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SERVICE CORPORATION INTERNATIONAL REPORTS RECORD SECOND QUARTER RESULTS

HOUSTON, July 22 /PRNewswire/ -- Service Corporation International (NYSE: SRV) ("SCI"), the world's largest funeral and cemetery company, today reported record second quarter revenues and earnings. For the three months ended June 30, 1996, the company reported revenues of $564.7 million, net income of $62.3 million and primary earnings per share of $.52 (fully diluted of $.50). This represents a 60 percent increase in revenues, a 53 percent increase in net income and a 24 percent increase in primary earnings per share (28 percent increase in fully diluted) over the second quarter of 1995.

For the six months ended June 30, 1996, the company reported revenues of $1.14 billion, net income of $134.1 million and primary earnings per share of $1.12 (fully diluted of $1.08). This represents a 62 percent increase in revenues, a 52 percent increase in net income and a 23 percent increase in primary earnings per share (27 percent increase in fully diluted) over the same period in 1995.

Observing these results, SCI Chairman Robert L. Waltrip said, "This quarter's record performance resulted from the strategic acquisitions completed in the fall of 1995 and the continued progress we are making to improve the results of our existing and newly acquired operations by successfully applying our proven cluster strategy. Our 1996 acquisition activity has been solid and we are very pleased with the quality of the businesses acquired to date."

During the second quarter of 1996, SCI acquired 65 funeral service locations and 8 cemeteries at a cost of $110 million. These businesses are expected to produce annualized revenues of approximately $53 million. During the first six months of 1996, SCI acquired 120 funeral service locations, 20 cemeteries, and 1 crematory at a cost of $204 million. These businesses are expected to produce approximately $99 million in annualized revenues.

1996 Second Quarter Highlights:

Funeral Segment revenues increased nearly 71 percent to $405.3 million compared to the second quarter of 1995, reflecting the impact of the large number of recently acquired properties, particularly those in Europe. Funeral Segment profits rose $21.1 million to $87.0 million, an increase of 32 percent. Operating margins averaged 21.5 percent for the second quarter of 1996, compared to 27.7 percent for the same period in 1995, reflecting the expected impact of the traditionally lower margins associated with the businesses acquired in Europe.

Funeral revenues from existing business clusters in North America, the United Kingdom and Australia owned for the second quarter of 1996 and 1995 increased 8 percent, contributing $79.2 million to segment operating profit, a 9 percent increase over the same period last year. During the second quarter of 1996, SCI operations performed approximately 124,000 funeral services worldwide, 57,000 in North America, 60,000 in Europe and 7,000 in the Pacific Rim.

During the second quarter of 1996, sales of prearranged funeral contracts were approximately $142 million or 57 percent more than 1995. At the end of second quarter of 1996, the backlog of prearranged funeral contracts to be serviced in future periods was approximately $2.5 billion. Revenues from such contracts will be recognized during the periods in which the services are performed.

Cemetery Segment revenues increased 38 percent to $154.1 million compared to the second quarter of 1995. Cemetery Segment profits rose $16.3 million to $54.6 million, an increase of 42 percent, reflecting the results of recently acquired cemeteries and improved productivity at existing cemetery operations. Operating margins averaged 35.4 percent for the second quarter of 1996, compared to 34.4 percent for the same period in 1995.

General and administrative costs increased approximately 34 percent during the second quarter of 1996 to $14.8 million, or 2.6 percent of revenues, as compared to $11.0 million, or 3.1 percent of revenues for the same period in 1995.

Interest expense was $6.7 million higher than the same period last year due to increased indebtedness related to acquisitions.

Service Corporation International is the largest funeral home and cemetery organization in the world, with 2,832 funeral service locations, 331 cemeteries and 146 crematoria as of June 30, 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
                              (Unaudited)

                             Three Months Ended      Six Months Ended
                                   June 30,              June 30,
                               1996       1995       1996        1995
                                (Thousands, except per share amounts)
    Revenues:
      Funeral              $ 405,300  $ 237,213  $  830,000  $  479,969
      Cemetery               154,054    111,400     299,616     211,797
      Financial services
       and other.              5,395      5,036      10,586       9,996
    Total                    564,749    353,649   1,140,202     701,762
    Cost and expenses:
      Funeral                318,346    171,407     636,887     335,878
      Cemetery                99,472     73,089     193,285     136,851
      Financial services
       and other.              2,868      3,171       5,799       6,376
    Total                    420,686    247,667     835,971     479,105
    TOTAL                    144,063    105,982     304,231     222,657
    General and administrative
      expense                (14,786)   (11,018)    (28,541)    (23,471)
    Operating income         129,277     94,964     275,690     199,186
    Interest expense         (34,245)   (27,525)    (66,931)    (52,809)
    Dividends on preferred
      securities of
      SCI Finance LLC         (2,696)    (2,696)     (5,391)     (5,391)
    Other income               5,232      1,757       7,423       3,073
    Total                    (31,709)   (28,464)    (64,899)    (55,127)
    Income before
      income taxes             97,568     66,500     210,791     144,059
    Provision for
      income taxes             35,318     25,860      76,644      56,039
    Net income              $  62,250  $  40,640   $ 134,147  $   88,020
    Earnings per share:
      Primary               $    0.52  $    0.42   $    1.12  $     0.91
      Fully diluted         $    0.50  $    0.39   $    1.08  $     0.85
    Weighted average number of common
      shares                  120,556     96,987     120,147      96,729

CONTACT: Todd Matherne, Vice President Investor Relations of SCI, 713-525-5243, or 102121.2653@compuserve.com -- e-mail