SERVICE CORP INTERNATIONAL

PART II

11. Acquisitions and Divestiture-Related Activities

Acquisitions

We spent $164.2 million and $72.5 million for several business acquisitions during the nine months ended September 30, 2024 and 2023, respectively. This includes $2.3 million of cash acquired. In addition, we acquired $53.3 million and $41.1 million for several real estate acquisitions during the nine months ended September 30, 2024 and 2023, respectively.

In the third quarter of 2024, we acquired a total of 10 funeral homes and 2 cemeteries, including one combination location, for $123.4 million in total cash. This includes two separate acquisitions in major metropolitan markets for $120.6 million in cash.

The primary reasons for the acquisitions and the principal factors that contributed to the recognition of goodwill in these acquisitions were:

•the acquisitions enhance our network footprint, enabling us to serve a number of complementary areas; and

•the acquisitions of the preneed backlog of deferred revenues enhance our long-term stability.

The following table summarizes the fair values of the assets acquired and liabilities assumed in the two separate acquisitions (in thousands):

The purchase accounting is preliminary as we have not finalized our assessment of the fair value because there has been insufficient time between the acquisition date and the issuance of these financial statements to complete our review and final determination of fair value.

Goodwill, land, and certain identifiable intangible assets recorded in the acquisition are not subject to amortization; however, the goodwill and intangible assets will be tested periodically for impairment. Of the $72.7 million in recognized goodwill, $59.1 million is deductible for tax purposes. Of this total, $25.8 million was allocated to our cemetery segment, while $46.9 million was allocated to our funeral segment. Tradenames comprise the identified intangible assets.

We incurred acquisition costs of $0.3 million, which is included in General and administrative expenses in our Consolidated Statement of Operations.

Pro forma summary results for the twelve months ended December 31, 2023 and the nine months ended September 30, 2024 have not been provided as it is impracticable to do so given the extent of integration activities to date.

FORM 10-Q 27

PART II

Divestiture-Related Activities

As divestitures occur in the normal course of business, gains or losses on the sale of such locations are recognized in the unaudited Condensed Consolidated Statement of Operations line item Gains on divestitures and impairment charges, net, which comprised the following:

28 Service Corporation International