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SCI Corporate Communications
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Email: Press.Room@sci-us.com
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Service Corporation International Reports First Quarter Results

HOUSTON, April 23 /PRNewswire/ -- Service Corporation International (NYSE: SRV) (SCI), the world's largest funeral and cemetery company, today reported record first quarter revenues and earnings. For the three months ended March 31, 1998, the company reported revenues of $682.7 million, net income of $108.8 million and diluted earnings per share of $.42 ($.43 basic). This represents a 6.9 percent increase in revenues, a 20.4 percent increase in net income and a 16.7 percent increase in diluted earnings per share (13.2 percent basic) when compared to the first quarter of 1997. The first quarter of 1997 included a gain on the sale of a corporate investment and an extraordinary loss related to the early retirement of certain outstanding debt which, when combined, resulted in a gain of $1.7 million or $.01 diluted earnings per share ($.01 basic).

SCI Chairman and Chief Executive Officer Robert L. Waltrip said, "We are pleased with the consolidated results achieved in the first quarter despite the softness experienced in European mortality rates. Our North American operations performed well. Additionally, recently announced major acquisitions in Spain and Norway, which will close in the second quarter, reflect our confidence in the European death care market."

Acquisition Activity

As of April 19, 1998, SCI had acquired, or received signed letters of intent to acquire, 183 funeral service locations, 36 cemeteries and 2 crematoria for an aggregate purchase price of $442 million. These businesses are expected to produce approximately $189 million in annualized revenues, including $64 million from North American operations and $125 million from operations outside North America.

1998 First Quarter Highlights:

Revenues from existing business clusters of funeral homes and cemeteries in North America, Europe and the Pacific Rim owned for both periods increased 4.9 percent to $656.9 million, contributing $209.7 million to existing cluster operating profit, a 13.3 percent increase over last year.

Compared to the first quarter of 1997, funeral segment revenues increased 3.3 percent to $472.1 million. During the first quarter of 1998, SCI operations performed approximately 147,000 funeral services worldwide, 73,000 in North America, 67,000 in Europe and 7,000 on the Pacific Rim. Funeral segment profits rose $13.0 million to $132.7 million, an increase of 10.9 percent. Funeral segment margins for the first quarter of 1998 increased to 28.1%, compared to 26.2% in the same period of 1997. A 7.3% increase in North American funerals performed fueled the increase. Growth in funeral revenues was limited by a reduced number of mortalities in markets served by SCI in Europe due primarily to mild winter weather. Additionally, the strengthening of the U.S. dollar relative to the French franc, compared to the same period last year had the effect of a $12.4 million reduction in revenue this quarter.

During the first quarter of 1998, sales of prearranged funeral contracts were approximately $135 million, which expanded the backlog of prearranged funeral contracts to be serviced in future periods to approximately $3.3 billion. Revenues and associated investment earnings from such contracts are deferred, and will be recognized during the periods in which the funeral services are actually performed.

Compared to first quarter of 1997, cemetery segment revenues increased 15.8 percent to $205.9 million. Cemetery segment profits rose $14.5 million to $81.3 million, an increase of 21.6 percent, reflecting the results of recently acquired cemeteries and increased investment returns associated with the larger asset base from the cemetery merchandise and endowment care trust funds. Cemetery segment margins expanded to 39.5 percent, compared to 37.6 percent for first quarter of 1997.

As of March 31, 1998, SCI operated 3,166 funeral service locations, 398 cemeteries and 166 crematoria. SCI provides funeral and cemetery services in 18 countries on five continents. SCI's stock is traded on the New York Stock Exchange. The company's ticker symbol is SRV.

                      SERVICE CORPORATION INTERNATIONAL
                       CONSOLIDATED STATEMENT OF INCOME

                                              Three Months Ended
                                                  March 31,
    (Thousands, except per share amounts)      1998      1997

    Revenues:
      Funeral                                $472,128  $457,071
      Cemetery                                205,941   177,790
      Financial services                        4,615     3,588
                                              682,684   638,449

    Cost and expenses:
      Funeral                                 339,436   337,368
      Cemetery                                124,688   110,997
      Financial services                        2,432     1,932
                                              466,556   450,297
                                              216,128   188,152
    General and administrative expense        (17,008)  (16,628)

    Income from operations                    199,120   171,524

    Interest expense                          (37,710)  (34,538)
    Dividends on preferred securities of
     SCI Finance LLC                              ---    (2,629)
    Other income                                6,651     3,090
    Gain on sale of investment                    ---    68,077
                                              (31,059)   34,000
    Income before income taxes and
     extraordinary loss                       168,061   205,524
    Provision for income taxes                 59,275    74,377

    Net income before extraordinary loss      108,786   131,147
    Extraordinary loss on early
     extinguishment of debt (net of
     $23,383 income taxes)                        ---   (40,802)
    Net income                               $108,786  $ 90,345

    Earnings per share:
      Basic:
        Income before extraordinary loss     $   0.43  $   0.55
        Extraordinary loss on early
         extinguishment of debt                   ---     (0.17)
        Net income                           $   0.43  $   0.38

      Diluted:
       Income before extraordinary loss      $   0.42  $   0.52
       Extraordinary loss on early
        extinguishment of debt                    ---     (0.16)
       Net income                            $   0.42  $   0.36

    Basic weighted average number of
     shares                                   254,635   237,264
    Diluted weighted average number of
     shares                                   261,768   255,538


    Geographic segment information was as follows:
    (Dollars in thousands)

                            United              Other    Other
                            States    France   European Foreign
    Revenues:
     Three months
     ended March 31:
        1998               $453,026  $122,928  $63,714  $43,396
        1997                403,282   133,614   61,313   40,844
        Change from
         prior year        $ 49,744  $(10,686) $ 2,401  $ 2,552
        Percentage change
         from prior year       12.3%     -8.0%     3.9%     6.2%

    Income from
     operations:
     Three months
     ended March 31:
        1998               $163,804  $ 11,554  $13,293  $10,469
        1997                126,721    15,258   16,590   12,806
        Change from
         prior year        $ 37,083  $ (3,704) $(3,297) $(2,337)
        Percentage change
         from prior year       29.3%    -24.3%   -19.9%   -18.2%

    Operating income
     margin:
     Three months
     ended March 31:
        1998                  36.2%      9.4%    20.9%    24.1%
        1997                  31.4%     11.4%    27.1%    31.4%

    Funeral services
     performed:
     Three months
     ended March 31:
        1998                66,069    38,776   29,330   13,300
        1997                61,964    41,587   29,772   12,240
        Percentage change
         from prior year       6.6%     -6.8%    -1.5%     8.7%

    Number of locations
     at March 31:
        1998                 1,584     1,118      731      297
        1997                 1,483     1,073      633      261

SOURCE Service Corporation International
Web site: http: //www.sci-corp.com
Company News On-Call: http: //www.prnewswire.com or fax, 800-758-5804, ext. 104532
CONTACT: George R. Champagne, Senior Vice President/Chief Financial Officer, 713-525-5238, or Investor Relations, 713-525-9072, both of Service Corporation International