<PAGE>

                      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 JUNE 30, 2001

                                      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 333-21411
                         ___________________________


                              ROSE HILLS COMPANY
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


             DELAWARE                                           13-3915765
 (STATE OR OTHER JURISDICTION OF                             (I.R.S. EMPLOYER
  INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NO.)

                         3888 SOUTH WORKMAN MILL ROAD
                          WHITTIER, CALIFORNIA 90601
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)


                                (562) 692-1212
              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE


                                      N/A
  (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
                                    REPORT)

                                _________________


   Indicate by check [X] 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 [_]

   The number of outstanding common shares as of August 13, 2001 was 1,000.
<PAGE>

                      ROSE HILLS COMPANY AND SUBSIDIARIES
           (A WHOLLY-OWNED SUBSIDIARY OF ROSE HILLS HOLDINGS CORP.)

<TABLE>
<CAPTION>
                                                                                                 PAGE
<S>                                                                                             <C>
PART I. FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS:

       CONDENSED CONSOLIDATED BALANCE SHEETS
         as of June 30, 2001 and December 31, 2000                                                   1

       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         for the Three and Six Months Ended June 30, 2001 and 2000                                   2

       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         for the Six Months Ended June 30, 2001 and 2000                                             3

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                          4

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
       CONDITION AND RESULTS OF OPERATIONS                                                      6 - 10

     ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            10

PART II. OTHER INFORMATION

     ITEM 5    OTHER INFORMATION                                                                    10

     ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K                                                     12

     SIGNATURES                                                                                     12

     INDEX OF EXHIBITS                                                                              13
</TABLE>


<PAGE>

                      ROSE HILLS COMPANY AND SUBSIDIARIES
           (A Wholly-Owned Subsidiary of Rose Hills Holdings Corp.)
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   AS OF DECEMBER 31, 2000 AND JUNE 30, 2001
                     (In thousands, except share amounts)
                                  (unaudited)

<TABLE>
<CAPTION>
                                    ASSETS
                                                                                2000              2001
                                                                                ----              ----
<S>                                                                         <C>               <C>
Current assets:
 Cash and equivalents                                                        $  8,171          $  6,950
 Accounts receivable, net of allowances                                        12,662            12,986
 Inventories                                                                    1,042             1,176
 Prepaid expenses and other current assets                                      2,640             2,154
 Deferred tax asset                                                             3,550             3,550
                                                                             --------          --------

   Total current assets                                                        28,065            26,816
                                                                             --------          --------

 Long-term receivables, net of allowances                                      14,012            10,760
 Cemetery property, at cost                                                    74,551            72,815
 Property and equipment, net                                                   59,870            58,655
 Goodwill                                                                     118,330           115,398
 Deferred finance charges                                                       5,777             4,962
Receivables from service trusts                                                 7,323             7,637
Other assets                                                                    2,533             2,542
                                                                             --------          --------

   Total assets                                                              $310,461          $299,585
                                                                             ========          ========

                     LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
Accounts payable and accrued liabilities                                        9,759             5,483
Current portion of long-term debt                                               7,842             8,800
                                                                             --------          --------
     Total current liabilities                                                 17,601            14,283

 Retirement plan liabilities                                                    6,876             6,813
 Deferred tax liability                                                         3,065             3,065
 Subordinated notes payable                                                    80,000            80,000
 Bank senior-term loan                                                         61,581            57,111
 Other long-term debt                                                           1,658             1,345
 Other liabilities                                                                 50                50
Deferred revenue                                                               17,995            17,889

Commitment and contingencies

 Stockholder's equity:
 Common stock, par value $.01; Authorized and outstanding 1,000 shares             --                --
 Additional paid in capital                                                   129,554           129,554
 Accumulated deficit                                                           (7,919)          (10,525)
                                                                             --------          --------

   Total stockholder's equity                                                 121,635           119,029
                                                                             --------          --------

 Total liabilities and stockholder's equity                                  $310,461          $299,585
                                                                             ========          ========
</TABLE>

  See accompanying notes to unaudited condensed consolidated financial
statements.

                                       1
<PAGE>

                      ROSE HILLS COMPANY AND SUBSIDIARIES
           (A Wholly-Owned Subsidiary of Rose Hills Holdings Corp.)
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (In thousands)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                           Three Months Ended               Six Months Ended
                                                           -------------------              ----------------
                                                                 June 30                        June 30
                                                                 -------                        -------
                                                          2000            2001            2000            2001
                                                          ----            ----            ----            ----
<S>                                                     <C>         <C>              <C>           <C>

Sales and services:
  Funeral sales and services                            $ 7,107     $    8,118       $   16,242     $   17,282
  Cemetery sales and services                            10,921         12,306           21,671         21,338
                                                        -------     ----------       ----------     ----------

     Total sales and services                            18,028         20,424           37,913         38,620


Cost of sales and services:
  Funeral sales and services                              5,559          5,898           11,516         12,095
  Cemetery sales and services                             7,306          9,323           15,037         17,180
                                                        -------     ----------       ----------     ----------

     Total costs of sales and services                   12,865         15,221           26,553         29,275
                                                        -------     ----------       ----------     ----------

   Gross profit                                           5,163          5,203           11,360          9,345

General and administrative expenses                       1,971          1,479            3,810          3,045
Amortization of purchase price in excess of
      net assets acquired and other intangibles             924            919            1,856          1,843
Asset write down and other charges                            -          3,425                -          3,425
                                                        -------     ----------       ----------     ----------

   Income (loss) from operations                          2,268           (620)           5,694          1,032

Other income (expense):
   Interest expense                                      (3,953)        (3,832)          (8,041)        (7,727)
   Finance and interest income                              787            747            1,539          1,515
                                                        -------     ----------       ----------     ----------


   Total other expense, net                              (3,167)        (3,085)          (6,502)        (6,212)

   Loss before income tax and cumulative
      effect of accounting change                          (898)        (3,705)            (808)        (5,180)

Income tax benefit                                         (835)        (1,940)            (749)        (2,574)
                                                        -------     ----------       ----------     ----------

   Net loss before cumulative effect of
      accounting change                                     (63)        (1,765)             (59)        (2,606)

Cumulative effect of accounting change (net of
       income tax benefit of $4,862)                         --             --           (7,467)            --
                                                        -------     ----------       ----------     ----------


Net loss                                                $   (63)    $   (1,765)      $   (7,526)    $   (2,606)
                                                        =======     ==========       ==========     ==========
</TABLE>


  See accompanying notes to unaudited condensed consolidated financial
statements.

                                       2
<PAGE>

                      ROSE HILLS COMPANY AND SUBSIDIARIES
           (A Wholly-Owned Subsidiary of Rose Hills Holdings Corp.)
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                               Six Months
                                                                                                 Ended
                                                                                                 June 30
                                                                                          2000             2001
                                                                                          ----             ----
<S>                                                                                    <C>               <C>
Cash flow from operating activities:
   Net loss                                                                            $ (7,526)         $(2,606)
   Adjustments to reconcile net loss to net cash provided by operating activities:
     Depreciation and amortization                                                        4,047            3,849
     Amortization of deferred finance cost                                                  815              815
     Amortization of cemetery property                                                    1,278            2,752
     Provision for bad debts and sales cancellation                                       2,267              524
     Asset write-off from disposal of funeral homes                                           -            1,455
     Provision for deferred taxes                                                             -               (5)
     Loss on disposal of property, plant and equipment                                        -                2
   Changes in assets and liabilities:
     Accounts receivable                                                                   (242)           1,389
     Inventories                                                                           (221)            (134)
     Prepaid expenses and in other current assets                                          (377)             486
     Accounts payable and accrued expenses                                               (8,573)          (4,276)
     Retirement plan liabilities                                                           (115)             (63)
     Net deferred revenue                                                                15,965             (106)
     Other assets and liabilities, net                                                   (1,039)             676
                                                                                       --------          -------

       Net cash provided by operating activities                                          6,279            4,758
                                                                                       --------          -------

Cash flows from investing activities:
   Capital expenditures                                                                  (2,204)          (2,163)
   Proceeds from disposal of property, plant and equipment                                    1                4
                                                                                       --------          -------

       Net cash used in investing activities                                             (2,203)          (2,159)
                                                                                       --------          -------

Cash flows from financing activities:
   Repayments of borrowings under Credit Agreement                                       (1,499)          (3,476)
   Principal payment of capital lease obligation                                           (181)            (344)
                                                                                       --------          -------

       Net cash used in financing activities                                             (1,680)          (3,820)
                                                                                       --------          -------

       Net increase (decrease) in cash and cash equivalents                               2,396           (1,221)

Cash and cash equivalents at beginning of period                                          2,150            8,171
                                                                                       --------          -------
Cash and cash equivalents at end of period                                               $4,546           $6,950
                                                                                       --------          -------

Supplemental disclosure of cash flow information:
   Cash paid during the period for:
     Interest                                                                            $7,106           $6,939
     Taxes                                                                                  200               --

</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.

                                       3
<PAGE>

                      ROSE HILLS COMPANY AND SUBSIDIARIES
           (A Wholly-Owned Subsidiary of Rose Hills Holdings Corp.)
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


1.  BASIS OF PRESENTATION

     The accompanying June 30, 2001 condensed consolidated financial statements
of Rose Hills Company and subsidiaries (the "Company") have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial reporting and with the instructions to Article 10
of Regulation S-X. Accordingly, they do not include all of the information and
footnote disclosures necessary for complete financial statements in conformity
with accounting principles generally accepted in the United Sates of America. In
the opinion of management, the accompanying interim consolidated financial
statements contain all adjustments (consisting of normal recurring accruals and
adjustments) considered necessary for a fair presentation of the financial
condition, results of operations and cash flows for the periods presented. These
unaudited consolidated financial statements should be read in conjunction with
the audited consolidated financial statements included in the Company's annual
report on Form 10-K for the year ended December 31, 2000.

     The Company operates 10 funeral homes, 3 funeral home and cemetery
combination properties and 1 cemetery property in the Southern California area.
Services offered at the locations include cemetery interment and professional
mortuary services, both of which include pre-need and at-need sales. In
addition, the Company offers for sale caskets, memorials, vaults, flowers and
the sale of pre-need funeral insurance from which commissions are earned.

     The accounting and reporting policies of the Company conform to accounting
principles generally accepted in the United States of America and the prevailing
practices within the cemetery and mortuary industry. All significant
intercompany accounts and transactions have been eliminated.


2.  CHANGE IN ACCOUNTING PRINCIPLE

     In December 1999, the SEC issued Staff Accounting Bulletin No. 101 (SAB
101), "Revenue Recognition in Financial Statements" (the "Bulletin"). The
Bulletin provides the Staff's views on the application of existing accounting
principles generally accepted in the United States of America to revenue
recognition in financial statements. The Bulletin, which applies to all
companies and was not directed at the death care industry, states that industry
practice would not override these views. The Bulletin among other matters
emphasizes the importance of physical delivery of a product or service to
justify the recognition of revenue. Prior to the effective date of the Bulletin,
the Company had heretofore followed industry practice in recognizing revenues,
including recognizing revenue upon the sale of cemetery merchandise and services
before the time of death.

     In response to the issuance of the Bulletin and after consultation with
the SEC Staff, the Company changed the following accounting principles effective
January 1, 2000:

 .   Revenue recognition of pre-need interment rights are now accounted for in
    accordance with Financial Accounting Standards No. 66, Accounting for the
    Sales of Real Estate (FAS 66). The direct and acquisition costs for the
    deferred sales is deferred and recognized concurrent with the recognition of
    the deferred sales. Prior to January 1, 2000, the Company recognized the
    sale of pre-need interment rights, and their related costs, at the time of
    sale.

 .   Revenue recognition of pre-need cemetery services and merchandise, and their
    direct and acquisition costs, are now deferred until time of delivery or
    performance of service. Prior to January 1, 2000, the Company recognized the
    sale of pre-need service and merchandise, and their related costs, at the
    time of sale.

 .   Earnings realized by the cemetery service and merchandise trust funds are
    now deferred until the underlying service and merchandise is delivered.
    Prior to January 1, 2000, the Company recognized the earnings as they
    accrued.

     The amounts for the three and six months ended June 30, 2000 in the
foregoing balance sheet, statement of operations and statement of cash flows,
and throughout the remainder of this report (including comparative data), have
been restated from those originally reported to reflect the proforma effects of
applying the accounting change effective January 1, 2000.

                                       4
<PAGE>

     During each of the six months ended June 30, 2000 and 2001, the Company
realized cemetery sales and services revenue of approximately $1.5 million and
$0.6 million, respectively, previously included in the cumulative effect of
accounting change (pre-tax) as of January 1, 2000.

3.  ASSET WRITE DOWN AND OTHER CHARGES:

Disposition of Funeral Homes

     In early 2001, the Company began assessing the long-term term prospects of
certain satellite properties including their fit with the Rose Hills Cemetery
and Mortuary and the effectiveness of clustering synergies. Based on this
assessment, the Company determined that four of the satellite properties did not
fit its long-term market strategy. In June 2001, the Company completed
disposition of these four locations, which included sub-leasing three locations,
and leasing one owned location to independent funeral operators.

     In connection with the disposition of these four locations, the Company
restructured its satellite operations and terminated approximately 40 employees.
The Company recorded a charge of $1.9 million ($1.5 million non-cash charges
relating to the write-off of goodwill and other assets and $.4 million in
severance pay and lease termination costs) during the quarter ended June 30,
2001.

Land Movement

     As more fully discussed in note (4) below the Company has accrued $1.5
million for remediation costs and related costs to be incurred in connection
with the land movement in a portion of the Rose Hills Memorial Park.

4.  Contingencies

     During August and September 2000, the Company discovered that there had
been some land movement in a portion of Rose Hills Memorial Park. The affected
area represents approximately 13 acres of the Park's approximately 1,418 total
acres, and consists of approximately 12,000 interment sites. The Company hired
an outside geo-technical and engineering firm to study the affected area, to
identify the underlying causes and the extent of the land movement, and to make
recommendations with regard to both short-term and long-term remediation and
stabilization measures. Pending the Company's receipt of the engineer's report,
the Company undertook various remediation measures, including the installation
of additional dewatering wells to improve water drainage conditions in the
affected area. The Company also began to relocate to other areas of the Park (at
the Company's expense) approximately 140 interred remains that were in the most
severely impacted portion of the affected area, and upon request from family
members, other interred remains that were located within the affected area. As
of July 31, 2001, the Company had relocated or had pending requests to relocate,
at the Company's expense, approximately 620 of the approximately 2,600 interred
remains in the affected area to other areas of the Cemetery.

     The Company received a preliminary report from the engineering firm in July
2001. In the preliminary report, the engineers have advised the Company that the
land movement most likely has been caused by a combination of geologic,
topographic, water and soil conditions within the affected area. The preliminary
report also identifies a variety of measures that the Company may take to
remediate and improve the stability of the land area, including the construction
and installation of engineered reinforcement fill berms at the base of the
slide, the installation of horizontal and other additional drains throughout the
affected area, and the implementation of other erosion control measures. The
Company's management is continuing to confer with the engineering consultants to
determine whether a combination of these measures is likely to be effective to
restore the affected area to a condition that is suitable for interments. If the
engineering consultants advise the Company that these measures are likely to
achieve such a result, management currently expects that the Company will
implement the measures in stages, with the installation of the horizontal
drains, erosion control measures and related improvements taking place as early
as the fourth quarter of fiscal 2001, and the construction and
installation of the reinforcement fill berms beginning in the second quarter of
fiscal 2002. If the area can not be restored for interments, management expects
the Company will implement only those measures that are necessary to repair and
stabilize the affected area, and management will then consider whether the area
may be utilized for alternate purposes. In this latter case, the Company is
likely to incur additional costs in connection with the relocation of interred
remains to other parts of the Cemetery, and may have to incur an accounting
charge associated with a reduction in the value of the affected property.

      Based on the engineering firm's preliminary cost estimates, the Company
presently estimates that the aggregate construction and related costs to restore
and stabilize the affected area will be between approximately $1.5 and $2.8
million. The Company expects to incur approximately $.5 million of these costs
during the fourth quarter of fiscal 2001, with the balance to be
incurred during the last three quarters of fiscal 2002. The Company also expects
that the total direct costs of

                                       5
<PAGE>

relocating interred remains for the affected area to other areas of the Cemetery
(should that become necessary) could approximate $1.0 million. To the extent
that funds are available, the Company intends to seek reimbursement from the
improvement reserve in the Company's Endowment Care Fund (ECF) for the costs of
relocating interred remains and for a significant portion of the site
assessment, repair, maintenance and remediation costs associated with the
affected area. Between October 2000 and June 30, 2001, the Company has incurred
and has been reimbursed from the ECF reserve for a total of $1.1 million of
direct costs related to the relocation of interred remains and professional and
other services associated with the assessment, remediation and stabilization of
the affected area. As of June 30, 2001, the ECF had $1.4 million in reserves for
cemetery improvements. The Company intends to utilize working capital and, if
necessary, borrowings under its existing revolving credit facility to pay for
any remediation and related costs which are not reimbursed from the ECF.

     Based on the present cost estimates and the amounts available in the ECF
improvement reserve fund, the Company has accrued $1.5 million as a reserve for
these matters during the quarter ended June 30, 2001.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS.

OVERVIEW

     Rose Hills Company (the "Company"), a Delaware corporation, is a wholly-
owned subsidiary of Rose Hills Holdings Corp. ("RH Holdings"). The Company was
formed in 1996 for purposes of acquiring Roses, Inc. (the "Mortuary") and
purchasing certain assets and assuming certain liabilities of Rose Hills
Memorial Park Association (the "Association") and Workman Mill Investment
Company , the owners of the real property and other cemetery assets of the Rose
Hills Memorial Park (the "Cemetery"). In connection with the acquisition, The
Loewen Group, Inc., a shareholder of RH Holdings, also caused one of its
subsidiaries to contribute 14 funeral homes and 2 funeral home cemetery
combination properties (the "Satellite Properties"). In 2001, the Company
disposed of four of the Satellite Properties as discussed above in Note 3. As a
result of these acquisitions (collectively the "Acquisition Transaction"), the
Company is the successor to the operations, assets and liabilities of the Rose
Hills Mortuary and Cemetery (collectively, "Rose Hills") and the Satellite
Properties.

     Rose Hills is the largest single location cemetery funeral home combination
in the United States and the Cemetery is the largest single location cemetery in
the United States. Rose Hills is situated less than 14 miles from downtown Los
Angeles on approximately 1,418 acres of permitted cemetery land near Whittier,
California. Rose Hills and the Satellite Properties constitute a strategic
assembly of cemeteries and funeral homes in the greater Los Angeles area.

RESULTS OF OPERATIONS

The following table sets forth details of certain income statement data (in
millions):

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED           SIX MONTHS ENDED
                                                          JUNE 30                     JUNE 30
                                                      2000        2001            2000        2001
                                                     ------      ------          ------      ------
<S>                                                 <C>          <C>             <C>         <C>
     Sales and service:
        Funeral:
            Services and merchandise                $  6.4      $  7.2            $14.9       $15.5
            Insurance commissions                      0.6         0.8              1.2         1.7
            Other                                      0.1         0.1              0.1         0.1
        Cemetery:
            Before need                                6.1         7.3             11.3        10.9
            At-need                                    3.8         3.9              8.5         8.4
            Endowment care                             1.0         1.1              1.9         2.0
     Total sales and services                         18.0        20.4             37.9        38.6

     Gross profit:
        Funeral sales and services                     1.5         2.2              4.7         5.2
        Cemetery sales and services                    3.6         3.0              6.6         4.1
     Total gross profit                                5.1         5.2             11.3         9.3
</TABLE>

                                       6
<PAGE>

The following table sets forth certain income statement data as a percentage of
total sales for the Company.

<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED                          SIX MONTHS ENDED
                                                     JUNE 30                                    JUNE 30

                                              2000               2001                     2000             2001
                                              ----               ----                     ----             ----
<S>                                        <C>               <C>                        <C>             <C>
Sales and services:
 Funeral sales and services                   39.4%             39.7%                     42.8%           44.7%
 Cemetery sales and services                  60.6%             60.3%                     57.2%           55.3%
 Total sales and services                    100.0%            100.0%                    100.0%          100.0%
Gross profit:
 Funeral sales and services                   21.8%             27.4%                     29.1%           30.0%
 Cemetery sales and services                  33.1%             24.2%                     30.6%           19.5%
Total gross profit                            28.6%             25.5%                     30.0%           24.2%
General and administrative
 expenses                                     10.9%              7.2%                     10.0%            7.9%
Goodwill amortization                          5.1%              4.5%                      4.9%            4.8%
Interest expense                              21.9%             18.8%                     21.2%           20.0%
</TABLE>

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

     Consolidated revenues for the quarter ended June 30, 2001 increased 13.3%
to $20.4 million from $18.0 million for the quarter ended June 30, 2000.
Consolidated gross profit for the second quarter of 2001 was $5.2 million is
comparable to the same quarter of 2000. As a percentage of revenue, consolidated
gross margin percentage for the second quarter decreased to 25.5% in 2001 from
28.6% in the same quarter 2000.

     Funeral revenue for the quarter was $8.1 million compared to $7.1 million
in the same quarter for the prior year. At-need funeral revenue for the quarter
totaled $7.4 million, representing a 15.6% increase over the same period last
year. The Company performed 1,979 funeral service calls during the second
quarter of 2001 compared to 1,836 in the second quarter of 2000, representing a
7.8% increase. Based on available market data the Company believes a portion of
the increase is attributable to an increase in market share. In addition,
average revenue per funeral call increased 4% compared to last year. The Company
has not increased its prices; accordingly, the Company attributes the increase
to changes in the mix of services and products sold. Pre-need funeral revenue
for the quarter was $0.8 million compared to $0.6 million for the same quarter
in the prior year. The operating margin for the funeral segment was 27.4% for
the second quarter of 2001 compared to 21.8% for the same quarter last year. The
increase in operating margin was primarily attributable to improved operating
leverage from the case count increase and improved labor cost controls.

     Cemetery revenue for the quarter was $12.3 million, representing a 12.7%
increase from the same quarter in the prior year. Pre-need cemetery revenue for
the second quarter of 2001 was $7.3 million compared to $6.1 million for the
same quarter during the prior year. Included in the second quarter was a large
group property sale to IBPS for $2.0 million. The number of property units sold
during the second quarter of 2001 was 1,956 compared to 1,977 units during the
same quarter of 2000. Pre-need property commission expense as a percentage of
sales was 26% for the second quarter compared to 23% for the same quarter last
year. At-need cemetery revenue for the quarter was $3.9 million compared to $3.8
million last year. Total interments were 2,518 for the quarter, which
represented a 16% increase over the same quarter in the prior year. The
operating margin for the cemetery segment during the quarter decreased from
33.1% last year to 24.2% as a percentage of sales. The decrease was due
principally to the lower profit margin associated with the 2.5-acre bulk sale to
IBPS in April 2001.

     Corporate general and administrative expense decreased to $1.5 million for
the quarter ended June 30, 2001 from $2.0 million for the same quarter in 2000.
As a percentage of total sales, general and administrative expenses was 7.2%
compared to 10.9% for the same quarter of 2000.

     In April 2001, the Company eliminated 30 staff positions and began a
program to consolidate certain satellite property funeral service functions with
the Rose Hills Mortuary in an effort to improve operating efficiencies. The
Company incurred a charge of $0.3 million during the second quarter of 2001 for
severance payments made to the former employees. By June 2001, the Company
completed its evaluation of all the satellite funeral home locations and
completed the disposition of 4 locations. In connection with these dispositions,
the Company provided for an asset impairment reserve resulting in a non-
recurring charge of $1.6 million. The components of the charge consisted of $1.5
million of goodwill and other assets and $.1 million of lease termination
costs.

                                       7
<PAGE>

     In July 2001, the Company received a preliminary report from its
engineering firm hired to study and evaluate recent land movement in the Rose
Hills Memorial Park. Based on management's evaluation of the preliminary report,
the Company has accrued $1.5 million as a reserve for remediation and related
costs. See Note 4 and Part II, item 5, "Contingencies".

     EBITDA, earnings before interest, taxes, depreciation, amortization and
non-recurring charges (including cemetery property amortization included in cost
of sales), increased to $7.5 million for the quarter ended June 30, 2001 from
$5.9 million for the quarter ended June 30, 2000. The $1.6 million increase over
the prior year was primarily the result of the large group sale of $1.8 million
and 7.8% increase in funeral case volume. EBITDA should not be considered in
isolation, as a substitute for net income or cash flow data prepared in
accordance with accounting principles generally accepted in the United States of
America or as a measure of a company's profitability or liquidity.

SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

     Consolidated revenues for the six months ended June 30, 2001 were $38.6
million and 1.9% above the same period ended June 30, 2000. Consolidated gross
profit totaled $9.3 million compared to $11.4 million in the same period in
2000. As a percentage of revenue, consolidated gross margin decreased to 24.2%
in 2001 from 30.0% in 2000.

     Funeral revenue for the six months ended June 30, 2001 increased to $17.3
million from $16.2 million during the same period in the prior year, an increase
of 6.4%. At-need funeral revenue totaled $15.5 million, representing a 4.0%
increase from the prior year. The number of total funeral calls of 4,236 was
comparable to the number of calls during the same period in the prior year. The
Rose Hills funeral home experienced a 5.7% case count increase, which was offset
by an 8.1% decrease at the satellite funeral locations. Pre-need funeral revenue
for the period was $1.7 million compared to $1.2 million in the prior year,
representing a 41.7% increase. The significant increase over the prior year is
due to a greater emphasis on increasing prearranged funeral services and selling
pre-need cemetery merchandise and services on insurance contracts (beginning
July 2001). As of June 30, 2001 the Company had a prearranged funeral and
cemetery insurance backlog of approximately $150.0 million. The operating margin
for the funeral segment was 30.0% compared to 29.1% last year.

     Cemetery revenue for the six months ended June 30, 2001 decreased 1.5% over
last year to $21.3 million. Pre-need cemetery revenue decreased 4.0% to $10.9
compared to the same period last year. Pre-need cemetery revenue in 2001
includes a bulk sale to the IBPS for $1.8 million. No comparable sale was made
in the same period last year. During the period the Company also deferred
approximately $0.8 million in cemetery property sales relating to projects under
construction. Management believes these projects will be completed and the
associated revenue recognized by year-end. At-need cemetery revenue for the
period was $8.4 million and comparable to same period last year. Total
interments for the period were 5,074, a 7.0% increase over last year. Income
from endowment care funds totaled approximately $2.0 million and was
approximately equal to last year. The operating margin for the cemetery segment
was 19.5% of sales compared to 30.6% last year. The decline was due to the lower
profit margin received from the IBPS $1.8 million bulk property sale in April
2001 and increased advertising costs in the first quarter this year.

     Corporate general and administrative expenses decreased to $3.0 million
from $3.8 million in 2001. As a percentage of total sales, general and
administrative expenses was 7.9% compared to 10.0% for the same period in 2000.

         In April 2001, the Company eliminated 30 staff positions and began a
program to consolidate certain satellite property funeral service functions with
the Rose Hills Mortuary in an effort to improve operating efficiencies. The
Company incurred a charge of $0.3 million during the second quarter of 2001 for
severance payments made to the former employees. By June 2001, the Company
completed the disposition of 4 locations. In connection with these dispositions,
the Company provided for an asset impairment reserve resulting in a
non-recurring charge of $1.6 million. The components of the charge consisted of
$1.5 million of goodwill and other assets and $.1 million of lease termination
costs. See Note 4 and Part II, item 5, "Contingencies".

         In July 2001, the Company received a preliminary report from its
engineering firm hired to study and evaluate recent land movement in the Rose
Hills Memorial Park. Based on management's evaluation of the preliminary report
the Company has accrued $1.5 million as a reserve for remediation and related
costs. See Note 4 and Part II, item 5, "Contingencies."

     EBITDA, earnings before interest, taxes, depreciation, amortization and
non-recurring charges (including cemetery property amortization included in
cost of sales), increased to $12.6 million for the six months ended June 30,
2001 from $12.5 million in 2000. EBITDA should not be considered in isolation,
as a substitute for net income or cash flow data prepared in accordance with
accounting principles generally accepted in the United States of America or as a
measure of a company's profitability or liquidity.

                                       8
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company presently believes that, based upon current levels of
operations and anticipated growth and the availability of the Bank Revolving
Facility (see description below), it can meet working capital and short-term
liquidity requirements for current operations, satisfy its contingent
obligations and service its indebtedness through December 31, 2002. As of June
30, 2001, the Company had net working capital of $12.5 million and a current
ratio of 1.88 as compared to $10.5 million of net working capital and current
ratio of 1.59 at December 31, 2000.

     Net cash provided by operating activities was $4.8 million for the six
months ended June 30, 2001. For the same period last year, net cash provided by
operating activities was $6.3 million. The primary reason for the decline over
prior year is the decrease in account receivable turnover and non-recurring
severance related costs in 2001.

     The primary use of cash will be for working capital, principal payments on
outstanding long-term indebtedness and capital expenditures as permitted under
the terms of bank agreements. The Company estimates its current year capital
expenditures of approximately $5.0 million will be used primarily to develop and
improve the existing infrastructure and cemetery grounds.

     Concurrent with the Acquisition Transaction, the Company entered into
senior secured amortization extended term loan facilities (the "Bank Term
Facility") in an aggregate principal amount of $75.0 million, the proceeds of
which were used to finance the Acquisition Transaction and related transaction
costs, to pre-fund certain capital expenditures and to refinance existing
indebtedness of the Company, and a senior secured revolving credit facility (the
"Bank Revolving Facility") in an aggregate principal amount of up to $25.0
million , the proceeds of which are available for general corporate purposes and
a portion of which may be extended (as agreed upon) in the form of swing line
loans or letters of credit for the account of the Company. Effective May 2, 2001
the Company effectively amended the Bank Revolving Facility reducing the
aggregate principal amount available to $10.0 million and extending its maturity
date to April 1, 2003. Borrowings under the Revolving Credit Facility must be
fully paid for a minimum period of 30 days for each 12-month period ending
December 1.

     The Bank Term Facility is payable, subject to certain conditions, in
semi-annual installments in the amounts of $1.0 million in each of the first
three years after the anniversary of the closing date of the Bank Term Facility
(the "Bank Closing"); $3.0 million in the fourth year after the Bank Closing;
$7.0 million in 2001; $9.0 million in 2002 and $53.0 million upon maturity of
the Bank Term Facility.

     All obligations under the Bank Credit Facilities entered into with the
lenders or their affiliates in connection therewith are unconditionally
guaranteed (the "Bank Guarantees"), jointly and severally, by Rose Hills
Holdings Corp. and each of the Company's existing and future domestic
subsidiaries (the "Bank Guarantors"). All obligations of the Company and the
Bank Guarantees are secured by first priority security interests in all existing
and future assets (including real property located at Rose Hills but excluding
other real property and vehicles covered by certificates of title) of the
Company and the Bank Guarantors. In addition, the Bank Credit Facilities are
secured by a first priority security interest in 100% of the capital stock of
the Company and each subsidiary thereof and all intercompany receivables.

     In connection with the Acquisition Transaction, the Company also issued $80
million of 9-1/2% Senior Subordinated Notes due 2004, which were exchanged in
September 1997 for $80 million of 9-1/2% Senior Subordinated Notes due 2004 (the
"Notes") that were registered under the Securities Act of 1933. The Notes mature
on November 15, 2004. Interest on the Notes is payable semi-annually on May 15
and November 15 at the annual rate of 9-1/2%. The Notes are redeemable in cash
at the option of the Company, in whole or in part, at any time on or after
November 15, 2000, at prices ranging from 104.75% with annual reductions to 100%
in 2003 plus accrued and unpaid interest, if any, to the redemption date. The
proceeds of the Notes were used, in part, to finance the Acquisition
Transaction.

     As a result of the Acquisition Transaction and the application of proceeds
therefrom, the Company's total outstanding indebtedness was approximately $145.1
million as of June 30, 2001. As of August 10, 2001 the Company had the entire
$10.0 million of borrowing capacity available under the Bank Revolving Facility
available. Management currently believes that, based upon current levels of
operations and anticipated growth and the availability under the Bank Revolving
Facility, it can adequately service its existing indebtedness through December
31, 2002. If the Company cannot generate sufficient cash flow from operations or
borrow under the Bank Revolving Facility to meet such obligations, the Company
may be required to take certain actions, including reducing capital
expenditures, restructuring its debt, selling assets or seeking additional
equity in order to avoid an Event of Default. There can be no assurance that
such actions could be effected or would be effective in allowing the Company to
meet such obligations. In addition, the Company currently expects that it will
have to obtain new or additional financing to pay some or all of the principal
amount due at maturity under the Bank Term Facility ($53 million by November 1,
2003) and under the Notes ($80 million on November 15, 2004). No assurance can
be given that such financing

                                       9
<PAGE>

will be available to the Company or, if available, that it may be obtained on
terms and conditions that are satisfactory to the Company.

      The Company and its Subsidiaries are subject to certain restrictive
covenants contained in the indenture to the Notes, including, but not limited
to, covenants imposing limitations on: the incurrence of additional
indebtedness; certain payments, including dividends and investments; the
creation of liens; sales of assets and preferred stock; transactions with
interested persons; payment restrictions affecting subsidiaries; sale-leaseback
transactions; and mergers and consolidations. In addition, the Bank Credit
Facilities contain certain restrictive covenants that, among other things, limit
the ability of the Company and its subsidiaries to dispose of assets, incur
additional indebtedness, prepay other indebtedness (including the Exchange
Notes), pay dividends or make certain restricted payments, create liens on
assets, engage in mergers or acquisitions or enter into leases or transactions
with affiliates. At June 30, 2001 the Company was in compliance with the terms
of the indenture and the Bank Credit Facilities.

NEW ACCOUNTING PRONOUNCEMENTS

         On June 29, 2001, Statement of Financial Accounting Standards (SFAS)
No. 142, "Goodwill and Other Intangible Assets" was approved by the Financial
Accounting Standards Board (FASB). SFAS 142 changes the accounting for goodwill
from an amortization method to an impairment -only approach. Amortization of
goodwill, including goodwill recorded in past business combinations, will cease
upon adoption of this statement. The provisions of SFAS No. 142 will be
effective for fiscal years beginning after December 15, 2001 and must be adopted
at the beginning of a fiscal year. Company has not determined the impact that
this statement will have on its consolidated financial position or results of
operations.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      The Company's market risk is impacted by changes in interest rates.
Pursuant to the Company's policies, and depending on market conditions, the
Company may utilize derivative financial instruments (such as interest rate
collar agreements) from time to time to reduce the impact of adverse changes in
interest rates. The Company does not use derivative instruments for speculation
or trading purposes, and has no material sensitivity to changes in market rates
and prices on its derivative financial instrument positions. The Company did not
have any such agreements or instruments in place as of June 30, 2001.

PART II

ITEM 5 - OTHER INFORMATION

CONTINGENCIES

      The Company is involved in certain matters of threatened and filed
litigation, none of which, in the judgment of the Management, will have a
material impact on the Company's consolidated financial position or results of
operations.

      Environmental audits of the Company's various properties were conducted in
connection with the Acquisition Transaction. Management is aware of certain
areas within the Cemetery that have required and may in the future require
remediation, including a solid waste disposal area that previously was used to
dump rubbish, green waste and used motor oil in the 1970's. The Company believes
that Rose Hills Foundation (the "Foundation"), an unaffiliated company that is
the successor to the Association, is obligated to pay for or otherwise indemnify
the Company for the remediation costs associated with this area pursuant to the
terms of an Environmental Compliance Agreement entered into at the time of the
Acquisition Transaction. However, the Foundation has denied responsibility for
certain costs of remediation, including post-closure monitoring and maintenance,
as well as the construction of a leachate collection system. As a result, the
Company has retained an outside technical consultant to further investigate the
solid waste disposal area to determine what risks, if any, the solid waste
disposal area poses for the Company, and to quantify such risks. The Company's
ultimate goal is to resolve future responsibility with respect to the solid
waste disposal area as between the Foundation and the Company. The Company and
the Foundation are currently in discussions regarding these goals, and the
Company is keeping the local regional water quality control board apprised of
the investigation being conducted. However, no assurance can be given as to the
outcome of the Company's discussions with the local water board agency or as to
the outcome of the Company's indemnification claim against the Foundation.

      In addition, two of the Company's cemetery properties are located in or
near areas of regional groundwater contamination. The Company submitted
information in connection with contamination at one of these areas and was
informed by the Environmental Protection Agency that the Company will not be
included in the Super Fund cleanup of the basin.

                                       10
<PAGE>

      Although there can be no assurance, Management does not believe that the
above or other environmental matters affecting the Company will have a material
adverse effect on the Company's financial condition or results of operations.

      During August and September 2000, the Company discovered that there had
been some land movement in a portion of Rose Hills Memorial Park. The affected
area represents approximately 13 acres of the Park's approximately 1,418 total
acres, and consists of approximately 12,000 interment sites. The Company hired
an outside geo-technical and engineering firm to study the affected area, to
identify the underlying causes and the extent of the land movement, and to make
recommendations with regard to both short-term and long-term remediation and
stabilization measures. Pending the Company's receipt of the engineer's report,
the Company undertook various remediation measures, including the installation
of additional dewatering wells to improve water drainage conditions in the
affected area. The Company also began to relocate to other areas of the Park (at
the Company's expense) approximately 140 interred remains that were in the most
severely impacted portion of the affected area, and upon request from family
members, other interred remains that were located within the affected area. As
of July 31, 2001, the Company had relocated or had pending requests to relocate,
at the Company's expense, approximately 620 of the approximately 2,600 interred
remains in the affected area to other areas of the Cemetery.

      The Company received a preliminary report from the engineering firm in
July 2001. In the preliminary report, the engineers have advised the Company
that the land movement most likely has been caused by a combination of geologic,
topographic, water and soil conditions within the affected area. The preliminary
report also identifies a variety of measures that the Company may take to
remediate and improve the stability of the land area, including the construction
and installation of engineered reinforcement fill berms at the base of the
slide, the installation of horizontal and other additional drains throughout the
affected area, and the implementation of other erosion control measures. The
Company's management is continuing to confer with the engineering consultants to
determine whether a combination of these measures is likely to be effective to
restore the affected area to a condition that is suitable for interments. If the
engineering consultants advise the Company that these measures are likely to
achieve such a result, management currently expects that the Company will
implement the measures in stages, with the installation of the horizontal
drains, erosion control measures and related improvements taking place as early
as the fourth quarter of fiscal 2001, and the construction and installation of
the reinforcement fill berms beginning in the second quarter of fiscal 2002. If
the area can not be restored for interments, management expects the Company will
implement only those measures that are necessary to repair and stabilize the
affected area, and management will then consider whether the area may be
utilized for alternate purposes. In this latter case, the Company is likely to
incur additional costs in connection with the relocation of interred remains to
other parts of the Cemetery, and may have to incur an accounting charge
associated with a reduction in the value of the affected property.

      Based on the engineering firm's preliminary cost estimates, the Company
presently estimates that the aggregate construction and related costs to restore
and stabilize the affected area will be between approximately $1.5 and $2.8
million. The Company expects to incur approximately $0.5 million of these costs
during the fourth quarter of fiscal 2001, with the balance to be incurred during
the last three quarters of fiscal 2002. The Company also expects that the total
direct costs of relocating interred remains for the affected area to other areas
of the Cemetery (should that become necessary) could approximate $1.0 million.
To the extent that funds are available, the Company intends to seek
reimbursement from the improvement reserve in the Company's Endowment Care Fund
(ECF) for the costs of relocating interred remains and for a significant portion
of the site assessment, repair, maintenance and remediation costs associated
with the affected area. Between October 2000 and June 30, 2001, the Company has
incurred and has been reimbursed from the ECF reserve for a total of $1.1
million of direct costs related to the relocation of interred remains and
professional and other services associated with the assessment, remediation and
stabilization of the affected area. As of June 30, 2001, the ECF had $1.4
million in reserves for cemetery improvements. The Company intends to utilize
working capital and, if necessary, borrowings under its existing revolving
credit facility to pay for any remediation and related costs which are not
reimbursed from the ECF.

      Based on the present cost estimates and the amounts available in the ECF
improvement reserve fund, the Company has accrued $1.5 million as a reserve for
these matters during the quarter ended June 30, 2001.

      In connection with the Acquisition Transaction, the Rose Hills Memorial
Park cemetery land was subject to a significant step-up in assessed value by the
County of Los Angeles. Prior to the Acquisition Transaction, the Cemetery was
operated as a not-for profit corporation and was largely exempt from property
taxes. In connection with the Acquisition Transaction, the Company obtained an
independent appraisal of the fair value of the undeveloped and unsold cemetery
property. In early 1998, the Company also engaged an independent property tax
consultant to prepare an estimate of the fair value of the property to assist in
the process.

      In July 2000, the County of Los Angeles completed its property tax
reassessment reflecting its opinion of the fair value of Rose Hills' cemetery
property at the Acquisition Transaction date. The County placed a fair value on
the cemetery property that is approximately 60% higher than the independent
appraisal prepared by the property tax consultant and approximately

                                       11
<PAGE>

50% higher than the fair market value computed by the independent appraiser at
the time of the Acquisition Transaction. The Company filed an assessment appeal
with the Los Angeles County Assessor, however, the supplemental tax based on the
reassessment must be paid during the appeal process. The total supplemental
property tax assessed by the County for the period November 1996 to June 30,
2001 is approximately $2.5 million greater than the amount accrued by the
Company using the independent property tax appraisal. A large portion of the
supplemental tax bill is payable, interest-free, over four years.

     The Company believes, based in part on the advice of its property tax
advisors, that it can obtain a significant reduction in assessed value during
the appeal process. However, there is no assurance that the appeal will succeed.
In the event the Company does not prevail upon appeal, the Company will pursue
other administrative procedures, including filing for a reduction in assessed
value under California's Proposition 8, which requires the County to reduce
assessed values when declines deemed other than temporary occur.





FORWARD-LOOKING STATEMENTS

     Certain statements in this Quarterly Report on Form 10-Q include "forward-
looking statements" as defined in Section 21E of the Securities Exchange Act of
1934. All statements other than statements of historical facts included herein,
including, without limitation, the statements under Item 2 "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding the Company's financial position and its plans to increase revenues
and operating margins, reduce general and administrative expenses, take
advantage of synergies, and make capital expenditures, and the ability to meet
its financial obligations, are forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to be
correct. Important factors that could cause actual results to differ materially
from the Company's expectations include those which have been disclosed herein
and in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000. Persons should review the factors identified herein and in
the Company's Form 10-K to understand the risks inherent in such forward-looking
statements.

     All subsequent written and oral forward-looking statements attributable to
the Company or persons acting on its behalf are expressly qualified in their
entirety by the qualifications in the preceding paragraph.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     The Exhibit, as shown in the "Index of Exhibits", attached hereto as page
12, is filed as a part of this Report.



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.


                   ROSE HILLS COMPANY


                   /s/ KENTON C. WOODS
                   -------------------
                   Kenton C. Woods
                   Executive Vice President Finance and Chief Financial Officer,
                   Secretary and Treasurer
                   (Duly Authorized Officer and Principal Financial Officer)



August 13, 2001

                                       12
<PAGE>

INDEX OF EXHIBITS


Exhibit
Number    Description
------    -----------
*10.29    Gregg Williamson Employment Agreement

(b)  Reports on Form 8-K

      None

________________
  *Filed Herewith.

                                       13