,
Texas, owns and operates funeral service locations and cemeteries. We have an
extensive network of businesses including 1,169 funeral service locations and
390 cemeteries in North America as of March 31, 2005. 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
March 31,
-----------------------
2005 2004
---------- ----------
(Restated)
Revenues:
Funeral $ 317,174 $ 435,931
Cemetery 135,749 153,491
---------- ----------
452,923 589,422
Gross profit:
Funeral 77,306 87,930
Cemetery 20,481 28,383
---------- ----------
97,787 116,313
General and administrative expenses (19,716) (51,021)
Gains and impairment (losses) on
dispositions, net (3,962) 34,782
Other operating (expense) income (1,600) 416
---------- ----------
Operating income 72,509 100,490
Interest expense (24,656) (32,658)
Loss on early extinguishment of debt (1,207) -
Other income, net 2,687 6,424
(23,176) (26,234)
Income from continuing operations before
income taxes and cumulative effects of
accounting changes 49,333 74,256
Provision (benefit) for income taxes 17,266 (3,375)
---------- ----------
Income from continuing operations before
cumulative effects of accounting changes 32,067 77,631
(Loss) income from discontinued operations
(net of income tax expense of $594 and $141,
respectively) (650) 754
Cumulative effects of accounting changes
(net of income tax benefit of $117,428 and
$20,710, respectively) (187,538) (47,074)
---------- ----------
Net (loss) income $ (156,121) $ 31,311
========== ==========
Basic earnings (loss) per share:
Income from continuing operations before
cumulative effects of accounting changes $ .10 $ .26
(Loss) income from discontinued operations,
net of tax (.00) .00
Cumulative effects of accounting changes,
net of tax (.60) (.16)
Net (loss) income $ (.50) $ .10
========== ==========
Diluted earnings (loss) per share:
Income from continuing operations before
cumulative effects of accounting changes $ .10 $ .23
(Loss) income from discontinued operations,
net of tax (.00) .00
Cumulative effects of accounting changes,
net of tax (.59) (.13)
---------- ----------
Net (loss) income $ (.49) $ .10
========== ==========
Basic weighted average number of shares 313,490 303,018
========== ==========
Diluted weighted average number of shares 317,751 353,088
========== ==========
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In thousands, except share amounts)
March 31, December 31,
2005 2004
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 320,493 $ 287,785
Receivables, net 102,002 102,156
Inventories 86,312 81,526
Current assets of discontinued operations - 11,085
Other 34,510 50,945
------------ ------------
Total current assets 543,317 533,497
------------ ------------
Preneed funeral receivables and trust
investments 1,236,538 1,264,600
Preneed cemetery receivables and trust
investments 1,368,451 1,402,750
Cemetery property, at cost 1,503,268 1,506,782
Property, plant and equipment, at cost, net 966,707 970,547
Non-current assets of discontinued operations - 4,367
Deferred charges and other assets 295,789 618,565
Goodwill 1,162,215 1,169,040
Cemetery perpetual care trust investments 707,594 729,048
$ 7,783,879 $ 8,199,196
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 223,675 $ 221,877
Current maturities of long-term debt 75,936 75,075
Current liabilities of discontinued
operations - 7,111
Income taxes 4,152 7,850
------------ ------------
Total current liabilities 303,763 311,913
------------ ------------
Long-term debt 1,172,139 1,178,885
Deferred preneed funeral revenues 492,455 486,191
Deferred preneed cemetery revenues 809,581 801,065
Deferred income taxes 193,473 279,474
Non-current liabilities of discontinued
operations - 58,225
Other liabilities 418,291 429,103
Non-controlling interest in funeral and
cemetery trusts 2,042,879 2,095,852
Non-controlling interest in perpetual care
trusts 686,726 704,912
Stockholders' equity:
Common stock, $1 per share par value,
500,000,000 shares authorized,
310,009,494 and 323,225,352, issued and
outstanding (net of 32,653,741 and
18,502,478 treasury shares, at par) 310,009 323,225
Capital in excess of par value 2,313,322 2,395,057
Unearned compensation (5,251) (2,022)
Accumulated deficit (980,485) (824,364)
Accumulated other comprehensive income (loss) 26,977 (38,320)
------------ ------------
Total stockholders' equity 1,664,572 1,853,576
------------ ------------
$ 7,783,879 $ 8,199,196
------------ ------------
SERVICE CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In thousands)
Three months ended
March 31,
---------------------------
2005 2004
------------ ------------
(Restated)
Cash flows from operating activities:
Net (loss) income $ (156,121) $ 31,311
Adjustments to reconcile net (loss) income to
net cash provided by
operating activities:
Net loss (income) from discontinued operations 650 (754)
Loss on early extinguishments of debt 1,207 -
Cumulative effects of accounting changes,
net of tax 187,538 47,074
Depreciation and amortization 21,129 36,005
Provision (benefit) for deferred income
taxes 15,677 (4,753)
(Gains) and impairment losses on dispositions,
net 3,962 (34,782)
Other operating expense (income) 1,600 (416)
Change in assets and liabilities, net of
effects from acquisitions and dispositions:
(Increase) decrease in receivables (5,548) 7,172
Decrease in other assets 29,031 2,836
(Decrease) increase in payables and
other liabilities (6,322) 5,667
Net effect of preneed funeral production
and maturities 12,470 (11,078)
Net effect of cemetery production and deliveries 22,475 4,635
Other 101 4,460
------------ ------------
Net cash provided by operating activities from
continuing operations 127,849 87,377
Net cash (used in) provided by operating
activities from discontinued operations (241) 1,267
------------ ------------
Net cash provided by operating activities 127,608 88,644
Cash flows from investing activities:
Capital expenditures (20,613) (17,698)
Proceeds from divestitures and sales of
property and equipment 8,236 8,744
Proceeds and distributions from dispositions
of businesses, net of cash retained 21,597 287,886
Indemnity payments related to the joint
venture of French operations (772) -
Net deposits (withdrawals) of restricted funds
and other 6,961 (105,601)
------------ ------------
Net cash provided by investing activities from
continuing operations 15,409 173,331
Net cash used in investing activities from
discontinued operations - (39)
------------ ------------
Net cash provided by investing activities 15,409 173,292
Cash flows from financing activities:
Payments of debt (1,974) (5,907)
Early extinguishments of debt (7,673) -
Proceeds from exercise of stock options 3,904 3,294
Purchase of Company common stock (103,570) -
Purchase of subsidiary stock (844) -
------------ ------------
Net cash used in financing activities (110,157) (2,613)
Effect of foreign currency (152) 157
------------ ------------
Net increase in cash and cash equivalents 32,708 259,480
Cash and cash equivalents at beginning of
period 287,785 239,431
------------ ------------
Cash and cash equivalents at end of period $ 320,493 $ 498,911
============ ============
SOURCE Service Corporation International
-0- 05/16/2005
/CONTACT: Investors, Debbie Young - Director of Investor Relation,
+1-713-525-9088, or Media, Terry Hemeyer - Managing Director / Corporate
Communications, +1-713-525-5497 both of Service Corporation International/
/First Call Analyst: /
/FCMN Contact: Sandy.Bobo@sci-us.com /
/Web site: http://www.sci-corp.com