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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 Record Results for 1996

HOUSTON, Feb. 6 /PRNewswire/ -- Service Corporation International (NYSE: SRV) (SCI), the world's largest funeral and cemetery company, today reported record revenues and earnings for 1996. For the year ended December 31, 1996, the company reported revenues of $2.3 billion, net income of $265.3 million and primary earnings per share of $1.10 (fully diluted of $1.07), after recording a $6 million pretax charge for expenses related directly to the Loewen exchange offer. This represents a 38.9 percent increase in revenues, a 44.5 percent increase in net income and a 22.2 percent increase in primary earnings per share (25.9 percent increase in fully diluted) when compared to 1995.

For the three months ended December 31, 1996, the company reported revenues of $609.5 million, net income of $73.8 million and primary earnings per share of $.30 (fully diluted of $.30). This represents an 11.5 percent increase in revenues, a 30.7 percent increase in net income and a 20.0 percent increase in primary earnings per share (25.0 percent increase in fully diluted) over the same period in 1995.

SCI Chairman and Chief Executive Officer Robert L. Waltrip said, "This year marks the seventh consecutive year of increased revenues and earnings per share for SCI, a record that we confidently plan to extend. I am pleased to report that SCI's consistent earnings growth over the last seven years has resulted in an impressive, compounded annual earnings per share growth rate of 19.3 percent."

During 1996, SCI acquired 210 funeral service locations, 35 cemeteries, and 9 crematoria at a cost of approximately $363 million. These businesses are expected to produce approximately $180 million in annualized revenues. From 1991 through 1996, SCI invested approximately $3.2 billion to acquire funeral and cemetery businesses which at the time of such acquisitions represented nearly $1.6 billion in annualized revenues.

Waltrip stated, "Very significant growth opportunities exist for SCI, both domestically and internationally. SCI will continue to execute its proven strategy of solid internal growth and growth by acquisitions that add value for our shareholders."

1996 Highlights:

Revenues from existing business clusters in North America, the United Kingdom and Australia owned for all of 1996 and 1995 increased 15.9 percent to $1.6 billion, contributing $587.5 million to existing cluster operating profit, a 22.2 percent increase over last year. During 1996, SCI operations performed approximately 510,000 funeral services worldwide, 237,000 in North America, 242,000 in Europe and 31,000 on the Pacific Rim.

Funeral segment revenues increased 42.6 percent to $1.7 billion, reflecting the impact of recently acquired properties, particularly those in Europe. Funeral segment profits rose $85.7 million to $380.8 million, an increase of 29.0 percent. Operating margins averaged 22.9 percent for 1996, compared to 25.3 percent in 1995, reflecting the expected full year effect of the traditionally lower margins associated with the businesses acquired in Europe. However, 1996 fourth quarter operating margins expanded 230 basis points to 24.6% from 22.3% for 1995.

During 1996, sales of prearranged funeral contracts were approximately $550 million, 48 percent more than 1995. At the end of 1996, the backlog of prearranged funeral contracts to be serviced in future periods was approximately $2.7 billion. Revenues from such contracts will be recognized during the periods in which the services are performed.

Compared to 1995, Cemetery segment revenues increased 32.1 percent to $612.4 million. Cemetery segment profits rose $54.3 million to $214.7 million, an increase of 33.8 percent, reflecting the results of recently acquired cemeteries. Operating margins averaged 35.1 percent for 1996, compared to 34.6 percent for 1995. Notably, 1996 fourth quarter operating margins grew 420 basis points to 35.9% compared to 31.7% for 1995.

General and administrative costs for 1996 were $63.2 million or 2.8 percent of revenues and include a $6 million pretax charge for expenses directly related to the Loewen exchange offer. Excluding the Loewen related expenses, 1996 general and administrative costs were $57.2 million or 2.5% of revenues, compared to $53.6 million, or 3.2 percent of revenues for 1995.

Interest expense in 1996 was $20.4 million higher than 1995 due to increased indebtedness related to acquisitions.

Service Corporation International is the largest funeral and cemetery organization in the world, with 2,882 funeral service locations, 345 cemeteries and 150 crematoria as of December 31, 1996. SCI provides funeral and cemetery services in North America, Europe and the Pacific Rim. 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       Twelve Months Ended
                            December 31,              December 31,
                         1996          1995        1996        1995
                            (Thousands, except per share amounts)

    Revenues:
     Funeral           $ 444,356    $ 404,950      $1,663,387  $1,166,247
     Cemetery            162,221      134,829         612,421     463,754
     Financial services    2,915        7,094          18,386      22,125
                         609,492      546,873       2,294,194   1,652,126
    Cost and expenses:
     Funeral             335,013      314,845       1,282,546     871,096
     Cemetery            103,959       92,036         397,700     303,312
     Financial services    1,677        3,152           9,496      12,497
                         440,649      410,033       1,689,742   1,186,905
                         168,843      136,840         604,452     465,221
    General and administrative
     expense             (22,378)     (17,923)        (63,215)    (53,600)
    Income from
     operations          146,465      118,917         541,237     411,621
    Interest expense     (35,631)     (33,085)       (138,557)   (118,148)
    Dividends on preferred securities
     of SCI Finance LLC   (2,695)      (2,695)        (10,781)    (10,781)
    Other income           6,177        4,993          21,982      11,519
                         (32,149)     (30,787)       (127,356)   (117,410)
    Income before
     income taxes        114,316       88,130         413,881     294,211
    Provision for
     income taxes..       40,560       31,698         148,583     110,623
    Net income          $ 73,756     $ 56,432      $  265,298  $  183,588
    Earnings per share:
    Primary             $   0.30     $   0.25      $     1.10  $     0.90
    Fully diluted       $   0.30     $   0.24      $     1.07  $     0.85

    Weighted average number of
     common shares       242,181      232,580         241,178      204,148

All share and per share data has been restated to reflect a 2 for 1 common stock split in August 1996.

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

                      United                Other      Other
                      States    France*   European**  Foreign***  Consolidated
    Revenues:
    Twelve months ended December 31:
    1996          $1,409,408   $537,080   $184,943    $162,763     $2,294,194
    1995          $1,178,407   $191,256   $150,060    $132,403     $1,652,126
    Three months ended
    December 31:
    1996            $375,182   $143,485    $49,606     $41,219       $609,492
    1995            $325,362   $143,519    $42,759     $35,233       $546,873

Income from operations:

    Twelve months ended
    December 31:
    1996            $400,622    $52,204    $37,376     $51,035       $541,237
    1995            $314,698    $18,783    $34,261     $43,879       $411,621
    Three months ended
    December 31:
    1996            $107,989    $19,016     $8,285     $11,175       $146,465
    1995             $83,431    $16,778     $8,037     $10,671       $118,917

    Funeral services performed:
    Twelve months ended
    December 31:
    1996             217,471    150,269     92,491      50,039        510,270
    1995             198,682     49,298     81,101      44,381        373,462
    Three months ended
    December 31:
    1996              57,285     38,219     22,772      12,342        130,618
    1995              52,518     35,538     20,558      11,201        119,815

    Number of locations
    at December 31:
    1996               1,441      1,056        631         249          3,377
    1995               1,274      1,067        618         237          3,196

    *    French operations began in August 1995.

** Includes United Kingdom operations as well as other European operations which began in August 1995.

*** Primarily Canadian and Australian operations.
SOURCE Service Corporation International
CONTACT: Todd Matherne, Vice President, Investor Relations of Service Corporation, 713-525-5243 or 102121.2653@compuserve.com