Service Corporation International (SCI) investor relations material

Year-to-date performance and outlook

• FY26 began with a $4.20 adjusted EPS midpoint; Q1 funeral volume fell 6% YoY amid a strong Q1 2025 flu-season comparison and a light Q1 2026 season, implying a 1.5%-2% full-year volume decline.

• Q2 volume fell 1.5% versus an expected 3% decline; Q3 volume fell 0.1% versus an expected 0.5% increase.

• Weaker-than-expected Q4 volume, sustained selling and advertising costs, higher fuel and healthcare costs, and negative trust returns in September led to a revised FY26 adjusted EPS midpoint of ~$4.

• High-cost healthcare claims above $250,000 rose from 1-2 per month in the first five months of 2026 to 6-9 per month in June-September; the expense trend was expected to continue into Q4 and subside next year.

Growth outlook and operating trends

• The normalized growth framework remains 5%-7% organic growth plus 3%-5% from capital deployment, supporting an 8%-12% adjusted EPS growth target; 2027 expectations remain under development.

• 2027 growth drivers include easier volume comparisons, mid-single-digit production growth, and disciplined fixed-cost management; volume remains the main upside or downside variable.

• Funeral volume outlook is flattish over the next 2-3 years; baby-boomer impact is expected to become more pronounced into the 2030s, with peak industry impact around the early 2040s.

• Cemetery pre-need production has remained strong; annual production of $2.6B and a mid-single-digit growth algorithm indicate $100M-$125M of funeral and cemetery pre-need growth next year, absent a major consumer-sentiment decline.

• Cemetery margin percentages are expected to expand 30-50 bps with mid-single-digit production growth; near-term funeral margins are expected to remain flat.

Industry and business mix

• Large cemetery sales represent 11%-12% of roughly $1.4B in cemetery production; management expects low-to-mid-single-digit annual growth, while noting deal timing can make quarterly results lumpy.

• Cremation mix has been increasing near 60 bps annually, within a 50-100 bps outlook; management expects the rate to slow as penetration approaches the 75%-80% levels seen in some other markets.

• Cemetery pre-need sales showed no material consumer-economy impact in 2026; large-sale activity may be more sensitive to financial-market volatility.