CARRIAGE SERVICES INC

Credit Facility

On September 30, 2026, we entered into a $300.0 million revolving credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, replacing our $250.0 million revolving credit facility (the “Prior Credit Facility”) for which Bank of America, N.A., served as administrative agent. At closing, we borrowed $114.7 million under the new facility. The proceeds were used to repay $113.0 million of principal outstanding under the Prior Credit Facility, settle related accrued interest and facility fees, and fund costs of the refinancing. Existing letters of credit under the Prior Credit Facility were continued under the new Credit Facility.

At September 30, 2026, the Credit Facility was comprised of: (i) a $300.0 million revolving credit facility (the “Revolving Credit Facility”), including a $15.0 million subfacility for letters of credit and a $10.0 million swingline, and (ii) an accordion or incremental option allowing for future increases in the facility size by an additional amount of up to $100.0 million in the aggregate in the form of increased revolving commitments, subject to the satisfaction of customary terms and conditions.

Our obligations under the Credit Facility are unconditionally guaranteed on a joint and several basis by the same subsidiaries which guarantee the Senior Notes (as defined in Senior Notes above) and certain of our subsequently acquired or organized domestic subsidiaries (collectively, the “Subsidiary Guarantors”). The obligations under the Credit Facility are secured by a first-priority security interest in substantially all of our personal property assets and of the Subsidiary Guarantors, including a pledge of all equity interests held by the Company or any Subsidiary Guarantor, subject to certain exceptions set forth in the Credit Facility and the related Collateral Documents (as defined in the Credit Facility). The Credit Facility includes provisions that require us and certain subsidiaries, upon the occurrence of an event of default or in the event the Company’s actual Total Net Leverage Ratio (as defined in the Credit Facility) for two consecutive fiscal quarters is not at least 0.50 less than the Required Total Leverage Ratio (defined below), to grant additional liens on real property assets accounting for no less than 50% of our and certain subsidiaries’ funeral operations.

Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to, at our option, either (a) the Alternate Base Rate (as defined in the Credit Facility) plus the Applicable Rate (as defined in the Credit Facility) or (b) the Term SOFR Rate (as defined in the Credit Facility) plus the Applicable Rate. The Applicable Rate is determined based on the Company’s Total Net Leverage Ratio (as defined in the Credit Facility), in accordance with the following pricing grid:

The Credit Facility contains customary affirmative and negative covenants, including covenants limiting our ability and the ability of our subsidiaries to, among other things: incur or permit to exist debt; incur or permit to exist liens; make investments; engage in mergers, consolidations, dissolutions or similar fundamental transactions; dispose of assets; pay dividends and make other restricted payments; change the nature of their business and enter into transactions with affiliates. The Credit Facility also requires us to maintain (i) a maximum Total Net Leverage Ratio not to exceed 5.00 to 1.00 as of the last day of each fiscal quarter; provided that in connection with certain material acquisitions, the Company may elect an Adjusted Covenant Period for a period of four (4) consecutive fiscal quarters, during which time, the Total Net Leverage Ratio may not exceed 5.50 to 1.00 as of the last day of each fiscal quarter (the ratio applicable under this clause (i), the “Required Total Leverage Ratio”) and (ii) a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.20 to 1.00 as of the last day of each fiscal quarter.

The Revolving Credit Facility matures on September 30, 2031; provided that the Senior Notes are not refinanced by February 13, 2029 to include a maturity date of December 30, 2031 or later, the Revolving Credit Facility will instead mature on February 14, 2029.

For the three and nine months ended September 30, 2026, we recognized a loss on debt extinguishment of approximately $0.6 million, consisting of the write-off of unamortized deferred financing costs attributable to departing lenders and the reduction in a continuing lender’s borrowing capacity, together with costs associated with terminating the previous facility. Approximately $0.4 million of unamortized financing costs attributable to continuing lenders was carried forward based on a lender-by-lender borrowing-capacity assessment. We capitalized approximately $1.3 million of costs associated with the new facility. These costs, together with the retained financing costs, are presented as a deferred financing cost asset and amortized to interest expense over the applicable term of the new facility.

Our Credit Facility and acquisition debt consisted of the following (in thousands):

At September 30, 2026, we had outstanding borrowings under the Credit Facility of $114.8 million. We also hadone letter of credit for $2.2 million under the Credit Facility. The letter of credit will expire on November 25, 2026, and is expected to automatically renew annually and secures our obligations under our various self-insured policies. At September 30, 2026, we had $183.0 million of availability under the Credit Facility.

At September 30, 2026, the alternative rate was equivalent to 1.000% and the SOFR term margin was 2.000%, reflecting the initial Category 4 pricing under the credit agreement. The weighted average interest rate on our Credit Facility was 5.9% and 6.7% for the three months ended September 30, 2026 and 2025, respectively, and 5.9% and 6.8% for the nine months ended September 30, 2026 and 2025, respectively.

We have no material assets or operations independent of the Subsidiary Guarantors, as all of our assets and operations are held and conducted by the Subsidiary Guarantors. Additionally, we do not currently have any significant restrictions on our ability to receive dividends or loans from any Subsidiary Guarantors.

The interest expense and amortization of debt issuance costs related to our Credit Facility are as follows (in thousands):

Acquisition debt

Acquisition debt consists of deferred purchase price and promissory notes payable to sellers. A majority of the deferred purchase price and notes bear no interest and are discounted at imputed interest rates ranging from 6.5% to 8.5%. Original maturities typically range from nine totwenty years.

The imputed interest expense related to our acquisition debt is as follows (in thousands):