SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2012

SEGMENT INFORMATION

14. SEGMENT INFORMATION

The Company is organized into five distinct reportable segments which are classified as Cemetery Operations – Southeast, Cemetery Operations – Northeast, Cemetery Operations – West, Funeral Homes, and Corporate.

The Company has chosen this level of organization of reportable segments due to the fact that a) each reportable segment has unique characteristics that set it apart from other segments; b) the Company has organized its management personnel at these operational levels; and c) it is the level at which the Company’s chief decision makers and other senior management evaluate performance.

The cemetery operations segments sell interment rights, caskets, burial vaults, cremation niches, markers and other cemetery related merchandise. The nature of the Company’s customers differs in each of our regionally based cemetery operating segments. Cremation rates in the West region are substantially higher than they are in the Southeast region. Rates in the Northeast region tend to be somewhere between the two. Statistics indicate that customers who select cremation services have certain attributes that differ from customers who select other methods of interment. The disaggregation of cemetery operations into the three distinct regional segments is primarily due to these differences in customer attributes along with the previously mentioned management structure and senior management analysis methodologies.

The Company’s Funeral Homes segment offers a range of funeral-related services such as family consultation, the removal of and preparation of remains and the use of funeral home facilities for visitation. These services are distinctly different than the cemetery merchandise and services sold and provided by the cemetery operations segments.

The Company’s Corporate segment includes various home office selling and administrative expenses that are not allocable to the other operating segments.

Segment information is as follows:

As of and for the three months ended March 31, 2012:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	20,880	$	8,458	$	10,031	$	—	$	—		$	(8,347	)	$	31,022
Service and other		9,528		6,575		7,523		—		—			(3,998	)		19,628
Funeral home		—		—		—		9,273		—			(336	)		8,937
Total revenues		30,408		15,033		17,554		9,273		—			(12,681	)		59,587
Costs and expenses
Cost of sales		4,290		1,674		1,664		—		3			(1,211	)		6,420
Cemetery		5,704		3,065		4,023		—		—			—			12,792
Selling		7,025		3,136		3,212		—		461			(2,047	)		11,787
General and administrative		3,623		1,526		2,044		—		—			—			7,193
Corporate overhead		—		—		—		—		6,603			—			6,603
Depreciation and amortization		536		224		568		620		382			—			2,330
Funeral home		—		—		—		6,799		—			(43	)		6,756
Acquisition related costs		—		—		—		—		331			—			331
Total costs and expenses		21,178		9,625		11,511		7,419		7,780			(3,301	)		54,212
Operating profit	$	9,230	$	5,408	$	6,043	$	1,854	$	(7,780	)	$	(9,380	)	$	5,375
Total assets	$	487,479	$	294,230	$	386,786	$	79,211	$	27,255		$	—		$	1,274,961
Amortization of cemetery property	$	979	$	560	$	294	$	—	$	—		$	18		$	1,851
Long lived asset additions	$	3,963	$	549	$	470	$	59	$	412		$	—		$	5,453
Goodwill	$	7,471	$	—	$	11,948	$	17,220	$	—		$	—		$	36,639

As of and for the three months ended March 31, 2011:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	18,743	$	7,969	$	10,091	$	—	$	2		$	(12,277	)	$	24,528
Service and other		8,360		5,962		8,815		—		—			(5,766	)		17,371
Funeral home		—		—		—		7,480		—			(148	)		7,332
Total revenues		27,103		13,931		18,906		7,480		2			(18,191	)		49,231
Costs and expenses
Cost of sales		3,718		1,600		1,554		—		—			(1,879	)		4,993
Cemetery		4,951		3,070		4,065		—		—			—			12,086
Selling		6,416		2,818		2,931		—		583			(3,204	)		9,544
General and administrative		2,976		1,527		1,927		—		(3	)		—			6,427
Corporate overhead		—		—		—		—		5,958			—			5,958
Depreciation and amortization		331		214		509		397		995			—			2,446
Funeral home		—		—		—		5,309		—			—			5,309
Acquisition related costs		—		—		—		—		933			—			933
Total costs and expenses		18,392		9,229		10,986		5,706		8,466			(5,083	)		47,696
Operating profit	$	8,711	$	4,702	$	7,920	$	1,774	$	(8,464	)	$	(13,108	)	$	1,535
Total assets	$	429,736	$	290,298	$	377,936	$	48,354	$	45,712		$	—		$	1,192,036
Amortization of cemetery property	$	753	$	549	$	179	$	—	$	—		$	(98	)	$	1,383
Long lived asset additions	$	2,940	$	263	$	1,263	$	46	$	112		$	—		$	4,624
Goodwill	$	629	$	—	$	11,801	$	5,897	$	—		$	—		$	18,327

Results of individual business units are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to accounting principles generally accepted in the United States of America; therefore, the financial results of individual business units are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the business units. Methodologies are refined from time to time as management accounting practices are enhanced and businesses change. Revenues and associated expenses are not deferred in accordance with SAB No. 104 therefore, the deferral of these revenues and expenses is provided in the adjustment column to reconcile the Company’s managerial financial statements to those prepared in accordance with GAAP. Pre-need sales revenues included within the sales category consist primarily of the sale of burial lots, burial vaults, mausoleum crypts, grave markers and memorials, and caskets. Management accounting practices included in the Southeast, Northeast, and Western Regions reflect these pre-need sales when contracts are signed by the customer and accepted by the Company. Pre-need sales reflected in the consolidated financial statements, prepared in accordance with GAAP, recognize revenues for the sale of burial lots and mausoleum crypts when the product is constructed and at least 10% of the sales price is collected. With respect to the other products, the consolidated financial statements prepared under GAAP recognize sales revenues when the criteria for delivery under SAB No. 104 are met. These criteria include, among other things, purchase of the product, delivery and installation of the product in the ground, and transfer of title to the customer. In each case, costs are accrued in connection with the recognition of revenues; therefore, the consolidated financial statements reflect Deferred Cemetery Revenue, Net and Deferred Selling and Obtaining Costs on the balance sheet, whereas the Company’s management accounting practices exclude these items.