Corporate Report – Alderwoods Group, Inc.IntroductionThe funeral industry is made up of thousands of independent operators and a few large corporations that each own and operate hundreds of funeral homes, cemeteries and crematoria. Alderwoods Group, Inc. is a company that entered the funeral services industry in 2002 after the restructuring of the now bankrupt Loewen Group, Inc. (Financial Post). The price-earnings ratio as of October 2005 is seventeen times earnings per share (Yahoo! Finance). Over the next ten years, both revenues and market capitalization are expected to increase at Alderwoods due to the aging baby boom generation and the fact that Alderwoods has aggressively liquidated its debt by selling off many of its assets (which include cemeteries and funeral homes). Funeral homes, cemeteries and crematoria are businesses that serve the after-life activities of families. The industry covers everything from coffin manufacturers and laboratory equipment manufacturers (suppliers), funeral homes (suppliers) to the final final resting place in a cemetery (plots, crypts, headstones, burials, mausoleums) or in the case of cremation , ovens, magazines and, finally, urns. Within the industry there are four major nationwide competitors: Service Corporation International (SCI), Alderwoods Group, Inc., Carriage Services, Inc., and Stewart Enterprises, Inc. They are all public companies that operate funeral homes, cemeteries, and crematoria throughout North America. As of January 1, 2005, the Alderwoods Group "employs approximately 8,500 people in 648 funeral homes, 79 cemeteries, and 63 funeral home and cemetery combinations throughout North America (Alderwoods Annual Report 2004)." These totals are significantly lower than in the 1990s, when Loewen's sought to gain market share and aggressively purchased hundreds of independent funeral homes and cemeteries. Overextending itself and having to settle a $500 million breach of contract lawsuit, the Loewen Group filed for bankruptcy and sold many of its assets before reorganizing as Alderwoods (Financial Post). The Alderwoods Group has had to continue to take drastic measures to ensure its survival and return on investment. As a result, management continued to sell its assets and reduced its debt from $2,342,916,000 at the end of 2002 to $1,307,043,000 (Alderwoods Annual Reports, 2002 and 2004). In January 2003, Alderwoods downsized from 802 funeral homes and 185 cemeteries to where it is today (Alderwoods 2002 Annual Report). Adlerwoods stock performance has outpaced the S&P 500 over the past two years (Yahoo! Finance).