SERVICE CORP INTERNATIONAL

PART I

4. Income Taxes

Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items, which are recorded in the period in which they occur. Discrete items include, among others, events such as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or decreases in valuation allowances on deferred tax assets. Our effective tax rate was 25.0% and 26.1% for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate was lower for the three months ended March 31, 2026 primarily due to a discrete tax benefit from an investment in a renewable energy project recognized in the quarter. The impact on the full year is expected to be minimal. The effective tax rate for the three months ended March 31, 2026 was higher than the federal statutory tax rate of 21.0% primarily due to state and foreign tax expense.

We participate in tax equity investments in renewable energy projects that qualify for federal investment tax credits. These investments are accounted for under the proportional amortization method. Tax credits and other related tax benefits are recognized as a reduction of income tax expense as they are realized, with corresponding amortization of the investment in proportion to the tax benefits received. During the the three months ended March 31, 2026, we recognized $52.1 million of investment tax credits and other tax benefits and recorded $49.9 million of amortization related to these investments. The tax credits and related amortization are presented net within the Provision for income taxes in the Consolidated Statement of Operations. As of March 31, 2026, the unamortized balance of renewable energy tax credit investments was $1.1 million included in Deferred charges and other assets, and unfunded commitments related to these investments, which are expected to be paid in 2026, totaled $40.8 million included in Accounts payable and accrued liabilities on the Consolidated Balance Sheet.

The federal statutes of limitations have expired for all tax years prior to 2022. Currently, our 2022 federal income tax return is under audit by the IRS, and certain state income tax returns for the years 2022 through 2023 are also being audited. While there are no federal or provincial audits in Canada, years subsequent to 2021 remain open for potential examination. The outcome of each of these audits cannot be predicted at this time.

18 Service Corporation International

PART I

5. Debt

The components of Debt are:

Current maturities of debt at March 31, 2026 include amounts due under our term loan, mortgage notes and other debt, and finance leases within the next year as well as the portion of unamortized debt issuance costs expected to be recognized in the next twelve months.

Approximately 79% of our total debt had a fixed interest rate at both March 31, 2026 and December 31, 2025.

The components of our weighted average interest rate are as follows:

During the three months ended March 31, 2026 and 2025, we paid $32.9 million and $29.2 million in cash interest, respectively.

Bank Credit Agreement

The bank credit agreement provides us with flexibility for working capital, if needed, and is guaranteed by a majority of our domestic subsidiaries. The subsidiary guaranty is a guaranty of payment of the outstanding amount of the total lending commitment, including letters of credit. The bank credit agreement contains a maximum leverage ratio financial covenant and certain dividend and share repurchase restrictions. As of March 31, 2026, we were in compliance with all of our debt covenants. At March 31, 2026, we issued $46.7 million of letters of credit and pay a quarterly fee on the unused commitment, which was 0.20%. As of March 31, 2026, we have $1,448.3 million in borrowing capacity under the facility. The bank credit agreement had an interest rate of 5.42% and 5.44% at March 31, 2026 and December 31, 2025, respectively. As of December 31, 2025, we issued $47.0 million of letters of credit.

Debt Issuances and Additions

During the three months ended March 31, 2026, we issued or added $166.1 million of debt including:

•$140.0 million on our Bank Credit Facility due November 2030; and

•$26.1 million on our Corporate Headquarters Debt Facility due February 2037.

Net proceeds were used for general corporate purposes and to fund the new corporate headquarters.

During the three months ended March 31, 2025, we issued or added $187.5 million of debt including:

FORM 10-Q 19

PART I

•$185.0 million on our Bank Credit Facility due January 2028; and

•$2.5 million on our Corporate Headquarters Debt Facility due February 2037.

Net proceeds were used for general corporate purposes and to fund the new corporate headquarters.

Debt Reductions

During the three months ended March 31, 2026, we made aggregate debt payments of $146.8 million for scheduled and early debt payments including:

•$140.0 million in aggregate principal of our Bank Credit Facility due November 2030;

•$4.7 million in aggregate principal of our Term Loan due November 2030; and

•$2.1 million in other debt.

During the three months ended March 31, 2025, we made aggregate debt payments of $201.5 million for scheduled and early debt payments including:

•$195.0 million in aggregate principal of our Bank Credit Facility due January 2028;

•$4.2 million in aggregate principal of our Term Loan due January 2028; and

•$2.3 million in other debt.

20 Service Corporation International