##### 



Item 6. Selected Financial Data
 Reclassifications
  Comparability of Information in Selected Consolidated Financial Data Table
  
    
    SFAS No. 142, Goodwill and Other Intangible Assets (SFAS No. 142), was implemented
in fiscal year 2002.
    
    Fiscal year 2002 includes the results of our foreign operations in continuing
operations. The sale of our foreign operations was completed in fiscal year 2002.
    
    In fiscal year 2004, we adopted Financial Accounting Standards Board Interpretation 46R,
Consolidation of Variable Interest Entities (FIN 46R).
    
    In fiscal year 2005, we changed our method of accounting for preneed selling costs.
    
    In fiscal year 2006, we adopted SFAS No. 123R, Share-Based Payment (SFAS No. 123R).
    
    All businesses sold in fiscal years 2004, 2005, 2006 and 2007 that met the criteria for
discontinued operations under SFAS No. 144 have been classified as discontinued operations
for all periods presented.
 1




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##### 



Selected Consolidated Financial Data
(Dollars in thousands, except per share amounts)
 Year Ended October 31,(1)2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Statement of Earnings Data:Revenues:Funeral
    
    $
    282,300
    
    
    $
    272,909
    
    
    $
    270,176
    
    
    $
    267,782
    
    
    $
    310,319Cemetery
    
    
    234,792
    
    
    
    219,046
    
    
    
    222,535
    
    
    
    209,008
    
    
    
    214,677Total revenues
    
    
    517,092
    (2)
    
    
    491,955
    
    
    
    492,711
    
    
    
    476,790
    
    
    
    524,996Gross profit:Funeral
    
    
    65,453
    
    
    
    61,585
    
    
    
    68,680
    
    
    
    58,557
    
    
    
    71,516Cemetery
    
    
    49,441
    
    
    
    40,485
    
    
    
    46,148
    
    
    
    39,689
    
    
    
    40,346Total gross profit
    
    
    114,894
    
    
    
    102,070
    
    
    
    114,828
    
    
    
    98,246
    
    
    
    111,862Corporate general and administrative
expenses
    
    
    (31,739
    )
    
    
    (19,440
    )
    
    
    (17,097
    )
    
    
    (17,733
    )
    
    
    (17,261
    )Hurricane related recoveries (charges), net
    
    
    1,628
    (2)
    
    
    (9,366
    )(2)
    
    
    
    
    
    
    
    
    
    
    Separation charges
    
    
    (991
    )(3)
    
    
    (1,507
    )(3)
    
    
    (3,435
    )(3)
    
    
    (2,450
    )(3)
    
    
    Gains on dispositions and impairment
(losses), net
    
    
    (353
    )(4)
    
    
    1,234
    (4)
    
    
    (225
    )(4)
    
    
    (9,562
    )(4)
    
    
    (18,500
    )(5)Other operating income, net
    
    
    1,308
    
    
    
    1,415
    
    
    
    2,090
    
    
    
    2,082
    
    
    
    2,534Operating earnings
    
    
    84,747
    (2)(3)(4)
    
    
    74,406
    (2)(3) (4)
    
    
    96,161
    (3)(4)
    
    
    70,583
    (3)(4)
    
    
    78,635
    (5)Interest expense
    
    
    (29,633
    )
    
    
    (30,460
    )
    
    
    (47,335
    )
    
    
    (53,643
    )
    
    
    (61,980
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    (32,822
    )(6)
    
    
    
    
    
    
    (11,289
    )(7)
    
    
    Investment and other income (expense), net
    
    
    3,676
    
    
    
    713
    
    
    
    178
    
    
    
    (749
    )
    
    
    794Earnings from continuing operations before
income taxes
    
    $
    58,790
    
    
    $
    11,837
    
    
    $
    49,004
    
    
    $
    4,902
    
    
    $
    17,449Earnings from continuing operations
    
    $
    37,539
    
    
    $
    8,623
    
    
    $
    30,874
    
    
    $
    1,459
    
    
    $
    10,990Earnings (loss) from discontinued
operations
    
    
    54
    (4)
    
    
    1,231
    (4)
    
    
    5,818
    (4)
    
    
    (19,491
    )(4)
    
    
    1,303Cumulative effect of change in accounting
principles (net of $101,061 and $16,310
income tax benefit in 2005 and 2002,
respectively)
    
    
    
    
    
    
    (153,180
    )(1)
    
    
    
    
    
    
    
    
    
    
    (193,090
    )(1)Net earnings (loss)
    
    $
    37,593
    
    
    $
    (143,326
    )
    
    $
    36,692
    
    
    $
    (18,032
    )
    
    $
    (180,797
    )Per Share Data:Basic earnings (loss) per common share:Earnings from continuing operations
    
    $
    .35
    (2)(3)(4)
    
    $
    .08
    (2)(3)(4)(6)
    
    $
    .29
    (3)(4)
    
    $
    .01
    (3)(4)(7)
    
    $
    .10
    (5)Earnings (loss) from discontinued
operations
    
    
    
    
    
    
    .01
    (4)
    
    
    .05
    (4)
    
    
    (.18
    )(4)
    
    
    .01Cumulative effect of change in
accounting principles
    
    
    
    
    
    
    (1.40
    )(1)
    
    
    
    
    
    
    
    
    
    
    (1.79
    )(1)Net earnings (loss)
    
    $
    .35
    
    
    $
    (1.31
    )
    
    $
    .34
    
    
    $
    (.17
    )
    
    $
    (1.68
    )Diluted earnings (loss) per common share:Earnings from continuing operations
    
    $
    .35
    (2)(3)(4)
    
    $
    .08
    (2)(3)(4)(6)
    
    $
    .29
    (3)(4)
    
    $
    .01
    (3)(4)(7)
    
    $
    .10
    (5)Earnings (loss) from discontinued
operations
    
    
    
    
    
    
    .01
    (4)
    
    
    .05
    (4)
    
    
    (.18
    )(4)
    
    
    .01Cumulative effect of change in
accounting principles
    
    
    
    
    
    
    (1.40
    )(1)
    
    
    
    
    
    
    
    
    
    
    (1.78
    )(1)Net earnings (loss)
    
    $
    .35
    
    
    $
    (1.31
    )
    
    $
    .34
    
    
    $
    (.17
    )
    
    $
    (1.67
    )Weighted average common shares outstanding
(in thousands):Basic
    
    
    106,855
    
    
    
    109,040
    
    
    
    107,522
    
    
    
    108,220
    
    
    
    107,861Diluted
    
    
    106,900
    
    
    
    109,205
    
    
    
    108,159
    
    
    
    108,230
    
    
    
    108,299Dividends declared per common share
    
    $
    .10
    
    
    $
    .075
    
    
    $
    
    
    
    $
    
    
    
    $
    
  2




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##### 



Selected Consolidated Financial Data
(Dollars in thousands, except per share amounts)
 Year Ended October 31,(8)2004
    
    
    2003
    
    
    2002Pro forma amounts assuming 2005 change in
accounting principle for preneed selling
costs was applied retroactively:Net earnings (loss)
    
    $
    30,739
    
    
    $
    (24,721
    )
    
    $
    (186,907
    )Basic earnings (loss) per common share
    
    $
    .28
    
    
    $
    (.23
    )
    
    $
    (1.73
    )Diluted earnings (loss) per common share
    
    $
    .28
    
    
    $
    (.23
    )
    
    $
    (1.73
    )
 October 31,2006
    
    2005
    
    2004
    
    2003
    
    2002Balance Sheet Data :Assets
    
    $
    2,380,577
    
    
    $
    2,335,609
    
    
    $
    2,511,508
    
    
    $
    2,504,161
    
    
    $
    2,565,047Long-term debt, less current maturities
    
    
    374,020
    
    
    
    406,859
    
    
    
    415,080
    
    
    
    488,180
    
    
    
    542,548Shareholders equity
    
    
    446,893
    
    
    
    439,453
    
    
    
    587,978
    
    
    
    552,731
    
    
    
    570,017
 Selected Consolidated Operating Data
 Year Ended October 31,(1)2006
    
    2005
    
    2004
    
    2003
    
    2002Operating Data:Funeral homes in operation at end of period
    
    
    229
    
    
    
    231
    
    
    
    242
    
    
    
    299
    
    
    
    307At-need funerals performed
    
    
    38,937
    
    
    
    39,264
    
    
    
    42,542
    
    
    
    48,544
    
    
    
    71,017Prearranged funerals performed
    
    
    21,799
    
    
    
    22,076
    
    
    
    23,891
    
    
    
    22,538
    
    
    
    24,314Total funerals performed
    
    
    60,736
    
    
    
    61,340
    
    
    
    66,433
    
    
    
    71,082
    
    
    
    95,331Prearranged funerals sold
    
    
    30,738
    
    
    
    28,967
    
    
    
    29,296
    
    
    
    28,563
    
    
    
    31,270Backlog of prearranged funerals at end of period
    
    
    333,592
    
    
    
    326,672
    
    
    
    337,879
    
    
    
    347,785
    
    
    
    349,110Cemeteries in operation at end of period
    
    
    143
    
    
    
    144
    
    
    
    147
    
    
    
    148
    
    
    
    150Interments performed
    
    
    52,255
    
    
    
    52,436
    
    
    
    53,149
    
    
    
    53,830
    
    
    
    57,405
 
 (1)
    
    Effective November 1, 2001, we implemented SFAS No. 142, which eliminated the
amortization of goodwill and resulted in a $209.4 million ($193.1 million after tax, or $1.78
per diluted share) charge for the cumulative effect of the change in accounting principles.
Effective November 1, 2004, we changed our method of accounting for selling costs incurred
related to new preneed funeral and cemetery service and merchandise sales to expense them as
incurred, which resulted in a $254.2 million ($153.2 million after tax, or $1.40 per diluted
share) charge for the cumulative effect of the change in accounting principles. For
additional information, see Note 3(b) to the consolidated financial statements included in
Item 8.Effective April 30, 2004, we implemented FIN 46R which resulted in the consolidation of our
preneed funeral and cemetery merchandise and services trusts and our cemetery perpetual care
trusts. Our financial statements were not restated to reflect the implementation of FIN 46R.
Accordingly, the implementation of FIN 46R is reflected in our fiscal year 2004, 2005 and 2006
financial statements, but not in our financial statements for fiscal years 2003 or 2002. The
implementation of FIN 46R affects classifications within the balance sheet, statement of
earnings and statement of cash flows, but has no material effect on shareholders equity, net
cash flow or the recognition and reporting of revenues or net earnings. For a more detailed
discussion, see Notes 2(k) and 4 through 7 to the consolidated financial statements included in
Item 8.Effective November 1, 2005, we implemented SFAS No. 123R, using the modified prospective
application transition method. Our financial statements were not restated to reflect this
implementation. Accordingly, the implementation of SFAS No. 123R is reflected in our fiscal
year 2006 financial statements but not in our financial statements for fiscal years 2005, 2004,
2003 and 2002. For additional information, see Note 18 to the consolidated financial statements
included in Item 8.All businesses sold in fiscal years 2004, 2005, 2006 and 2007 that met the criteria for
discontinued operations under SFAS No. 144 have been classified as discontinued operations for
all periods presented. The operating data presented represents activity related to our total
operations for the respective year. See Note 2(v) to the consolidated financial statements included in Item 8. 3




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##### 



Fiscal year 2002 includes the results of our foreign operations in continuing operations. The
sale of our foreign operations was completed in fiscal year 2002.(2)
    
    In fiscal year 2006, we recorded $3.2 million in business interruption insurance
proceeds in funeral and cemetery revenue related to Hurricane Katrina, which struck the New
Orleans metropolitan area and Mississippi and Alabama Gulf Coasts on August 29, 2005. In
fiscal years 2006 and 2005, we also recorded $1.6 million and ($9.4) million, respectively, in
net recoveries (expenses) related to Hurricane Katrina. See Note 22 to the consolidated
financial statements included in Item 8.(3)
    
    During fiscal year 2006, we recorded $1.0 million in separation charges related to
separation pay of a former executive officer and additional reorganization costs for the 2005
restructuring of the divisions. During the fourth quarter of 2005, we restructured our
operating divisions and incurred $1.5 million in related severance charges. During fiscal
years 2004 and 2003, we incurred $3.4 million and $2.5 million, respectively, in separation
charges related to severance and other costs associated with workforce reductions announced in
December 2003 and related to separation pay for former executive officers. See Note 13 to the
consolidated financial statements included in Item 8.(4)
    
    In fiscal year 2003, we incurred charges for the impairment of certain long-lived
assets related to our divestiture plan of $9.6 million in continuing operations and $22.2
million in discontinued operations. In fiscal year 2004, we recorded gains on dispositions,
net of impairment losses, of ($0.2) million in continuing operations and $2.4 million in
discontinued operations. In fiscal year 2005, we recorded gains on dispositions, net of
impairment losses, of $1.2 million in continuing operations and $1.2 million in discontinued
operations. In fiscal year 2006, we recorded gains on dispositions, net of impairment losses,
of ($0.3) million in continuing operations. As of October 31, 2004, we had closed on the sale
of 56 businesses with an additional 15 closing in fiscal year 2005 and an additional 3 closing
in fiscal year 2006. See Note 12 to the consolidated financial statements included in Item 8.(5)
    
    In the third quarter of 2002, primarily as a result of the significant devaluation
of the Argentine peso and the depressed economic conditions in Argentina, we changed our
estimate of our expected loss on the disposition of assets held for sale, and we incurred a
charge of $18.5 million.(6)
    
    In the first quarter of fiscal year 2005, we completed the refinancing of our senior
secured credit facility and recorded a charge for early extinguishment of debt of $2.7 million
to write off fees associated with the previous credit facility. In the second quarter of
fiscal year 2005, we completed the private offering of our 6.25 percent senior notes and
recorded a charge for early extinguishment of debt of $30.0 million representing the bond
tender premium, related fees and expenses and the write-off of unamortized fees related to our
10.75 percent senior subordinated notes. In the third quarter of fiscal year 2005, we
recorded a charge for early extinguishment of debt of $0.1 million representing the call
premium and write-off of remaining unamortized fees on the 10.75 percent senior subordinated
notes. For additional information, see Note 14 to the consolidated financial statements
included in Item 8.(7)
    
    In the third quarter of 2003, we incurred an $11.3 million charge related to the
redemption of our Remarketable Or Redeemable Securities (ROARS).(8)
    
    The pro forma data presented for fiscal years 2002 through 2004 is reported as if
the fiscal year 2005 change in accounting principle had occurred at the beginning of fiscal
year 2002. 4