News Release

SCI Corporate Communications
Phone: 1-844-220-4408
Email: Press.Room@sci-us.com
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Service Corporation International Announces Third Quarter 2002 GAAP Earnings
Of $.01 Per Diluted Share

HOUSTON, Nov. 6 /PRNewswire-FirstCall/ -- Service Corporation International (NYSE: SRV), the world's largest funeral and cemetery company, today announced results for the third quarter of 2002.

     GAAP Results

                                    Three Months Ended     Nine Months Ended
    (In millions, except               September 30,          September 30,
     per share amounts)              2002       2001         2002       2001

    Total Revenues                  $543.8     $583.0     $1,695.9   $1,879.5
    Total Gross Profits              $75.4      $67.0       $285.8     $264.5
    Net Income (Loss)                 $4.1       $4.3      $(227.7)     $(6.0)
    Diluted Earnings (Loss)
     Per Share                        $.01       $.02        $(.77)     $(.02)


     Discussion of GAAP Results

    -- Total revenues for the three and nine months ended September 30, 2002
       are below prior year levels primarily due to the Company's active asset
       disposition and international joint venture programs.  Since January 1,
       2001, the Company has sold or joint ventured businesses which
       previously generated approximately $425 million of total annualized
       revenues.
    -- Gross profits increased $8.4 million and $21.3 million for the three
       and nine months ended September 30, 2002, respectively, compared to the
       corresponding prior year periods primarily as a result of discontinuing
       goodwill amortization in 2002 in compliance with new accounting
       standards.
    -- Included in the Company's GAAP results were $27.9 million and
       $264.5 million of impairment losses and other operating expenses of a
       non-recurring nature in the three and nine months ended September 30,
       2002, respectively.  The $27.9 million charge reported in the third
       quarter of 2002 consisted of $19.6 million related to an adjustment to
       the market value of certain options associated with the Company's
       senior notes due 2020 (putable in 2003), $5.2 million related to
       severance costs of former employees and $3.1 million primarily related
       to impairment adjustments to the value of certain funeral and cemetery
       operations sold in the third quarter of 2002.  All options associated
       with the Company's senior notes due 2020 were fully settled in
       October 2002.  The Company expects to recognize an additional charge of
       approximately $22 million in the fourth quarter of 2002 as a result of
       the final settlement of these derivative financial instruments.
    -- The Company reported net extraordinary gains on early extinguishments
       of debt of $4.9 million and $2.7 million for the three and nine months
       ended September 30, 2002, respectively.
    -- For the nine months ended September 30, 2002, the Company reported a
       charge related to a cumulative effect of accounting change of
       $135.6 million resulting from the adoption of SFAS No. 142, "Goodwill
       and Other Intangible Assets".

    Pro Forma Financial Information and Management's Analysis

The following pro forma financial information is being presented by the Company to enhance the comparability of financial information and results of operations from period to period. To create the pro forma financial information, the Company has excluded certain non-recurring items for all periods presented. The Company has also adjusted the results of operations in 2001 to be consistent with the accounting presentation in 2002. Details and descriptions of these non-recurring items and pro forma adjustments to 2001 are presented in a separate section at the end of this press release. The Company also reconciles the following pro forma financial information to the financial results presented under GAAP in a separate section at the end of this press release.

Excluding non-recurring items and including pro forma adjustments to 2001, the Company reported $16.5 million ($.06 per diluted share) and $15.2 million ($.05 per diluted share) of earnings before non-recurring items in the third quarter of 2002 and 2001, respectively. For the nine months ended September 30, 2002, the Company reported earnings before non-recurring items of $89.1 million ($.30 per diluted share) compared to $77.9 million ($.27 per diluted share) for the same period of 2001.

Commenting on the third quarter 2002 financial results, SCI President and Chief Operating Officer, Thomas L. Ryan, said:

"On a worldwide comparable basis, our funeral businesses produced strong operating results during the quarter with funeral revenues increasing 5.1% (2.5% excluding foreign currency effect) and our funeral gross profits increasing 13.4%, quarter over quarter. Our cemetery businesses produced operating results that were enhanced by a higher rate of completion of cemetery property development projects in North America, offset by substantial negative currency effects from our South America cemetery operations.

"As we look to the future, we remain committed to providing growth in our core funeral and cemetery operations. We believe we have executed our plan very well to improve our capital structure and increase our cash flows over the last several years. In the near term, the focus of this management team will be centered upon delivering growth in gross profits and cash flows from our comparable funeral and cemetery operations. Revenue growth initiatives, such as our atneed and preneed funeral sales of Dignity Memorial(R) packaged funeral plans, are expected to continue to drive operating performance in our funeral segment in the near term. We also have a renewed focus on our operational and sales processes that should result in the continued rationalization of our cost structure. As our cemetery segment revenues in the future contain more normalized levels of completion of cemetery property development projects, we expect to substantially rationalize our cemetery operating and sales structure and processes to ultimately enhance gross profits and cash flows in this segment. We believe these actions will provide future operating performance that, when coupled with our strong cash flows and improved capital structure, will maximize shareholder value."

Pro Forma Financial Results

The following table and segment analysis summarizes the Company's comparable results for the three and nine months ended September 30, 2002 and 2001. Comparable financial information excludes operations that have been acquired or constructed after January 1, 2001 and operations that have been divested by the Company prior to September 30, 2002. Comparable financial results are designed to be reflective of the Company's "same store" results of operations.

    (Dollars in millions, except average          Comparable Locations
     revenue per funeral service)        Three Months Ended  Nine Months Ended
                                           September 30,       September 30,
                                                  Pro Forma          Pro Forma
                                          2002      2001      2002      2001
    North America Funeral Revenues       $262.8    $257.7    $835.1    $827.9
    International Funeral Revenues       $117.9    $104.7    $348.2    $322.2
        Funeral Revenues                 $380.7    $362.4  $1,183.3  $1,150.1

    North America Funeral Gross Profits   $44.0     $39.3    $178.6    $172.5
    International Funeral Gross Profits   $12.3     $10.3     $41.3     $31.2
        Funeral Gross Profits             $56.3     $49.6    $219.9    $203.7

    North America Funeral Services
     Performed                           63,999    64,478   205,710   207,269
    France Funeral Services Performed    30,302    32,168   100,031   100,969
    North America Average Revenue
     Per Funeral Service                 $4,062    $3,975    $4,034    $3,970
    France Average Revenue Per Funeral
     Service, Excluding Currency Effect  $2,095    $2,014    $1,951    $1,868

    North America Cemetery Revenues      $155.4    $145.1    $456.4    $435.5
    International Cemetery Revenues        $5.2     $14.4     $20.6     $37.9
        Cemetery Revenues                $160.6    $159.5    $477.0    $473.4

    North America Cemetery Gross Profits  $19.9     $22.8     $59.0     $67.5
    International Cemetery Gross Profits  $(0.3)     $4.4      $3.0     $10.0
        Cemetery Gross Profits            $19.6     $27.2     $62.0     $77.5

EBITDA before non-recurring items is calculated by adding interest, tax, depreciation and amortization expenses back to earnings before non-recurring items and then deducting gains from dispositions.

                                             Consolidated Locations
                                       Three Months Ended  Nine Months Ended
                                           September 30,     September 30,
                                                 Pro Forma        Pro Forma
                                          2002     2001     2002     2001
    North America Consolidated EBITDA
     Before Non-Recurring Items          $80.2    $76.7    $283.0   $286.0
    Total Consolidated EBITDA
     Before Non-Recurring Items          $97.3   $102.9    $340.2   $371.8


North America EBITDA increased in the third quarter of 2002 compared to the third quarter of 2001 as a result of increases in North America funeral gross profits, increases in consolidated other income and reductions in North America overhead costs that were partially offset by a decrease in North America cemetery gross profits. An analysis of the third quarter 2002 comparable operating results by funeral and cemetery segment follows.

    Funeral Segment Analysis -- Third Quarter 2002
    --  The increase in North America funeral revenues quarter over quarter
        was a result of a 2.2% increase in the average revenue per funeral
        service, partially offset by a .7% decrease in funeral services
        performed.  The average revenue per funeral service in North America
        continues to be positively impacted by the Company's Dignity
        Memorial(R) packaged funeral plans.
    --  The North America funeral gross margin was 16.7% versus 15.3% in the
        prior year's third quarter.  The gross margin of 16.7% is below the
        Company's annual 2002 targeted range of 18% to 23% due to the
        traditional weakness in the number of deaths in the third quarter of
        each year.
    --  North America funeral locations had a cremation rate of 38.5% compared
        to 37.2% in the prior year quarter.  The increase in the cremation
        rate continues to weigh against the Company's initiatives to grow
        comparable funeral revenues, as the average revenue for a cremation
        service is substantially less than the average revenue for a
        traditional funeral service.
    --  In North America, 31.8% of funeral services performed were previously
        prearranged compared to 30.5% in the prior year quarter.  Prearranged
        funeral contracts that have turned atneed had an average revenue per
        funeral service of approximately 5.4% less than the Company's average
        revenue per funeral service from atneed walk-in business.
    --  The increase in international funeral revenues was driven by a 14.2%
        increase in France's funeral revenues.  Excluding the favorable effect
        of currency, France's funeral revenues increased 3.4% as a result of
        increases in the average revenue per funeral service and the average
        revenue for burial monuments delivered.

    Cemetery Segment Analysis -- Third Quarter 2002
    --  The increase in North America cemetery revenues quarter over quarter
        was primarily a result of an increase in the completion of cemetery
        property development projects and an increase in the mix of developed
        versus undeveloped cemetery property sold on a preneed basis during
        the quarter, partially offset by a decrease in cemetery merchandise
        revenues.  Preneed cemetery property revenues are recognized upon
        completion of the development of the property coupled with customer
        payment of at least ten percent of the total contract amount.
    --  The North America cemetery gross margin was 12.8% versus 15.7% in the
        prior year's third quarter.  The gross margin of 12.8% is within the
        Company's annual 2002 targeted range of 11% to 16%.  The gross margin
        of 12.8% is below the third quarter of 2001 due to reduced levels of
        revenues recognized related to changes in estimates of deferred
        preneed cemetery contract revenues.  As a result of ongoing reviews of
        the Company's deferred preneed cemetery contract revenues, changes in
        estimates recognized in revenues and gross profits were $9.4 and
        $8.8 million, respectively, in the third quarter of 2002 compared to
        $27.6 and $23.1 million in the third quarter of 2001, respectively.
    --  International cemetery revenues decreased as a result of the economic
        instability in South America and a $5.8 million unfavorable currency
        effect during the third quarter of 2002.  International cemetery gross
        profits were also negatively impacted by an increase of $1.5 million
        in the allowance for doubtful accounts in South America cemetery
        operations.

    Other Costs and Expenses

The Company has three components of overhead costs in North America: general and administrative expenses, home office overhead and field overhead. Home office and field overhead costs are allocated to funeral and cemetery operations in North America while general and administrative expenses are disclosed in a separate line item of the income statement. In the third quarter of 2002, general and administrative expenses included $4.4 million of accelerated non-cash amortization expense for existing capitalized system costs as a result of the Company's decision to implement new information systems. Excluding this $4.4 million, general and administrative expenses increased $1.0 million primarily related to costs associated with the Company's efforts to redevelop operating processes and implement new information systems. Also excluding this $4.4 million, the sum of all three overhead components decreased $1.5 million or 3.1 % in the third quarter of 2002 as a result of the Company's ongoing process improvement and cost rationalization programs.

Debt Reduction and Cash Flows

At September 30, 2002, the Company had $141.0 million of cash and cash equivalents on hand. The Company's net debt (total debt less cash and cash equivalent on hand) was reduced during the third quarter by $145.9 million to $1.86 billion. The Company's net debt is now within its targeted range of $1.8 to $1.9 billion by December 31, 2002. The third quarter 2002 net debt reduction of $145.9 million was primarily a result of operating free cash flow produced during the quarter, proceeds from asset sales and tax refunds and the substitution of letters of credit for cash collateral on deposit related to Company obligations. The Company also completed in the third quarter of 2002 an exchange of $172.2 million of the Company's 6% Senior Notes due 2005 for 7.7% Senior Notes due 2009.

For the three months ended September 30, 2002, the Company produced recurring operating free cash flow of $44.7 million compared to $45.9 million for the same period of 2001. For the nine months ended September 30, 2002 and 2001, the Company produced recurring operating free cash flow of $154.9 and $164.4 million, respectively. As defined in our Form 10-K, recurring operating free cash flow is calculated by adjusting cash flows provided by operating activities to exclude (i) cash payments associated with the Company's restructuring and non-recurring charges and (ii) other cash receipts or payments (included in cash flows provided by operating activities) which are of a non-recurring operational nature, and then subtracting maintenance capital expenditures.

The decrease in recurring operating free cash flow of $1.2 million and $9.5 million for the three and nine months ended September 30, 2002, respectively, compared to the same periods of 2001 are a result of the following financial results:

                                                Positive (Negative)
                                                Effect on Cash Flow
    (In millions)                      Three Months Ended    Nine Months Ended
                                       September 30, 2002   September 30, 2002
    Decrease in EBITDA before
     non-recurring items                    $(5.6)                $(31.6)
    Decrease in Cash Interest and
     Cash Taxes Paid                         15.4                   58.9
    Increase in the Use of Cash for
     Working Capital Purposes                (8.2)                 (38.9)
    (Increase) Decrease in Maintenance
     Capital Expenditures                    (2.8)                   2.1
                                            $(1.2)                $( 9.5)

The $8.2 million increase in the third quarter in the use of cash for working capital purposes is primarily a result of the timing of cash receipts related to prearranged funeral contracts that were performed during the third quarter of 2002. The $38.9 million increase in the nine months ended September 30, 2002 in the use of cash for working capital purposes is primarily a result of significant decreases in cash receipts of distributable earnings from prearranged funeral trust funds, increases in the negative cash flow effect to working capital from prearranged funeral contracts turning atneed and the $8.2 million negative cash flow effect in the third quarter discussed above.

Conference Call

The Company will host a conference call tomorrow morning (Thursday, November 7, 2002) at 8:00 a.m. Central time. A question and answer session will follow a brief presentation made by the Company. The conference call dial-in number is (913) 981-4900. The conference call will also be broadcast live via the Internet at http://www.firstcallevents.com/service/ajwz367327930gf12.html . After the completion of the live conference call, a replay can be accessed at (719) 457-0820 with the confirmation code of 792654 through November 21, 2002.

Cautionary Statement on Forward-Looking Statements

The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate" or "predict," that convey the uncertainty of future events or outcomes. These statements are based on assumptions that the Company believes are reasonable; however, many important factors could cause the Company's actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by, or on behalf of, the Company. Important factors which could cause actual results of the Company to differ materially from those in forward-looking statements include, among others, the following:

    1)  Changes in general economic conditions, both domestically and
        internationally, impacting financial markets (e.g., marketable
        security values, as well as currency and interest rate fluctuations)
        that could negatively affect the Company, particularly, but not
        limited to, levels of interest expense and negative currency
        translation effects.
    2)  Changes in credit relationships impacting the availability of credit
        and the general availability of credit in the marketplace.
    3)  The Company's ability to successfully implement its strategic plan as
        defined in the Company's Form 10-K for the year ended
        December 31, 2001, including:
        --  the interest of third parties to enter into and consummate
            alliances and joint ventures with the Company, including with
            respect to its operations in France,
        --  the continuation of cost reduction initiatives,
        --  the continuation of actions to improve operating free cash flow,
        --  the continuation of debt reduction initiatives, including the sale
            of certain funeral and cemetery operations,
        --  the implementation of strategic revenue and marketing initiatives
            resulting in increased volume through its existing facilities, and
        --  the continuation of operating improvements in France.
    4)  Changes in consumer demand and/or pricing for the Company's products
        and services caused by several factors, such as changes in local
        number of deaths, cremation rates, competitive pressures and local
        economic conditions.
    5)  Changes in domestic and international political and/or regulatory
        environments in which the Company operates, including potential
        changes in tax and accounting policies.
    6)  The Company's ability to successfully access at a reasonable cost
        surety and insurance markets.
    7)  The Company's ability to successfully exploit its substantial
        purchasing power with certain of the Company's vendors.
    8)  The outcomes of pending lawsuits against the Company involving alleged
        violations of securities laws.
    9)  The outcomes of pending lawsuits in Florida involving certain cemetery
        locations, including the possibility of criminal charges or other
        civil claims being filed against the Company, its subsidiaries or its
        employees.

For further information on these and other risks and uncertainties, see the Company's Securities and Exchange Commission filings, including the Company's 2001 Annual Report on Form 10-K. The Company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the Company, whether as a result of new information, future events or otherwise.

As of September 30, 2002, the Company and its affiliates operated 2,444 funeral service locations, 456 cemeteries and 155 crematoria and provides funeral and cemetery services in 8 countries.

     For additional information contact:

     Investor Relations:  Debbie Fisher Young - Director/Investor Relations
                          Tel:  (713) 525-9088

     Media Relations:   Terry Hemeyer - Managing Director/Corp. Communications
                        Tel:  (713) 525-5497

Other Service Corporation International news and investor information can be found at: http://www.sci-corp.com .

                        SERVICE CORPORATION INTERNATIONAL
                       CONSOLIDATED STATEMENT OF OPERATIONS

    (In thousands, except
     per share amounts)          Three Months Ended       Nine Months Ended
                                    September 30,          September 30,
                                  2002       2001*       2002         2001*
    Revenues:
      Funeral                   $382,670   $414,183   $1,212,700   $1,369,253
      Cemetery                   161,138    168,796      483,194      510,213
                                 543,808    582,979    1,695,894    1,879,466
    Gross Profit:
      Funeral                     55,406     43,265      221,953      194,290
      Cemetery                    20,003     23,754       63,893       70,187
                                  75,409     67,019      285,846      264,477
    General and administrative
     expenses                    (22,492)   (17,049)     (57,815)     (53,451)
    Impairment losses and other
     operating expenses          (27,942)    (6,185)    (264,510)     (57,431)
       Operating income (loss)    24,975     43,785      (36,479)     153,595
    Interest expense             (38,221)   (49,432)    (123,013)    (164,390)
    Other income                   9,548      4,967       19,171       12,648
    Gains from dispositions        2,729      5,543        7,869       11,543
       (Loss) income before income
        taxes, extraordinary items
        and cumulative effects
        of accounting changes       (969)     4,863     (132,452)      13,396
    Income tax benefit (expense)     125       (681)      37,616      (16,551)
       (Loss) income before
        extraordinary items and
        cumulative effects
        of accounting changes       (844)     4,182      (94,836)      (3,155)
    Extraordinary gains on early
     extinguishments of debt
     (net of income tax expense
     of $2,819, $63, $1,570 and
     $3,015, respectively)         4,905         99        2,731        4,717
    Cumulative effects of
     accounting changes (net of
     income tax benefit of
     $11,234 and $5,318,
     respectively)                   ---        ---     (135,560)      (7,601)
       Net income (loss)          $4,061     $4,281    $(227,665)     $(6,039)

    Basic income (loss) per share:
       (Loss) income before
        extraordinary items and
        cumulative effects of
        accounting changes         $(.00)      $.02        $(.32)       $(.01)
       Extraordinary gains on
        early extinguishments
        of debt                      .01        .00          .01          .02
       Cumulative effects of
        accounting changes           ---        ---         (.46)        (.03)
       Net income (loss)            $.01       $.02        $(.77)       $(.02)

    Diluted income (loss) per share:
       (Loss) income before
        extraordinary items and
        cumulative effects of
        accounting changes         $(.00)      $.02        $(.32)       $(.01)
       Extraordinary gains on
        early extinguishments
        of debt                      .01        .00          .01          .02
       Cumulative effects of
        accounting changes           ---        ---         (.46)        (.03)
       Net income (loss)            $.01       $.02        $(.77)       $(.02)

    Basic weighted average
     number of shares            295,151    290,258      293,892      282,916
    Diluted weighted average
     number of shares            295,151    293,763      293,892      282,916

    * Operating results for 2001 have been reclassified to recognize, as part
      of funeral operations instead of cemetery operations, those revenues
      associated with delivered caskets previously prearranged on cemetery
      contracts.


                        SERVICE CORPORATION INTERNATIONAL
                            CONSOLIDATED BALANCE SHEET

    (In thousands, except share                   September 30,   December 31,
     and per share amounts)                           2002            2001

    Assets
    Current assets:
      Cash and cash equivalents                     $141,045        $29,292
      Receivables, net of allowances                 323,889        386,479
      Inventories                                    151,232        168,975
      Other                                           27,849        245,207
        Total current assets                         644,015        829,953

    Prearranged funeral contracts                  4,113,255      4,109,195
    Long-term receivables, net of allowances       1,205,165      1,249,492
    Cemetery property, at cost                     1,570,624      1,924,773
    Property, plant and equipment, at cost (net)   1,140,964      1,357,410
    Deferred charges and other assets                754,403        699,805
    Goodwill (net)                                 1,187,876      1,409,309
                                                 $10,616,302    $11,579,937

    Liabilities & Stockholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities      $407,954       $484,150
      Current maturities of long-term debt           103,143        220,640
      Income taxes                                     2,671          5,812
        Total current liabilities                    513,768        710,602

    Long-term debt                                 1,899,510      2,313,973
    Deferred prearranged funeral contract revenues 4,528,133      4,596,116
    Deferred preneed cemetery contract revenues    1,695,280      1,756,041
    Deferred income taxes                            481,574        546,747
    Other liabilities                                213,193        223,597
    Stockholders' equity:
      Common stock, $1 per share par value,
       500,000,000 shares authorized,
       295,717,551 and 292,153,765, issued and
       outstanding (net of 2,516,075 and
       2,502,190 treasury shares, at par)            295,718        292,154
      Capital in excess of par value               2,257,066      2,246,055
      Accumulated deficit                         (1,041,814)      (814,149)
      Accumulated other comprehensive loss          (226,126)      (291,199)
        Total stockholders' equity                 1,284,844      1,432,861
                                                 $10,616,302    $11,579,937


           Pro Forma Financial Information And Non-Recurring Items

Pro forma financial information is being presented by the Company in this press release to enhance the comparability of financial information and results of operations from period to period. To create the pro forma financial information, the Company has excluded certain non-recurring items for all periods presented. The Company has also adjusted the results of operations in 2001 to be consistent with the accounting presentation in 2002.

In 2002 and 2001, non-recurring items excluded to create pro forma financial information consists of charges included in the line item, Impairment losses and other operating expenses, related to sales of businesses or joint venture transactions, severance costs, market adjustments to certain derivative financial instruments and the termination of certain contractual agreements; gains from dispositions; extraordinary gains and losses on early extinguishments of debt; and cumulative effects of accounting changes. The cumulative effects of accounting changes primarily relate to the adoption in 2002 of SFAS No. 142, "Goodwill and Other Intangible Assets". This standard requires goodwill to no longer be amortized but instead tested for impairment annually. As a result of the adoption of SFAS No. 142, the Company recognized a charge in the first quarter of 2002 reflected as a cumulative effect of accounting change of $146.8 million on a pretax basis and $135.6 million on an after tax basis.

The results for the three and nine months ended September 30, 2001 are also presented in this press release in a pro forma format as if certain changes were implemented on January 1, 2001 to provide a more relevant comparison to the 2002 results. Such changes include (1) discontinuing amortization of goodwill pursuant to new accounting standards, (2) changing the amortization period related to deferred prearranged funeral obtaining costs from 20 to 12 years, (3) revising its estimated allocation of overhead costs between the funeral and cemetery segments, (4) recognizing as part of funeral operations instead of cemetery operations, those revenues associated with delivered caskets previously prearranged on cemetery contracts, and (5) discontinuing the depreciation of certain operating assets held for sale in 2002.

Pro Forma Reconciliations

The following two tables reconcile net income (loss) and diluted earnings (loss) per share under GAAP to earnings before non-recurring items and diluted EPS before non-recurring items.

    (In millions)                        Three Months Ended  Nine Months Ended
                                            September 30,      September 30,
                                            2002    2001      2002       2001
    Net income (loss)                       $4.1    $4.3    $(227.7)    $(6.0)

    Adjust for non-recurring items
     (after tax):
       Gains from dispositions, impairment
        losses and other operating expenses 17.3    (0.6)     183.9      37.5
       Extraordinary gains on early
        extinguishments of debt             (4.9)   (0.1)      (2.7)     (4.7)
       Cumulative effects of accounting
        changes                              ---     ---      135.6       7.6

    Adjust for pro forma items (after tax):
       Goodwill amortization                 ---    10.5        ---      33.5
       Amortization of deferred prearranged
        funeral obtaining costs              ---    (0.9)       ---      (2.6)
       Depreciation expense related to
        operations held for sale in 2002     ---     2.0        ---      12.6
         Earnings before non-recurring
          items                            $16.5   $15.2      $89.1     $77.9


                                         Three Months Ended  Nine Months Ended
                                            September 30,       September 30,
                                            2002    2001       2002      2001
    Diluted earnings (loss) per share       $.01    $.02      $(.77)    $(.02)
    Adjust for non-recurring items:
      Gains from dispositions, impairment
       losses and other operating Expenses   .06    (.01)       .63       .13
      Extraordinary gains on early
       extinguishments of debt              (.01)   (.00)      (.01)     (.02)
      Cumulative effects of accounting
       changes                               ---     ---        .46       .03
      Effect of dilution on pro forma
       income from continuing operations     ---     ---       (.01)      ---

    Adjust for pro forma items:
      Goodwill amortization                  ---     .03        ---       .12
      Amortization of deferred prearranged
       funeral obtaining costs               ---    (.00)       ---      (.01)
      Depreciation expense related to
       operations held for sale in 2002      ---     .01        ---       .04
         Diluted EPS before non-recurring
          items                             $.06    $.05       $.30      $.27

    Comparable Revenues

Comparable revenues for 2002 and 2001 represent revenues excluding operations that have been acquired or constructed after January 1, 2001 and operations that have been divested by the Company prior to September 30, 2002.

    (In millions)                       Three Months Ended  Nine Months Ended
                                          September 30,      September 30,
                                         2002     2001      2002       2001
    Total revenues                      $543.8   $583.0   $1,695.9   $1,879.5
    Less:  Revenues from operations
     acquired/constructed after
     01/01/01 or divested prior
     to 09/30/02                          (2.5)   (61.1)     (35.6)    (256.0)
       Comparable revenues              $541.3   $521.9   $1,660.3   $1,623.5


    2001 Pro Forma Revenues and Gross Profits

The following tables reconcile funeral and cemetery revenues and gross profits previously reported in 2001 to pro forma 2001 amounts used in this release for comparison purposes.

     Revenues

    (In millions)                     Three Months Ended    Nine Months Ended
                                      September 30, 2001    September 30, 2001
                                      Funeral   Cemetery   Funeral    Cemetery
                                      Revenues  Revenues   Revenues   Revenues
    2001 revenues as previously
     reported                          $409.9    $173.1    $1,357.2    $522.3
    Reclassification of casket revenues   4.3      (4.3)       12.1     (12.1)
      Total 2001 revenues as
       reclassified                     414.2     168.8     1,369.3     510.2
    Less:  Revenues from operations
     acquired/constructed after
     01/01/01 or divested prior
     to 09/30/02                        (51.8)     (9.3)     (219.2)    (36.8)
    Less:  Comparable revenues
     outside of North America          (104.7)    (14.4)     (322.2)    (37.9)
      Pro forma comparable
       North America revenues          $257.7    $145.1      $827.9    $435.5


     Gross Profits

    (In millions)                      Three Months Ended    Nine Months Ended
                                       September 30, 2001   September 30, 2001
                                       Funeral   Cemetery    Funeral  Cemetery
                                        Gross     Gross       Gross     Gross
                                       Profits   Profits     Profits   Profits
    2001 gross profits as
     previously reported                $40.9     $26.1      $187.7     $76.8
    Reclassification of casket
     gross profits                        2.3      (2.3)        6.6      (6.6)
       Total 2001 gross profits
        as reclassified                  43.2      23.8       194.3      70.2
    Less:  Gross (profits) losses
     from operations acquired/
     constructed after 01/01/01
     or divested prior to 09/30/02        1.0      (2.1)      (14.5)     (9.5)
    Less:  Comparable gross profits
     outside of North America            (8.9)     (2.9)      (19.7)     (5.3)
       Comparable North America
        gross profits                    35.3      18.8       160.1      55.4
    Goodwill amortization                 8.4       1.0        25.6       3.1
    Amortization of deferred
     prearranged funeral obtaining costs (1.4)      ---        (4.2)      ---
    Allocation of overhead costs         (3.0)      3.0        (9.0)      9.0
       Pro forma comparable
        North America gross profits     $39.3     $22.8      $172.5     $67.5

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SOURCE Service Corporation International