Condensed Consolidating Financial Statements of Guarantors of Senior Notes and Senior Convertible Notes

9 Months Ended

Jul. 31, 2011

Condensed Consolidating Financial Statements of Guarantors of Senior Notes and Senior Convertible Notes [Abstract]

Condensed Consolidating Financial Statements of Guarantors of Senior Notes and Senior Convertible Notes

(11) Condensed Consolidating Financial Statements of Guarantors of Senior Notes and Senior Convertible Notes

     The following tables present the condensed consolidating historical financial statements as of July 31, 2011 and October 31, 2010 and for the three and nine months ended July 31, 2011 and 2010, for the direct and indirect domestic subsidiaries of the Company that serve as guarantors of the Company’s 6.50 percent senior notes and its 3.125 percent and 3.375 percent senior convertible notes, and the financial results of the Company’s subsidiaries that do not serve as guarantors. Non-guarantor subsidiaries of the 6.50 percent senior notes and senior convertible notes include the Puerto Rican subsidiaries, Investors Trust, Inc. and certain immaterial domestic subsidiaries, which are not 100 percent owned, or are prohibited by law from guaranteeing the 6.50 percent senior notes and senior convertible notes. The guarantor subsidiaries of the 6.50 percent senior notes and senior convertible notes are 100 percent owned directly or indirectly by the Company. The guarantees are full and unconditional and joint and several. In the condensed consolidating statements of earnings and other comprehensive income, corporate general and administrative expenses and interest expense of the parent are presented net of amounts charged to the guarantor and non-guarantor subsidiaries.

Condensed Consolidating Statements of Earnings and Other Comprehensive Income

	Three Months Ended July 31, 2011
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Funeral	$	—		$	63,745		$	5,016		$	—		$	68,761
Cemetery		—			49,599			5,997			—			55,596
		—			113,344			11,013			—			124,357
Costs and expenses:
Funeral		—			51,102			3,278			—			54,380
Cemetery		—			43,764			4,461			—			48,225
		—			94,866			7,739			—			102,605
Gross profit		—			18,478			3,274			—			21,752
Corporate general and administrative expenses		(7,069	)		—			—			—			(7,069	)
Hurricane related recoveries, net		4,174			6,683			1,492			—			12,349
Net gain on dispositions		—			11			—			—			11
Other operating income, net		13			419			80			—			512
Operating earnings (loss)		(2,882	)		25,591			4,846			—			27,555
Interest expense		(764	)		(4,247	)		(489	)		—			(5,500	)
Loss on early extinguishment of debt		(73	)		—			—			—			(73	)
Investment and other income, net		30			—			—			—			30
Equity in subsidiaries		12,521			218			—			(12,739	)		—
Earnings before income taxes		8,832			21,562			4,357			(12,739	)		22,012
Income tax expense (benefit)		(3,154	)		11,485			1,695			—			10,026
Net earnings		11,986			10,077			2,662			(12,739	)		11,986
Other comprehensive loss, net		(3	)		—			(3	)		3			(3	)
Comprehensive income	$	11,983		$	10,077		$	2,659		$	(12,736	)	$	11,983

Condensed Consolidating Statements of Earnings and Other Comprehensive Income

	Three Months Ended July 31, 2010
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Funeral	$	—		$	61,904		$	4,781		$	—		$	66,685
Cemetery		—			50,435			5,438			—			55,873
		—			112,339			10,219			—			122,558
Costs and expenses:
Funeral		—			48,586			3,352			—			51,938
Cemetery		—			43,741			4,447			—			48,188
		—			92,327			7,799			—			100,126
Gross profit		—			20,012			2,420			—			22,432
Corporate general and administrative expenses		(7,937	)		—			—			—			(7,937	)
Hurricane related charges, net		(30	)		—			—			—			(30	)
Other operating income, net		18			547			42			—			607
Operating earnings (loss)		(7,949	)		20,559			2,462			—			15,072
Interest expense		(690	)		(5,025	)		(469	)		—			(6,184	)
Loss on early extinguishment of debt		(106	)		—			—			—			(106	)
Investment and other income, net		62			—			—			—			62
Equity in subsidiaries		9,171			413			—			(9,584	)		—
Earnings from continuing operations before income taxes		488			15,947			1,993			(9,584	)		8,844
Income tax expense (benefit)		(5,551	)		7,058			1,309			—			2,816
Earnings from continuing operations		6,039			8,889			684			(9,584	)		6,028
Discontinued operations:
Earnings from discontinued operations before income taxes		—			19			—			—			19
Income taxes		—			8			—			—			8
Earnings from discontinued operations		—			11			—			—			11
Net earnings		6,039			8,900			684			(9,584	)		6,039
Other comprehensive income, net		12			—			12			(12	)		12
Comprehensive income	$	6,051		$	8,900		$	696		$	(9,596	)	$	6,051

Condensed Consolidating Statements of Earnings and Other Comprehensive Income

	Nine Months Ended July 31, 2011
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Funeral	$	—		$	200,353		$	15,248		$	—		$	215,601
Cemetery		—			149,980			17,705			—			167,685
		—			350,333			32,953			—			383,286
Costs and expenses:
Funeral		—			152,849			9,935			—			162,784
Cemetery		—			131,239			13,515			—			144,754
		—			284,088			23,450			—			307,538
Gross profit		—			66,245			9,503			—			75,748
Corporate general and administrative expenses		(20,358	)		—			—			—			(20,358	)
Hurricane related recoveries, net		4,070			6,683			1,492			—			12,245
Net loss on dispositions		—			(389	)		—			—			(389	)
Other operating income, net		141			853			199			—			1,193
Operating earnings (loss)		(16,147	)		73,392			11,194			—			68,439
Interest expense		(2,599	)		(12,968	)		(1,401	)		—			(16,968	)
Loss on early extinguishment of debt		(1,884	)		—			—			—			(1,884	)
Investment and other income, net		394			—			—			—			394
Equity in subsidiaries		37,528			605			—			(38,133	)		—
Earnings before income taxes		17,292			61,029			9,793			(38,133	)		49,981
Income tax expense (benefit)		(12,736	)		26,149			6,540			—			19,953
Net earnings		30,028			34,880			3,253			(38,133	)		30,028
Other comprehensive income, net		6			—			6			(6	)		6
Comprehensive income	$	30,034		$	34,880		$	3,259		$	(38,139	)	$	30,034

Condensed Consolidating Statements of Earnings and Other Comprehensive Income

	Nine Months Ended July 31, 2010
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Funeral	$	—		$	195,008		$	14,457		$	—		$	209,465
Cemetery		—			147,981			17,157			—			165,138
		—			342,989			31,614			—			374,603
Costs and expenses:
Funeral		—			148,257			10,281			—			158,538
Cemetery		—			129,447			13,863			—			143,310
		—			277,704			24,144			—			301,848
Gross profit		—			65,285			7,470			—			72,755
Corporate general and administrative expenses		(20,723	)		—			—			—			(20,723	)
Hurricane related recoveries (charges), net		(117	)		—			55			—			(62	)
Other operating income, net		60			839			152			—			1,051
Operating earnings (loss)		(20,780	)		66,124			7,677			—			53,021
Interest expense		(1,172	)		(15,923	)		(1,436	)		—			(18,531	)
Loss on early extinguishment of debt		(89	)		—			—			—			(89	)
Investment and other income, net		121			1			—			—			122
Equity in subsidiaries		32,668			658			—			(33,326	)		—
Earnings from continuing operations before income taxes		10,748			50,860			6,241			(33,326	)		34,523
Income tax expense (benefit)		(11,169	)		21,126			2,689			—			12,646
Earnings from continuing operations		21,917			29,734			3,552			(33,326	)		21,877
Discontinued operations:
Earnings from discontinued operations before income taxes		—			65			—			—			65
Income taxes		—			25			—			—			25
Earnings from discontinued operations		—			40			—			—			40
Net earnings		21,917			29,774			3,552			(33,326	)		21,917
Other comprehensive income, net		12			—			12			(12	)		12
Comprehensive income	$	21,929		$	29,774		$	3,564		$	(33,338	)	$	21,929

Condensed Consolidating Balance Sheets

	July 31, 2011
			Guarantor			Non-Guarantor
	Parent		Subsidiaries			Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	51,448	$	13,962		$	1,161	$	—		$	66,571
Restricted cash and cash equivalents		6,250		—			—		—			6,250
Certificates of deposit and marketable securities		—		—			671		—			671
Receivables, net of allowances		5,897		45,225			7,966		—			59,088
Inventories		333		32,909			2,557		—			35,799
Prepaid expenses		1,572		3,353			1,913		—			6,838
Deferred income taxes, net		15,001		11,337			2,799		—			29,137
Intercompany receivables		2,895		—			—		(2,895	)		—
Total current assets		83,396		106,786			17,067		(2,895	)		204,354
Receivables due beyond one year, net of allowances		—		53,657			11,925		—			65,582
Preneed funeral receivables and trust investments		—		407,800			9,614		—			417,414
Preneed cemetery receivables and trust investments		—		212,993			7,371		—			220,364
Goodwill		—		227,203			19,835		—			247,038
Cemetery property, at cost		—		358,554			36,259		—			394,813
Property and equipment, at cost		58,623		486,171			42,640		—			587,434
Less accumulated depreciation		44,461		236,850			18,785		—			300,096
Net property and equipment		14,162		249,321			23,855		—			287,338
Deferred income taxes, net		3,096		76,046			4,401					83,543
Cemetery perpetual care trust investments		—		227,428			12,903		—			240,331
Other assets		9,891		4,913			1,030		—			15,834
Intercompany receivables		688,801		—			—		(688,801	)		—
Equity in subsidiaries		13,893		9,493			—		(23,386	)		—
Total assets	$	813,239	$	1,934,194		$	144,260	$	(715,082	)	$	2,176,611
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	5	$	—		$	—	$	—		$	5
Accounts payable, accrued expenses and other current liabilities		15,085		68,890			4,512		—			88,487
Intercompany payables		—		—			2,895		(2,895	)		—
Total current liabilities		15,090		68,890			7,407		(2,895	)		88,492
Long-term debt, less current maturities		316,848		—			—		—			316,848
Deferred income taxes, net		—		4,353			580		—			4,933
Intercompany payables		—		672,881			15,920		(688,801	)		—
Deferred preneed funeral revenue		—		193,908			46,652		—			240,560
Deferred preneed cemetery revenue		—		230,762			29,326		—			260,088
Deferred preneed funeral and cemetery receipts held in trust		—		563,804			8,069		—			571,873
Perpetual care trusts’ corpus		—		226,203			12,889		—			239,092
Other long-term liabilities		18,720		1,025			31		—			19,776
Negative equity in subsidiaries		27,632		—			—		(27,632	)		—
Total liabilities		378,290		1,961,826			120,874		(719,328	)		1,741,662
Common stock		90,401		102			376		(478	)		90,401
Other		344,524		(27,734	)		22,986		4,748			344,524
Accumulated other comprehensive income		24		—			24		(24	)		24
Total shareholders’ equity		434,949		(27,632	)		23,386		4,246			434,949
Total liabilities and shareholders’ equity	$	813,239	$	1,934,194		$	144,260	$	(715,082	)	$	2,176,611

Condensed Consolidating Balance Sheets

	October 31, 2010
			Guarantor			Non-Guarantor
	Parent		Subsidiaries			Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	48,270	$	6,055		$	1,735	$	—		$	56,060
Certificates of deposit and marketable securities		10,000		—			—		—			10,000
Receivables, net of allowances		3,685		40,698			6,768		—			51,151
Inventories		329		32,779			2,600		—			35,708
Prepaid expenses		1,292		2,589			1,598		—			5,479
Deferred income taxes, net		13,835		11,604			2,873		—			28,312
Assets held for sale		—		27			—		—			27
Intercompany receivables		7,782		—			—		(7,782	)		—
Total current assets		85,193		93,752			15,574		(7,782	)		186,737
Receivables due beyond one year, net of allowances		1,973		53,683			11,802		—			67,458
Preneed funeral receivables and trust investments		—		405,296			9,622		—			414,918
Preneed cemetery receivables and trust investments		—		201,960			7,327		—			209,287
Goodwill		—		227,203			19,835		—			247,038
Cemetery property, at cost		—		349,252			36,752		—			386,004
Property and equipment, at cost		56,964		474,538			41,681		—			573,183
Less accumulated depreciation		40,837		225,118			17,678		—			283,633
Net property and equipment		16,127		249,420			24,003		—			289,550
Deferred income taxes, net		16,620		75,449			5,956		—			98,025
Cemetery perpetual care trust investments		—		217,743			12,987		—			230,730
Non-current assets held for sale		—		1,214			—		—			1,214
Other assets		6,096		4,772			1,037		—			11,905
Intercompany receivables		693,981		—			—		(693,981	)		—
Equity in subsidiaries		15,612		8,888			—		(24,500	)		—
Total assets	$	835,602	$	1,888,632		$	144,895	$	(726,263	)	$	2,142,866
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	5	$	—		$	—	$	—		$	5
Accounts payable, accrued expenses and other current liabilities		15,524		70,740			5,871		—			92,135
Liabilities associated with assets held for sale		—		8			—		—			8
Intercompany payables		—		—			7,782		(7,782	)		—
Total current liabilities		15,529		70,748			13,653		(7,782	)		92,148
Long-term debt, less current maturities		314,027		—			—		—			314,027
Deferred income taxes, net		—		4,950			—		—			4,950
Intercompany payables		—		683,501			10,480		(693,981	)		—
Deferred preneed funeral revenue		—		197,148			46,372		—			243,520
Deferred preneed cemetery revenue		—		228,908			29,136		—			258,044
Deferred preneed funeral and cemetery receipts held in trust		—		546,876			7,840		—			554,716
Perpetual care trusts’ corpus		—		216,379			12,861		—			229,240
Long-term liabilities associated with assets held for sale		—		714			—		—			714
Other long-term liabilities		18,050		1,920			53		—			20,023
Negative equity in subsidiaries		62,512		—			—		(62,512	)		—
Total liabilities		410,118		1,951,144			120,395		(764,275	)		1,717,382
Common stock		92,294		102			376		(478	)		92,294
Other		333,172		(62,614	)		24,106		38,508			333,172
Accumulated other comprehensive income		18		—			18		(18	)		18
Total shareholders’ equity		425,484		(62,512	)		24,500		38,012			425,484
Total liabilities and shareholders’ equity	$	835,602	$	1,888,632		$	144,895	$	(726,263	)	$	2,142,866

Condensed Consolidating Statements of Cash Flows

	Nine Months Ended July 31, 2011
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	13,590		$	41,931		$	4,946		$	—	$	60,467
Cash flows from investing activities:
Proceeds from sales of certificates of deposit		10,000			—			—			—		10,000
Purchases of restricted cash equivalents and marketable securities		(6,250	)		—			(662	)		—		(6,912	)
Proceeds from sale of assets		—			332			—			—		332
Purchase of subsidiaries, net of cash acquired		—			(9,110	)		—			—		(9,110	)
Additions to property and equipment		(1,730	)		(12,920	)		(1,038	)		—		(15,688	)
Other		—			103			—			—		103
Net cash provided by (used in) investing activities		2,020			(21,595	)		(1,700	)		—		(21,275	)
Cash flows from financing activities:
Proceeds from long-term debt		200,000			—			—			—		200,000
Intercompany receivables (payables)		16,249			(12,429	)		(3,820	)		—		—
Repayments of long-term debt		(200,004	)		—			—			—		(200,004	)
Issuance of common stock		1,386			—			—			—		1,386
Purchase and retirement of common stock		(15,622	)		—			—			—		(15,622	)
Debt refinancing costs		(5,933	)		—			—			—		(5,933	)
Dividends		(8,662	)		—			—			—		(8,662	)
Excess tax benefits from share-based payment arrangements		154			—			—			—		154
Net cash used in financing activities		(12,432	)		(12,429	)		(3,820	)		—		(28,681	)
Net increase (decrease) in cash		3,178			7,907			(574	)		—		10,511
Cash and cash equivalents, beginning of period		48,270			6,055			1,735			—		56,060
Cash and cash equivalents, end of period	$	51,448		$	13,962		$	1,161		$	—	$	66,571

Condensed Consolidating Statements of Cash Flows

	Nine Months Ended July 31, 2010
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	955		$	44,143		$	4,047		$	—	$	49,145
Cash flows from investing activities:
Proceeds from sales of marketable securities		—			—			250			—		250
Purchases of certificates of deposit and marketable securities		(15,000	)		—			(661	)		—		(15,661	)
Proceeds from sale of assets		—			388			—			—		388
Additions to property and equipment		(2,320	)		(8,424	)		(820	)		—		(11,564	)
Other		—			136			—			—		136
Net cash used in investing activities		(17,320	)		(7,900	)		(1,231	)		—		(26,451	)
Cash flows from financing activities:
Repayments of long-term debt		(18,423	)		—			—			—		(18,423	)
Intercompany receivables (payables)		37,914			(34,272	)		(3,642	)		—		—
Retirement of common stock warrants		(2,118	)		—			—			—		(2,118	)
Issuance of common stock		621			—			—			—		621
Retirement of call options		2,370			—			—			—		2,370
Debt refinancing costs		(38	)		—			—			—		(38	)
Dividends		(8,278	)		—			—			—		(8,278	)
Excess tax benefits from share based payment arrangements		37			—			—			—		37
Net cash provided by (used in) financing activities		12,085			(34,272	)		(3,642	)		—		(25,829	)
Net increase (decrease) in cash		(4,280	)		1,971			(826	)		—		(3,135	)
Cash and cash equivalents, beginning of period		56,734			5,096			978			—		62,808
Cash and cash equivalents, end of period	$	52,454		$	7,067		$	152		$	—	$	59,673