Achieving a 2 percent increase in revenue, a 14 percent increase in gross profit, a 21 percent increase in adjusted earnings and a 30 percent increase in adjusted earnings per share over the second quarter of 2011;

Improving cemetery gross profit by 40 percent and gross profit margin by 430 basis points compared to the same quarter of last year by increasing cemetery revenue and controlling expenses;

Increasing funeral gross profit by 3 percent and improving funeral gross profit margin by 70 basis points compared to the same quarter of last year;

Producing an 18 percent increase in net preneed funeral sales and a 10 percent increase in cemetery property sales compared to the same quarter of last year;

Earning total returns of 4 percent in both the Company’s preneed and perpetual care trusts;

Announcing a 14 percent increase in the Company’s dividend to $.04 per share quarterly and returning $3.5 million through the payment of dividends; and

Generating operating and free cash flow of $20.7 million and $16.8 million, respectively.

Funeral revenue declined $0.2 million, or 0.3 percent, to $72.7 million for the second quarter of 2012. This decline is primarily due to a 2.7 percent decrease in same-store funeral services, which the Company believes compares favorably with industry-wide data in the Company’s markets. This decrease was partially offset by a 0.8 percent improvement in same-store average revenue per funeral service. In addition, the Company experienced a $0.7 million, or 17.6 percent, improvement in insurance commission revenue, primarily due to the increase in net preneed funeral sales.

Funeral gross profit increased $0.5 million, or 2.8 percent, to $18.5 million for the second quarter of 2012 compared to $18.0 million for the same period of 2011, primarily due to the Company’s continuing focus on effectively controlling its costs. Funeral gross profit margin improved 70 basis points to 25.4 percent for the second quarter of 2012 from 24.7 percent for the second quarter of 2011.

The cremation rate for the Company’s same-store operations was 42.4 percent for the second quarter of 2012 compared to 43.1 percent for the second quarter of 2011.

Net preneed funeral sales increased 17.9 percent during the second quarter of 2012 compared to the second quarter of 2011. Preneed funeral sales are deferred until the underlying contracts are performed and have no impact on current revenue.

Cemetery revenue increased $3.2 million, or 5.6 percent, to $59.9 million for the second quarter of 2012 primarily due to a $2.5 million, or 9.7 percent, improvement in cemetery property sales, coupled with a $0.9 million improvement in revenue related to trust activities and a $0.4 million improvement in the reserve for cancellations.

Cemetery gross profit increased $3.0 million, or 39.5 percent, to $10.6 million for the second quarter of 2012 compared to $7.6 million for the same period of 2011. This increase is primarily attributable to the increase in cemetery revenue, as previously noted and due to the Company’s continuing focus on effectively controlling its costs. Cemetery gross profit margin improved 430 basis points to 17.7 percent for the second quarter of 2012 from 13.4 percent for the same period of 2011.

The Company recorded $2.5 million in restructuring and other charges during the second quarter of 2012. This charge was primarily related to separation pay, termination benefits and a non-cash asset impairment, due in part to the restructuring of the sales and operations of the organization, as well as a separate reduction in workforce associated with the Company’s ongoing continuous improvement initiative.

As a result of the refinancing of the Company’s senior notes and revolving credit facility in April 2011, the Company recorded a $1.8 million charge for the early extinguishment of debt.

The effective tax rate for continuing operations for the quarter ended April 30, 2012 was 35.9 percent compared to 15.7 percent for the same period in 2011. The reduced rate in the second quarter of 2011 is primarily due to a $2.5 million tax benefit resulting from a reduction in the valuation allowance for capital losses, associated with the improved performance of the Company’s trust portfolio. In the second quarter of 2012, the Company recorded a tax benefit of $0.4 million resulting from a reduction in the valuation allowance for capital losses, associated with the improved performance of the Company’s trust portfolio.

During the second quarter of 2012, the Company decided to hold one of its e-commerce businesses for sale with the results of its operations and the related impairment included in discontinued operations.

During the second quarter of 2012, the Company repurchased 0.6 million shares of the Company’s Class A common stock for $3.8 million under its stock repurchase program.

Funeral revenue declined $2.1 million, or 1.4 percent, to $144.8 million for the first half of fiscal 2012. This decline is primarily due to a 3.6 percent decrease in same-store funeral services, which the Company believes is generally consistent with industry-wide data in the Company’s markets. This decrease was partially offset by a 1.0 percent improvement in same-store average revenue per funeral service. In addition, the Company experienced a $1.1 million, or 14.2 percent, improvement in insurance commission revenue, primarily due to the increase in net preneed funeral sales.

Funeral gross profit decreased $1.2 million, or 3.1 percent, to $37.3 million for the first six months of 2012, primarily as a result of the decrease in revenue, as previously noted. Funeral gross profit margin declined 40 basis points to 25.8 percent for the first six months of 2012 from 26.2 percent for the same period of 2011.

The cremation rate for the Company’s same-store operations was 42.8 percent for the first six months of 2012 compared to 42.3 percent for the same period of 2011.

Net preneed funeral sales increased 17.5 percent during the first half of fiscal 2012 compared to the same period of 2011. Preneed funeral sales are deferred until the underlying contracts are performed and have no impact on current revenue.

Cemetery revenue increased $0.6 million, or 0.5 percent, to $112.7 million for the first six months of fiscal 2012.

Cemetery property sales improved $3.3 million, or 6.9 percent compared to the first six months of 2011. In addition, the Company experienced a $1.8 million increase in revenue related to trust activities. These improvements were partially offset by a decline in finance charges as a result of reduced interest rates in this low interest rate environment, coupled with a $4.6 million decline in construction on various cemetery projects and in cemetery property revenue due to revenue recognition requirements for cemetery property sales.

Cemetery gross profit increased $1.8 million, or 11.6 percent, to $17.3 million for the first six months of 2012, primarily attributable to the increase in cemetery revenue, as previously noted, coupled with the Company’s continuing focus on effectively controlling its costs. Cemetery gross profit margin improved 160 basis points to 15.4 percent for the first six months of 2012 from 13.8 percent for the same period of 2011.

The Company recorded $2.5 million in restructuring and other charges during the second quarter of 2012. This charge was primarily related to separation pay, termination benefits and a non-cash asset impairment due to the restructuring of the sales and operations of the organization, as well as a separate reduction in workforce associated with the Company’s ongoing continuous improvement initiative.

As a result of the refinancing of the Company’s senior notes and revolving credit facility in April 2011, the Company recorded a $1.8 million charge for the early extinguishment of debt.

The effective tax rate for continuing operations for the six months ended April 30, 2012 was 35.0 percent compared to 35.6 percent for the same period in 2011. For the six months ended April 30, 2012, the Company recorded a benefit of $1.0 million resulting from a reduction in the valuation allowance for capital losses, associated with the positive performance of its trust portfolio. During the six months ended April 30, 2011, the Company recorded a $3.4 million tax benefit primarily related to the reduction in the valuation allowance for capital losses, associated with the favorable performance of its trust portfolio. This benefit was partially offset by a $2.9 million one-time, non-cash charge to income tax expense, as a result of the revaluation of its Puerto Rican deferred tax assets due to a change in Puerto Rican tax legislation.

During the first six months of 2012, the Company decided to hold one of its e-commerce businesses for sale with the results of its operations and the related impairment included in discontinued operations.

During the first six months of 2012, the Company repurchased 1.9 million shares of the Company’s Class A common stock for $11.6 million under its stock repurchase program. Since the reinstatement of the program in September 2010, the Company has purchased a total of 7.2 million shares for $44.3 million. The Company currently has $32.2 million remaining under its $125.0 million program.

The Company’s weighted average diluted shares outstanding decreased to 86.9 million shares for the six months ended April 30, 2012 compared to 91.1 million shares for the same period of 2011. The decrease is primarily due to the Company’s stock repurchase program, which has yielded a positive impact on the Company’s earnings per share.

Cash flow provided by operating activities for the second quarter of fiscal year 2012 was $20.7 million compared to $20.5 million for the same period of last year.

Cash flow provided by operating activities for the first six months of 2012 was $28.5 million compared to $35.7 million for the same period of last year. During the first six months of 2012, the Company invested $11.0 million in several cemetery inventory development projects, compared to $7.7 million for the same period of last year. This spending includes a $5.2 million investment in the Company’s cremation inventory development projects during the first six months of fiscal 2012, or a $3.9 million increase over the same period of last year. In addition, the Company experienced a change in working capital during the first six months of 2012, partly driven by a $5.0 million change in receivables due in part to improved preneed funeral and cemetery property sales, which are typically financed.

Free cash flow was $16.8 million and $20.7 million for the second quarter and first six months of 2012, respectively, compared to $17.4 million and $28.5 million for the second quarter and first six months of 2011, respectively, primarily due to the changes in operating cash flow, as described above.

The Company paid $3.5 million, or $.04 per share, and $6.5 million, or $.075 per share, in dividends for the second quarter and first six months of 2012, respectively, compared to $2.7 million, or $.03 per share, and $5.5 million, or $.06 per share, in dividends during the second quarter and first six months of 2011, respectively.

For the quarter ended April 30, 2012, the Company’s preneed funeral and cemetery merchandise and services trusts experienced a total return of 3.7 percent, and its perpetual care trusts experienced a total return of 4.0 percent.

For the last six months ended April 30, 2012, the Company’s preneed funeral and cemetery merchandise and services trusts and the perpetual care trusts both experienced a total return of 8.0 percent.

For the last three years ended April 30, 2012, the Company’s preneed funeral and cemetery merchandise and services trusts experienced an average annual total return of 14.9 percent, and its perpetual care trusts experienced an average annual total return of 16.3 percent.

For the last five years ended April 30, 2012, the Company’s preneed funeral and cemetery merchandise and services trusts experienced an average annual total return of 1.6 percent, and its perpetual care trusts experienced an average annual total return of 3.3 percent.

For the six months ended April 30, 2012, the fair market value of the Company’s portfolio improved $42.6 million to $847.2 million.

Revenues:

Funeral

Cemetery

Costs and expenses:

Funeral

Cemetery

Gross profit

Corporate general and administrative expenses

Restructuring and other charges

Hurricane related charges, net

Net loss on dispositions

Other operating income, net

Operating earnings

Interest expense

Loss on early extinguishment of debt

Investment and other income, net

Earnings from continuing operations before income taxes

Income taxes

Earnings from continuing operations

Discontinued operations:

Loss from discontinued operations before income taxes

Income tax benefit

Loss from discontinued operations

Net earnings

Basic earnings per common share:

Earnings from continuing operations

Loss from discontinued operations

Net earnings

Diluted earnings per common share:

Earnings from continuing operations

Loss from discontinued operations

Net earnings

Weighted average common shares outstanding (in thousands):

Basic

Diluted

Dividends declared per common share

Revenues:

Funeral

Cemetery

Costs and expenses:

Funeral

Cemetery

Gross profit

Corporate general and administrative expenses

Restructuring and other charges

Hurricane related charges, net

Net gain (loss) on dispositions

Other operating income, net

Operating earnings

Interest expense

Loss on early extinguishment of debt

Investment and other income, net

Earnings from continuing operations before income taxes

Income taxes

Earnings from continuing operations

Discontinued operations:

Loss from discontinued operations before income taxes

Income tax benefit

Loss from discontinued operations

Net earnings

Basic earnings per common share:

Earnings from continuing operations

Loss from discontinued operations

Net earnings

Diluted earnings per common share:

Earnings from continuing operations

Loss from discontinued operations

Net earnings

Weighted average common shares outstanding (in thousands):

Basic

Diluted

Dividends declared per common share

ASSETS

Current assets:

Cash and cash equivalents

Restricted cash and cash equivalents

Marketable securities

Receivables, net of allowances

Inventories

Prepaid expenses

Deferred income taxes, net

Total current assets

Receivables due beyond one year, net of allowances

Preneed funeral receivables and trust investments

Preneed cemetery receivables and trust investments

Goodwill

Cemetery property, at cost

Property and equipment, at cost:

Land

Buildings

Equipment and other

Less accumulated depreciation

Net property and equipment

Deferred income taxes, net

Cemetery perpetual care trust investments

Other assets

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Current maturities of long-term debt

Accounts payable and accrued expenses

Accrued payroll and other benefits

Accrued insurance

Accrued interest

Estimated obligation to fund cemetery perpetual care trust

Other current liabilities

Income taxes payable

Total current liabilities

Long-term debt, less current maturities

Deferred income taxes, net

Deferred preneed funeral revenue

Deferred preneed cemetery revenue

Deferred preneed funeral and cemetery receipts held in trust

Perpetual care trusts’ corpus

Other long-term liabilities

Total liabilities

Commitments and contingencies

Shareholders’ equity:

Preferred stock, $1.00 par value, 5,000,000 shares authorized; no shares issued

Common stock, $1.00 stated value:

Class A authorized 200,000,000 shares; issued and outstanding 83,141,621 and 84,421,416 shares at April 30, 2012 and October 31, 2011, respectively

Class B authorized 5,000,000 shares; issued and outstanding 3,555,020 shares at April 30, 2012 and October 31, 2011; 10 votes per share convertible into an equal number of Class A shares

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income:

Unrealized appreciation of investments

Total accumulated other comprehensive income

Total shareholders’ equity

Total liabilities and shareholders’ equity

Cash flows from operating activities:

Net earnings

Adjustments to reconcile net earnings to net cash provided by operating activities:

Net loss on dispositions

Loss on early extinguishment of debt

Non-cash restructuring charge

Premiums paid on early extinguishment of debt

Depreciation and amortization

Non-cash interest and amortization of discount on senior convertible notes

Provision for doubtful accounts

Share-based compensation

Excess tax benefits from share-based payment arrangements

Provision for deferred income taxes

Estimated obligation to fund cemetery perpetual care trust

Other

Changes in assets and liabilities:

(Increase) decrease in receivables

Increase in prepaid expenses

Increase in inventories and cemetery property

Decrease in accounts payable and accrued expenses

Net effect of preneed funeral production and maturities:

(Increase) decrease in preneed funeral receivables and trust investments

Decrease in deferred preneed funeral revenue

Decrease in deferred preneed funeral receipts held in trust

Net effect of preneed cemetery production and deliveries:

Increase in preneed cemetery receivables and trust investments

Increase (decrease) in deferred preneed cemetery revenue

Increase in deferred preneed cemetery receipts held in trust

Increase in other

Net cash provided by operating activities

Cash flows from investing activities:

Proceeds from sales of certificates of deposit and marketable securities and release of restricted funds

Deposits of restricted funds and purchases of marketable securities

Proceeds from the sale of assets

Purchase of subsidiaries and other investments, net of cash acquired

Additions to property and equipment

Other

Net cash used in investing activities

Cash flows from financing activities:

Proceeds of long-term debt

Repayments of long-term debt

Debt refinancing costs

Issuance of common stock

Purchase and retirement of common stock

Dividends

Excess tax benefits from share-based payment arrangements

Net cash used in financing activities

Net increase (decrease) in cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental cash flow information:

Cash paid during the period for:

Income taxes, net

Interest

Non-cash investing and financing activities:

Issuance of common stock to directors

Issuance of restricted stock, net of forfeitures

Consolidated net earnings

Add: Loss from discontinued operations

Earnings from continuing operations

Add: Non-cash interest expense on senior convertible notes ⁽²⁾

Add: Restructuring and other charges ⁽³⁾

Add: Loss on early extinguishment of debt

Add: Perpetual care funding obligation ⁽⁴⁾

Subtract: Net gain on dispositions

Subtract Unusual tax adjustments ⁽⁵⁾

Adjusted earnings from continuing operations

Net cash provided by operating activities ⁽¹⁾

Less: Maintenance capital expenditures

Free cash flow

Adjusted EBITDA

(Dollars in millions)

Consolidated net earnings

Add: Loss from discontinued operations

Earnings from continuing operations

Add: Depreciation and amortization

Add: Interest expense

Add: Loss on early extinguishment of debt

Add: Perpetual care funding obligation ⁽¹⁾

Add: Restructuring and other charges

Add: Income taxes

Subtract: Net gain on dispositions

Adjusted EBITDA

effects on our trusts and escrow accounts of changes in stock and bond prices and interest and dividend rates;

effects of the substantial unrealized losses in the investments in our trusts, including:

decreased future cash flow and earnings as a result of reduced earnings from our trusts and trust fund management;

the potential to realize additional losses and additional cemetery perpetual care funding obligations and tax valuation allowances;

effects on at-need and preneed sales of a weak economy;

effects on revenue due to the changes in the number of deaths in our markets and recent annual declines in funeral call volume;

effects on our revenue and earnings of the continuing national trend toward increased cremation and the increases in the percentage of cremations performed by us that are inexpensive direct cremations;

effects on cash flow and earnings as a result of increased costs, particularly supply costs related to increases in commodity prices;

effects on our market share, prices, revenues and margins of intensified price competition or improved advertising and marketing by competitors, including low-cost casket providers and increased offerings of products or services over the Internet;

risk of loss due to hurricanes and other natural disasters;

effects of the call options the Company purchased and the warrants the Company sold on our Class A common stock and the effects of the outstanding warrants on the ownership interest of our current stockholders;

our ability to pay future dividends on and repurchase our common stock;

our ability to consummate significant acquisitions of or investments in death care or related businesses successfully;

the effects on us as a result of our industry’s complex accounting model;