Investor and Analyst Day Grand Hyatt Hotel NYC November 11, 2015
Investor and Analyst Day Grand Hyatt Hotel
NYC November 11, 2015
Forward-Looking Statements
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, those associated with the cash flow from our pre-need and at-need sales,
our trusts, and financings, which may impact our ability to meet our financial projections, our ability
to service our debt and pay distributions, and our ability to increase our distributions; future revenue
and revenue growth; the integration or anticipated benefits of our recent acquisitions or any future
acquisitions; our ability to complete and fund additional acquisitions; the effect of economic
downturns; the impact of our leverage on our operating plans; the decline in the fair value of certain
equity and debt securities held in our trusts; our ability to attract, train and retain an adequate number
of sales people; the volume and timing of pre-need sales of cemetery services and products; increased
use of cremation; changes in the death rate; changes in the political or regulatory environments,
including potential changes in tax accounting and trusting policies; litigation or legal proceedings that
could expose us to significant liabilities and damage our reputation; the effects of cyber security
attacks due to our significant reliance on information technology; the financial condition of third-
party insurance companies that fund our pre-need funeral contracts; 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.
2
Agenda
Topic Presenter
Introductions John McNamara
Who We Are Larry Miller
Industry Dynamics Larry Miller
Growth Strategy Larry Miller
Financial Strategy Sean McGrath
Financial Performance Sean McGrath
Q&A
3
Management Team Representatives
Name Title
Larry Miller Chairman, President and Chief Executive Officer
Sean McGrath Chief Financial Officer & Secretary
David Meyers Chief Operating Officer
Ken Lee Vice President, Funeral Operations
Ray Smith Vice President, Marketing
John McNamara Director of Investor Relations
4
Who We Are
Larry Miller President & CEO
StoneMor At-a-Glance
Second largest owner and operator of cemeteries in the U.S.
306 cemeteries / 103 funeral homes, located across 28 states and Puerto Rico
Complete range of funeral merchandise and services, along with cemetery property, merchandise and services, both at the time of need and on a pre-need basis
Over 15,716 acres of land, as of December 30, 2014, equivalent to a weighted average sales life of 247 years
55,500 burials performed in 2015 TTM / 15,572 funeral service calls
$771.1 million in Merchandise and Perpetual Care Trusts as of September 30, 2015
We are the only deathcare company structured as a master limited partnership (MLP)
6
Mission-Driven Strategy
Mission
Vision
Strategy
To help families memorialize every life with dignity.
To be the preferred operator of deathcare facilities and preferred provider of deathcare services.
To use an aggressive, yet conservatively financed acquisition strategy to build market share. Leverage these positions to expand service offerings.
7
Business Overview
A full suite of memorialization products
and services
– 111,000+ pre-need and at-need contracts written in 2014
– 92,660 + pre-need and at-need contracts written year-to-date
2015
• Average contract value of $2,748
– 14,900+ funeral calls in 2014
– 11,800+ calls YTD
• Average per call value of $4,000
Burial Lots Funeral Services
Grave Opening & Closing
Cremation
Mausoleums Burial Vaults
Caskets Grave Markers
Lawn Crypts Memorials
8
Our Evolution
2004 (IPO)(1) 2015(2)
Operational Data
Cemeteries / Funeral Homes 132 / 7 306 / 103
Employees ~1,100 ~3,400
Annual Interments ~22,000 ~50,500
Funeral Service Calls 650 14,900
Financial Data
Production-Based Revenue $89 million $391 million
Adjusted EBITDA $29 million $95 million
Distribution per Unit $1.85 $2.58(3)
Market Cap $175 million $970 million
(1) Represents data as of 12/31/2004 or for the twelve month period ended 12/31/2004, as applicable. (2) Represents data as of 9/30/2015 or for the twelve month period ended 9/30/2015, as applicable. (3) Includes distribution declared on 10/27/2015
9
Our Footprint in 2004
WA
OR
CA CO
KS
IA
IL
MO
AR
IN
MI
OH
PA
WV
KY
TN
VA
NC
SC
GA AL MS
FL
Ohio 2 Cemeteries 1 Funeral Home
Rhode Island 2 Cemeteries
Pennsylvania 44 Cemeteries 2 Funeral Homes
New Jersey 6 Cemeteries
Delaware 1 Cemetery
Maryland 10 Cemeteries 1 Funeral Home
West Virginia 32 Cemeteries
Virginia 29 Cemeteries 2 Funeral Homes
Georgia 1 Cemetery
Tennessee 3 Cemeteries
Alabama 1 Cemetery 1 Funeral Home
GA AL
TN
VA WV
PA
OH
132 Cemeteries
+ 7 Funeral Homes
= 139 Total Locations
As of December 31, 2004
Strong regional presence at the time of our IPO
10
Our Footprint Today
Significantly enhanced geographic scale and diversity
306 Cemeteries
+ 103 Funeral Homes
= 409 Total Locations
WA
OR
CA CO
KS
IA
IL
MO
AR
IN
MI
OH
PA
WV
KY
TN
VA
NC
SC
GA AL MS
FL
Washington 3 Cemeteries 2 Funeral Homes
Oregon 7 Cemeteries 11 Funeral Homes
California 7 Cemeteries 8 Funeral Homes
Colorado 2 Cemeteries
Kansas 3 Cemeteries 2 Funeral Homes
Hawaii 1 Cemetery
Iowa 1 Cemetery
Illinois 11 Cemeteries 4Funeral Homes
Indiana 11 Cemeteries 5 Funeral Homes Michigan
13 Cemeteries
Kentucky 2 Cemeteries
Ohio 14 Cemeteries 2 Funeral Homes
Rhode Island
2 Cemeteries
Pennsylvania 68 Cemeteries 10 Funeral Homes
New Jersey 6 Cemeteries
Delaware 1 Cemetery
Maryland 10 Cemeteries 1 Funeral Home
West Virginia 33 Cemeteries 2 Funeral Homes
Virginia 34 Cemeteries 2 Funeral Homes
North Carolina 19 Cemeteries 2 Funeral Homes
South Carolina 8 Cemeteries 2 Funeral Homes
Puerto Rico 7 Cemeteries 5 Funeral Homes
Georgia 7 Cemeteries
Florida 8 Cemeteries 26 Funeral Homes
Tennessee 11 Cemeteries 5 Funeral Homes
Alabama 9 Cemeteries 6 Funeral Homes
Mississippi 2 Cemeteries 1 Funeral Home
Arkansas 2 Funeral Homes
Missouri 6 Cemeteries 5 Funeral Homes
As of September 30, 2015 11
Diversified Revenue Streams
> 50% of revenues generated through at-need and other highly predictable sources
2015 YTD
BUSINESS MIX GENERATES STABLE AND PREDICTABLE REVENUE STREAMS
Pre-need Sales, 41.0%
At-need Sales, 26.3%
Investment Income, 12.2%
Interest Income, 2.2%
Funeral Home Revenues, 16.8%
Other Cemetery Revenues, 1.4%
12
Stable and Growing Cash Flow
Key Attributes of the Most Stable MLPs StoneMor?
Long-lived, Secure Assets
Defensible Competitive Advantage
Attractive Industry Fundamentals
Conservative Financial Profile
StoneMor features the key attributes of the most stable MLPs as well as an attractive total return profile
StoneMor Value Proposition in Context
13
Industry Dynamics
Larry Miller President & CEO
Industry Snapshot
We are an industry leader with great opportunity
Aging population driving both at-need and pre-need demand
$20 billion industry
Healthy historical and projected growth
80% of properties* are owned by independents
Only a few scale players
No new supply
Significant financial and operating regulations
Favorable Demographics
Large and Growing Market
Fragmented Ownership
Substantial Barriers to Entry
*Cemeteries and funeral homes combined 15
Demographic Tailwinds
Source: Department of Health and Human Services.
ANNUAL BIRTHS IN THE U.S. (1930-1960)
Aging Baby Boom Generation will:
1. Accelerate the death rate
2. Expand our target pre-need market (55 to 65 age range)
− More financially stable and resilient to economic downturns
− Beginning to think of legacy
Source: U.S. Department of Commerce Census Bureau.
PROJECTED U.S. POPULATION OVER 55
87
98 106
112 118
130
2015 2020 2025 2030 2035 2040
(in millions)
1.5
2.0
2.5
3.0
3.5
4.0
4.5
(in millions)
16
Cemeteries
Funeral Homes &
Crematories
$16 billion
$4 billion
Source: National Funeral Directors Association; IBIS World Market Research Source: National Funeral Directors Association; U.S. Census Bureau.
$20 Billion Market
DEATHCARE MARKET SIZE
Large and Growing Industry
CONTINUED GROWTH
2.1
2.4
2.6
3.3
1990 2000 2010 2030P
Deaths in the U.S. (millions)
Industry growth driven by demographics and supported by ever-
present demand for memorialization and celebrations of life
17
Cremation projected to rise to ~50% of total deaths in the U.S. by 2020
– However, number of non-cremation deaths will remain steady in the future
Cremation: Friend (not Foe)
* Total anticipated deaths per U.S. Census Bureau 2009 projections.
RISE IN CREMATION…
37% 40%
42% 45%
48% 51%
53% 55%
57%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2005 2010 2015 2020 2025 2030 2035 2040
# of Deaths % Cremation
Cremation
Non-Cremation
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Represents a key component of our growth strategy
Just 15% of current cremations utilize some form of memorialization
– Western society still memorializes life regardless of the method of disposition
Stronger linkage between cremation and
memorialization options
− Cremation gardens
− Cremation-related products and services
Increased land utilization
Higher profit margins
Cremation: Friend (not Foe)
…CREATES OPPORTUNITY
19
Cremation: Friend (not Foe)
Cremation Gardens
Glass Enclosed Niches
20
Highly Fragmented Cemetery Market
LARGEST PUBLIC CEMETERY OPERATORS
As the only cemetery-focused scale player, we are uniquely well-positioned to execute
on our consolidation strategy
Source: SEC company filings; National Funeral Directors Association. Source: IBIS World Research & National Association of Funeral Directors. (1) Includes non-public consolidators.
CEMETERY OWNERSHIP BREAKDOWN
Owned by Consolidators,
34%(1)
Independent
Operators, 66%
Ownership of cemeteries is highly fragmented
− Majority of owners are non-economic in nature (e.g. religious or municipal)
Cemeteries Funeral Homes Ratio
SCI 466 1559 1 : 3
StoneMor 306 103 3 : 1
Carriage 32 166 1 : 5
21
Substantial 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
CEMETERY BARRIERS
FUNERAL HOME BARRIERS
Licensing requirements
Funeral homes are part of the community
Strength of family tradition and heritage
Only an experienced, well-capitalized acquirer like StoneMor can gain share in this industry
22
Growth Strategy
Larry Miller President & CEO
Our Acquisition Approach
Disciplined target selection – “never break the model”
Strategic locations to create and / or enhance market clusters
Cemetery
− 25+ year sales life
− 200+ annual interments
Seasoned, professional management
Consolidate office functions into home office
Institute pre-need sales program
Leverage buying power to reduce product costs
Professional trust fund management
Philosophy
Target Criteria
Integration
Funeral
− 150+ Annual Calls
− Strong legacy
Accretive from day one
IRR > cost of capital
24
Proven Acquisition Track Record
178 cemeteries and 105 funeral homes acquired since 2004 IPO(1)
Target acquisition multiples of 4x – 6x EBITDA
Acquisition pipeline remains robust
$16 $33
$115 $117 $124
$173 $189 $224
$247
$354 $369
$0
$100
$200
$300
$400
$500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ACQUISITIONS SINCE IPO (CUMULATIVE PURCHASE PRICE)
# Cemeteries: # Funeral Homes:
($ in millions)
23 6
46 20
94 50
101 52
104 52
126 57
143 68
148 85
149 91
175 100
(1) Net of sales and divestitures, 174 cemeteries and 96 funeral homes acquired since 2004 IPO.
$107mm of acquisitions in 2014; Historical average of $27mm annually since IPO
178 105
$14mm
25
Archdiocese of Philadelphia Update:
Key Stats 13 cemeteries leased
60-year management agreement
7,000 existing burials per year; all at-need
Rationale Strengthen market position in Philadelphia backyard
Introduce pre-need sales to large and growing population
Upside from optimizing productivity of land
Significant opportunities for other Archdioceses
Update
23% increase in contracts written for 3Q15 compared with prior year
41% increase in revenue for 3Q15 compared with prior year
Pre-need contracts accounted for 30% of total contracts written for 3Q15 vs. 23% for prior year
Closed in May 2014 with $53 million initial lease payment
26
Organic Growth Initiatives
Continuous organic growth efforts support our acquisition strategy
Salesforce Development
Has grown from 310 at IPO to ~900 today
Commission schedule incentivizes top performers
Recently implemented regional training centers
Insurance Division
Currently 29 sales people
Pre-need Insurance
As of Q3, has already surpassed total 2014 sales
Final Expense Insurance
Serving the growing needs of the 50% of Americans who say they don’t have enough Life Insurance*
Telemedicine, ID Theft, Medicare Consulting, Private Exchange
* Source: LIMRA (Life Insurance Marketing Research Association)
27
Organic Growth Initiatives
Continuous organic growth efforts support our acquisition strategy
Expanded Product/Service Offerings
Substantial growth in cremation related products and services
Jewelry
Memorialization keepsakes
Cremation gardens
Optimize Real Estate Productivity
Land sales
Ability to add vertical structures to property
28
Marketing & Consumer Reach
• A website with strong lead generation capabilities to serve as foundation for direct marketing programs
Site Metrics YTD
• 296,373 new visitors went to BurialPlanning.com compared to 266,805 in 2014
• 4,735 consumers have become leads by requesting more information
• 932 households have purchased space or merchandise
• $5.8mm in revenue vs. $4.4mm in 2014
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Financial Strategy
Sean McGrath CFO
We Are The Only Deathcare MLP
MLP Overview
Qualification Parameters
We use MLP status to conservatively unlock value
Our Competitive Advantage
We make distributions to unitholders on a quarterly basis
Qualifying income generated primarily from the sale of real property
− Non-qualifying activities operated through taxable subsidiaries
MLP status reviewed by IRS and confirmed in recent audit
Category Qualifying Non-Qualifying
Interment Rights Burial lots Lawn and mausoleum crypts Cremation niches Perpetual care rights
N/A
Merchandise Burial Vaults Caskets Grave markers
Services / Other Vault installation Casket and other installations
Other Interest and dividends Funeral home sales
Size / Scale
Market focus
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MLP Rationale
Highly secure assets generating reliable, predictable cash flow
OPERATIONAL ASSETS FINANCIAL ASSETS
Perfect match of long-term operating and financial assets
Long-lived operating real estate assets
Over $344 mm of cemetery property (book value)
15,716 acres of land; average sales life of 247 years
Long-lived capital market assets
Over $771mm in perpetual and merchandise trusts
3rd party mgmt, income/preservation of capital
$312
$459
$50
$150
$250
$350
$450
$550
Perpetual Trusts Merchandise Trusts
Trust Fund Assets ($ in millions)
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Growth Through
Disciplined Acquisition
Strategy
Prudent Balance Sheet Management
Deliver Reliable,
Consistent Value to
Unitholders
We have delivered steady, conservatively financed growth
Avg. $27mm annual acquisitions (’05-’13)
– 2014 acquisitions ~4x average annual pace
Target 4x – 6x EBITDA purchase prices
Proven Track Record
Keys to Our Success
Recent Developments
~$14mm acquisitions YTD
AOP and SCI properties operating on plan
Conservative leverage (3.0x debt/ Adj. EBITDA)
Distributions expected to grow by $0.01 per unit each quarter through the end of 2015
Distribution coverage conservatively managed
32% 40% 36%
28% 26%
12/11 12/12 12/13 12/14 9/15
Debt/Enterprise Value
$2.23 $2.33 $2.35 $2.39
$2.43 $2.58
2010 2011 2012 2013 2014 2015TTM
Annual Distributions/LP Unit
33
Financial Performance
Sean McGrath CFO
Strong and Stable Results
CONTRACTS WRITTEN ADJUSTED EBITDA
($ in millions)
DISTRIBUTABLE AVAILABLE
CASH
($ in millions)
$75
$87
$91
$95
$60
$65
$70
$75
$80
$85
$90
$95
$100
2012 2013 2014 2015TTM
$62
$79 $80
$96
$50
$60
$70
$80
$90
$100
$110
2012 2013 2014 2015TTM
(in thousands)
98
102
111
122
80
85
90
95
100
105
110
115
120
125
2012 2013 2014 2015TTM
35
($ in millions)
DISTRIBUTABLE AVAILABLE CASH AND DISTRIBUTIONS
$62
$79 $80
$96
$47 $52
$63
$74
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
2012 2013 2014 2015 TTM
Distributable Available Cash Distributions
Sustained and Stable Cash Flows
36
Strong and Growing Asset Base
Asset base has grown while leverage has remained steady
TOTAL ASSETS AND DEBT
($ in millions)
$1,146
$1,249 $1,344
$1,474
$1,699 $1,681
$220 $195 $255
$292 $287 $291
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2010 2011 2012 2013 2014 2015 YTD
Total Assets Total Debt
37
Significant Asset Value
NET LIQUID ASSETS
($ in millions)
FUTURE VALUE-GENERATING ASSETS
Cemetery Property:
− $345mm book value
− Approximately 15,716 acres
− Weighted average sales life of 247 years
Property and Equipment:
− $102.7mm book value, net
Perpetual Care Trusts:
− $312mm under management
− Fund future maintenance costs
Marketable assets provide debt protection and $138mm of excess value
Assets underlying $91mm of Adjusted EBITDA in 2014 & $95mm 2015 TTM
Conservative balance sheet:
‒ $138mm of net liquid assets (detail below) at 9/30/15
‒ Significant additional value from long-term, profit-generating assets of the business
$630
$138
$42
$159
$291
$0
$100
$200
$300
$400
$500
$600
$700
Cash, AR andMerchandise
Trust
AP andAccrued
Liabilities
MerchandiseLiability
Debt Excess Cashand Assets
38
Merchandise Trust and
Perpetual Care Trust
Measured Performance*
$459 million (Merchandise Trust)
– All principal, interest and dividends accrue to StoneMor over time
$312 Million (Perpetual Care)
– Principal remains in trust in perpetuity
– Interest and dividends accrue to StoneMor
Trust Management
6% 8%
7%
9% 8%
12/10 12/11 12/12 12/13 12/14
Merchandise Trust
Investment Management
Governed by investment guidelines adopted by Trust and Compliance Committee of B.O.D.
Balanced approach to preservation of capital
Variety of intermediate-term, investment-grade, fixed-income securities, high-yield securities, REITS, MLPs, other equities and cash
7% 6% 6%
5% 4%
12/10 12/11 12/12 12/13 12/14
Perpetual Care Trust
*Past performance is not indicative of future performance
39
Total Return
Source: Bloomberg and Index monthly reports. Market data as of 09-30-2015
13.4%
12.1%
10.3%
8.0% 7.7% 7.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
StoneMor NASDAQ 100 Alerian MLP Index DJ Utility Index S&P 500 Russell 2000
STON TEN-YEAR AVERAGE ANNUAL TOTAL RETURN vs. BENCHMARK ASSET CLASSES
40
Recap – StoneMor Investment Thesis
Key Attributes of the Most Stable MLPs
StoneMor?
StoneMor Investment Thesis
StoneMor features the key attributes of the most stable MLPs as well as an attractive total return profile
Conservative Financial
Profile
Attractive Industry
Fundamentals
Defensible Competitive Advantage
Long-lived, Secure Assets
Stable and Growing
Cash Flow
Highly predictable, non-cyclical business model
43 consecutive quarterly distributions
Proven track record of accretive acquisitions
$345mm+ of cemetery property (book value)
15,700 acres of land; avg. sales life of 247 years
$771mm+ in perpetual & merchandise trusts
Scale to create leveraged market positions
Cemetery / pre-need expertise drives organic growth
MLP facilitates acquisition growth
Demographic tailwinds
Large, growing and fragmented market
Prohibitive barriers to entry
Significant, growing asset base with modest leverage
Discipline in returning capital to unitholders
41
Thank You