CARRIAGE SERVICES INC

5. GOODWILL

Many of the former owners and staff of our acquired funeral home and cemetery businesses have provided high quality service to families for generations, which often represents a substantial portion of the value of a business. The excess of the purchase price over the fair value of identifiable net assets of acquired funeral home and cemetery businesses is recorded as goodwill.

The following table presents changes in goodwill in the accompanying Consolidated Balance Sheets (in thousands):

During the three months ended March 31, 2026, we allocated $0.2 million of goodwill to assets held for sale in our funeral home segment.

During the three months ended March 31, 2025, we allocated $4.2 million of goodwill to the sale oftwo funeral homes andthree cemeteries which was recorded in Net loss (gain) on divestitures and impairment chargeson our Condensed Consolidated Statements of Operations, of which $2.6 million was allocated to our funeral home segment and $1.6 million was allocated to our cemetery segment.

During the first quarter of 2026, the Company implemented an executive leadership restructuring that resulted in changes to the manner in which certain operations are managed and reviewed. As a result of these changes, the Company reassessed its reporting unit structure in accordance with ASC 350, Intangibles—Goodwill and Other. The Company concluded that its previously identified reporting units within the funeral home segment no longer meet the definition of separate reporting units, as discrete financial information for those components is no longer regularly reviewed by management for purposes of resource allocation and performance assessment. Accordingly, the Company aggregated these components into a single reporting unit.

This change did not affect the Company’s operating segments as determined under ASC 280. The Company performed a qualitative assessment and concluded that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, and therefore no impairment charge was recognized.