November Investor Day

1. Analyst / Investor Day
November 18, 2013

2. Confidential
This presentation contains certain statements that may be deemed to be forward-looking
statements within the meaning of the Securities Acts. All statements, other than statements of
historical facts, that address activities, events or developments that the Partnership expects,
projects, believes or anticipates will or may occur in the future, including, without limitation, the
outlook for population growth and death rates, general industry conditions including future
operating results of the Partnerships properties, capital expenditures, asset sales, expansion and
growth opportunities, bank borrowings, financing activities and other such matters, are forwardlooking statements. Although the Partnership believes that its expectations stated in this
presentation are based on reasonable assumptions, actual results may differ from those
projected in the forward-looking statements. For a more detailed discussion of risk factors,
please refer to the annual Report on Form 10-K and quarterly reports on form 10-Q filed with the
SEC and the prospectus and the prospectus supplement relating to this offering.
In addition, the projected impact of acquisitions reflect managements projections as to possible
future results based on a number of assumptions that are inherently uncertain, including without
limitation the organic growth of the Partnership, the availability of acquisition targets, the
purchase prices for the targets, the availability of debt or equity financing from either third parties
or the targets and the Partnership’s ability to integrate and manage such acquisitions. The
assumptions involve significant elements of subjective judgment and analysis, and no
representation is made as to their or the projections attainability.
2

3. Presenters
StoneMor Partners L.P.
Name
Title
Lawrence Miller
Chairman, President and Chief Executive Officer
Timothy Yost
Chief Financial Officer
William R. Shane
Vice-Chairman
Raymond Smith
Vice-President Marketing
John C. McNamara
Director of Investor Relations
David Spungen
CEO Hillview Capital Advisors
3

4. Company Overview
Lawrence Miller
President & CEO

5. StoneMor Partners L.P.
 StoneMor is the second largest owner and operator of cemeteries in
the US
• 277 cemeteries and 90 funeral homes, diversely located across 28 states and
Puerto Rico
• As of 12/31/2012, over 12,300 acres of land, equivalent to an aggregate weighted
average sales life of 246 years
5

6. Cemetery Revenues – Major Products Sold
Pre-need
At- need
 Burial Lots


 Mausoleums


 Burial Vaults and Crypts


 Grave Markers


 Grave Opening and Closing



(Funeral Homes only)
Fees
 Caskets
6

7. Diverse Geographic Exposure
As of November 1,
2013
Indiana
11 Cemeteries
5 Funeral Homes
Iowa
1 Cemeteries
Washington
3 Cemeteries
2 Funeral Homes
Kansas
3 Cemeteries
2 Funeral Homes
Illinois
8 Cemeteries
22Funeral Homes
Rhode Island
2 Cemeteries
Kentucky
2 Cemeteries
WA
Oregon
6 Cemeteries
12 Funeral Homes
Ohio
14 Cemeteries
2 Funeral Homes
Michigan
13 Cemeteries
Pennsylvania
52 Cemeteries
8 Funeral Homes
New Jersey
6 Cemeteries
OR
Delaware
1 Cemeteries
MI
Maryland
10 Cemeteries
1 Funeral Homes
PA
IA
OH
WV
CO
CA
KS
NC
TN
MS
Colorado
2 Cemeteries
Arkansas
2 Funeral Homes
Missouri
6 Cemeteries
5 Funeral Homes
7
GA
Alabama
9 Cemeteries
6 Funeral Homes
Mississippi
2 Cemeteries
1 Funeral Homes
277 Cemeteries
= 367 Total Locations
AL
Virginia
31 Cemeteries
2 Funeral Homes
North Carolina
South Carolina
16 Cemeteries
8 Cemeteries
3 Funeral Homes
SC
AR
+ 90 Funeral Homes
VA
KY
MO
California
6 Cemeteries
10 Funeral Homes
Hawaii
1 Cemeteries
West Virginia
33 Cemeteries
2 Funeral Homes
IN
IL
Puerto Rico
7 Cemeteries
5 Funeral Homes
FL
Tennessee
11 Cemeteries
5 Funeral Homes
Georgia
7 Cemeteries
Florida
4 Cemeteries
17 Funeral Homes

8. Investment Highlights

10%* yield superior to most MLPs**

Strong historical performance

Proven acquisition record

Favorable demographic trends

High barriers to entry

Experienced management
8
*Source: Barrons
**As of November 11, 2013

9. Attractive Yield

10% Yield vs. 6% Average MLP Yield*

Has increased 30% since 2004 IPO

37 consecutive quarterly distributions
Distribution Per Unit
$2.45
$2.39
$2.40
$2.36
$2.33
$2.35
$2.30
$2.25
$2.25
$2.20
$2.22
$2.16
$2.15
$2.10
$2.05
$2.00
2008 2009 2010 2011 2012 2013
TTM
*Source: Barrons
9

10. Historical Performance
($ in millions)
($ in millions)
REVENUE
OPERATING PROFIT
$350
$300
$281
$247
$250
$183
$228
$218
$209
$200
$70
$314
$296
$58
$60
$243
$54
$243
$49
$50
$197
$181
$40
$38
$36
$32
$150
$30
$100
$20
$50
$17
$10
$-
$14
$13
$10
$6
$3
$2008
2009
2010
GAAP
2011
Accrual
2012
2013
TTM
2008
2009
2010
GAAP
10
2011
Accrual
2012
2013 TTM

11. Diversified Revenue Streams
STONEMOR BUSINESS MIX BY REVENUE – TWELVE MONTHS ENDED DECEMBER 31, 2012
Funeral Home
Revenues,
14.7%
~60% of StoneMor’s
revenue is generated
through highly
predictable at-need
business
Interest
Income, 2.8%
Investment
Income, 9.9%
At-need Sales,
30.8%
StoneMor’s +800 person sales team creates an unparalleled advantage
in pre-need sales performance
11
Other
Cemetery
Revenues,
1.8%
Pre-need
Sales, 40.0%

12. Proven Growth and Acquisition Strategy
 StoneMor has demonstrated a consistent track record of growth and
financial performance
• 145 cemeteries and 85 funeral homes acquired since 2004 IPO
• Revenue (GAAP) has increased from $145 million in 2007 to $243 million in 2013
(TTM)
o
10.8% ’07-’12 CAGR
• Adjusted operating profits have increased from $27 million in 2007 to $58.0 million
in 2013 (TTM)
o
15.1% ’07-’12 CAGR
12

13. Favorable Demographics
 Aging of the Baby Boom Generation will accelerate the death rate
and expand our target pre-need market
ANNUAL BIRTHS IN THE UNITED STATES 1930-1960
Source: Department of Health and Human Services.
13

14. Favorable Demographics
 Sharply increasing population in our target pre-need market
Projected U.S. Population
(in thousands)
PROJECTED U.S. POPULATION IN 55-65 YEAR OLD CATEGORY
Target Market More
Resilient to
Economic
Downturns

Target 55 to 65 age range

Near retirement – low unemployment risk

Mortgage paid-off (or almost) – minimal debt obligations

Adult children – no tuition costs
Source: U.S. Department of Commerce Census Bureau.
14

15. Substantial Industry and Financial
Barriers to Entry
Barriers to Entry
 Scarcity and cost of real estate near densely populated areas
 Zoning restrictions
 Initial capital requirements
 Strength of family tradition and heritage
 Administratively complex business for new entrants
 Deferred revenue accounting (SAB 101) makes cemetery
acquisitions unattractive to “C-corps” valued on EPS and EBITDA,
keeping consolidators out of the market
Because of the barriers to entry, there are few new cemeteries built. The only way to enter
the industry is to buy an existing cemetery
15

16. Highly Fragmented Industry
Large Death Care Industry
Highly Fragmented Industry Revenue
$17 Billion Market
Owned by
Consolidators
20% (1)
Cemeteries,
9,600, 30%
$6 billion
$11 billion
Funeral
Homes,
22,000, 70%
Independent
Operators,
80%
Economies of scale and consolidation opportunities provide competitive advantages
___________________________
Source: ABN Amro Research; Public Filings.
(1) Includes StoneMor, SCI, Stewart, Carriage and Loewen.
___________________________
Source: National Directory of Morticians; Public Filings.
16

17. Unique Cemetery Focus
22,600 U.S. Cemeteries
Largest For-Profit Cemetery Operators
Cemeteries
SCI
StoneMor
Stewart
(3)
Carriage
(4)
(2)
Ratio
374
(1)
Funeral
Homes
1,431
1:3.8
277
90
3:1
141
217
1:1.5
32
167
1:5.2
For Profit,
9,600, 42%
Municipal,
Military,
Religious,
Non-Profit,
13,000, 58%
StoneMor has a unique focus on
ownership and operation of cemetery
assets
(1)From page 38 of SCI’s 9/30/13 10-Q
(2) From page 5 of StoneMor’s 9/30/13 10-Q
(3) From page10 of Stewart’s 7/31/13 10-Q
(4) From page 9 of Carriage’s 9/30/13 10-Q
17

18. Experienced Management Team
StoneMor Partners L.P.
Name
Title
Years of Industry Experience
Lawrence Miller
Chairman, President and Chief
Executive Officer
40
Timothy Yost
Chief Financial Officer
22(1)
Michael Stache
Senior Vice President and Chief
Operating Officer
24
Ken Lee
Vice President of Funeral Home
Operations
32
Frank Milles
Vice President Administration,
Trust & Due Diligence
35
Gregg Strom
Senior Vice President of Business
Development
25
(1) Reflects total experience.
18

19. Total Return
Indexed Total Return of StoneMor Units vs. NYSE Index
19

20. Financial Overview
Tim Yost
Chief Financial Officer

21. 2013 Highlights
 Acquired Florida based Seawind Funeral Homes
• Paid $15 million in cash, units and debt
• 6 homes, 2 with cremation facilities
 Increased distribution to $0.60 per unit
 Raised approximately $40 million through 1.61 million unit offering
 Cash tender for outstanding 10.25% Senior Notes due 2017
 Priced $175 million in senior notes due 2021 at 7.875%
 Acquired Forest Lawn Cemetery in Richmond, Virginia
• Paid $5 Million
• More than 500 interments per year
 Operating Agreement with Archdiocese of Philadelphia
21

22. 2013 9-Month Operational
Performance Highlights
 Increased Distributable Free Cash Flow 34.3%
 Increased Production Based Revenue by 7.8%
 Increased Value of Pre-Need Contracts by 6.0%
 Increased Funeral Home Revenues by 36.4%
 Increased Adjusted Operating Profits by 11.1%
22

23. StoneMor’s Master Limited
Partnership Structure
MLP
Overview
 StoneMor makes distributions to its unitholders on
a quarterly basis
• Paid from available cash after debt service and other
expenses
 MLP structure is predominantly tax free
 At least 90% of gross income must be “qualifying
income”
Tax Status
• Qualifying income comprised of sale of real property (burial
lots, lawn and mausoleum crypts), cremation niches, interest
and dividends
 Non-qualifying income, such as caskets, markers
and funeral home sales, are operated through taxsubject subsidiaries
23

24. Cemetery Accounting – GAAP vs. Accrual
 GAAP requires that cemetery product revenue be deferred until (i) the product is
purchased, (ii) the product is specifically identified to the customer, and (iii) title is
transferred
 Management uses “accrual” accounting to monitor its performance, recognizing
revenue at the time a contract is finalized
 The timing differences between GAAP criteria for recognition and the time sales are
made create significant disparities in financial results across the two methods
• Cemetery operations are particularly affected due to the high level of pre-need
sales
 SEC now requires the Company to show both accrual and GAAP-based MD&A in
its filings
CEMETERY AND FUNERAL HOME BUSINESS MIX
Cemeteries
SCI
StoneMor
(*)
Ratio
374
*
Funeral
Homes
1,431
1:3.8
277
90
3:1
Stewart
(*)
141
217
1:1.5
Carriage
*
32
167
1:5.2
*See slide 17 for sources
24
Cemetery focus
requires use of
accrual
accounting

25. Cemetery Revenue –
Accounting Recognition
 There are significant timing differences for cemetery product revenue recognition
between GAAP and accrual accounting
Cemetery Product
GAAP Revenue Recognition
Burial Lots
10% of selling price collected
Mausoleums
(Pre-Constructed)
% of completion basis, once 10%
of selling price collected
Mausoleums
(Existing)
10% of selling price collected
Burial Vaults and
Crypts
When installed in the ground
(0 to 18 months)
When stored in a warehouse
owned by a 3rd party
(0 to 18 months)
Caskets
When stored in a warehouse
owned by a 3rd party
(0 to 18 months)
Grave Opening (initial)
When vault is installed
(0 to 18 months)
Grave Opening (final) When customer is dead & buried
(~25 years)
Accrual Revenue Recognition
•
Recognized when the
customer and StoneMor
finalize a contract for a
particular product or
service
•
Revenue is recorded less
a 10% bad debt reserve
(historically 8.8%)
•
Expenses are accrued
•
Receivables are booked
Grave Markers
25

26. Historical Performance
($ in millions)
($ in millions)
REVENUE
OPERATING PROFIT
$350
$300
$281
$247
$250
$183
$228
$218
$209
$200
$70
$314
$296
$58
$60
$243
$54
$243
$49
$50
$197
$181
$40
$38
$36
$32
$150
$30
$100
$20
$50
$17
$10
$-
$14
$13
$10
$6
$3
$2008
2009
2010
GAAP
2011
Accrual
2012
2013
TTM
2008
2009
2010
GAAP
26
2011
Accrual
2012
2013 TTM

27. Conservative Financial Profile
Adjusted Operating Profits (Accrual) Exceed Distributions
$58
$54
$60
$49
$50
$38
$36
$51
$47
$45
$40
$32
$30
$27
$20
$13
$10
$3
$10
$-
Adj. Operating Profit / Accrual*
$14
Distributions
2009
2010
$6
2011
GAAP Operating Profit
2012
2013 TTM
GAAP Operating Profit
Distributions
Adj. Operating Profit / Accrual*
Adjusted Operating Profit, or the Accrual
method, is the measure by which
management operates the business
27

28. Condensed Consolidated Balance Sheet
(in thousands)
September 30,
2013
December 31,
2012
Assets
Cash
Accounts Receivable
Cemetery Property
Property and Equipment
Trust Funds
$
Deferred Costs and Expenses
Goodwill and other
Total Assets
19,984
128,247
316,522
85,282
718,121
$
7,946
123,416
309,980
79,740
658,286
94,034
86,625
85,936
78,421
$1,448,815
$ 1,343,725
$
$
Liabilities and Partners' Capital
Accounts Payable and Accrued Liabilities
Long-term Debt
Deferred Revenues
Merchandise Liability
Perpetual Care Trust Corpus
Deferred Taxes and other
39,325
281,092
557,973
129,922
30,806
254,949
497,861
125,869
302,766
13,610
282,313
16,745
1,324,688
1,208,543
124,127
135,182
$1,448,815
$ 1,343,725
Partners' Capital
Total Liabilities and Partners' Capital
28

29. Strong Balance Sheet & Recovery Profile
 Balance sheet with low-risk, marketable assets providing full debt protection
$600
$34
$500
$130
$400
$300
$564
$281
$200
$100
$119
$0
Cash, AR and
AP and Accrued
Merchandise Trust (1) Liabilities
Merchandise
Liability
Debt
Excess Cash and
Assets
 Additional Value from Cemetery Property and Perpetual Care Trusts
• Cemetery Property
o
$316.5 million book value as of September 30, 2013
o
Approximately 12,300 acres, weighted average estimated sales life of over 246 years
• Perpetual Care Trusts
o
Future maintenance costs are funded through perpetual trusts, with assets of $302.8 million
as of September 30, 2013
29

30. Sustained Business Growth While
Maintaining Stable Credit Profile
Asset base has grown while total leverage has remained steady
($ in millions)
Total Assets, Debt and Partners’ Capital
Total Debt / Accrual EBITDA
5.0x
Total Assets
Total Debt
Total Partners' Capital
$1,448
$1,500
$1,344
4.0x
$1,249
3.8x
3.6x
3.6x
$1,147
$1,200
3.4x
3.1x
3.0x
2.8x
$859
$900
$738
2.0x
$600
$300
$183
$161
$112
$119
$220
$128
$255
$195
$180
$135
$281
1.0x
$124
$0
0.0x
2008
2009
2010
2011
2012
3Q '13
2008
30
2009
2010
2011
2012
TTM Q3

31. Financial Summary
 Accounting not representative of current sales activity
 Continuing operational performance and growth
 Strong balance sheet with solid assets
 Cash and investments far in excess of all liabilities
 Uniquely positioned to take advantage of rising interest rate
environment
31

32. Growth Through Acquisitions
William R. Shane
Vice-Chairman

33. Disciplined Acquisition Philosophy
 Acquisitions have contributed to strong corporate growth
 Discipline in selecting target -- “Never break the model”
 Focus on acquisitions that generate incremental cash flow in
excess of financing costs
 Accretive from day one
33

34. Acquisition Track Record
Since Our IPO in September 2004
Cemeteries
Funeral Homes
Purchase Price(1)(2)
2005 Purchases
23
6
$16.0
2006 Purchases
23
14
17.0
2007 Purchases
48
30
81.9
2008 Purchases
7
2
2.1
2009 Purchases
3
0
7.3
2010 Purchases
22
5
49.4
2011 Purchases
17
11
16.2
2012 Purchases
5
17
34.9
2013 Purchases (YTD)
1
6
22.8
149
91
$247.6
Assets
(1) Includes transaction costs
(2) In millions
34

35. Acquisition Contributions
Acquisitions Contribute to Overall Corporate Growth
Selected Information
2004 (000’s)
2012 (000’s)
% Increase
Cemetery Property
$151,215
$309,980
106%
Trust Funds
$242,474
$658,286
171%
Total Assets
$494,467
$1,343,725
172%
Total Revenues (GAAP)
$89,248
$242,606
172%
132
276
109%
7
86
1,129%
# Cemeteries
# Funeral Homes
36

36. Funeral Home Growth
2004
2012
7
86
Revenues
$1,953
$35,679
Expense
$1,712
$28,725
$241
$6,954
Funeral Homes
Operating Profit
 Funeral home revenue increased from 2% to 15% of total
GAAP revenue
 Funeral homes generally generate positive cash flow
without the need to fund capital growth
36

37. Acquisition Criteria
 Internal rate of return greater than cost of capital
•
•
10 year discounted cash flow
Terminal value equal to 5 times year-10 cash flow
 Positive cash flow after repaying acquisition price over a 10 year
period
 Generate cash flow toward an increased distribution
 Cemetery property must have minimum of 25 years sales life at
projected rate
 Reasonably be able to fit within the companies debt leverage
calculation
37

38. Properties that meet the preceding
criteria generally have:
 Large trust funds
 Significant available inventory for sale
 Proximity to metropolitan market areas
 Historical interments in excess of 200 annually
 Significant at-need historical volume
38

39. Major Improvements
Post Acquisition
 Institute pre-need sales program
 Seasoned, professional management
 Significantly reduce product costs
 Consolidate office functions into home office
 Professional trust fund management which improves trust fund
returns
 Price increases do not support purchase price
39

40. Working Capital Borrowings
 Cemetery Acquisitions generally require working capital
borrowings to finance growth as indicated by:
• Build in Accounts Receivable
• Deposits into Merchandise Trust Funds
• Construction of lawn crypts, mausoleums & niches
 Borrowing requirement greatest in years 1 & 2 after acquisition
 Borrowing needs are generally eliminated after year 4
 Acquisition criteria require all borrowings to be repaid by year-10
 Borrowings represent deferred acquisition price
40

41. Acquisitions
Acquisition philosophy has helped company to:
 Increase distribution from $1.85 per unit in 2004 to $2.40 per unit in 2013
 Increase assets over $800 million while increasing long term debt only
$172 million
41

42. Thank You