SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

15. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Partnership’s Senior Secured Notes are guaranteed by the Partnership’s 100% owned subsidiaries, other than the co-issuer, as described in Note 8 Long-Term Debt. The guarantees are full, unconditional, joint and several. The Partnership, or the "Parent," and its 100% owned subsidiary, Cornerstone Family Services of West Virginia Subsidiary Inc., are the co-issuers of the Senior Secured Notes. The Partnership’s unaudited condensed consolidated financial statements as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and 2018 include the accounts of cemeteries operated under long-term leases, operating agreements and management agreements. For the purposes of this note, these entities are deemed non-guarantor subsidiaries, as they are not 100% owned by the Partnership. The Partnership’s unaudited condensed consolidated financial statements also contain merchandise and perpetual care trusts that are also non-guarantor subsidiaries for the purposes of this note.

The financial information presented below reflects the Partnership’s standalone accounts, the combined accounts of the subsidiary co-issuer, the combined accounts of the guarantor subsidiaries, the combined accounts of the non-guarantor subsidiaries, the consolidating adjustments and eliminations and the Partnership’s consolidated accounts as of September 30, 2019 and December 31, 2018 and for the three and nine months ended September 30, 2019 and 2018. For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their respective subsidiaries are presented in accordance with the equity method of accounting (in thousands):

CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)

September 30, 2019	Parent			Subsidiary Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents, excluding restricted cash	$	—		$	—		$	42,066	$	1,449		$	—		$	43,515
Restricted cash		—			—			20,580		—			—			20,580
Other current assets		—			3,470			69,812		11,966			—			85,248
Total current assets		—			3,470			132,458		13,415			—			149,343
Long-term accounts receivable		—			2,906			64,918		10,314			—			78,138
Cemetery and funeral home property and    equipment		—			696			404,948		31,960			—			437,604
Merchandise trusts		—			—			—		519,529			—			519,529
Perpetual care trusts		—			—			—		343,028			—			343,028
Deferred selling and obtaining costs		—			5,580			90,236		17,785			—			113,601
Intangible assets		—			—			187		56,375			—			56,562
Other assets		—			—			29,939		2,779			—			32,718
Investments in and amounts due from affiliates    eliminated upon consolidation		—			—			649,920		—			(649,920	)		—
Total assets	$	—		$	12,652		$	1,372,606	$	995,185		$	(649,920	)	$	1,730,523
Liabilities, Redeemable Convertible Preferred Units and Partners’ Capital (Deficit)
Current liabilities		—			150			63,418		1,520			—			65,088
Long-term debt, net of deferred financing costs		—			—			362,173		—			—			362,173
Deferred revenues		—			32,926			797,538		113,091			—			943,555
Perpetual care trust corpus		—			—			—		343,028			—			343,028
Other long-term liabilities		—			—			46,820		16,384			—			63,204
Investments in and amounts due to affiliates    eliminated upon consolidation		46,525			259,737			—		570,954			(877,216	)		—
Total liabilities		46,525			292,813			1,269,949		1,044,977			(877,216	)		1,777,048
Redeemable convertible preferred units		57,500			—			—		—			—			57,500
Partners’ capital (deficit)		(104,025	)		(280,161	)		102,657		(49,792	)		227,296			(104,025	)
Total liabilities, redeemable convertible preferred units and partners’ capital  (deficit)	$	—		$	12,652		$	1,372,606	$	995,185		$	(649,920	)	$	1,730,523

CONSOLIDATING BALANCE SHEET

December 31, 2018	Parent			Subsidiary Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents, excluding restricted cash	$	—		$	—		$	16,298	$	1,849		$	—		$	18,147
Restricted cash		—			—			—		—			—			—
Other current assets		—			3,718			64,924		11,527			—			80,169
Total current assets		—			3,718			81,222		13,376			—			98,316
Long-term accounts receivable		—			3,118			71,708		12,322			—			87,148
Cemetery and funeral home property and    equipment		—			806			409,201		33,550			—			443,557
Merchandise trusts		—			—			—		488,248			—			488,248
Perpetual care trusts		—			—			—		330,562			—			330,562
Deferred selling and obtaining costs		—			5,511			88,705		18,444			—			112,660
Goodwill and intangible assets		—			—			25,676		60,607			—			86,283
Other assets		—			—			19,403		2,924			—			22,327
Investments in and amounts due from affiliates    eliminated upon consolidation		61,875			(586	)		539,997		—			(601,286	)		—
Total assets	$	61,875		$	12,567		$	1,235,912	$	960,033		$	(601,286	)	$	1,669,101
Liabilities, Redeemable Convertible Preferred Units and Partners’ Capital (Deficit)
Current liabilities	$	—		$	184		$	60,216	$	1,400		$	—		$	61,800
Long-term debt, net of deferred financing costs		68,453			105,160			146,635		—			—			320,248
Deferred revenues		—			32,147			770,337		111,802			—			914,286
Perpetual care trust corpus		—			—			—		330,562			—			330,562
Other long-term liabilities		—			—			33,553		15,230			—			48,783
Due to affiliates		—			—			173,613		543,543			(717,156	)		—
Total liabilities		68,453			137,491			1,184,354		1,002,537			(717,156	)		1,675,679
Redeemable convertible preferred units		—			—			—		—			—			—
Partners’ capital (deficit)		(6,578	)		(124,924	)		51,556		(42,502	)		115,870			(6,578	)
Total liabilities, redeemable convertible preferred units and partners’ capital  (deficit)	$	61,875		$	12,567		$	1,235,910	$	960,035		$	(601,286	)	$	1,669,101

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended September 30, 2019	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues	$	—		$	1,257		$	61,520		$	12,154		$	(1,780	)	$	73,151
Total costs and expenses		—			(3,336	)		(64,596	)		(13,440	)		1,780			(79,592	)
Other loss		—			—			(129	)		—			—			(129	)
Net loss from equity investment in    subsidiaries		(42,652	)		(33,050	)		—		.				75,702			—
Interest expense		—			—			(12,486	)		(279	)		—			(12,765	)
Loss on debt extinguishment		—			—			—			—			—			—
Loss on impairment of goodwill		—			—			(24,206	)		(656	)		—			(24,862	)
Income (loss) from continuing operations    before income taxes		(42,652	)		(35,129	)		(39,897	)		(2,221	)		75,702			(44,197	)
Income tax benefit		—			—			1,545			—			—			1,545
Net income (loss)	$	(42,652	)	$	(35,129	)	$	(38,352	)	$	(2,221	)	$	75,702		$	(42,652	)
Three Months Ended September 30, 2018	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues	$	—		$	1,513		$	61,254		$	12,116		$	(1,698	)		73,185
Total costs and expenses		—			(3,192	)		(68,979	)		(12,728	)		1,698			(83,201	)
Other income		—			—			702			—			—			702
Net loss from equity investment in    subsidiaries		(15,867	)		(13,280	)		—			—			29,147			—
Interest expense		(1,358	)		(2,087	)		(3,935	)		(258	)					(7,638	)
Income (loss) from continuing operations    before income taxes		(17,225	)		(17,046	)		(10,958	)		(870	)		29,147			(16,952	)
Income tax expense		—			—			(273	)		—			—			(273	)
Net income (loss)	$	(17,225	)	$	(17,046	)	$	(11,231	)	$	(870	)	$	29,147		$	(17,225	)

Nine Months Ended September 30, 2019	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues	$	—		$	4,260		$	187,021		$	36,354		$	(4,520	)	$	223,115
Total costs and expenses		—			(11,894	)		(197,511	)		(40,793	)		4,520			(245,678	)
Other loss		—			—			(1,475	)		(2,083	)		—			(3,558	)
Net loss from equity investment in    subsidiaries		(94,405	)		(74,333	)		—			—			168,738			—
Interest expense		(4,241	)		(5,909	)		(24,311	)		(821	)		—			(35,282	)
Loss on debt extinguishment		(938	)		(1,441	)		(6,099	)		—			—			(8,478	)
Loss on impairment of goodwill		—			—			(24,206	)		(656	)		—			(24,862	)
Income (loss) from continuing operations    before income taxes		(99,584	)		(89,317	)		(66,581	)		(7,999	)		168,738			(94,743	)
Income tax expense		—			—			(4,841	)		—			—			(4,841	)
Net income (loss)	$	(99,584	)	$	(89,317	)	$	(71,422	)	$	(7,999	)	$	168,738		$	(99,584	)
Nine Months Ended September 30, 2018	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues	$	—		$	4,563		$	196,638		$	38,390		$	(6,890	)	$	232,701
Total costs and expenses		—			(10,278	)		(214,804	)		(41,289	)		6,890			(259,481	)
Other loss		—			—			(4,503	)		—			—			(4,503	)
Net loss from equity investment in    subsidiaries		(48,090	)		(40,382	)		—			—			88,472			—
Interest expense		(4,075	)		(6,261	)		(11,755	)		(767	)		—			(22,858	)
Income (loss) from continuing operations    before income taxes		(52,165	)		(52,358	)		(34,424	)		(3,666	)		88,472			(54,141	)
Income tax benefit		—			—			1,976			—			—			1,976
Net income (loss)	$	(52,165	)	$	(52,358	)	$	(32,448	)	$	(3,666	)	$	88,472		$	(52,165	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30, 2019	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash used in (provided by) operating activities	$	—		$	212		$	(16,712	)	$	(105	)	$	(10,150	)	$	(26,755	)
Cash Flows From Investing Activities:
Cash paid for acquisitions and capital    expenditures, net of proceeds from    divestitures and asset sales		—			(188	)		(4,158	)		(147	)		—			(4,493	)
Payments to affiliates		(57,500	)		—			—			—			57,500			—
Net cash used in investing activities		(57,500	)		(188	)		(4,158	)		(147	)		57,500			(4,493	)
Cash Flows From Financing Activities:
Cash distributions		—			—			—			—			—			—
Payments from affiliates		—			—			47,350			—			(47,350	)		—
Proceeds from issuance of redeemable convertible preferred units, net		57,500			—			—			—			—			57,500
Net borrowings and repayments of debt		—			(24	)		38,517			(148	)		—			38,345
Other financing activities		—			—			(18,649	)		—			—			(18,649	)
Net cash provided by (used in) financing activities		57,500			(24	)		67,218			(148	)		(47,350	)		77,196
Net increase (decrease) in cash and cash equivalents and restricted cash		—			—			46,348			(400	)		—			45,948
Cash and cash equivalents and restricted cash—    Beginning of period		—			—			16,298			1,849			—			18,147
Cash and cash equivalents and restricted cash—    End of period	$	—		$	—		$	62,646		$	1,449		$	—		$	64,095

Nine Months Ended September 30, 2018	Parent		Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	—	$	363		$	29,462		$	(78	)	$	(10,336	)	$	19,411
Cash Flows From Investing Activities:
Cash paid for acquisitions and capital    expenditures, net of proceeds from    divestitures and asset sales		—		(363	)		(9,888	)		(626	)		—			(10,877	)
Net cash used in investing activities		—		(363	)		(9,888	)		(626	)		—			(10,877	)
Cash Flows From Financing Activities:
Cash distributions		—		—			—			—			—			—
Payments to affiliates		—		—			(10,336	)		—			10,336			—
Proceeds from issuance of redeemable convertible preferred units, net		—		—			—			—			—			—
Net borrowings and repayments of debt		—		—			(4,044	)		—			—			(4,044	)
Other financing activities		—		—			(3,268	)		—			—			(3,268	)
Net cash (used in) provided by financing activities		—		—			(17,648	)		—			10,336			(7,312	)
Net increase (decrease) in cash and cash equivalents and restricted cash		—		—			1,926			(704	)		—			1,222
Cash and cash equivalents and restricted cash—Beginning of    period		—		—			4,216			2,605			—			6,821
Cash and cash equivalents and restricted cash—End of period	$	—	$	—		$	6,142		$	1,901		$	—		$	8,043

16. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Partnership’s Senior Notes are guaranteed by StoneMor Operating LLC and its 100% owned subsidiaries, other than the co-issuer, as described below. The guarantees are full, unconditional, joint and several. The Partnership, or the "Parent," and its 100% owned subsidiary, Cornerstone Family Services of West Virginia Subsidiary Inc., are the co-issuers of the Senior Notes. The Partnership’s consolidated financial statements as of and for the years ended December 31, 2018 and 2017 include the accounts of cemeteries operated under long-term lease, operating or management agreements. For the purposes of this note, these entities are deemed non-guarantor subsidiaries, as they are not 100% owned by the Partnership. The Partnership’s consolidated financial statements also contain merchandise and perpetual care trusts that are also non-guarantor subsidiaries for the purposes of this note.

The financial information presented below reflects the Partnership’s standalone accounts, the combined accounts of the subsidiary co-issuer, the combined accounts of the guarantor subsidiaries, the combined accounts of the non-guarantor subsidiaries, the consolidating adjustments and eliminations and the Partnership’s consolidated accounts as of and for the years ended December 31, 2018 and 2017 For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their respective subsidiaries are presented in accordance with the equity method of accounting (in thousands):

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2018	Parent			Subsidiary Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	—		$	16,298	$	1,849		$	—		$	18,147
Assets held for sale		—			—			757		—			—			757
Other current assets		—			3,718			64,167		11,527			—			79,412
Total current assets		—			3,718			81,222		13,376			-			98,316
Long-term accounts receivable		—			3,118			71,708		12,322			—			87,148
Cemetery and funeral home property and    equipment		—			806			409,201		33,550			—			443,557
Merchandise trusts		—			—			—		488,248			—			488,248
Perpetual care trusts		—			—			—		330,562			—			330,562
Deferred selling and obtaining costs		—			5,511			88,705		18,444			—			112,660
Goodwill and intangible assets		—			—			25,676		60,607			—			86,283
Other assets		—			—			19,403		2,924			—			22,327
Investments in and amounts due from affiliates    eliminated upon consolidation		61,875			(586	)		539,997		—			(601,286	)		-
Total assets	$	61,875		$	12,567		$	1,235,912	$	960,033		$	(601,286	)	$	1,669,101
Liabilities and Partners’ Capital
Current liabilities	$	—		$	184		$	60,216	$	1,400		$	—		$	61,800
Long-term debt, net of deferred financing costs		68,453			105,160			146,635		—			—			320,248
Deferred revenues		—			32,147			770,337		111,802			—			914,286
Perpetual care trust corpus		—			—			—		330,562			—			330,562
Other long-term liabilities		—			—			33,553		15,230			—			48,783
Due to affiliates		—			—			173,613		543,543			(717,156	)		-
Total liabilities		68,453			137,491			1,184,354		1,002,537			(717,156	)		1,675,679
Partners’ capital		(6,578	)		(124,924	)		51,556		(42,502	)		115,870			(6,578	)
Total liabilities and partners’ capital	$	61,875		$	12,567		$	1,235,910	$	960,035		$	(601,286	)	$	1,669,101

CONDENSED CONSOLIDATING BALANCE SHEETS (continued)

December 31, 2017	Parent		Subsidiary Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	—		$	4,216	$	2,605		$	—		$	6,821
Assets held for sale		—		—			1,016		—			—			1,016
Other current assets		—		3,882			83,901		17,366			—			105,149
Total current assets		—		3,882			89,133		19,971			—			112,986
Long-term accounts receivable		—		2,179			89,275		14,481			—			105,935
Cemetery and funeral home property and    equipment		—		738			411,936		34,820			—			447,494
Merchandise trusts		—		—			—		515,456			—			515,456
Perpetual care trusts		—		—			—		339,928			—			339,928
Deferred selling and obtaining costs		—		6,171			98,639		21,588			—			126,398
Goodwill and intangible assets		—		—			26,347		61,759			—			88,106
Other assets		—		—			16,995		2,784			—			19,779
Investments in and amounts due from affiliates    eliminated upon consolidation		159,946		82,836			556,783		—			(799,565	)		-
Total assets	$	159,946	$	95,806		$	1,289,108	$	1,010,787		$	(799,565	)	$	1,756,082
Liabilities and Partners’ Capital
Current liabilities	$	—	$	72		$	44,380	$	1,354		$	—		$	45,806
Long-term debt, net of deferred financing costs		68,250		104,848			144,595		—			—			317,693
Deferred revenues		—		33,469			773,516		105,641			—			912,626
Perpetual care trust corpus		—		—			—		339,928			—			339,928
Other long-term liabilities		—		—			34,149		14,184			—			48,333
Due to affiliates		—		—			173,098		576,025			(749,123	)		-
Total liabilities		68,250		138,389			1,169,738		1,037,132			(749,123	)		1,664,386
Partners’ capital		91,696		(42,583	)		119,370		(26,345	)		(50,442	)		91,696
Total liabilities and partners’ capital	$	159,946	$	95,806		$	1,289,108	$	1,010,787		$	(799,565	)	$	1,756,082

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Year Ended December 31, 2018	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues	$	—		$	6,382		$	266,550		$	52,271		$	(9,077	)	$	316,126
Total costs and expenses		—			(13,666	)		(285,578	)		(58,349	)		9,077			(348,516	)
Other loss		—			(445	)		(9,510	)		(1,549	)		—			(11,504	)
Net loss from equity investment in    subsidiaries		(63,084	)		(54,573	)		—			—			117,657			—
Interest expense		(5,434	)		(8,348	)		(15,787	)		(1,033	)		—			(30,602	)
Income (loss) from continuing operations    before income taxes		(68,518	)		(70,650	)		(44,325	)		(8,660	)		117,657			(74,496	)
Income tax benefit		—			—			1,797			—			—			1,797
Net income (loss)	$	(68,518	)	$	(70,650	)	$	(42,528	)	$	(8,660	)	$	117,657		$	(72,699	)

Year Ended December 31, 2017	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues	$	—		$	7,788		$	279,399		$	58,981		$	(7,941	)	$	338,227
Total costs and expenses		—			(12,306	)		(290,850	)		(53,685	)		7,941			(348,900	)
Other loss		—			—			(46,761	)		—			—			(46,761	)
Net loss from equity investment in    subsidiaries		(69,724	)		(71,281	)		—			—			141,005			—
Interest expense		(5,434	)		(8,348	)		(12,623	)		(940	)		—			(27,345	)
Income (loss) from continuing operations    before income taxes		(75,158	)		(84,147	)		(70,835	)		4,356			141,005			(84,779	)
Income tax benefit		—			—			9,621			—			—			9,621
Net income (loss)	$	(75,158	)	$	(84,147	)	$	(61,214	)	$	4,356		$	141,005		$	(75,158	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Year Ended December 31, 2018	Parent		Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	—	$	370		$	39,943		$	(73	)	$	(13,783	)	$	26,457
Cash Flows From Investing Activities:
Cash paid for acquisitions and capital    expenditures, net of proceeds from    divestitures and asset sales		—		(370	)		(11,510	)		(683	)		—			(12,563	)
Net cash used in investing activities		—		(370	)		(11,510	)		(683	)		—			(12,563	)
Cash Flows From Financing Activities:
Cash distributions		—		—			—			—			—			—
Payments to affiliates		—		—			(13,782	)		—			13,782			—
Net borrowings and repayments of debt		—		—			1,387			—			—			1,387
Other financing activities		—		—			(3,955	)		—			—			(3,955	)
Net cash used in financing activities		-		—			(16,350	)		—			13,782			(2,568	)
Net decrease in cash and cash equivalents		—		—			12,082			(756	)		—			11,326
Cash and cash equivalents—Beginning of    period		—		—			4,216			2,605			—			6,821
Cash and cash equivalents—End of period	$	—	$	—		$	16,298		$	1,849		$	—		$	18,147

Year Ended December 31, 2017	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	24,545		$	103		$	28,488		$	167		$	(38,327	)	$	14,976
Cash Flows From Investing Activities:
Cash paid for acquisitions and capital    expenditures, net of proceeds from    divestitures and asset sales		—			(103	)		(7,831	)		(987	)		—			(8,921	)
Net cash used in investing activities		—			(103	)		(7,831	)		(987	)		—			(8,921	)
Cash Flows From Financing Activities:
Cash distributions		(24,545	)		—			—			—			—			(24,545	)
Payments to affiliates		—			—			(38,327	)		—			38,327			—
Net borrowings and repayments of debt		—			—			14,341			—			—			14,341
Other financing activities		—			—			(1,600	)		—			—			(1,600	)
Net cash used in financing activities		(24,545	)		—			(25,586	)		—			38,327			(11,804	)
Net decrease in cash and cash equivalents		—			—			(4,929	)		(820	)		—			(5,749	)
Cash and cash equivalents—Beginning of    period		—			—			9,145			3,425			—			12,570
Cash and cash equivalents—End of period	$	—		$	—		$	4,216		$	2,605		$	—		$	6,821