3. ACQUISITIONS

2016 Acquisition

During the second quarter of 2016, the Partnership acquired related assets, net of certain assumed liabilities of three direct service cremation businesses for $1.5 million. The Partnership accounted for this transaction under the acquisition method of accounting. Accordingly, the Partnership evaluated the identifiable assets acquired and liabilities assumed at the acquisition date fair values. All other costs incurred associated with the acquisition of the assets noted were expensed as incurred. The following table presents the Partnership’s values assigned to the assets acquired and liabilities assumed in the acquisition, based on their estimated fair values at the date of the acquisition, which may be prospectively adjusted as additional information is received (in thousands):


Assets:
Accounts receivable	$	22
Cemetery and funeral home property		90
Property and equipment		220
Merchandise trusts, restricted		290
Other assets		13

Total assets		635

Liabilities:
Deferred revenues		193

Total liabilities		193

Fair value of net assets acquired		442

Consideration paid - cash		1,500

Total consideration paid		1,500

Goodwill from purchase	$	1,058

The Partnership recorded goodwill of $1.1 million in the Funeral Home reporting unit for the properties acquired in 2016.

2015 Acquisitions

During the year ended December 31, 2015, the Partnership acquired the following properties and related assets, net of certain assumed liabilities:

•

One funeral home for cash consideration of $0.9 million on July 21, 2015;

•

Three funeral homes and one cemetery for cash consideration of $5.7 million on August 6, 2015;

•

Two cemeteries for cash consideration of $1.5 million on August 20, 2015;

•

One funeral home for cash consideration of $5.0 million on August 31, 2015, and an additional $1.0 million paid in five annual installments beginning on the 1^st anniversary of the closing date; and

•

One cemetery and two funeral homes for cash consideration of $5.7 million on December 1, 2015.

The Partnership accounted for these transactions under the acquisition method of accounting. Accordingly, the Partnership evaluated the identifiable assets acquired and liabilities assumed at their respective acquisition date fair values. All other costs incurred associated with the acquisition of the assets noted were expensed as incurred. The following table presents the Partnership’s values assigned to the assets acquired and liabilities assumed in the acquisitions, based on their estimated and revised fair values, as applicable, which may be prospectively adjusted as additional information is received (in thousands):


Assets:
Accounts receivable	$	2,641
Cemetery property		5,249
Property and equipment		7,710
Inventory		53
Merchandise trusts, restricted		15,075
Perpetual care trusts, restricted		4,134
Intangible assets		406

Total assets		35,268

Liabilities:
Deferred revenues		21,349
Perpetual care trust corpus		4,134
Other liabilities		21

Total liabilities		25,504

Fair value of net assets acquired		9,764

Consideration paid – cash		18,800
Deferred cash consideration		876

Total consideration paid		19,676

Gain on bargain purchase	$	766

Goodwill from purchase	$	10,678

Certain provisional amounts pertaining to the 2015 acquisitions were adjusted in the second quarter of 2016 as the Company obtained additional information related to two of the acquisitions. The changes resulted in an adjustment to the gain on acquisition recognized during the year ended December 31, 2015, reducing the gain by $0.8 million via a loss recognized in the current period in accordance with GAAP. The amounts shown may be adjusted as additional information is received. The Partnership recorded goodwill of $1.1 million and $9.6 million in the Cemetery and Funeral Home reporting units, respectively, with regard to the properties acquired during the year ended December 31, 2015.

The following data presents pro forma revenues, net income (loss) and basic and diluted net income (loss) per unit for the Partnership as if the acquisitions consummated during the six months ended June 30, 2016 and the year ended December 31, 2015 had occurred as of January 1, 2015. The Partnership prepared these pro forma unaudited financial results for comparative purposes only. The results may not be indicative of the results that would have occurred if the acquisitions consummated during the six months ended June 30, 2016 and 2015 had occurred as of January 1, 2015 or the results that will be attained in future periods (in thousands, except per unit data):


	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Revenue	$	78,282		$	86,426		$	155,324		$	158,832
Net loss		(8,651	)		(4,516	)		(16,107	)		(12,898	)
Net loss per limited partner unit (basic and diluted)	$	(0.28	)	$	(0.18	)	$	(0.54	)	$	(0.50	)

The properties acquired in 2016 have contributed $0.1 million of revenue and less than $0.1 million of operating profit for the three and six months ended June 30, 2016, respectively. The properties acquired in 2015 have contributed $4.8 million and $2.4 million of revenue and $0.8 million and $0.4 million of operating profit for the three and six months ended June 30, 2016 respectively.