SERVICE CORP INTERNATIONAL

Results of Operations — Years Ended December 31, 2024 and 2023

Management Summary

In 2024, we reported consolidated net income attributable to common stockholders of $518.6 million ($3.53 per diluted share) compared to net income attributable to common stockholders in 2023 of $537.3 million ($3.53 per diluted share). These results were impacted by certain significant items including:

(1) The fourth quarter of 2024 includes a reduction of our legal reserve of $20.3 million related to previously disclosed legal matters in California that have now been resolved.

(2) See Note 5 in Part II, Item 8. Financial Statements and Supplementary Data, for additional information related to change in uncertain tax reserves and other.

In addition to the above items, the decrease over the prior year is due to lower gross profit from lower services performed combined with higher expenses, including facility and maintenance expenses from natural disasters. Additionally, fewer shares outstanding and a lower tax rate helped to offset the impact of higher interest.

FORM 10-K 31

PART II

Funeral Results

(1)We define comparable (or same store) operations as those funeral locations owned by us for the entire period beginning January 1, 2023 and ending December 31, 2024.

(2)We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding general agency revenue, non-funeral home preneed sales revenue, and other revenue to avoid distorting our average of normal funeral services revenue, by the comparable number of funeral services performed during the period.

Funeral Revenue

Consolidated revenue from funeral operations was $2,324.2 million for the year ended December 31, 2024, compared to $2,303.0 million in 2023. This $21.2 million, or 0.9%, increase in revenue is primarily attributable to a $25.8 million increase in revenue contributed by newly constructed and acquired properties, partially offset by a $1.1 million decrease in comparable funeral revenue.

Comparable revenue from funeral operations was $2,287.6 million for the year ended December 31, 2024 compared to $2,288.7 million in 2023. Our comparable funeral services performed decreased 2.5%, which was primarily offset by a 2.5% growth in the comparable average revenue per service. Our total comparable cremation rate increased 70 basis points to 63.8% for the year ended December 31, 2024. Non-funeral home preneed sales revenue decreased by $31.1 million primarily due to a decline of non-funeral home preneed sales production impacted by our transition from trust to insurance-funded contracts. Core general agency and other revenue grew $31.1 million, primarily due to growth in general agency revenue from higher commission rates, primarily as a result of our new preneed insurance marketing agreement.

Funeral Gross Profit

Consolidated funeral gross profit decreased $31.8 million, or 6.4%, in 2024 compared to 2023. This decrease is primarily attributable to the decrease in comparable funeral gross profit of $32.6 million, or 6.6%. Comparable funeral gross profit decreased $32.6 million to $464.1 million and the comparable gross profit percentage decreased 140 basis points from 21.7% to 20.3%. This decrease in gross profit is due to the decline in revenue mentioned above combined with higher employee-related inflationary costs, higher overhead costs including incentive compensation costs, and higher facility costs on increased maintenance expenses from damages incurred at locations impacted by natural disasters during the year.

32 Service Corporation International

PART II

Cemetery Results

(1)We define comparable (or same store) operations as those cemetery locations owned by us for the entire period beginning January 1, 2023 and ending December 31, 2024.

Cemetery Revenue

Consolidated revenue from our cemetery operations increased $65.5 million, or 3.6%, in 2024 compared to 2023 primarily due to a $53.2 million, or 3.0%, increase in comparable cemetery revenue and a $14.3 million increase in revenue contributed by newly constructed and acquired properties.

The $53.2 million increase in comparable cemetery revenue was primarily attributable to a $42.0 million increase in comparable cemetery core revenue. This increase was primarily a result of a $45.1 million increase in recognized preneed revenue, which benefited from growth in comparable preneed sales production and trust fund income. Additionally, comparable other revenue increased $11.3 million, primarily from higher endowment care trust fund income.

Cemetery Gross Profit

Consolidated cemetery gross profit increased $30.7 million, or 5.2%, in 2024 compared to 2023 and is primarily attributable to an increase in comparable cemetery gross profit of $22.5 million, and an increase in gross profit contributed by newly constructed and acquired properties of $9.5 million. Comparable cemetery gross profit increased $22.5 million to $618.2 million, and the gross profit percentage increased 30 basis points from 33.2% to 33.5% as the growth in comparable cemetery revenue more than offset higher overhead costs, including incentive compensation, and increased maintenance expenses from damages incurred at locations impacted by natural disasters during the year.

Other Financial Statement Items

Corporate General and Administrative Expenses

Corporate general and administrative expenses were $139.0 million in 2024 compared to $157.4 million in 2023. During the fourth quarter, we recognized a $20.3 million reduction in our California legal reserve as the primary claim period expired. Adjusting for the $20.3 million, corporate general and administrative expenses grew $1.9 million due to higher employee-related inflationary costs.

Restructuring Charge

During the fourth quarter of 2024, we recognized $11.5 million in restructuring charges, which included the retirements and position eliminations of various home office positions as part of ongoing cost management.

Gain and Loss on Divestitures and Impairment Charges, Net

We recognized a $12.5 million net pre-tax loss and a $9.8 million net pre-tax gain on asset divestitures and impairments in 2024 and 2023, respectively, which includes the net impact from the sale of non-essential real estate and businesses as well as impairment of long-lived assets and intangibles.

Interest Expense

Interest expense increased $18.3 million to $257.8 million in 2024 primarily due to higher interest rates on our floating rate debt as well as higher debt balances. Our floating rate debt carried a weighted average interest rate of 7.34% for the full year 2024, which is 23 basis points higher than the weighted average rate for our floating rate debt for the full year 2023 of 7.11%.

FORM 10-K 33

PART II

Provision for Income Taxes

The 2024 consolidated effective tax rate was 23.2%, compared to 24.1% in 2023. The decrease in the effective tax rate in 2024 was primarily due to anincrease in excess tax benefits recognized on the settlement of employee share-based awards. The effective tax rate for the year ended December 31, 2024 was higher than the federal statutory tax rate of 21% primarily due to state and foreign income taxes.