For purposes of computing the ratio of earnings to fixed charges, earnings consist of pretax earnings plus fixed charges (excluding interest capitalized during the period). Fixed charges consist of gross interest expense, capitalized interest, amortization of debt expense and discount or premium relating to any indebtedness, and the portion of rental expense that management believes to be representative of the interest component of rental expense. Fiscal years 2000 and 1999 reflect the 1999 change in accounting principle; fiscal years 1998 and 1997 reflect the 1997 change in accounting principles; fiscal year 1996 reflects the Company's previous accounting methods that were in effect at that time.

        During fiscal year 2000, the Company completed the acquisition of four cemeteries through seller financing at a net purchase price of $5.3 million.

        Historically, the Company's growth has been primarily from acquisitions. This trend began to change in late fiscal year 1999. As industry conditions reduced the number of major consolidators participating in the acquisition market, those that remained generally applied significantly tighter pricing criteria, and many potential sellers withdrew their businesses from the market rather than pursuing transactions at lower prices.

        The Company's current growth strategy focuses on achieving internal growth from existing operations and from new initiatives. For example, during fiscal year 2000, the Company began to implement programs based on the results of its comprehensive study of consumer preferences. The Company has begun to offer more personalized services and products and has enhanced its funeral arranger training. The Company has also created a new Sales and Marketing Division to strengthen sales effectiveness and create consistency in marketing, sales and training. Additional information about the Company's internal growth initiatives is contained in the section titled "Initiatives" in Item 1.

        During fiscal year 2000, the Company opened three new funeral homes in an operating partnership with the Archdiocese of Los Angeles. The fourth Archdiocese of Los Angeles funeral home opened during the first fiscal quarter of 2001, and a fifth funeral home is currently under construction. The operating partnerships enable the Company to build a total of nine funeral homes on cemetery land owned by the Archdiocese. Thus far, the number of families serviced by the Archdiocese funeral homes has exceeded management's expectations.

        Although the Company has no material commitments for fiscal year 2001 (other than approximately $7.0 million related to construction of the Archdiocese of Los Angeles funeral homes), the Company contemplates capital expenditures of approximately $28.0 million for the fiscal year ending October 31, 2001, which includes $10.0 million in internal growth initiatives (including the construction of the Archdiocese of Los Angeles funeral homes) and approximately $18.0 million for maintenance capital expenditures.

        With potential long-term debt maturities of $557.5 million, $228.5 million and $112.1 million in fiscal years 2002, 2003 and 2004, respectively, management of liquidity and capitalization represents a significant short- and medium-term priority for the Company. The Company believes that its ability to meet its future capital requirements will depend primarily upon the successful implementation of its strategies to provide cash from operations and generate cash from other sources, such as the sale of some or all of its foreign operations, and its ability to refinance its revolving credit facility and public debt prior to or at their maturities.

 Inflation

        Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," establishes accounting and reporting standards for derivative instruments. SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," and SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," are amendments to the accounting and reporting standards of SFAS No. 133 and must be adopted concurrently with SFAS No. 133. SFAS No. 133 is required to be implemented in the first quarter of the Company's fiscal year 2001. The Company has begun its analysis of the impact of SFAS Nos. 133, 137 and 138 on its consolidated financial condition and results of operations, and the pronouncements are not expected to have an impact on the Company's consolidated statement of earnings. It is estimated that the adoption of the new standards will result in an increase in shareholders' equity of approximately $4.7 million. This estimate is based on market information and the fair value of the Company's three-year interest rate swap as of October 31, 2000. The actual effect on the Company's financial statements will depend on the fair value of the swap at the date of adoption.

        The Company and other industry participants continue to discuss directly with the staff of the SEC the application of its recently issued SAB 101 as it relates to prearranged sales activities. SAB 101, which applies to all companies and was not directed at the death care industry, emphasizes among other matters the importance of physical delivery of a product or service to justify the recognition of revenue. Based on currently available information, the Company believes that the implementation of SAB 101 will require a deferral of previously recorded revenue associated with prearranged sales. The amounts deferred will be recognized in future years as the products and services that have been bought and paid for are ultimately delivered.

        Based on the tentative agreement with the SEC staff, the Company estimates that although there will be no negative impact on cash flow, had it adopted SAB 101 in fiscal year 2000, before adjusting for the cumulative effect, the implementation would have reduced earnings by a range of $0.09 to $0.13 per share. The Company also estimates that had SAB 101 been adopted in fiscal year 2000, it would have resulted in a nonrecurring, noncash $250.0 million to $275.0 million after-tax charge for the cumulative effect of the changes. Implementation of SAB 101 would have resulted in an additional backlog that would have produced approximately $1 billion of revenue in the future as these prepaid products and services are delivered. Based on what the Company currently knows, the implementation of SAB 101 should not cause a violation of any financial covenants in its debt agreements. The SEC and the industry have not reached a final resolution of these discussions, but the Company anticipates that they will be finalized shortly. The Company is not required to implement the new accounting guidance until the fourth fiscal quarter of 2001 but may choose to implement the guidance earlier.

        Effective November 1, 1999, the Company implemented Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities," ("SOP 98-5") which requires costs of start-up activities and organization costs to be expensed as incurred. The implementation of SOP 98-5 did not have a material impact on the Company's financial condition or results of operations.

        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.

        The Company recently revised its short-term outlook and goals. Management's current goal is to continue to increase its average revenue per funeral service performed worldwide at least 2 to 3 percent annually. The Company's goal is to grow its cemetery sales by 2 percent over 2000 with costs increasing 1 percent. Fiscal year 2001 goals also include spending $10.0 million on internal growth initiatives. The current tax rate anticipated for fiscal year 2001 is 36.5 percent, and the Company's weighted average cost of debt as of October 31, 2000, was 6.7 percent. During fiscal year 2001, the Company plans to continue its focus on improving liquidity and leverage. See "Liquidity and Capital Resources" above. Any refinancing of the Company's debt is likely to be at interest rates substantially higher than those currently in effect, although the effect of the rate increases may be moderated if the Company is able to substantially reduce its total debt prior to or in connection with such refinancing.

        Absent any nonrecurring charges related to the cumulative effect of implementing SAB 101 and any asset sales, the Company's current goal for fiscal year 2001 is earnings per share consistent with fiscal year 2000, and the Company's goal is to increase earnings per share for fiscal year 2002 with accelerating improvement thereafter. The Company's goal is $80 to $90 million in cash flow from operations in fiscal year 2001.

        The Company's cash flow initiatives detailed in Item 1 under the heading "Initiatives - - Cash Flow Initiatives" include analyzing the benefits associated with the sale of some or all of its foreign operations and analyzing excess cemetery property, under-performing assets and real estate for sale or re-deployment. The potential sale of some or all foreign operations could result in a material charge to earnings but could generate significant cash for debt reduction.

        In response to changes in the acquisition market discussed in Item 1 under the heading "The Death Care Industry," the Company has not included acquisitions in its growth expectations for fiscal year 2001 and beyond.

        Forward-looking statements are based on assumptions about future events and are therefore inherently uncertain; actual results may differ materially from those projected. See "Cautionary Statements" below.

        The Company cautions readers that the following important factors, among others, in some cases have affected, and in the future could affect, the Company's actual consolidated results and could cause the Company's actual consolidated results in the future to differ materially from the goals and expectations expressed in the forward-looking statements above and in any other forward-looking statements made by or on behalf of the Company.

        (1)    The Company's ability to achieve its revenue goals and the corresponding cash flows from operations are affected by the volume, mix and prices of the properties, products and services sold. The annual sales targets set by the Company are aggressive, and the inability of the Company to achieve planned levels of volume, mix or prices could cause the Company not to meet anticipated revenue goals. The ability of the Company to achieve planned volume, mix or price levels at any location depends on numerous factors, including the local economy, the local death rate, cremation rates, competition and consumer preferences. Furthermore, the Company may experience pricing pressures from low-cost funeral service and merchandise providers, which could result in reduced volume or having to reduce funeral service and merchandise prices in order to recapture market share where appropriate.

        (2)    Preneed cemetery sales are a significant component of the Company's cemetery revenue. The Company sets very aggressive preneed sales targets. The inability of the Company to achieve the planned level of sales could cause a shortfall in anticipated levels of revenue and net income. Changes in the sales organization, compensation thereof and sales terms and conditions of the Company's preneed contracts could affect the Company's ability to achieve its preneed sales targets.

        (3)    Morale is a key ingredient in any sales organization, and morale can be adversely affected by numerous factors, including aggressive sales targets that make it difficult for the Company's approximately 2,000 commissioned sales counselors to achieve their goals.

        (4)    When acquiring businesses, the Company set pro forma levels at which it expected those businesses to perform based on the mix of traditional services and cremation services the businesses had historically delivered and how the Company expected each business to perform over the following 12 months. As the Company typically charges a higher price for a traditional service than a cremation service, material changes in the types of services delivered from those assumed in the pro forma could affect the level of anticipated revenue generated by those businesses. Additionally, although a cremation service can yield a higher margin than a traditional service, it generally produces lower revenue and a lower total gross profit.

        (5)    The ability of the Company to increase or sustain current price levels and retain market share is affected by local competition in the Company's markets, including competition from low-cost funeral providers and casket stores, as well as consumer preferences.

        (6)    Another important component of revenue is earnings from the Company's cemetery trust funds and escrow accounts, which are determined by the size of, and returns (which include dividends, interest and realized capital gains) on, the funds. The returns on the Company's prearranged funeral trust funds and escrow accounts affect the Company's future revenue. The performance of the funds depends primarily on market conditions that are not within the Company's control. Additionally, the performance of the funds is affected by the mix of fixed-income and equity securities. The size of the funds depends on the level of sales, funds added through acquisitions, if any, funds removed from the trust as preneed contracts turn at-need and the amount of returns that are reinvested.

        (7)    Future revenue is also affected by the level of prearranged sales in prior periods. The level of prearranged sales may be adversely affected by numerous factors, including deterioration in the economy, which causes individuals to have less discretionary income.

        (8)    The death care business is a high fixed-cost business. Positive or negative changes in revenue can have a disproportionately large effect on net earnings.

        (9)    In order to address its long-term debt maturities over the next three to four fiscal years, the Company is considering selling some or all of its foreign operations. Given the current market environment, no assurance can be given that foreign assets can be sold. It is likely that sales of operations in certain markets will be at prices below the carrying values of those assets and could result in a material charge to earnings but could generate significant cash for debt reduction. Sales of some or all foreign operations could result in a material reduction in revenue and, to a lesser extent, net earnings.

        (11)    The Company first entered foreign markets in the fourth quarter of fiscal year 1994, and no assurance can be given that the Company will continue to be successful in operating in foreign markets or that any operations in foreign markets will yield results comparable to those realized through the Company's expansion in the United States.

        (12)    Historically, in order to support its rapid growth, the Company has periodically accessed capital markets including the secondary equity and debt markets, and the Company may need to continue to do so in order to support future growth or to meet existing operating and debt service requirements even in the absence of significant future growth. The Company's ability to access these capital markets successfully in the future will depend on numerous factors, including the Company's financial performance, stock market performance, changes in interest rates, any changes in the Company's credit ratings and perceptions in the capital markets regarding the death care industry, the Company's performance and future prospects. Additionally, any amendments, renegotiations or extensions of existing debt agreements are likely to result in higher interest costs to the Company.

        (13)    The Company and other industry participants continue to discuss directly with the staff of the SEC the application of its recently issued SAB 101 as it relates to prearranged sales activities. A discussion of the potential implications of SAB 101 is contained under the heading "Recent Accounting Standards."

        (14)    While the Company does not anticipate that a majority of consumers will make their preneed or at-need purchasing decisions over the Internet, no assurance can be given of the impact of technological changes on the Company's business nor of the effects of market acceptance of advances in technology made by the Company or its competitors.

        (15)    The Company's ability to remain in compliance with the restrictions of its debt agreements is affected by several factors, including the Company's earnings and fixed charges. The Company's ability to achieve projected earnings and fixed charges depends upon many uncertainties, including each of the factors discussed herein.

        (16)    In addition to the factors discussed above, earnings per share and cash flow from operations may be affected by other important factors, including the following:

        The Company also 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 market risk inherent in the Company's market risk sensitive instruments and positions is the potential change arising from increases or decreases in the prices of marketable equity securities, foreign currency exchange rates, and interest rates as discussed below. Generally, the Company's market risk sensitive instruments and positions are characterized as "other than trading." The Company's exposure to market risk as discussed below includes forward-looking statements and represents an estimate of possible changes in fair value or future earnings that would occur assuming hypothetical future movements in equity markets, foreign currency exchange rates or interest rates. The Company's views on market risk are not necessarily indicative of actual results that may occur and do not represent the maximum possible gains and losses that may occur, since actual gains and losses will differ from those estimated, based on actual fluctuations in equity markets, foreign currency exchange rates, interest rates and the timing of transactions.

        As of October 31, 2000 and 1999, the Company's marketable equity securities subject to market risk consist principally of investments held by its prearranged funeral, merchandise and perpetual care trust and escrow accounts and had fair values of $463.3 million and $447.9 million, respectively, determined using final sale prices quoted on stock exchanges. Each 10 percent change in the average market prices of the equity securities held in such accounts would result in a change of approximately $46.3 million and $44.8 million, respectively, in the fair value of such accounts.

        The Company's prearranged funeral, merchandise and perpetual care trust funds and escrow accounts are detailed in Notes 5 and 6 to the Company's consolidated financial statements included in Item 8. Generally, the Company's wholly-owned subsidiary, Investors Trust, Inc., serves as investment adviser on these trust and escrow accounts. ITI manages the mix of equities and fixed-income securities in accordance with an investment policy established by the Investment Committee of the Company's Board of Directors with the assistance of  professional financial consultants. The policy emphasizes conservation, diversification and preservation of principal, while seeking appropriate levels of current income and capital appreciation. ITI is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940.

        The Company's foreign subsidiaries receive revenues and pay expenses in a number of foreign currencies. For the fiscal years ended October 31, 2000 and 1999, each 10 percent change in the average exchange rate between such currencies and the U.S. dollar would result in changes of approximately $2.8 million and $3.1 million, respectively, in the Company's pre-tax earnings.

        The Company does not currently hedge its investments in foreign subsidiaries; however, the Company continually monitors the exchange rates of its foreign currencies to determine whether hedging transactions would be appropriate.

        The Company has entered into various fixed- and variable-rate debt obligations, which are detailed in Note 11 to the Company's consolidated financial statements included in Item 8.

        As of October 31, 2000 and 1999, the carrying values of the Company's long-term fixed-rate debt, including accrued interest and the unamortized portion of the ROARS option premium, were approximately $433.9 million and $435.0 million, respectively, compared to fair values of $305.0 million and $372.6 million, respectively. Fair values were determined using quoted market prices, where applicable, or future cash flows discounted at market rates for similar types of borrowing arrangements. Each approximate 10 percent change in the average interest rates applicable to such debt, 265 and 125 basis points for 2000 and 1999, respectively, would result in changes of approximately $13.3 million and $12.0 million, respectively, in the fair values of these instruments. If these instruments are held to maturity, no change in fair value will be realized.

        In order to hedge a portion of the interest rate risk associated with its variable-rate debt, during the first quarter of 1999, the Company entered into a three-year interest rate swap agreement involving a notional amount of $200 million. This agreement, which became effective March 4, 1999, effectively converted $200 million of variable-rate debt bearing interest based on three-month LIBOR to a fixed rate based on the swap rate of 4.915 percent. The estimated fair value of the interest rate swap based on quoted market prices was $4.7 million and $6.1 million as of October 31, 2000 and 1999, respectively. A hypothetical 100 basis point increase in the average interest rates applicable to such debt would result in a change of approximately $2.8 million and $4.7 million in the fair value of this instrument as of October 31, 2000 and 1999, respectively.

        As of October 31, 2000 and 1999, the carrying values of the Company's borrowings outstanding under its revolving credit facility, including accrued interest, were $529.0 million and $533.1 million, respectively, compared to fair values of $512.2 million and $524.9 million, respectively. Fair value was determined using future cash flows discounted at market rates for similar types of borrowing arrangements. Of the borrowings outstanding under the revolving credit facility, $329.0 million as of October 31, 2000 and 1999 was not hedged by the interest rate swap and was subject to short-term variable interest rates. Each approximate 10 percent, or 75 basis point, change in the average interest rate applicable to this debt would result in a change of approximately $1.0 million and $1.2 million, respectively, in the Company's pre-tax earnings as of October 31, 2000 and 1999, respectively. Any refinancing of the Company's revolving credit facility is likely to be at interest rates substantially higher than those currently in effect, although the effect of the rate increases may be moderated if the Company is able to substantially reduce its total debt prior to or in connection with such refinancing.

        The Company monitors its mix of fixed- and variable-rate debt obligations in light of changing market conditions and from time to time may alter that mix by, for example, refinancing balances outstanding under its variable-rate revolving credit facility with fixed-rate debt or by entering into interest rate swaps.

        As of October 31, 2000 and 1999, the Company's fixed-income securities subject to market risk consisted principally of investments in its prearranged funeral, merchandise and perpetual care trust and escrow accounts and had aggregate quoted market values of $275.2 million and $254.9 million, respectively. Each 10 percent change in interest rates on these fixed-income securities would result in changes of approximately $9.0 million and $8.6 million, respectively, in the fair values of such securities based on discounted expected future cash flows. If these securities are held to maturity, no change in fair value will be realized.

        As of October 31, 2000 and 1999, the Company's money market and other short-term investments subject to market risk had fair values of $351.0 million and $359.4 million, respectively. The Company's prearranged funeral trust funds contained $232.0 million and $250.2 million of these money market and other short-term investments as of October 31, 2000 and 1999, respectively. Under the Company's current accounting methods adopted in fiscal year 1999 as described in Note 3 to the Company's consolidated financial statements included in Item 8, a change in the average interest rate earned by the Company's prearranged funeral trust funds would not result in a change in the Company's current pre-tax earnings. As such, as of October 31, 2000 and 1999, only $119.0 million and $109.2 million of these short-term investments were subject to changes in interest rates. Each 10 percent change in average interest rates applicable to such investments, 70 and 50 basis points for 2000 and 1999, respectively, would result in changes of approximately $800,000 and $500,000 in the Company's pre-tax earnings.

        The fixed-income securities, money market and other short-term investments owned by the Company are principally invested in its prearranged funeral, merchandise and perpetual care trust and escrow accounts which are managed by ITI. ITI operates pursuant to a formal investment policy as discussed above.

    Index to Consolidated Financial Statements

                                                                                   Page
                                                                                  ------
      Report of Independent Accountants...........................................  36
      Consolidated Statements of Earnings for the Years Ended October 31,
        2000, 1999 and 1998.......................................................  37
      Consolidated Balance Sheets as of October 31, 2000 and 1999.................  38
      Consolidated Statements of Shareholders' Equity for the Years Ended
        October 31, 2000, 1999 and 1998...........................................  40
      Consolidated Statements of Cash Flows for the Years Ended October 31,
        2000, 1999 and 1998.......................................................  42
      Notes to Consolidated Financial Statements..................................  44

To the Board of Directors and
Shareholders of Stewart Enterprises, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, shareholders' equity and cash flows present fairly, in all material respects, the financial position of Stewart Enterprises, Inc. and Subsidiaries at October 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended October 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.

As described in Note 3 to the financial statements, the Company changed its method of accounting for funeral services investment trust fund earnings in 1999.

PricewaterhouseCoopers LLP
New Orleans, Louisiana
December 12, 2000, except for
Note 19 as to which the date is
January 9, 2001

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

                                                            Year Ended October 31,
                                                      ---------------------------------
                                                          2000       1999      1998
                                                      ----------  ---------  ----------
Revenues:
  Funeral..........................................   $  451,852  $ 445,877  $  379,095
  Cemetery.........................................      282,949    310,231     269,270
                                                      ----------  ---------  ----------
                                                         734,801    756,108     648,365
                                                      ----------  ---------  ----------
Costs and expenses:
  Funeral..........................................      335,163    319,002     260,669
  Cemetery.........................................      220,598    226,705     191,712
                                                      ----------  ---------  ----------
                                                         555,761    545,707     452,381
                                                      ----------  ---------  ----------
  Gross profit.....................................      179,040    210,401     195,984
Corporate general and administrative expenses......       19,763     19,161      16,621
                                                      ----------  ---------  ----------
  Operating earnings before performance-based
    stock options..................................      159,277    191,240     179,363
Performance-based stock options....................          -          -        76,762
                                                      ----------  ---------  ----------
  Operating earnings...............................      159,277    191,240     102,601
Interest expense, net..............................      (56,284)   (52,174)    (41,792)
Other income, net..................................        2,194      3,485       4,155
                                                      ----------  ---------  ----------
  Earnings before income taxes and cumulative
    effect of change in accounting principle.......      105,187    142,551      64,964
Income taxes.......................................       38,393     52,031      23,062
                                                      ----------  ---------  ----------
  Earnings before cumulative effect of
    change in accounting principle.................       66,794     90,520      41,902

Cumulative effect of change in accounting principle
  (net of $28,798 income tax benefit in 1999)
  (Note 3).........................................          -      (50,101)       -
                                                      ----------  ---------  ----------
  Net earnings.....................................   $   66,794  $  40,419  $   41,902
                                                      ==========  =========  ==========
Basic earnings per common share:
  Earnings before cumulative effect of change in
    accounting principle...........................   $      .63  $     .84  $      .43
  Cumulative effect of change in accounting
    principle......................................         -          (.47)       -
                                                      ----------  ---------  ----------
  Net earnings.....................................   $      .63  $     .37  $      .43
                                                      ==========  =========  ==========
Diluted earnings per common share:
  Earnings before cumulative effect of change in
    accounting principle...........................   $      .63  $     .84  $      .43
  Cumulative effect of change in accounting
    principle......................................         -          (.47)       -
                                                      ----------  ---------  ----------
  Net earnings.....................................   $      .63  $     .37  $      .43
                                                      ==========  =========  ==========
Weighted average common shares outstanding
    (in thousands):
  Basic............................................      106,600    107,452      97,691
                                                      ==========  =========  ==========
  Diluted..........................................      106,603    107,834      98,444
                                                      ==========  =========  ==========
Pro forma amounts assuming change in accounting
  principle was applied retroactively:
  Net earnings.....................................                          $   33,199
                                                                             ==========
  Basic earnings per common share..................                          $      .34
                                                                             ==========
  Diluted earnings per common share................                          $      .34
                                                                             ==========

See accompanying notes to consolidated financial statements.

                                                       October 31,
                                            -------------------------------
                   ASSETS                       2000                1999
                   ------                   -----------         -----------

Current assets:
  Cash and cash equivalent investments .... $    91,595         $    30,877
  Marketable securities ...................       7,273              46,549
  Receivables, net of allowances ..........     177,474             176,215
  Inventories .............................      60,649              51,431
  Prepaid expenses ........................       4,063               5,997
                                            -----------         -----------
   Total current assets ...................     341,054             311,069
Receivables due beyond one year, net of
   allowances .............................     217,073             237,578
Intangible assets .........................     668,462             673,361
Deferred charges ..........................     126,158             109,436
Cemetery property, at cost ................     441,646             424,032
Property and equipment, at cost:
  Land ....................................      78,736              83,237
  Buildings ...............................     353,189             329,721
  Equipment and other .....................     161,223             158,722
                                            -----------         -----------
                                                593,148             571,680
  Less accumulated depreciation ...........     145,219             124,635
                                            -----------         -----------
  Net property and equipment ..............     447,929             447,045
Long-term investments .....................       4,203              16,812
Merchandise trust, less estimated
  cost to deliver .........................      85,969              58,999
Other assets ..............................       4,514               5,548
                                            -----------         -----------
                                            $ 2,337,008         $ 2,283,880
                                            ===========         ===========

(continued)

                                                       October 31,
                                            -------------------------------
     LIABILITIES AND SHAREHOLDERS' EQUITY       2000                 1999
     ------------------------------------   ----------           ----------
Current liabilities:
  Current maturities of long-term debt....  $   29,857           $   12,582
  Accounts payable........................      20,342               21,802
  Accrued payroll.........................      17,433               21,784
  Accrued insurance.......................      16,470               11,535
  Accrued interest........................      13,039               16,757
  Accrued other...........................      22,084               26,328
  Income taxes payable....................          -                 5,495
  Deferred income taxes...................      15,251               17,193
                                            ----------           ----------
   Total current liabilities..............     134,476              133,476
Long-term debt, less current maturities...     920,670              938,831
Deferred income taxes.....................      83,740               81,434
Deferred revenue..........................     108,744               64,961
Other long-term liabilities...............      14,721                8,566
                                            ----------           ----------
   Total liabilities......................   1,262,351            1,227,268
                                            ----------           ----------
Commitments and contingencies (Note 16)
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 150,000,000 shares;
     issued and outstanding 103,277,329
     and 102,664,572 shares at October
     31, 2000 and 1999, respectively.....      103,277              102,664
   Class B authorized 5,000,000 shares;
     issued and outstanding 3,555,020
     shares at October 31, 2000 and 1999;
     10 votes per share; convertible into
     an equal number of Class A shares...        3,555                3,555
  Additional paid-in capital.............      673,658              671,891
  Retained earnings......................      407,398              347,002
  Cumulative foreign translation
    adjustment...........................     (103,553)             (65,152)
  Unrealized depreciation of investments.       (9,678)              (3,348)
                                            ----------           -----------
   Total shareholders' equity............    1,074,657           $ 1,056,612
                                            ----------           -----------
                                            $2,337,008           $ 2,283,880
                                            ==========           ===========

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands, except per share amounts)

                                          Common Stock                                                 Unrealized
                                  -------------------------                              Cumulative   Appreciation,
                                  Shares -                       Additional                Foreign   (Depreciation)      Total
                                  Classes A                       Paid-in     Retained   Translation       of       Shareholders'
                                  and B(1)         Amount         Capital     Earnings   Adjustment   Investments       Equity
                                  ----------      ---------      ----------   --------   -----------  ------------- -------------
                                       (In thousands)

Balance October 31, 1997              97,363(2)   $  97,363       $ 477,499   $279,104   $   (36,609) $       2,213 $     819,570

Comprehensive income:
  Net earnings ..................                                               41,902                                     41,902

  Other comprehensive income:
    Foreign translation
      adjustment ................                                                            (28,278)                     (28,278)
    Unrealized depreciation of
      investments ...............                                                                            (5,242)       (5,242)
    Deferred income tax benefit
      on unrealized depreciation
      of investments ............                                                                             1,861         1,861
                                  ----------      ---------      ----------   --------   -----------  ------------- -------------
    Total other comprehensive
      income ....................                                                            (28,278)        (3,381)      (31,659)
                                  ----------      ---------      ----------   --------   -----------  ------------- -------------
  Total comprehensive income ....                                               41,902       (28,278)        (3,381)       10,243
Issuance of common stock ........         68             68           1,320                                                 1,388


Subsidiaries acquired with
  common stock ..................        294            294           7,411                                                 7,705
Stock options exercised .........        637            637          14,714                                                15,351
Purchase and retirement of common
  stock .........................       (334)          (334)         (8,767)                                               (9,101)
Dividends ($.06 per share)(1)....                                               (5,866)                                    (5,866)
                                  ----------      ---------      ----------   --------   -----------  ------------- -------------
Balance October 31, 1998 ........     98,028(2)   $  98,028      $  492,177   $315,140   $   (64,887) $      (1,168)$     839,290
                                  ==========      =========      ==========   ========   ===========  ============= =============


Comprehensive income:
  Net earnings ..................                                               40,419                                     40,419

  Other comprehensive income:
    Foreign translation
      adjustment ................                                                               (265)                        (265)
    Unrealized depreciation of
      investments ...............                                                                            (3,433)       (3,433)
    Deferred income tax benefit
      on unrealized depreciation
      of investments ............                                                                             1,253         1,253
                                  ----------      ---------      ----------   --------   -----------  ------------- -------------
    Total other comprehensive
      income ....................                                                               (265)        (2,180)       (2,445)
                                  ----------      ---------      ----------   --------   -----------  ------------- -------------
  Total comprehensive income ....                                               40,419          (265)        (2,180)       37,974
Sales and issuance of
  common stock ..................     13,741         13,741         206,713                                               220,454
Subsidiaries acquired with
  common stock ..................         19             19             281                                                   300
Stock options exercised .........         11             11              91                                                   102
Purchase and retirement of common
  stock .........................     (5,580)        (5,580)        (27,371)                                              (32,951)
Dividends ($.08 per share).......                                               (8,557)                                    (8,557)
                                  ----------      ---------      ----------   --------   -----------  ------------- -------------
Balance October 31, 1999 ........    106,219(2)   $ 106,219      $  671,891   $347,002   $   (65,152) $      (3,348)$   1,056,612
                                  ==========      =========      ==========   ========   ===========  ============= =============


                                                                                                                      (continued)

                                         Common Stock
                                  -------------------------                              Cumulative      Unrealized
                                  Shares -                       Additional                Foreign      Depreciation    Total
                                  Classes A                       Paid-in     Retained   Translation        of       Shareholders'
                                  and B           Amount          Capital     Earnings   Adjustment    Investments     Equity
                                  ----------    -----------     -----------  ----------  ------------  ------------  ------------
                                     (In thousands) 




Balance October 31, 1999........     106,219(2) $   106,219     $   671,891   $ 347,002  $    (65,152) $     (3,348) $  1,056,612

Comprehensive income:
  Net earnings..................                                                 66,794                                    66,794

  Other comprehensive income:
    Foreign translation
      adjustment................                                                              (38,401)                    (38,401)
    Unrealized depreciation of
      investments...............                                                                             (9,969)       (9,969)
    Deferred income tax benefit
      on unrealized depreciation
      of investments............                                                                              3,639         3,639
                                  ----------    -----------     ------------  ----------  ------------ ------------  ------------

    Total other comprehensive
      income....................                                                               (38,401)      (6,330)      (44,731)
                                  ----------    -----------     ------------  ----------  ------------ ------------  ------------
  Total comprehensive income....                                                  66,794       (38,401)      (6,330)       22,063

Issuance of common stock........         613            613            1,767                                                2,380

Dividends ($.06 per share)......                                                  (6,398)                                  (6,398)
                                  ----------    -----------     ------------  ----------  ------------ ------------  ------------
Balance October 31, 2000........     106,832(2) $   106,832     $    673,658  $  407,398  $   (103,553)$     (9,678) $  1,074,657
                                  ==========    ===========     ============  ==========  ============ ============  ============

See accompanying notes to consolidated financial statements.

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

                                                                             Year Ended October 31,
                                                               ---------------------------------------------
                                                                    2000             1999           1998
                                                               -------------    ------------   -------------
Cash flows from operating activities:
  Net earnings ..............................................  $      66,794    $     40,419   $      41,902
  Adjustments to reconcile net earnings to net cash
    provided by operating activities:
   Performance-based stock options ..........................            -               -            76,762
   Depreciation and amortization  ...........................         54,267          50,620          38,742
   Provision for doubtful accounts ..........................         35,877          33,914          28,325
   Cumulative effect of change in accounting principle ......            -            50,101               -
   Net gains on sales of marketable securities ..............         (1,079)         (4,221)         (2,727)
   Provision for deferred income taxes ......................          9,001          11,139             532
   Changes in assets and liabilities, net of effects
     from acquisitions:
     Increase in prearranged funeral trust receivables ......            -               -            (8,252)
     Increase in other receivables ..........................        (20,897)       (108,610)        (90,997)
     Increase in deferred charges and intangible assets .....         (6,064)         (7,987)        (11,306)
     Increase in inventories and  cemetery  property ........        (16,336)        (18,831)        (15,343)
     Increase (decrease) in accounts payable and accrued
       expenses .............................................         (6,751)            683           6,517
     Increase in merchandise trust, less estimated cost to
       deliver merchandise ..................................        (31,541)        (28,761)        (20,641)
     Increase (decrease) in other ...........................          3,967          (2,041)          2,916
                                                               -------------    ------------   -------------

   Net cash provided by operating activities ................         87,238          16,425          46,430
                                                               -------------    ------------   -------------

Cash flows from investing activities:
  Changes in prearranged funeral activity, net ..............        (17,687)        (10,807)        (24,026)
  Proceeds from sale of marketable securities ...............         65,100          42,240          19,039
  Purchases of marketable securities and
    long-term investments ...................................        (13,771)        (26,185)        (30,438)
  Purchases of subsidiaries, net of cash, seller
    financing and stock issued ..............................           (804)       (162,032)       (223,414)
  Additions to property and equipment .......................        (36,017)        (54,883)        (44,805)
  Other .....................................................          1,326           3,111               2
                                                               -------------    ------------   -------------
   Net cash used in investing activities ....................         (1,853)       (208,556)       (303,642)
                                                               -------------    ------------   -------------

(continued)

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

                                                                        Year Ended October 31,
                                                               -------------------------------------------
                                                                  2000             1999           1998
                                                               -----------      -----------    -----------
Cash flows from financing activities:
  Proceeds from long-term debt.............................         8,366           247,579        602,782
  Repayments of long-term debt.............................       (23,150)         (232,775)      (270,682)
  Retirement of performance-based stock options............          -                 -           (69,431)
  Issuance of common stock.................................         2,380           220,556         11,738
  Purchase and retirement of common stock..................          -              (32,951)        (9,101)
  Dividends................................................        (6,398)           (8,557)        (5,866)
                                                              -----------       -----------    -----------
   Net cash provided by (used in) financing activities.....       (18,802)          193,852        259,440
                                                              -----------       -----------    -----------

Effect of exchange rates on cash and cash equivalents......        (5,865)           (1,577)        (3,135)
                                                              -----------       -----------    -----------

Net increase (decrease) in cash............................        60,718               144          (907)
Cash and cash equivalents, beginning of year...............        30,877            30,733        31,640
                                                              -----------       -----------    ----------
Cash and cash equivalents, end of year.....................   $    91,595       $    30,877    $   30,733
                                                              ===========       ===========    ==========

Supplemental cash flow information:
  Cash paid during the year for:
   Income taxes............................................   $    30,400     $    48,900   $    8,900
   Interest................................................   $    65,100     $    51,400   $   38,000

Noncash investing and financing activities:
  Subsidiaries acquired through seller financing...........   $    13,900     $     1,600   $   16,200
  Subsidiaries acquired with common stock..................   $      -        $       300   $    7,705

See accompanying notes to consolidated financial statements.

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

        Stewart Enterprises, Inc. (the "Company") is the third largest provider of products and services in the death care industry in North America. Through its subsidiaries, the Company offers a complete line of funeral merchandise and services, along with cemetery property, merchandise and services. For the year ended October 31, 2000, the funeral and cemetery segments contributed approximately 61 percent and 39 percent, respectively, of consolidated total revenues and 65 percent and 35 percent, respectively, of consolidated total gross profit.

        As of October 31, 2000, the Company owned and operated 627 funeral homes and 163 cemeteries in 30 states within the United States and in Puerto Rico, Mexico, Australia, New Zealand, Canada, Spain, Portugal, the Netherlands, Argentina, France and Belgium. The Company commenced its international operations in Mexico in fiscal year 1994 and entered Australia in fiscal year 1995, New Zealand and Canada in fiscal year 1996, Spain and Portugal in fiscal year 1997, and the Netherlands, Argentina, France and Belgium in fiscal year 1998. For fiscal year 2000, foreign operations contributed approximately 20 percent of consolidated total revenue and, as of October 31, 2000, represented approximately 19 percent of consolidated total assets.

        The accompanying consolidated financial statements include the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

         (b)    Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

        (c)    Fair Value of Financial Instruments

        Estimated fair value amounts have been determined using available market information and the valuation methodologies described below. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein may not be indicative of the amounts the Company could realize in a current market. The use of different market assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

        The carrying amounts of cash and cash equivalents and current receivables approximate fair value due to the short-term nature of these instruments. The carrying amount of receivables due beyond one year approximates fair value because they bear interest at rates currently offered by the Company for receivables with similar terms and maturities. The carrying amounts of marketable securities and long-term investments are stated at fair value as they are classified as available for sale under the provisions of Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The fair value of the Company's long-term floating rate debt is estimated using future cash flows discounted at market rates for similar types of borrowing

arrangements. The fair value of the Company's long-term fixed-rate debt is estimated using quoted market prices, where applicable, or future cash flows discounted at rates for similar types of borrowing arrangements. See Note 11.

        (d)    Inventories

        Inventories are stated at the lower of cost (specific identification and first-in, first-out methods) or net realizable value. The portion of developed cemetery property that management estimates will be used in the next twelve months is included in inventories.

        (e)    Depreciation and Amortization

        Buildings and equipment are depreciated over their estimated useful lives, ranging from 19 to 45 years and from 3 to 10 years, respectively, primarily using the straight-line method. For the fiscal years ended October 31, 2000, 1999 and 1998, depreciation expense totaled approximately $28,938, $25,418 and $21,094, respectively.

        Goodwill, or costs in excess of net assets of companies acquired, totaled approximately $667,128 and $669,790 as of October 31, 2000 and 1999, respectively, and is amortized principally over 40 years using the straight-line method. The Company continually evaluates the recoverability of this intangible asset by assessing whether the amortization of the goodwill balance over its remaining life can be recovered through undiscounted expected future cash flows. Other intangible assets are amortized over five years using the straight-line method. Accumulated amortization was $82,944 and $63,300 as of October 31, 2000 and 1999, respectively.

        (f)    Foreign Currency Translation

        In accordance with SFAS No. 52, "Foreign Currency Translation," all assets and liabilities of the Company's foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect at the end of the period, and revenues and expenses are translated at average exchange rates prevailing during the period. The resulting translation adjustments are reflected in a separate component of shareholders' equity.

        During fiscal year 1998, the Company reported translation adjustments for its Mexican operations under the method prescribed for highly inflationary economies. Under that method, foreign currency translation adjustments are reflected in results of operations, instead of in shareholders' equity. This change did not have a material effect on the Company's results of operations for fiscal year 1998.

        As of January 1, 1999, the Mexican economy was no longer considered highly inflationary according to the SEC staff. Accordingly, subsequent to January 1, 1999, gains and losses resulting from translation of the financial statements of the Company's Mexican operations are reflected in shareholders' equity and the functional currency used by our Mexican operations returned to the Mexican peso. These changes did not have a material effect on the Company's results of operations for fiscal years 2000, 1999 and 1998.

        (g)    Funeral Revenue

        The Company sells prearranged funeral services and merchandise under contracts that provide for delivery of the services and merchandise at the time of death. Prearranged funeral services are recorded as funeral revenue in the period the funeral is performed. Prearranged funeral merchandise is recognized as revenue upon delivery in jurisdictions where such sales are included in funeral and insurance contracts. The Company considers prearranged funeral contracts to be investments in future funeral revenue made to retain and expand future market share. Accordingly, the cash flow item related to prearranged funeral contracts, "changes in prearranged funeral activity, net," has been classified as cash flows from investing activities.

        Commissions and direct marketing costs relating to prearranged funeral services and prearranged funeral merchandise sales are accounted for in the same manner as the revenue to which they relate. Where revenue is deferred, the related commissions and direct marketing costs are deferred and amortized as the funeral contracts are delivered. Conversely, where revenues are recognized currently, the related costs are expensed as incurred. Indirect costs of marketing prearranged funeral services are expensed in the period in which incurred.

        Prearranged funeral services and merchandise generally are funded either through trust funds or escrow accounts established by the Company or through insurance. Principal amounts deposited in the trust funds or escrow accounts are available to the Company as funeral services and merchandise are delivered and are refundable to the customer in those situations where state law provides for the return of those amounts under the purchaser's option to cancel the contract. Certain jurisdictions provide for non-refundable trust funds or escrow accounts where the Company receives such amounts upon cancellation by the customer. Earnings are withdrawn only as funeral services and merchandise are delivered or contracts are cancelled, except in jurisdictions that permit earnings to be withdrawn currently and in unregulated jurisdictions where escrow accounts are used. When prearranged funeral services and merchandise are funded through third-party insurance policies purchased by customers from third-party insurance companies, the Company earns a commission on the sale of the policies. Insurance commissions, net of related expenses, are recognized at the point at which the commission is no longer subject to refund. Policy proceeds are available to the Company as funeral services and merchandise are delivered.

        Effective November 1, 1998, the Company changed its method of accounting for prearranged funeral trust earnings. See Note 3.

        Funeral services sold at the time of need are recorded as funeral revenue in the period the funeral is performed.

        (h)    Cemetery Revenue

        The Company recognizes income currently from the sale of unconstructed mausoleum crypts to the extent it has available inventory. Costs of mausoleum and lawn crypts sold but not yet constructed are based upon management's estimated cost to construct those items.

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

        In certain jurisdictions in which the Company operates, local law or contracts with customers generally require that a portion of the sale price of prearranged cemetery merchandise be placed in trust funds or escrow accounts. The Company recognizes as revenue on a current basis all dividends and interest earned, and net capital gains realized, by prearranged merchandise trust funds or escrow accounts. At the same time, the liability for the estimated cost to deliver merchandise is adjusted through a charge to earnings to reflect inflationary merchandise cost increases. Principal and earnings are withdrawn only as the merchandise is delivered or contracts are cancelled.

        Pursuant to perpetual care contracts and laws, a portion, generally 10 percent, of the proceeds from cemetery property sales is deposited into perpetual care trust funds. The income from these funds, which have been established in most jurisdictions in which the Company operates cemeteries, is used for maintenance of those cemeteries, but principal, including in some jurisdictions net realized capital gains, must generally be held in perpetuity. Accordingly, the trust fund corpus is not reflected in the consolidated financial statements. The Company recognizes and withdraws currently all dividend and interest income earned and, where permitted, capital gains realized by perpetual care funds.

        Some of the Company's sales of cemetery property and merchandise are made under installment contracts bearing interest at prevailing rates. Finance charges are recognized as cemetery revenue under the effective interest method over the terms of the related installment receivables.

        (i)    Income Taxes

        The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of assets and liabilities. The Company has not provided for possible United States federal income taxes on the undistributed earnings of foreign subsidiaries that are considered to be reinvested indefinitely.

        (j)    Earnings Per Common Share

        Basic earnings per common share is computed by dividing net earnings by the weighted average number of common shares outstanding during each period. Diluted earnings per common share is computed by dividing net earnings by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if the dilutive potential common shares (in this case, exercise of the Company's time-vest stock options) had been issued during each period. See Note 12. The Company's share and per share amounts have been adjusted for a two-for-one common stock split effective April 24, 1998.

        (k)    Recent Accounting Standards

        SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," establishes accounting and reporting standards for derivative instruments. SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," and SFAS No. 138, "Accounting for Certain

Derivative Instruments and Certain Hedging Activities," are amendments to the accounting and reporting standards of SFAS No. 133 and must be adopted concurrently with SFAS No. 133. SFAS No. 133 is required to be implemented in the first quarter of the Company's fiscal year 2001. The Company has begun its analysis of the impact of SFAS Nos. 133, 137 and 138 on its consolidated financial condition and results of operations, and the pronouncements are not expected to have an impact on the Company's consolidated statement of earnings. It is estimated that the adoption of the new standards will result in an increase in shareholders' equity of approximately $4,693. This estimate is based on market information and the fair value of the Company's three-year interest rate swap as of October 31, 2000. The actual effect on the Company's financial statements will depend on the fair value of the swap at the date of adoption.

        The Company and other industry participants continue to discuss directly with the staff of the Securities and Exchange Commission ("SEC") the application of its recently issued Staff Accounting Bulletin No. 101 - "Revenue Recognition in Financial Statements" ("SAB 101") as it relates to prearranged sales activities. SAB 101, which applies to all companies and was not directed at the death care industry, emphasizes among other matters the importance of physical delivery of a product or service to justify the recognition of revenue. Based on currently available information, the Company believes that the implementation of SAB 101 will require a deferral of previously recorded revenue associated with prearranged sales. The amounts deferred will be recognized in future years as the products and services that have been bought and paid for are ultimately delivered.

        Based on the tentative agreement with the SEC staff, the Company estimates that although there will be no negative impact on cash flow, had it adopted SAB 101 in fiscal year 2000, before adjusting for the cumulative effect, the implementation would have reduced earnings by a range of $0.09 to $0.13 per share. The Company also estimates that had SAB 101 been adopted in fiscal year 2000, it would have resulted in a nonrecurring, noncash $250,000 to $275,000 after-tax charge for the cumulative effect of the changes. This would have resulted in an additional backlog that would have produced approximately $1 billion of revenue in the future as these prepaid products and services are delivered. Based on what the Company currently knows, the implementation of SAB 101 should not cause a violation of any financial covenants in its debt agreements. The SEC and the industry have not reached a final resolution of these discussions, but the Company anticipates that they will be finalized shortly. The Company is not required to implement the new accounting guidance until the fourth fiscal quarter of 2001 but may choose to implement the guidance earlier.

        Effective November 1, 1999, the Company implemented Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities," ("SOP 98-5") which requires costs of start-up activities and organization costs to be expensed as incurred. The implementation of SOP 98-5 did not have a material impact on the Company's financial condition or results of operations.

        (l)    Reclassifications

        Certain reclassifications have been made to the 1998 and 1999 consolidated financial statements to conform with the presentation used in the 2000 consolidated financial statements. These reclassifications had no effect on net earnings or shareholders' equity.

        The Company changed the following accounting principle effective November 1, 1998:

        The Company now defers all of the earnings realized by irrevocable prearranged funeral trust funds and escrow accounts until the underlying funeral service is delivered. Previously, the Company recognized a portion of those earnings and deferred the remainder to offset the estimated future effects of inflation.

        The accounting change was made principally to match revenue recognition more closely with cash receipts and also to improve the comparability of the Company's earnings with those of its principal competitors. The new method will allow the Company to take a longer-term view and increase its flexibility in managing the funeral trust funds.

        The cumulative effect of this change on prior years resulted in a decrease in net earnings for the year ended October 31, 1999, of $50,101 (net of a $28,798 income tax benefit), or $.47 per share. For the year ended October 31, 1999, the current year effect of the change in accounting principle was a decrease in net earnings of $16,190, or $.15 per share.

        The following table reflects the Company's acquisition activity during the past three fiscal years:

                                                 Businesses Acquired
                                              --------------------------
                                              Funeral Homes   Cemeteries
                                              -------------   ----------
   Fiscal year 2000..........................       -             4
   Fiscal year 1999..........................      83            17
   Fiscal year 1998..........................     153             9

        These acquisitions have been accounted for by the purchase method, and their results of operations are included in the accompanying consolidated financial statements from the dates of acquisition. The purchase price allocations for certain of these acquisitions are based on preliminary information.

         The following table reflects, on an unaudited pro forma basis, the combined operations of the Company and the businesses acquired during fiscal year 2000 as if such acquisitions had taken place at the beginning of the respective periods presented. Appropriate adjustments have been made to reflect the accounting basis used in recording the acquisitions. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that would have resulted had the combinations been in effect on the dates indicated, that have resulted since the dates of acquisition or that may result in the future.

                                                               Year Ended October 31,
                                                         -------------------------------
                                                             2000               1999
                                                         -------------     -------------
                                                                      (Unaudited)

Revenues............................................     $     735,064      $    760,491
                                                         =============      ============
Operating earnings..................................     $     159,309      $    191,794
                                                         =============      ============
Earnings before cumulative effect of change
   in accounting principle..........................     $      66,811      $     90,827
                                                         =============      ============
Net earnings........................................     $      66,811      $     40,726
                                                         =============      ============
Basic earnings per common share:

   Earnings before cumulative effect of change in
     accounting principle...........................     $         .63      $        .85
                                                         =============      ============
   Net earnings.....................................     $         .63      $        .38
                                                         =============      ============

Diluted earnings per common share:
   Earnings before cumulative effect of change in
     accounting principle...........................     $         .63      $        .84
                                                         =============      ============
   Net earnings.....................................     $         .63      $        .38
                                                         =============      ============

Weighted average common shares outstanding (in thousands):
   Basic............................................           106,600           107,452
                                                         =============      ============
   Diluted..........................................           106,603           107,834
                                                         =============      ============

        The effect of acquisitions at dates of purchase on the consolidated financial statements was as follows:

                                                         Year Ended October 31,
                                             -------------------------------------------
                                                2000             1999             1998
                                             --------          --------         --------
Current assets...........................    $ 14,878          $ 24,730         $ 35,561
Receivables due beyond one year..........         -                  70               91
Cemetery property........................       2,630            25,131           47,987
Property and equipment, net..............       3,652            33,751           42,247
Deferred charges and other assets........       4,960             2,076            2,242
Intangible assets, net...................      30,274           125,924          177,708
Deferred tax asset.......................       2,689              -                -
Current liabilities......................        (526)          (18,450)          (9,128)
Long-term debt...........................     (13,898)          (14,249)         (33,872)
Deferred income taxes....................         -              (5,317)         (20,107)
Deferred revenue.........................     (41,485)           (6,942)         (10,357)
Other long-term liabilities..............      (2,370)           (4,392)          (1,253)
                                             --------          --------         --------
                                                  804           162,332          231,119
Common stock used for acquisitions .....          -                 300            7,705
                                             --------          --------         --------
Cash used for acquisitions .............     $    804          $162,032         $223,414
                                             ========          ========         ========

         The following summary reflects prearranged funeral services sold, but not yet delivered, which are funded with trusts, escrow accounts and insurance and related prearranged funeral trust fund and escrow account balances. The trust- and insurance-funded balances are not reflected in the accompanying consolidated financial statements. Amounts which represent the Company's voluntary deposits into escrow accounts in those jurisdictions where trust or escrow arrangements are neither statutorily nor contractually required aggregated $4,203 and $14,347 as of October 31, 2000 and 1999, respectively, and are classified as long-term investments.

        Amounts deposited in the trust funds and escrow accounts and funded through insurance are available to the Company when the services are performed. Funds held in trust or escrow are invested, and earnings (including net realized capital gains) realized on irrevocable trust funds and escrow accounts are deferred until the underlying funeral service is delivered, in accordance with the Company's change in accounting method effective November 1, 1998. Under the Company's previous accounting method, earnings of $26,463 were included in funeral revenue for fiscal year 1998.

                                                                            October 31,
                                                                   ------------------------------
                                                                      2000                 1999
                                                                   ----------          ----------
  Trust or escrow funded:
   Prearranged funeral services sold, but not delivered .........  $  610,113          $  615,956
                                                                   ==========          ==========

   Investments at market value ..................................  $  614,454          $  610,701
   Receivables to be collected on prearranged funeral service
     contracts ..................................................     116,832             106,605
                                                                   ----------          ----------
                                                                   $  731,286          $  717,306
                                                                   ==========          ==========
  Insurance-funded and other prearranged funeral services .......  $  259,589          $  241,860
                                                                   ==========          ==========

  Investments consist of:
   U.S. Government, agencies and municipalities .................  $   30,649          $   27,189
   Canadian Government, agencies and municipalities .............      30,866              30,937
   Corporate bonds ..............................................      82,955              80,644
   Preferred stocks .............................................      60,611              60,577
   Common stocks ................................................     185,839             177,163
   Money market funds and other short-term investments ..........     169,659             183,029
   Short-term fixed income foreign investments ..................      52,124              57,270
                                                                   ----------          ----------
   Total value at cost ..........................................     612,703             616,809
   Net unrealized appreciation (depreciation) ...................       1,751              (6,108)
                                                                   ----------          ----------
   Total value at market ........................................  $  614,454          $  610,701
                                                                   ==========          ==========

        The following summary reflects the Company's merchandise trust fund and escrow account balances, as well as merchandise sold, but undelivered, at current cost. Merchandise sold, but undelivered, is reflected at current cost in the accompanying consolidated balance sheets net of the related merchandise trust fund and escrow account balances and accumulated earnings. As of October 31, 2000 and 1999, there were no merchandise trust fund and escrow account balances classified as long-term investments.

        Amounts deposited in the trust funds and escrow accounts are invested, and the revenue on the funds (including net realized capital gains) of $21,021, $17,371 and $13,157 is reflected in cemetery revenue for 2000, 1999 and 1998, respectively. Amounts deposited in merchandise trust funds and escrow accounts that are invested in debt securities as of October 31, 2000 totaled $65,704 and are scheduled to mature as follows: $8,549 in less than one year; $21,502 in one through five years; $35,049 in five through ten years; and $604 in more than ten years.

                                                                          October 31,
                                                               -------------------------------
                                                                  2000                 1999
                                                               ----------           ----------

  Merchandise trust funds and escrow accounts:
     Merchandise sold, but not delivered, at current cost..    $  146,287           $  140,270
                                                               ==========           ==========

     Investments at market value...........................    $  232,256           $  199,269
     Amounts to be collected on merchandise contracts......        60,510               66,624
                                                               ----------           ----------
                                                               $  292,766           $  265,893
                                                               ==========           ==========

   Investments consist of:
     U.S. Government, agencies and municipalities..........    $   12,536           $   10,213
     Corporate bonds.......................................        53,953               44,588
     Preferred stocks......................................        24,336               23,737
     Common stocks.........................................       105,669               78,952
     Money market funds and other short-term investments...        49,044               46,287
                                                               ----------           ----------
     Total value at cost...................................       245,538              203,777
     Net unrealized depreciation...........................       (13,282)              (4,508)
                                                               ----------           ----------
     Total value at market.................................    $  232,256           $  199,269
                                                               ==========           ==========

        The following summary reflects the Company's perpetual care trust fund and escrow account balances. Since principal cannot be withdrawn, these balances are not reflected in the accompanying financial statements, except for $2,465, classified as long-term investments as of October 31, 1999, which represents the Company's voluntary deposits into escrow accounts in those jurisdictions where trust or escrow arrangements are neither statutorily nor contractually required. As of October 31, 2000, there were no perpetual care escrow account balances classified as long-term investments. Funds held in trust or escrow are invested, and the earnings withdrawn from the trust funds and escrow accounts are used for the maintenance of cemetery grounds. For the years ended October 31, 2000, 1999 and 1998, such withdrawals, included in cemetery revenue, totaled $16,630, $14,470, and $12,615, respectively.

                                                                         October 31,
                                                                -----------------------------
                                                                   2000               1999
                                                                ----------         ----------
    Perpetual care trust funds and escrow accounts:
     Investments at market value...........................     $  213,588         $  201,021
     Amounts to be collected under existing agreements.....         10,413             10,328
                                                                ----------         ----------
                                                                $  224,001         $  211,349
                                                                ==========         ==========
    Investments consist of:
     U.S. Government, agencies and municipalities..........     $   14,190         $   15,516
     Corporate bonds.......................................         49,096             41,723
     Preferred stocks......................................         18,897             17,676
     Common stocks.........................................         67,549             63,370
     Money market funds and other short-term investments...         55,744             53,441
                                                                ----------         ----------
     Total value at cost...................................        205,476            191,726
     Net unrealized appreciation...........................          8,112              9,295
                                                                ----------         ----------
     Total value at market.................................     $  213,588         $  201,021
                                                                ==========         ==========

        The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company deposits its cash and cash equivalent investments with high quality credit institutions. Such balances typically exceed applicable FDIC insurance limits.

                                                                         October 31,
                                                                -----------------------------
                                                                   2000              1999
                                                                ----------         ----------
   Cash....................................................     $   69,594         $   26,268
   Cash equivalent investments.............................         22,001              4,609
                                                                ----------         ----------
                                                                $   91,595         $   30,877
                                                                ==========         ==========

         The market value of long-term investments as of October 31, 2000 and 1999 was $4,203 and $16,812, respectively, which included gross unrealized gains of $28 and $341, and gross unrealized losses of $0 and $109, respectively. There were no amounts classified as long-term investments and invested in debt securities as of October 31, 2000. See Notes 5 and 6 which include details of the Company's long-term investments.

(9)     Receivables

                                                                                      October 31,
                                                                             --------------------------
                                                                                 2000           1999
                                                                             -----------    -----------
   Current receivables are summarized as follows:

     Installment contracts due within one year............................   $   93,061     $   88,673
     Trade accounts, notes and other......................................       49,582         41,334
     Allowance  for  sales  cancellations  and  doubtful  accounts........       (9,924)       (11,432)
     Amounts to be collected for perpetual care funds.....................       (5,913)        (5,628)
                                                                             ----------     ----------
                                                                                126,806        112,947
     Funeral receivables..................................................       50,668         63,268
                                                                             ----------     ----------
         Net current receivables..........................................   $  177,474     $  176,215
                                                                             ==========     ==========


   Long-term receivables are summarized as follows:

     Installment contracts due beyond one year............................   $  238,433     $  256,835
     Allowance  for  sales  cancellations  and  doubtful  accounts........      (16,860)       (14,557)
     Amounts to be collected for perpetual care funds.....................       (4,500)        (4,700)
                                                                             ----------     ----------
         Net long-term receivables........................................   $  217,073     $  237,578
                                                                             ==========     ==========

        The Company's receivables as of October 31, 2000 are expected to mature as follows:

    Years ending October 31,
     2001.....................................................  $ 177,474
     2002.....................................................     36,106
     2003.....................................................     33,070
     2004.....................................................     24,966
     2005.....................................................     22,980
     Later years..............................................     99,951
                                                                ---------
                                                                $ 394,547
                                                                =========

(10)    Inventories and Cemetery Property

        Inventories are comprised of the following:

                                                             October 31,
                                                       -----------------------
                                                         2000           1999
                                                       --------       --------
 Developed cemetery property.........................  $ 18,248       $ 15,850
 Merchandise and supplies............................    42,401         35,581
                                                       --------       --------
                                                       $ 60,649       $ 51,431
                                                       ========       ========

 Cemetery property is comprised of the following:
                                                              October 31,
                                                       -----------------------
                                                         2000            1999
                                                       --------       ---------

 Developed cemetery property.........................  $ 94,382       $ 94,221
 Undeveloped cemetery property.......................   347,264        329,811
                                                       --------       --------
                                                       $441,646       $424,032
                                                       ========       ========

        The Company evaluates the recoverability of the cost of undeveloped cemetery property through comparison with undiscounted expected future cash flows.

 (11) Long-term Debt

         The following is a summary of long-term debt:

                                                                              October 31,
                                                                        -----------------------
                                                                           2000         1999
                                                                        ---------     ---------
Revolving Credit Facilities (see "evolving Credit Facility"
    and "Revolving Line of Credit Note" below) .......................  $ 529,000     $ 529,000
    Senior Notes .....................................................     88,572        95,714
    6.70% Notes ......................................................    100,000       100,000
    6.40% Notes ......................................................    204,781       205,164
    Other, principally seller financing of acquired operations or
    assumption upon acquisition, weighted average interest rate
    of 6.4% as of October 31, 2000, partially secured by
    assets of subsidiaries, with maturities through 2023 .............     28,174        21,535
                                                                        ---------     ---------
                                                                          950,527       951,413
   Less current maturities............................................     29,857        12,582
                                                                        ---------     ---------
                                                                        $ 920,670     $ 938,831
                                                                        =========     =========

         In April 1997, the Company completed the syndication of a $600,000 revolving credit facility ("Revolving Credit Facility"). The Revolving Credit Facility matures on April 30, 2002 and contains a facility fee which was 22.5 basis points on October 31, 2000. Borrowings bear interest at the lead lending bank's prime rate or certain optional rates at the Company's election. Under this agreement $529,000 was outstanding with weighted average interest rates of 6.46 percent and 5.63 percent as of October 31, 2000 and 1999, respectively, which includes the effect of the interest rate swap agreement discussed below. As of October 31, 2000 and 1999, the carrying value of these borrowings, including accrued interest, was $529,000 and $533,086, respectively, whereas the fair value was $512,193 and $524,924, respectively. Additionally, as of October 31, 2000 and 1999, the Company had outstanding letters of credit in the amount of $5,551 and $4,813, respectively, resulting in $65,449 and $66,187, respectively, of availability under its Revolving Credit Facility.

        In order to hedge a portion of the interest rate risk associated with its variable-rate debt, during the first quarter of 1999 the Company entered into a three-year interest rate swap agreement involving a notional amount of $200,000. This agreement which became effective March 4, 1999, effectively converted $200,000 of variable-rate debt bearing interest based on three-month LIBOR to a fixed rate based on the swap rate of 4.915 percent. The estimated fair value of the interest rate swap as of October 31, 2000 and 1999, based on quoted market prices, was $4,693 and $6,090, respectively. As of October 31, 2000 and 1999, the Company had $529,000 of outstanding borrowings under its $600,000 Revolving Credit Facility, $329,000 of which was not hedged by the interest rate swap agreement and was subject to a weighted average short-term variable interest rate of 7.16 percent and 5.92 percent, respectively.

         Additionally, the Company has available with a separate financial institution an uncollateralized and uncommitted revolving line of credit ("Revolving Line of Credit Note") used to support the interim cash funding for advances to be made under the Revolving Credit Facility in amounts less than $5,000. Borrowings under the Revolving Line of Credit Note are limited to $10,000, bear interest at the lending bank's cost of funds rate and are payable on demand. There were no amounts outstanding under the Revolving Line of Credit Note as of October 31, 2000 and 1999.

        On December 21, 1993, the Company issued $50,000 of uncollateralized senior notes, bearing interest at a rate of 6.04 percent and maturing on November 30, 2003. Principal payments of $7,143 are due each year; the first such payment was made on November 30, 1997, and the final payment is due on November 30, 2003. On November 7, 1994, the Company issued $75,000 of uncollateralized senior notes with an average maturity of seven years and a weighted average interest rate of 8.44 percent. A principal payment of $15,000 was made on May 1, 1998. The remaining notes have a weighted average interest rate of 8.49 percent, and principal payments are due as follows: $16,667 on each of November 1, 2000, 2001 and 2002, and $10,000 on November 1, 2006. As of October 31, 2000 and 1999, the carrying value of the Company's senior notes, including accrued interest, was $91,822 and $99,145, respectively, whereas the fair value was $74,853 and $91,137, respectively.

        In December 1996, the Company issued $100,000 of unsecured, unsubordinated debt securities in the form of 6.70 percent Notes due in 2003. Net proceeds were approximately $99,400, of which $96,800 was used to reduce balances outstanding under the Company's revolving credit facilities, with the remaining $2,600 used for acquisitions and general corporate purposes. As of October 31, 2000 and 1999, the carrying value of these notes, including accrued interest, was $102,773, whereas the fair value was $65,573 and $84,553, respectively.

        In April 1998, the Company issued $200,000 of 6.40 percent Remarketable Or Redeemable Securities ("ROARS") due May 1, 2013 (remarketing date May 1, 2003). The ROARS were priced to the public at 99.677 percent to yield 6.476 percent. Net proceeds were approximately $203,631, including the payment made to the Company by the remarketing dealer for the right to remarket the securities after five years. The proceeds were used to reduce balances outstanding under the Company's revolving credit facilities. The net effective rate to the Company, assuming the securities are redeemed by the Company after five years, is 5.77 percent. If the securities are remarketed after five years, the net effective rate for the remaining term will be 5.44 percent (10-year Treasury rate, fixed upon initial issuance of the ROARS) plus the Company's then current credit spread. If the ROARS are redeemed by the Company on May 1, 2003, a principal payment of $200,000 will be required. As of October 31, 2000 and 1999, the carrying value of these notes, including accrued interest and the unamortized portion of the option premium, was $211,146 and $211,528, respectively, whereas the fair value was $136,444 and $175,366, respectively.

        The bank loan agreements and senior note agreements contain various restrictive covenants that limit consolidated funded indebtedness, indebtedness of subsidiaries, the sale of assets to entities outside the consolidated group and the payment of dividends on, and repurchases of, the capital stock of the Company. Additionally, the bank loan agreements contain change of control provisions. The Company is also required to maintain specified financial ratios related to net worth and fixed charges.

        Scheduled principal payments and maturities of the Company's long-term debt for the fiscal years ending October 31, 2001 through October 31, 2005, excluding the Revolving Credit Facility and assuming the ROARS are redeemed by the Company on May 1, 2003, are approximately $29,474 in 2001, $28,482 in 2002, $228,528 in 2003, $112,087 in 2004 and $2,049 in 2005. Current maturities of long-term debt of $29,857 as of October 31, 2000, as reported in the Company's consolidated balance sheets, include $383 relating to the unamortized ROARS option premium.

        All of the Company's debt is uncollateralized, except for approximately $14,000 of term notes incurred principally in connection with acquisitions that are secured by mortgages on some of the Company's funeral homes. These notes were either assumed by the Company upon its acquisition of the property or represent seller financing for the acquired property.

(12)    Reconciliation of Basic and Diluted Per Share Data

                                                                      Earnings       Shares      Per Share
                                                                     (Numerator)  (Denominator)     Data
                                                                      ---------    -----------   ---------
     Year Ended October 31, 2000
     ---------------------------

     Net earnings..................................................   $  66,794
                                                                      =========
     Basic earnings per common share:
          Net earnings available to common shareholders............   $  66,794       106,600        $ .63
                                                                                                     =====
     Effect of dilutive securities:
          Time-vest stock options assumed exercised................        -                3
                                                                      ---------     ---------
     Diluted earnings per common share:
          Net earnings available to common shareholders
          plus time-vest stock options assumed exercised...........   $  66,794       106,603        $ .63
                                                                      =========     =========        =====


                                                                      Earnings        Shares     Per Share
                                                                     (Numerator)  (Denominator)    Data
                                                                      ---------    -----------   ---------

   YEAR ENDED OCTOBER 31, 1999
   ---------------------------

   Earnings before cumulative effect of change in
   accounting principle............................................   $  90,520
                                                                      =========
   Basic  earnings  per  common share:
     Earnings available to common shareholders.....................   $  90,520        107,452       $ .84
                                                                                                     =====

   Effect of dilutive securities:
     Time-vest stock options assumed exercised.....................        -               382
                                                                      ---------    -----------
   Diluted earnings per common share:
     Earnings available to common shareholders
     plus time-vest stock options assumed exercised................   $  90,520        107,834       $ .84
                                                                      =========    ===========       =====


                                                                      Earnings       Shares      Per Share
                                                                     (Numerator)  (Denominator)     Data
                                                                      ---------    -----------   ---------
   Year Ended October 31, 1998
   ---------------------------

   Net earnings....................................................   $  41,902
                                                                      =========
   Basic earnings per common share:
     Net earnings available to common shareholders.................   $  41,902        97,691        $ .43
                                                                                                     =====
   Effect of dilutive securities:
     Time-vest stock options assumed exercised.....................        -              753
                                                                      ---------    ----------
   Diluted earnings per common share:
     Net earnings available to common shareholders
     plus time-vest stock options assumed exercised................   $  41,902        98,444        $ .43
                                                                      =========    ==========        =====

        Options to purchase 7,049,471 shares of common stock at prices ranging from $4.16 to $27.25 were outstanding but were not included in the computation of diluted earnings per share for the fiscal year ended October 31, 2000 because the options' exercise prices were greater than the average market price of the common shares. The options, which expire between January 2, 2001 and April 12, 2005, were still outstanding at the end of fiscal year 2000.

        Options to purchase 1,733,504 shares of common stock at prices ranging from $16.00 to $27.25 were outstanding but were not included in the computation of diluted earnings per share for the fiscal year ended October 31, 1999 because the options' exercise prices were greater than the average market price of the common shares. The options, which expire between January 2, 2001 and July 31, 2004, were still outstanding at the end of fiscal year 1999.

        Options to purchase 319,210 shares of common stock at $25.81 and 895,560 shares of common stock at $27.25 were outstanding but were not included in the computation of diluted earnings per share for the fiscal year ended October 31, 1998 because the options' exercise prices were greater than the average market price of the common shares. The options, which expire on July 31, 2004, were still outstanding at the end of fiscal year 1998.

        Income tax expense (benefit) is comprised of the following components:

                                                                    U.S. and
                                                                   Possessions      State       Foreign       Total
                                                                   -----------    ---------   -----------   ---------
   Year Ended October 31,
   ----------------------

   2000:
     Current tax expense........................................  $     20,094     $  3,196    $    6,102   $  29,392
     Deferred tax expense.......................................         5,626          759         2,616       9,001
                                                                   -----------    ---------   -----------   ---------
                                                                  $     25,720     $  3,955    $    8,718   $  38,393
                                                                  ============     ========    ==========   =========

   1999:
     Current tax expense........................................  $     27,869     $  4,783    $    8,240   $  40,892
     Deferred tax expense.......................................         4,628        2,923         3,588      11,139
                                                                  ------------     --------    ----------   ---------
                                                                  $     32,497     $  7,706    $   11,828   $  52,031
                                                                  ============     ========    ==========   =========

   1998:
     Current tax expense........................................  $     13,871     $  3,918    $    4,741   $  22,530
     Deferred tax expense (benefit).............................        (2,075)         617         1,990         532
                                                                  ------------     --------    ----------   ---------
                                                                  $     11,796     $  4,535    $    6,731   $  23,062
                                                                  ============     ========    ==========   =========

        The reconciliation of the statutory tax rate to the effective tax rate is as follows:

                                                                                            Year Ended October 31,
                                                                                    ---------------------------------
                                                                                     2000           1999        1998
                                                                                    ------         ------      ------
   Statutory tax rate...........................................                    35.00%         35.00%      35.00%
   Increases (reductions) in tax rate resulting from:
       State and U.S. possessions...............................                     2.44           4.03        6.21
       Goodwill and other.......................................                     2.28           2.17        3.86
       Dividend exclusion.......................................                    (2.48)         (1.56)      (2.21)
       Foreign tax rate differential............................                    (0.74)         (1.86)      (5.57)
       Foreign tax credit.......................................                      -            (1.28)      (1.79)
                                                                                     -----         ------      ------

       Effective tax rate.......................................                    36.50%         36.50%      35.50%
                                                                                    ======         ======      ======

        Deferred tax assets and liabilities consist of the following:

                                                                                    October 31,
                                                                          ----------------------------
                                                                            2000                1999
                                                                          --------            --------
     Deferred tax assets:
       Domestic trust earnings.........................................   $ 47,416            $ 44,653
       Allowance for sales cancellations and doubtful accounts.........      8,157               8,483
       Deferred preneed sales and expenses.............................     16,109              17,806
       Unrealized depreciation of investments..........................      5,563               1,925
       Deferred compensation...........................................        649                 795
       Other...........................................................      3,305               2,966
                                                                          --------            --------
                                                                            81,199              76,628
                                                                          --------            --------


     Deferred tax liabilities:
       Purchase accounting adjustments.................................    127,990             130,778
       Foreign trust earnings..........................................     16,035              14,101
       Deferred revenue on cemetery property and merchandise sales.....     19,117              15,845
       State income taxes..............................................      5,151               5,102
       Percentage of completion on long-term contracts.................        255                 605
       Goodwill........................................................      6,685               4,133
       Non-compete amortization........................................      1,992               1,914
       Depreciation....................................................        877                 343
       Other...........................................................      2,088               2,434
                                                                          --------            --------
                                                                           180,190             175,255
                                                                          --------            --------
                                                                          $ 98,991            $ 98,627
                                                                          ========            ========

       Current net deferred liability..................................   $ 15,251            $ 17,193
       Long-term net deferred liability................................     83,740              81,434
                                                                          --------            --------
                                                                          $ 98,991            $ 98,627
                                                                          ========            ========

        For the year ended October 31, 2000, the Company's earnings before income taxes generated from properties in foreign jurisdictions were negative. For the years ended October 31, 1999 and 1998, approximately 4 percent and 5 percent, respectively, of the Company's earnings before performance-based stock options and income taxes were generated from properties in foreign jurisdictions.

        The Company has not recognized a deferred tax liability of approximately $10,000 for the undistributed earnings of non-U.S. subsidiaries because the Company currently considers these earnings to be reinvested indefinitely.

Stewart Enterprises Employees' Retirement Trust

        The Company has a defined contribution retirement plan, the "Stewart Enterprises Employees' Retirement Trust (A Profit-Sharing Plan) ("SEERT")." This plan covers substantially all employees with more than one year of service who have attained the age of 21. Contributions are made to the plan at the discretion of the Company's Board of Directors. Additionally, employees who participate may contribute up to 15 percent of their earnings. The first 5 percent of such employee contributions are eligible for Company matching contributions at the rate of $.50 for each $1.00 contributed. The Company's expense, including the Company's matching contributions, for the fiscal years ended October 31, 2000, 1999 and 1998 was approximately $3,350, $3,700 and $3,550, respectively.

        The Company has a non-qualified key employee defined contribution supplemental retirement plan, which provides certain highly compensated employees the opportunity to accumulate deferred compensation which cannot be accumulated under SEERT due to certain limitations. Contributions are made to the plan at the discretion of the Company's Board of Directors. Additionally, employees who participate may contribute up to 15 percent of their earnings. The first 5 percent of such employee contributions are eligible for Company matching contributions at the rate of $.50 for each $1.00 contributed. The Company's expense, including the Company's matching contributions, for the fiscal years ended October 31, 2000, 1999 and 1998 was approximately $250, $300, and $300, respectively.

         In August 1995, the Board of Directors adopted, and in December 1995 and December 1996 amended, the 1995 Incentive Compensation Plan, pursuant to which officers and other employees of the Company may be granted stock options, stock awards, restricted stock, stock appreciation rights, performance share awards or cash awards by the Compensation Committee of the Board of Directors. From September 7, 1995 through April 7, 1998, the Company granted options to officers and other employees for the purchase of a total of 7,424,536 shares of Class A common stock at exercise prices equal to the fair market value at the grant dates, which ranged from $10.50 to $21.50 per share. In general, two thirds of the options became exercisable in full on the first day between the date of grant and August 31, 2000 that the average of the closing sale prices of a share of the Company's Class A common stock for the 20 preceding consecutive trading days equaled or exceeded $26.44, which represented a 20 percent annual compounded growth in the price of a share of the Company's Class A common stock over five years.

        The remaining options generally become exercisable in 20 percent annual increments beginning on September 7, 1996, except for grants issued since the initial grant date, which options vest over the remainder of the original five-year period. The Compensation Committee may accelerate the exercisability of any option at any time at its discretion and the options become immediately exercisable in the event of a change of control of the Company, as defined in the plan. All of these options expire on October 31, 2001. As of October 31, 2000, 4,983,230 options had been repurchased or exercised under this plan, and 1,062,118 options had been forfeited.

        During April 1998, the stock price performance target was achieved, and the Company's performance-based stock options granted under the Company's 1995 Incentive Compensation Plan and covering 4,855,886 shares vested. Accordingly, during the second quarter of fiscal year 1998, the Company was required by accounting principles generally accepted in the United States of America to record a nonrecurring, noncash charge to earnings of $76,762 ($50,279, or $.51 per share, after tax).

         Additionally, to encourage optionees to exercise their options immediately in order to renew the performance-based option program and to reduce potential dilution from additional shares in the market, the Company offered to repurchase the options for the difference between $27.31, the closing price on the date on which the options vested, and the exercise price of the options. The repurchase of certain of the options by the Company and the exercise of the remaining options resulted in a cash outlay of $69,431.

        From July 1998 to February 1999, the Company granted new options under the 1995 Incentive Compensation Plan to officers and employees for the purchase of 3,682,250 shares of Class A common stock at exercise prices equal to the fair market value at the grant dates, which ranged from $16.00 to $27.25 per share. One third of the options become exercisable in 20 percent annual increments beginning on July 17, 1999. The remaining two thirds of the options become exercisable in full on the first day between the grant date and July 17, 2003 that the average of the closing sale prices of a share of Class A common stock over the 20 preceding consecutive trading days equals or exceeds $67.81, which represents a 20 percent annual compounded growth in the price of a share of Class A common stock over five years. Accounting principles generally accepted in the United States of America require that a charge to earnings be recorded for the performance-based options for the difference between the exercise price and the then current stock price when achievement of the performance objective becomes probable. All of the options expire on July 31, 2004. As of October 31, 2000, none of these options had been exercised, and 1,427,200 options had been forfeited.

        In January 2000, the Company granted new options under the 1995 Incentive Compensation Plan to officers and employees for the purchase of 4,018,168 shares of Class A common stock at exercise prices equal to the fair market value at the grant dates, which ranged from $5.50 to $6.00 per share. The options become exercisable in 25 percent annual increments beginning January 21, 2001. All of these options expire on January 21, 2005. As of October 31, 2000, none of these options had been exercised, and 620,640 options had been forfeited.

(14)  Benefit Plans--(Continued)

        Effective January 2, 1996, the Board of Directors adopted, and in December 1996 amended, the Directors' Stock Option Plan, pursuant to which each director of the Company who is not an employee of the Company was granted an option to purchase 72,000 shares of the Company's Class A common stock. From January 2, 1996 through October 31, 1997, the Company granted a total of 360,000 options at exercise prices equal to the fair market value at the grant dates, which ranged from $12.34 to $18.25 per share. The options generally became exercisable in 25 percent annual increments beginning January 2, 1997, except for grants issued since the initial grant date, which options vested over the remainder of the original four-year period. All of the options expired on January 2, 2001. As of October 31, 2000, 91,052 options had been exercised, and none of these options had been forfeited.

        In January 2000, the Company granted new options under the Directors' Stock Option Plan to directors of the Company who are not employees of the Company for the purchase of a total of 72,000 shares of Class A common stock at an exercise price of $6.00 per share. The options vested immediately. All of these options expire on January 31, 2005. As of October 31, 2000, none of these options had been exercised or forfeited.

 2000 Directors' Stock Option Plan

        The Board of Directors adopted, and in April 2000 the shareholders approved, the 2000 Directors' Stock Option Plan pursuant to which each director of the Company who is not an employee of the Company may be granted an option to purchase 50,000 shares of the Company's Class A common stock. On April 13, 2000, the Company granted a total of 200,000 options at an exercise price equal to the fair market value at the grant date, which was $4.30 per share. The options generally become exercisable in 25 percent annual increments beginning on April 13, 2001. The Compensation Committee may accelerate the exercisability of any option at any time at its discretion, and the options become immediately exercisable in the event of a change of control of the Company, as defined in the plan. All of these options expire on January 31, 2005. As of October 31, 2000, none of these options had been exercised or forfeited.

        On July 1, 1992, the Company adopted an "Employee Stock Purchase Plan" and reserved 2,250,000 shares of Class A common stock for purchase by eligible employees, as defined. The plan provides to eligible employees the opportunity to purchase the Company's Class A common stock semi-annually on June 30 and December 31. The purchase price is established at a 15 percent discount from fair market value, as defined. As of October 31, 2000, 894,543 shares had been acquired under this plan.

(14)    Benefit Plans--(Continued)

        The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," and continues to apply Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its stock-based compensation plans. The following table is a summary of the Company's stock options outstanding as of October 31, 2000, 1999 and 1998, and the changes that occurred during fiscal years 2000, 1999 and 1998.

                                                                        2000                  1999                   1998
                                                                --------------------   --------------------   -------------------
                                                                Number of   Weighted   Number of   Weighted   Number of  Weighted
                                                                 Shares      Average    Shares      Average    Shares     Average
                                                                Underlying  Exercise   Underlying  Exercise   Underlying Exercise
                                                                 Options     Prices     Options     Prices     Options    Prices
                                                                ----------  --------   ----------  --------   ---------- --------


Outstanding at  beginning of year.............................  6,241,122   $  20.81   6,187,038   $ 20.77    6,993,710  $  11.38
Granted.......................................................  6,527,900   $   5.06      90,000   $ 22.67    4,268,250  $  25.98
Exercised/Repurchased.........................................          -   $      -     (14,724)  $ 10.50   (4,991,580) $  12.24
Forfeited..................................................... (3,199,936)  $  16.69     (21,192)  $ 22.58      (83,342) $  10.70
                                                               -----------             ----------             ----------
Outstanding at end of year....................................  9,569,086   $  11.44   6,241,122   $ 20.81    6,187,038  $  20.77
                                                               ===========             ==========             ==========
Exercisable at end of year....................................  2,023,224   $  14.44   2,199,099   $ 13.78    1,349,651  $  11.76
                                                               ===========             ==========             ==========
Weighted-average fair value of
 options granted..............................................              $   2.60               $ 10.28               $   7.11

        The following table further describes the Company's stock options outstanding as of October 31, 2000:

                                         Options Outstanding                                    Options Exercisable
                          ------------------------------------------------------    ---------------------------------------
                             Number       Weighted Average                            Number
       Range of            Outstanding       Remaining         Weighted Average      Exercisable           Weighted Average
   Exercise Prices        at 10/31/2000   Contractual Life      Exercise Price      at 10/31/2000           Exercise Price
 ------------------       -------------   ----------------     -----------------    -------------          ----------------
 $  2.22 to $  5.00        2,196,372        4.43 years              $  4.24                -                   $     -
 $  5.01 to $ 10.00        3,469,528        4.23 years              $  5.56             72,000                 $  6.00
 $ 10.01 to $ 15.00        1,307,446         .86 years              $ 10.81          1,307,446                 $ 10.81
 $ 15.01 to $ 20.00          202,416         .87 years              $ 17.50            196,464                 $ 17.53
 $ 20.01 to $ 25.00          144,774        1.03 years              $ 21.49            143,474                 $ 21.49
 $ 25.01 to $ 27.25        2,248,550        3.75 years              $ 26.75            303,840                 $ 26.76
                           ---------                                                 ---------
 $  2.22 to $ 27.25        9,569,086        3.58 years              $ 11.44          2,023,224                 $ 14.44
                           =========                                                 =========

 (14)  Benefit Plans--(Continued)

        SFAS 123 applies only to options granted and shares acquired under the Company's Employee Stock Purchase Plan since the beginning of the Company's 1996 fiscal year. Consequently, the pro forma amounts disclosed below do not reflect any compensation cost for the 7.8 million stock options outstanding as of the beginning of fiscal year 1996. If the Company had elected to recognize compensation cost for its stock option and employee stock purchase plans based on the fair value at the grant dates for awards under those plans, in accordance with SFAS 123, net earnings and earnings per share would have been as follows:

                                                                              (Unaudited)
                                                                         Year Ended October 31,
                                                                -------------------------------------
                                                                  2000           1999          1998
                                                                ---------      ---------     --------

Net earnings                        - as reported.........      $  66,794      $  40,419     $  41,902
                                    - pro forma...........         61,939         35,735        40,027

Basic earnings per common share     - as reported.........      $     .63      $     .37     $     .43
                                    - pro forma...........            .58            .33           .41

Diluted earnings per common share   - as reported.........      $     .63      $     .37     $     .43
                                    - pro forma...........            .58            .33           .41

        The fair value of the Company's stock options used to compute pro forma net earnings and earnings per share disclosures is the estimated present value at grant date using the Black-Scholes option pricing model with the following weighted average assumptions for fiscal years 2000, 1999 and 1998, respectively: expected dividend yield of .1 percent, .3 percent and .3 percent; expected volatility of 39.3 percent, 21.3 percent and 20.9 percent; risk-free interest rate of 6.2 percent, 5.5 percent and 5.5 percent; and an expected term of 4.9 years, 4.8 years and 4.7 years.

        Likewise, the fair value of shares acquired through the Employee Stock Purchase Plan is estimated on each semi-annual grant date using the Black-Scholes option pricing model with the following weighted average assumptions for fiscal years 2000, 1999 and 1998, respectively: expected dividend yield of .1 percent, .4 percent and .2 percent; expected volatility of 48.3 percent, 38.1 percent and 20.5 percent; risk-free interest rate of 5.8 percent, 4.9 percent and 5.3 percent; and an expected term of .5 years, for all years.

        On November 3, 1999, the Company's Board of Directors adopted a rights plan intended to protect shareholder interests in the event the Company becomes the subject of a takeover initiative that the Company's Board of Directors believes could deny the Company's shareholders the full value of their investment. This plan does not prohibit the Board from considering any offer that it deems advantageous to its shareholders.

        The rights were issued to each common shareholder of record on October 28, 1999, and will be exercisable only if a person acquires, or announces a tender offer that would result in ownership of, 15 percent or more of the Company's outstanding Class A and Class B common stock. The initial exercise price will be $24.00 per right. The rights will expire on October 28, 2009, unless redeemed or exchanged at an earlier date.

        In Re Stewart Enterprises, Inc. Securities Litigation, No. 01-30035 on the docket of the United States Court of Appeal for the Fifth Circuit. During the fall of 1999, 16 putative securities class action lawsuits were filed in the United States District Court for the Eastern District of Louisiana against the Company, certain of its directors and officers and the lead underwriters of the Company's January 1999 common stock offering. The suits were consolidated, and the court appointed lead plaintiffs as well as lead and liaison counsel for the plaintiffs, who filed a consolidated amended complaint.

        The consolidated amended complaint alleges violations of Section 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder on behalf of purchasers of the Company's common stock during the period October 1, 1998 through August 12, 1999. Plaintiffs generally allege that the defendants made false and misleading statements and failed to disclose allegedly material information in the prospectus relating to the January 1999 common stock offering and in certain of the Company's other public filings and announcements. The plaintiffs also allege that these allegedly false and misleading statements and omissions permitted the Chairman of the Company to sell Company common stock during the class period at inflated market prices. The plaintiffs seek remedies including certification of the putative class, unspecified damages, attorneys' fees and costs, rescission to the extent any members of the class still hold the Company's common stock, and such other relief as the court may deem proper.

        On December 7, 2000, the District Court granted motions to dismiss, filed by the Company and the other defendants, dismissing the complaint against all defendants for failure to state a claim. On January 4, 2001, the plaintiffs filed a notice of appeal.

        The outcome and the costs of defending this litigation cannot be predicted at this time. The Company believes that the claims are without merit and intends to defend itself vigorously.

        The Company and certain of its subsidiaries are parties to a number of other legal proceedings that have arisen in the ordinary course of business. While the outcome of these proceedings cannot be predicted with certainty, management does not expect these matters to have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

        The Company carries insurance with coverages and coverage limits that it believes to be adequate. Although there can be no assurance that such insurance is sufficient to protect the Company against all contingencies, management believes that its insurance protection is reasonable in view of the nature and scope of the Company's operations.

        As of October 31, 2000, the Company had advanced approximately $1,411, including accrued interest, to fund premiums on a split-dollar "second-to-die" life insurance policy on behalf of the Company's Chairman, Mr. Frank B. Stewart, Jr., and Mrs. Stewart. The advances are collateralized by the assignment of other insurance policies and the pledge of Class A common stock of the Company. In 1992, the Company agreed to continue to advance such premiums for a twelve-year period and will be repaid at the earliest of (a) the surrender of the policy, (b) the deaths of Mr. and Mrs. Stewart, or (c) 60 days following payment in full of all premiums on the policy.

        The Company has noncancellable operating leases, primarily for land and buildings, that expire over the next 1 to 23 years, except for nine leases that expire between 2032 and 2072. Rent expense under these leases was $9,527, $8,042 and $7,805 for the years ended October 31, 2000, 1999 and 1998, respectively. Through July of 2000, the Company

leased office space from an affiliated company. Rental payments to the affiliated company were approximately $479, $534, and $636 for the years ended October 31, 2000, 1999 and 1998, respectively. The Company now leases a smaller portion of the office space from a non-affiliated company. Rental payments to the non-affiliated company were $132 for the year ended October 31, 2000.

        The Company's future minimum lease payments as of October 31, 2000 are $8,528, $7,165, $5,693, $4,585, $3,810 and $34,749 for the years ending October 31, 2001, 2002, 2003, 2004, 2005 and later years, respectively. Additionally, the Company has entered into non-compete agreements with prior owners of acquired subsidiaries that expire through 2012. The Company's future non-compete payments as of October 31, 2000 for the same periods are $6,969, $6,312, $5,625, $4,437, $3,075 and $5,838, respectively.

        With potential long-term debt maturities of $557,482, $228,528 and $112,087 in fiscal years 2002, 2003 and 2004, respectively, management of liquidity and capitalization represents a significant short- and medium-term priority for the Company. The Company believes that its ability to meet its future capital requirements will depend primarily upon the successful implementation of its strategies to provide cash from operations and generate cash from other sources, such as the possible sale of some or all of its foreign operations, and its ability to refinance its revolving credit facility and public debt prior to or at their maturities.

        In fiscal year 1999, the Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The accounting policies of the segments are the same as those described in the "Summary of Significant Accounting Policies." The Company evaluates the performance of its segments and allocates resources to them based on gross profit.

        The Company's operations are product-based and geographically-based. As such, the Company's primary reportable operating segments presented in the following table are based on products and services and include funeral and cemetery operations.

        The Company's funeral homes offer a complete range of funeral services and products both at the time of need and on a prearranged basis. The Company's services and products include family consultation, removal and preparation of remains, the use of funeral home facilities for visitation, worship and funeral services, transportation services, flowers and caskets. In addition to traditional funeral services, all of the Company's funeral homes offer cremation products and services.

        The Company's cemetery operations involve the sale of cemetery property and related merchandise, including lots, lawn crypts, family and community mausoleums, monuments, memorials and burial vaults, along with the sale of burial site openings and closings. Cemetery property and merchandise sales are made both at the time of need and on a prearranged basis.

        The Company conducts both funeral and cemetery operations domestically including the United States and Puerto Rico, and in Mexico, Canada, Australia and Argentina. The Company conducts funeral operations in New Zealand, Spain, Portugal, the Netherlands, Belgium and France.

        The table below presents information about reported segments for fiscal years ended October 31, 2000, 1999 and 1998:

                                                                              Reconciling       Consolidated
                                         Funeral           Cemetery             Items(1)           Totals
                                      -------------     --------------     ----------------   ----------------
Revenues from external customers
  October 31, 2000................     $   451,852           282,949                   -          $   734,801
  October 31, 1999................     $   445,877           310,231                   -          $   756,108
  October 31, 1998................     $   379,095           269,270                   -          $   648,365


Gross profit
  October 31, 2000................     $   116,689            62,351                   -          $   179,040
  October 31, 1999................     $   126,875            83,526                   -          $   210,401
  October 31, 1998................     $   118,426            77,558                   -          $   195,984

Total assets
  October 31, 2000................     $ 1,263,354           996,830              76,824          $ 2,337,008
  October 31, 1999................     $ 1,242,119           996,282              45,479          $ 2,283,880
  October 31, 1998................     $ 1,265,237           746,569              37,132          $ 2,048,938


Depreciation and amortization
  October 31, 2000................     $    36,864            13,067               4,336          $    54,267
  October 31, 1999................     $    36,373            11,850               2,397          $    50,620
  October 31, 1998................     $    28,299             8,546               1,897          $    38,742


Additions to long-lived assets (2)
  October 31, 2000................     $    35,371            33,714               4,394          $    73,479
  October 31, 1999................     $    62,926            66,356              11,919          $   141,201
  October 31, 1998................     $    64,344            81,407              10,504          $   156,255

STEWART ENTERPRISES, INC.
AND SUBSIDIARIES

        A reconciliation of total segment gross profit to total earnings before income taxes and cumulative effect of change in accounting principle for fiscal years ended October 31, 2000, 1999 and 1998, is as follows:

                                                         2000             1999             1998
                                                    --------------     -----------     ------------
Gross profit for reportable segments.............   $      179,040     $   210,401     $    195,984
Corporate general and administrative
 expenses........................................          (19,763)        (19,161)         (16,621)
Performance-based stock options..................             -               -             (76,762)
Interest expense, net............. ..............          (56,284)        (52,174)         (41,792)
Other income, net................................            2,194           3,485            4,155
                                                    --------------     -----------     ------------
Earnings before income taxes and cumulative
 effect of change in accounting principle........   $      105,187     $   142,551     $     64,964
                                                    ==============     ===========     ============


                                                        U.S. and
                                                     Possessions(1)     Foreign(2)     Consolidated
                                                    --------------     -----------     ------------

Revenues from external customers
 October 31, 2000................................   $      588,480         146,321     $    734,801
 October 31, 1999................................   $      603,530         152,578     $    756,108
 October 31, 1998................................   $      534,427         113,938     $    648,365

Gross profit
 October 31, 2000................................   $      155,223          23,817     $    179,040
 October 31, 1999................................   $      180,693          29,708     $    210,401
 October 31, 1998................................   $      170,415          25,569     $    195,984

Long-lived assets(3)
 October 31, 2000................................   $      765,240         124,335     $    889,575
 October 31, 1999................................   $      735,649         135,428     $    871,077
 October 31, 1998................................   $      647,350         121,447     $    768,797

                                                             First          Second         Third         Fourth
                                                           ---------      ---------      ---------      ---------
Year Ended October 31, 2000
- ---------------------------
Revenues.........................................          $ 192,960      $ 188,861      $ 181,823      $ 171,157
Gross profit.....................................             48,708         49,784         45,935         34,613
Net earnings.....................................             18,841         19,332         18,077         10,544
Earnings per common share:
  Basic..........................................                .18            .18            .17            .10
  Diluted........................................                .18            .18            .17            .10


                                                             First          Second         Third         Fourth
                                                           ---------      ---------      ---------      ---------

Year Ended October 31, 1999(1)
- ---------------------------
Revenues........................................           $ 178,172      $ 194,297      $ 193,721      $ 189,918
Gross profit....................................              54,241         57,668         53,674         44,818
Earnings before cumulative effect of change
 in accounting principle........................              23,501         27,108         23,347         16,564
Earnings per common share before cumulative
 effect of change in accounting principle:
   Basic........................................                 .24            .24            .21            .15
   Diluted......................................                 .24            .24            .21            .15
   Net earnings (loss)(2)                                    (26,600)        27,108         23,347         16,564
Earnings per common share:
   Basic........................................                (.27)           .24            .21            .15
   Diluted......................................                (.27)           .24            .21            .15

  (19) Subsequent Events

        Subsequent to fiscal year 2000, the Company withdrew approximately $40,000 from its funeral trust funds by obtaining a bond to guarantee performance under certain specified contracts in lieu of trusting requirements.   The Company agreed to maintain unused credit facilities in the aggregate that will equal or exceed the bond amount related to these contracts.  The Company used the proceeds along with cash on hand to make approximately $24,900 of regularly scheduled principal payments and an additional $55,000 principal payment to reduce the balance of its revolving credit facility.

        None.

        The information regarding executive officers required by Item 10 may be found under Item 4(a) of this report.

        The information regarding directors and compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, required by Item 10 is incorporated by reference to the Registrant's definitive proxy statement relating to its 2001 annual meeting of shareholders, which proxy statement will be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year.

        The information required by Item 11 is incorporated by reference to the Registrant's definitive proxy statement relating to its 2001 annual meeting of shareholders, which proxy statement will be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year.

        The information required by Item 12 is incorporated by reference to the Registrant's definitive proxy statement relating to its 2001 annual meeting of shareholders, which proxy statement will be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year.

        The information required by Item 13 is incorporated by reference to the Registrant's definitive proxy statement relating to its 2001 annual meeting of shareholders, which proxy statement will be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year.

 Item 14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K

                 (1)    Financial Statements

                 The Company's consolidated financial statements listed below have been filed as part of this report:

                                                                                            Page
                                                                                            ----
             Report of Independent Accountants...........................................    36
             Consolidated Statements of Earnings for the Years Ended
               October 31, 2000, 1999 and 1998...........................................    37
             Consolidated Balance Sheets as of October 31, 2000 and 1999.................    38
             Consolidated Statements of Shareholders' Equity for the Years Ended
               October 31, 2000, 1999 and 1998...........................................    40
             Consolidated Statements of Cash Flows for the Years Ended
               October 31, 2000, 1999 and 1998...........................................    42
             Notes to Consolidated Financial Statements..................................    44

                (2)    Financial Statement Schedule for the years ended October 31, 2000, 1999 and 1998

             Report of Independent Accountants on Financial Statement Schedule...........    73
             Schedule II-Valuation and Qualifying Accounts...............................    74

        All other schedules are omitted because they are not applicable or not required, or the information appears in the financial statements or notes thereto.

The Board of Directors and Shareholders of
Stewart Enterprises, Inc.:

Our report on the consolidated financial statements of Stewart Enterprises, Inc. and Subsidiaries, which includes an emphasis paragraph related to changes in the Company's method of accounting for funeral services investment trust fund earnings in 1999, is included in Item 8 of this Form 10-K. In connection with our audits of such financial statements, we have also audited the related financial statement schedule listed in Item 14(a) of this Form 10-K. This financial statement schedule is the responsibility of the Company's management.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.

PricewaterhouseCoopers LLP
New Orleans, Louisiana
December 12, 2000, except for
Note 19 as to which the date is
January 9, 2001

               COLUMN A                        COLUMN B             COLUMN C             COLUMN D        COLUMN E
               --------                        --------    ---------------------------   --------        --------
                                                                    Additions
                                                           ---------------------------
                                               Balance at  Charged to      Charged to
                                               beginning   costs  and        other       Deductions   Balance at end
              Description                      of period    expenses       accounts(1)   write-offs     of period
              -----------                      ---------   ----------     -----------    ----------   --------------

Current-Allowance for contract
  cancellations and doubtful accounts:
     Year ended October 31,
       2000 .............................       $ 11,432      14,351               53        15,912       $  9,924
       1999 .............................       $ 10,738      14,050            2,223        15,579       $ 11,432
       1998 .............................       $  6,869      16,191            1,875        14,197       $ 10,738

Due after one year-Allowance for
  contract cancellations and doubtful
  accounts:
     Year ended October 31,
       2000 .............................       $ 14,557      21,526                -        19,223       $ 16,860
       1999 .............................       $ 12,063      19,864                -        17,370       $ 14,557
       1998 .............................       $  9,696      12,134              728        10,495       $ 12,063

Accumulated amortization of intangible
  assets:
     Year ended October 31,
       2000 .............................       $ 63,300     19,644                 -             -       $ 82,944
       1999 .............................       $ 43,831     19,469                 -             -       $ 63,300
       1998 .............................       $ 29,383     14,448                 -             -       $ 43,831

The Company hereby agrees to furnish to the Commission, upon request, a copy of the instruments which define the rights of holders of the Company's long-term debt. None of such instruments (other than those included as exhibits herein) represent long-term debt in excess of 10 percent of the Company's consolidated total assets.

Management Contracts and Compensatory Plans or Arrangements

        The Company filed a Form 8-K on September 6, 2000, reporting under "Item 5. Other Events," the earnings release for the quarter ended July 31, 2000.

         The Company filed a Form 8-K on September 27, 2000, reporting under "Item 5. Other Events," the announcement that the Company is in discussions to sell its European operations.

        The Company filed a Form 8-K on October 5, 2000, reporting under "Item 5. Other Events," the announcement to suspend the Company's quarterly dividend.

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on January 25, 2001.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Exhibit Index