10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-32270

STONEMOR PARTNERS L.P.

(Exact name of registrant as specified in its charter)

Delaware	80-0103159
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

311 Veterans Highway, Suite B Levittown, Pennsylvania	19056
(Address of principal executive offices)	(Zip Code)

(215) 826-2800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of the registrant’s outstanding common units at October 31, 2015 was 31,779,105.

Index – Form 10-Q

		Page
Part I	Financial Information
Item 1.	Financial Statements (unaudited)		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		60
Item 4.	Controls and Procedures		62
Part II	Other Information
Item 1.	Legal Proceedings		62
Item 1A.	Risk Factors		63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		63
Item 3.	Defaults Upon Senior Securities		63
Item 4.	Mine Safety Disclosures		63
Item 5.	Other Information		63
Item 6.	Exhibits		64
	Signatures		65

Part I – Financial Information

Item 1. Financial Statements

StoneMor Partners L.P.

Condensed Consolidated Balance Sheet

(in thousands)

(unaudited)

	September 30, 2015			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	11,792		$	10,401
Accounts receivable, net of allowance		66,099			62,503
Prepaid expenses		7,064			4,708
Other current assets		33,448			24,266
Total current assets		118,403			101,878
Long-term accounts receivable, net of allowance		93,273			89,536
Cemetery property		344,662			339,848
Property and equipment, net of accumulated depreciation		102,671			100,391
Merchandise trusts, restricted, at fair value		459,320			484,820
Perpetual care trusts, restricted, at fair value		311,781			345,105
Deferred financing costs, net of accumulated amortization		7,907			9,089
Deferred selling and obtaining costs		108,754			97,795
Deferred tax assets		42			40
Goodwill		64,048			58,836
Intangible assets		67,681			68,990
Other assets		3,158			3,136
Total assets	$	1,681,700		$	1,699,464
Liabilities and partners’ capital
Current liabilities:
Accounts payable and accrued liabilities	$	37,448		$	35,382
Accrued interest		4,868			1,219
Current portion, long-term debt		3,294			2,251
Total current liabilities		45,610			38,852
Other long-term liabilities		2,003			1,292
Obligation for lease and management agreements, net		9,307			8,767
Long-term debt		287,724			285,378
Deferred cemetery revenues, net		645,233			643,408
Deferred tax liabilities		17,815			17,708
Merchandise liability		158,592			150,192
Perpetual care trust corpus		311,781			345,105
Total liabilities		1,478,065			1,490,702
Commitments and contingencies
Partners’ capital (deficit)
General partner deficit		(8,612	)		(5,113	)
Common partners, 31,779 and 29,204 units outstanding as of September 30, 2015 and December 31, 2014, respectively		212,247			213,875
Total partners’ capital		203,635			208,762
Total liabilities and partners’ capital	$	1,681,700		$	1,699,464

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

3

StoneMor Partners L.P.

Condensed Consolidated Statement of Operations

(in thousands, except per unit data)

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Revenues:
Cemetery
Merchandise	$	34,709		$	37,812		$	97,688		$	98,452
Services		14,195			14,971			42,696			37,760
Investment and other		15,054			13,152			43,062			42,418
Funeral home
Merchandise		6,588			4,752			19,913			14,770
Services		7,654			7,487			23,083			20,694
Total revenues		78,200			78,174			226,442			214,094
Costs and expenses:
Cost of goods sold (exclusive of depreciation shown separately below):
Perpetual care		1,993			1,898			5,727			5,110
Merchandise		6,735			7,164			19,891			20,106
Cemetery expense		18,245			18,076			53,789			47,546
Selling expense		14,647			16,494			44,326			42,544
General and administrative expense		8,819			9,808			27,340			26,333
Corporate overhead (including $277 and $265 in unit-based compensation for the three months ended September 30, 2015 and 2014, and $824 and $802 for the nine months ended September 30, 2015 and 2014, respectively)		8,152			8,392			26,979			22,394
Depreciation and amortization		3,311			3,112			9,207			7,993
Funeral home expense
Merchandise		1,002			1,441			5,444			4,691
Services		5,432			5,522			16,728			15,023
Other		4,774			3,396			13,335			9,367
Acquisition related costs, net of recoveries		963			451			1,648			2,040
Total cost and expenses		74,073			75,754			224,414			203,147
Operating profit		4,127			2,420			2,028			10,947
Legal settlement		3,000			—			3,000			—
Gain on sale of funeral home		—			244			—			244
Gain on acquisitions		1,540			—			1,540			412
Gain on settlement agreement, net		—			—			—			888
Interest expense		5,669			5,268			16,902			15,990
Net loss before income taxes		(3,002	)		(2,604	)		(16,334	)		(3,499	)
Income tax expense (benefit)		400			664			799			(522	)
Net loss	$	(3,402	)	$	(3,268	)	$	(17,133	)	$	(2,977	)
General partner’s interest in net loss for the period	$	(42	)	$	(44	)	$	(227	)	$	(49	)
Limited partners’ interest in net loss for the period	$	(3,360	)	$	(3,224	)	$	(16,906	)	$	(2,928	)
Net loss per limited partner unit (basic and diluted)	$	(.11	)	$	(.11	)	$	(.56	)	$	(.11	)
Weighted average number of limited partners’ units outstanding (basic and diluted)		31,491			29,018			30,011			25,712
Distributions declared per unit	$	.650		$	.610		$	1.920		$	1.810

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

4

StoneMor Partners L.P.

Condensed Consolidated Statement of

Partners’ Capital (Deficit)

(in thousands)

(unaudited)

	Partners’ Capital (Deficit)
	Common Unit Holders			General Partner			Total
Balance, December 31, 2014	$	213,875		$	(5,113	)	$	208,762
Proceeds from public offerings		67,871			—			67,871
Issuance of common units		4,331			—			4,331
Compensation related to unit awards		824			—			824
Net loss		(16,906	)		(227	)		(17,133	)
Cash distributions		(53,417	)		(3,272	)		(56,689	)
Unit distributions		(4,331	)		—			(4,331	)
Balance, September 30, 2015	$	212,247		$	(8,612	)	$	203,635

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

5

StoneMor Partners L.P.

Condensed Consolidated Statement of Cash Flows

(in thousands)

(unaudited)

	For the nine months ended September 30,
	2015			2014
Operating activities:
Net loss	$	(17,133	)	$	(2,977	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Cost of lots sold		7,506			7,181
Depreciation and amortization		9,207			7,993
Unit-based compensation		824			802
Accretion of debt discounts		2,207			2,127
Gain on acquisitions		(1,540	)		(412	)
Gain on sale of funeral home		—			(244	)
Changes in assets and liabilities that provided cash:
Accounts receivable		(6,403	)		(2,958	)
Allowance for doubtful accounts		1,565			2,647
Merchandise trust fund		(33,403	)		(26,547	)
Prepaid expenses		(2,356	)		(2,913	)
Other current assets		(9,128	)		(1,019	)
Other assets		(67	)		(1,397	)
Accounts payable and accrued and other liabilities		5,550			7,382
Deferred selling and obtaining costs		(10,959	)		(6,855	)
Deferred cemetery revenue		60,572			45,475
Deferred taxes (net)		106			(1,254	)
Merchandise liability		5,482			(3,793	)
Net cash provided by operating activities		12,030			23,238
Investing activities:
Cash paid for cemetery property		(6,022	)		(4,692	)
Purchase of subsidiaries		(13,100	)		(54,000	)
Consideration for lease and management agreements		—			(53,000	)
Proceeds from divestiture of funeral home		—			297
Cash paid for property and equipment		(5,011	)		(6,430	)
Net cash used in investing activities		(24,133	)		(117,825	)
Financing activities:
Cash distributions		(56,689	)		(45,297	)
Additional borrowings on long-term debt		102,323			63,365
Repayments of long-term debt		(99,945	)		(86,788	)
Proceeds from public offerings		67,871			120,345
Proceeds from issuance of common units		—			53,237
Cost of financing activities		(66	)		(275	)
Net cash provided by financing activities		13,494			104,587
Net increase in cash and cash equivalents		1,391			10,000
Cash and cash equivalents - Beginning of period		10,401			12,175
Cash and cash equivalents - End of period	$	11,792		$	22,175
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	10,918		$	10,303
Cash paid during the period for income taxes	$	4,167		$	3,536
Non-cash investing and financing activities:
Acquisition of assets by financing	$	593		$	251
Acquisition of asset by assumption of directly related liability	$	876		$	8,368

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

6

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

StoneMor Partners L.P. (“StoneMor”, the “Company” or the “Partnership”) is a provider of funeral and cemetery products and services in the death care industry in the United States. Through its subsidiaries, StoneMor offers a complete range of funeral merchandise and services, along with cemetery property, merchandise and services, both at the time of need and on a pre-need basis. As of September 30, 2015, the Partnership operated 306 cemeteries in 27 states and Puerto Rico, of which 275 are owned and 31 are operated under lease, management or operating agreements. The Partnership also owned and operated 103 funeral homes in 19 states and Puerto Rico.

Basis of Presentation

The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All interim financial data is unaudited. However, in the opinion of management, the interim financial data as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results of operations to be expected for a full year. The December 31, 2014 condensed consolidated balance sheet data was derived from audited financial statements included in the Company’s 2014 Annual Report on Form 10-K (“2014 Form 10-K”), but does not include all disclosures required by GAAP, which are presented in the Company’s 2014 Form 10-K.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of each of the Company’s subsidiaries. These statements also include the accounts of the merchandise and perpetual care trusts in which the Company has a variable interest and is the primary beneficiary. The Company operates 31 cemeteries under long-term lease, operating or management contracts. The operations of 16 of these managed cemeteries have been consolidated in accordance with the provisions of Accounting Standards Codification (ASC) 810.

The Company operates 15 cemeteries under long-term lease, operating or management agreements that do not qualify as acquisitions for accounting purposes, including 13 cemeteries related to the transaction with the Archdiocese of Philadelphia that closed in the second quarter of 2014. As a result, the Company did not consolidate all of the existing assets and liabilities related to these cemeteries. The Company has consolidated the existing assets and liabilities of these cemeteries’ merchandise and perpetual care trusts as variable interest entities since the Company controls and receives the benefits and absorbs any losses from operating these trusts. Under these long-term lease, operating or management agreements, which are subject to certain termination provisions, the Company is the exclusive operator of these cemeteries. The Company earns revenues related to sales of merchandise, services, and interment rights and incurs expenses related to such sales and the maintenance and upkeep of these cemeteries. Upon termination of these contracts, the Company will retain all of the benefits and related contractual obligations incurred from sales generated during the contract period. The Company has also recognized the existing merchandise liabilities that it assumed as part of these agreements.

New Accounting Pronouncements

In the second quarter of 2014, the Financial Accounting Standards Board issued Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which supersedes the revenue recognition requirements in “Topic 605 - Revenue Recognition” and most industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. During the third quarter of 2015, Update No. 2015-14, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2015-14”) was released, deferring the effective date of the amendments to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted, only as of an annual reporting period beginning after December 15, 2016. The Company is currently in the process of evaluating the potential impact of these updates on its financial statements.

7

In the first quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-02, “Consolidation (Topic 810)” (“ASU 2015-02”), which amends previous consolidation analysis guidance. ASU 2015-02 requires companies to consider revised consolidation criteria regarding limited partnerships and similar legal entities. The amendments are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early application is permitted. The Company has evaluated the impact of this update, concluding that it will not have an impact on the Company’s financial position, results of operations, or cash flows.

In the second quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which changes the presentation of debt issuance costs. During the third quarter of 2015, Update No. 2015-15, “Interest - Imputation of Interest (Subtopic 835-30) (“ASU 2015-15”) was released clarifying the treatment of debt issuance costs associated with line-of-credit arrangements. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. AUS 2015-15 allows the deferral and presentation of debt issuance costs pertaining to line-of-credit arrangements as an asset. The amendments in the update are effective for annual reporting periods beginning after December 15, 2015, including interim periods within those reporting periods. Early application is permitted. The Company is currently in the process of evaluating the potential impact of these updates on its financial statements.

In the third quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). ASU 2015-16 requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments are effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company is currently in the process of evaluating the potential impact of this update on its financial statements.

Use of Estimates

Preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. As a result, actual results could differ from those estimates. The most significant estimates in the unaudited condensed consolidated financial statements are the valuation of assets in the merchandise trusts and perpetual care trusts, allowance for cancellations, unit-based compensation, merchandise liability, deferred sales revenue, deferred margin, deferred merchandise trust investment earnings, deferred obtaining costs, assets and liabilities obtained via business combinations and income taxes. Deferred sales revenue, deferred margin and deferred merchandise trust investment earnings are included in deferred cemetery revenues, net, on the unaudited condensed consolidated balance sheet.

2. LONG-TERM ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

Long-term accounts receivable, net, consists of the following:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Customer receivables	$	203,200		$	194,537
Unearned finance income		(20,125	)		(20,360	)
Allowance for contract cancellations		(23,703	)		(22,138	)
		159,372			152,039
Less: current portion, net of allowance		66,099			62,503
Long-term portion, net of allowance	$	93,273		$	89,536

8

Activity in the allowance for contract cancellations is as follows:

	For the nine months ended September 30,
	2015			2014
	(in thousands)
Balance - Beginning of period	$	22,138		$	20,275
Provision for cancellations		19,054			17,080
Charge-offs - net		(17,489	)		(13,610	)
Balance - End of period	$	23,703		$	23,745

There have been no changes to the Company’s long-term accounts receivable accounting policies since the filing of the Company’s 2014 Form 10-K.

3. CEMETERY PROPERTY

Cemetery property consists of the following:

	As of
	September 30, 2015		December 31, 2014
	(in thousands)
Developed land	$	82,048	$	79,058
Undeveloped land		172,610		172,238
Mausoleum crypts and lawn crypts		78,879		78,524
Other land		11,125		10,028
Total	$	344,662	$	339,848

4. PROPERTY AND EQUIPMENT

Major classes of property and equipment follow:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Building and improvements	$	114,673		$	108,178
Furniture and equipment		51,947			49,290
		166,620			157,468
Less: accumulated depreciation		(63,949	)		(57,077	)
Property and equipment - net	$	102,671		$	100,391

Depreciation expense was $2.8 million and $7.5 million for the three and nine months ended September 30, 2015, respectively, as compared to $2.5 million and $6.5 million during the same periods last year.

5. MERCHANDISE TRUSTS

At September 30, 2015, the Company’s merchandise trusts consisted of the following types of assets:

• Money market funds that invest in low risk short term securities;

9

• Publicly traded mutual funds that invest in underlying debt securities;

• Publicly traded mutual funds that invest in underlying equity securities;

• Equity investments primarily in securities that are currently paying dividends or distributions. These investments include Master Limited Partnerships and global equity securities;

• Fixed maturity debt securities issued by various corporate entities; and

• Fixed maturity debt securities issued by U.S. states and local government agencies.

• Certain assets related to the July 21, 2015 and August 6, 2015 acquisitions of Gloria Weiss Realty, LLC and Herr Funeral Homes, LTD respectively (see Note 13). According to the terms of the agreement, the seller was required to liquidate the holdings of the related trusts upon closing and forward the proceeds to the Company as soon as practicable. As of September 30, 2015, the Company has not received all of these amounts. Accordingly, a portion of the assets are shown in a single line item in the disclosures below as “Assets acquired via acquisition” and the cost basis and fair value of such assets are based upon preliminary estimates that the Company is required to make in accordance with Accounting Topic 805.

These investments are classified as Available for Sale as defined by the Investments in Debt and Equity topic of the ASC. Accordingly, all of the assets are carried at fair value. All of these investments are considered to be either Level 1 or Level 2 assets as defined by the Fair Value Measurements and Disclosures topic of the ASC. See Note 15 for further details. There were no Level 3 assets.

The merchandise trusts are variable interest entities (VIE) for which the Company is the primary beneficiary. The assets held in the merchandise trusts are required to be used to purchase the merchandise to which they relate. If the value of these assets falls below the cost of purchasing such merchandise, the Company may be required to fund this shortfall.

The Company has included $8.1 million and $8.3 million of investments held in trust by the West Virginia Funeral Directors Association at September 30, 2015 and December 31, 2014, respectively, in its merchandise trust assets. As required by law, the Company deposits a portion of certain funeral merchandise sales in West Virginia into a trust that is held by the West Virginia Funeral Directors Association. These trusts are recorded at their account value, which approximates their fair value.

10

The cost and market value associated with the assets held in the merchandise trusts at September 30, 2015 and December 31, 2014 were as follows:

As of September 30, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	27,125	$	—	$	—		$	27,125
Fixed maturities:
U.S. State and local government agency		81		10		—			91
Corporate debt securities		12,550		25		(880	)		11,695
Other debt securities		7,177		—		(9	)		7,168
Total fixed maturities		19,808		35		(889	)		18,954
Mutual funds - debt securities		260,872		33		(28,666	)		232,239
Mutual funds - equity securities		145,260		9		(27,011	)		118,258
Equity securities		60,169		340		(14,796	)		45,713
Other invested assets		7,046		152		—			7,198
Total managed investments	$	520,280	$	569	$	(71,362	)	$	449,487
Assets acquired via acquisition		1,722		—		—			1,722
West Virginia Trust Receivable		8,111		—		—			8,111
Total	$	530,113	$	569	$	(71,362	)	$	459,320
As of December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	52,521	$	—	$	—		$	52,521
Fixed maturities:
U.S. State and local government agency		270		—		(1	)		269
Corporate debt securities		9,400		23		(447	)		8,976
Other debt securities		7,157		—		(18	)		7,139
Total fixed maturities		16,827		23		(466	)		16,384
Mutual funds - debt securities		150,477		869		(8,666	)		142,680
Mutual funds - equity securities		167,353		12,568		(463	)		179,458
Equity securities		81,639		4,167		(5,507	)		80,299
Other invested assets		5,400		—		(241	)		5,159
Total managed investments	$	474,217	$	17,627	$	(15,343	)	$	476,501
West Virginia Trust Receivable		8,319		—		—			8,319
Total	$	482,536	$	17,627	$	(15,343	)	$	484,820

The contractual maturities of debt securities as of September 30, 2015 are presented below:

As of September 30, 2015	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
	(in thousands)
U.S. State and local government agency	$	—	$	44	$	45	$	2
Corporate debt securities		—		8,290		3,405		—
Other debt securities		2,136		5,032		—		—
Total fixed maturities	$	2,136	$	13,366	$	3,450	$	2

11

Temporary Declines in Fair Value

The Company evaluates declines in fair value below cost of each individual asset held in the merchandise trusts on a quarterly basis.

An aging of unrealized losses on the Company’s investments in fixed maturities and equity securities at September 30, 2015 and December 31, 2014 is presented below:

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of September 30, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	6,277	$	254	$	4,641	$	626	$	10,918	$	880		64
Other debt securities		160		—		6,374		9		6,534		9		11
Total fixed maturities		6,437		254		11,015		635		17,452		889		75
Mutual funds - debt securities		20,308		1,896		208,471		26,770		228,779		28,666		45
Mutual funds - equity securities		105,814		24,292		12,382		2,719		118,196		27,011		9
Equity securities		22,291		5,088		20,096		9,708		42,387		14,796		89
Total	$	154,850	$	31,530	$	251,964	$	39,832	$	406,814	$	71,362		218

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of December 31, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
U.S. State and local government agency	$	143	$	1	$	—	$	—	$	143	$	1		3
Corporate debt securities		5,905		342		1,506		105		7,411		447		58
Other debt securities		2,370		8		4,769		10		7,139		18		13
Total fixed maturities		8,418		351		6,275		115		14,693		466		74
Mutual funds - debt securities		32,072		1,039		95,629		7,627		127,701		8,666		34
Mutual funds - equity securities		4,147		463		—		—		4,147		463		2
Equity securities		44,563		4,641		3,909		866		48,472		5,507		60
Other invested assets		—		—		4,881		241		4,881		241		1
Total	$	89,200	$	6,494	$	110,694	$	8,849	$	199,894	$	15,343		171

There were 218 and 171 securities in an unrealized loss position in merchandise trusts as of September 30, 2015 and December 31, 2014, respectively, of which 102 and 39, respectively, were in an unrealized loss position for more than twelve months. For all securities in an unrealized loss position, the Company evaluated the severity of the impairment, the length of time that a security has been in a loss position, and the security’s performance relative to the overall performance for the sector in which the security resides, and has concluded the decline in fair value below the asset’s cost was temporary in nature. In addition, the Company is not aware of any circumstances that would prevent the future market value recovery for these securities.

Other-Than-Temporary Impairment of Trust Assets

During the three months ended September 30, 2015, the Company determined that there were no other than temporary impairments to the investment portfolio in the merchandise trusts. During the nine months ended September 30, 2015, the Company determined that there were two securities with an aggregate cost basis of approximately $0.6 million and an aggregate fair value of approximately $0.4 million, resulting in an impairment of $0.2 million, wherein such impairment was considered to be other-than-temporary. During the nine months ended September 30, 2014, the Company determined that there were two securities with an aggregate cost basis of approximately $0.2 million and an aggregate fair value of approximately $0.1 million, resulting in an impairment of $0.1 million, wherein such impairment was considered to be other-than-temporary. Accordingly, the Company adjusted the cost basis of these assets to their current value and offset this change against deferred revenue. This reduction in deferred revenue will be reflected in earnings in future periods as the underlying merchandise is delivered or the underlying service is performed.

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A reconciliation of the Company’s merchandise trust activities for the nine months ended September 30, 2015 is presented below:

Fair Value at 12/31/2014		Contributions		Distributions			Interest/ Dividends		Capital Gain Distributions			Realized Net Gain/ (Loss) (1)		Taxes			Fees			Unrealized Change in Fair Value			Fair Value at 9/30/2015
(in thousands)
$	484,820		60,875		(34,477	)		13,642		(738	)		14,190		(3,441	)		(2,474	)		(73,077	)	$	459,320

(1) Includes $4.2 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

The Company made net contributions into the trusts of approximately $26.4 million during the nine months ended September 30, 2015. During the nine months ended September 30, 2015, purchases and sales of securities available for sale included in trust investments were approximately $508.1 million and $489.6 million, respectively. Contributions include $12.1 million of assets that were acquired through acquisitions during the nine months ended September 30, 2015.

6. PERPETUAL CARE TRUSTS

At September 30, 2015, the Company’s perpetual care trusts consisted of the following types of assets:

• Money market funds that invest in low risk short term securities;

• Publicly traded mutual funds that invest in underlying debt securities;

• Publicly traded mutual funds that invest in underlying equity securities;

• Equity investments that are currently paying dividends or distributions. These investments include Master Limited Partnerships and global equity securities;

• Fixed maturity debt securities issued by various corporate entities;

• Fixed maturity debt securities issued by the U.S. Government and U.S. Government agencies; and

• Fixed maturity debt securities issued by U.S. states and local government agencies.

All of these investments are classified as Available for Sale as defined by the Investments in Debt and Equity topic of the ASC. Accordingly, all of the assets are carried at fair value. All of these investments are considered to be either Level 1 or Level 2 assets as defined by the Fair Value Measurements and Disclosures topic of the ASC. See Note 15 for further details. There were no Level 3 assets.

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The cost and market value associated with the assets held in the perpetual care trusts at September 30, 2015 and December 31, 2014 were as follows:

As of September 30, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	14,455	$	—	$	—		$	14,455
Fixed maturities:
U.S. Government and federal agency		101		12		—			113
U.S. State and local government agency		27		—		—			27
Corporate debt securities		23,953		105		(1,381	)		22,677
Other debt securities		371		—		—			371
Total fixed maturities		24,452		117		(1,381	)		23,188
Mutual funds - debt securities		229,047		1,572		(20,282	)		210,337
Mutual funds - equity securities		71,177		1,082		(10,965	)		61,294
Equity securities		1,927		407		(47	)		2,287
Other invested assets		220		—		—			220
Total	$	341,278	$	3,178	$	(32,675	)	$	311,781
As of December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	26,644	$	—	$	—		$	26,644
Fixed maturities:
U.S. Government and federal agency		100		16		—			116
U.S. State and local government agency		78		1		—			79
Corporate debt securities		24,275		104		(913	)		23,466
Other debt securities		371		—		—			371
Total fixed maturities		24,824		121		(913	)		24,032
Mutual funds - debt securities		128,735		379		(5,220	)		123,894
Mutual funds - equity securities		103,701		23,003		(1,268	)		125,436
Equity securities		30,617		14,704		(247	)		45,074
Other invested assets		25		—		—			25
Total	$	314,546	$	38,207	$	(7,648	)	$	345,105

The contractual maturities of debt securities as of September 30, 2015 were as follows:

As of September 30, 2015	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
	(in thousands)
U.S. Government and federal agency	$	—	$	113	$	—	$	—
U.S. State and local government agency		27		—		—		—
Corporate debt securities		256		15,888		6,515		18
Other debt securities		371		—		—		—
Total fixed maturities	$	654	$	16,001	$	6,515	$	18

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Temporary Declines in Fair Value

The Company 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 Company’s investments in fixed maturities and equity securities at September 30, 2015 and December 31, 2014 is presented below:

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of September 30, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	9,916	$	455	$	7,549	$	926	$	17,465	$	1,381		68
Total fixed maturities		9,916		455		7,549		926		17,465		1,381		68
Mutual funds - debt securities		95,075		5,115		112,826		15,167		207,901		20,282		40
Mutual funds - equity securities		43,893		10,965		—		—		43,893		10,965		4
Equity securities		186		30		47		17		233		47		6
Total	$	149,070	$	16,565	$	120,422	$	16,110	$	269,492	$	32,675		118

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of December 31, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	14,434	$	798	$	2,519	$	115	$	16,953	$	913		83
Total fixed maturities		14,434		798		2,519		115		16,953		913		83
Mutual funds - debt securities		30,345		768		86,814		4,452		117,159		5,220		31
Mutual funds - equity securities		13,035		1,268		—		—		13,035		1,268		5
Equity securities		3,866		245		620		2		4,486		247		29
Total	$	61,680	$	3,079	$	89,953	$	4,569	$	151,633	$	7,648		148

There were 118 and 148 securities in an unrealized loss position in perpetual care trusts as of September 30, 2015 and December 31, 2014, respectively, of which 55 and 20, respectively, were in an unrealized loss position for more than twelve months. For all securities in an unrealized loss position, the Company evaluated the severity of the impairment, the length of time that a security has been in a loss position, and the security’s performance relative to the overall performance for the sector in which the security resides, and has concluded the decline in fair value below the asset’s cost was temporary in nature. In addition, the Company is not aware of any circumstances that would prevent the future market value recovery for these securities.

Other-Than-Temporary Impairment of Trust Assets

During the three and nine months ended September 30, 2015 and during the three months ended September 30, 2014, the Company determined that there were no other than temporary impairments to the investment portfolio in the perpetual care trusts. During the nine months ended September 30, 2014, the Company determined that there were 2 securities with an aggregate cost basis of approximately $1.3 million and an aggregate fair value of approximately $0.8 million, resulting in an impairment of $0.5 million, wherein such impairment was considered to be other-than-temporary. Accordingly, the Company adjusted the cost basis of these assets to their current value and offset this change against the liability for perpetual care trust corpus.

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A reconciliation of the Company’s perpetual care trust activities for the nine months ended September 30, 2015 is presented below:

Fair Value at 12/31/2014		Contributions		Distributions			Interest/ Dividends		Capital Gain Distributions		Realized Net Gain/ (Loss) (1)		Taxes			Fees			Unrealized Change in Fair Value			Fair Value at 9/30/2015
(in thousands)
$	345,105		12,058		(10,254	)		13,236		41		13,942		(637	)		(1,654	)		(60,056	)	$	311,781

(1) Includes $12.0 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

The Company made net contributions from the trusts of approximately $1.8 million during the nine months ended September 30, 2015. During the nine months, ended September 30, 2015, purchases and sales of securities available for sale included in trust investments were approximately $326.9 million and $320.2 million, respectively. Contributions include $3.6 million of assets that were acquired through acquisitions during the nine months ended September 30, 2015.

7. GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in acquisitions.

There have been no changes in the goodwill balance during the period and a summary by reportable segment is as follows:

	Cemeteries						Funeral Homes		Total
	Southeast		Northeast		West
	(in thousands)
Balance as of December 31, 2014	$	8,950	$	3,288	$	11,948	$	34,650	$	58,836
Goodwill acquired from acquisitions during 2015		—		—		—		5,212		5,212
Balance as of September 30, 2015	$	8,950	$	3,288	$	11,948	$	39,862	$	64,048

Other Acquired Intangible Assets

The Company has other acquired intangible assets, most of which have been recognized as a result of acquisitions and long-term lease, management and operating agreements. All of the intangible assets are amortized as a component of depreciation and amortization in the unaudited condensed consolidated statement of operations. The major classes of intangible assets are as follows:

	As of September 30, 2015							As of December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Intangible Asset		Gross Carrying Amount		Accumulated Amortization			Net Intangible Asset
	(in thousands)
Amortized intangible assets:
Lease and management agreements	$	59,758	$	(1,328	)	$	58,430	$	59,758	$	(581	)	$	59,177
Underlying contract value		6,239		(975	)		5,264		6,239		(858	)		5,381
Non-compete agreements		5,576		(2,860	)		2,716		5,250		(2,126	)		3,124
Other intangible assets		1,439		(168	)		1,271		1,439		(131	)		1,308
Total intangible assets	$	73,012	$	(5,331	)	$	67,681	$	72,686	$	(3,696	)	$	68,990

See Note 7 of the Company’s 2014 Form 10-K for a discussion of the Company’s intangible assets, including its contract-based intangible asset pertaining to the lease and management agreements with the Archdiocese of Philadelphia.

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8. LONG-TERM DEBT

The Company had the following outstanding debt:

	As of
	September 30, 2015		December 31, 2014
	(in thousands)
7.875% Senior Notes, due June 2021	$	175,000	$	175,000
Credit Facility, due December 2019:
Working Capital Draws		75,000		85,902
Acquisition Draws		38,500		25,000
Notes payable - acquisition debt		732		861
Notes payable - acquisition non-competes		1,894		2,765
Insurance and vehicle financing		3,006		1,632
Total		294,132		291,160
Less current portion		3,294		2,251
Less unamortized bond and note payable discounts		3,114		3,531
Long-term portion	$	287,724	$	285,378

This note includes a summary of material terms of the Company’s senior notes and revolving credit facility. For a more detailed description of the Company’s long-term debt agreements, see the Company’s 2014 Form 10-K.

7.875% Senior Notes due 2021

On May 28, 2013, the Company issued $175.0 million aggregate principal amount of 7.875% Senior Notes due 2021 (the “Senior Notes”). The Company pays 7.875% interest per annum on the principal amount of the Senior Notes, payable in cash semi-annually in arrears on June 1 and December 1 of each year, since December 1, 2013. The net proceeds from the offering were used to retire a $150.0 million aggregate principal amount of 10.25% Senior Notes due 2017 and the remaining proceeds were used for general corporate purposes. The Senior Notes were issued at 97.832% of par resulting in gross proceeds of $171.2 million with an original issue discount of approximately $3.8 million. The Company incurred debt issuance costs and fees of approximately $4.6 million. These costs and fees are deferred and are amortized over the life of the Senior Notes. Based on trades made on September 30, 2015, the Company has estimated the fair value of its Senior Notes to be in excess of par and trading at a premium of 3.0%, which would imply a fair value of $180.3 million at September 30, 2015. The Senior Notes are valued using Level 2 inputs as defined by the Fair Value Measurements and Disclosures topic of the ASC in Note 15. As of September 30, 2015, the Company was in compliance with all applicable covenants of the Senior Notes.

Credit Facility

On December 19, 2014, the Partnership entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”).

The Credit Agreement provides for a single revolving credit facility of $180.0 million (the “Credit Facility”) maturing on December 19, 2019. Additionally the Credit Agreement provides for an uncommitted ability to increase the Credit Facility by an additional $70.0 million. The summary of the material terms of the Credit Agreement is set forth below. Capitalized terms, which are not defined in the following description, shall have the meaning assigned to such terms in the Credit Agreement.

At September 30, 2015, amounts outstanding under the Credit Facility bore interest at rates of approximately 4.1%. The interest rates on the Credit Facility are calculated as follows:

• For Eurodollar Rate Loans, the outstanding principal amount thereof bears interest for each Interest Period at a rate per annum equal to the Eurodollar Rate for the Interest Period plus the Applicable Rate for Eurodollar Rate Loans; and

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• For Base Rate Loans and Swing Line Loans, the outstanding principal amount thereof bears interest from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans.

In addition, the Borrowers must pay a Letter of Credit Fee for each Letter of Credit equal to the Applicable Rate for Letter of Credit Fees times the daily amount to be drawn under such Letter of Credit. The Applicable Rate is determined based on the Consolidated Leverage Ratio of the Partnership and its Subsidiaries, and ranges from 2.25% to 4.00% for Eurodollar Rate Loans and Letter of Credit Fees, and 1.25% to 3.00% for Base Rate Loans. The current Applicable Rate for each of: (i) Eurodollar Rate Loans and Letter of Credit Fees is 3.25% and (ii) Base Rate Loans is 2.25% based on the current Consolidated Leverage Ratio. The Credit Agreement also requires the Borrowers to pay a quarterly unused commitment fee, which is calculated based on the amount by which the commitments under the Credit Agreement exceeds the usage of such commitments.

The Credit Agreement contains financial covenants, pursuant to which the Borrowers and the Guarantors will not permit:

• Consolidated EBITDA for any Measurement Period to be less than the sum of (i) $80.0 million plus (ii) 80% of the aggregate of all Consolidated EBITDA for each Permitted Acquisition completed after June 30, 2014;

• the Consolidated Debt Service Coverage Ratio to be less than 2.50 to 1.0 for any Measurement Period; and

• the Consolidated Leverage Ratio to be greater than 4.00 to 1.0 for any period.

The covenants include, among other limitations, limitations on: (i) liens, (ii) the creation or incurrence of debt, (iii) investments and acquisitions, (iv) dispositions of property, (v) dividends, distributions and redemptions, and (vi) transactions with Affiliates.

The Credit Agreement provides that two types of draws are permitted with respect to the Credit Facility: Acquisition Draws and Working Capital Draws. The proceeds of Acquisition Draws may be utilized by the Borrowers to finance Permitted Acquisitions, the purchase and construction of mausoleums and related costs or the net amount of Merchandise Trust deposits made after the Closing Date under the Credit Agreement, irrespective of whether such amounts relate to new or existing cemeteries or funeral homes. The proceeds of Working Capital Draws, Letters of Credit and Swing Line Loans may be utilized by the Borrowers to finance working capital requirements, Capital Expenditures and for other general corporate purposes. The borrowing of Working Capital Advances is subject to a borrowing formula of 85% of Eligible Receivables. This limit was $135.5 million at September 30, 2015.

Each Acquisition Draw is subject to equal quarterly amortization of the principal amount of such draw, with annual principal payments comprised of ten percent (10%) of the related draw amount, commencing on the second anniversary of such draw, with the remaining principal due on the Maturity Date, subject to certain mandatory prepayment requirements. Working Capital Draws are due on the Maturity Date, subject to certain mandatory prepayment requirements.

Effective July 10, 2015, the Company entered into the First Amendment (the “First Amendment”) to the Credit Agreement to allow the Company to apply Net Cash Proceeds received from certain: (i) Dispositions of property by any Credit Party or any of its Subsidiaries, (ii) sales or issuances of Equity Interests by the Company or any of its Subsidiaries and (iii) Extraordinary Receipts received by or paid to or for the account of any Credit Party or any of its Subsidiaries and not otherwise included in clause (i) and (ii) above that are required to be prepaid to the Lenders, to Acquisition Draws or Working Capital Draws, at the Company’s discretion. Prior to the execution of the First Amendment, the Credit Agreement required that the Net Cash Proceeds from the transactions described above be applied to Acquisition Draws before they could be applied to Working Capital Draws.

As of September 30, 2015, there were $113.5 million of outstanding borrowings under the Credit Facility. The Credit Facility approximates fair value as it consists of multiple current LIBOR borrowings with maturities of 90 days or less, with amounts that can be rolled-over or reborrowed at market rates. It is valued using Level 2 inputs. As of September 30, 2015, the Company complied with all applicable financial covenants.

The Company routinely incurs debt financing costs and fees when borrowing under, or making amendments to, the Credit Facility. These costs and fees are deferred and are amortized over the life of the Credit Facility.

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9. INCOME TAXES

As of September 30, 2015, the Company’s taxable corporate subsidiaries had federal net operating loss carryforwards of approximately $223.1 million, which will begin to expire in 2017 and $272.0 million in state net operating loss carryforwards, a portion of which expires annually.

The Partnership is not a taxable entity for federal and state income tax purposes; rather, the Partnership’s tax attributes, except those of its corporate subsidiaries, are to be included in the individual tax returns of its partners. Neither the Partnership’s financial reporting income, nor the cash distributions to unit-holders, can be used as a substitute for the detailed tax calculations that the Partnership must perform annually for its partners. Net income from the Partnership is not treated as “passive income” for federal income tax purposes. As a result, partners subject to the passive activity loss rules are not permitted to offset income from the Partnership with passive losses from other sources.

The Partnership’s corporate subsidiaries account for their income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The provision for income taxes for the nine months ended September 30, 2015 and 2014 is based upon the estimated annual effective tax rates expected to be applicable to the Company for 2015 and 2014, respectively. The Company’s effective tax rate differs from its statutory tax rate primarily because the Company’s legal entity structure includes different tax filing entities, including a significant number of partnerships that are not subject to paying tax.

The Company is not currently under examination by any federal or state jurisdictions. The federal statute of limitations and certain state statutes of limitations are open from 2011 forward. Management believes that the accrual for tax liabilities is adequate for all open years. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. Based on present information, it is the opinion of the Company’s management that there are no pending assessments that will result in a material effect on the Company’s consolidated financial statements over the next twelve months.

10. DEFERRED CEMETERY REVENUES, NET

At September 30, 2015 and December 31, 2014, deferred cemetery revenues, net, consisted of the following:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Deferred cemetery revenue	$	517,840		$	456,632
Deferred merchandise trust revenue		128,779			104,717
Deferred merchandise trust unrealized gains (losses)		(70,793	)		2,284
Deferred pre-acquisition margin		140,389			140,378
Deferred cost of goods sold		(70,982	)		(60,603	)
Deferred cemetery revenues, net	$	645,233		$	643,408
Deferred selling and obtaining costs	$	108,754		$	97,795

Deferred selling and obtaining costs are carried as an asset on the unaudited condensed consolidated balance sheet in accordance with the Financial Services – Insurance topic of ASC 944.

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11. COMMITMENTS AND CONTINGENCIES

Legal

During the third quarter of 2015, the Company recorded a charge pertaining to a legal settlement of a Fair Labor Standards Act claim. This $3.0 million amount is recorded under “Legal settlement” on the Consolidated Statement of Operations and consists of a charge for the settlement amount and legal fees related to the case.

The Company is party to 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 effect on the Company’s financial position, results of operations or liquidity.

Leases

At September 30, 2015, the Company was committed to operating lease payments for premises, automobiles and office equipment under various operating leases with initial terms ranging from one to twenty-four years and options to renew at varying terms. Expenses under these operating leases were $0.9 million and $2.4 million for the three and nine months ended September 30, 2015, respectively, and $0.5 million and $1.7 million for the three and nine months ended September 30, 2014, respectively.

On June 5, 2015, the Company entered into a lease agreement for a new corporate office location in Trevose, Pennsylvania. The lease term will commence on February 1, 2016 and will expire on July 31, 2028, with certain contractual renewal options. The Company does not expect this new lease to have a significant impact on its cash flows.

The operating leases will result in future payments in the following approximate amounts from September 30, 2015 and beyond:

	(in thousands)
2015	$	812
2016		3,087
2017		3,292
2018		3,205
2019		2,885
2020		1,691
Thereafter		10,471
Total	$	25,443

Other

See Note 13 of the Company’s 2014 Form 10-K for a discussion of the Company’s future commitments related to its agreements with the Archdiocese of Philadelphia.

12. PARTNERS’ CAPITAL

The table below reflects the activity relating to the number of common units outstanding for the nine months ended September 30, 2015:

	Nine months ended September 30, 2015
Outstanding, beginning of period		29,203,595
Public offerings		2,415,000
Unit distributions		152,879
Unit-based compensation		7,631
Outstanding, end of period		31,779,105

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Unit-Based Compensation

The Company has issued to certain key employees, management, and directors unit-based compensation in the form of unit appreciation rights and restricted phantom partnership units.

Compensation expense recognized related to unit appreciation rights and restricted phantom unit awards for the three and nine months ended September 30, 2015 and 2014 are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Unit appreciation rights	$	15	$	21	$	55	$	60
Restricted phantom units		262		244		769		742
Total unit-based compensation expense	$	277	$	265	$	824	$	802

As of September 30, 2015, there was approximately $0.1 million in non-vested unit appreciation rights expense outstanding. These unit appreciation rights will be expensed through 2018.

The diluted weighted average number of limited partners’ units outstanding presented on the unaudited condensed consolidated statement of operations does not include 192,482 and 187,640 units for the three and nine months ended September 30, 2015, respectively, and 180,959 and 179,929 units for the three and nine months ended September 30, 2014, as their effects would be anti-dilutive.

During the nine months ended September 30, 2015, 7,631 common units were issued under the StoneMor Partners L.P. Long-Term Incentive Plans. See Note 11 of the Company’s 2014 Form 10-K for a description of the Company’s Long-Term Incentive Plan, as amended.

Other Unit Issuances

On July 10, 2015, the Company completed a follow-on public offering of 2,415,000 common units at a public offering price of $29.63 per unit. Net proceeds of the offering, after deducting underwriting discounts and offering expenses, were approximately $67.9 million. The proceeds were used to pay down outstanding indebtedness under our Credit Facility.

Pursuant to a Common Unit Purchase Agreement, dated May 19, 2014, by and between the Company and American Cemeteries Infrastructure Investors, LLC, a Delaware limited liability company (“ACII”), the Company issued 54,622, 49,911 and 48,346 common units to ACII in lieu of cash distributions of approximately $1.4 million, $1.4 million and $1.5 million on February 16, 2015, May 15, 2015 and August 14, 2015, respectively. Refer to the Company’s 2014 Form 10-K, Note 17, for a detailed discussion of the Common Unit Purchase Agreement.

13. ACQUISITIONS

Third Quarter 2015 Acquisitions

On July 21, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Gloria Weiss Realty, LLC. (the “Seller”). Pursuant to the Agreement, the Buyer acquired one funeral home in Florida, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $0.9 million in cash.

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The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting goodwill from purchase. These amounts may be retrospectively adjusted as additional information is received. The acquired goodwill is recorded in the Company’s Funeral Homes operating segment.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	313
Property and equipment		24
Merchandise trusts, restricted, at fair value		1,211
Total assets		1,548
Liabilities:
Deferred margin		200
Merchandise liabilities		1,424
Total liabilities		1,624
Fair value of net assets acquired		(76	)
Consideration paid		900
Goodwill from purchase	$	976

On August 6, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Herr Funeral Homes, LTD and Sunset Hill Memorial Estates, LTD. (the “Sellers”). Pursuant to the Agreement, the Buyer acquired three funeral homes and one cemetery in Illinois, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Sellers $5.7 million in cash.

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The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting gain on bargain purchase. These amounts may be retrospectively adjusted as additional information is received.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	62
Cemetery and funeral home property		3,180
Property and equipment		2,317
Merchandise trusts, restricted, at fair value		511
Perpetual care trusts, restricted, at fair value		2,032
Intangible assets		150
Total assets		8,252
Liabilities:
Deferred margin		139
Merchandise liabilities		128
Perpetual care trust corpus		2,032
Total liabilities		2,299
Fair value of net assets acquired		5,953
Consideration paid		5,700
Gain on bargain purchase	$	253

On August 20, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Bronze Stone, LLC (the “Seller”). Pursuant to the Agreement, the Buyer acquired two cemeteries in Illinois, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $1.5 million in cash.

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The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting gain on bargain purchase. These amounts may be retrospectively adjusted as additional information is received.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	158
Cemetery property		1,355
Property and equipment		400
Merchandise trusts, restricted, at fair value		1,999
Perpetual care trusts, restricted, at fair value		1,541
Intangible assets		33
Total assets		5,486
Liabilities:
Deferred margin		602
Merchandise liabilities		556
Perpetual care trust corpus		1,541
Total liabilities		2,699
Fair value of net assets acquired		2,787
Consideration paid		1,500
Gain on bargain purchase	$	1,287

On August 31, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Vista Funeral Home, Inc. (the “Seller”). Pursuant to the Agreement, the Buyer acquired one funeral home in Florida, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $5.0 million in cash and an additional $1.0 million will be paid in five equal annual installments. The Company has recorded the deferred cash payment as a liability to “Other long-term liabilities” on its balance sheet at its estimated fair value of $0.9 million.

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The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting goodwill from purchase. These amounts may be retrospectively adjusted as additional information is received. The acquired goodwill is recorded in the Company’s Funeral Homes operating segment.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	1,961
Funeral home property		600
Property and equipment		1,464
Merchandise trusts, restricted, at fair value		8,380
Intangible assets		143
Other assets		56
Total assets		12,604
Liabilities:
Deferred margin		2,275
Merchandise liabilities		8,689
Total liabilities		10,964
Fair value of net assets acquired		1,640
Consideration paid		5,000
Deferred cash consideration		876
Goodwill from purchase	$	4,236

First Quarter 2014 Acquisition

On January 16, 2014, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Carriage Cemetery Services, Inc. (the “Seller”). Pursuant to the Agreement, the Buyer acquired one cemetery in Florida, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $0.2 million in cash.

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The table below reflects the Company’s final assessment of the fair value of net assets acquired and the resulting gain on bargain purchase.

	Final Assessment
	(in thousands)
Assets:
Accounts receivable	$	47
Cemetery property		470
Property and equipment		140
Merchandise trusts, restricted, at fair value		2,607
Perpetual care trusts, restricted, at fair value		691
Total assets		3,955
Liabilities:
Deferred margin		1,035
Merchandise liabilities		956
Deferred tax liability		641
Perpetual care trust corpus		691
Other liabilities		20
Total liabilities		3,343
Fair value of net assets acquired		612
Consideration paid		200
Gain on bargain purchase	$	412

Second Quarter 2014 Acquisition

On June 10, 2014, certain subsidiaries of the Company (collectively the “Buyers”) closed the transaction under the Asset Sale Agreements (the “Agreements”), with certain subsidiaries of Service Corporation International (collectively the “Sellers”) to acquire nine funeral homes, twelve cemeteries and certain related assets in Central Florida, North Carolina, Southeastern Pennsylvania and Virginia. In consideration for the net assets acquired, the Buyers paid the Sellers $53.8 million in cash.

The Company recorded an intangible asset of $1.2 million for a favorable interest in a lease at one of the acquired North Carolina funeral home businesses. This asset will be amortized over the full remaining term of the lease agreement, which is approximately 36 years, with renewals. This asset was previously reported as a component of “Other assets” on the consolidated balance sheet.

The table below reflects the Company’s final assessment of the fair value of net assets acquired and the resulting goodwill from purchase. There was no change to the amounts retrospectively adjusted in the fourth quarter of 2014. The

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Company acquired goodwill of $2.8 million, $3.3 million and $2.4 million in the Company’s Cemetery Operations—Southeast, Cemetery Operations—Northeast and Funeral Homes operating segments, respectively.

	Final Assessment
	(in thousands)
Assets:
Accounts receivable	$	6,188
Cemetery property		26,029
Property and equipment		15,776
Merchandise trusts, restricted, at fair value		31,534
Perpetual care trusts, restricted, at fair value		16,913
Intangible assets		1,170
Other assets		178
Total assets		97,788
Liabilities:
Deferred margin		13,570
Merchandise liabilities		19,905
Deferred tax liability		2,010
Perpetual care trust corpus		16,913
Other liabilities		63
Total liabilities		52,461
Fair value of net assets acquired		45,327
Consideration paid		53,800
Goodwill from purchase	$	8,473

Agreements with the Archdiocese of Philadelphia

On May 28, 2014, certain subsidiaries of the Company (“Tenant”) and the Archdiocese of Philadelphia, an archdiocese governed by Canon Law of the Roman Catholic Church (“Landlord”) closed a Lease Agreement (the “Lease”) and a Management Agreement (the “Management Agreement”), pursuant to which Tenant will operate 13 cemeteries in Pennsylvania for a term of 60 years. The Company joined the Lease and the Management Agreement as a guarantor of all of Tenant’s obligations under this operating arrangement.

Landlord agreed to lease to Tenant eight cemetery sites in the Philadelphia area. The Lease granted Tenant a sole and exclusive license (the “License”) to maintain and construct improvements in the operation of the cemeteries and to sell burial rights and all related merchandise and services, subject to the terms and conditions of the Lease. The Management Agreement enabled Tenant, subject to certain closing conditions, to serve as the exclusive operator of the remaining five cemeteries. The Lease may be terminated pursuant to the terms of the Lease, including, but not limited to, by notice of termination given by Landlord to Tenant at any time during Lease year 11 (a “Lease Year 11 Termination”) or by either party due to the default or bankruptcy of the other party in accordance with the termination provisions of the Lease. If the Lease is terminated by Landlord or Tenant pursuant to the terms of the Lease, the Management Agreement will also be terminated.

At closing, Tenant paid to Landlord an up-front rental payment of $53.0 million (the “Up-Front Rent”). Tenant shall also pay to Landlord aggregate fixed rent of $36.0 million (the “Fixed Rent”) for the Cemeteries in the following amounts:

Lease Years 1-5	None
Lease Years 6-20	$1,000,000 per Lease Year
Lease Years 21-25	$1,200,000 per Lease Year
Lease Years 26-35	$1,500,000 per Lease Year
Lease Years 36-60	None

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The Fixed Rent for Lease Years 6 through 11 (the “Deferred Fixed Rent”) shall be deferred. If Landlord terminates the Lease pursuant to a Lease Year 11 Termination or Tenant terminates the Lease as a result of a Landlord’s default prior to the end of Lease Year 11 (collectively, a “Covered Termination”), the Deferred Fixed Rent shall be forfeited by Landlord and shall be retained by Tenant. If the Lease is not terminated by a Covered Termination, the Deferred Fixed Rent shall become due and payable 30 days after the end of Lease Year 11.

If Landlord terminates the Lease pursuant to a Lease Year 11 Termination, Landlord must repay to Tenant all $53.0 million of the Up-Front Rent. If the Lease is terminated for cause at any time, Landlord must repay to Tenant the unamortized portion of the Up-Front Rent: (i) based on a 60 year amortization schedule if terminated by Tenant due to Landlord’s default and (ii) based on a 30 year amortization schedule if terminated by Landlord due to Tenant’s default.

Generally, 51% of gross revenues from any source received by Tenant on account of the Cemeteries but unrelated to customary operations of the Cemeteries less Tenant’s and Landlord’s reasonable costs and expenses applicable to such unrelated activity shall be paid to Landlord as additional rent. In addition, Tenant shall have the right to request from time to time that Landlord sell (to a party that is independent and not an affiliate of StoneMor or any party that is a Tenant) all or portions of undeveloped land at the leased Cemeteries. If Landlord approves the sale of such undeveloped land, Tenant shall pay to Landlord, as additional rent, 51% of the net proceeds of any such sale.

The table below reflects the assets and liabilities recognized:

	(in thousands)
Assets:
Accounts receivable	$	1,610
Intangible asset		59,758
Total assets		61,368
Liabilities:
Obligation for lease and management agreements		36,000
Discount on obligation for lease and management agreements		(27,632	)
Obligation for lease and management agreements, net		8,368
Total liabilities		8,368
Total net assets	$	53,000

The Company recorded the underlying value of the Lease and Management Agreements as a contract-based intangible asset at the present value of the consideration, less the fair value of net assets received, consisting of acquired accounts receivable. A liability of $8.4 million was also recorded for the present value of the Fixed Rent, which is equal to the $36.0 million gross amount due to the Archdiocese of Philadelphia in the future, net of a discount $27.6 million. The discounted values were determined using an effective annual rate of 8.3%, which represents an estimate of the return an investor would require to make this type of investment in the Company over the rent payment period.

If the transactions noted above had been consummated at the beginning of the comparable prior annual reporting period, on a pro forma basis, for the three and nine months ended September 30, 2015 and 2014, consolidated revenues,

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consolidated net income (loss), and net income (loss) per limited partner unit (basic and diluted) would have been as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Revenue	$	78,972		$	79,576		$	229,971		$	231,752
Net income (loss)		(4,606	)		(2,770	)		(17,358	)		393
Net income (loss) per limited partner unit (basic and diluted)	$	(.14	)	$	(.09	)	$	(.57	)	$	.01

These pro forma results are unaudited, have been prepared for comparative purposes only, and may include certain adjustments such as increased interest on the acquisition of debt, changes in the timing of financing events and the recognition of gains on acquisitions. They do not purport to be indicative of the results of operations which actually would have resulted had these transactions been in effect at the beginning of the comparable prior annual reporting period or of future results of operations of the location.

The properties acquired in 2015 have contributed $0.6 million of revenue and $0.2 million of operating profit for the three and nine months ended September 30, 2015, respectively. The properties above that were acquired in 2014 contributed $10.8 million and $31.6 million of revenue, for the three and nine months ended September 30, 2015, respectively, and $1.8 million and $4.8 million of operating profit for the three and nine months ended September 30, 2015. The properties contributed $8.0 million and $10.3 million of revenue, for the three and nine months ended September 30, 2014, respectively, and $0.4 million of operating profit for both the three and nine months ended September 30, 2014.

Other 2014 Acquisitions

See Note 13 of the Company’s 2014 Form 10-K for a discussion of the Company’s other 2014 acquisitions. There have been no changes during the period to assessments of the fair value of net assets acquired in the other 2014 acquisitions. Those amounts may be retrospectively adjusted as additional information is received.

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 its 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.

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Segment information is as follows:

As of and for the three months ended September 30, 2015:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	26,264	$	15,475	$	12,628	$	—	$	—		$	(15,622	)	$	38,745
Service and other		9,838		9,249		6,267		—		—			(141	)		25,213
Funeral home		—		—		—		17,077		—			(2,835	)		14,242
Total revenues		36,102		24,724		18,895		17,077		—			(18,598	)		78,200
Costs and expenses
Cost of sales		5,690		3,318		2,324		—		—			(2,604	)		8,728
Cemetery		7,534		6,608		4,103		—		—			—			18,245
Selling		8,471		4,931		3,940		—		692			(3,387	)		14,647
General and administrative		4,629		2,616		1,574		—		—			—			8,819
Corporate overhead		—		—		—		—		8,152			—			8,152
Depreciation and amortization		833		639		461		780		598			—			3,311
Funeral home		—		—		—		11,625		—			(417	)		11,208
Acquisition related costs, net of recoveries		—		—		—		—		963			—			963
Total costs and expenses		27,157		18,112		12,402		12,405		10,405			(6,408	)		74,073
Operating profit (loss)	$	8,945	$	6,612	$	6,493	$	4,672	$	(10,405	)	$	(12,190	)	$	4,127
Total assets	$	622,820	$	419,729	$	427,419	$	185,712	$	26,020		$	—		$	1,681,700
Amortization of cemetery property	$	1,457	$	1,131	$	322	$	—	$	—		$	(697	)	$	2,213
Long lived asset additions	$	2,206	$	502	$	5,871	$	4,388	$	595		$	—		$	13,562
Goodwill	$	8,950	$	3,288	$	11,948	$	39,862	$	—		$	—		$	64,048

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As of and for the nine months ended September 30, 2015:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	78,128	$	44,024	$	36,809	$	—	$	—		$	(50,567	)	$	108,394
Service and other		34,370		29,438		25,322		—		—			(14,078	)		75,052
Funeral home		—		—		—		50,226		—			(7,230	)		42,996
Total revenues		112,498		73,462		62,131		50,226		—			(71,875	)		226,442
Costs and expenses
Cost of sales		17,332		9,221		7,045		—		—			(7,980	)		25,618
Cemetery		22,518		19,378		11,893		—		—			—			53,789
Selling		26,552		15,368		12,382		—		1,974			(11,950	)		44,326
General and administrative		13,921		7,731		5,688		—		—			—			27,340
Corporate overhead		—		—		—		—		26,979			—			26,979
Depreciation and amortization		2,443		1,883		1,417		2,381		1,083			—			9,207
Funeral home		—		—		—		36,911		—			(1,404	)		35,507
Acquisition related costs, net of recoveries		—		—		—		—		1,648			—			1,648
Total costs and expenses		82,766		53,581		38,425		39,292		31,684			(21,334	)		224,414
Operating profit (loss)	$	29,732	$	19,881	$	23,706	$	10,934	$	(31,684	)	$	(50,541	)	$	2,028
Total assets	$	622,820	$	419,729	$	427,419	$	185,712	$	26,020		$	—		$	1,681,700
Amortization of cemetery property	$	4,059	$	2,385	$	1,062	$	—	$	—		$	(1,366	)	$	6,140
Long lived asset additions	$	6,451	$	2,272	$	6,804	$	4,859	$	780		$	—		$	21,166
Goodwill	$	8,950	$	3,288	$	11,948	$	39,862	$	—		$	—		$	64,048

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As of and for the three months ended September 30, 2014:

	Cemeteries						Funeral Homes
	Southeast		Northeast		West				Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	22,653	$	13,228	$	11,512	$	—	$	—		$	(4,719	)	$	42,674
Service and other		10,097		11,040		8,633		—		—			(6,509	)		23,261
Funeral home		—		—		—		14,457		—			(2,218	)		12,239
Total revenues		32,750		24,268		20,145		14,457		—			(13,446	)		78,174
Costs and expenses
Cost of sales		4,828		2,555		2,167		—		—			(488	)		9,062
Cemetery		7,533		6,576		3,967		—		—			—			18,076
Selling		8,173		4,572		4,001		—		631			(883	)		16,494
General and administrative		4,343		2,132		3,333		—		—			—			9,808
Corporate overhead		—		—		—		—		8,392			—			8,392
Depreciation and amortization		800		670		539		867		236			—			3,112
Funeral home		—		—		—		10,674		—			(315	)		10,359
Acquisition related costs, net of recoveries		—		—		—		—		451			—			451
Total costs and expenses		25,677		16,505		14,007		11,541		9,710			(1,686	)		75,754
Operating profit (loss)	$	7,073	$	7,763	$	6,138	$	2,916	$	(9,710	)	$	(11,760	)	$	2,420
Total assets	$	636,192	$	423,434	$	448,732	$	163,762	$	40,677		$	—		$	1,712,797
Amortization of cemetery property	$	1,035	$	341	$	435	$	—	$	—		$	168		$	1,979
Long lived asset additions	$	1,950	$	1,205	$	906	$	203	$	183		$	—		$	4,447
Goodwill	$	8,949	$	3,288	$	11,948	$	33,025	$	—		$	—		$	57,210

As of and for the nine months ended September 30, 2014:

	Cemeteries						Funeral Homes
	Southeast		Northeast		West				Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	69,319	$	31,583	$	35,211	$	—	$	—		$	(26,605	)	$	109,508
Service and other		31,085		29,529		26,768		—		—			(18,260	)		69,122
Funeral home		—		—		—		40,777		—			(5,313	)		35,464
Total revenues		100,404		61,112		61,979		40,777		—			(50,178	)		214,094
Costs and expenses
Cost of sales		15,045		6,576		7,686		—		—			(4,091	)		25,216
Cemetery		21,057		14,499		11,990		—		—			—			47,546
Selling		24,019		11,443		11,462		—		1,480			(5,860	)		42,544
General and administrative		13,053		5,533		7,747		—		—			—			26,333
Corporate overhead		—		—		—		—		22,394			—			22,394
Depreciation and amortization		2,094		1,244		1,593		2,346		716			—			7,993
Funeral home		—		—		—		29,813		—			(732	)		29,081
Acquisition related costs, net of recoveries		—		—		—		—		2,040			—			2,040
Total costs and expenses		75,268		39,295		40,478		32,159		26,630			(10,683	)		203,147
Operating profit (loss)	$	25,136	$	21,817	$	21,501	$	8,618	$	(26,630	)	$	(39,495	)	$	10,947
Total assets	$	636,192	$	423,434	$	448,732	$	163,762	$	40,677		$	—		$	1,712,797
Amortization of cemetery property	$	3,499	$	1,762	$	2,237	$	—	$	—		$	(414	)	$	7,084
Long lived asset additions	$	28,470	$	72,515	$	3,350	$	9,024	$	443		$	—		$	113,802
Goodwill	$	8,949	$	3,288	$	11,948	$	33,025	$	—		$	—		$	57,210

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Results of individual operating segments are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to GAAP; therefore, the financial results of individual operating segments are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the operating segments. 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 unaudited condensed 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 unaudited condensed 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 unaudited condensed consolidated financial statements reflect Deferred Cemetery Revenue, Net, and Deferred Selling and Obtaining Costs on the unaudited condensed consolidated balance sheet, whereas the Company’s management accounting practices exclude these items.

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15. FAIR VALUE MEASUREMENTS

The Fair Value Measurements and Disclosures topic of the ASC defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. This topic also establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy defined by this topic are described below.

Level 1: Quoted market prices available in active markets for identical assets or liabilities. The Company includes short-term investments, consisting primarily of money market funds, U.S. Government debt securities and publicly traded equity securities and mutual funds in its level 1 investments.

Level 2: Quoted prices in active markets for similar assets; quoted prices in non-active markets for identical or similar assets; inputs other than quoted prices that are observable. The Company includes U.S. state and municipal, corporate and other fixed income debt securities in its level 2 investments.

Level 3: Any and all pricing inputs that are generally unobservable and not corroborated by market data.

On the Company’s unaudited condensed consolidated balance sheet, current assets, long-term accounts receivable and current liabilities are recorded at amounts that approximate fair value.

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The following table displays the Company’s assets measured at fair value as of September 30, 2015 and December 31, 2014.

As of September 30, 2015
Merchandise Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	27,125	$	—	$	27,125
Fixed maturities:
U.S. state and local government agency		—		91		91
Corporate debt securities		—		11,695		11,695
Other debt securities		—		7,168		7,168
Total fixed maturity investments		—		18,954		18,954
Mutual funds - debt securities		232,239		—		232,239
Mutual funds - equity securities - real estate sector		17,366		—		17,366
Mutual funds - equity securities - energy sector		8,279		—		8,279
Mutual funds - equity securities - MLP’s		13,899		—		13,899
Mutual funds - equity securities - other		78,714		—		78,714
Equity securities:
Master limited partnerships		18,382		—		18,382
Global equity securities		27,331		—		27,331
Other invested assets		—		7,198		7,198
Total	$	423,335	$	26,152	$	449,487
Perpetual Care Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	14,455	$	—	$	14,455
Fixed maturities:
U.S. government and federal agency		113		—		113
U.S. state and local government agency		—		27		27
Corporate debt securities		—		22,677		22,677
Other debt securities		—		371		371
Total fixed maturity investments		113		23,075		23,188
Mutual funds - debt securities		210,337		—		210,337
Mutual funds - equity securities - real estate sector		15,616		—		15,616
Mutual funds - equity securities - energy sector		13,246		—		13,246
Mutual funds - equity securities - MLP’s		26,432		—		26,432
Mutual funds - equity securities - other		6,000		—		6,000
Equity securities:
Master limited partnerships		1,268		—		1,268
Global equity securities		1,019		—		1,019
Other invested assets		—		220		220
Total	$	288,486	$	23,295	$	311,781

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As of December 31, 2014
Merchandise Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	52,521	$	—	$	52,521
Fixed maturities:
U.S. state and local government agency		—		269		269
Corporate debt securities		—		8,976		8,976
Other debt securities		—		7,139		7,139
Total fixed maturity investments		—		16,384		16,384
Mutual funds - debt securities		142,680		—		142,680
Mutual funds - equity securities - real estate sector		58,672		—		58,672
Mutual funds - equity securities - energy sector		7,733		—		7,733
Mutual funds - equity securities - MLP’s		22,927		—		22,927
Mutual funds - equity securities - other		90,126		—		90,126
Equity securities:
Master limited partnerships		50,091		—		50,091
Global equity securities		30,208		—		30,208
Other invested assets		—		5,159		5,159
Total	$	454,958	$	21,543	$	476,501
Perpetual Care Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	26,644	$	—	$	26,644
Fixed maturities:
U.S. government and federal agency		116		—		116
U.S. state and local government agency		—		79		79
Corporate debt securities		—		23,466		23,466
Other debt securities		—		371		371
Total fixed maturity investments		116		23,916		24,032
Mutual funds - debt securities		123,894		—		123,894
Mutual funds - equity securities - real estate sector		41,753		—		41,753
Mutual funds - equity securities - energy sector		14,829		—		14,829
Mutual funds - equity securities - MLP’s		43,596		—		43,596
Mutual funds - equity securities - other		25,258		—		25,258
Equity securities:
Master limited partnerships		43,207		—		43,207
Global equity securities		1,867		—		1,867
Other invested assets		—		25		25
Total	$	321,164	$	23,941	$	345,105

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Level 1 securities primarily consist of actively publicly traded money market funds, mutual funds and equity securities.

Level 2 securities primarily consist of corporate and other fixed income debt securities. The Company obtains pricing information for these securities from an independent pricing vendor. The pricing vendor uses various pricing models for each asset class that are consistent with what other market participants would use. The inputs and assumptions to the pricing vendor’s model are derived from market observable sources including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. Since many fixed income securities do not trade on a daily basis, the pricing vendor uses available information as applicable such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. Thus, certain securities may not be priced using quoted prices, but rather determined from market observable information. These investments are included in Level 2. The Company reviews the information provided by the pricing vendor on a regular basis. In addition, the pricing vendor has an established process in place for the identification and resolution of potentially erroneous prices.

There were no level 3 assets.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The words “we,” “us,” “our,” “StoneMor,” the “Partnership,” the “Company” and similar words refer to StoneMor Partners L.P. and its subsidiaries.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in “Part I, Item 1” of this Quarterly Report on Form 10-Q.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q, including, but not limited to, information regarding the status and progress of our operating activities, the plans and objectives of our management, assumptions regarding our future performance and plans, and any financial guidance provided or guidance related to our future distributions, as well as certain information in our other filings with the SEC and elsewhere are forward-looking statements.

Generally, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend (including, but not limited to our intent to maintain or increase our distributions),” “project,” “expect,” “predict” and similar expressions identify these forward-looking statements.

These forward-looking statements are made subject to certain risks and uncertainties that could cause actual results to differ materially from those stated or implied. Our major risk is related to uncertainties associated with the cash flow from our pre-need and at-need sales, our trusts, and financings, which may impact our ability to meet our financial projections, our ability to service our debt and pay distributions, and our ability to increase our distributions.

Our additional risks and uncertainties, include, but are not limited to, the following: uncertainties associated with future revenue and revenue growth; uncertainties associated with the integration or anticipated benefits of our recent acquisitions or any future acquisitions; our ability to complete and fund additional acquisitions; the effect of economic downturns; the impact of our significant leverage on our operating plans; the decline in the fair value of certain equity and debt securities held in our trusts; our ability to attract, train and retain an adequate number of sales people; uncertainties associated with the volume and timing of pre-need sales of cemetery services and products; increased use of cremation; changes in the death rate; changes in the political or regulatory environments, including potential changes in tax accounting and trusting policies; our ability to successfully implement a strategic plan relating to achieving operating improvements, strong cash flows and further deleveraging; our ability to successfully compete in the cemetery and funeral home industry; litigation or legal proceedings that could expose us to significant liabilities and damage our reputation; the effects of cyber security attacks due to our significant reliance on information technology; uncertainties relating to the financial condition of third-party insurance companies that fund our pre-need funeral contracts; and various other uncertainties associated with the death care industry and our operations in particular.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (“2014 Form 10-K”), our Current Report on Form 8-K filed with the SEC on July 6, 2015 and our other reports filed with the SEC.

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Except as required under applicable law, we assume no obligation to 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.

Overview

Cemetery Operations

We are currently the second largest owner and operator of cemeteries in the United States. As of September 30, 2015, we operated 306 cemeteries in 27 states and Puerto Rico. We own 275 of these cemeteries and we manage or operate the remaining 31 under lease, operating or management agreements. As a result of the agreements, other control arrangements and applicable accounting rules, we have treated 16 of these cemeteries as acquisitions for accounting purposes.

We operate 15 cemeteries under long-term lease, operating or management agreements that do not qualify as acquisitions for accounting purposes. As a result, we did not consolidate all of the existing assets and liabilities related to these cemeteries. We have consolidated the existing assets and liabilities of these cemeteries’ merchandise and perpetual care trusts as variable interest entities since we control and receive the benefits and absorb any losses from operating these trusts. Under these long-term lease, operating or management agreements, which are subject to certain termination provisions, we are the exclusive operator of these cemeteries. We earn revenues related to sales of merchandise, services, and interment rights and incur expenses related to such sales and the maintenance and upkeep of these cemeteries. Upon termination of these contracts, we will retain all of the benefits and related contractual obligations incurred from sales generated during the contract period. We have also recognized the existing merchandise liabilities assumed as part of these agreements.

We sell cemetery products and services both at the time of death, which we refer to as at-need, and prior to the time of death, which we refer to as pre-need. Revenues from cemetery operations accounted for approximately 81.8% and 81.0% of our total revenues during the three and nine months ended September 30, 2015, respectively, as compared to 84.3% and 83.4% during the same periods last year. The change in the contribution to total revenues was primarily due to one large land sale from the first quarter of 2014, as well as higher contributions during the current period from our 2014 funeral home acquisitions.

Our results of operations for our cemetery operations are determined primarily by the volume of sales of products and services and the timing of product delivery and performance of services. We derive our cemetery revenues primarily from:

• at-need sales of cemetery interment rights, merchandise and services, which we recognize as revenue when we have delivered the related merchandise or performed the service;

• pre-need sales of cemetery interment rights, which we generally recognize as revenues when we have collected 10% of the sales price from the customer;

• pre-need sales of cemetery merchandise, which we recognize as revenues when we satisfy the criteria specified below for delivery of the merchandise to the customer;

• pre-need sales of cemetery services which we recognize as revenues when we perform the services for the customer;

• investment income from assets held in our merchandise trust, which we recognize as revenues when we deliver the underlying merchandise or perform the underlying services and recognize the associated sales revenue as discussed above;

• investment income from perpetual care trusts, excluding realized gains and losses on the sale of trust assets, which we recognize as revenues as the income is earned in the trust; and

• other items, such as interest income on pre-need installment contracts and sales of land.

The criteria for recognizing revenue related to the sale of cemetery merchandise is that such merchandise is “delivered” to our customer, which generally means that:

• the merchandise is complete and ready for installation; or

• the merchandise is either installed or stored at an off-site location, at no additional cost to us, and specifically identified with a particular customer; and

• the risks and rewards of ownership have passed to the customer.

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We generally satisfy these delivery criteria by purchasing the merchandise and either installing it on our cemetery property or storing it, at the customer’s request, in third-party warehouses, at no additional cost to us, until the time of need. With respect to burial vaults, we install the vaults rather than storing them to satisfy the delivery criteria. When merchandise is stored for a customer, we may issue a certificate of ownership to the customer to evidence the transfer to the customer of the risks and rewards of ownership.

Pre-need Sales

As previously noted, we do not recognize revenue on pre-need sales of merchandise and services until we have delivered the merchandise or performed the services. Accordingly, deferred revenues from pre-need sales and related merchandise trust earnings are reflected as a liability on our unaudited condensed consolidated balance sheet in deferred cemetery revenues, net.

Total deferred cemetery revenues, net, also includes deferred revenues from pre-need sales that were entered into by entities we acquired prior to the time we acquired them. This includes both those entities that we acquired at the time of the formation of Cornerstone and other subsequent acquisitions. Our profit margin on pre-need sales entered into by entities we subsequently acquired is generally less than our profit margin on other pre-need sales because, in accordance with industry practice at the time these acquired pre-need sales were made, none of the selling expenses were recognized at the time of sale. As a result, we are required to recognize all of the expenses (including deferred selling expenses) associated with these acquired pre-need sales when we recognize the revenues from that sale.

Pre-need products and services are typically sold on an installment basis. Subject to state law, these contracts are normally subject to “cooling-off” periods, generally between three and thirty days, during which the customer may elect to cancel the contract and receive a full refund of amounts paid. Also, subject to applicable state law, we are generally permitted to retain the amounts already paid on contracts, including any amounts that were required to be deposited into trust, on contracts cancelled after the “cooling-off” period. Historical post “cooling-off” period cancellations total approximately 10% of our pre-need sales (based on contract dollar amounts). If the products and services purchased under a pre-need contract are needed for interment before payment has been made in full, generally the balance due must be immediately paid in full.

Contracts related to pre-need installment sales are usually for a period not to exceed 60 months, with payments of principal and interest required. Pre-need sales contracts normally contain provisions for both principal and interest. For those contracts that do not bear a market rate of interest, we impute such interest based upon the prime rate plus 150 basis points, which resulted in a rate of 4.75% for the three and nine months ended September 30, 2015 and 2014.

We normally offer prepayment incentives to customers whose pre-need contracts are longer than 36 months and bear interest. If those customers pay their contracts in full in less than 12 months, we rebate the interest that we have collected from them. Even though this rebate policy reduces the amount of interest income we receive on our accounts receivable, the net effect is an increase in our immediate cash flow.

In certain cases, pre-need contracts will be cancelled before they are fully paid. In these circumstances, we are generally permitted to retain amounts already paid to us, including any amounts that were required to be deposited into trust. In certain other cases, the products and services purchased under a pre-need contract are needed for interment before payment has been made in full. In these cases, we are generally entitled to be immediately paid in full for any amounts still outstanding.

At-need Sales

Revenue on at-need merchandise sales is deferred until the time that such merchandise is delivered. The lag between the contract origination and delivery is normally minimal. At-need sales of products and services are generally required to be paid for in full at the time of sale. At that time, we will deposit amounts, as legally required, into our perpetual care trusts. We are not required to deposit any amounts from our at-need sales into merchandise trusts.

Expenses

We analyze and categorize our operating expenses as follows:

1. Cost of goods sold and selling expenses

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Cost of goods sold reflects the actual cost of purchasing products and performing services. Sales of cemetery lots and interment rights, whether at-need or pre-need, typically have a lower cost of goods sold than other merchandise that we sell.

Selling expenses consist of salesperson and sales management payroll costs, including selling commissions, bonuses and employee benefits. We self-insure medical expenses of our employees up to certain individual and aggregate limits over which we have stop-loss insurance coverage. Our self-insurance policy may result in variability in our future operating expenses. Selling expenses also include other costs of obtaining product and service sales, such as advertising, marketing, postage and telephone.

Direct costs associated with pre-need sales of cemetery merchandise and services, such as sales commissions and cost of goods sold, are reflected in the unaudited condensed consolidated balance sheet in deferred selling and obtaining costs and deferred cemetery revenues, net, respectively, and are expensed as the merchandise is delivered or the services are performed. Indirect costs, such as marketing and advertising costs, are expensed in the period in which they are incurred.

2. Cemetery Expenses

Cemetery expenses represent the cost to maintain and repair our cemetery properties and consist primarily of labor and equipment, utilities, real estate taxes and other maintenance items. Repairs necessary to maintain our cemeteries are expensed as they are incurred. Other maintenance costs required over the long term to maintain the operating capacity of our cemeteries, such as to build roads and install sprinkler systems are capitalized.

3. General and administrative expenses

General and administrative expenses, which do not include corporate overhead, primarily include personnel costs, insurance and other costs necessary to maintain our cemetery offices.

4. Depreciation and amortization

We depreciate our property and equipment on a straight-line basis over their estimated useful lives.

5. Acquisition related costs

Acquisition related costs, which include legal fees and other third party costs incurred in acquisition related activities, are expensed as incurred.

Funeral Home Operations

As of September 30, 2015, we owned and operated 103 funeral homes. These properties are located in 19 states and Puerto Rico. Forty-six of our funeral homes are located on the grounds of cemeteries that we own.

We derive revenues at our funeral homes from the sale of funeral home merchandise, including caskets and related funeral merchandise, and services, including removal and preparation of remains, the use of our facilities for visitation, worship and performance of funeral services and transportation services. We sell these services and merchandise generally at the time of need utilizing salaried licensed funeral directors. Our funeral home operations also include revenues related to the sale of term and final expense whole life insurance in markets where we do not own a funeral home, as well as pre-need whole life insurance in markets where we own a funeral home. Funeral home revenues accounted for approximately 18.2% and 19.0% of our total revenues during the three and nine months ended September 30, 2015, respectively, as compared to 15.7% and 16.6% during the same periods last year.

Pursuant to state law, a portion of proceeds received from pre-need funeral service contracts is put into trust while amounts used to defray the initial administrative costs are not. All investment earnings generated by the assets in the trust (including realized gains and losses) are deferred until the associated merchandise is delivered or the services are performed. The balance of the amounts in these trusts is included within the merchandise trusts.

We generally include revenues from pre-need casket sales in the results of our cemetery operations. However, some states require that caskets be sold by funeral homes, and revenues from casket sales in those states are included in our funeral home results.

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Our funeral home operating expenses consist primarily of compensation to our funeral directors, day-to-day costs of managing the business and the cost of caskets.

Corporate

We incur fixed costs for corporate overhead primarily for centralized functions, such as payroll, accounting, collections and professional fees. We also incur expenses related to reporting requirements under U.S. federal securities laws and certain other additional expenses of being a public company.

2015 Developments

Significant business developments for 2015 include the following:

• On June 5, 2015, we entered into a lease agreement for a new corporate office location in Trevose, Pennsylvania. The lease term will commence on February 1, 2016 and will expire on July 31, 2028, with certain contractual renewal options.

• On July 10, 2015, we completed a follow-on public offering of 2,415,000 common units at a public offering price of $29.63 per unit. Net proceeds of the offering, after deducting underwriting discounts and offering expenses, were approximately $67.9 million. The proceeds were used to pay down outstanding indebtedness under our Credit Facility.

• During the third quarter of 2015, we acquired three cemeteries in Illinois, three funeral homes in Illinois and two funeral homes in Florida for aggregate consideration of $14.0 million. After these acquisitions, we operate 306 cemeteries and 103 funeral homes in 28 states and Puerto Rico.

Current Market Conditions and Economic Developments

As of September 30, 2015, the amortized cost of the assets in our merchandise trusts exceeded their market value by 15.4%, compared to December 31, 2014 when the market value of the assets exceeded their amortized cost by 0.5%. As of September 30, 2015, the amortized cost of the assets in our perpetual care trusts exceeded their market value by 9.5% as compared to December 31, 2014 when the market value of the assets exceeded their amortized cost by 9.7%. Changes in the cost to market ratios are due in part to the repositioning of assets within our merchandise and perpetual care trust portfolios, as well as declines in market conditions.

As of September 30, 2015, the majority of our long-term debt consisted of $175.0 million in Senior Notes due 2021, the offering of which took place in May of 2013, and $113.5 million of borrowings under our credit facility, which expires in 2019. As of September 30, 2015, we had $66.5 million of total availability under our revolving credit facility. The revolving credit facility provides for both acquisition draws, which are used primarily to finance acquisitions, acquisition related costs and mausoleum construction costs, and working capital draws, which are used to finance all other corporate costs. As of September 30, 2015, we had $75.0 million of working capital draws, which are limited to a borrowing formula of 85% of eligible account receivables. This limit was $135.5 million at September 30, 2015.

On July 10, 2015, we completed a follow-on public offering of 2,415,000 common units at a public offering price of $29.63 per unit. Net proceeds of the offering, after deducting underwriting discounts and offering expenses, were approximately $67.9 million. The proceeds were used to pay down outstanding indebtedness under our Credit Facility.

The aggregate values of pre-need and at-need contracts written were $86.1 million and $254.6 million for the three and nine months ended September 30, 2015, respectively, as compared to $77.6 million and $219.2 million during the same periods last year.

Impact on Our Ability to Meet Our Debt Covenants

Debt covenants in the Credit Agreement specifically relate to a certain measure of Consolidated EBITDA and certain coverage and leverage ratios as defined in the Credit Agreement described below.

Consolidated EBITDA is a non-GAAP financial measure and is primarily related to the current period value of contracts written, investment income from the merchandise and perpetual care trusts, and current expenses incurred.

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We have two primary debt covenants that are dependent upon our financial results, the Consolidated Leverage Ratio and the Consolidated Debt Service Coverage Ratio. The Consolidated Leverage Ratio relates to the ratio of Consolidated Funded Indebtedness to Consolidated EBITDA. Our Consolidated Leverage Ratio was 3.00 at September 30, 2015 compared to a maximum allowed ratio of 4.00. The Consolidated Debt Service Coverage Ratio relates to the ratio of Consolidated EBITDA to Consolidated Debt Service. Our Consolidated Debt Service Coverage Ratio was 4.47 at September 30, 2015 compared to a minimum allowed ratio of 2.50.

Segment Reporting and Related 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.

We chose this level of organization and disaggregation of reportable segments due to the fact that a) each reportable segment has unique characteristics that set it apart from each other; b) we have organized our management personnel at these operational levels; and c) this is the level at which our 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. Our cemetery operations are disaggregated into three different geographically based segments. The nature of our 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.

Our 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.

Our Corporate segment includes various home office expenses, miscellaneous selling, cemetery and general administrative expenses that are not allocable to other operating segments, certain depreciation and amortization expenses and acquisition related costs.

Critical Accounting Policies and Estimates

The unaudited condensed consolidated financial statements are prepared in conformity with GAAP. The preparation of these consolidated financial statements required us to make estimates, judgments and assumptions that affected the reported amounts of assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods (see Note 1 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q). Our critical accounting policies are those that are both important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgment. These critical accounting policies are discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our 2014 Form 10-K. There have been no significant changes to our critical accounting policies since the filing of our 2014 Form 10-K.

Results of Operations – Segments

We account for and analyze the results of operations for our segments on a basis of accounting that is different from GAAP. We reconcile these non-GAAP accounting results of operations to GAAP based amounts at the consolidated level. This reconciliation is included in Note 14 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

The method of accounting we utilize to analyze our overall results of operations, including segment results, provides for a production-based view of our business. Under the production-based view, we recognize revenues at their contract value at the point in time in which the contract is written, less a historic cancellation reserve. All related costs are expensed in the period the contract is recognized as revenue. In contrast, GAAP requires that we defer all revenues, and the direct costs associated with these revenues, until we meet certain delivery and performance requirements. The nature of our business is such that there is no meaningful relationship between the time that elapses from the date a contract is

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executed and the date the underlying merchandise is delivered or the service, delivery and performance requirements are met. Further, certain factors affecting this time period, such as weather and supplier issues, are out of our control. As a result, during a period of growth, operating profits as defined by GAAP will tend to lag behind operating profits on a production-based view because of the required deferral of revenues. Our performance-based view ignores these delays and presents results based upon the underlying value of contracts written. We believe this is the most reliable indicator of our performance for a given period as the value of contracts written less a historical cancellation reserve reflects the economic value added during a given period of time. Accordingly, the ensuing segment discussion is on a basis of accounting that differs from GAAP. See Note 1 to the consolidated financial statements included in the 2014 Form 10-K for a more detailed discussion of our accounting policies under GAAP.

Three Months Ended September 30, 2015 Compared to Three Months Ended September 30, 2014

Cemetery Segments

Cemetery Operations – Southeast

In June of 2014, we acquired nine properties in our Cemetery Operations – Southeast segment. The acquired properties had less impact on the results for the three months ended September 30, 2014 as compared to the results for the three months ended September 30, 2015. These properties contributed approximately $4.2 million of the revenues and $2.6 million of the costs and expenses for the three months ended September 30, 2015 as compared to $2.5 million and $1.9 million, respectively, for the same period last year.

The table below compares the results of operations for our Cemetery Operations – Southeast for the three months ended September 30, 2015 to the same period last year:

	Three months ended September 30,
	2015		2014		Change ($)		Change (%)
	(in thousands) (non-GAAP)
Total revenues	$	36,102	$	32,750	$	3,352		10.2	%
Total costs and expenses		27,157		25,677		1,480		5.8	%
Operating profit	$	8,945	$	7,073	$	1,872		26.5	%

Revenues

The increase in revenues was primarily related to increases of $3.0 million in the value of pre-need contracts written, $0.5 million in the value of at-need contracts written and $0.5 million in interest and other income, partially offset by a $0.6 million decrease in income from our trusts. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Total costs and expenses

The net increase in costs and expenses was primarily related to:

• A $0.9 million increase in the cost of goods sold primarily attributable to the increase in the value of contracts written and changes in product mix.

• A $0.3 million increase in selling expenses primarily due to increases in commissions and personnel costs.

• A $0.3 million increase in general and administrative expenses primarily due to an increase of $0.1 million in professional fees and a $0.1 million in taxes with the remainder attributable to increases in other general expense categories.

Cemetery Operations – Northeast

During the second quarter of 2014, we acquired three properties and separately obtained the rights from the Archdiocese of Philadelphia to operate thirteen properties in our Cemetery Operations – Northeast segment. These acquired properties had less impact on the results for the three months ended September 30, 2014 as compared to the

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results for the three months ended September 30, 2015. These properties contributed approximately $10.5 million of the revenues and $7.2 million of the costs and expenses of the segment for the three months ended September 30, 2015 as compared to $7.6 million and $5.5 million, respectively, for the same period last year.

The table below compares the results of operations for our Cemetery Operations – Northeast for the three months ended September 30, 2015 to the same period last year:

	Three months ended September 30,
	2015		2014		Change ($)			Change (%)
	(in thousands)
	(non-GAAP)
Total revenues	$	24,724	$	24,268	$	456			1.9	%
Total costs and expenses		18,112		16,505		1,607			9.7	%
Operating profit	$	6,612	$	7,763	$	(1,151	)		-14.8	%

Revenues

The increase in revenues was primarily related to increases of $2.2 million in the value of pre-need contracts written, $0.2 million in the value of at-need contracts written and $0.4 million in interest and other income, partially offset by a $2.3 million decrease in income from our trusts. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Total costs and expenses

The net increase in costs and expenses was primarily related to:

• A $0.8 million increase in the cost of goods sold primarily attributable to the increase in the value of contracts written and changes in product mix.

• A $0.4 million increase in selling expenses primarily due to increases of $0.2 million in commissions and personnel costs and a $0.2 million increase in advertising and marketing costs.

• A $0.4 million increase in general and administrative expenses primarily due to increases of $0.1 million in both insurance costs and personnel costs and $0.2 million in professional fees.

Cemetery Operations – West

During the third quarter of 2015, we acquired three properties in our Cemetery Operations – West segment. The results of operations for these properties have no impact on the results for the three months ended September 30, 2014, but are included in the results for the three months ended September 30, 2015. The additions have contributed approximately $0.5 million of the revenues and $0.3 million of the costs and expenses of the segment for the three months ended September 30, 2015.

The table below compares the results of operations for our Cemetery Operations – West for the three months ended September 30, 2015 to the same period last year:

	Three months ended September 30,
	2015		2014		Change ($)			Change (%)
	(in thousands)
	(non-GAAP)
Total revenues	$	18,895	$	20,145	$	(1,250	)		-6.2	%
Total costs and expenses		12,402		14,007		(1,605	)		-11.5	%
Operating profit	$	6,493	$	6,138	$	355			5.8	%

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Revenues

The decrease in revenues was primarily related to decreases of $2.5 million in income from our trusts and $0.1 million in the value of at-need contracts written, partially offset by increases of $1.1 million in the value of pre-need contracts written and $0.2 million in interest and other income. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Total costs and expenses

The net decrease in costs and expenses was primarily related to:

• A $0.2 million increase in the cost of goods sold primarily attributable to the change in the value of contracts written and changes in product mix.

• A $1.8 million decrease in general and administrative expenses primarily related to a decrease of $1.7 million in professional fees and legal costs related to a legal settlement in the prior year.

Funeral Homes Segment

In the fourth quarter of 2014, we acquired two funeral homes. During the third quarter of 2015, we acquired five funeral homes. Therefore, the results of operations for these properties have no impact on the results for the three months ended September 30, 2014 as compared to the results for the three months ended September 30, 2015. The additions have contributed approximately $1.1 million of the revenues and $0.6 million of the costs and expenses of the segment for the three months ended September 30, 2015.

The table below compares the results of operations for our Funeral Homes segment for the three months ended September 30, 2015 to the same period last year:

	Three months ended September 30,
	2015		2014		Change ($)		Change (%)
	(in thousands) (non-GAAP)
Total revenues	$	17,077	$	14,457	$	2,620		18.1	%
Total costs and expenses		12,405		11,541		864		7.5	%
Operating profit	$	4,672	$	2,916	$	1,756		60.2	%

Revenues

The increase in revenues was primarily attributable to increases of $1.1 million in the value of at-need contracts written, $1.6 million in insurance-related revenues and $0.4 million in other income, partially offset by a decrease of $0.5 million in the value of pre-need contracts written.

Total costs and expenses

The net increase in costs and expenses was primarily attributable to increases of $0.1 million in personnel costs, $0.2 million in facility related costs, $0.9 million in expenses related to insurance sales and $0.1 million in advertising and marketing costs, partially offset by a decrease of $0.4 million in merchandise costs.

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Corporate Segment

The table below compares expenses incurred by the Corporate segment for the three months ended September 30, 2015 to the same period last year:

	Three months ended September 30,
	2015		2014		Change ($)			Change (%)
	(in thousands) (non-GAAP)
Selling, cemetery and general and administrative expenses	$	692	$	631	$	61			100.0	%
Depreciation and amortization		598		236		362			153.4	%
Acquisition related costs, net of recoveries		963		451		512			113.5	%
Corporate expenses
Corporate personnel expenses		3,598		3,425		173			5.1	%
Other corporate expenses		4,554		4,967		(413	)		-8.3	%
Total corporate overhead		8,152		8,392		(240	)		-2.9	%
Total corporate expenses	$	10,405	$	9,710	$	695			7.2	%

The increase in corporate expenses was primarily driven by increases of $0.5 million acquisition related costs, $0.4 million in depreciation and amortization and $0.2 million in personnel costs. These increases were partially offset by a decrease in corporate overhead of $0.4 million, primarily related to a reduction in professional fees. Acquisition costs may vary from period to period depending on the amount of acquisition activity that takes place.

Reconciliation of Segment Results of Operations to Consolidated Results of Operations

As discussed in the segment sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, revenues and their associated costs as reported at the segment level are not deferred.

Periodic consolidated revenues recorded in accordance with GAAP reflect the amount of total merchandise and services that were delivered during the period. Accordingly, period over period changes to revenues can be impacted by:

• Changes in the value of contracts written and other revenues generated during a period that are delivered in their period of origination and are recognized as revenue and not deferred as of the end of their period of origination.

• Changes in merchandise and services that are delivered during a period that had been originated during a prior period.

The table below analyzes results of operations and the changes therein for the three months ended September 30, 2015 as compared to the same period last year. The table is structured so that our readers can determine whether changes were based upon changes in the level of merchandise and services and other revenues generated during each period and/or changes in the timing of when merchandise and services were delivered. Since March 31, 2014, we acquired 15 cemeteries and 16 funeral homes, and obtained the rights from the Archdiocese of Philadelphia to operate 13 cemetery properties. The results of operations for these properties had either less or no impact on the results for the three months

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ended September 30, 2014, but are included in the results for the three months ended September 30, 2015. These properties are contributing a significant portion of the increases to revenues and costs and expenses in the table below.

	Three months ended September 30, 2015							Three months ended September 30, 2014
	(in thousands)							(in thousands)
	Segment Results (non-GAAP)		GAAP Adjustments			GAAP Results		Segment Results (non-GAAP)		GAAP Adjustments			GAAP Results		Change in GAAP results ($)			Change in GAAP results (%)
Revenues
Pre-need cemetery revenues	$	42,492	$	(15,008	)	$	27,484	$	36,170	$	(5,030	)	$	31,140	$	(3,656	)		-11.7	%
At-need cemetery revenues		25,151		(618	)		24,533		24,746		244			24,990		(457	)		-1.8	%
Investment income from trusts		8,691		(109	)		8,582		13,985		(6,740	)		7,245		1,337			18.5	%
Interest income		2,233		—			2,233		1,807		—			1,807		426			23.6	%
Funeral home revenues		17,077		(2,835	)		14,242		14,457		(2,218	)		12,239		2,003			16.4	%
Other cemetery revenues		1,154		(28	)		1,126		455		298			753		373			49.5	%
Total revenues		96,798		(18,598	)		78,200		91,620		(13,446	)		78,174		26			0.0	%
Costs and expenses
Cost of goods sold		11,332		(2,604	)		8,728		9,550		(488	)		9,062		(334	)		-3.7	%
Cemetery expense		18,245		—			18,245		18,076		—			18,076		169			0.9	%
Selling expense		18,034		(3,387	)		14,647		17,377		(883	)		16,494		(1,847	)		-11.2	%
General and administrative expense		8,819		—			8,819		9,808		—			9,808		(989	)		-10.1	%
Corporate overhead		8,152		—			8,152		8,392		—			8,392		(240	)		-2.9	%
Depreciation and amortization		3,311		—			3,311		3,112		—			3,112		199			6.4	%
Funeral home expense		11,625		(417	)		11,208		10,674		(315	)		10,359		849			8.2	%
Acquisition related costs, net of recoveries		963		—			963		451		—			451		512			113.5	%
Total costs and expenses		80,481		(6,408	)		74,073		77,440		(1,686	)		75,754		(1,681	)		-2.2	%
Operating profit	$	16,317	$	(12,190	)	$	4,127	$	14,180	$	(11,760	)	$	2,420	$	1,707			70.5	%

Revenues

Pre-need cemetery revenues were $27.5 million for the three months ended September 30, 2015, a decrease of $3.6 million, or 11.7%, as compared to $31.1 million during the same period last year. The decrease was primarily caused by an increase of $9.9 million in deferred revenue as activity on contracts written exceeded activity related to delivered products and services to a greater degree during the current period. This decrease was partially offset by an increase of $6.3 million in the value of cemetery contracts written.

At-need cemetery revenues were $24.5 million for the three months ended September 30, 2015, a decrease of $0.5 million, or 1.8%, as compared to $25.0 million during the same period last year. The decrease was primarily caused by an increase of $0.9 million in deferred revenue as activity on contracts written exceeded activity related to delivered products and services to a greater degree during the current period. This decrease was partially offset by an increase of $0.4 million in the value of cemetery contracts written.

Investment income from trusts was $8.6 million for the three months ended September 30, 2015, an increase of $1.4 million, or 18.5%, as compared to $7.2 million during the same period last year. On a segment basis, we had a decrease of $5.3 million, which was offset by an adjustment of $6.7 million related to funds for which we have met the requirements that would allow us to recognize them as revenue. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Interest income on accounts receivable was $2.2 million for the three months ended September 30, 2015, an increase of $0.4 million, or 23.6%, as compared to $1.8 million during the same period last year, primarily due to an increase in accounts receivable.

Funeral home revenues were $14.2 million for the three months ended September 30, 2015, an increase of $2.0 million, or 16.4%, as compared to $12.2 million during the same period last year. The increase was primarily driven by the funeral homes we acquired in 2014 and 2015 and increased revenues from insurance sales.

Other cemetery revenues were $1.1 million during the three months ended September 30, 2015 as compared to $0.8 million in the same period last year.

Costs and Expenses

The cost of goods sold was $8.7 million for the three months ended September 30, 2015, a decrease of $0.4 million, or 3.7%, as compared to $9.1 million during the same period last year. The ratio of cost of goods sold to pre-need and at-need cemetery revenues was 16.8% during the three months ended September 30, 2015 as compared to 16.1% during the same period last year. The change in the ratio primarily relates to changes in product mix.

Cemetery expenses were $18.2 million during the three months ended September 30, 2015, an increase of $0.1 million, or 0.9%, compared to $18.1 million during the same period last year. Within this category, there was an increase

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of $0.4 million in real estate tax expense, partially offset by a decrease of $0.3 million in repair and maintenance costs. Cemetery expenses relate to the current costs of managing and maintaining our cemetery properties. These costs are expensed as incurred and are not deferred. Accordingly, from a margin standpoint, the most effective gauge of measuring cemetery expenses is as a ratio of such expenses to segment level pre-need and at-need cemetery revenues. Changes in this ratio give an indication of our ability to manage and control our operating costs relative to our overall cemetery operations. An increase in the ratio indicates that expense increases related to the operation and maintenance of our cemetery properties exceeded increases in the value of contracts written, while a decrease in the ratio indicates that expense growth did not exceed increases in the value of contracts written. In the short-term, this ratio can be positively or negatively impacted by our acquisitions, including such factors as how long it takes us to fully implement our pre-need sales programs and whether there are any unanticipated costs. Over the long-term, we would expect this ratio to slightly decline as many of the expenses in this category are fixed in nature. The ratio of cemetery expenses to segment level pre-need and at-need cemetery revenues was 27.0% during the three months ended September 30, 2015 as compared to 29.7% during the same period last year.

Selling expenses were $14.6 million during the three months ended September 30, 2015, a decrease of $1.9 million, or 11.2%, as compared to $16.5 million during the same period last year. The ratio of selling expenses to cemetery revenues was 28.2% during the three months ended September 30, 2015 as compared to 29.4% during the same period last year. This is largely due to segment-based increases of $0.8 million in commissions and personnel costs, offset by a $2.5 million increase in deferred selling expenses. The ratio gives some indication of how effectively the money we invest in selling efforts is translating into sales. However, the majority of our selling expenses are directly related to sales commissions and bonuses, which would be directly related to changes in the value of pre-need and at-need contracts written. As a result, we would expect this ratio to follow relatively consistent trends over the long-term.

General and administrative expenses were $8.8 million during the three months ended September 30, 2015, a decrease of $1.0 million, or 10.1%, as compared to $9.8 million during the same period last year. The decrease was due to a decrease of $1.4 million in professional fees and legal costs primarily related to a legal settlement, partially offset by $0.1 million increases in both insurance and tax expenses with the remainder attributable to increases in other general expense categories. General and administrative expenses are expensed as incurred and are not deferred. Accordingly, from a margin standpoint, the most effective gauge of measuring general and administrative expenses is as a ratio of such expenses to segment level pre-need and at-need cemetery revenues. Changes in this ratio give an indication of our ability to manage and control our general and administrative costs relative to our overall cemetery operations. An increase in the ratio indicates that general and administrative percentage expense increases related to our cemetery properties exceeded percent increases in the value of contracts written, while a decrease in the ratio indicates that expense growth on a percentage basis did not exceed percentage increases in the value of contracts written. In the short-term, this ratio can be positively or negatively impacted by our acquisitions, including such factors as how long it takes us to fully implement our pre-need sales programs and whether there are any unanticipated costs. Over the long-term, we would expect this ratio to decrease slightly as many of the expenses in this category are fixed in nature. The ratio of general and administrative expenses to segment level pre-need and at-need cemetery revenues was 13.0% during the three months ended September 30, 2015 as compared to 16.1% during the same period last year.

Total corporate overhead was $8.2 million for the three months ended September 30, 2015, a decrease of $0.2 million, or 2.9% compared to $8.4 million during the same period last year. The decrease was primarily driven by a decrease in professional fees, partially offset by an increase in personnel costs.

Depreciation and amortization was $3.3 million for the three months ended September 30, 2015, an increase of $0.2 million, or 6.4%, as compared to $3.1 million during the same period last year. The majority of the increase was attributable to acquired properties and amortization of the intangible assets relating to the lease and management agreements entered into in 2014.

Funeral home expenses were $11.2 million for the three months ended September 30, 2015, an increase of $0.8 million, or 8.2%, as compared to $10.4 million during the same period last year. The increase was primarily attributable to an increase of $0.9 million in expenses relating to insurance sales.

Acquisition related costs were $1.0 million for the three months ended September 30, 2015, an increase of $0.5 million, or 113.5%, as compared to $0.5 million during the same period last year. These costs may vary from period to period depending on the amount of acquisition activity that takes place.

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Non-segment Allocated Results

Certain statement of operations amounts are not allocated to segment operations. These amounts are those line items that can be found on our unaudited condensed consolidated statement of operations below operating profit and above net income (loss).

The table below summarizes these items and the changes between the three months ended September 30, 2015 and 2014:

	Three months ended September 30,
	2015		2014		Change ($)			Change (%)
	(in thousands)
Legal settlement	$	3,000	$	—	$	3,000			100.0	%
Gain on sale of funeral home		—		244		(244	)		-100.0	%
Gain on acquisitions		1,540		—		1,540			100.0	%
Interest expense		5,669		5,268		401			7.6	%
Income tax expense (benefit)	$	400	$	664	$	(264	)		-39.8	%

During the third quarter of 2015, the Company recorded a charge pertaining to a legal settlement. The $3.0 million includes both the settlement amount and legal fees related to the case.

The gain on sale of funeral home recorded during the three months ended September 30, 2014 pertains to the sale of one funeral home in California during September 2014.

The gain on acquisitions recorded during the three months ended September 30, 2015 relates to our third quarter 2015 acquisitions.

There was an increase in interest expense on amounts outstanding under the credit facility due to increases in both amounts outstanding and interest rates. Average amounts outstanding under the credit facility were $116.0 million and $92.4 million during the three months ended September 30, 2015 and 2014, respectively.

We had income tax expense of $0.4 million for the three months ended September 30, 2015, as compared to an income tax expense of $0.7 million during the same period last year. Our effective tax rate differs from our statutory tax rate primarily because our legal entity structure includes different tax filing entities, including a significant number of partnerships that are not subject to paying tax.

Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2014

Cemetery Operations – Southeast

During the first and second quarters of 2014, we acquired ten properties in our Cemetery Operations – Southeast segment. The results of operations for these acquired properties have less impact on the results for the nine months ended September 30, 2014 as compared to the results for the nine months ended September 30, 2015. The acquisitions contributed approximately $11.7 million of the revenues and $7.6 million of the costs and expenses for the nine months ended September 30, 2015 as compared to $3.2 million and $2.5 million, respectively, for the same period last year.

The table below compares the results of operations for our Cemetery Operations – Southeast for the nine months ended September 30, 2015 to the same period last year:

	Nine months ended September 30,
	2015		2014		Change ($)		Change (%)
	(in thousands)
	(non-GAAP)
Total revenues	$	112,498	$	100,404	$	12,094		12.0	%
Total costs and expenses		82,766		75,268		7,498		10.0	%
Operating profit	$	29,732	$	25,136	$	4,596		18.3	%

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Revenues

The increase in revenues was primarily related to increases of $5.3 million in the value of pre-need contracts written, $3.8 million in the value of at-need contracts written, $1.2 million in interest and other income and $1.8 million in income from our trusts. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Total costs and expenses

The net increase in costs and expenses was primarily related to:

• A $2.3 million increase in cost of goods sold primarily attributable to the increase in the value of contracts written and changes in product mix.

• A $1.5 million increase in cemetery expenses primarily due to increases of $0.9 million in labor costs and $0.3 million in repairs and maintenance costs.

• A $2.5 million increase in selling expenses primarily due to increases in commissions and personnel costs.

• A $0.9 million increase in general and administrative expense primarily due to increases of $0.3 million in both personnel costs and insurance costs and $0.1 million in repairs and maintenance expense.

• A $0.3 million increase in depreciation expense.

Cemetery Operations – Northeast

During the second quarter of 2014, we acquired three properties and separately obtained the rights from the Archdiocese of Philadelphia to operate thirteen properties in our Cemetery Operations – Northeast segment. The results of operations for these acquired properties have less impact on the results for the nine months ended September 30, 2014 as compared to the results for the nine months ended September 30, 2015. The additions have contributed approximately $30.4 million of the revenues and $20.7 million of the costs and expenses of the segment for the nine months ended September 30, 2015 as compared to $9.6 million and $7.4 million, respectively, for the same period last year.

The table below compares the results of operations for our Cemetery Operations – Northeast for the nine months ended September 30, 2015 to the same period last year:

	Nine months ended September 30,
	2015		2014		Change ($)			Change (%)
	(in thousands)
	(non-GAAP)
Total revenues	$	73,462	$	61,112	$	12,350			20.2	%
Total costs and expenses		53,581		39,295		14,286			36.4	%
Operating profit	$	19,881	$	21,817	$	(1,936	)		-8.9	%

Revenues

The increase in revenues was primarily related to increases of $11.2 million in the value of pre-need contracts written and $7.0 million in the value of at-need contracts written, partially offset by a $3.0 million decrease in other income and $2.8 million decrease in income from our trusts. The comparison of other income was affected by the one-time land sale in the first quarter of 2014. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Total costs and expenses

The net increase in costs and expenses was primarily related to:

• A $2.6 million increase in cost of goods sold primarily attributable to the increase in the value of contracts written and changes in product mix.

• A $4.9 million increase in cemetery expenses primarily attributable to increases of $3.0 million in labor costs, $1.2 million in repairs and maintenance expense, $0.1 million in utility and fuel costs and $0.4 million in real estate tax expense.

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• A $3.9 million increase in selling expenses primarily attributable to increases of $3.1 million in commissions and personnel costs and $0.6 million in advertising and marketing expenses.

• A $2.3 million increase in general and administrative expenses primarily due to increases of $0.5 million in insurance costs, $0.4 million in professional fees and $0.9 million in personnel costs.

• A $0.6 million increase in depreciation and amortization expenses, $0.4 million of which was attributable to the amortization of the intangible assets relating to the lease and management agreements with the Archdiocese of Philadelphia.

Cemetery Operations – West

During the third quarter of 2015, we acquired three properties in our Cemetery Operations – West segment. The results of operations for these properties have no impact on the results for the nine months ended September 30, 2014, but are included in the results for the nine months ended September 30, 2015. The additions have contributed approximately $0.5 million of the revenues and $0.3 million of the costs and expenses of the segment for the nine months ended September 30, 2015.

The table below compares the results of operations for our Cemetery Operations – West for the nine months ended September 30, 2015 to the same period last year:

	Nine months ended September 30,
	2015		2014		Change ($)			Change (%)
	(in thousands)
	(non-GAAP)
Total revenues	$	62,131	$	61,979	$	152			0.2	%
Total costs and expenses		38,425		40,478		(2,053	)		-5.1	%
Operating profit	$	23,706	$	21,501	$	2,205			10.3	%

Revenues

The increase in revenues was primarily related to increases of $1.3 million in the value of pre-need contracts written, $0.1 million in the value of at-need contracts written and $0.7 million in interest and other income, partially offset by a decrease of $1.9 million in income from our trusts. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Total costs and expenses

The net decrease in costs and expenses was primarily related to:

• A $0.6 million decrease in cost of goods sold primarily attributable to changes in product mix.

• A $0.1 million decrease in cemetery expenses primarily due to a decrease of $0.3 million in repairs and maintenance expenses, partially offset by an increase of $0.2 million in real estate tax expense.

• A $0.9 million increase in selling expenses primarily due to a $0.8 million increase in commission and personnel costs and $0.1 million increase in travel expenses.

• A $2.1 million decrease in general and administrative expenses primarily due to a decrease in professional fees and legal costs related to a legal settlement in the prior year.

• A $0.2 million decrease in depreciation expense.

Funeral Homes Segment

Since January 1, 2014, we have acquired sixteen properties in our Funeral Home operations. The first nine properties were acquired during the second quarter of 2014, the next two properties were acquired during the fourth quarter of 2014 and the remaining five were acquired during the third quarter of 2015. Therefore, the results of operations for these properties have either less or no impact on the results for the nine months ended September 30, 2014 as compared to the results for the nine months ended September 30, 2015. The additions have contributed approximately $9.1 million of the revenues and $6.6 million of the costs and expenses of the segment for the nine months ended September 30, 2015 as compared to $2.9 million and $2.0 million, respectively, for the same period last year.

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The table below compares the results of operations for our Funeral Homes segment for the nine months ended September 30, 2015 to the same period last year:

	Nine months ended September 30,
	2015		2014		Change ($)		Change (%)
	(in thousands)
	(non-GAAP)
Total revenues	$	50,226	$	40,777	$	9,449		23.2	%
Total costs and expenses		39,292		32,159		7,133		22.2	%
Operating profit	$	10,934	$	8,618	$	2,316		26.9	%

Revenues

The increase in revenues was primarily related to increases of $2.3 million in the value of pre-need contracts written, $4.5 million in the value of at-need contracts written, $2.3 million in insurance-related revenues and $0.3 million in other income.

Total costs and expenses

The increase in costs and expenses was primarily attributable to increases of $2.4 million in personnel costs, $0.9 million in merchandise costs, $0.7 million in other service and supplies costs, $0.6 million in facility costs, $0.6 million in general and administrative expenses, $1.8 million in expenses related to insurance sales and $0.1 million in advertising and marketing expenses.

Corporate Segment

The table below compares expenses incurred by the Corporate segment for the nine months ended September 30, 2015 to the same period last year:

	Nine months ended September 30,
	2015		2014		Change ($)			Change (%)
	(in thousands)
	(non-GAAP)
Selling, cemetery and general and administrative expenses	$	1,974	$	1,480	$	494			33.4	%
Depreciation and amortization		1,083		716		367			51.3	%
Acquisition related costs, net of recoveries		1,648		2,040		(392	)		-19.2	%
Corporate expenses
Corporate personnel expenses		10,987		9,784		1,203			12.3	%
Other corporate expenses		15,992		12,610		3,382			26.8	%
Total corporate overhead		26,979		22,394		4,585			20.5	%
Total corporate expenses	$	31,684	$	26,630	$	5,054			19.0	%

The increase in corporate expenses was primarily driven by an increase in corporate overhead of $4.6 million, which included increases of $1.4 million in professional fees, $1.2 million in personnel costs, $0.7 million in advertising expenses, $0.1 million in utility costs, $0.1 million in bank fees and $0.3 million in information technology costs with the remainder attributable to increases in other general expense categories. There was also an increase in corporate selling expenses, which included increases of $0.3 million in personnel costs and $0.2 million in advertising expenses. There was also an increase of $0.4 million in depreciation and amortization expenses. These increases were partially offset by a $0.4 million decrease in acquisition related costs. Acquisition costs may vary from period to period depending on the amount of acquisition activity that takes place.

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Reconciliation of Segment Results of Operations to Consolidated Results of Operations

As discussed in the segment sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, cemetery revenues and their associated costs as reported at the segment level are not deferred.

The table below analyzes results of operations and the changes therein for the nine months ended September 30, 2015 as compared to the same period last year. The table is structured so that our readers can determine whether changes were based upon changes in the level of merchandise and services and other revenues generated during each period and/or changes in the timing of when merchandise and services were delivered. During 2014, we acquired 13 cemeteries and 11 funeral homes, and obtained the rights from the Archdiocese of Philadelphia to operate 13 cemetery properties and during the third quarter of 2015, we acquired three cemeteries and five funeral homes. The results of operations for these properties have either less or no impact on the results for the nine months ended September 30, 2014, but are included in the results for the nine months ended September 30, 2015. These properties are contributing a significant portion of the increases to revenues and costs and expenses in the table below:

	Nine months ended September 30, 2015							Nine months ended September 30, 2014
	(in thousands)							(in thousands)
	Segment Results (non-GAAP)		GAAP Adjustments			GAAP Results		Segment Results (non-GAAP)		GAAP Adjustments			GAAP Results		Change in GAAP results ($)			Change in GAAP results (%)
Revenues
Pre-need cemetery revenues	$	122,397	$	(46,426	)	$	75,971	$	104,555	$	(26,957	)	$	77,598	$	(1,627	)		-2.1	%
At-need cemetery revenues		78,562		(4,476	)		74,086		67,704		614			68,318		5,768			8.4	%
Investment income from trusts		36,317		(14,120	)		22,197		39,225		(19,529	)		19,696		2,501			12.7	%
Interest income		6,617		—			6,617		5,848		—			5,848		769			13.1	%
Funeral home revenues		50,226		(7,230	)		42,996		40,777		(5,313	)		35,464		7,532			21.2	%
Other cemetery revenues		4,198		377			4,575		6,163		1,007			7,170		(2,595	)		-36.2	%
Total revenues		298,317		(71,875	)		226,442		264,272		(50,178	)		214,094		12,348			5.8	%
Costs and expenses
Cost of goods sold		33,598		(7,980	)		25,618		29,307		(4,091	)		25,216		402			1.6	%
Cemetery expense		53,789		—			53,789		47,546		—			47,546		6,243			13.1	%
Selling expense		56,276		(11,950	)		44,326		48,404		(5,860	)		42,544		1,782			4.2	%
General and administrative expense		27,340		—			27,340		26,333		—			26,333		1,007			3.8	%
Corporate overhead		26,979		—			26,979		22,394		—			22,394		4,585			20.5	%
Depreciation and amortization		9,207		—			9,207		7,993		—			7,993		1,214			15.2	%
Funeral home expense		36,911		(1,404	)		35,507		29,813		(732	)		29,081		6,426			22.1	%
Acquisition related costs, net of recoveries		1,648		—			1,648		2,040		—			2,040		(392	)		-19.2	%
Total costs and expenses		245,748		(21,334	)		224,414		213,830		(10,683	)		203,147		21,267			10.5	%
Operating profit	$	52,569	$	(50,541	)	$	2,028	$	50,442	$	(39,495	)	$	10,947	$	(8,919	)		-81.5	%

Revenues

Pre-need cemetery revenues were $76.0 million for the nine months ended September 30, 2015, a decrease of $1.6 million, or 2.1%, as compared to $77.6 million during the same period last year. The decrease was primarily caused by an increase of $19.5 million in deferred revenue as activity on contracts written exceeded activity related to delivered products and services to a greater degree during the current period. This decrease was partially offset by an increase of $17.9 million in the value of cemetery contracts written.

At-need cemetery revenues were $74.1 million for the nine months ended September 30, 2015, an increase of $5.8 million, or 8.4%, as compared to $68.3 million during the same period last year. The increase was primarily caused by an increase of $10.9 million in the value of cemetery contracts written, partially offset by an increase of $5.1 million in deferred revenue as activity on contracts written exceeded activity related to delivered products and services to a greater degree during the current period.

Investment income from trusts was $22.2 million for the nine months ended September 30, 2015, an increase of $2.5 million, or 12.7%, as compared to $19.7 million during the same period last year. On a segment basis, we had a decrease of $2.9 million, which was offset by an adjustment of $5.4 million related to funds where we have met the requirements that allow us to recognize them as revenue. Our investment results can vary from period to period based on a number of factors including realized income and the timing of the recognition of gains within the trusts.

Interest income on accounts receivable was $6.6 million for the nine months ended September 30, 2015, an increase of $0.8 million or 13.1%, as compared to $5.8 million during the same period last year, primarily due to a larger accounts receivable balance.

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Funeral home revenues were $43.0 million for the nine months ended September 30, 2015, an increase of $7.5 million, or 21.2%, compared to $35.5 million during the same period last year. The increase was primarily driven by the 16 funeral homes we acquired in 2014 and 2015.

Other cemetery revenues were $4.6 million for the nine months ended September 30, 2015, as compared to $7.2 million during the same period last year. The comparison of other cemetery revenues was affected by the one-time land sale in the first quarter of 2014.

Costs and Expenses

The cost of goods sold was $25.6 million for the nine months ended September 30, 2015, an increase of $0.4 million, or 1.6%, as compared to $25.2 million during the same period last year. The ratio of cost of goods sold to pre-need and at-need cemetery revenues was 17.1% during the nine months ended September 30, 2015 as compared to 17.3% during the same period last year. The change in the ratio primarily relates to changes in product mix.

Cemetery expenses were $53.8 million during the nine months ended September 30, 2015, an increase of $6.3 million, or 13.1%, compared to $47.5 million during the same period last year. Within this category, there were increases of $1.2 million in repairs and maintenance expenses, $4.0 million in personnel costs and $0.6 million in real estate tax expense with the remaining increase in general cemetery costs. Cemetery expenses relate to the current costs of managing and maintaining our cemetery properties. These costs are expensed as incurred and are not deferred. Accordingly, from a margin standpoint, the most effective gauge of measuring cemetery expenses is as a ratio of such expenses to segment level pre-need and at-need cemetery revenues. Changes in this ratio give an indication of our ability to manage and control our operating costs relative to our overall cemetery operations. An increase in the ratio indicates that expense increases related to the operation and maintenance of our cemetery properties exceeded increases in the value of contracts written, while a decrease in the ratio indicates that expense growth did not exceed increases in the value of contracts written. In the short-term, this ratio can be positively or negatively impacted by our acquisitions, including such factors as how long it takes us to fully implement our pre-need sales programs and whether there are any unanticipated costs. Over the long-term, we would expect this ratio to slightly decline as many of the expenses in this category are fixed in nature. The ratio of cemetery expenses to segment level pre-need and at-need cemetery revenues was 26.8% during the nine months ended September 30, 2015 as compared to 27.6% during the same period last year.

Selling expenses were $44.3 million during the nine months ended September 30, 2015, an increase of $1.8 million, or 4.2%, as compared to $42.5 million during the same period last year. The overall expense increase was primarily caused by segment-based increases of $6.9 million in commissions and personnel costs, $0.7 million in advertising and marketing expenses, $0.1 million in supplies and printing costs and $0.2 million in travel expenses, partially offset by an increase in deferred selling expenses of $6.1 million. The ratio of selling expenses to cemetery revenues was 29.5% during the nine months ended September 30, 2015 as compared to 29.2% during the same period last year. The ratio gives some indication of how effectively the money we invest in selling efforts is translating into sales. However, the majority of our selling expenses are directly related to sales commissions and bonuses, which would be directly related to changes in the value of pre-need and at-need contracts written. As a result, we would expect this ratio to follow relatively consistent trends over the long-term.

General and administrative expenses were $27.3 million during the nine months ended September 30, 2015, an increase of $1.0 million, or 3.8%, compared to $26.3 million during the same period last year. The majority of the increase was due to increases of $1.3 million in personnel costs, $0.9 million in insurance costs and $0.2 million in repairs and maintenance costs, partially offset by a decrease of $1.5 million in professional fees and legal costs, primarily related to a legal settlement. General and administrative expenses are expensed as incurred and are not deferred. Accordingly, from a margin standpoint, the most effective gauge of measuring general and administrative expenses is as a ratio of such expenses to segment level pre-need and at-need cemetery revenues. Changes in this ratio give an indication of our ability to manage and control our general and administrative costs relative to our overall cemetery operations. An increase in the ratio indicates that general and administrative percentage expense increases related to our cemetery properties exceeded percent increases in the value of contracts written, while a decrease in the ratio indicates that expense growth on a percentage basis did not exceed percentage increases in the value of contracts written. In the short-term, this ratio can be positively or negatively impacted by our acquisitions, including such factors as how long it takes us to fully implement our pre-need sales programs and whether there are any unanticipated costs. Over the long-term, we would expect this ratio to decrease slightly as many of the expenses in this category are fixed in nature. The ratio of general and administrative expenses to segment level pre-need and at-need cemetery revenues was 13.6% during the nine months ended September 30, 2015 as compared to 15.3% during the same period last year.

Total corporate overhead was $27.0 million for the nine months ended September 30, 2015, an increase of $4.6 million, or 20.5% compared to $22.4 million during the same period last year. The increase in corporate expenses was

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primarily attributable to increases of $1.4 million in professional fees, $1.2 million in personnel costs, $0.7 million in advertising expenses, $0.3 million in information technology costs, $0.1 million in utility costs and $0.1 million in bank fees with the remainder attributable to increases in other general expense categories.

Depreciation and amortization was $9.2 million during the nine months ended September 30, 2015, an increase of $1.2 million, or 15.2%, as compared to $8.0 million during the same period last year. The majority of the increase was attributable to acquired properties and amortization of the intangible assets relating to the lease and management agreements entered into in 2014.

Funeral home expenses were $35.5 million for the nine months ended September 30, 2015, an increase of $6.4 million, or 22.1%, compared to $29.1 million during the same period last year. The increase was primarily attributable to increases of $1.7 million in personnel costs, $0.8 million in merchandise costs, $0.5 million in other service and supplies costs, $0.5 million in facility costs, $0.5 million in general and administrative expenses and $1.8 million in expenses related to insurance sales with the remainder attributable to increases in other general expense categories.

Acquisition related costs were $1.6 million for the nine months ended September 30, 2015, a decrease of $0.4 million, or 19.2%, as compared to $2.0 million during the same period last year. These costs may vary from period to period depending on the amount of acquisition activity that takes place.

Non-segment Allocated Results

As previously mentioned, certain statement of operations amounts are not allocated to segment operations. These amounts are those line items that can be found on our unaudited condensed consolidated statement of operations below operating profit and above net income (loss).

The table below summarizes these items and the changes between the nine months ended September 30, 2015 and 2014:

	Nine months ended September 30,
	2015		2014			Change ($)			Change (%)
	(in thousands)
Legal settlement	$	3,000	$	—		$	3,000			100.0	%
Gain on sale of funeral home		—		244			(244	)		-100.0	%
Gain on acquisitions		1,540		412			1,128			273.8	%
Gain on settlement agreement, net		—		888			(888	)		-100.0	%
Interest expense		16,902		15,990			912			5.7	%
Income tax expense (benefit)	$	799	$	(522	)	$	1,321			-253.1	%

During the third quarter of 2015, the Company recorded a charge pertaining to a legal settlement. The $3.0 million includes both the settlement amount and legal fees related to the case.

The gain on sale of funeral home recorded during the nine months ended September 30, 2014 pertains to the sale of one funeral home in California during September 2014.

The gain on acquisitions recorded during the nine months ended September 30, 2015 relates to our third quarter 2015 acquisitions. The gain on acquisition recorded during the nine months ended September 30, 2014 relates to our first quarter 2014 acquisition.

During the nine months ended September 30, 2014, we recovered an additional $1.5 million related to the settlement of claims from locations acquired in 2010. A gain of $0.9 million has been recorded as gain on settlement agreement on the unaudited condensed consolidated statement of operations, which was net of legal fees of $0.6 million.

There was an increase in interest expense on amounts outstanding under the credit facility due to an increase in amounts outstanding. Average amounts outstanding under the credit facility were $127.5 million and $92.6 million during the nine months ended September 30, 2015 and 2014, respectively.

We had an income tax expense of $0.8 million for the nine months ended September 30, 2015, as compared to an income tax benefit of $0.5 million during the same period last year. Our effective tax rate differs from our statutory tax rate primarily because our legal entity structure includes different tax filing entities, including a significant number of partnerships that are not subject to paying tax.

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Supplemental Data

The following table presents supplemental operating data for the periods presented:

	Three months ended September 30, 2015		Three months ended September 30, 2014		Nine months ended September 30, 2015		Nine months ended September 30, 2014
Operating Data:
Interments performed		12,878		13,079		41,514		36,580
Interment rights sold (1):
Lots		8,086		8,613		23,980		24,360
Mausoleum crypts (including pre-construction)		446		494		1,779		1,697
Niches		441		363		1,285		1,144
Net interment rights sold (1)		8,973		9,470		27,044		27,201
Number of contracts written		30,722		29,633		92,664		82,286
Aggregate contract amount, in thousands (excluding interest)	$	86,092	$	77,568	$	254,600	$	219,178
Average amount per contract (excluding interest)	$	2,802	$	2,618	$	2,748	$	2,664
Number of pre-need contracts written		15,257		14,215		44,687		40,474
Aggregate pre-need contract amount, in thousands (excluding interest)	$	58,211	$	50,222	$	168,216	$	144,233
Average amount per pre-need contract (excluding interest)	$	3,815	$	3,533	$	3,764	$	3,564
Number of at-need contracts written		15,465		15,418		47,977		41,812
Aggregate at-need contract amount, in thousands (excluding interest)	$	27,881	$	27,346	$	86,384	$	74,945
Average amount per at-need contract (excluding interest)	$	1,803	$	1,774	$	1,801	$	1,792

(1) Net of cancellations. Sales of double-depth burial lots are counted as two sales.

Liquidity and Capital Resources

Overview

Our primary short-term liquidity needs are to fund general working capital requirements, repay our debt obligations, service our debt, make routine maintenance capital improvements and pay distributions. We will need additional liquidity to construct mausoleum and lawn crypts on the grounds of our cemetery properties.

Our primary sources of liquidity are cash flows from operations and amounts available under our revolving credit facility as described below. In the past, we have been able to increase our liquidity through long-term bank borrowings and the issuance of additional common units and other partnership securities, including debt, subject to the restrictions in our revolving credit facility and under our senior notes.

        We believe that cash generated from operations and our borrowing capacity under our revolving credit facility, which is discussed below, will be sufficient to meet our working capital requirements as well as our anticipated capital expenditures for the foreseeable future.

In addition to macroeconomic conditions, our ability to satisfy our debt service obligations, fund planned capital expenditures, make acquisitions and pay distributions to partners will depend upon our future operating performance. Our operating performance is primarily dependent on the sales volume of customer contracts, the cost of purchasing cemetery merchandise that we have sold, the amount of funds withdrawn from merchandise trusts and perpetual care trusts and the timing and amount of collections on our pre-need installment contracts.

Long-term Debt

7.875% Senior Notes due 2021

On May 28, 2013, we issued $175.0 million aggregate principal amount of 7.875% Senior Notes due 2021 (the “Senior Notes”). We pay 7.875% interest per annum on the principal amount of the Senior Notes, payable in cash semi-annually in arrears on June 1 and December 1 of each year, since December 1, 2013. The net proceeds from the offering were used to retire our previously outstanding $150.0 million aggregate principal amount of 10.25% Senior Notes due 2017 and the remaining proceeds were used for general corporate purposes. The Senior Notes were issued at 97.832% of par resulting in gross proceeds of $171.2 million with an original issue discount of approximately $3.8 million. We incurred debt issuance costs and fees of approximately $4.6 million. These costs and fees are deferred and are amortized over the life of the Senior Notes. As of September 30, 2015, we were in compliance with all applicable covenants of the Senior Notes.

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Credit Facility

On December 19, 2014, we entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”).

The Credit Agreement provides for a single revolving credit facility of $180.0 million (the “Credit Facility”) maturing on December 19, 2019. Additionally the Credit Agreement provides for an uncommitted ability to increase the Credit Facility by an additional $70.0 million. The summary of the material terms of the Credit Agreement is set forth below. Capitalized terms, which are not defined in the following description, shall have the meaning assigned to such terms in the Credit Agreement.

At September 30, 2015, amounts outstanding under the Credit Facility bore interest at rates of approximately 4.1%. The interest rates on the Credit Facility are calculated as follows:

• For Eurodollar Rate Loans, the outstanding principal amount thereof bears interest for each Interest Period at a rate per annum equal to the Eurodollar Rate for the Interest Period plus the Applicable Rate for Eurodollar Rate Loans; and

• For Base Rate Loans and Swing Line Loans, the outstanding principal amount thereof bears interest from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans.

In addition, the Borrowers must pay a Letter of Credit Fee for each Letter of Credit equal to the Applicable Rate for Letter of Credit Fees times the daily amount to be drawn under such Letter of Credit. The Applicable Rate is determined based on our Consolidated Leverage Ratio, and ranges from 2.25% to 4.00% for Eurodollar Rate Loans and Letter of Credit Fees, and 1.25% to 3.00% for Base Rate Loans. The current Applicable Rate for each of: (i) Eurodollar Rate Loans and Letter of Credit Fees is 3.25% and (ii) Base Rate Loans is 2.25% based on the current Consolidated Leverage Ratio. The Credit Agreement also requires the Borrowers to pay a quarterly unused commitment fee, which is calculated based on the amount by which the commitments under the Credit Agreement exceed the usage of such commitments.

The Credit Agreement contains financial covenants, pursuant to which the Borrowers and the Guarantors will not permit:

• Consolidated EBITDA for any Measurement Period to be less than the sum of (i) $80.0 million plus (ii) 80% of the aggregate of all Consolidated EBITDA for each Permitted Acquisition completed after June 30, 2014;

• the Consolidated Debt Service Coverage Ratio to be less than 2.50 to 1.0 for any Measurement Period; and

• the Consolidated Leverage Ratio to be greater than 4.00 to 1.0 for any period.

The covenants include, among other limitations, limitations on: (i) liens, (ii) the creation or incurrence of debt, (iii) investments and acquisitions, (iv) dispositions of property, (v) dividends, distributions and redemptions, and (vi) transactions with Affiliates.

As of September 30, 2015, we were in compliance with all applicable financial covenants.

The Credit Agreement provides that two types of draws are permitted with respect to the Credit Facility: Acquisition Draws and Working Capital Draws. The proceeds of Acquisition Draws may be utilized by the Borrowers to finance Permitted Acquisitions, the purchase and construction of mausoleums and related costs or the net amount of Merchandise Trust deposits made after the Closing Date under the Credit Agreement, irrespective of whether such amounts relate to new or existing cemeteries or funeral homes. The proceeds of Working Capital Draws, Letters of Credit and Swing Line Loans may be utilized by the Borrowers to finance working capital requirements, Capital Expenditures and for other general corporate purposes. The borrowing of Working Capital Advances is subject to a borrowing formula of 85% of Eligible Receivables.

Each Acquisition Draw is subject to equal quarterly amortization of the principal amount of such draw, with annual principal payments comprised of ten percent (10%) of the related draw amount, commencing on the second anniversary of such draw, with the remaining principal due on the Maturity Date, subject to certain mandatory prepayment requirements. Working Capital Draws are due on the Maturity Date, subject to certain mandatory prepayment requirements.

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Effective July 10, 2015, we entered into the First Amendment (the “First Amendment”) to the Credit Agreement to allow us to apply Net Cash Proceeds received from certain: (i) Dispositions of property by any Credit Party or any of its Subsidiaries, (ii) sales or issuances of Equity Interests by us or any of our Subsidiaries and (iii) Extraordinary Receipts received by or paid to or for the account of any Credit Party or any of its Subsidiaries and not otherwise included in clause (i) and (ii) above that are required to be prepaid to the Lenders, to Acquisition Draws or Working Capital Draws, at the Company’s discretion. Prior to the execution of the First Amendment, the Credit Agreement required that the Net Cash Proceeds from the transactions described above be applied to Acquisition Draws before they could be applied to Working Capital Draws. We used the proceeds from the follow-on public offering in July 2015 to reduce our Working Capital Draws.

Amounts outstanding under our Credit Facility fluctuated during the nine months ended September 30, 2015 and 2014. At the beginning of 2014, we had $114.0 million outstanding on our Credit Facility. During the first quarter of 2014, we reduced our borrowings on the Credit Facility by $36.6 million as we had borrowed $17.0 million prior to February 27, 2014 and then we used the net proceeds from our February 27, 2014 follow-on public offering and other available cash to repay $53.6 million of amounts outstanding on our Credit Facility. During the second quarter of 2014, we increased our borrowings on the Credit Facility by $1.0 million as we had borrowed $19.0 million prior to June 12, 2014 and then we used a portion of the proceeds from our June 12, 2014 follow-on public offering and other available cash to repay $18.0 million of amounts outstanding on our Credit Facility. During the third quarter of 2014, we increased our borrowings on the Credit Facility by a net $13.0 million resulting in outstanding borrowings of $91.4 million at September 30, 2014. At the beginning of 2015, we had $110.9 million outstanding on our Credit Facility. During the first quarter of 2015, we increased our borrowings on the Credit Facility by a net $12.0 million. During the second quarter of 2015, we increased our borrowings on the Credit Facility by a net $29.0 million. During the third quarter of 2015, we reduced our borrowings on the Credit Facility by $38.4 million. We used the net proceeds from our July follow-on public offering to repay amounts borrowed on our working capital line and we had additional borrowings to fund our working capital needs, as well as borrowings of $13.5 million related to our third quarter 2015 acquisitions, resulting in outstanding borrowings of $113.5 million at September 30, 2015. The average amounts outstanding under our Credit Facility were $127.5 million and $92.6 million for the nine months ended September 30, 2015 and 2014, respectively.

For a more detailed description of our long-term debt agreements, see our 2014 Form 10-K.

Legal Settlement

During the third quarter of 2015, the Company recorded a charge pertaining to a legal settlement of a Fair Labor Standards Act claim. This $3.0 million amount is recorded under “Legal settlement” on the Consolidated Statement of Operations and consists of a charge for the settlement amount and legal fees related to the case.

Corporate Office Lease

On June 5, 2015, the Company entered into a lease agreement for a new corporate office location in Trevose, Pennsylvania. Refer to Note 11 of our unaudited condensed consolidated financial statements in Item 1 of this Form 10-Q for a more detailed discussion.

Cash Flow from Operating Activities

Net cash flows provided by operating activities were $12.0 million during the nine months ended September 30, 2015, compared to net cash flows provided by operating activities of $23.2 million during the same period last year. The main factors contributing to the net decrease in cash flows were contributions to trust and less cash generated from accounts receivable.

Cash Flow from Investing Activities

Net cash used in investing activities was $24.1 million during the nine months ended September 30, 2015 as compared to $117.8 million during the same period last year. Cash flows used for investing activities during the nine months ended September 30, 2015 were $13.1 million for the acquisitions of 5 funeral homes and 3 cemeteries and $11.0 million for other capital expenditures. Cash flows used for investing activities during the nine months ended September 30, 2014 were $54.0 million for the acquisition of 13 cemeteries and 9 funeral homes, $53.0 million for up-front rent for the transaction with the Archdiocese of Philadelphia and $11.1 million for other capital expenditures.

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Cash Flow from Financing Activities

Net cash flows provided by financing activities were $13.5 million during the nine months ended September 30, 2015 as compared to $104.6 million during the same period last year. Cash flows provided by financing activities for the nine months ended September 30, 2015 consisted of $2.4 million of net increases in long-term debt offset by cash distributions to unit holders of $56.7 million. In addition, proceeds of $67.9 million from our follow-on public offering on July 10, 2015 were used to pay down outstanding indebtedness under our Credit Facility. Cash flows provided by financing activities for the nine months ended September 30, 2014 consisted of $173.6 million of net proceeds from our follow-on public offerings and our issuance of common units to ACII, partially offset by net repayments of long-term debt of $23.4 million, cost of financing activities of $0.3 million, and cash distributions to unit holders of $45.3 million.

Capital Expenditures

The following table summarizes total maintenance capital expenditures and expansion capital expenditures, including expenditures for acquisitions described in Note 13 of our unaudited condensed consolidated financial statements in Item 1 of Part I of this Form 10-Q and the construction of mausoleums for the periods presented. Prior period expansion capital expenditures are higher as a result of acquisitions and lease and management agreements completed during the period.

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Maintenance capital expenditures	$	1,632	$	2,326	$	5,011	$	6,430
Expansion capital expenditures		15,251		1,778		19,122		111,692
Total capital expenditures	$	16,883	$	4,104	$	24,133	$	118,122

Seasonality

The death care business is relatively stable and predictable. Although we experience seasonal increases in deaths due to extreme weather conditions and winter flu, these increases have not historically had any significant impact on our results of operations. In addition, we perform fewer initial openings and closings in the winter when the ground is frozen.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The information presented below should be read in conjunction with the notes to our unaudited condensed consolidated financial statements included under “Part I, Item 1. Financial Statements” in this Quarterly Report on Form 10-Q.

The market risk inherent in our market risk sensitive instruments and positions is the potential change arising from increases or decreases in interest rates and the prices of marketable equity securities, as discussed below. Our exposure to market risk includes forward-looking statements and represents an estimate of possible changes in fair value or future earnings that would occur assuming hypothetical future movements in interest rates or debt and equity markets. Our views on market risk are not necessarily indicative of actual results that may occur and do not represent the maximum possible gains and losses that may occur, since actual gains and losses will differ from those estimated, based on actual fluctuations in interest rates, equity markets and the timing of transactions. We classify our market risk sensitive instruments and positions as “other than trading.”

Interest-Bearing Investments

Our fixed-income securities subject to market risk consist primarily of investments in our merchandise trusts and perpetual care trusts. As of September 30, 2015, the fair value of fixed-income securities in our merchandise trusts represented 4.1% of the fair value of total trust assets while the fair value of fixed-income securities in our perpetual care trusts represented 7.4% of the fair value of total trust assets. The aggregate quoted fair value of these fixed-income securities was $19.0 million and $23.2 million in merchandise trusts and perpetual care trusts, respectively, as of September 30, 2015. Each 1% change in interest rates on these fixed-income securities would result in changes of approximately $190,000 and $232,000 in the fair market value of the assets in our merchandise trusts and perpetual care trusts, respectively, based on discounted expected future cash flows. If these securities are held to maturity, no change in fair market value will be realized.

Our money market and other short-term investments subject to market risk consist primarily of investments in our merchandise trusts and perpetual care trusts. As of September 30, 2015, the fair value of money market and short-term

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investments in our merchandise trusts represented 5.9% of the fair value of total trust assets while the fair value of money market and short-term investments in our perpetual care trusts represented 4.6% of the fair value of total trust assets. The aggregate quoted fair value of these money market and short-term investments was $27.1 million and $14.5 million in the merchandise trusts and perpetual care trusts, respectively, as of September 30, 2015. Each 1% change in interest rates on these money market and short-term investments would result in changes of approximately $271,000 and $145,000 in the fair market value of the assets in our merchandise trusts and perpetual care trusts, respectively, based on discounted expected future cash flows.

Marketable Equity Securities

Our marketable equity securities subject to market risk consist primarily of investments held in our merchandise trusts and perpetual care trusts. These assets consist of investments in both individual equity securities as well as closed and open-ended mutual funds. As of September 30, 2015, the fair value of marketable equity securities in our merchandise trusts represented 10.0% of the fair value of total trust assets while the fair value of marketable equity securities in our perpetual care trusts represented 0.7% of total trust assets. The aggregate quoted fair market value of these marketable equity securities was $45.7 million and $2.3 million in our merchandise trusts and perpetual care trusts, respectively, as of September 30, 2015, based on final quoted sales prices. Each 10% change in the average market prices of the equity securities would result in a change of approximately $4.6 million and $0.2 million in the fair market value of securities held in the merchandise trusts and perpetual care trusts, respectively. As of September 30, 2015, the fair value of marketable closed and open-ended mutual funds in our merchandise trusts represented 76.3% of the fair value of total trust assets, 66.3% of which pertained to fixed-income mutual funds. As of September 30, 2015, the fair value of closed and open-ended mutual funds in our perpetual care trusts represented 87.1% of total trust assets, 77.4% of which pertained to fixed-income mutual funds. The aggregate quoted fair market value of these closed and open-ended mutual funds was $350.5 million and $271.6 million, respectively, in the merchandise trusts and perpetual care trusts as of September 30, 2015, based on final quoted sales prices, of which $232.2 million and $210.3 million, respectively, pertained to fixed-income mutual funds. Each 10% change in the average market prices of the closed and open-ended mutual funds would result in a change of approximately $35.1 million and $27.2 million in the fair market value of securities held in our merchandise trusts and perpetual care trusts, respectively.

Investment Strategies and Objectives

Our internal investment strategies and objectives for funds held in the merchandise trusts and perpetual care trusts are specified in an Investment Policy Statement that requires us to do the following:

• State in a written document our expectations, objectives, tolerances for risk and guidelines in the investment of our assets;

• Set forth a disciplined and consistent structure for managing all trust assets. This structure is based on a long-term asset allocation strategy, which is diversified across asset classes, investment styles and strategies. We believe this structure is likely to meet our stated objectives within our tolerances for risk and variability. This structure also includes ranges around the target allocations allowing for adjustments when appropriate to reduce risk or enhance returns. It further includes guidelines for the selection of investment managers and vehicles through which to implement the investment strategy;

• Provide specific guidelines for each investment manager. These guidelines control the level of overall risk and liquidity assumed in each portfolio;

• Appoint third-party investment advisors to oversee the specific investment managers and advise our Trust Committee; and

• Establish criteria to monitor, evaluate and compare the performance results achieved by the overall trust portfolios and by our investment managers. This allows us to compare the performance results of the trusts to our objectives and other benchmarks, including peer performance, on a regular basis.

Our investment guidelines are based on relatively long investment horizons, which vary with the type of trust. Because of this, interim fluctuations should be viewed with appropriate perspective. The strategic asset allocation of the trust portfolios is also based on this longer-term perspective. However, in developing our investment policy, we have taken into account the potential negative impact on our operations and financial performance of significant short-term declines in market value.

We recognize the challenges we face in achieving our investment objectives in light of the uncertainties and complexities of contemporary investment markets. Furthermore, we recognize that in order to achieve the stated long-term objectives we may have short-term declines in market value. Given the need to maintain consistent values in the

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portfolio, we have attempted to develop a strategy, which is likely to maximize returns and earnings without experiencing overall declines in value in excess of 3% over any 12-month period. However, we are considering alternative strategies in light of current market conditions.

In order to consistently achieve the stated return objectives within our tolerance for risk, we use a strategy of allocating appropriate portions of our portfolio to a variety of asset classes with attractive risk and return characteristics, and low to moderate correlations of returns. See the notes to our unaudited condensed consolidated financial statements for a breakdown of the assets held in our merchandise trusts and perpetual care trusts by asset class.

Debt Instruments

Our Credit Facility bears interest at a floating rate, based on LIBOR, which is adjusted quarterly. This subjects us to increases in interest expense resulting from movements in interest rates. As of September 30, 2015, we had $113.5 million of borrowings outstanding under our Credit Facility. After these borrowings, our total available borrowing capacity under the Credit Facility is $66.5 million. The revolving credit facility provides for both acquisition draws, which are used primarily to finance acquisitions, acquisition related costs and mausoleum construction costs, and working capital draws, which are used to finance all other corporate costs. As of September 30, 2015, we had approximately $75.0 million of working capital draws, which are limited to a borrowing formula of 85% of eligible account receivables. This limit was $135.5 million at September 30, 2015. The amounts outstanding under the Credit Facility bore interest at rates of approximately 4.1% at September 30, 2015.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Disclosure Committee and management, including our Chief Executive Officer and our Interim Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based upon, and as of the date of this evaluation, our Chief Executive Officer and our Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

We and certain of our subsidiaries are parties to legal proceedings that have arisen in the ordinary course of business. We do not expect these matters to have a material adverse effect on our consolidated financial position, results of operations or cash flows. We carry insurance with coverage and coverage limits that we believe to be customary in the funeral home and cemetery industries. Although there can be no assurance that such insurance will be sufficient to protect us against all contingencies, we believe that our insurance protection is reasonable in view of the nature and scope of our operations.

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Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in “Part I, Item 1A. Risk Factors” in our 2014 Form 10-K, Current Report on Form 8-K filed with the SEC on July 6, 2015 and other reports that we file with the SEC, which could materially affect our business, financial condition or future results.

The risks described in the 2014 Form 10-K, Current Report on Form 8-K filed with the SEC on July 6, 2015 and other reports that we file with the SEC are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including the risks faced by us described in our 2014 Form 10-K, Current Report on Form 8-K filed with the SEC on July 6, 2015 and other reports that we file with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number	Description
10.1	First Amendment to Fourth Amended and Restated Credit Agreement, dated July 10, 2015, by and among StoneMor Operating LLC, its Subsidiaries, StoneMor GP LLC, StoneMor Partners L.P., the Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).
10.2	Letter Agreement by and between Sean P. McGrath and StoneMor GP LLC.
10.3	Confidentiality and Non-Compete Agreement by and between Sean P. McGrath and StoneMor GP LLC.
31.1	Certification pursuant to Exchange Act Rule 13a-14(a) of Lawrence Miller, Chief Executive Officer, President and Chairman of the Board of Directors.
31.2	Certification pursuant to Exchange Act Rule 13a-14(a) of Sean P. McGrath, Chief Financial Officer.
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and Exchange Act Rule 13a-14(b) of Lawrence Miller, Chief Executive Officer, President and Chairman of the Board of Directors (furnished herewith).
32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and Exchange Act Rule 13a-14(b) of Sean P. McGrath, Chief Financial Officer (furnished herewith).
101	Attached as Exhibit 101 to this report are the following Interactive Data Files formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets as of September 30, 2015, and December 31, 2014; (ii) Unaudited Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2015 and 2014; (iii) Unaudited Condensed Consolidated Statement of Partners’ Capital (Deficit); (iv) Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2015 and 2014; and (v) Notes to the Unaudited Condensed Consolidated Financial Statements. Users of this data are advised that the information contained in the XBRL documents is unaudited and these are not the official publicly filed financial statements of StoneMor Partners L.P.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STONEMOR PARTNERS L.P.
	By: StoneMor GP LLC
	its general partner
November 9, 2015	/s/ Lawrence Miller
	Lawrence Miller
	Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer)
November 9, 2015	/s/ Sean P. McGrath
	Sean P. McGrath
	Chief Financial Officer (Principal Financial Officer)

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Exhibit Index

Exhibit Number	Description
10.1	First Amendment to Fourth Amended and Restated Credit Agreement, dated July 10, 2015, by and among StoneMor Operating LLC, its Subsidiaries, StoneMor GP LLC, StoneMor Partners L.P., the Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).
10.2	Letter Agreement by and between Sean P. McGrath and StoneMor GP LLC.
10.3	Confidentiality and Non-Compete Agreement by and between Sean P. McGrath and StoneMor GP LLC.
31.1	Certification pursuant to Exchange Act Rule 13a-14(a) of Lawrence Miller, Chief Executive Officer, President and Chairman of the Board of Directors.
31.2	Certification pursuant to Exchange Act Rule 13a-14(a) of Sean P. McGrath, Chief Financial Officer.
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and Exchange Act Rule 13a-14(b) of Lawrence Miller, Chief Executive Officer, President and Chairman of the Board of Directors (furnished herewith).
32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and Exchange Act Rule 13a-14(b) of Sean P. McGrath, Chief Financial Officer (furnished herewith).
101	Attached as Exhibit 101 to this report are the following Interactive Data Files formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets as of September 30, 2015, and December 31, 2014; (ii) Unaudited Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2015 and 2014; (iii) Unaudited Condensed Consolidated Statement of Partners’ Capital (Deficit); (iv) Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2015 and 2014; and (v) Notes to the Unaudited Condensed Consolidated Financial Statements. Users of this data are advised that the information contained in the XBRL documents is unaudited and these are not the official publicly filed financial statements of StoneMor Partners L.P.

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EX-10.2

Exhibit 10.2

August 26, 2015

Mr. Sean McGrath

Re: Employment Offer

Dear Sean:

I am delighted to offer you the position of Chief Financial Officer and Secretary of StoneMor GP LLC (the “Company”). All of us at StoneMor are pleased with your decision to join the team and excited about working with you. This letter, when signed by you, will constitute your employment with the Company. In accordance with our discussions, set forth below are the terms and conditions of your employment:

TITLE:	Chief Financial Officer and Secretary
REPORTING TO:	Larry Miller, Chief Executive Officer, President and Chairman of the Board
START DATE:	On or before September 28, 2015
BASE SALARY:	$350,000 annually (payable weekly or pursuant to standard company practice)
ANNUAL BONUS:	For each calendar year of your employment, you shall have the opportunity to earn an annual incentive bonus with a target bonus equal to 75% of Base Salary. The actual incentive bonus awarded is discretionary and will be based on Company performance against performance targets established by the Compensation Committee as well as mutually agreed upon personal performance goals. For your service during the 2015 calendar year, you will be awarded an annual incentive bonus of $175,000, paid during the Company’s normal bonus award cycle in the first quarter of 2016.

EQUITY PARTICIPATION:	Annually, you will receive long-term equity incentive awards at nominal values approved by the Compensation Committee. This award is currently targeted at 75% of Base Salary and will be comprised of StoneMor LP units. Half (50%) of this award will vest ratably over three (3) years and the other half (50%) will vest based upon performance criteria approved by the Compensation Committee in 2015 or 2016. Additionally, within our General Partner, you will receive a 1 % GP Incentive Interest which will feature two sources of cash flow to you: (1) ongoing quarterly cash distributions from the GP/Incentive Distribution Rights (IDRs) and (2) the exit value upon GP monetization.
VACATION:	Four weeks
MEDICAL BENEFITS:	You will receive the same benefit terms and conditions as for all Company employees and officers. This benefits summary will be provided to you within a separate document. During the waiting period to become eligible for health coverage at the Company, you will be fully reimbursed for the cost of COBRA payments to maintain your current plan at your prior employer.
SEVERANCE POLICY:	Should you be terminated from the Company without cause (including due to a change of control), you will be eligible to receive a severance payment equal to one (1) year of base salary at the time of your termination, assuming that you have executed a separation agreement and full release of claims as provided by the Company.
OTHER BENEFITS:	You will have the option between accepting a company- provided mobile phone or receiving a $170 monthly allowance.

You also acknowledge and agree that, during your employment with the StoneMor, you will be subject to the Company’s standard policies, if any, relating to non-disparagement, non-solicitation, non-competition and confidentiality, as set forth in any Company policies or plans generally applicable to its executives. (Attached) In addition, this letter does not constitute an employment contract. Your employment will be at-will, meaning that you or StoneMor may terminate the employment relationship at any time, with or without cause, and with or without notice.

This offer is contingent upon satisfactory completion of our standard pre-hire requirements, including completion of references, a pre-employment drug and alcohol test and background check. This letter shall be governed by, and construed in accordance with, the laws of the State of Pennsylvania, without regard to principles of conflict of laws thereof.

Sean, I’m again looking forward to our partnership together and your contributions to the growth and success of StoneMor. Please feel free to contact me if you have further questions regarding this offer.

Best Regards,
By:	/s/ Lawrence Miller
	Lawrence Miller
	Chief Executive Officer, President and Chairman of the Board
Agreed and Accepted,
This 31 day of August, 2015:
By:	/s/ Sean McGrath
	Sean McGrath

EX-10.3

Exhibit 10.3

CONFIDENTIALITY AND NON-COMPETE AGREEMENT

In consideration of the commencement of my employment as Chief Financial Officer and Secretary at StoneMor GP LLC (“StoneMor” or “Company”), the General Partner of StoneMor Partners, L.P., as described in my offer letter, and the other consideration as described in more detail below, the receipt and sufficiency of which I hereby acknowledge, and intending to be legally bound hereby, I, Sean McGrath, state and agree as follows:

1. Business. StoneMor GP LLC, its parents, affiliates, subsidiaries, divisions, and related companies or entities, and their respective predecessors, successors and assigns, now existing or hereafter created, (collectively referred to herein as “StoneMor”), are engaged in the deathcare industry and provide a broad scope of products and services through the ownership, development, and operation of cemeteries and funeral homes (the “Business”):

a. StoneMor invests substantial time, money, and effort, on an ongoing basis, to train its employees with specialized skills and knowledge unique to StoneMor and its Business, to develop products and services for the Business, to maintain and expand its customer base, and to improve and develop its products and services;

b. In my executive role as Chief Financial Officer and Secretary, from the outset of and during my employment with StoneMor, I will have access to, receive, learn, develop and/or conceive information that is proprietary and/or confidential to StoneMor related to all aspects of its business, including but not limited to financials, customers and contracts;

c. This information must be kept in strict confidence to protect StoneMor’s Business and maintain its competitive position in the marketplace, and this information would be useful to StoneMor’s existing and potential competitors for indefinite periods of time;

d. From the outset of and during my employment with StoneMor, I will have access to and will be required to develop, maintain, and/or supervise technology, products and customer relationships and intellectual property that are valuable to StoneMor and which it has a legitimate interest in protecting;

e. StoneMor would be irreparably harmed by my subsequent work with, for or as a competitor of StoneMor, due to the possibility that there would be inadvertent or other disclosures of StoneMor’s proprietary and/or confidential information or that there would be improper interference with its valuable customer relationships and goodwill;

f. The commencement of my employment with StoneMor is adequate consideration for signing this Confidentiality and Non-Compete Agreement (the “Agreement”);

g. The restrictions in this Agreement are reasonable and necessary to protect StoneMor’s legitimate business interests;

h. The post-termination restrictions set forth in this Agreement shall apply regardless of whether my employment is terminated with or without cause and regardless of whether the termination was initiated by me or by StoneMor; and

i. The post-termination restrictions set forth in this Agreement may limit, but do not prohibit, me from earning a satisfactory livelihood.

	/s/ SM Initial
Page 1 of 6

2. Covenants.

a. No Solicitation. During my employment with StoneMor and for a period of two (2) years thereafter, I will not, directly or indirectly: (i) solicit, entice, persuade or induce any employee, director, officer, associate, consultant, agent or independent contractor of the Company to terminate his or her employment or engagement by the Company to become employed or engaged in competition with the Company by any person, firm, corporation or other business enterprise other than a member of the Company, except in furtherance of my responsibility during my employment with StoneMor; (ii) authorize or assist in the taking of such action by any third party; or (iii) solicit or persuade any customer or prospect to discontinue its business relationship with the Company. For purposes of this Section 2.a, the terms “employee,” “director,” “officer,” “associate,” “consultant,” “agent,” and “independent contractor” shall include any person with such status at any time during my employment and for one year following my termination of employment.

b. No Competition. During my employment with StoneMor and for a period of one (1) year thereafter, I will not, directly or indirectly, engage, participate, make any financial investment in, or become employed by or render advisory or other services to or for any person, firm, corporation or other business enterprise (the “Competing Enterprise”) which is engaged, directly or indirectly, during the period of my employment or at the time of the termination of my employment, as the case may be, in any Business of the type and character engaged in or competitive with that conducted by the Company in any state or marketing area in which the Company is doing business or is qualified to do business. I acknowledge that these restrictions on competition are fair because, in my position as Chief Financial Officer and Secretary, I will have knowledge of and access to all business practices and information, without limitation to a specific geography, department or customer.

c. Confidentiality. During my employment and thereafter without limit as to time, I will not (other than in the regular course and in furtherance of the Company’s business) divulge, furnish or make available to any person any knowledge or information with respect to the business or affairs of the Company which is confidential, including, without limitation, “know-how,” trade secrets, customer lists, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition or disposition plans, new personnel employment plans, methods, technical processes, designs and design projects, inventions and research projects and financial data, analyses, budgets and forecasts of the Company except (1) information which at the time is available to others in the business or generally known to the public other than as a result of disclosure by the Company not permitted hereunder, and (2) when required to do so by a court of competent jurisdiction, by any governmental agency or by any administrative body or legislative body (including a committee thereof) with purported or apparent jurisdiction to order me to divulge, disclose or make accessible such information. All memoranda, notes, lists, records, electronically stored data, recordings or videotapes and other documents (and all copies thereof) made or compiled by me or made available to me (whether during my employment by the Company or by any predecessor thereof) concerning the business of the Company or any predecessor thereof shall be the property of the Company and shall be delivered to the Company promptly upon the termination of my employment. Nothing in this Agreement is intended to prohibit Employee from voluntarily communicating with the United States Securities and Exchange Commission (“SEC”) or any other governmental agency about a good-faith belief that a securities law violation may have occurred. Employee does not require prior authorization of Company to make a

	/s/ SM Initial
Page 2 of 6

report or disclosure about a potential securities law violation to any governmental agency or entity, including but not limited to the Department of Justice, the SEC, the Congress, or any agency Inspector General, nor is Employee required to notify the Company that such reports or disclosures were made. Nothing in this Agreement shall waive or release any rights or claims that Employee may have under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).

d. Nondisclosure. Except as set forth in Schedule A (attached hereto), I shall not disclose or utilize in my work with the Company any Intellectual Property or secret or confidential information of others (including any prior employers), or any Intellectual Property, inventions or innovations of my own which are not included within the scope of this agreement (collectively, “Prior Inventions”). For the purposes of this Agreement, “Intellectual Property” shall include, but shall not be limited to, ideas, inventions, methods, know-how, discoveries, processes, works of authorship, designs, analyses, drawings, reports, trademarks, service marks, slogans, logos, trade dress, technical, business, sales, operations and computer software innovations. If disclosure of any Prior Invention would cause me to violate any prior confidentiality agreement, I understand that I should not list such Prior Inventions in Schedule A, but I should only disclose a cursory name for each such Prior Invention, listing of the party/ies to which it belongs and the fact that full disclosure as to such Prior Inventions has not been made for that reason. If no such disclosure is attached, I represent that there are no Prior Inventions. If, in the course of my employment with the Company, I incorporate a Prior Invention into a StoneMor service, product or process, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicenses) to make, have made, modify, use and sell such Prior Invention. Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any StoneMor service, product or process without the Company’s prior written consent and I represent that I have the right to provide all such Prior Inventions.

e. Employee Innovation. I acknowledge that all developments, including, without limitation, inventions, patentable or otherwise, trade secrets, discoveries, improvements, ideas and writings that alone or jointly with others I may conceive, make, develop or acquire during my employment by the Company and any predecessor thereof (collectively, the “Developments”), are and shall remain the sole and exclusive property of the Company and I hereby assigns to the Company all of my right, title and interest in all such Developments. I shall promptly and fully disclose all future Developments to the Company’s Board, and, at any time upon request and at the expense of the Company, shall execute, acknowledge and deliver to the Company all instruments that the Company shall prepare, give evidence, and take all other actions that are necessary or desirable in the reasonable opinion of the Company’s counsel, to enable the Company to file and prosecute applications for and to acquire, maintain and enforce all letters patent, trademark registrations or copyrights covering the Developments in all countries in which the same are deemed necessary.

f. Remedies. I acknowledge that the services to be rendered by me are of a special, unique and extraordinary character and, in connection with such services, I will have access to and be furnished with confidential information vital to the Company’s business and that irreparable injury would be sustained by the Company in the event of my breach of any of the covenants contained in this Section 2, which injury could not be remedied adequately by the recovery of damages in an action at law. Accordingly, I agree that, upon a breach or threatened breach by me of any of such covenants, the Company shall be entitled, in addition to and not in lieu of any and all other remedies, to an injunction to be issued by any court of competent jurisdiction restraining the commission or continuance of any such breach or threatened breach upon minimal bond, with or without surety, and that such an injunction will

	/s/ SM Initial
Page 3 of 6

not work an undue hardship on me. I acknowledge that the covenant periods set forth in this Section shall be extended by the period of any breach by me. Further, any proven breach by me shall result in the forfeiture of any remaining payments of benefits due to me hereunder.

g. Survival. The provisions of this Section 2 shall survive the termination of this Agreement, without regard to the reasons therefore.

3. Severability and Reformation. If any court determines that any of the provisions of this Agreement is invalid or unenforceable, the remainder of such provisions shall not thereby be affected and shall be given full effect without regard to the invalid provisions. If any court construes any of the provisions of this Agreement, or any part thereof, to be unreasonable because of the duration of such provision or the geographic scope thereof, such court shall have the power to reduce the duration or restrict the geographic scope of such provision and to enforce such provision as so reduced or restricted.

4. Waiver. A decision by StoneMor or any third-party beneficiary to enforce certain breaches of this Agreement but not others shall not be construed as a waiver of any possible remedy that StoneMor or any third-party beneficiary has for my breach of this Agreement regardless of any claims that I may have against StoneMor.

5. Modification; Termination. This Agreement may not be modified or terminated, in whole or part, except in writing signed by an authorized representative of StoneMor.

6. Choice of Law and Forum. This Agreement will be governed by Pennsylvania law applicable to contracts entered into and performed in Pennsylvania. I agree that this Agreement shall exclusively be enforced by any federal or state court of competent jurisdiction in the Commonwealth of Pennsylvania and hereby consent to the personal jurisdiction of these courts.

7. Assignment. I agree that StoneMor may assign part or all of this Agreement to any direct or indirect parent, affiliate, subsidiary, division, related company or entity of StoneMor and to any transferee of substantially all of the assets of StoneMor and that any assignee shall have the same rights as StoneMor. I understand that I have no rights to assign this Agreement.

8. No Other Agreements or Obligations. I represent that, except as stated below, I have not signed any non-competition or other contract that prohibits me from being employed by StoneMor or assigning my works and ideas to StoneMor.

[Signature Page Follows]

	/s/ SM Initial
Page 4 of 6

I INTEND TO BE LEGALLY BOUND BY THIS AGREEMENT:

		Sean McGrath:
Date:	9/1/15	/s/ Sean McGrath
		Sean McGrath
		STONEMOR GP LLC
Date:	9/1/15	By:	/s/ Lawrence Miller
		Name:	Lawrence Miller
		Title:	President and Chief Executive Officer

	Initial
Page 5 of 6

SCHEDULE A

Employee Innovation and Non-Disclosure Agreement

I have set forth herein all such ideas, inventions, methods, know-how, discoveries, processes, works of authorship, designs, analyses, drawings, reports, trademarks, service marks, slogans, logos, trade dress, technical, business, sales, operations, computer software innovations, trade secrets and all other Intellectual Property which are not included within the scope of this Agreement, or a short summary of anything that cannot be listed, and I have disclosed in writing to StoneMor on or before the date of this Agreement the title or identifying criteria, and a full description, of each such item, including, without limitation, the state of completion of each such item, and whether and the extent to which each item is the subject of a trademark, service mark, or copyright application or registration, or a patent application or patent. I understand and agree that no such ideas, inventions, methods, know-how, discoveries, processes, works of authorship, designs, analyses, drawings, reports, trademarks, service marks, slogans, logos, trade dress, or technical, business, sales, operations, clinical, computer software innovations, trade secrets or other Intellectual Property will be excluded from the scope of this Agreement except to the extent disclosed and described below.

		Sean McGrath:
Date:	9/1/15	/s/ Sean McGrath
		Sean McGrath
		STONEMOR GP LLC
Date:	9/1/15	By:	/s/ Lawrence Miller
		Name:	Lawrence Miller
		Title:	President and Chief Executive Officer

	Initial
Page 6 of 6

EX-31.1

CERTIFICATION

Exhibit 31.1

I, Lawrence Miller, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of StoneMor Partners L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2015	By:	/s/ Lawrence Miller
		Lawrence Miller
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

CERTIFICATION

Exhibit 31.2

I, Sean P. McGrath, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of StoneMor Partners L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2015	By:	/s/ Sean P. McGrath
		Sean P. McGrath
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officer of StoneMor GP LLC, the general partner of StoneMor Partners L.P. (the “Partnership”), does hereby certify with respect to the Quarterly Report of the Partnership on Form 10-Q for the quarter ended September 30, 2015 (the “Report”) that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ Lawrence Miller
President and Chief Executive Officer	Date: November 9, 2015
(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officer of StoneMor GP LLC, the general partner of StoneMor Partners L.P. (the “Partnership”), does hereby certify with respect to the Quarterly Report of the Partnership on Form 10-Q for the quarter ended September 30, 2015 (the “Report”) that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ Sean P. McGrath
Chief Financial Officer	Date: November 9, 2015
(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

XML

Major Classes of Property and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 166,620	$ 157,468
Less: accumulated depreciation	(63,949)	(57,077)
Property and equipment - net	102,671	100,391
Building and improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	114,673	108,178
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 51,947	$ 49,290

XML

Major Classes of Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 73,012	$ 72,686
Accumulated Amortization	(5,331)	(3,696)
Net Intangible Asset	67,681	68,990
Lease and management agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	59,758	59,758
Accumulated Amortization	(1,328)	(581)
Net Intangible Asset	58,430	59,177
Underlying contract value
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	6,239	6,239
Accumulated Amortization	(975)	(858)
Net Intangible Asset	5,264	5,381
Noncompete Agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,576	5,250
Accumulated Amortization	(2,860)	(2,126)
Net Intangible Asset	2,716	3,124
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,439	1,439
Accumulated Amortization	(168)	(131)
Net Intangible Asset	$ 1,271	$ 1,308

XML

Contractual Maturities of Debt Securities Held in Perpetual Care Trusts (Detail) - Fixed maturities - Variable Interest Entity, Primary Beneficiary - Perpetual care trusts $ in Thousands	Sep. 30, 2015 USD ($)
Investments Classified by Contractual Maturity Date [Line Items]
Less than 1 year	$ 654
1 year through 5 years	16,001
6 years through 10 years	6,515
More than 10 years	18
U.S. Government and federal agency
Investments Classified by Contractual Maturity Date [Line Items]
1 year through 5 years	113
U.S. State and local government agency
Investments Classified by Contractual Maturity Date [Line Items]
Less than 1 year	27
Corporate debt securities
Investments Classified by Contractual Maturity Date [Line Items]
Less than 1 year	256
1 year through 5 years	15,888
6 years through 10 years	6,515
More than 10 years	18
Other debt securities
Investments Classified by Contractual Maturity Date [Line Items]
Less than 1 year	$ 371

XML

Segment Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2015 Segment
Segment Reporting Information [Line Items]
Number of distinct reportable segments	5
Pre-need sales revenue recognition, percentage of sales price collected	10.00%
Cemetery
Segment Reporting Information [Line Items]
Number of distinct reportable segments	3

XML

Outstanding Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	May. 28, 2013
Debt Instrument [Line Items]
Long-Term Debt	$ 294,132	$ 291,160
Less current portion	3,294	2,251
Less unamortized bond and note payable discounts	3,114	3,531
Long-term portion	287,724	285,378
Senior Notes | 7.878% notes, due 2021
Debt Instrument [Line Items]
Long-Term Debt	175,000	175,000
Less unamortized bond and note payable discounts			$ 3,800
Line of Credit | Working Capital Credit Facility, due December 2019
Debt Instrument [Line Items]
Long-Term Debt	75,000	85,902
Line of Credit | Acquisition Credit Facility, due December 2019
Debt Instrument [Line Items]
Long-Term Debt	38,500	25,000
Notes Payable, other Payables | Acquisitions Debt
Debt Instrument [Line Items]
Long-Term Debt	732	861
Notes Payable, other Payables | Acquisition non-competes
Debt Instrument [Line Items]
Long-Term Debt	1,894	2,765
Insurance and vehicle financing
Debt Instrument [Line Items]
Long-Term Debt	$ 3,006	$ 1,632

XML

Reconciliation of Merchandise Trust Activities (Parenthetical) (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
Variable Interest Entity, Primary Beneficiary | Merchandise Trusts
Schedule of Available-for-sale Securities [Line Items]
Net effect of other-than-temporary impairment charges	$ 4.2

XML

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2015

Segment Information

Segment information is as follows:

As of and for the three months ended September 30, 2015:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	26,264	$	15,475	$	12,628	$	—	$	—		$	(15,622	)	$	38,745
Service and other		9,838		9,249		6,267		—		—			(141	)		25,213
Funeral home		—		—		—		17,077		—			(2,835	)		14,242
Total revenues		36,102		24,724		18,895		17,077		—			(18,598	)		78,200
Costs and expenses
Cost of sales		5,690		3,318		2,324		—		—			(2,604	)		8,728
Cemetery		7,534		6,608		4,103		—		—			—			18,245
Selling		8,471		4,931		3,940		—		692			(3,387	)		14,647
General and administrative		4,629		2,616		1,574		—		—			—			8,819
Corporate overhead		—		—		—		—		8,152			—			8,152
Depreciation and amortization		833		639		461		780		598			—			3,311
Funeral home		—		—		—		11,625		—			(417	)		11,208
Acquisition related costs, net of recoveries		—		—		—		—		963			—			963
Total costs and expenses		27,157		18,112		12,402		12,405		10,405			(6,408	)		74,073
Operating profit (loss)	$	8,945	$	6,612	$	6,493	$	4,672	$	(10,405	)	$	(12,190	)	$	4,127
Total assets	$	622,820	$	419,729	$	427,419	$	185,712	$	26,020		$	—		$	1,681,700
Amortization of cemetery property	$	1,457	$	1,131	$	322	$	—	$	—		$	(697	)	$	2,213
Long lived asset additions	$	2,206	$	502	$	5,871	$	4,388	$	595		$	—		$	13,562
Goodwill	$	8,950	$	3,288	$	11,948	$	39,862	$	—		$	—		$	64,048

As of and for the nine months ended September 30, 2015:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	78,128	$	44,024	$	36,809	$	—	$	—		$	(50,567	)	$	108,394
Service and other		34,370		29,438		25,322		—		—			(14,078	)		75,052
Funeral home		—		—		—		50,226		—			(7,230	)		42,996
Total revenues		112,498		73,462		62,131		50,226		—			(71,875	)		226,442
Costs and expenses
Cost of sales		17,332		9,221		7,045		—		—			(7,980	)		25,618
Cemetery		22,518		19,378		11,893		—		—			—			53,789
Selling		26,552		15,368		12,382		—		1,974			(11,950	)		44,326
General and administrative		13,921		7,731		5,688		—		—			—			27,340
Corporate overhead		—		—		—		—		26,979			—			26,979
Depreciation and amortization		2,443		1,883		1,417		2,381		1,083			—			9,207
Funeral home		—		—		—		36,911		—			(1,404	)		35,507
Acquisition related costs, net of recoveries		—		—		—		—		1,648			—			1,648
Total costs and expenses		82,766		53,581		38,425		39,292		31,684			(21,334	)		224,414
Operating profit (loss)	$	29,732	$	19,881	$	23,706	$	10,934	$	(31,684	)	$	(50,541	)	$	2,028
Total assets	$	622,820	$	419,729	$	427,419	$	185,712	$	26,020		$	—		$	1,681,700
Amortization of cemetery property	$	4,059	$	2,385	$	1,062	$	—	$	—		$	(1,366	)	$	6,140
Long lived asset additions	$	6,451	$	2,272	$	6,804	$	4,859	$	780		$	—		$	21,166
Goodwill	$	8,950	$	3,288	$	11,948	$	39,862	$	—		$	—		$	64,048

As of and for the three months ended September 30, 2014:

	Cemeteries						Funeral Homes
	Southeast		Northeast		West				Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	22,653	$	13,228	$	11,512	$	—	$	—		$	(4,719	)	$	42,674
Service and other		10,097		11,040		8,633		—		—			(6,509	)		23,261
Funeral home		—		—		—		14,457		—			(2,218	)		12,239
Total revenues		32,750		24,268		20,145		14,457		—			(13,446	)		78,174
Costs and expenses
Cost of sales		4,828		2,555		2,167		—		—			(488	)		9,062
Cemetery		7,533		6,576		3,967		—		—			—			18,076
Selling		8,173		4,572		4,001		—		631			(883	)		16,494
General and administrative		4,343		2,132		3,333		—		—			—			9,808
Corporate overhead		—		—		—		—		8,392			—			8,392
Depreciation and amortization		800		670		539		867		236			—			3,112
Funeral home		—		—		—		10,674		—			(315	)		10,359
Acquisition related costs, net of recoveries		—		—		—		—		451			—			451
Total costs and expenses		25,677		16,505		14,007		11,541		9,710			(1,686	)		75,754
Operating profit (loss)	$	7,073	$	7,763	$	6,138	$	2,916	$	(9,710	)	$	(11,760	)	$	2,420
Total assets	$	636,192	$	423,434	$	448,732	$	163,762	$	40,677		$	—		$	1,712,797
Amortization of cemetery property	$	1,035	$	341	$	435	$	—	$	—		$	168		$	1,979
Long lived asset additions	$	1,950	$	1,205	$	906	$	203	$	183		$	—		$	4,447
Goodwill	$	8,949	$	3,288	$	11,948	$	33,025	$	—		$	—		$	57,210

As of and for the nine months ended September 30, 2014:

	Cemeteries						Funeral Homes
	Southeast		Northeast		West				Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	69,319	$	31,583	$	35,211	$	—	$	—		$	(26,605	)	$	109,508
Service and other		31,085		29,529		26,768		—		—			(18,260	)		69,122
Funeral home		—		—		—		40,777		—			(5,313	)		35,464
Total revenues		100,404		61,112		61,979		40,777		—			(50,178	)		214,094
Costs and expenses
Cost of sales		15,045		6,576		7,686		—		—			(4,091	)		25,216
Cemetery		21,057		14,499		11,990		—		—			—			47,546
Selling		24,019		11,443		11,462		—		1,480			(5,860	)		42,544
General and administrative		13,053		5,533		7,747		—		—			—			26,333
Corporate overhead		—		—		—		—		22,394			—			22,394
Depreciation and amortization		2,094		1,244		1,593		2,346		716			—			7,993
Funeral home		—		—		—		29,813		—			(732	)		29,081
Acquisition related costs, net of recoveries		—		—		—		—		2,040			—			2,040
Total costs and expenses		75,268		39,295		40,478		32,159		26,630			(10,683	)		203,147
Operating profit (loss)	$	25,136	$	21,817	$	21,501	$	8,618	$	(26,630	)	$	(39,495	)	$	10,947
Total assets	$	636,192	$	423,434	$	448,732	$	163,762	$	40,677		$	—		$	1,712,797
Amortization of cemetery property	$	3,499	$	1,762	$	2,237	$	—	$	—		$	(414	)	$	7,084
Long lived asset additions	$	28,470	$	72,515	$	3,350	$	9,024	$	443		$	—		$	113,802
Goodwill	$	8,949	$	3,288	$	11,948	$	33,025	$	—		$	—		$	57,210

XML

Long Term Debt - Additional Information (Detail) - USD ($)		9 Months Ended
	May. 28, 2013	Sep. 30, 2015	Dec. 31, 2014
Debt Disclosure [Line Items]
Long-Term Debt, discount		$ 3,114,000	$ 3,531,000
Credit Agreement
Debt Disclosure [Line Items]
Credit facility , maximum borrowing		180,000,000
Credit facility, additional borrowing capacity		$ 70,000,000
Long term debt, maturity date		Dec. 19, 2019
Debt covenant, Consolidated EBITDA requirement for recently completed four fiscal quarters		$ 80,000,000
Debt covenant, Percentage of consolidated EBITDA		80.00%
Maximum consolidated leverage ratio		400.00%
Credit Agreement | Minimum
Debt Disclosure [Line Items]
Consolidated coverage ratio		250.00%
Credit Agreement | Line of Credit
Debt Disclosure [Line Items]
Credit facility , maximum borrowing		$ 135,500,000
Credit facility, interest rate		4.10%
Minimum percentage of eligible receivables to borrow working capital advance		85.00%
Credit facility, outstanding borrowing amount		$ 113,500,000
Credit Agreement | Line of Credit | Base Rate
Debt Disclosure [Line Items]
Credit facility, basis spread on variable rate		2.25%
Credit Agreement | Line of Credit | Eurodollar
Debt Disclosure [Line Items]
Credit facility, basis spread on variable rate		3.25%
Credit Agreement | Line of Credit | Minimum | Base Rate
Debt Disclosure [Line Items]
Credit facility, basis spread on variable rate		1.25%
Credit Agreement | Line of Credit | Minimum | Eurodollar
Debt Disclosure [Line Items]
Credit facility, basis spread on variable rate		2.25%
Credit Agreement | Line of Credit | Maximum | Base Rate
Debt Disclosure [Line Items]
Credit facility, basis spread on variable rate		3.00%
Credit Agreement | Line of Credit | Maximum | Eurodollar
Debt Disclosure [Line Items]
Credit facility, basis spread on variable rate		4.00%
7.878% notes, due 2021 | Senior Notes
Debt Disclosure [Line Items]
Long-Term Debt, principal amount	$ 175,000,000
Long-Term Debt, interest rate	7.875%	7.875%	7.875%
Long-Term Debt, Issued price per $100	97.832%
Net proceeds from issuance of senior notes	$ 171,200,000
Long-Term Debt, discount	3,800,000
Long-Term Debt, debt issuance costs	$ 4,600,000
Debt premium percentage		3.00%
Long-Term Debt, fair value		$ 180,300,000
10.25% Notes, due 2017 | Senior Notes
Debt Disclosure [Line Items]
Long-Term Debt, principal amount		$ 150,000,000
Long-Term Debt, interest rate	10.25%

XML

Segment Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Revenues
Revenues	$ 78,200	$ 78,174	$ 226,442	$ 214,094
Costs and expenses
Cost of sales	8,728	9,062	25,618	25,216
Cemetery	18,245	18,076	53,789	47,546
Selling	14,647	16,494	44,326	42,544
General and administrative	8,819	9,808	27,340	26,333
Corporate overhead	8,152	8,392	26,979	22,394
Depreciation and amortization	3,311	3,112	9,207	7,993
Funeral home	11,208	10,359	35,507	29,081
Acquisition related costs, net of recoveries	963	451	1,648	2,040
Total cost and expenses	74,073	75,754	224,414	203,147
Operating profit (loss)	4,127	2,420	2,028	10,947
Total assets	1,681,700	1,712,797	1,681,700	1,712,797	$ 1,699,464
Long lived asset additions	13,562	4,447	21,166	113,802
Goodwill	64,048	57,210	64,048	57,210	58,836
Sales
Revenues
Revenues	38,745	42,674	108,394	109,508
Service and other
Revenues
Revenues	25,213	23,261	75,052	69,122
Funeral Homes Property
Revenues
Revenues	14,242	12,239	42,996	35,464
Cemetery property
Costs and expenses
Amortization of cemetery property	2,213	1,979	6,140	7,084
Cemetery Operations South East
Costs and expenses
Goodwill	8,950		8,950		8,950
Cemetery Operations North East
Costs and expenses
Goodwill	3,288		3,288		3,288
Cemetery Operations West
Costs and expenses
Goodwill	11,948		11,948		11,948
Funeral Home
Costs and expenses
Goodwill	39,862		39,862		$ 34,650
Operating Segments | Cemetery Operations South East
Revenues
Revenues	36,102	32,750	112,498	100,404
Costs and expenses
Cost of sales	5,690	4,828	17,332	15,045
Cemetery	7,534	7,533	22,518	21,057
Selling	8,471	8,173	26,552	24,019
General and administrative	4,629	4,343	13,921	13,053
Depreciation and amortization	833	800	2,443	2,094
Total cost and expenses	27,157	25,677	82,766	75,268
Operating profit (loss)	8,945	7,073	29,732	25,136
Total assets	622,820	636,192	622,820	636,192
Long lived asset additions	2,206	1,950	6,451	28,470
Goodwill	8,950	8,949	8,950	8,949
Operating Segments | Cemetery Operations South East | Sales
Revenues
Revenues	26,264	22,653	78,128	69,319
Operating Segments | Cemetery Operations South East | Service and other
Revenues
Revenues	9,838	10,097	34,370	31,085
Operating Segments | Cemetery Operations South East | Cemetery property
Costs and expenses
Amortization of cemetery property	1,457	1,035	4,059	3,499
Operating Segments | Cemetery Operations North East
Revenues
Revenues	24,724	24,268	73,462	61,112
Costs and expenses
Cost of sales	3,318	2,555	9,221	6,576
Cemetery	6,608	6,576	19,378	14,499
Selling	4,931	4,572	15,368	11,443
General and administrative	2,616	2,132	7,731	5,533
Depreciation and amortization	639	670	1,883	1,244
Total cost and expenses	18,112	16,505	53,581	39,295
Operating profit (loss)	6,612	7,763	19,881	21,817
Total assets	419,729	423,434	419,729	423,434
Long lived asset additions	502	1,205	2,272	72,515
Goodwill	3,288	3,288	3,288	3,288
Operating Segments | Cemetery Operations North East | Sales
Revenues
Revenues	15,475	13,228	44,024	31,583
Operating Segments | Cemetery Operations North East | Service and other
Revenues
Revenues	9,249	11,040	29,438	29,529
Operating Segments | Cemetery Operations North East | Cemetery property
Costs and expenses
Amortization of cemetery property	1,131	341	2,385	1,762
Operating Segments | Cemetery Operations West
Revenues
Revenues	18,895	20,145	62,131	61,979
Costs and expenses
Cost of sales	2,324	2,167	7,045	7,686
Cemetery	4,103	3,967	11,893	11,990
Selling	3,940	4,001	12,382	11,462
General and administrative	1,574	3,333	5,688	7,747
Depreciation and amortization	461	539	1,417	1,593
Total cost and expenses	12,402	14,007	38,425	40,478
Operating profit (loss)	6,493	6,138	23,706	21,501
Total assets	427,419	448,732	427,419	448,732
Long lived asset additions	5,871	906	6,804	3,350
Goodwill	11,948	11,948	11,948	11,948
Operating Segments | Cemetery Operations West | Sales
Revenues
Revenues	12,628	11,512	36,809	35,211
Operating Segments | Cemetery Operations West | Service and other
Revenues
Revenues	6,267	8,633	25,322	26,768
Operating Segments | Cemetery Operations West | Cemetery property
Costs and expenses
Amortization of cemetery property	322	435	1,062	2,237
Operating Segments | Funeral Home
Revenues
Revenues	17,077	14,457	50,226	40,777
Costs and expenses
Depreciation and amortization	780	867	2,381	2,346
Funeral home	11,625	10,674	36,911	29,813
Total cost and expenses	12,405	11,541	39,292	32,159
Operating profit (loss)	4,672	2,916	10,934	8,618
Total assets	185,712	163,762	185,712	163,762
Long lived asset additions	4,388	203	4,859	9,024
Goodwill	39,862	33,025	39,862	33,025
Operating Segments | Funeral Home | Funeral Homes Property
Revenues
Revenues	17,077	14,457	50,226	40,777
Corporate
Costs and expenses
Selling	692	631	1,974	1,480
Corporate overhead	8,152	8,392	26,979	22,394
Depreciation and amortization	598	236	1,083	716
Acquisition related costs, net of recoveries	963	451	1,648	2,040
Total cost and expenses	10,405	9,710	31,684	26,630
Operating profit (loss)	(10,405)	(9,710)	(31,684)	(26,630)
Total assets	26,020	40,677	26,020	40,677
Long lived asset additions	595	183	780	443
Adjustment
Revenues
Revenues	(18,598)	(13,446)	(71,875)	(50,178)
Costs and expenses
Cost of sales	(2,604)	(488)	(7,980)	(4,091)
Selling	(3,387)	(883)	(11,950)	(5,860)
Funeral home	(417)	(315)	(1,404)	(732)
Total cost and expenses	(6,408)	(1,686)	(21,334)	(10,683)
Operating profit (loss)	(12,190)	(11,760)	(50,541)	(39,495)
Adjustment | Sales
Revenues
Revenues	(15,622)	(4,719)	(50,567)	(26,605)
Adjustment | Service and other
Revenues
Revenues	(141)	(6,509)	(14,078)	(18,260)
Adjustment | Funeral Homes Property
Revenues
Revenues	(2,835)	(2,218)	(7,230)	(5,313)
Adjustment | Cemetery property
Costs and expenses
Amortization of cemetery property	$ (697)	$ 168	$ (1,366)	$ (414)

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2015

Property and Equipment

Major classes of property and equipment follow:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Building and improvements	$	114,673		$	108,178
Furniture and equipment		51,947			49,290
		166,620			157,468
Less: accumulated depreciation		(63,949	)		(57,077	)
Property and equipment - net	$	102,671		$	100,391

Cemetery property

Property and Equipment

Cemetery property consists of the following:

	As of
	September 30, 2015		December 31, 2014
	(in thousands)
Developed land	$	82,048	$	79,058
Undeveloped land		172,610		172,238
Mausoleum crypts and lawn crypts		78,879		78,524
Other land		11,125		10,028
Total	$	344,662	$	339,848

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Perpetual Care Trusts - Additional Information (Detail) - Variable Interest Entity, Primary Beneficiary - Perpetual care trusts	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($) Securities	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Securities	Sep. 30, 2014 USD ($) Securities	Dec. 31, 2014 USD ($) Securities
Schedule of Available-for-sale Securities [Line Items]
Number of Securities in Loss Position | Securities	118		118		148
Number of Securities in Loss Position for More than Twelve Months | Securities	55		55		20
Trust assets, cost	$ 341,278,000		$ 341,278,000		$ 314,546,000
Trust assets, fair value	311,781,000		311,781,000		$ 345,105,000
Net deposits into the trust			1,800,000
Purchases of securities available for sale included in trust investments			326,900,000
Sales of securities available for sale included in trust investments			320,200,000
Contributions of assets			3,600,000
Other Than Temporarily Impaired Securities
Schedule of Available-for-sale Securities [Line Items]
Other than temporary impairments loss	$ 0	$ 0	$ 0	$ 500,000
Number of securities resulting impairment | Securities				2
Trust assets, cost		1,300,000		$ 1,300,000
Trust assets, fair value		$ 800,000		$ 800,000

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Cost and Market Value Associated with Assets Held in Merchandise Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Merchandise Trusts - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Cost	$ 530,113	$ 482,536
Gross Unrealized Gains	569	17,627
Gross Unrealized Losses	(71,362)	(15,343)
Fair Value	459,320	484,820
Short-term investments
Schedule of Available-for-sale Securities [Line Items]
Cost	27,125	52,521
Fair Value	27,125	52,521
Fixed maturities
Schedule of Available-for-sale Securities [Line Items]
Cost	19,808	16,827
Gross Unrealized Gains	35	23
Gross Unrealized Losses	(889)	(466)
Fair Value	18,954	16,384
Fixed maturities | U.S. State and local government agency
Schedule of Available-for-sale Securities [Line Items]
Cost	81	270
Gross Unrealized Gains	10
Gross Unrealized Losses		(1)
Fair Value	91	269
Fixed maturities | Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost	12,550	9,400
Gross Unrealized Gains	25	23
Gross Unrealized Losses	(880)	(447)
Fair Value	11,695	8,976
Fixed maturities | Other debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost	7,177	7,157
Gross Unrealized Losses	(9)	(18)
Fair Value	7,168	7,139
Mutual funds - debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost	260,872	150,477
Gross Unrealized Gains	33	869
Gross Unrealized Losses	(28,666)	(8,666)
Fair Value	232,239	142,680
Mutual funds - equity securities
Schedule of Available-for-sale Securities [Line Items]
Cost	145,260	167,353
Gross Unrealized Gains	9	12,568
Gross Unrealized Losses	(27,011)	(463)
Fair Value	118,258	179,458
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Cost	60,169	81,639
Gross Unrealized Gains	340	4,167
Gross Unrealized Losses	(14,796)	(5,507)
Fair Value	45,713	80,299
Other invested assets
Schedule of Available-for-sale Securities [Line Items]
Cost	7,046	5,400
Gross Unrealized Gains	152
Gross Unrealized Losses		(241)
Fair Value	7,198	5,159
Total managed investments
Schedule of Available-for-sale Securities [Line Items]
Cost	520,280	474,217
Gross Unrealized Gains	569	17,627
Gross Unrealized Losses	(71,362)	(15,343)
Fair Value	449,487	476,501
West Virginia Trust Receivable
Schedule of Available-for-sale Securities [Line Items]
Cost	8,111	8,319
Fair Value	8,111	$ 8,319
Assets acquired via acquisition
Schedule of Available-for-sale Securities [Line Items]
Cost	1,722
Fair Value	$ 1,722

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Activity in Allowance for Contract Cancellations (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance - Beginning of period	$ 22,138
Balance - End of period	23,703
Contract Cancellations
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance - Beginning of period	22,138	$ 20,275
Provision for cancellations	19,054	17,080
Charge-offs - net	(17,489)	(13,610)
Balance - End of period	$ 23,703	$ 23,745

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Reconciliation of Perpetual Care Trust Activities (Parenthetical) (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
Variable Interest Entity, Primary Beneficiary | Perpetual care trusts
Schedule of Available-for-sale Securities [Line Items]
Net effect of other-than-temporary impairment charges	$ 12

XML

Fixed Rent for Cemeteries (Detail) - Second Quarter 2014 Acquisition	May. 28, 2014 USD ($)
Lease Years 1-5
Management Agreement Future Minimum Payments Due [Line Items]
Fixed rent for cemeteries, per lease year	$ 0
Lease Years 6-20
Management Agreement Future Minimum Payments Due [Line Items]
Fixed rent for cemeteries, per lease year	1,000,000
Lease Years 21-25
Management Agreement Future Minimum Payments Due [Line Items]
Fixed rent for cemeteries, per lease year	1,200,000
Lease Years 26- 35
Management Agreement Future Minimum Payments Due [Line Items]
Fixed rent for cemeteries, per lease year	1,500,000
Lease Years 36-60
Management Agreement Future Minimum Payments Due [Line Items]
Fixed rent for cemeteries, per lease year	$ 0
Minimum | Lease Years 1-5
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	1 year
Minimum | Lease Years 6-20
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	6 years
Minimum | Lease Years 21-25
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	21 years
Minimum | Lease Years 26- 35
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	26 years
Minimum | Lease Years 36-60
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	36 years
Maximum | Lease Years 1-5
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	5 years
Maximum | Lease Years 6-20
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	20 years
Maximum | Lease Years 21-25
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	25 years
Maximum | Lease Years 26- 35
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	35 years
Maximum | Lease Years 36-60
Management Agreement Future Minimum Payments Due [Line Items]
Lease years	60 years

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Operating Leases Future Payments (Detail) $ in Thousands	Sep. 30, 2015 USD ($)
Operating Leases Future Minimum Payments Due [Line Items]
2015	$ 812
2016	3,087
2017	3,292
2018	3,205
2019	2,885
2020	1,691
Thereafter	10,471
Total	$ 25,443

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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, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Cost	$ 341,278	$ 314,546
Gross Unrealized Gains	3,178	38,207
Gross Unrealized Losses	(32,675)	(7,648)
Fair Value	311,781	345,105
Short-term investments
Schedule of Available-for-sale Securities [Line Items]
Cost	14,455	26,644
Fair Value	14,455	26,644
Fixed maturities
Schedule of Available-for-sale Securities [Line Items]
Cost	24,452	24,824
Gross Unrealized Gains	117	121
Gross Unrealized Losses	(1,381)	(913)
Fair Value	23,188	24,032
Fixed maturities | U.S. Government and federal agency
Schedule of Available-for-sale Securities [Line Items]
Cost	101	100
Gross Unrealized Gains	12	16
Fair Value	113	116
Fixed maturities | U.S. State and local government agency
Schedule of Available-for-sale Securities [Line Items]
Cost	27	78
Gross Unrealized Gains		1
Fair Value	27	79
Fixed maturities | Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost	23,953	24,275
Gross Unrealized Gains	105	104
Gross Unrealized Losses	(1,381)	(913)
Fair Value	22,677	23,466
Fixed maturities | Other debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost	371	371
Fair Value	371	371
Mutual funds - debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost	229,047	128,735
Gross Unrealized Gains	1,572	379
Gross Unrealized Losses	(20,282)	(5,220)
Fair Value	210,337	123,894
Mutual funds - equity securities
Schedule of Available-for-sale Securities [Line Items]
Cost	71,177	103,701
Gross Unrealized Gains	1,082	23,003
Gross Unrealized Losses	(10,965)	(1,268)
Fair Value	61,294	125,436
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Cost	1,927	30,617
Gross Unrealized Gains	407	14,704
Gross Unrealized Losses	(47)	(247)
Fair Value	2,287	45,074
Other invested assets
Schedule of Available-for-sale Securities [Line Items]
Cost	220	25
Fair Value	$ 220	$ 25

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LONG-TERM ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

9 Months Ended

Sep. 30, 2015

LONG-TERM ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

2. LONG-TERM ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

Long-term accounts receivable, net, consists of the following:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Customer receivables	$	203,200		$	194,537
Unearned finance income		(20,125	)		(20,360	)
Allowance for contract cancellations		(23,703	)		(22,138	)
		159,372			152,039
Less: current portion, net of allowance		66,099			62,503
Long-term portion, net of allowance	$	93,273		$	89,536

Activity in the allowance for contract cancellations is as follows:

	For the nine months ended September 30,
	2015			2014
	(in thousands)
Balance - Beginning of period	$	22,138		$	20,275
Provision for cancellations		19,054			17,080
Charge-offs - net		(17,489	)		(13,610	)
Balance - End of period	$	23,703		$	23,745

There have been no changes to the Company’s long-term accounts receivable accounting policies since the filing of the Company’s 2014 Form 10-K.

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Activity Relating to Number of Common Units Outstanding (Detail) - shares					9 Months Ended
	Aug. 14, 2015	Jul. 10, 2015	May. 15, 2015	Feb. 16, 2015	Sep. 30, 2015
Limited Partners' Capital Account [Line Items]
Outstanding, beginning of period					29,203,595
Public offerings		2,415,000			2,415,000
Unit distributions	48,346		49,911	54,622	152,879
Unit-based compensation					7,631
Outstanding, end of period					31,779,105

XML

Contractual Maturities of Debt Securities Held in Merchandise Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Merchandise Trusts - Fixed maturities $ in Thousands	Sep. 30, 2015 USD ($)
Investments Classified by Contractual Maturity Date [Line Items]
Less than 1 year	$ 2,136
1 year through 5 years	13,366
6 years through 10 years	3,450
More than 10 years	2
U.S. State and local government agency
Investments Classified by Contractual Maturity Date [Line Items]
1 year through 5 years	44
6 years through 10 years	45
More than 10 years	2
Corporate debt securities
Investments Classified by Contractual Maturity Date [Line Items]
1 year through 5 years	8,290
6 years through 10 years	3,405
Other debt securities
Investments Classified by Contractual Maturity Date [Line Items]
Less than 1 year	2,136
1 year through 5 years	$ 5,032

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DEFERRED CEMETERY REVENUES, NET (Tables)

9 Months Ended

Sep. 30, 2015

Deferred Cemetery Revenues, Net

At September 30, 2015 and December 31, 2014, deferred cemetery revenues, net, consisted of the following:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Deferred cemetery revenue	$	517,840		$	456,632
Deferred merchandise trust revenue		128,779			104,717
Deferred merchandise trust unrealized gains (losses)		(70,793	)		2,284
Deferred pre-acquisition margin		140,389			140,378
Deferred cost of goods sold		(70,982	)		(60,603	)
Deferred cemetery revenues, net	$	645,233		$	643,408
Deferred selling and obtaining costs	$	108,754		$	97,795

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LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2015

Outstanding Debt

The Company had the following outstanding debt:

	As of
	September 30, 2015		December 31, 2014
	(in thousands)
7.875% Senior Notes, due June 2021	$	175,000	$	175,000
Credit Facility, due December 2019:
Working Capital Draws		75,000		85,902
Acquisition Draws		38,500		25,000
Notes payable - acquisition debt		732		861
Notes payable - acquisition non-competes		1,894		2,765
Insurance and vehicle financing		3,006		1,632
Total		294,132		291,160
Less current portion		3,294		2,251
Less unamortized bond and note payable discounts		3,114		3,531
Long-term portion	$	287,724	$	285,378

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Outstanding Debt (Parenthetical) (Detail)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	May. 28, 2013
Senior Notes | 7.878% notes, due 2021
Debt Instrument [Line Items]
Long-Term Debt, interest rate	7.875%	7.875%	7.875%
Long-Term Debt, maturity date	2021-06	2021-06
Line of Credit | Working Capital Credit Facility, due December 2019
Debt Instrument [Line Items]
Long-Term Debt, maturity date	2019-12	2019-12
Line of Credit | Acquisition Credit Facility, due December 2019
Debt Instrument [Line Items]
Long-Term Debt, maturity date	2019-12	2019-12

XML

Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Merchandise Trusts (Detail) - Variable Interest Entity, Primary Beneficiary - Merchandise Trusts $ in Thousands	Sep. 30, 2015 USD ($) Securities	Dec. 31, 2014 USD ($) Securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 154,850	$ 89,200
Less than 12 months Unrealized Losses	31,530	6,494
12 Months or more Fair Value	251,964	110,694
12 Months or more Unrealized Losses	39,832	8,849
Total Fair Value	406,814	199,894
Total Unrealized Losses	$ 71,362	$ 15,343
Number of Securities in Loss Position | Securities	218	171
Fixed maturities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 6,437	$ 8,418
Less than 12 months Unrealized Losses	254	351
12 Months or more Fair Value	11,015	6,275
12 Months or more Unrealized Losses	635	115
Total Fair Value	17,452	14,693
Total Unrealized Losses	$ 889	$ 466
Number of Securities in Loss Position | Securities	75	74
Fixed maturities | U.S. State and local government agency
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value		$ 143
Less than 12 months Unrealized Losses		1
Total Fair Value		143
Total Unrealized Losses		$ 1
Number of Securities in Loss Position | Securities		3
Fixed maturities | Corporate debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 6,277	$ 5,905
Less than 12 months Unrealized Losses	254	342
12 Months or more Fair Value	4,641	1,506
12 Months or more Unrealized Losses	626	105
Total Fair Value	10,918	7,411
Total Unrealized Losses	$ 880	$ 447
Number of Securities in Loss Position | Securities	64	58
Fixed maturities | Other debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 160	$ 2,370
Less than 12 months Unrealized Losses		8
12 Months or more Fair Value	6,374	4,769
12 Months or more Unrealized Losses	9	10
Total Fair Value	6,534	7,139
Total Unrealized Losses	$ 9	$ 18
Number of Securities in Loss Position | Securities	11	13
Mutual funds - debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 20,308	$ 32,072
Less than 12 months Unrealized Losses	1,896	1,039
12 Months or more Fair Value	208,471	95,629
12 Months or more Unrealized Losses	26,770	7,627
Total Fair Value	228,779	127,701
Total Unrealized Losses	$ 28,666	$ 8,666
Number of Securities in Loss Position | Securities	45	34
Mutual funds - equity securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 105,814	$ 4,147
Less than 12 months Unrealized Losses	24,292	463
12 Months or more Fair Value	12,382
12 Months or more Unrealized Losses	2,719
Total Fair Value	118,196	4,147
Total Unrealized Losses	$ 27,011	$ 463
Number of Securities in Loss Position | Securities	9	2
Equity securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 22,291	$ 44,563
Less than 12 months Unrealized Losses	5,088	4,641
12 Months or more Fair Value	20,096	3,909
12 Months or more Unrealized Losses	9,708	866
Total Fair Value	42,387	48,472
Total Unrealized Losses	$ 14,796	$ 5,507
Number of Securities in Loss Position | Securities	89	60
Other invested assets
Investments, Unrealized Loss Position [Line Items]
12 Months or more Fair Value		$ 4,881
12 Months or more Unrealized Losses		241
Total Fair Value		4,881
Total Unrealized Losses		$ 241
Number of Securities in Loss Position | Securities		1

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2015

Operating Leases Future Payments

The operating leases will result in future payments in the following approximate amounts from September 30, 2015 and beyond:

	(in thousands)
2015	$	812
2016		3,087
2017		3,292
2018		3,205
2019		2,885
2020		1,691
Thereafter		10,471
Total	$	25,443

XML

PARTNERS' CAPITAL (Tables)

9 Months Ended

Sep. 30, 2015

Activity Relating to Number of Common Units Outstanding

The table below reflects the activity relating to the number of common units outstanding for the nine months ended September 30, 2015:

	Nine months ended September 30, 2015
Outstanding, beginning of period		29,203,595
Public offerings		2,415,000
Unit distributions		152,879
Unit-based compensation		7,631
Outstanding, end of period		31,779,105

Compensation Expense Recognized Related to Unit Appreciation Rights and Restricted Phantom Unit Awards

Compensation expense recognized related to unit appreciation rights and restricted phantom unit awards for the three and nine months ended September 30, 2015 and 2014 are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Unit appreciation rights	$	15	$	21	$	55	$	60
Restricted phantom units		262		244		769		742
Total unit-based compensation expense	$	277	$	265	$	824	$	802

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NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2015

NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

StoneMor Partners L.P. (“StoneMor”, the “Company” or the “Partnership”) is a provider of funeral and cemetery products and services in the death care industry in the United States. Through its subsidiaries, StoneMor offers a complete range of funeral merchandise and services, along with cemetery property, merchandise and services, both at the time of need and on a pre-need basis. As of September 30, 2015, the Partnership operated 306 cemeteries in 27 states and Puerto Rico, of which 275 are owned and 31 are operated under lease, management or operating agreements. The Partnership also owned and operated 103 funeral homes in 19 states and Puerto Rico.

Basis of Presentation

The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All interim financial data is unaudited. However, in the opinion of management, the interim financial data as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results of operations to be expected for a full year. The December 31, 2014 condensed consolidated balance sheet data was derived from audited financial statements included in the Company’s 2014 Annual Report on Form 10-K (“2014 Form 10-K”), but does not include all disclosures required by GAAP, which are presented in the Company’s 2014 Form 10-K.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of each of the Company’s subsidiaries. These statements also include the accounts of the merchandise and perpetual care trusts in which the Company has a variable interest and is the primary beneficiary. The Company operates 31 cemeteries under long-term lease, operating or management contracts. The operations of 16 of these managed cemeteries have been consolidated in accordance with the provisions of Accounting Standards Codification (ASC) 810.

The Company operates 15 cemeteries under long-term lease, operating or management agreements that do not qualify as acquisitions for accounting purposes, including 13 cemeteries related to the transaction with the Archdiocese of Philadelphia that closed in the second quarter of 2014. As a result, the Company did not consolidate all of the existing assets and liabilities related to these cemeteries. The Company has consolidated the existing assets and liabilities of these cemeteries’ merchandise and perpetual care trusts as variable interest entities since the Company controls and receives the benefits and absorbs any losses from operating these trusts. Under these long-term lease, operating or management agreements, which are subject to certain termination provisions, the Company is the exclusive operator of these cemeteries. The Company earns revenues related to sales of merchandise, services, and interment rights and incurs expenses related to such sales and the maintenance and upkeep of these cemeteries. Upon termination of these contracts, the Company will retain all of the benefits and related contractual obligations incurred from sales generated during the contract period. The Company has also recognized the existing merchandise liabilities that it assumed as part of these agreements.

New Accounting Pronouncements

In the second quarter of 2014, the Financial Accounting Standards Board issued Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which supersedes the revenue recognition requirements in “Topic 605 - Revenue Recognition” and most industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. During the third quarter of 2015, Update No. 2015-14, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2015-14”) was released, deferring the effective date of the amendments to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted, only as of an annual reporting period beginning after December 15, 2016. The Company is currently in the process of evaluating the potential impact of these updates on its financial statements.

In the first quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-02, “Consolidation (Topic 810)” (“ASU 2015-02”), which amends previous consolidation analysis guidance. ASU 2015-02 requires companies to consider revised consolidation criteria regarding limited partnerships and similar legal entities. The amendments are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early application is permitted. The Company has evaluated the impact of this update, concluding that it will not have an impact on the Company’s financial position, results of operations, or cash flows.

In the second quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which changes the presentation of debt issuance costs. During the third quarter of 2015, Update No. 2015-15, “Interest - Imputation of Interest (Subtopic 835-30) (“ASU 2015-15”) was released clarifying the treatment of debt issuance costs associated with line-of-credit arrangements. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. AUS 2015-15 allows the deferral and presentation of debt issuance costs pertaining to line-of-credit arrangements as an asset. The amendments in the update are effective for annual reporting periods beginning after December 15, 2015, including interim periods within those reporting periods. Early application is permitted. The Company is currently in the process of evaluating the potential impact of these updates on its financial statements.

In the third quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). ASU 2015-16 requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments are effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company is currently in the process of evaluating the potential impact of this update on its financial statements.

Use of Estimates

Preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. As a result, actual results could differ from those estimates. The most significant estimates in the unaudited condensed consolidated financial statements are the valuation of assets in the merchandise trusts and perpetual care trusts, allowance for cancellations, unit-based compensation, merchandise liability, deferred sales revenue, deferred margin, deferred merchandise trust investment earnings, deferred obtaining costs, assets and liabilities obtained via business combinations and income taxes. Deferred sales revenue, deferred margin and deferred merchandise trust investment earnings are included in deferred cemetery revenues, net, on the unaudited condensed consolidated balance sheet.

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ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2015

Fair Values of Net Assets Acquired

The table below reflects the Company’s final assessment of the fair value of net assets acquired and the resulting goodwill from purchase. There was no change to the amounts retrospectively adjusted in the fourth quarter of 2014. The Company acquired goodwill of $2.8 million, $3.3 million and $2.4 million in the Company’s Cemetery Operations—Southeast, Cemetery Operations—Northeast and Funeral Homes operating segments, respectively.

	Final Assessment
	(in thousands)
Assets:
Accounts receivable	$	6,188
Cemetery property		26,029
Property and equipment		15,776
Merchandise trusts, restricted, at fair value		31,534
Perpetual care trusts, restricted, at fair value		16,913
Intangible assets		1,170
Other assets		178
Total assets		97,788
Liabilities:
Deferred margin		13,570
Merchandise liabilities		19,905
Deferred tax liability		2,010
Perpetual care trust corpus		16,913
Other liabilities		63
Total liabilities		52,461
Fair value of net assets acquired		45,327
Consideration paid		53,800
Goodwill from purchase	$	8,473

Fixed Rent for Cemeteries

(the “Up-Front Rent”). Tenant shall also pay to Landlord aggregate fixed rent of $36.0 million (the “Fixed Rent”) for the Cemeteries in the following amounts:

Lease Years 1-5	None
Lease Years 6-20	$1,000,000 per Lease Year
Lease Years 21-25	$1,200,000 per Lease Year
Lease Years 26-35	$1,500,000 per Lease Year
Lease Years 36-60	None

Assets and Liabilities Recognized

The table below reflects the assets and liabilities recognized:

	(in thousands)
Assets:
Accounts receivable	$	1,610
Intangible asset		59,758
Total assets		61,368
Liabilities:
Obligation for lease and management agreements		36,000
Discount on obligation for lease and management agreements		(27,632	)
Obligation for lease and management agreements, net		8,368
Total liabilities		8,368
Total net assets	$	53,000

Consolidated Pro Forma Information

If the transactions noted above had been consummated at the beginning of the comparable prior annual reporting period, on a pro forma basis, for the three and nine months ended September 30, 2015 and 2014, consolidated revenues, consolidated net income (loss), and net income (loss) per limited partner unit (basic and diluted) would have been as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Revenue	$	78,972		$	79,576		$	229,971		$	231,752
Net income (loss)		(4,606	)		(2,770	)		(17,358	)		393
Net income (loss) per limited partner unit (basic and diluted)	$	(.14	)	$	(.09	)	$	(.57	)	$	.01

First Quarter 2014 Acquisition

Fair Values of Net Assets Acquired

The table below reflects the Company’s final assessment of the fair value of net assets acquired and the resulting gain on bargain purchase.

	Final Assessment
	(in thousands)
Assets:
Accounts receivable	$	47
Cemetery property		470
Property and equipment		140
Merchandise trusts, restricted, at fair value		2,607
Perpetual care trusts, restricted, at fair value		691
Total assets		3,955
Liabilities:
Deferred margin		1,035
Merchandise liabilities		956
Deferred tax liability		641
Perpetual care trust corpus		691
Other liabilities		20
Total liabilities		3,343
Fair value of net assets acquired		612
Consideration paid		200
Gain on bargain purchase	$	412

Gloria Weiss Realty LLC

Fair Values of Net Assets Acquired

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting goodwill from purchase. These amounts may be retrospectively adjusted as additional information is received. The acquired goodwill is recorded in the Company’s Funeral Homes operating segment.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	313
Property and equipment		24
Merchandise trusts, restricted, at fair value		1,211
Total assets		1,548
Liabilities:
Deferred margin		200
Merchandise liabilities		1,424
Total liabilities		1,624
Fair value of net assets acquired		(76	)
Consideration paid		900
Goodwill from purchase	$	976

Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd

Fair Values of Net Assets Acquired

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting gain on bargain purchase. These amounts may be retrospectively adjusted as additional information is received.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	62
Cemetery and funeral home property		3,180
Property and equipment		2,317
Merchandise trusts, restricted, at fair value		511
Perpetual care trusts, restricted, at fair value		2,032
Intangible assets		150
Total assets		8,252
Liabilities:
Deferred margin		139
Merchandise liabilities		128
Perpetual care trust corpus		2,032
Total liabilities		2,299
Fair value of net assets acquired		5,953
Consideration paid		5,700
Gain on bargain purchase	$	253

Bronze Stone LLC

Fair Values of Net Assets Acquired

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting gain on bargain purchase. These amounts may be retrospectively adjusted as additional information is received.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	158
Cemetery property		1,355
Property and equipment		400
Merchandise trusts, restricted, at fair value		1,999
Perpetual care trusts, restricted, at fair value		1,541
Intangible assets		33
Total assets		5,486
Liabilities:
Deferred margin		602
Merchandise liabilities		556
Perpetual care trust corpus		1,541
Total liabilities		2,699
Fair value of net assets acquired		2,787
Consideration paid		1,500
Gain on bargain purchase	$	1,287

Vista Funeral Home Inc

Fair Values of Net Assets Acquired

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting goodwill from purchase. These amounts may be retrospectively adjusted as additional information is received. The acquired goodwill is recorded in the Company’s Funeral Homes operating segment.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	1,961
Funeral home property		600
Property and equipment		1,464
Merchandise trusts, restricted, at fair value		8,380
Intangible assets		143
Other assets		56
Total assets		12,604
Liabilities:
Deferred margin		2,275
Merchandise liabilities		8,689
Total liabilities		10,964
Fair value of net assets acquired		1,640
Consideration paid		5,000
Deferred cash consideration		876
Goodwill from purchase	$	4,236

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Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 2.8	$ 2.5	$ 7.5	$ 6.5

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Goodwill Balance During Period and Summary by Reportable Segment (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 58,836
Goodwill acquired from acquisitions	5,212
Goodwill, Ending Balance	64,048	$ 58,836
Cemetery Operations South East
Goodwill [Line Items]
Goodwill, Beginning Balance	8,950
Goodwill acquired from acquisitions		2,800
Goodwill, Ending Balance	8,950	8,950
Cemetery Operations North East
Goodwill [Line Items]
Goodwill, Beginning Balance	3,288
Goodwill acquired from acquisitions		3,300
Goodwill, Ending Balance	3,288	3,288
Cemetery Operations West
Goodwill [Line Items]
Goodwill, Beginning Balance	11,948
Goodwill, Ending Balance	11,948	11,948
Funeral Home
Goodwill [Line Items]
Goodwill, Beginning Balance	34,650
Goodwill acquired from acquisitions	5,212	2,400
Goodwill, Ending Balance	$ 39,862	$ 34,650

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Assets and Liabilities Measured at Fair Value (Detail) - Variable Interest Entity, Primary Beneficiary - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Perpetual care trusts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	$ 311,781	$ 345,105
Perpetual care trusts | Short-term investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	14,455	26,644
Perpetual care trusts | Short-term investments | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	14,455	26,644
Perpetual care trusts | Fixed maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	23,188	24,032
Perpetual care trusts | Fixed maturities | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	113	116
Perpetual care trusts | Fixed maturities | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	23,075	23,916
Perpetual care trusts | Fixed maturities | U.S. Government and federal agency
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	113	116
Perpetual care trusts | Fixed maturities | U.S. Government and federal agency | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	113	116
Perpetual care trusts | Fixed maturities | U.S. State and local government agency
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	27	79
Perpetual care trusts | Fixed maturities | U.S. State and local government agency | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	27	79
Perpetual care trusts | Fixed maturities | Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	22,677	23,466
Perpetual care trusts | Fixed maturities | Corporate debt securities | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	22,677	23,466
Perpetual care trusts | Fixed maturities | Other debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	371	371
Perpetual care trusts | Fixed maturities | Other debt securities | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	371	371
Perpetual care trusts | Mutual funds - debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	210,337	123,894
Perpetual care trusts | Mutual funds - debt securities | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	210,337	123,894
Perpetual care trusts | Mutual funds - equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	61,294	125,436
Perpetual care trusts | Mutual funds - equity securities | real estate sector
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	15,616	41,753
Perpetual care trusts | Mutual funds - equity securities | real estate sector | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	15,616	41,753
Perpetual care trusts | Mutual funds - equity securities | energy sector
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	13,246	14,829
Perpetual care trusts | Mutual funds - equity securities | energy sector | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	13,246	14,829
Perpetual care trusts | Mutual funds - equity securities | Master limited partnerships
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	26,432	43,596
Perpetual care trusts | Mutual funds - equity securities | Master limited partnerships | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	26,432	43,596
Perpetual care trusts | Mutual funds - equity securities | Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	6,000	25,258
Perpetual care trusts | Mutual funds - equity securities | Other | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	6,000	25,258
Perpetual care trusts | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	2,287	45,074
Perpetual care trusts | Equity securities | Master limited partnerships
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	1,268	43,207
Perpetual care trusts | Equity securities | Master limited partnerships | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	1,268	43,207
Perpetual care trusts | Equity securities | Global Equity Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	1,019	1,867
Perpetual care trusts | Equity securities | Global Equity Securities | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	1,019	1,867
Perpetual care trusts | Other invested assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	220	25
Perpetual care trusts | Other invested assets | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	220	25
Perpetual care trusts | Total managed investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	311,781	345,105
Perpetual care trusts | Total managed investments | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	288,486	321,164
Perpetual care trusts | Total managed investments | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	23,295	23,941
Merchandise Trusts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	459,320	484,820
Merchandise Trusts | Short-term investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	27,125	52,521
Merchandise Trusts | Short-term investments | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	27,125	52,521
Merchandise Trusts | Fixed maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	18,954	16,384
Merchandise Trusts | Fixed maturities | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	18,954	16,384
Merchandise Trusts | Fixed maturities | U.S. State and local government agency
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	91	269
Merchandise Trusts | Fixed maturities | U.S. State and local government agency | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	91	269
Merchandise Trusts | Fixed maturities | Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	11,695	8,976
Merchandise Trusts | Fixed maturities | Corporate debt securities | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	11,695	8,976
Merchandise Trusts | Fixed maturities | Other debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	7,168	7,139
Merchandise Trusts | Fixed maturities | Other debt securities | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	7,168	7,139
Merchandise Trusts | Mutual funds - debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	232,239	142,680
Merchandise Trusts | Mutual funds - debt securities | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	232,239	142,680
Merchandise Trusts | Mutual funds - equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	118,258	179,458
Merchandise Trusts | Mutual funds - equity securities | real estate sector
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	17,366	58,672
Merchandise Trusts | Mutual funds - equity securities | real estate sector | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	17,366	58,672
Merchandise Trusts | Mutual funds - equity securities | energy sector
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	8,279	7,733
Merchandise Trusts | Mutual funds - equity securities | energy sector | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	8,279	7,733
Merchandise Trusts | Mutual funds - equity securities | Master limited partnerships
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	13,899	22,927
Merchandise Trusts | Mutual funds - equity securities | Master limited partnerships | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	13,899	22,927
Merchandise Trusts | Mutual funds - equity securities | Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	78,714	90,126
Merchandise Trusts | Mutual funds - equity securities | Other | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	78,714	90,126
Merchandise Trusts | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	45,713	80,299
Merchandise Trusts | Equity securities | Master limited partnerships
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	18,382	50,091
Merchandise Trusts | Equity securities | Master limited partnerships | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	18,382	50,091
Merchandise Trusts | Equity securities | Global Equity Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	27,331	30,208
Merchandise Trusts | Equity securities | Global Equity Securities | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	27,331	30,208
Merchandise Trusts | Other invested assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	7,198	5,159
Merchandise Trusts | Other invested assets | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	7,198	5,159
Merchandise Trusts | Total managed investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	449,487	476,501
Merchandise Trusts | Total managed investments | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	423,335	454,958
Merchandise Trusts | Total managed investments | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	$ 26,152	$ 21,543

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Condensed Consolidated Balance Sheet - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 11,792	$ 10,401
Accounts receivable, net of allowance	66,099	62,503
Prepaid expenses	7,064	4,708
Other current assets	33,448	24,266
Total current assets	118,403	101,878
Long-term accounts receivable, net of allowance	93,273	89,536
Cemetery property	344,662	339,848
Property and equipment, net of accumulated depreciation	102,671	100,391
Merchandise trusts, restricted, at fair value	459,320	484,820
Perpetual care trusts, restricted, at fair value	311,781	345,105
Deferred financing costs, net of accumulated amortization	7,907	9,089
Deferred selling and obtaining costs	108,754	97,795
Deferred tax assets	42	40
Goodwill	64,048	58,836
Intangible assets	67,681	68,990
Other assets	3,158	3,136
Total assets	1,681,700	1,699,464
Current liabilities:
Accounts payable and accrued liabilities	37,448	35,382
Accrued interest	4,868	1,219
Current portion, long-term debt	3,294	2,251
Total current liabilities	45,610	38,852
Other long-term liabilities	2,003	1,292
Obligation for lease and management agreements, net	9,307	8,767
Long-term debt	287,724	285,378
Deferred cemetery revenues, net	645,233	643,408
Deferred tax liabilities	17,815	17,708
Merchandise liability	158,592	150,192
Perpetual care trust corpus	311,781	345,105
Total liabilities	$ 1,478,065	$ 1,490,702
Commitments and contingencies
Partners' capital (deficit)
General partner deficit	$ (8,612)	$ (5,113)
Common partners, 31,779 and 29,204 units outstanding as of September 30, 2015 and December 31, 2014, respectively	212,247	213,875
Total partners' capital	203,635	208,762
Total liabilities and partners' capital	$ 1,681,700	$ 1,699,464

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Reconciliation of Merchandise Trust Activities (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 484,820
Fair Value	459,320
Variable Interest Entity, Primary Beneficiary | Merchandise Trusts
Schedule of Available-for-sale Securities [Line Items]
Fair Value	484,820
Contributions	60,875
Distributions	(34,477)
Interest/ Dividends	13,642
Capital Gain Distributions	(738)
Realized Net Gain/ (Loss)	14,190	[1]
Taxes	(3,441)
Fees	(2,474)
Unrealized Change in Fair Value	(73,077)
Fair Value	$ 459,320

[1] Includes $4.2 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

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Condensed Consolidated Statement of Partners' Capital (Deficit) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Total	Common Unit Holders	General Partner
Balance at Dec. 31, 2014	$ 208,762	$ 213,875	$ (5,113)
Proceeds from public offerings	67,871	67,871
Issuance of common units	4,331	4,331
Compensation related to unit awards	824	824
Net loss	(17,133)	(16,906)	(227)
Cash distributions	(56,689)	(53,417)	(3,272)
Unit distributions	(4,331)	(4,331)
Balance at Sep. 30, 2015	$ 203,635	$ 212,247	$ (8,612)

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Deferred Cemetery Revenues Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Deferred Revenue Arrangement [Line Items]
Deferred merchandise trust unrealized gains (losses)	$ (70,793)	$ 2,284
Deferred cost of goods sold	(70,982)	(60,603)
Deferred cemetery revenues, net	645,233	643,408
Deferred selling and obtaining costs	108,754	97,795
Pre Acquisition Margin
Deferred Revenue Arrangement [Line Items]
Deferred cemetery revenues, net	140,389	140,378
Merchandise Trusts
Deferred Revenue Arrangement [Line Items]
Deferred cemetery revenues, net	128,779	104,717
Cemetery
Deferred Revenue Arrangement [Line Items]
Deferred cemetery revenues, net	$ 517,840	$ 456,632

XML

Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail)	Sep. 30, 2015 Property State
Consolidated Properties | Cemetery property
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of operating locations	16
Cemetery | Unconsolidated Properties
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of operating locations	15
Cemetery | Unconsolidated Properties | Second Quarter 2014 Acquisition
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of operating locations	13
Cemetery | US and Puerto Rico
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of operating locations	306
Number of states | State	27
Cemetery | US and Puerto Rico | Wholly Owned Properties
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of operating locations	275
Cemetery | US and Puerto Rico | Managed Properties
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of operating locations	31
Funeral Home | US and Puerto Rico
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of operating locations	103
Number of states | State	19

XML

Acquisitions - Additional Information (Detail) $ in Thousands								3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2015 USD ($) Property	Aug. 20, 2015 USD ($) Property	Aug. 06, 2015 USD ($) Property	Jul. 21, 2015 USD ($) Property	Jun. 10, 2014 USD ($) Property	May. 28, 2014 USD ($) Property	Jan. 16, 2014 USD ($) Property	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Deferred cash consideration	$ 876
Goodwill acquired										$ 5,212
Aggregate fixed rent payment to landlord								$ 25,443		25,443
Funeral Home
Business Acquisition [Line Items]
Goodwill acquired										5,212		$ 2,400
Cemetery Operations South East
Business Acquisition [Line Items]
Goodwill acquired												2,800
Cemetery Operations North East
Business Acquisition [Line Items]
Goodwill acquired												3,300
Gloria Weiss Realty LLC
Business Acquisition [Line Items]
Consideration paid				$ 900
Gloria Weiss Realty LLC | Cemetery property
Business Acquisition [Line Items]
Number of properties acquired | Property				1
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd
Business Acquisition [Line Items]
Consideration paid			$ 5,700
Intangible asset			$ 150
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Cemetery property
Business Acquisition [Line Items]
Number of properties acquired | Property			1
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Funeral Homes Property
Business Acquisition [Line Items]
Number of properties acquired | Property			3
Bronze Stone LLC
Business Acquisition [Line Items]
Consideration paid		$ 1,500
Intangible asset		$ 33
Bronze Stone LLC | Cemetery property
Business Acquisition [Line Items]
Number of properties acquired | Property		2
First Quarter 2014 Acquisition
Business Acquisition [Line Items]
Consideration paid							$ 200
First Quarter 2014 Acquisition | Cemetery property
Business Acquisition [Line Items]
Number of properties acquired | Property							1
Second Quarter 2014 Acquisition
Business Acquisition [Line Items]
Consideration paid					$ 53,800							53,800
Intangible asset						$ 59,758						1,170
Up-front rental payment to landlord						53,000
Aggregate fixed rent payment to landlord						$ 36,000
Potential repayment of up-front amount if lease is terminated												$ 53,000
Percentage of sales proceeds to landlord from the sale of undeveloped land						51.00%
Present value of fixed rent liability						$ 8,368
Gross fixed rent liability						36,000
Fixed rent, discount						$ 27,632
Effective annual discount rate						8.30%
Second Quarter 2014 Acquisition | Funeral Home
Business Acquisition [Line Items]
Intangible asset					$ 1,200
Second Quarter 2014 Acquisition | Funeral Home | Other Assets
Business Acquisition [Line Items]
Finite lived intangible asset, amortization period					36 years
Second Quarter 2014 Acquisition | If terminated by Tenant due to Landlord's default
Business Acquisition [Line Items]
Amortization period for lease termination												60 years
Second Quarter 2014 Acquisition | If terminated by Landlord due to Tenant's default
Business Acquisition [Line Items]
Amortization period for lease termination												30 years
Second Quarter 2014 Acquisition | Minimum
Business Acquisition [Line Items]
Fixed rent for lease, years deferred						6 years
Second Quarter 2014 Acquisition | Maximum
Business Acquisition [Line Items]
Fixed rent for lease, years deferred						11 years
Second Quarter 2014 Acquisition | Cemetery property
Business Acquisition [Line Items]
Number of properties acquired | Property					12	13
Finite lived intangible asset, amortization period						60 years
Second Quarter 2014 Acquisition | Cemetery property | License Agreement
Business Acquisition [Line Items]
Number of properties acquired | Property						8
Second Quarter 2014 Acquisition | Cemetery property | Management Agreement
Business Acquisition [Line Items]
Number of properties acquired | Property						5
Second Quarter 2014 Acquisition | Funeral Homes Property
Business Acquisition [Line Items]
Number of properties acquired | Property					9
Vista Funeral Home Inc
Business Acquisition [Line Items]
Consideration paid	5,000
Deferred cash consideration	876
Intangible asset	$ 143
Vista Funeral Home Inc | Cemetery property
Business Acquisition [Line Items]
Number of properties acquired | Property	1
Two Thousand Fifteen Acquisitions
Business Acquisition [Line Items]
Property Acquired, revenue contributed								600		600
Property Acquired, operating profit (loss) contributed								200		200
Two Thousand Fourteen Acquisitions
Business Acquisition [Line Items]
Property Acquired, revenue contributed								10,800	$ 8,000	31,600	$ 10,300
Property Acquired, operating profit (loss) contributed								$ 1,800	$ 400	$ 4,800	$ 400

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2015

FAIR VALUE MEASUREMENTS

15. FAIR VALUE MEASUREMENTS

The Fair Value Measurements and Disclosures topic of the ASC defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. This topic also establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy defined by this topic are described below.

Level 1: Quoted market prices available in active markets for identical assets or liabilities. The Company includes short-term investments, consisting primarily of money market funds, U.S. Government debt securities and publicly traded equity securities and mutual funds in its level 1 investments.

Level 2: Quoted prices in active markets for similar assets; quoted prices in non-active markets for identical or similar assets; inputs other than quoted prices that are observable. The Company includes U.S. state and municipal, corporate and other fixed income debt securities in its level 2 investments.

Level 3: Any and all pricing inputs that are generally unobservable and not corroborated by market data.

On the Company’s unaudited condensed consolidated balance sheet, current assets, long-term accounts receivable and current liabilities are recorded at amounts that approximate fair value.

The following table displays the Company’s assets measured at fair value as of September 30, 2015 and December 31, 2014.

As of September 30, 2015
Merchandise Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	27,125	$	—	$	27,125
Fixed maturities:
U.S. state and local government agency		—		91		91
Corporate debt securities		—		11,695		11,695
Other debt securities		—		7,168		7,168
Total fixed maturity investments		—		18,954		18,954
Mutual funds - debt securities		232,239		—		232,239
Mutual funds - equity securities - real estate sector		17,366		—		17,366
Mutual funds - equity securities - energy sector		8,279		—		8,279
Mutual funds - equity securities - MLP’s		13,899		—		13,899
Mutual funds - equity securities - other		78,714		—		78,714
Equity securities:
Master limited partnerships		18,382		—		18,382
Global equity securities		27,331		—		27,331
Other invested assets		—		7,198		7,198
Total	$	423,335	$	26,152	$	449,487
Perpetual Care Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	14,455	$	—	$	14,455
Fixed maturities:
U.S. government and federal agency		113		—		113
U.S. state and local government agency		—		27		27
Corporate debt securities		—		22,677		22,677
Other debt securities		—		371		371
Total fixed maturity investments		113		23,075		23,188
Mutual funds - debt securities		210,337		—		210,337
Mutual funds - equity securities - real estate sector		15,616		—		15,616
Mutual funds - equity securities - energy sector		13,246		—		13,246
Mutual funds - equity securities - MLP’s		26,432		—		26,432
Mutual funds - equity securities - other		6,000		—		6,000
Equity securities:
Master limited partnerships		1,268		—		1,268
Global equity securities		1,019		—		1,019
Other invested assets		—		220		220
Total	$	288,486	$	23,295	$	311,781

As of December 31, 2014
Merchandise Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	52,521	$	—	$	52,521
Fixed maturities:
U.S. state and local government agency		—		269		269
Corporate debt securities		—		8,976		8,976
Other debt securities		—		7,139		7,139
Total fixed maturity investments		—		16,384		16,384
Mutual funds - debt securities		142,680		—		142,680
Mutual funds - equity securities - real estate sector		58,672		—		58,672
Mutual funds - equity securities - energy sector		7,733		—		7,733
Mutual funds - equity securities - MLP’s		22,927		—		22,927
Mutual funds - equity securities - other		90,126		—		90,126
Equity securities:
Master limited partnerships		50,091		—		50,091
Global equity securities		30,208		—		30,208
Other invested assets		—		5,159		5,159
Total	$	454,958	$	21,543	$	476,501
Perpetual Care Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	26,644	$	—	$	26,644
Fixed maturities:
U.S. government and federal agency		116		—		116
U.S. state and local government agency		—		79		79
Corporate debt securities		—		23,466		23,466
Other debt securities		—		371		371
Total fixed maturity investments		116		23,916		24,032
Mutual funds - debt securities		123,894		—		123,894
Mutual funds - equity securities - real estate sector		41,753		—		41,753
Mutual funds - equity securities - energy sector		14,829		—		14,829
Mutual funds - equity securities - MLP’s		43,596		—		43,596
Mutual funds - equity securities - other		25,258		—		25,258
Equity securities:
Master limited partnerships		43,207		—		43,207
Global equity securities		1,867		—		1,867
Other invested assets		—		25		25
Total	$	321,164	$	23,941	$	345,105

Level 1 securities primarily consist of actively publicly traded money market funds, mutual funds and equity securities.

Level 2 securities primarily consist of corporate and other fixed income debt securities. The Company obtains pricing information for these securities from an independent pricing vendor. The pricing vendor uses various pricing models for each asset class that are consistent with what other market participants would use. The inputs and assumptions to the pricing vendor’s model are derived from market observable sources including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. Since many fixed income securities do not trade on a daily basis, the pricing vendor uses available information as applicable such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. Thus, certain securities may not be priced using quoted prices, but rather determined from market observable information. These investments are included in Level 2. The Company reviews the information provided by the pricing vendor on a regular basis. In addition, the pricing vendor has an established process in place for the identification and resolution of potentially erroneous prices.

There were no level 3 assets.

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Long-Term Accounts Receivable Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Customer receivables	$ 203,200	$ 194,537
Unearned finance income	(20,125)	(20,360)
Allowance for contract cancellations	(23,703)	(22,138)
Accounts Receivable, Net, Total	159,372	152,039
Less: current portion, net of allowance	66,099	62,503
Long-term portion, net of allowance	93,273	89,536
Accounts Receivable, Net	$ 159,372	$ 152,039

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LONG-TERM ACCOUNTS RECEIVABLE, NET OF ALLOWANCE (Tables)

9 Months Ended

Sep. 30, 2015

Long-Term Accounts Receivable, Net

Long-term accounts receivable, net, consists of the following:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Customer receivables	$	203,200		$	194,537
Unearned finance income		(20,125	)		(20,360	)
Allowance for contract cancellations		(23,703	)		(22,138	)
		159,372			152,039
Less: current portion, net of allowance		66,099			62,503
Long-term portion, net of allowance	$	93,273		$	89,536

Activity in Allowance for Contract Cancellations

Activity in the allowance for contract cancellations is as follows:

	For the nine months ended September 30,
	2015			2014
	(in thousands)
Balance - Beginning of period	$	22,138		$	20,275
Provision for cancellations		19,054			17,080
Charge-offs - net		(17,489	)		(13,610	)
Balance - End of period	$	23,703		$	23,745

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Asset and Liabilities Recognized (Detail) - Second Quarter 2014 Acquisition - USD ($) $ in Thousands	Dec. 31, 2014	May. 28, 2014
Business Acquisition [Line Items]
Accounts receivable		$ 1,610
Intangible asset	$ 1,170	59,758
Total assets	97,788	61,368
Obligation for lease and management agreements		36,000
Discount on obligation for lease and management agreements		(27,632)
Obligation for lease and management agreements, net		8,368
Total liabilities	52,461	8,368
Total net assets	$ 45,327	$ 53,000

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Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities:
Net loss	$ (17,133)	$ (2,977)
Adjustments to reconcile net loss to net cash provided by operating activities:
Cost of lots sold	7,506	7,181
Depreciation and amortization	9,207	7,993
Unit-based compensation	824	802
Accretion of debt discounts	2,207	2,127
Gain on acquisitions	(1,540)	(412)
Changes in assets and liabilities that provided cash:
Accounts receivable	(6,403)	(2,958)
Allowance for doubtful accounts	1,565	2,647
Merchandise trust fund	(33,403)	(26,547)
Prepaid expenses	(2,356)	(2,913)
Other current assets	(9,128)	(1,019)
Other assets	(67)	(1,397)
Accounts payable and accrued and other liabilities	5,550	7,382
Deferred selling and obtaining costs	(10,959)	(6,855)
Deferred cemetery revenue	60,572	45,475
Deferred taxes (net)	106	(1,254)
Merchandise liability	5,482	(3,793)
Net cash provided by operating activities	12,030	23,238
Investing activities:
Cash paid for cemetery property	(6,022)	(4,692)
Purchase of subsidiaries	(13,100)	(54,000)
Consideration for lease and management agreements		(53,000)
Cash paid for property and equipment	(5,011)	(6,430)
Net cash used in investing activities	(24,133)	(117,825)
Financing activities:
Cash distributions	(56,689)	(45,297)
Additional borrowings on long-term debt	102,323	63,365
Repayments of long-term debt	(99,945)	(86,788)
Proceeds from public offerings	67,871	120,345
Proceeds from issuance of common units		53,237
Cost of financing activities	(66)	(275)
Net cash provided by financing activities	13,494	104,587
Net increase in cash and cash equivalents	1,391	10,000
Cash and cash equivalents - Beginning of period	10,401	12,175
Cash and cash equivalents - End of period	11,792	22,175
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	10,918	10,303
Cash paid during the period for income taxes	4,167	3,536
Non-cash investing and financing activities:
Acquisition of assets by financing	593	251
Acquisition of asset by assumption of directly related liability	$ 876	8,368
Funeral Home
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain on sale of funeral home		(244)
Investing activities:
Proceeds from divestiture of funeral home		$ 297

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Condensed Consolidated Balance Sheet (Parenthetical) - shares shares in Thousands	Sep. 30, 2015	Dec. 31, 2014
Common partners units, outstanding	31,779	29,204

XML

DEFERRED CEMETERY REVENUES, NET

9 Months Ended

Sep. 30, 2015

DEFERRED CEMETERY REVENUES, NET

10. DEFERRED CEMETERY REVENUES, NET

At September 30, 2015 and December 31, 2014, deferred cemetery revenues, net, consisted of the following:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Deferred cemetery revenue	$	517,840		$	456,632
Deferred merchandise trust revenue		128,779			104,717
Deferred merchandise trust unrealized gains (losses)		(70,793	)		2,284
Deferred pre-acquisition margin		140,389			140,378
Deferred cost of goods sold		(70,982	)		(60,603	)
Deferred cemetery revenues, net	$	645,233		$	643,408
Deferred selling and obtaining costs	$	108,754		$	97,795

Deferred selling and obtaining costs are carried as an asset on the unaudited condensed consolidated balance sheet in accordance with the Financial Services – Insurance topic of ASC 944.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 31, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	STON
Entity Registrant Name	STONEMOR PARTNERS LP
Entity Central Index Key	0001286131
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		31,779,105

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2015

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

Legal

During the third quarter of 2015, the Company recorded a charge pertaining to a legal settlement of a Fair Labor Standards Act claim. This $3.0 million amount is recorded under “Legal settlement” on the Consolidated Statement of Operations and consists of a charge for the settlement amount and legal fees related to the case.

The Company is party to 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 effect on the Company’s financial position, results of operations or liquidity.

Leases

At September 30, 2015, the Company was committed to operating lease payments for premises, automobiles and office equipment under various operating leases with initial terms ranging from one to twenty-four years and options to renew at varying terms. Expenses under these operating leases were $0.9 million and $2.4 million for the three and nine months ended September 30, 2015, respectively, and $0.5 million and $1.7 million for the three and nine months ended September 30, 2014, respectively.

On June 5, 2015, the Company entered into a lease agreement for a new corporate office location in Trevose, Pennsylvania. The lease term will commence on February 1, 2016 and will expire on July 31, 2028, with certain contractual renewal options. The Company does not expect this new lease to have a significant impact on its cash flows.

The operating leases will result in future payments in the following approximate amounts from September 30, 2015 and beyond:

	(in thousands)
2015	$	812
2016		3,087
2017		3,292
2018		3,205
2019		2,885
2020		1,691
Thereafter		10,471
Total	$	25,443

Other

See Note 13 of the Company’s 2014 Form 10-K for a discussion of the Company’s future commitments related to its agreements with the Archdiocese of Philadelphia.

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Condensed Consolidated Statement of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Total revenues	$ 78,200	$ 78,174	$ 226,442	$ 214,094
Costs and expenses:
Cemetery expense	18,245	18,076	53,789	47,546
Selling expense	14,647	16,494	44,326	42,544
General and administrative expense	8,819	9,808	27,340	26,333
Corporate overhead	8,152	8,392	26,979	22,394
Depreciation and amortization	3,311	3,112	9,207	7,993
Acquisition related costs, net of recoveries	963	451	1,648	2,040
Total cost and expenses	74,073	75,754	224,414	203,147
Operating profit	4,127	2,420	2,028	10,947
Legal settlement	3,000		3,000
Gain on acquisitions	1,540		1,540	412
Gain on settlement agreement, net				888
Interest expense	5,669	5,268	16,902	15,990
Net loss before income taxes	(3,002)	(2,604)	(16,334)	(3,499)
Income tax expense (benefit)	400	664	799	(522)
Net loss	(3,402)	(3,268)	(17,133)	(2,977)
General partner's interest in net loss for the period	(42)	(44)	(227)	(49)
Limited partners' interest in net loss for the period	$ (3,360)	$ (3,224)	$ (16,906)	$ (2,928)
Net loss per limited partner unit (basic and diluted)	$ (0.11)	$ (0.11)	$ (0.56)	$ (0.11)
Weighted average number of limited partners' units outstanding (basic and diluted)	31,491	29,018	30,011	25,712
Distributions declared per unit	$ 0.650	$ 0.610	$ 1.920	$ 1.810
Cemetery
Revenues:
Merchandise	$ 34,709	$ 37,812	$ 97,688	$ 98,452
Services	14,195	14,971	42,696	37,760
Investment and other	15,054	13,152	43,062	42,418
Costs and expenses:
Perpetual care	1,993	1,898	5,727	5,110
Merchandise	6,735	7,164	19,891	20,106
Cemetery expense	18,245	18,076	53,789	47,546
Funeral Home
Revenues:
Merchandise	6,588	4,752	19,913	14,770
Services	7,654	7,487	23,083	20,694
Costs and expenses:
Perpetual care	5,432	5,522	16,728	15,023
Merchandise	1,002	1,441	5,444	4,691
Other	$ 4,774	3,396	$ 13,335	9,367
Gain on sale of funeral home		$ 244		$ 244

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MERCHANDISE TRUSTS

9 Months Ended

Sep. 30, 2015

MERCHANDISE TRUSTS

5. MERCHANDISE TRUSTS

At September 30, 2015, the Company’s merchandise trusts consisted of the following types of assets:

• Money market funds that invest in low risk short term securities;

• Publicly traded mutual funds that invest in underlying debt securities;

• Publicly traded mutual funds that invest in underlying equity securities;

• Equity investments primarily in securities that are currently paying dividends or distributions. These investments include Master Limited Partnerships and global equity securities;

• Fixed maturity debt securities issued by various corporate entities; and

• Fixed maturity debt securities issued by U.S. states and local government agencies.

• Certain assets related to the July 21, 2015 and August 6, 2015 acquisitions of Gloria Weiss Realty, LLC and Herr Funeral Homes, LTD respectively (see Note 13). According to the terms of the agreement, the seller was required to liquidate the holdings of the related trusts upon closing and forward the proceeds to the Company as soon as practicable. As of September 30, 2015, the Company has not received all of these amounts. Accordingly, a portion of the assets are shown in a single line item in the disclosures below as “Assets acquired via acquisition” and the cost basis and fair value of such assets are based upon preliminary estimates that the Company is required to make in accordance with Accounting Topic 805.

These investments are classified as Available for Sale as defined by the Investments in Debt and Equity topic of the ASC. Accordingly, all of the assets are carried at fair value. All of these investments are considered to be either Level 1 or Level 2 assets as defined by the Fair Value Measurements and Disclosures topic of the ASC. See Note 15 for further details. There were no Level 3 assets.

The merchandise trusts are variable interest entities (VIE) for which the Company is the primary beneficiary. The assets held in the merchandise trusts are required to be used to purchase the merchandise to which they relate. If the value of these assets falls below the cost of purchasing such merchandise, the Company may be required to fund this shortfall.

The Company has included $8.1 million and $8.3 million of investments held in trust by the West Virginia Funeral Directors Association at September 30, 2015 and December 31, 2014, respectively, in its merchandise trust assets. As required by law, the Company deposits a portion of certain funeral merchandise sales in West Virginia into a trust that is held by the West Virginia Funeral Directors Association. These trusts are recorded at their account value, which approximates their fair value.

The cost and market value associated with the assets held in the merchandise trusts at September 30, 2015 and December 31, 2014 were as follows:

As of September 30, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	27,125	$	—	$	—		$	27,125
Fixed maturities:
U.S. State and local government agency		81		10		—			91
Corporate debt securities		12,550		25		(880	)		11,695
Other debt securities		7,177		—		(9	)		7,168
Total fixed maturities		19,808		35		(889	)		18,954
Mutual funds - debt securities		260,872		33		(28,666	)		232,239
Mutual funds - equity securities		145,260		9		(27,011	)		118,258
Equity securities		60,169		340		(14,796	)		45,713
Other invested assets		7,046		152		—			7,198
Total managed investments	$	520,280	$	569	$	(71,362	)	$	449,487
Assets acquired via acquisition		1,722		—		—			1,722
West Virginia Trust Receivable		8,111		—		—			8,111
Total	$	530,113	$	569	$	(71,362	)	$	459,320
As of December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	52,521	$	—	$	—		$	52,521
Fixed maturities:
U.S. State and local government agency		270		—		(1	)		269
Corporate debt securities		9,400		23		(447	)		8,976
Other debt securities		7,157		—		(18	)		7,139
Total fixed maturities		16,827		23		(466	)		16,384
Mutual funds - debt securities		150,477		869		(8,666	)		142,680
Mutual funds - equity securities		167,353		12,568		(463	)		179,458
Equity securities		81,639		4,167		(5,507	)		80,299
Other invested assets		5,400		—		(241	)		5,159
Total managed investments	$	474,217	$	17,627	$	(15,343	)	$	476,501
West Virginia Trust Receivable		8,319		—		—			8,319
Total	$	482,536	$	17,627	$	(15,343	)	$	484,820

The contractual maturities of debt securities as of September 30, 2015 are presented below:

As of September 30, 2015	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
	(in thousands)
U.S. State and local government agency	$	—	$	44	$	45	$	2
Corporate debt securities		—		8,290		3,405		—
Other debt securities		2,136		5,032		—		—
Total fixed maturities	$	2,136	$	13,366	$	3,450	$	2

Temporary Declines in Fair Value

The Company evaluates declines in fair value below cost of each individual asset held in the merchandise trusts on a quarterly basis.

An aging of unrealized losses on the Company’s investments in fixed maturities and equity securities at September 30, 2015 and December 31, 2014 is presented below:

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of September 30, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	6,277	$	254	$	4,641	$	626	$	10,918	$	880		64
Other debt securities		160		—		6,374		9		6,534		9		11
Total fixed maturities		6,437		254		11,015		635		17,452		889		75
Mutual funds - debt securities		20,308		1,896		208,471		26,770		228,779		28,666		45
Mutual funds - equity securities		105,814		24,292		12,382		2,719		118,196		27,011		9
Equity securities		22,291		5,088		20,096		9,708		42,387		14,796		89
Total	$	154,850	$	31,530	$	251,964	$	39,832	$	406,814	$	71,362		218

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of December 31, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
U.S. State and local government agency	$	143	$	1	$	—	$	—	$	143	$	1		3
Corporate debt securities		5,905		342		1,506		105		7,411		447		58
Other debt securities		2,370		8		4,769		10		7,139		18		13
Total fixed maturities		8,418		351		6,275		115		14,693		466		74
Mutual funds - debt securities		32,072		1,039		95,629		7,627		127,701		8,666		34
Mutual funds - equity securities		4,147		463		—		—		4,147		463		2
Equity securities		44,563		4,641		3,909		866		48,472		5,507		60
Other invested assets		—		—		4,881		241		4,881		241		1
Total	$	89,200	$	6,494	$	110,694	$	8,849	$	199,894	$	15,343		171

There were 218 and 171 securities in an unrealized loss position in merchandise trusts as of September 30, 2015 and December 31, 2014, respectively, of which 102 and 39, respectively, were in an unrealized loss position for more than twelve months. For all securities in an unrealized loss position, the Company evaluated the severity of the impairment, the length of time that a security has been in a loss position, and the security’s performance relative to the overall performance for the sector in which the security resides, and has concluded the decline in fair value below the asset’s cost was temporary in nature. In addition, the Company is not aware of any circumstances that would prevent the future market value recovery for these securities.

Other-Than-Temporary Impairment of Trust Assets

During the three months ended September 30, 2015, the Company determined that there were no other than temporary impairments to the investment portfolio in the merchandise trusts. During the nine months ended September 30, 2015, the Company determined that there were two securities with an aggregate cost basis of approximately $0.6 million and an aggregate fair value of approximately $0.4 million, resulting in an impairment of $0.2 million, wherein such impairment was considered to be other-than-temporary. During the nine months ended September 30, 2014, the Company determined that there were two securities with an aggregate cost basis of approximately $0.2 million and an aggregate fair value of approximately $0.1 million, resulting in an impairment of $0.1 million, wherein such impairment was considered to be other-than-temporary. Accordingly, the Company adjusted the cost basis of these assets to their current value and offset this change against deferred revenue. This reduction in deferred revenue will be reflected in earnings in future periods as the underlying merchandise is delivered or the underlying service is performed.

A reconciliation of the Company’s merchandise trust activities for the nine months ended September 30, 2015 is presented below:

Fair Value at 12/31/2014		Contributions		Distributions			Interest/ Dividends		Capital Gain Distributions			Realized Net Gain/ (Loss) (1)		Taxes			Fees			Unrealized Change in Fair Value			Fair Value at 9/30/2015
(in thousands)
$	484,820		60,875		(34,477	)		13,642		(738	)		14,190		(3,441	)		(2,474	)		(73,077	)	$	459,320

(1) Includes $4.2 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

The Company made net contributions into the trusts of approximately $26.4 million during the nine months ended September 30, 2015. During the nine months ended September 30, 2015, purchases and sales of securities available for sale included in trust investments were approximately $508.1 million and $489.6 million, respectively. Contributions include $12.1 million of assets that were acquired through acquisitions during the nine months ended September 30, 2015.

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2015

PROPERTY AND EQUIPMENT

4. PROPERTY AND EQUIPMENT

Major classes of property and equipment follow:

	As of
	September 30, 2015			December 31, 2014
	(in thousands)
Building and improvements	$	114,673		$	108,178
Furniture and equipment		51,947			49,290
		166,620			157,468
Less: accumulated depreciation		(63,949	)		(57,077	)
Property and equipment - net	$	102,671		$	100,391

Depreciation expense was $2.8 million and $7.5 million for the three and nine months ended September 30, 2015, respectively, as compared to $2.5 million and $6.5 million during the same periods last year.

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NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2015

Nature of Operations

Nature of Operations

StoneMor Partners L.P. (“StoneMor”, the “Company” or the “Partnership”) is a provider of funeral and cemetery products and services in the death care industry in the United States. Through its subsidiaries, StoneMor offers a complete range of funeral merchandise and services, along with cemetery property, merchandise and services, both at the time of need and on a pre-need basis. As of September 30, 2015, the Partnership operated 306 cemeteries in 27 states and Puerto Rico, of which 275 are owned and 31 are operated under lease, management or operating agreements. The Partnership also owned and operated 103 funeral homes in 19 states and Puerto Rico.

Basis of Presentation

Basis of Presentation

The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All interim financial data is unaudited. However, in the opinion of management, the interim financial data as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results of operations to be expected for a full year. The December 31, 2014 condensed consolidated balance sheet data was derived from audited financial statements included in the Company’s 2014 Annual Report on Form 10-K (“2014 Form 10-K”), but does not include all disclosures required by GAAP, which are presented in the Company’s 2014 Form 10-K.

Principles of Consolidation

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of each of the Company’s subsidiaries. These statements also include the accounts of the merchandise and perpetual care trusts in which the Company has a variable interest and is the primary beneficiary. The Company operates 31 cemeteries under long-term lease, operating or management contracts. The operations of 16 of these managed cemeteries have been consolidated in accordance with the provisions of Accounting Standards Codification (ASC) 810.

The Company operates 15 cemeteries under long-term lease, operating or management agreements that do not qualify as acquisitions for accounting purposes, including 13 cemeteries related to the transaction with the Archdiocese of Philadelphia that closed in the second quarter of 2014. As a result, the Company did not consolidate all of the existing assets and liabilities related to these cemeteries. The Company has consolidated the existing assets and liabilities of these cemeteries’ merchandise and perpetual care trusts as variable interest entities since the Company controls and receives the benefits and absorbs any losses from operating these trusts. Under these long-term lease, operating or management agreements, which are subject to certain termination provisions, the Company is the exclusive operator of these cemeteries. The Company earns revenues related to sales of merchandise, services, and interment rights and incurs expenses related to such sales and the maintenance and upkeep of these cemeteries. Upon termination of these contracts, the Company will retain all of the benefits and related contractual obligations incurred from sales generated during the contract period. The Company has also recognized the existing merchandise liabilities that it assumed as part of these agreements.

New Accounting Pronouncements

New Accounting Pronouncements

In the second quarter of 2014, the Financial Accounting Standards Board issued Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which supersedes the revenue recognition requirements in “Topic 605 - Revenue Recognition” and most industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. During the third quarter of 2015, Update No. 2015-14, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2015-14”) was released, deferring the effective date of the amendments to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted, only as of an annual reporting period beginning after December 15, 2016. The Company is currently in the process of evaluating the potential impact of these updates on its financial statements.

In the first quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-02, “Consolidation (Topic 810)” (“ASU 2015-02”), which amends previous consolidation analysis guidance. ASU 2015-02 requires companies to consider revised consolidation criteria regarding limited partnerships and similar legal entities. The amendments are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early application is permitted. The Company has evaluated the impact of this update, concluding that it will not have an impact on the Company’s financial position, results of operations, or cash flows.

In the second quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which changes the presentation of debt issuance costs. During the third quarter of 2015, Update No. 2015-15, “Interest - Imputation of Interest (Subtopic 835-30) (“ASU 2015-15”) was released clarifying the treatment of debt issuance costs associated with line-of-credit arrangements. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. AUS 2015-15 allows the deferral and presentation of debt issuance costs pertaining to line-of-credit arrangements as an asset. The amendments in the update are effective for annual reporting periods beginning after December 15, 2015, including interim periods within those reporting periods. Early application is permitted. The Company is currently in the process of evaluating the potential impact of these updates on its financial statements.

In the third quarter of 2015, the Financial Accounting Standards Board issued Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). ASU 2015-16 requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments are effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company is currently in the process of evaluating the potential impact of this update on its financial statements.

Use of Estimates

Use of Estimates

Preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. As a result, actual results could differ from those estimates. The most significant estimates in the unaudited condensed consolidated financial statements are the valuation of assets in the merchandise trusts and perpetual care trusts, allowance for cancellations, unit-based compensation, merchandise liability, deferred sales revenue, deferred margin, deferred merchandise trust investment earnings, deferred obtaining costs, assets and liabilities obtained via business combinations and income taxes. Deferred sales revenue, deferred margin and deferred merchandise trust investment earnings are included in deferred cemetery revenues, net, on the unaudited condensed consolidated balance sheet.

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PARTNERS' CAPITAL

9 Months Ended

Sep. 30, 2015

PARTNERS' CAPITAL

12. PARTNERS’ CAPITAL

The table below reflects the activity relating to the number of common units outstanding for the nine months ended September 30, 2015:

	Nine months ended September 30, 2015
Outstanding, beginning of period		29,203,595
Public offerings		2,415,000
Unit distributions		152,879
Unit-based compensation		7,631
Outstanding, end of period		31,779,105

Unit-Based Compensation

The Company has issued to certain key employees, management, and directors unit-based compensation in the form of unit appreciation rights and restricted phantom partnership units.

Compensation expense recognized related to unit appreciation rights and restricted phantom unit awards for the three and nine months ended September 30, 2015 and 2014 are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Unit appreciation rights	$	15	$	21	$	55	$	60
Restricted phantom units		262		244		769		742
Total unit-based compensation expense	$	277	$	265	$	824	$	802

As of September 30, 2015, there was approximately $0.1 million in non-vested unit appreciation rights expense outstanding. These unit appreciation rights will be expensed through 2018.

The diluted weighted average number of limited partners’ units outstanding presented on the unaudited condensed consolidated statement of operations does not include 192,482 and 187,640 units for the three and nine months ended September 30, 2015, respectively, and 180,959 and 179,929 units for the three and nine months ended September 30, 2014, as their effects would be anti-dilutive.

During the nine months ended September 30, 2015, 7,631 common units were issued under the StoneMor Partners L.P. Long-Term Incentive Plans. See Note 11 of the Company’s 2014 Form 10-K for a description of the Company’s Long-Term Incentive Plan, as amended.

Other Unit Issuances

On July 10, 2015, the Company completed a follow-on public offering of 2,415,000 common units at a public offering price of $29.63 per unit. Net proceeds of the offering, after deducting underwriting discounts and offering expenses, were approximately $67.9 million. The proceeds were used to pay down outstanding indebtedness under our Credit Facility.

Pursuant to a Common Unit Purchase Agreement, dated May 19, 2014, by and between the Company and American Cemeteries Infrastructure Investors, LLC, a Delaware limited liability company (“ACII”), the Company issued 54,622, 49,911 and 48,346 common units to ACII in lieu of cash distributions of approximately $1.4 million, $1.4 million and $1.5 million on February 16, 2015, May 15, 2015 and August 14, 2015, respectively. Refer to the Company’s 2014 Form 10-K, Note 17, for a detailed discussion of the Common Unit Purchase Agreement.

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LONG-TERM DEBT

9 Months Ended

Sep. 30, 2015

LONG-TERM DEBT

8. LONG-TERM DEBT

The Company had the following outstanding debt:

	As of
	September 30, 2015		December 31, 2014
	(in thousands)
7.875% Senior Notes, due June 2021	$	175,000	$	175,000
Credit Facility, due December 2019:
Working Capital Draws		75,000		85,902
Acquisition Draws		38,500		25,000
Notes payable - acquisition debt		732		861
Notes payable - acquisition non-competes		1,894		2,765
Insurance and vehicle financing		3,006		1,632
Total		294,132		291,160
Less current portion		3,294		2,251
Less unamortized bond and note payable discounts		3,114		3,531
Long-term portion	$	287,724	$	285,378

This note includes a summary of material terms of the Company’s senior notes and revolving credit facility. For a more detailed description of the Company’s long-term debt agreements, see the Company’s 2014 Form 10-K.

7.875% Senior Notes due 2021

On May 28, 2013, the Company issued $175.0 million aggregate principal amount of 7.875% Senior Notes due 2021 (the “Senior Notes”). The Company pays 7.875% interest per annum on the principal amount of the Senior Notes, payable in cash semi-annually in arrears on June 1 and December 1 of each year, since December 1, 2013. The net proceeds from the offering were used to retire a $150.0 million aggregate principal amount of 10.25% Senior Notes due 2017 and the remaining proceeds were used for general corporate purposes. The Senior Notes were issued at 97.832% of par resulting in gross proceeds of $171.2 million with an original issue discount of approximately $3.8 million. The Company incurred debt issuance costs and fees of approximately $4.6 million. These costs and fees are deferred and are amortized over the life of the Senior Notes. Based on trades made on September 30, 2015, the Company has estimated the fair value of its Senior Notes to be in excess of par and trading at a premium of 3.0%, which would imply a fair value of $180.3 million at September 30, 2015. The Senior Notes are valued using Level 2 inputs as defined by the Fair Value Measurements and Disclosures topic of the ASC in Note 15. As of September 30, 2015, the Company was in compliance with all applicable covenants of the Senior Notes.

Credit Facility

On December 19, 2014, the Partnership entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”).

The Credit Agreement provides for a single revolving credit facility of $180.0 million (the “Credit Facility”) maturing on December 19, 2019. Additionally the Credit Agreement provides for an uncommitted ability to increase the Credit Facility by an additional $70.0 million. The summary of the material terms of the Credit Agreement is set forth below. Capitalized terms, which are not defined in the following description, shall have the meaning assigned to such terms in the Credit Agreement.

At September 30, 2015, amounts outstanding under the Credit Facility bore interest at rates of approximately 4.1%. The interest rates on the Credit Facility are calculated as follows:

• For Eurodollar Rate Loans, the outstanding principal amount thereof bears interest for each Interest Period at a rate per annum equal to the Eurodollar Rate for the Interest Period plus the Applicable Rate for Eurodollar Rate Loans; and

• For Base Rate Loans and Swing Line Loans, the outstanding principal amount thereof bears interest from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans.

In addition, the Borrowers must pay a Letter of Credit Fee for each Letter of Credit equal to the Applicable Rate for Letter of Credit Fees times the daily amount to be drawn under such Letter of Credit. The Applicable Rate is determined based on the Consolidated Leverage Ratio of the Partnership and its Subsidiaries, and ranges from 2.25% to 4.00% for Eurodollar Rate Loans and Letter of Credit Fees, and 1.25% to 3.00% for Base Rate Loans. The current Applicable Rate for each of: (i) Eurodollar Rate Loans and Letter of Credit Fees is 3.25% and (ii) Base Rate Loans is 2.25% based on the current Consolidated Leverage Ratio. The Credit Agreement also requires the Borrowers to pay a quarterly unused commitment fee, which is calculated based on the amount by which the commitments under the Credit Agreement exceeds the usage of such commitments.

The Credit Agreement contains financial covenants, pursuant to which the Borrowers and the Guarantors will not permit:

• Consolidated EBITDA for any Measurement Period to be less than the sum of (i) $80.0 million plus (ii) 80% of the aggregate of all Consolidated EBITDA for each Permitted Acquisition completed after June 30, 2014;

• the Consolidated Debt Service Coverage Ratio to be less than 2.50 to 1.0 for any Measurement Period; and

• the Consolidated Leverage Ratio to be greater than 4.00 to 1.0 for any period.

The covenants include, among other limitations, limitations on: (i) liens, (ii) the creation or incurrence of debt, (iii) investments and acquisitions, (iv) dispositions of property, (v) dividends, distributions and redemptions, and (vi) transactions with Affiliates.

The Credit Agreement provides that two types of draws are permitted with respect to the Credit Facility: Acquisition Draws and Working Capital Draws. The proceeds of Acquisition Draws may be utilized by the Borrowers to finance Permitted Acquisitions, the purchase and construction of mausoleums and related costs or the net amount of Merchandise Trust deposits made after the Closing Date under the Credit Agreement, irrespective of whether such amounts relate to new or existing cemeteries or funeral homes. The proceeds of Working Capital Draws, Letters of Credit and Swing Line Loans may be utilized by the Borrowers to finance working capital requirements, Capital Expenditures and for other general corporate purposes. The borrowing of Working Capital Advances is subject to a borrowing formula of 85% of Eligible Receivables. This limit was $135.5 million at September 30, 2015.

Each Acquisition Draw is subject to equal quarterly amortization of the principal amount of such draw, with annual principal payments comprised of ten percent (10%) of the related draw amount, commencing on the second anniversary of such draw, with the remaining principal due on the Maturity Date, subject to certain mandatory prepayment requirements. Working Capital Draws are due on the Maturity Date, subject to certain mandatory prepayment requirements.

Effective July 10, 2015, the Company entered into the First Amendment (the “First Amendment”) to the Credit Agreement to allow the Company to apply Net Cash Proceeds received from certain: (i) Dispositions of property by any Credit Party or any of its Subsidiaries, (ii) sales or issuances of Equity Interests by the Company or any of its Subsidiaries and (iii) Extraordinary Receipts received by or paid to or for the account of any Credit Party or any of its Subsidiaries and not otherwise included in clause (i) and (ii) above that are required to be prepaid to the Lenders, to Acquisition Draws or Working Capital Draws, at the Company’s discretion. Prior to the execution of the First Amendment, the Credit Agreement required that the Net Cash Proceeds from the transactions described above be applied to Acquisition Draws before they could be applied to Working Capital Draws.

As of September 30, 2015, there were $113.5 million of outstanding borrowings under the Credit Facility. The Credit Facility approximates fair value as it consists of multiple current LIBOR borrowings with maturities of 90 days or less, with amounts that can be rolled-over or reborrowed at market rates. It is valued using Level 2 inputs. As of September 30, 2015, the Company complied with all applicable financial covenants.

The Company routinely incurs debt financing costs and fees when borrowing under, or making amendments to, the Credit Facility. These costs and fees are deferred and are amortized over the life of the Credit Facility.

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jun. 05, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Leases And Employment Agreements Disclosure [Line Items]
Legal settlement		$ 3,000		$ 3,000
Operating lease expense		$ 900	$ 500	$ 2,400	$ 1,700
Lease commencement date	Feb. 01, 2016
Lease expiration date	Jul. 31, 2028
Minimum
Leases And Employment Agreements Disclosure [Line Items]
Operating lease, initial term				1 year
Maximum
Leases And Employment Agreements Disclosure [Line Items]
Operating lease, initial term				25 years

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PERPETUAL CARE TRUSTS

9 Months Ended

Sep. 30, 2015

PERPETUAL CARE TRUSTS

6. PERPETUAL CARE TRUSTS

At September 30, 2015, the Company’s perpetual care trusts consisted of the following types of assets:

• Money market funds that invest in low risk short term securities;

• Publicly traded mutual funds that invest in underlying debt securities;

• Publicly traded mutual funds that invest in underlying equity securities;

• Equity investments that are currently paying dividends or distributions. These investments include Master Limited Partnerships and global equity securities;

• Fixed maturity debt securities issued by various corporate entities;

• Fixed maturity debt securities issued by the U.S. Government and U.S. Government agencies; and

• Fixed maturity debt securities issued by U.S. states and local government agencies.

All of these investments are classified as Available for Sale as defined by the Investments in Debt and Equity topic of the ASC. Accordingly, all of the assets are carried at fair value. All of these investments are considered to be either Level 1 or Level 2 assets as defined by the Fair Value Measurements and Disclosures topic of the ASC. See Note 15 for further details. There were no Level 3 assets.

The cost and market value associated with the assets held in the perpetual care trusts at September 30, 2015 and December 31, 2014 were as follows:

As of September 30, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	14,455	$	—	$	—		$	14,455
Fixed maturities:
U.S. Government and federal agency		101		12		—			113
U.S. State and local government agency		27		—		—			27
Corporate debt securities		23,953		105		(1,381	)		22,677
Other debt securities		371		—		—			371
Total fixed maturities		24,452		117		(1,381	)		23,188
Mutual funds - debt securities		229,047		1,572		(20,282	)		210,337
Mutual funds - equity securities		71,177		1,082		(10,965	)		61,294
Equity securities		1,927		407		(47	)		2,287
Other invested assets		220		—		—			220
Total	$	341,278	$	3,178	$	(32,675	)	$	311,781
As of December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	26,644	$	—	$	—		$	26,644
Fixed maturities:
U.S. Government and federal agency		100		16		—			116
U.S. State and local government agency		78		1		—			79
Corporate debt securities		24,275		104		(913	)		23,466
Other debt securities		371		—		—			371
Total fixed maturities		24,824		121		(913	)		24,032
Mutual funds - debt securities		128,735		379		(5,220	)		123,894
Mutual funds - equity securities		103,701		23,003		(1,268	)		125,436
Equity securities		30,617		14,704		(247	)		45,074
Other invested assets		25		—		—			25
Total	$	314,546	$	38,207	$	(7,648	)	$	345,105

The contractual maturities of debt securities as of September 30, 2015 were as follows:

As of September 30, 2015	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
	(in thousands)
U.S. Government and federal agency	$	—	$	113	$	—	$	—
U.S. State and local government agency		27		—		—		—
Corporate debt securities		256		15,888		6,515		18
Other debt securities		371		—		—		—
Total fixed maturities	$	654	$	16,001	$	6,515	$	18

Temporary Declines in Fair Value

The Company 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 Company’s investments in fixed maturities and equity securities at September 30, 2015 and December 31, 2014 is presented below:

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of September 30, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	9,916	$	455	$	7,549	$	926	$	17,465	$	1,381		68
Total fixed maturities		9,916		455		7,549		926		17,465		1,381		68
Mutual funds - debt securities		95,075		5,115		112,826		15,167		207,901		20,282		40
Mutual funds - equity securities		43,893		10,965		—		—		43,893		10,965		4
Equity securities		186		30		47		17		233		47		6
Total	$	149,070	$	16,565	$	120,422	$	16,110	$	269,492	$	32,675		118

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of December 31, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	14,434	$	798	$	2,519	$	115	$	16,953	$	913		83
Total fixed maturities		14,434		798		2,519		115		16,953		913		83
Mutual funds - debt securities		30,345		768		86,814		4,452		117,159		5,220		31
Mutual funds - equity securities		13,035		1,268		—		—		13,035		1,268		5
Equity securities		3,866		245		620		2		4,486		247		29
Total	$	61,680	$	3,079	$	89,953	$	4,569	$	151,633	$	7,648		148

There were 118 and 148 securities in an unrealized loss position in perpetual care trusts as of September 30, 2015 and December 31, 2014, respectively, of which 55 and 20, respectively, were in an unrealized loss position for more than twelve months. For all securities in an unrealized loss position, the Company evaluated the severity of the impairment, the length of time that a security has been in a loss position, and the security’s performance relative to the overall performance for the sector in which the security resides, and has concluded the decline in fair value below the asset’s cost was temporary in nature. In addition, the Company is not aware of any circumstances that would prevent the future market value recovery for these securities.

Other-Than-Temporary Impairment of Trust Assets

During the three and nine months ended September 30, 2015 and during the three months ended September 30, 2014, the Company determined that there were no other than temporary impairments to the investment portfolio in the perpetual care trusts. During the nine months ended September 30, 2014, the Company determined that there were 2 securities with an aggregate cost basis of approximately $1.3 million and an aggregate fair value of approximately $0.8 million, resulting in an impairment of $0.5 million, wherein such impairment was considered to be other-than-temporary. Accordingly, the Company adjusted the cost basis of these assets to their current value and offset this change against the liability for perpetual care trust corpus.

A reconciliation of the Company’s perpetual care trust activities for the nine months ended September 30, 2015 is presented below:

Fair Value at 12/31/2014		Contributions		Distributions			Interest/ Dividends		Capital Gain Distributions		Realized Net Gain/ (Loss) (1)		Taxes			Fees			Unrealized Change in Fair Value			Fair Value at 9/30/2015
(in thousands)
$	345,105		12,058		(10,254	)		13,236		41		13,942		(637	)		(1,654	)		(60,056	)	$	311,781

(1) Includes $12.0 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

The Company made net contributions from the trusts of approximately $1.8 million during the nine months ended September 30, 2015. During the nine months, ended September 30, 2015, purchases and sales of securities available for sale included in trust investments were approximately $326.9 million and $320.2 million, respectively. Contributions include $3.6 million of assets that were acquired through acquisitions during the nine months ended September 30, 2015.

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GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2015

GOODWILL AND INTANGIBLE ASSETS

7. GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in acquisitions.

There have been no changes in the goodwill balance during the period and a summary by reportable segment is as follows:

	Cemeteries						Funeral Homes		Total
	Southeast		Northeast		West
	(in thousands)
Balance as of December 31, 2014	$	8,950	$	3,288	$	11,948	$	34,650	$	58,836
Goodwill acquired from acquisitions during 2015		—		—		—		5,212		5,212
Balance as of September 30, 2015	$	8,950	$	3,288	$	11,948	$	39,862	$	64,048

Other Acquired Intangible Assets

The Company has other acquired intangible assets, most of which have been recognized as a result of acquisitions and long-term lease, management and operating agreements. All of the intangible assets are amortized as a component of depreciation and amortization in the unaudited condensed consolidated statement of operations. The major classes of intangible assets are as follows:

	As of September 30, 2015							As of December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Intangible Asset		Gross Carrying Amount		Accumulated Amortization			Net Intangible Asset
	(in thousands)
Amortized intangible assets:
Lease and management agreements	$	59,758	$	(1,328	)	$	58,430	$	59,758	$	(581	)	$	59,177
Underlying contract value		6,239		(975	)		5,264		6,239		(858	)		5,381
Non-compete agreements		5,576		(2,860	)		2,716		5,250		(2,126	)		3,124
Other intangible assets		1,439		(168	)		1,271		1,439		(131	)		1,308
Total intangible assets	$	73,012	$	(5,331	)	$	67,681	$	72,686	$	(3,696	)	$	68,990

See Note 7 of the Company’s 2014 Form 10-K for a discussion of the Company’s intangible assets, including its contract-based intangible asset pertaining to the lease and management agreements with the Archdiocese of Philadelphia.

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INCOME TAXES

9 Months Ended

Sep. 30, 2015

INCOME TAXES

9. INCOME TAXES

As of September 30, 2015, the Company’s taxable corporate subsidiaries had federal net operating loss carryforwards of approximately $223.1 million, which will begin to expire in 2017 and $272.0 million in state net operating loss carryforwards, a portion of which expires annually.

The Partnership is not a taxable entity for federal and state income tax purposes; rather, the Partnership’s tax attributes, except those of its corporate subsidiaries, are to be included in the individual tax returns of its partners. Neither the Partnership’s financial reporting income, nor the cash distributions to unit-holders, can be used as a substitute for the detailed tax calculations that the Partnership must perform annually for its partners. Net income from the Partnership is not treated as “passive income” for federal income tax purposes. As a result, partners subject to the passive activity loss rules are not permitted to offset income from the Partnership with passive losses from other sources.

The Partnership’s corporate subsidiaries account for their income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The provision for income taxes for the nine months ended September 30, 2015 and 2014 is based upon the estimated annual effective tax rates expected to be applicable to the Company for 2015 and 2014, respectively. The Company’s effective tax rate differs from its statutory tax rate primarily because the Company’s legal entity structure includes different tax filing entities, including a significant number of partnerships that are not subject to paying tax.

The Company is not currently under examination by any federal or state jurisdictions. The federal statute of limitations and certain state statutes of limitations are open from 2011 forward. Management believes that the accrual for tax liabilities is adequate for all open years. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. Based on present information, it is the opinion of the Company’s management that there are no pending assessments that will result in a material effect on the Company’s consolidated financial statements over the next twelve months.

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Partners' Capital - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions					3 Months Ended		9 Months Ended
	Aug. 14, 2015	Jul. 10, 2015	May. 15, 2015	Feb. 16, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Limited Partners' Capital Account [Line Items]
Units excluded from the calculation of diluted weighted average number of limited partners' units, because of their anti-dilutive effect					192,482	180,959	187,640	179,929
Common units issued					7,631		7,631
Public offering, common units sold		2,415,000					2,415,000
Public offering, price per unit		$ 29.63
Public offering, net proceeds		$ 67.9
Distribution units issued	48,346		49,911	54,622			152,879
Cash Distributions paid	$ 1.5		$ 1.4	$ 1.4
Unit appreciation rights
Limited Partners' Capital Account [Line Items]
Non-vested unit appreciation rights expense outstanding					$ 0.1		$ 0.1

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Final Assessment of Fair Value of Net Assets Acquired and Resulting Gain on Bargain Purchase of First Quarter Twenty Fourteen (Detail) - USD ($) $ in Thousands							3 Months Ended	9 Months Ended		12 Months Ended
	Aug. 31, 2015	Aug. 20, 2015	Aug. 06, 2015	Jul. 21, 2015	Jun. 10, 2014	Jan. 16, 2014	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	May. 28, 2014
Business Acquisition [Line Items]
Deferred cash consideration	$ 876
Gain on bargain purchase							$ 1,540	$ 1,540	$ 412
Goodwill from purchase							$ 64,048	$ 64,048	$ 57,210	$ 58,836
First Quarter 2014 Acquisition
Business Acquisition [Line Items]
Total assets						$ 3,955
Total liabilities						3,343
Fair value of net assets acquired						612
Consideration paid						200
Gain on bargain purchase						412
First Quarter 2014 Acquisition | Other liabilities
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed						20
First Quarter 2014 Acquisition | Accounts receivable
Business Acquisition [Line Items]
Estimated fair value of assets acquired						47
First Quarter 2014 Acquisition | Perpetual care trusts, restricted, at fair value | Merchandise Trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired						2,607
First Quarter 2014 Acquisition | Perpetual care trusts, restricted, at fair value | Perpetual care trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired						691
First Quarter 2014 Acquisition | Deferred margin
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed						1,035
First Quarter 2014 Acquisition | Merchandise Liabilities Noncurrent
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed						956
First Quarter 2014 Acquisition | Deferred tax liability
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed						641
First Quarter 2014 Acquisition | Perpetual care trust corpus | Perpetual care trusts
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed						691
First Quarter 2014 Acquisition | Property and equipment
Business Acquisition [Line Items]
Estimated fair value of property acquired						140
First Quarter 2014 Acquisition | Cemetery property
Business Acquisition [Line Items]
Estimated fair value of property acquired						$ 470
Second Quarter 2014 Acquisition
Business Acquisition [Line Items]
Estimated fair value of assets acquired										1,170	$ 59,758
Total assets										97,788	61,368
Total liabilities										52,461	8,368
Fair value of net assets acquired										45,327	$ 53,000
Consideration paid					$ 53,800					53,800
Goodwill from purchase										8,473
Second Quarter 2014 Acquisition | Other liabilities
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed										63
Second Quarter 2014 Acquisition | Other Assets
Business Acquisition [Line Items]
Estimated fair value of assets acquired										178
Second Quarter 2014 Acquisition | Accounts receivable
Business Acquisition [Line Items]
Estimated fair value of assets acquired										6,188
Second Quarter 2014 Acquisition | Perpetual care trusts, restricted, at fair value | Merchandise Trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired										31,534
Second Quarter 2014 Acquisition | Perpetual care trusts, restricted, at fair value | Perpetual care trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired										16,913
Second Quarter 2014 Acquisition | Deferred margin
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed										13,570
Second Quarter 2014 Acquisition | Merchandise Liabilities Noncurrent
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed										19,905
Second Quarter 2014 Acquisition | Deferred tax liability
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed										2,010
Second Quarter 2014 Acquisition | Perpetual care trust corpus
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed										16,913
Second Quarter 2014 Acquisition | Property and equipment
Business Acquisition [Line Items]
Estimated fair value of property acquired										15,776
Second Quarter 2014 Acquisition | Cemetery property
Business Acquisition [Line Items]
Estimated fair value of property acquired										$ 26,029
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd
Business Acquisition [Line Items]
Estimated fair value of assets acquired			$ 150
Total assets			8,252
Total liabilities			2,299
Fair value of net assets acquired			5,953
Consideration paid			5,700
Gain on bargain purchase			253
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Accounts receivable
Business Acquisition [Line Items]
Estimated fair value of assets acquired			62
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Perpetual care trusts, restricted, at fair value | Merchandise Trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired			511
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Perpetual care trusts, restricted, at fair value | Perpetual care trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired			2,032
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Deferred margin
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed			139
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Merchandise Liabilities Noncurrent
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed			128
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Perpetual care trust corpus
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed			2,032
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Property and equipment
Business Acquisition [Line Items]
Estimated fair value of property acquired			2,317
Herr Funeral Homes Ltd And Sunset Hill Memorial Estates Ltd | Cemetery And Funeral Home Property
Business Acquisition [Line Items]
Estimated fair value of assets acquired			$ 3,180
Bronze Stone LLC
Business Acquisition [Line Items]
Estimated fair value of assets acquired		$ 33
Total assets		5,486
Total liabilities		2,699
Fair value of net assets acquired		2,787
Consideration paid		1,500
Gain on bargain purchase		1,287
Bronze Stone LLC | Accounts receivable
Business Acquisition [Line Items]
Estimated fair value of assets acquired		158
Bronze Stone LLC | Perpetual care trusts, restricted, at fair value | Merchandise Trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired		1,999
Bronze Stone LLC | Perpetual care trusts, restricted, at fair value | Perpetual care trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired		1,541
Bronze Stone LLC | Deferred margin
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed		602
Bronze Stone LLC | Merchandise Liabilities Noncurrent
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed		556
Bronze Stone LLC | Perpetual care trust corpus | Perpetual care trusts
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed		1,541
Bronze Stone LLC | Property and equipment
Business Acquisition [Line Items]
Estimated fair value of property acquired		400
Bronze Stone LLC | Cemetery property
Business Acquisition [Line Items]
Estimated fair value of property acquired		$ 1,355
Gloria Weiss Realty LLC
Business Acquisition [Line Items]
Total assets				$ 1,548
Total liabilities				1,624
Fair value of net assets acquired				(76)
Consideration paid				900
Goodwill from purchase				976
Gloria Weiss Realty LLC | Accounts receivable
Business Acquisition [Line Items]
Estimated fair value of assets acquired				313
Gloria Weiss Realty LLC | Perpetual care trusts, restricted, at fair value | Merchandise Trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired				1,211
Gloria Weiss Realty LLC | Deferred margin
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed				200
Gloria Weiss Realty LLC | Merchandise Liabilities Noncurrent
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed				1,424
Gloria Weiss Realty LLC | Property and equipment
Business Acquisition [Line Items]
Estimated fair value of property acquired				$ 24
Vista Funeral Home Inc
Business Acquisition [Line Items]
Estimated fair value of assets acquired	143
Total assets	12,604
Total liabilities	10,964
Fair value of net assets acquired	1,640
Consideration paid	5,000
Deferred cash consideration	876
Goodwill from purchase	4,236
Vista Funeral Home Inc | Other Assets
Business Acquisition [Line Items]
Estimated fair value of assets acquired	56
Vista Funeral Home Inc | Accounts receivable
Business Acquisition [Line Items]
Estimated fair value of assets acquired	1,961
Vista Funeral Home Inc | Perpetual care trusts, restricted, at fair value | Merchandise Trusts
Business Acquisition [Line Items]
Estimated fair value of assets acquired	8,380
Vista Funeral Home Inc | Deferred margin
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed	2,275
Vista Funeral Home Inc | Merchandise Liabilities Noncurrent
Business Acquisition [Line Items]
Estimated fair value of liabilities assumed	8,689
Vista Funeral Home Inc | Property and equipment
Business Acquisition [Line Items]
Estimated fair value of property acquired	1,464
Vista Funeral Home Inc | Funeral Homes Property
Business Acquisition [Line Items]
Estimated fair value of property acquired	$ 600

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Compensation Expense Recognized Related to Unit Appreciation Rights and Restricted Phantom Unit Awards (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 277	$ 265	$ 824	$ 802
Unit appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	15	21	55	60
Restricted phantom units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 262	$ 244	$ 769	$ 742

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2015

Assets and Liabilities Measured at Fair Value

The following table displays the Company’s assets measured at fair value as of September 30, 2015 and December 31, 2014.

As of September 30, 2015
Merchandise Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	27,125	$	—	$	27,125
Fixed maturities:
U.S. state and local government agency		—		91		91
Corporate debt securities		—		11,695		11,695
Other debt securities		—		7,168		7,168
Total fixed maturity investments		—		18,954		18,954
Mutual funds - debt securities		232,239		—		232,239
Mutual funds - equity securities - real estate sector		17,366		—		17,366
Mutual funds - equity securities - energy sector		8,279		—		8,279
Mutual funds - equity securities - MLP’s		13,899		—		13,899
Mutual funds - equity securities - other		78,714		—		78,714
Equity securities:
Master limited partnerships		18,382		—		18,382
Global equity securities		27,331		—		27,331
Other invested assets		—		7,198		7,198
Total	$	423,335	$	26,152	$	449,487
Perpetual Care Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	14,455	$	—	$	14,455
Fixed maturities:
U.S. government and federal agency		113		—		113
U.S. state and local government agency		—		27		27
Corporate debt securities		—		22,677		22,677
Other debt securities		—		371		371
Total fixed maturity investments		113		23,075		23,188
Mutual funds - debt securities		210,337		—		210,337
Mutual funds - equity securities - real estate sector		15,616		—		15,616
Mutual funds - equity securities - energy sector		13,246		—		13,246
Mutual funds - equity securities - MLP’s		26,432		—		26,432
Mutual funds - equity securities - other		6,000		—		6,000
Equity securities:
Master limited partnerships		1,268		—		1,268
Global equity securities		1,019		—		1,019
Other invested assets		—		220		220
Total	$	288,486	$	23,295	$	311,781

As of December 31, 2014
Merchandise Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	52,521	$	—	$	52,521
Fixed maturities:
U.S. state and local government agency		—		269		269
Corporate debt securities		—		8,976		8,976
Other debt securities		—		7,139		7,139
Total fixed maturity investments		—		16,384		16,384
Mutual funds - debt securities		142,680		—		142,680
Mutual funds - equity securities - real estate sector		58,672		—		58,672
Mutual funds - equity securities - energy sector		7,733		—		7,733
Mutual funds - equity securities - MLP’s		22,927		—		22,927
Mutual funds - equity securities - other		90,126		—		90,126
Equity securities:
Master limited partnerships		50,091		—		50,091
Global equity securities		30,208		—		30,208
Other invested assets		—		5,159		5,159
Total	$	454,958	$	21,543	$	476,501
Perpetual Care Trust
	Level 1		Level 2		Total
	(in thousands)
Assets
Short-term investments	$	26,644	$	—	$	26,644
Fixed maturities:
U.S. government and federal agency		116		—		116
U.S. state and local government agency		—		79		79
Corporate debt securities		—		23,466		23,466
Other debt securities		—		371		371
Total fixed maturity investments		116		23,916		24,032
Mutual funds - debt securities		123,894		—		123,894
Mutual funds - equity securities - real estate sector		41,753		—		41,753
Mutual funds - equity securities - energy sector		14,829		—		14,829
Mutual funds - equity securities - MLP’s		43,596		—		43,596
Mutual funds - equity securities - other		25,258		—		25,258
Equity securities:
Master limited partnerships		43,207		—		43,207
Global equity securities		1,867		—		1,867
Other invested assets		—		25		25
Total	$	321,164	$	23,941	$	345,105

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Reconciliation of Perpetual Care Trust Activities (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 345,105
Fair Value	311,781
Variable Interest Entity, Primary Beneficiary | Perpetual care trusts
Schedule of Available-for-sale Securities [Line Items]
Fair Value	345,105
Contributions	12,058
Distributions	(10,254)
Interest/ Dividends	13,236
Capital Gain Distributions	41
Realized Net Gain/ (Loss)	13,942	[1]
Taxes	(637)
Fees	(1,654)
Unrealized Change in Fair Value	(60,056)
Fair Value	$ 311,781

[1] Includes $12.0 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2015

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 its 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 September 30, 2015:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	26,264	$	15,475	$	12,628	$	—	$	—		$	(15,622	)	$	38,745
Service and other		9,838		9,249		6,267		—		—			(141	)		25,213
Funeral home		—		—		—		17,077		—			(2,835	)		14,242
Total revenues		36,102		24,724		18,895		17,077		—			(18,598	)		78,200
Costs and expenses
Cost of sales		5,690		3,318		2,324		—		—			(2,604	)		8,728
Cemetery		7,534		6,608		4,103		—		—			—			18,245
Selling		8,471		4,931		3,940		—		692			(3,387	)		14,647
General and administrative		4,629		2,616		1,574		—		—			—			8,819
Corporate overhead		—		—		—		—		8,152			—			8,152
Depreciation and amortization		833		639		461		780		598			—			3,311
Funeral home		—		—		—		11,625		—			(417	)		11,208
Acquisition related costs, net of recoveries		—		—		—		—		963			—			963
Total costs and expenses		27,157		18,112		12,402		12,405		10,405			(6,408	)		74,073
Operating profit (loss)	$	8,945	$	6,612	$	6,493	$	4,672	$	(10,405	)	$	(12,190	)	$	4,127
Total assets	$	622,820	$	419,729	$	427,419	$	185,712	$	26,020		$	—		$	1,681,700
Amortization of cemetery property	$	1,457	$	1,131	$	322	$	—	$	—		$	(697	)	$	2,213
Long lived asset additions	$	2,206	$	502	$	5,871	$	4,388	$	595		$	—		$	13,562
Goodwill	$	8,950	$	3,288	$	11,948	$	39,862	$	—		$	—		$	64,048

As of and for the nine months ended September 30, 2015:

	Cemeteries						Funeral
	Southeast		Northeast		West		Homes		Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	78,128	$	44,024	$	36,809	$	—	$	—		$	(50,567	)	$	108,394
Service and other		34,370		29,438		25,322		—		—			(14,078	)		75,052
Funeral home		—		—		—		50,226		—			(7,230	)		42,996
Total revenues		112,498		73,462		62,131		50,226		—			(71,875	)		226,442
Costs and expenses
Cost of sales		17,332		9,221		7,045		—		—			(7,980	)		25,618
Cemetery		22,518		19,378		11,893		—		—			—			53,789
Selling		26,552		15,368		12,382		—		1,974			(11,950	)		44,326
General and administrative		13,921		7,731		5,688		—		—			—			27,340
Corporate overhead		—		—		—		—		26,979			—			26,979
Depreciation and amortization		2,443		1,883		1,417		2,381		1,083			—			9,207
Funeral home		—		—		—		36,911		—			(1,404	)		35,507
Acquisition related costs, net of recoveries		—		—		—		—		1,648			—			1,648
Total costs and expenses		82,766		53,581		38,425		39,292		31,684			(21,334	)		224,414
Operating profit (loss)	$	29,732	$	19,881	$	23,706	$	10,934	$	(31,684	)	$	(50,541	)	$	2,028
Total assets	$	622,820	$	419,729	$	427,419	$	185,712	$	26,020		$	—		$	1,681,700
Amortization of cemetery property	$	4,059	$	2,385	$	1,062	$	—	$	—		$	(1,366	)	$	6,140
Long lived asset additions	$	6,451	$	2,272	$	6,804	$	4,859	$	780		$	—		$	21,166
Goodwill	$	8,950	$	3,288	$	11,948	$	39,862	$	—		$	—		$	64,048

As of and for the three months ended September 30, 2014:

	Cemeteries						Funeral Homes
	Southeast		Northeast		West				Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	22,653	$	13,228	$	11,512	$	—	$	—		$	(4,719	)	$	42,674
Service and other		10,097		11,040		8,633		—		—			(6,509	)		23,261
Funeral home		—		—		—		14,457		—			(2,218	)		12,239
Total revenues		32,750		24,268		20,145		14,457		—			(13,446	)		78,174
Costs and expenses
Cost of sales		4,828		2,555		2,167		—		—			(488	)		9,062
Cemetery		7,533		6,576		3,967		—		—			—			18,076
Selling		8,173		4,572		4,001		—		631			(883	)		16,494
General and administrative		4,343		2,132		3,333		—		—			—			9,808
Corporate overhead		—		—		—		—		8,392			—			8,392
Depreciation and amortization		800		670		539		867		236			—			3,112
Funeral home		—		—		—		10,674		—			(315	)		10,359
Acquisition related costs, net of recoveries		—		—		—		—		451			—			451
Total costs and expenses		25,677		16,505		14,007		11,541		9,710			(1,686	)		75,754
Operating profit (loss)	$	7,073	$	7,763	$	6,138	$	2,916	$	(9,710	)	$	(11,760	)	$	2,420
Total assets	$	636,192	$	423,434	$	448,732	$	163,762	$	40,677		$	—		$	1,712,797
Amortization of cemetery property	$	1,035	$	341	$	435	$	—	$	—		$	168		$	1,979
Long lived asset additions	$	1,950	$	1,205	$	906	$	203	$	183		$	—		$	4,447
Goodwill	$	8,949	$	3,288	$	11,948	$	33,025	$	—		$	—		$	57,210

As of and for the nine months ended September 30, 2014:

	Cemeteries						Funeral Homes
	Southeast		Northeast		West				Corporate			Adjustment			Total
	(in thousands)
Revenues
Sales	$	69,319	$	31,583	$	35,211	$	—	$	—		$	(26,605	)	$	109,508
Service and other		31,085		29,529		26,768		—		—			(18,260	)		69,122
Funeral home		—		—		—		40,777		—			(5,313	)		35,464
Total revenues		100,404		61,112		61,979		40,777		—			(50,178	)		214,094
Costs and expenses
Cost of sales		15,045		6,576		7,686		—		—			(4,091	)		25,216
Cemetery		21,057		14,499		11,990		—		—			—			47,546
Selling		24,019		11,443		11,462		—		1,480			(5,860	)		42,544
General and administrative		13,053		5,533		7,747		—		—			—			26,333
Corporate overhead		—		—		—		—		22,394			—			22,394
Depreciation and amortization		2,094		1,244		1,593		2,346		716			—			7,993
Funeral home		—		—		—		29,813		—			(732	)		29,081
Acquisition related costs, net of recoveries		—		—		—		—		2,040			—			2,040
Total costs and expenses		75,268		39,295		40,478		32,159		26,630			(10,683	)		203,147
Operating profit (loss)	$	25,136	$	21,817	$	21,501	$	8,618	$	(26,630	)	$	(39,495	)	$	10,947
Total assets	$	636,192	$	423,434	$	448,732	$	163,762	$	40,677		$	—		$	1,712,797
Amortization of cemetery property	$	3,499	$	1,762	$	2,237	$	—	$	—		$	(414	)	$	7,084
Long lived asset additions	$	28,470	$	72,515	$	3,350	$	9,024	$	443		$	—		$	113,802
Goodwill	$	8,949	$	3,288	$	11,948	$	33,025	$	—		$	—		$	57,210

Results of individual operating segments are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to GAAP; therefore, the financial results of individual operating segments are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the operating segments. 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 unaudited condensed 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 unaudited condensed 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 unaudited condensed consolidated financial statements reflect Deferred Cemetery Revenue, Net, and Deferred Selling and Obtaining Costs on the unaudited condensed consolidated balance sheet, whereas the Company’s management accounting practices exclude these items.

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PERPETUAL CARE TRUSTS (Tables) - Variable Interest Entity, Primary Beneficiary

9 Months Ended

Sep. 30, 2015

Merchandise Trusts

Cost and Market Value Associated with Assets Held in Trusts

The cost and market value associated with the assets held in the merchandise trusts at September 30, 2015 and December 31, 2014 were as follows:

As of September 30, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	27,125	$	—	$	—		$	27,125
Fixed maturities:
U.S. State and local government agency		81		10		—			91
Corporate debt securities		12,550		25		(880	)		11,695
Other debt securities		7,177		—		(9	)		7,168
Total fixed maturities		19,808		35		(889	)		18,954
Mutual funds - debt securities		260,872		33		(28,666	)		232,239
Mutual funds - equity securities		145,260		9		(27,011	)		118,258
Equity securities		60,169		340		(14,796	)		45,713
Other invested assets		7,046		152		—			7,198
Total managed investments	$	520,280	$	569	$	(71,362	)	$	449,487
Assets acquired via acquisition		1,722		—		—			1,722
West Virginia Trust Receivable		8,111		—		—			8,111
Total	$	530,113	$	569	$	(71,362	)	$	459,320
As of December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	52,521	$	—	$	—		$	52,521
Fixed maturities:
U.S. State and local government agency		270		—		(1	)		269
Corporate debt securities		9,400		23		(447	)		8,976
Other debt securities		7,157		—		(18	)		7,139
Total fixed maturities		16,827		23		(466	)		16,384
Mutual funds - debt securities		150,477		869		(8,666	)		142,680
Mutual funds - equity securities		167,353		12,568		(463	)		179,458
Equity securities		81,639		4,167		(5,507	)		80,299
Other invested assets		5,400		—		(241	)		5,159
Total managed investments	$	474,217	$	17,627	$	(15,343	)	$	476,501
West Virginia Trust Receivable		8,319		—		—			8,319
Total	$	482,536	$	17,627	$	(15,343	)	$	484,820

Contractual Maturities of Debt Securities Held in Trusts

The contractual maturities of debt securities as of September 30, 2015 are presented below:

As of September 30, 2015	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
	(in thousands)
U.S. State and local government agency	$	—	$	44	$	45	$	2
Corporate debt securities		—		8,290		3,405		—
Other debt securities		2,136		5,032		—		—
Total fixed maturities	$	2,136	$	13,366	$	3,450	$	2

Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Trusts

An aging of unrealized losses on the Company’s investments in fixed maturities and equity securities at September 30, 2015 and December 31, 2014 is presented below:

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of September 30, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	6,277	$	254	$	4,641	$	626	$	10,918	$	880		64
Other debt securities		160		—		6,374		9		6,534		9		11
Total fixed maturities		6,437		254		11,015		635		17,452		889		75
Mutual funds - debt securities		20,308		1,896		208,471		26,770		228,779		28,666		45
Mutual funds - equity securities		105,814		24,292		12,382		2,719		118,196		27,011		9
Equity securities		22,291		5,088		20,096		9,708		42,387		14,796		89
Total	$	154,850	$	31,530	$	251,964	$	39,832	$	406,814	$	71,362		218

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of December 31, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
U.S. State and local government agency	$	143	$	1	$	—	$	—	$	143	$	1		3
Corporate debt securities		5,905		342		1,506		105		7,411		447		58
Other debt securities		2,370		8		4,769		10		7,139		18		13
Total fixed maturities		8,418		351		6,275		115		14,693		466		74
Mutual funds - debt securities		32,072		1,039		95,629		7,627		127,701		8,666		34
Mutual funds - equity securities		4,147		463		—		—		4,147		463		2
Equity securities		44,563		4,641		3,909		866		48,472		5,507		60
Other invested assets		—		—		4,881		241		4,881		241		1
Total	$	89,200	$	6,494	$	110,694	$	8,849	$	199,894	$	15,343		171

Reconciliation of Trust Activities

A reconciliation of the Company’s merchandise trust activities for the nine months ended September 30, 2015 is presented below:

Fair Value at 12/31/2014		Contributions		Distributions			Interest/ Dividends		Capital Gain Distributions			Realized Net Gain/ (Loss) (1)		Taxes			Fees			Unrealized Change in Fair Value			Fair Value at 9/30/2015
(in thousands)
$	484,820		60,875		(34,477	)		13,642		(738	)		14,190		(3,441	)		(2,474	)		(73,077	)	$	459,320

(1) Includes $4.2 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

Perpetual care trusts

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 at September 30, 2015 and December 31, 2014 were as follows:

As of September 30, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	14,455	$	—	$	—		$	14,455
Fixed maturities:
U.S. Government and federal agency		101		12		—			113
U.S. State and local government agency		27		—		—			27
Corporate debt securities		23,953		105		(1,381	)		22,677
Other debt securities		371		—		—			371
Total fixed maturities		24,452		117		(1,381	)		23,188
Mutual funds - debt securities		229,047		1,572		(20,282	)		210,337
Mutual funds - equity securities		71,177		1,082		(10,965	)		61,294
Equity securities		1,927		407		(47	)		2,287
Other invested assets		220		—		—			220
Total	$	341,278	$	3,178	$	(32,675	)	$	311,781
As of December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Short-term investments	$	26,644	$	—	$	—		$	26,644
Fixed maturities:
U.S. Government and federal agency		100		16		—			116
U.S. State and local government agency		78		1		—			79
Corporate debt securities		24,275		104		(913	)		23,466
Other debt securities		371		—		—			371
Total fixed maturities		24,824		121		(913	)		24,032
Mutual funds - debt securities		128,735		379		(5,220	)		123,894
Mutual funds - equity securities		103,701		23,003		(1,268	)		125,436
Equity securities		30,617		14,704		(247	)		45,074
Other invested assets		25		—		—			25
Total	$	314,546	$	38,207	$	(7,648	)	$	345,105

Contractual Maturities of Debt Securities Held in Trusts

The contractual maturities of debt securities as of September 30, 2015 were as follows:

As of September 30, 2015	Less than 1 year		1 year through 5 years		6 years through 10 years		More than 10 years
	(in thousands)
U.S. Government and federal agency	$	—	$	113	$	—	$	—
U.S. State and local government agency		27		—		—		—
Corporate debt securities		256		15,888		6,515		18
Other debt securities		371		—		—		—
Total fixed maturities	$	654	$	16,001	$	6,515	$	18

Aging of Unrealized Losses on Investments in Fixed Maturities and Equity Securities Held in Trusts

An aging of unrealized losses on the Company’s investments in fixed maturities and equity securities at September 30, 2015 and December 31, 2014 is presented below:

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of September 30, 2015	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	9,916	$	455	$	7,549	$	926	$	17,465	$	1,381		68
Total fixed maturities		9,916		455		7,549		926		17,465		1,381		68
Mutual funds - debt securities		95,075		5,115		112,826		15,167		207,901		20,282		40
Mutual funds - equity securities		43,893		10,965		—		—		43,893		10,965		4
Equity securities		186		30		47		17		233		47		6
Total	$	149,070	$	16,565	$	120,422	$	16,110	$	269,492	$	32,675		118

	Less than 12 months				12 Months or more				Total				Number of Securities in Loss Position
As of December 31, 2014	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands, except number of securities data)
Fixed maturities:
Corporate debt securities	$	14,434	$	798	$	2,519	$	115	$	16,953	$	913		83
Total fixed maturities		14,434		798		2,519		115		16,953		913		83
Mutual funds - debt securities		30,345		768		86,814		4,452		117,159		5,220		31
Mutual funds - equity securities		13,035		1,268		—		—		13,035		1,268		5
Equity securities		3,866		245		620		2		4,486		247		29
Total	$	61,680	$	3,079	$	89,953	$	4,569	$	151,633	$	7,648		148

Reconciliation of Trust Activities

A reconciliation of the Company’s perpetual care trust activities for the nine months ended September 30, 2015 is presented below:

Fair Value at 12/31/2014		Contributions		Distributions			Interest/ Dividends		Capital Gain Distributions		Realized Net Gain/ (Loss) (1)		Taxes			Fees			Unrealized Change in Fair Value			Fair Value at 9/30/2015
(in thousands)
$	345,105		12,058		(10,254	)		13,236		41		13,942		(637	)		(1,654	)		(60,056	)	$	311,781

(1) Includes $12.0 million representing the net effect of other-than-temporary impairment charges and the release of previously realized impairment charges, as a result of sales and maturities of impaired securities.

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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 $ in Thousands	Sep. 30, 2015 USD ($) Securities	Dec. 31, 2014 USD ($) Securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 149,070	$ 61,680
Less than 12 months Unrealized Losses	16,565	3,079
12 Months or more Fair Value	120,422	89,953
12 Months or more Unrealized Losses	16,110	4,569
Total Fair Value	269,492	151,633
Total Unrealized Losses	$ 32,675	$ 7,648
Number of Securities in Loss Position | Securities	118	148
Fixed maturities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 9,916	$ 14,434
Less than 12 months Unrealized Losses	455	798
12 Months or more Fair Value	7,549	2,519
12 Months or more Unrealized Losses	926	115
Total Fair Value	17,465	16,953
Total Unrealized Losses	$ 1,381	$ 913
Number of Securities in Loss Position | Securities	68	83
Fixed maturities | Corporate debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 9,916	$ 14,434
Less than 12 months Unrealized Losses	455	798
12 Months or more Fair Value	7,549	2,519
12 Months or more Unrealized Losses	926	115
Total Fair Value	17,465	16,953
Total Unrealized Losses	$ 1,381	$ 913
Number of Securities in Loss Position | Securities	68	83
Mutual funds - debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 95,075	$ 30,345
Less than 12 months Unrealized Losses	5,115	768
12 Months or more Fair Value	112,826	86,814
12 Months or more Unrealized Losses	15,167	4,452
Total Fair Value	207,901	117,159
Total Unrealized Losses	$ 20,282	$ 5,220
Number of Securities in Loss Position | Securities	40	31
Mutual funds - equity securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 43,893	$ 13,035
Less than 12 months Unrealized Losses	10,965	1,268
Total Fair Value	43,893	13,035
Total Unrealized Losses	$ 10,965	$ 1,268
Number of Securities in Loss Position | Securities	4	5
Equity securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 186	$ 3,866
Less than 12 months Unrealized Losses	30	245
12 Months or more Fair Value	47	620
12 Months or more Unrealized Losses	17	2
Total Fair Value	233	4,486
Total Unrealized Losses	$ 47	$ 247
Number of Securities in Loss Position | Securities	6	29

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Merchandise Trusts - Additional Information (Detail) - Variable Interest Entity, Primary Beneficiary - Merchandise Trusts $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($) Property Securities	Sep. 30, 2015 USD ($) Property Securities	Sep. 30, 2014 USD ($) Property	Dec. 31, 2014 USD ($) Securities
Schedule of Available-for-sale Securities [Line Items]
Trust assets, fair value	$ 459,320	$ 459,320		$ 484,820
Number of Securities in Loss Position | Securities	218	218		171
Number of Securities in Loss Position for More than Twelve Months | Securities	102	102		39
Trust assets, cost	$ 530,113	$ 530,113		$ 482,536
Net deposits into the trust		26,400
Purchases of securities available for sale included in trust investments		508,100
Sales of securities available for sale included in trust investments		489,600
Contributions of assets		12,100
Other Than Temporarily Impaired Securities
Schedule of Available-for-sale Securities [Line Items]
Trust assets, fair value	$ 400	$ 400	$ 100
Number of securities resulting impairment | Property	0	2	2
Trust assets, cost	$ 600	$ 600	$ 200
Other than temporary impairments loss		200	$ 100
West Virginia Trust Receivable
Schedule of Available-for-sale Securities [Line Items]
Trust assets, fair value	8,111	8,111		8,319
Trust assets, cost	$ 8,111	$ 8,111		$ 8,319

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Condensed Consolidated Statement of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Corporate overhead, unit-based compensation	$ 277	$ 265	$ 824	$ 802

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CEMETERY PROPERTY

9 Months Ended

Sep. 30, 2015

CEMETERY PROPERTY

3. CEMETERY PROPERTY

Cemetery property consists of the following:

	As of
	September 30, 2015		December 31, 2014
	(in thousands)
Developed land	$	82,048	$	79,058
Undeveloped land		172,610		172,238
Mausoleum crypts and lawn crypts		78,879		78,524
Other land		11,125		10,028
Total	$	344,662	$	339,848

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Income Taxes - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
State and Local Jurisdiction
Income Taxes [Line Items]
Net operating loss carryforwards	$ 272.0
Internal Revenue Service (IRS)
Income Taxes [Line Items]
Net operating loss carryforwards	$ 223.1
Net operating loss carryforwards, expiration date	2017

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Consolidated Pro Forma Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Revenue	$ 78,972	$ 79,576	$ 229,971	$ 231,752
Net income (loss)	$ (4,606)	$ (2,770)	$ (17,358)	$ 393
Net income (loss) per limited partner unit (basic and diluted)	$ (0.14)	$ (0.09)	$ (0.57)	$ 0.01

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GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2015

Goodwill Balance During Period and Summary by Reportable Segment

There have been no changes in the goodwill balance during the period and a summary by reportable segment is as follows:

	Cemeteries						Funeral Homes		Total
	Southeast		Northeast		West
	(in thousands)
Balance as of December 31, 2014	$	8,950	$	3,288	$	11,948	$	34,650	$	58,836
Goodwill acquired from acquisitions during 2015		—		—		—		5,212		5,212
Balance as of September 30, 2015	$	8,950	$	3,288	$	11,948	$	39,862	$	64,048

Major Classes of Intangible Assets

The major classes of intangible assets are as follows:

	As of September 30, 2015							As of December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Intangible Asset		Gross Carrying Amount		Accumulated Amortization			Net Intangible Asset
	(in thousands)
Amortized intangible assets:
Lease and management agreements	$	59,758	$	(1,328	)	$	58,430	$	59,758	$	(581	)	$	59,177
Underlying contract value		6,239		(975	)		5,264		6,239		(858	)		5,381
Non-compete agreements		5,576		(2,860	)		2,716		5,250		(2,126	)		3,124
Other intangible assets		1,439		(168	)		1,271		1,439		(131	)		1,308
Total intangible assets	$	73,012	$	(5,331	)	$	67,681	$	72,686	$	(3,696	)	$	68,990

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Cemetery Property (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Cemetery property	$ 344,662	$ 339,848
Developed land
Property, Plant and Equipment [Line Items]
Cemetery property	82,048	79,058
Undeveloped land
Property, Plant and Equipment [Line Items]
Cemetery property	172,610	172,238
Mausoleum crypts and lawn crypts
Property, Plant and Equipment [Line Items]
Cemetery property	78,879	78,524
Other Land
Property, Plant and Equipment [Line Items]
Cemetery property	$ 11,125	$ 10,028

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ACQUISITIONS

9 Months Ended

Sep. 30, 2015

ACQUISITIONS

13. ACQUISITIONS

Third Quarter 2015 Acquisitions

On July 21, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Gloria Weiss Realty, LLC. (the “Seller”). Pursuant to the Agreement, the Buyer acquired one funeral home in Florida, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $0.9 million in cash.

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting goodwill from purchase. These amounts may be retrospectively adjusted as additional information is received. The acquired goodwill is recorded in the Company’s Funeral Homes operating segment.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	313
Property and equipment		24
Merchandise trusts, restricted, at fair value		1,211
Total assets		1,548
Liabilities:
Deferred margin		200
Merchandise liabilities		1,424
Total liabilities		1,624
Fair value of net assets acquired		(76	)
Consideration paid		900
Goodwill from purchase	$	976

On August 6, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Herr Funeral Homes, LTD and Sunset Hill Memorial Estates, LTD. (the “Sellers”). Pursuant to the Agreement, the Buyer acquired three funeral homes and one cemetery in Illinois, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Sellers $5.7 million in cash.

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting gain on bargain purchase. These amounts may be retrospectively adjusted as additional information is received.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	62
Cemetery and funeral home property		3,180
Property and equipment		2,317
Merchandise trusts, restricted, at fair value		511
Perpetual care trusts, restricted, at fair value		2,032
Intangible assets		150
Total assets		8,252
Liabilities:
Deferred margin		139
Merchandise liabilities		128
Perpetual care trust corpus		2,032
Total liabilities		2,299
Fair value of net assets acquired		5,953
Consideration paid		5,700
Gain on bargain purchase	$	253

On August 20, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Bronze Stone, LLC (the “Seller”). Pursuant to the Agreement, the Buyer acquired two cemeteries in Illinois, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $1.5 million in cash.

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting gain on bargain purchase. These amounts may be retrospectively adjusted as additional information is received.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	158
Cemetery property		1,355
Property and equipment		400
Merchandise trusts, restricted, at fair value		1,999
Perpetual care trusts, restricted, at fair value		1,541
Intangible assets		33
Total assets		5,486
Liabilities:
Deferred margin		602
Merchandise liabilities		556
Perpetual care trust corpus		1,541
Total liabilities		2,699
Fair value of net assets acquired		2,787
Consideration paid		1,500
Gain on bargain purchase	$	1,287

On August 31, 2015, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Vista Funeral Home, Inc. (the “Seller”). Pursuant to the Agreement, the Buyer acquired one funeral home in Florida, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $5.0 million in cash and an additional $1.0 million will be paid in five equal annual installments. The Company has recorded the deferred cash payment as a liability to “Other long-term liabilities” on its balance sheet at its estimated fair value of $0.9 million.

The table below reflects the Company’s preliminary assessment of the fair value of net assets acquired and the resulting goodwill from purchase. These amounts may be retrospectively adjusted as additional information is received. The acquired goodwill is recorded in the Company’s Funeral Homes operating segment.

	Preliminary Assessment
	(in thousands)
Assets:
Accounts receivable	$	1,961
Funeral home property		600
Property and equipment		1,464
Merchandise trusts, restricted, at fair value		8,380
Intangible assets		143
Other assets		56
Total assets		12,604
Liabilities:
Deferred margin		2,275
Merchandise liabilities		8,689
Total liabilities		10,964
Fair value of net assets acquired		1,640
Consideration paid		5,000
Deferred cash consideration		876
Goodwill from purchase	$	4,236

First Quarter 2014 Acquisition

On January 16, 2014, certain subsidiaries of the Company (collectively the “Buyer”) entered into an Asset Purchase and Sale Agreement with Carriage Cemetery Services, Inc. (the “Seller”). Pursuant to the Agreement, the Buyer acquired one cemetery in Florida, including certain related assets, and assumed certain related liabilities. In consideration for the net assets acquired, the Buyer paid the Seller $0.2 million in cash.

The table below reflects the Company’s final assessment of the fair value of net assets acquired and the resulting gain on bargain purchase.

	Final Assessment
	(in thousands)
Assets:
Accounts receivable	$	47
Cemetery property		470
Property and equipment		140
Merchandise trusts, restricted, at fair value		2,607
Perpetual care trusts, restricted, at fair value		691
Total assets		3,955
Liabilities:
Deferred margin		1,035
Merchandise liabilities		956
Deferred tax liability		641
Perpetual care trust corpus		691
Other liabilities		20
Total liabilities		3,343
Fair value of net assets acquired		612
Consideration paid		200
Gain on bargain purchase	$	412

Second Quarter 2014 Acquisition

On June 10, 2014, certain subsidiaries of the Company (collectively the “Buyers”) closed the transaction under the Asset Sale Agreements (the “Agreements”), with certain subsidiaries of Service Corporation International (collectively the “Sellers”) to acquire nine funeral homes, twelve cemeteries and certain related assets in Central Florida, North Carolina, Southeastern Pennsylvania and Virginia. In consideration for the net assets acquired, the Buyers paid the Sellers $53.8 million in cash.

The Company recorded an intangible asset of $1.2 million for a favorable interest in a lease at one of the acquired North Carolina funeral home businesses. This asset will be amortized over the full remaining term of the lease agreement, which is approximately 36 years, with renewals. This asset was previously reported as a component of “Other assets” on the consolidated balance sheet.

The table below reflects the Company’s final assessment of the fair value of net assets acquired and the resulting goodwill from purchase. There was no change to the amounts retrospectively adjusted in the fourth quarter of 2014. The Company acquired goodwill of $2.8 million, $3.3 million and $2.4 million in the Company’s Cemetery Operations—Southeast, Cemetery Operations—Northeast and Funeral Homes operating segments, respectively.

	Final Assessment
	(in thousands)
Assets:
Accounts receivable	$	6,188
Cemetery property		26,029
Property and equipment		15,776
Merchandise trusts, restricted, at fair value		31,534
Perpetual care trusts, restricted, at fair value		16,913
Intangible assets		1,170
Other assets		178
Total assets		97,788
Liabilities:
Deferred margin		13,570
Merchandise liabilities		19,905
Deferred tax liability		2,010
Perpetual care trust corpus		16,913
Other liabilities		63
Total liabilities		52,461
Fair value of net assets acquired		45,327
Consideration paid		53,800
Goodwill from purchase	$	8,473

Agreements with the Archdiocese of Philadelphia

On May 28, 2014, certain subsidiaries of the Company (“Tenant”) and the Archdiocese of Philadelphia, an archdiocese governed by Canon Law of the Roman Catholic Church (“Landlord”) closed a Lease Agreement (the “Lease”) and a Management Agreement (the “Management Agreement”), pursuant to which Tenant will operate 13 cemeteries in Pennsylvania for a term of 60 years. The Company joined the Lease and the Management Agreement as a guarantor of all of Tenant’s obligations under this operating arrangement.

Landlord agreed to lease to Tenant eight cemetery sites in the Philadelphia area. The Lease granted Tenant a sole and exclusive license (the “License”) to maintain and construct improvements in the operation of the cemeteries and to sell burial rights and all related merchandise and services, subject to the terms and conditions of the Lease. The Management Agreement enabled Tenant, subject to certain closing conditions, to serve as the exclusive operator of the remaining five cemeteries. The Lease may be terminated pursuant to the terms of the Lease, including, but not limited to, by notice of termination given by Landlord to Tenant at any time during Lease year 11 (a “Lease Year 11 Termination”) or by either party due to the default or bankruptcy of the other party in accordance with the termination provisions of the Lease. If the Lease is terminated by Landlord or Tenant pursuant to the terms of the Lease, the Management Agreement will also be terminated.

At closing, Tenant paid to Landlord an up-front rental payment of $53.0 million (the “Up-Front Rent”). Tenant shall also pay to Landlord aggregate fixed rent of $36.0 million (the “Fixed Rent”) for the Cemeteries in the following amounts:

Lease Years 1-5	None
Lease Years 6-20	$1,000,000 per Lease Year
Lease Years 21-25	$1,200,000 per Lease Year
Lease Years 26-35	$1,500,000 per Lease Year
Lease Years 36-60	None

The Fixed Rent for Lease Years 6 through 11 (the “Deferred Fixed Rent”) shall be deferred. If Landlord terminates the Lease pursuant to a Lease Year 11 Termination or Tenant terminates the Lease as a result of a Landlord’s default prior to the end of Lease Year 11 (collectively, a “Covered Termination”), the Deferred Fixed Rent shall be forfeited by Landlord and shall be retained by Tenant. If the Lease is not terminated by a Covered Termination, the Deferred Fixed Rent shall become due and payable 30 days after the end of Lease Year 11.

If Landlord terminates the Lease pursuant to a Lease Year 11 Termination, Landlord must repay to Tenant all $53.0 million of the Up-Front Rent. If the Lease is terminated for cause at any time, Landlord must repay to Tenant the unamortized portion of the Up-Front Rent: (i) based on a 60 year amortization schedule if terminated by Tenant due to Landlord’s default and (ii) based on a 30 year amortization schedule if terminated by Landlord due to Tenant’s default.

Generally, 51% of gross revenues from any source received by Tenant on account of the Cemeteries but unrelated to customary operations of the Cemeteries less Tenant’s and Landlord’s reasonable costs and expenses applicable to such unrelated activity shall be paid to Landlord as additional rent. In addition, Tenant shall have the right to request from time to time that Landlord sell (to a party that is independent and not an affiliate of StoneMor or any party that is a Tenant) all or portions of undeveloped land at the leased Cemeteries. If Landlord approves the sale of such undeveloped land, Tenant shall pay to Landlord, as additional rent, 51% of the net proceeds of any such sale.

The table below reflects the assets and liabilities recognized:

	(in thousands)
Assets:
Accounts receivable	$	1,610
Intangible asset		59,758
Total assets		61,368
Liabilities:
Obligation for lease and management agreements		36,000
Discount on obligation for lease and management agreements		(27,632	)
Obligation for lease and management agreements, net		8,368
Total liabilities		8,368
Total net assets	$	53,000

The Company recorded the underlying value of the Lease and Management Agreements as a contract-based intangible asset at the present value of the consideration, less the fair value of net assets received, consisting of acquired accounts receivable. A liability of $8.4 million was also recorded for the present value of the Fixed Rent, which is equal to the $36.0 million gross amount due to the Archdiocese of Philadelphia in the future, net of a discount $27.6 million. The discounted values were determined using an effective annual rate of 8.3%, which represents an estimate of the return an investor would require to make this type of investment in the Company over the rent payment period.

If the transactions noted above had been consummated at the beginning of the comparable prior annual reporting period, on a pro forma basis, for the three and nine months ended September 30, 2015 and 2014, consolidated revenues, consolidated net income (loss), and net income (loss) per limited partner unit (basic and diluted) would have been as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Revenue	$	78,972		$	79,576		$	229,971		$	231,752
Net income (loss)		(4,606	)		(2,770	)		(17,358	)		393
Net income (loss) per limited partner unit (basic and diluted)	$	(.14	)	$	(.09	)	$	(.57	)	$	.01

These pro forma results are unaudited, have been prepared for comparative purposes only, and may include certain adjustments such as increased interest on the acquisition of debt, changes in the timing of financing events and the recognition of gains on acquisitions. They do not purport to be indicative of the results of operations which actually would have resulted had these transactions been in effect at the beginning of the comparable prior annual reporting period or of future results of operations of the location.

The properties acquired in 2015 have contributed $0.6 million of revenue and $0.2 million of operating profit for the three and nine months ended September 30, 2015, respectively. The properties above that were acquired in 2014 contributed $10.8 million and $31.6 million of revenue, for the three and nine months ended September 30, 2015, respectively, and $1.8 million and $4.8 million of operating profit for the three and nine months ended September 30, 2015. The properties contributed $8.0 million and $10.3 million of revenue, for the three and nine months ended September 30, 2014, respectively, and $0.4 million of operating profit for both the three and nine months ended September 30, 2014.

Other 2014 Acquisitions

See Note 13 of the Company’s 2014 Form 10-K for a discussion of the Company’s other 2014 acquisitions. There have been no changes during the period to assessments of the fair value of net assets acquired in the other 2014 acquisitions. Those amounts may be retrospectively adjusted as additional information is received.