Forward-Looking Statements Certain statements made herein or elsewhere by, or on behalf of, the Company that are not historical facts are intended to be forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include any projections of earnings, revenues, asset sales, cash flow, debt levels or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan” or “anticipate” and other similar words. Forward-looking statements contained in this report include but are not limited to statements relating to (1) the Company’s plan to sell its foreign operations and certain funeral home assets and excess cemetery property, and potential effects thereof and (2) anticipated future performance of the Company’s preneed sales program and anticipated future performance of funds held in trust. On December 19, 2001, the Company filed a Form 8-K with detailed information discussing its financial forecasts for 2002. The summarized forecast information below is consistent with that information filed on Form 8-K. The forecast financial information included in this Form 10-K has been prepared by, and is the responsibility of, the Company’s management. PricewaterhouseCoopers LLP has neither examined nor compiled the accompanying forecast financial information and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report included in this Form 10-K relates to the Company’s historical financial information. It does not extend to the forecast financial information and should not be read to do so. Accuracy of the forecasts is dependent on assumptions about events that change over time and is thus susceptible to periodic change based on actual experience and new developments. The forecasts are based on a variety of estimates and assumptions made by management of the Company with respect to, among other things, industry performance; general economic, market, industry and interest rate conditions; preneed and at-need sales activities and trends; fluctuations in cost of goods sold and other expenses; capital expenditures; and other matters that cannot be accurately predicted, may not be realized and are subject to significant business, economic and competitive uncertainties, all of which are difficult to predict and many of which are beyond the Company’s control. Accordingly, there can be no assurance that the assumptions made in preparing the forecasts will prove accurate, and actual results may vary materially from those contained in the forecasts. For these reasons, the forecasts should not be regarded as an accurate prediction of future results, but only of results that may be obtained if substantially all of management’s principal expectations are realized. The Company cautions readers that it assumes no obligation to update or publicly release any revisions to forward-looking statements made herein or any other forward-looking statements made by or on behalf of the Company. The Company’s goal is to return to debt levels of approximately $500 million, or 2.5 times domestic EBITDA. Management projects that the Company will achieve this goal by the second quarter of 2003 by further reducing debt by approximately $140 million to $150 million with the estimated proceeds from the sale of its operations in Southern Europe (France, Spain and Portugal), Canada and Argentina, plus future tax benefits associated with closed and prospective sales and with an additional amount of approximately $50 million to $55 million per year in free cash flow. In addition, the Company anticipates generating $5 million to $10 million in fiscal year 2002 from the sale of domestic assets. By the end of 2002, management expects to have completed the sale of all of its foreign operations, and all tax benefits are expected to be realized in fiscal years 2002 and 2003. Management expects that once the Company achieves its debt goal, it will be in a position to expand its businesses internally and to consider acquiring high-quality firms, using internally generated free cash flow. Management projects fiscal year 2002 earnings per share of $0.38 to $0.42 (before the possible noncash charge related to the cumulative effect of the change in accounting for goodwill which the Company does not expect to be material) and cash flow from operations between $60 million and $70 million. Management expects the following factors to impact fiscal year 2002 financial results: Significant Factors Affecting Earnings: Management expects that the sale of its foreign operations will cause revenues, operating earnings and net earnings for fiscal year 2002 to be lower than fiscal year 2001, although the sales will have a positive impact on interest expense as proceeds are used to reduce debt. The Company expects interest expense to increase due to the refinancing completed on June 29, 2001, which increased the Company’s average borrowing rate by approximately 300 basis points. The Company expects the increase in interest expense to be mitigated as it reduces debt. The Company intends to adopt SFAS No. 142 effective November 1, 2001, and therefore would benefit from the elimination of domestic goodwill amortization for fiscal year 2002. In fiscal year 2001, domestic goodwill amortization was $14 million. During fiscal year 2001, the Company benefited from $5 million in nonrecurring net gains related to the sale of excess cemetery property, funeral home real estate and other assets. The Company expects that the yield on assets in its perpetual care trust funds will be below the 7.1 percent yield achieved in fiscal year 2001 due to current market conditions and the mix of investments held in the trusts. Management expects the Company’s tax rate to increase, due primarily to the disposition of its foreign assets offset by the implementation of SFAS No. 142. As discussed in Note 3 to the consolidated financial statements, the Company believes that the adoption of SFAS No. 142 will not result in a material noncash impairment charge in fiscal year 2002. Significant Factors Affecting Free Cash Flow (Cash Flow From Operations Less Maintenance Capital Expenditures): In fiscal year 2001, the Company realized cash benefits from several nonrecurring tax items such as a federal tax refund, a reduction in 2001 estimated tax payments, a refund of some state tax payments and repayment from the funeral trust funds for tax payments made on behalf of the trusts. The Company received $13.5 million in cash proceeds in fiscal year 2001 from the sale of excess cemetery property. Interest expenditures are expected to increase, as described above. The Company’s cash flow in fiscal year 2002 will be affected by any future foreign asset sales and the timing of the receipt of any tax benefits from completed and future sales.