The document provides an earnings supplement for StoneMor Partners LP for the second quarter of 2016. It notes a net loss of $9.1 million for the quarter compared to a $4.8 million loss in the prior year. Adjusted EBITDA was $23 million compared to $26.6 million last year. It also announced a quarterly distribution of $0.66 per unit. Backlog increased by $49.3 million over the last year. Working capital needs include funding trust contributions and expansion capital expenditures. Cash flows are impacted by trust funding and accounts receivable growth. Non-GAAP reconciliations are provided for Adjusted EBITDA, distributable cash flow, and distributable available
The quarterly PowerPoint slide deck sent to investors for 1Q16, from CONE Midstream. CONE is a joint venture between CONSOL Energy and Noble Energy with pipelines exclusively in the Marcellus/Utica region.
The past year has been an active one for accounting standards updates (ASUs). Fortunately for those preparing for year end, the fourth quarter only had one ASU issued and the majority of the 17 updates issued by the Financial Accounting Standards Board (FASB) during 2015 are narrow in scope or simplifications of existing standards.
The New Year promises broader changes from the FASB, however. Major projects, including the Leasing Standard have been approved and are pending publication in early 2016.
The Financial Accounting Standards Board (FASB) completed its project on the classification and measurement of financial instruments with the release of Accounting Standards Update (ASU) 2016-01, Financial Instruments- Overall (Topic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities. The project began as one of the significant convergence projects with the International Accounting Standards Board (IASB), however, differences between the two Boards has resulted in accounting standards for financial instruments that are not converged in many respects.
The project included two previous exposure drafts issued in 2010 and 2013. The finalized ASU, however, differs in many significant respects from the changes proposed in each of those exposure drafts, largely due to the feedback received from constituents. The scope of the classification and measurement project ultimately became narrower in focus. It provides only targeted improvements to various aspects of the measurement and classification of financial instruments, primarily equity instruments.
The final ASU also provides disclosure relief for both public and non-public entities. Guidance for the classification and measurement of debt securities and loans receivable remains unchanged.
The quarterly PowerPoint slide deck sent to investors for 1Q16, from CONE Midstream. CONE is a joint venture between CONSOL Energy and Noble Energy with pipelines exclusively in the Marcellus/Utica region.
The past year has been an active one for accounting standards updates (ASUs). Fortunately for those preparing for year end, the fourth quarter only had one ASU issued and the majority of the 17 updates issued by the Financial Accounting Standards Board (FASB) during 2015 are narrow in scope or simplifications of existing standards.
The New Year promises broader changes from the FASB, however. Major projects, including the Leasing Standard have been approved and are pending publication in early 2016.
The Financial Accounting Standards Board (FASB) completed its project on the classification and measurement of financial instruments with the release of Accounting Standards Update (ASU) 2016-01, Financial Instruments- Overall (Topic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities. The project began as one of the significant convergence projects with the International Accounting Standards Board (IASB), however, differences between the two Boards has resulted in accounting standards for financial instruments that are not converged in many respects.
The project included two previous exposure drafts issued in 2010 and 2013. The finalized ASU, however, differs in many significant respects from the changes proposed in each of those exposure drafts, largely due to the feedback received from constituents. The scope of the classification and measurement project ultimately became narrower in focus. It provides only targeted improvements to various aspects of the measurement and classification of financial instruments, primarily equity instruments.
The final ASU also provides disclosure relief for both public and non-public entities. Guidance for the classification and measurement of debt securities and loans receivable remains unchanged.
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2. Forward-Looking Statements
2
This presentation contains forward-looking statements that involve a number of assumptions, risks and
uncertainties that could cause actual results to differ materially from those contained in the forward-
looking statements. The Partnership cautions readers that any forward-looking information is not a
guarantee of future performance. Such forward-looking statements include, but are not limited to,
statements about future financial and operating results, the Partnership’s plans, objectives, expectations
and intentions and other statements that are not historical facts. Risks, assumptions and uncertainties that
could cause actual results to materially differ from the forward-looking statements include, but are not
limited to, uncertainties associated with the cash flow from pre-need and at-need sales, trusts and
financings, which may impact Partnership’s ability to meet its financial projections, its ability to service its
debt and pay distributions, and its ability to increase its distributions; uncertainties associated with future
revenue and revenue growth, the integration or anticipated benefits of recent acquisitions or any future
acquisitions; Partnership’s ability to complete and fund additional acquisitions; the impact of Partnership’s
significant leverage on its operating plans; the decline in the fair value of certain equity and debt securities
held in Partnership’s trusts; Partnership’s ability to attract, train and retain an adequate number of sales
people; and other risks, assumptions and uncertainties detailed from time to time in the Partnership’s
reports filed with the U.S. Securities and Exchange Commission, including quarterly reports on Form 10-Q,
reports on Form 8-K and annual reports on Form 10-K. Forward-looking statements speak only as of the
date hereof, and the Partnership assumes no obligation to update such statements, except as may be
required by applicable law.
3. 2016 2nd Quarter Highlights
3
Net loss was $9.1 million for the 2nd quarter compared with net-loss of $4.8
million in the prior year period
Adjusted EBITDA (non-GAAP) was $23.0 million for the 2nd quarter compared
with $26.6 million for the prior year period
Declared a 47th consecutive quarterly distribution, amounting to $0.66 per
unit, reflecting an annual run-rate of $2.64 per unit
Distributable Available Cash (non-GAAP) was $30.3 million for the second
quarter 2016 compared with $26.0 million for the prior year second quarter
Backlog increased by $49.3 million, to $640.8 million, compared with June 30,
2015
4. Working Capital Items
4
Principal working capital needs
– Fund contributions to Merchandise and Perpetual Care trusts
– Expansion capital expenditures.
Cash flows are impacted by working capital movements associated
with flows to Merchandise trust and growth in accounts receivable
5. Non-GAAP Reconciliations
5
Adjusted EBITDA, DCF and Distributable Available Cash should not be considered in isolation of, or as a
substitute for, net income (loss) as an indicator of operating performance or cash flows from operating activities
as a measure of liquidity.
The Partnership defines Adjusted EBITDA as net income (loss) plus the following adjustments:
• Interest expense;
• Income tax expense;
• Depreciation and amortization.
• Asset impairments;
• Acquisition and related costs;
• Non-cash stock compensation;
• (Gains) losses on asset disposal; and
• Other items.
DCF is determined by calculating EBITDA, then adjusting it for non-cash, non-recurring and other items to
achieve Adjusted EBITDA, and then deducting cash interest expense, net cash income tax, maintenance
capital expenditures and other items.
Distributable Available Cash is determined by adding cash on hand at the beginning of the period.
Non-GAAP financial measures that the Partnership uses should not be considered as alternatives to GAAP financial measures, and
you should not consider such non-GAAP financial measures in isolation or as a substitute for or superior to the Partnership results
as reported under GAAP. These non-GAAP financial measures are used internally by the management to measure Partnership
operating performance, and management believes that they are relevant and helpful to investors in understanding Partnership
performance. Non-GAAP financial measures used by the Partnership include (i) certain revenues and related expenses that are
deferred in accordance with GAAP because certain delivery and performance requirements have not yet been met during the period
the contracts were written, and (ii) exclude certain revenues and related expenses that are recognized in accordance with GAAP due
to their inclusion in non-GAAP measures during earlier periods when the contracts were written. A portion of the cash received
with regard to revenues that are deferred under GAAP is held in trust until the Partnership meets certain delivery and performance
requirements.
7. 7
($ in thousands)
Non-GAAP Reconciliation (cont.)
This table presents non-GAAP financial measures that are used internally by the Partnership to measure Partnership operating performance. A
reconciliation of these non-GAAP financial measures with the most directly comparable financial measures presented in accordance with GAAP is
provided on page 14 of the earnings press release for the second quarter of 2016. You can find our earnings press release on our website,
www.stonemor.com/press-releases.