10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	JUNE 30, 2020
		OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from          to

Commission file number 1-6402-1

SERVICE CORPORATION INTERNATIONAL

(Exact name of registrant as specified in its charter)

	Texas	74-1488375
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)
1929 Allen Parkway
Houston
Texas		77019
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (713) 522-5141

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol (s)	Name of Each Exchange on Which Registered
Common Stock ($1 par value)	SCI	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	Yes	þ	No	¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).	Yes	þ	No	¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer	þ	Accelerated filer	¨	Non-accelerated filer	¨	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	¨
Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the act).	Yes	☐	No	þ

The number of shares outstanding of the registrant’s common stock as of July 28, 2020 was 176,219,014 (net of treasury shares).

SERVICE CORPORATION INTERNATIONAL INDEX
		Page
GLOSSARY		3
PART I. FINANCIAL INFORMATION		5
Item 1.	Financial Statements	5
	Unaudited Condensed Consolidated Statement of Operations - Three and Six Months Ended June 30, 2020 and 2019	5
	Unaudited Condensed Consolidated Statement of Comprehensive Income - Three and Six Months Ended June 30, 2020 and 2019	6
	Unaudited Condensed Consolidated Balance Sheet - June 30, 2020 and December 31, 2019	7
	Unaudited Condensed Consolidated Statement of Cash Flows - Six Months Ended June 30, 2020 and 2019	8
	Unaudited Condensed Consolidated Statement of Equity — Three and Six Months Ended June 30, 2020 and 2019	9
	Notes to Consolidated Financial Statements	11
	1. Nature of Operations	11
	2. Summary of Significant Accounting Policies	11
	3. Preneed Activities	16
	4. Income Taxes	21
	5. Debt	22
	6. Credit Risk and Fair Value of Financial Instruments	23
	7. Equity	24
	8. Segment Reporting	25
	9. Commitments and Contingencies	26
	10. Earnings Per Share	27
	11. Acquisitions and Divestiture-Related Activities	28
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
	The Company	29
	Financial Condition, Liquidity, and Capital Resources	30
	Results of Operations - Three and Six Months Ended June 30, 2020 and 2019	36
	Critical Accounting Policies	41
	Cautionary Statement on Forward-Looking Statements	41
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43
PART II. OTHER INFORMATION		44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	45
SIGNATURE		47

2 Service Corporation International

Glossary

The following terms are common to the deathcare industry, are used throughout this report, and have the following meanings:

Atneed — Funeral, including cremation, and cemetery arrangements sold once death has occurred.

Cancellation — Termination of a preneed contract, which relieves us of the obligation to provide the goods and services included in the contract. Cancellations may be requested by the customer or be initiated by us for failure to comply with the contractual terms of payment. State or provincial laws govern the amount of refund, if any, owed to the customer.

Care Trust Corpus — The deposits and net realized capital gains and losses included in a perpetual care trust that cannot be withdrawn. In certain states, some or all of the net realized capital gains can be distributed, so they are not included in the corpus.

Cemetery Merchandise and Services — Stone and bronze memorials, markers, outer burial containers, floral placement, graveside services, merchandise installations, urns, and interments.

Cemetery Perpetual Care Trust or Endowment Care Fund (ECF) — A trust fund established for the purpose of maintaining cemetery grounds and property into perpetuity. For these trusts, the corpus remains in the trust in perpetuity and the investment earnings or elected distributions are withdrawn regularly and are intended to defray our expenses incurred to maintain the cemetery. In certain states, some or all of the net realized capital gains can also be distributed. Additionally, some states allow a total return distribution that may contain elements of income, capital appreciation, and principal.

Cemetery Property — Developed lots, lawn crypts, mausoleum spaces, niches, and cremation memorialization property items (constructed and ready to accept interments) and undeveloped land we intend to develop for the sale of interment rights. Includes the construction-in-progress balance during the pre-construction and construction phases of projects creating new developed property items.

Cemetery Property Amortization — The non-cash recognized expenses of cemetery property interment rights, which are recorded by specific identification with the cemetery property revenue for each contract.

Cemetery Property Interment Rights — The exclusive right to determine the human remains that will be interred in a specific cemetery property space. See also Cemetery Property Revenue below.

Cemetery Property Revenue — Recognized sales of interment rights in cemetery property when the receivable is deemed collectible and the property is fully constructed and available for interment.

Combination Location (Combos) — Locations where a funeral service location is physically located within or adjoining an SCI-owned cemetery location.

Cremation — The reduction of human remains to bone fragments by intense heat.

Cremation Memorialization — Products specifically designed to commemorate and honor the life of an individual that has been cremated. These products include cemetery property items that provide for the disposition of cremated remains within our cemeteries such as benches, boulders, statues, etc. They also include memorial walls and books where the name of the individual is inscribed but the remains have been scattered or kept by the family.

Funeral Merchandise and Services — Merchandise such as burial caskets and related accessories, outer burial containers, urns and other cremation receptacles, casket and cremation memorialization products, flowers, and professional services relating to funerals including arranging and directing services, use of funeral facilities and motor vehicles, removal, preparation, embalming, cremations, memorialization, visitations, travel protection, and catering.

Funeral Recognized Preneed Revenue — Funeral merchandise and travel protection, net sold on a preneed contract and delivered before a death has occurred.

Funeral Services Performed — The number of funeral services, including cremations, provided after the date of death, sometimes referred to as funeral volume.

General Agency (GA) Revenue — Commissions we receive from third-party life insurance companies for life insurance policies sold to preneed customers for the purpose of funding preneed funeral arrangements. The commission rate paid is determined based on the product type sold, the length of payment terms, and the age of the insured/annuitant.

Interment — The burial or final placement of human remains in the ground (interment), in mausoleums (entombment), in niches (inurnment), or in cremation memorialization property (inurnment).

Lawn Crypt — Cemetery property in which an underground outer burial receptacle constructed of concrete and reinforced steel has been pre-installed in predetermined designated areas.

Marker — A method of identifying a deceased person in a particular burial space, crypt, niche, or cremation memorialization property. Permanent burial and cremation memorialization markers are usually made of bronze or stone.

FORM 10-Q 3

Maturity — When the underlying contracted merchandise is delivered or service is performed, typically at death. This is the point at which preneed funeral contracts are converted to atneed contracts (note — delivery of certain merchandise and services can occur prior to death).

Mausoleum — An above ground structure that is designed to house caskets and/or cremation urns.

Merchandise and Service Trust — A trust account established in accordance with state or provincial law into which we deposit the required percentage of customers’ payments for preneed funeral, cremation, or cemetery merchandise and services to be delivered or performed by us in the future. The amounts deposited can be withdrawn only after we have completed our obligations under the preneed contract or the cancellation of the contract. Also referred to as a preneed trust.

Outer Burial Container — A reinforced container intended to inhibit the subsidence of the earth and house the casket after it is placed in the ground, also known as a burial vault.

Preneed — Purchase of cemetery property interment rights or any merchandise and services prior to death occurring.

Preneed Backlog — Future revenue from unfulfilled preneed funeral, cremation, and cemetery contractual arrangements.

Preneed Cemetery Production — Sales of preneed cemetery contracts. These sales are recorded in Deferred revenue, net until the merchandise is delivered, the service is performed, and the property has been constructed and is available for interment.

Preneed Funeral Production — Sales of preneed funeral trust-funded and insurance-funded contracts. Preneed funeral trust-funded contracts are recorded in Deferred revenue, net until the merchandise is delivered or the service is performed. We do not reflect the unfulfilled insurance-funded preneed funeral contract amounts in our Consolidated Balance Sheet. The proceeds of the life insurance policies will be reflected in revenue as these funerals are performed by us in the future.

Preneed Receivables, Net — Amounts due from customers when we have delivered the merchandise, performed the service, or transferred control of the cemetery property interment rights prior to a death occurring or amounts due from customers on irrevocable preneed contracts.

Sales Average — Average revenue per funeral service performed, excluding the impact of funeral recognized preneed revenue, GA revenue, and certain other revenue.

Travel Protection — A product that provides shipment of remains to the servicing funeral home or cemetery of choice if the purchaser passes away outside of a certain radius of their residence, without any additional expense to the family.

Trust Fund Income — Recognized investment earnings from our merchandise and service and perpetual care trust investments.

As used herein, “SCI”, “Company”, “we”, “our”, and “us” refer to Service Corporation International and companies owned directly or indirectly by Service Corporation International, unless the context requires otherwise. Management published a white paper on the corporate website for further understanding of accounting for preneed sales. You can view the white paper at http://investors.sci-corp.com under Featured Documents. Documents and information on our website are not incorporated by reference herein.

4 Service Corporation International

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Service Corporation International

Condensed Consolidated Statement of Operations (Unaudited)   

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(in thousands, except per share amounts)
Revenue
Property and merchandise revenue	$	414,596	$	415,492	$	792,479	$	796,701
Service revenue	354,799		339,090		722,327		694,461
Other revenue	50,640		57,990		108,194		119,622
Total revenue	820,035		812,572		1,623,000		1,610,784
Costs of revenue
Cost of property and merchandise	(207,102)		(213,635)		(403,550)		(411,529)
Cost of service	(173,515)		(193,378)		(371,039)		(384,191)
Overhead and other expenses	(220,651)		(214,413)		(450,600)		(432,084)
Costs of revenue	(601,268)		(621,426)		(1,225,189)		(1,227,804)
Gross profit	218,767		191,146		397,811		382,980
Corporate general and administrative expenses	(37,169)		(29,218)		(68,982)		(72,196)
Gains (losses) on divestitures and impairment charges, net	737		(11,823)		5,282		(13,701)
Operating income	182,335		150,105		334,111		297,083
Interest expense	(41,767)		(47,317)		(86,118)		(94,707)
Losses on early extinguishment of debt, net	(11)		(7,579)		(150)		(7,579)
Other income (expense), net	1,166		874		(81)		1,594
Income before income taxes	141,723		96,083		247,762		196,391
Provision for income taxes	(36,170)		(23,570)		(60,208)		(44,665)
Net income	105,553		72,513		187,554		151,726
Net income attributable to noncontrolling interests	(45)		(184)		(105)		(74)
Net income attributable to common stockholders	$	105,508	$	72,329	$	187,449	$	151,652
Basic earnings per share:
Net income attributable to common stockholders	$	0.59	$	0.40	$	1.04	$	0.83
Basic weighted average number of shares	177,902		182,369		179,378		182,048
Diluted earnings per share:
Net income attributable to common stockholders	$	0.59	$	0.39	$	1.03	$	0.82
Diluted weighted average number of shares	179,666		185,690		181,639		185,517

(See notes to unaudited condensed consolidated financial statements)

FORM 10-Q 5

PART I

Service Corporation International

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Net income	$	105,553	$	72,513	$	187,554	$	151,726
Other comprehensive income:
Foreign currency translation adjustments	13,738		6,998		(17,464)		14,399
Total comprehensive income	119,291		79,511		170,090		166,125
Total comprehensive income attributable to noncontrolling interests	(47)		(36)		(105)		(76)
Total comprehensive income attributable to common stockholders	$	119,244	$	79,475	$	169,985	$	166,049

(See notes to unaudited condensed consolidated financial statements)

6 Service Corporation International

PART I

Service Corporation International

Condensed Consolidated Balance Sheet (Unaudited)

	June 30, 2020		December 31, 2019
	(In thousands, except share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	222,234	$	186,276
Receivables, net of reserves of $6,006 and $2,262, respectively	76,963		81,671
Inventories	25,965		25,118
Other	58,474		80,488
Total current assets	383,636		373,553
Preneed receivables, net of reserves of $18,277 and $41,142, respectively, and trust investments	4,622,700		4,789,562
Cemetery property	1,882,890		1,873,602
Property and equipment, net	2,098,196		2,065,433
Goodwill	1,865,401		1,864,223
Deferred charges and other assets, net of reserves of $8,245 and $8,374, respectively	1,035,508		1,029,908
Cemetery perpetual care trust investments	1,599,599		1,681,149
Total assets	$	13,487,930	$	13,677,430
LIABILITIES & EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	460,718	$	478,545
Current maturities of long-term debt	87,267		69,821
Income taxes payable	58,840		8,353
Total current liabilities	606,825		556,719
Long-term debt	3,573,709		3,513,530
Deferred revenue, net	1,494,106		1,467,103
Deferred tax liability	433,021		421,482
Other liabilities	381,704		378,074
Deferred receipts held in trust	3,644,212		3,839,376
Care trusts’ corpus	1,600,025		1,677,891
Commitments and contingencies (Note 9)
Equity:
Common stock, $1 per share par value, 500,000,000 shares authorized, 186,104,673 and 185,100,789 shares issued, respectively, and 177,011,040 and 181,184,963 shares outstanding, respectively	177,011		181,185
Capital in excess of par value	1,002,988		1,010,361
Retained earnings	561,882		601,903
Accumulated other comprehensive income	12,400		29,864
Total common stockholders’ equity	1,754,281		1,823,313
Noncontrolling interests	47		(58)
Total equity	1,754,328		1,823,255
Total liabilities and equity	$	13,487,930	$	13,677,430

(See notes to unaudited condensed consolidated financial statements)

FORM 10-Q 7

PART I

Service Corporation International

Condensed Consolidated Statement of Cash Flows (Unaudited)

	Six Months Ended June 30,
	2020		2019
	(In thousands)
Cash flows from operating activities:
Net income	$	187,554	$	151,726
Adjustments to reconcile net income to net cash provided by operating activities:
Losses on early extinguishment of debt, net	150		7,579
Depreciation and amortization	75,582		74,244
Amortization of intangibles	11,304		13,653
Amortization of cemetery property	33,696		33,523
Amortization of loan costs	2,571		2,989
Provision for expected credit losses	9,023		4,273
Provision for deferred income taxes	5,681		6,090
(Gains) losses on divestitures and impairment charges, net	(5,282)		13,701
Share-based compensation	7,044		8,013
Change in assets and liabilities, net of effects from acquisitions and dispositions:
Decrease (increase) in receivables	2,781		(11,608)
Increase in other assets	(18,232)		(18,643)
Increase (decrease) in payables and other liabilities	41,936		(55,148)
Effect of preneed sales production and maturities:
Increase in preneed receivables, net and trust investments	(16,520)		(1,594)
Increase in deferred revenue, net	39,374		55,441
Decrease in deferred receipts held in trust	(12,360)		(21,346)
Net cash provided by operating activities	364,302		262,893
Cash flows from investing activities:
Capital expenditures	(104,828)		(112,714)
Business acquisitions, net of cash acquired	(26,271)		(21,418)
Real estate acquisitions	(32,766)		(11,337)
Proceeds from divestitures and sales of property and equipment	12,136		11,380
Payments for Company-owned life insurance policies	(3,848)		(8,586)
Proceeds from Company-owned life insurance policies and other	3,519		—
Net cash used in investing activities	(152,058)		(142,675)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	190,000		854,263
Debt issuance costs	—		(15,536)
Scheduled payments of debt	(16,455)		(8,712)
Early payments of debt	(95,897)		(828,121)
Principal payments on finance leases	(20,453)		(21,807)
Proceeds from exercise of stock options	15,126		23,101
Purchase of Company common stock	(210,568)		(29,574)
Payments of dividends	(68,133)		(65,691)
Bank overdrafts and other	6,686		12,307
Net cash used in financing activities	(199,694)		(79,770)
Effect of foreign currency	(4,575)		3,113
Net increase in cash, cash equivalents, and restricted cash	7,975		43,561
Cash, cash equivalents, and restricted cash at beginning of period	242,620		207,584
Cash, cash equivalents, and restricted cash at end of period	$	250,595	$	251,145

(See notes to unaudited condensed consolidated financial statements)

8 Service Corporation International

PART I

Service Corporation International

Condensed Consolidated Statement of Equity (Unaudited)

	Common Stock		Treasury Stock, Par Value		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Deficit)		Noncontrolling Interest		Total
	(In thousands, except per share amounts)
Balance at December 31, 2018	$	184,721	$	(3,250)	$	972,710	$	474,327	$	13,395	$	(88)	$	1,641,815
Comprehensive income	—		—		—		79,323		7,251		40		86,614
Dividends declared on common stock ($0.18 per share)	—		—		—		(32,820)		—		—		(32,820)
Stock option exercises	950		—		15,012		—		—		—		15,962
Restricted stock awards, net of forfeitures	126		—		(126)		—		—		—		—
Employee share-based compensation earned	—		—		4,568		—		—		—		4,568
Purchase of Company common stock	—		(355)		(1,935)		(12,252)		—		—		(14,542)
Other	59		—		(1,251)		—		—		—		(1,192)
Balance at March 31, 2019	$	185,856	$	(3,605)	$	988,978	$	508,578	$	20,646	$	(48)	$	1,700,405
Comprehensive income	—		—		—		72,329		7,146		36		79,511
Dividends declared on common stock ($0.18 per share)	—		—		—		(32,871)		—		—		(32,871)
Stock option exercises	513		—		6,626		—		—		—		7,139
Employee share-based compensation earned	—		—		3,445		—		—		—		3,445
Purchase of Company common stock	—		(337)		(1,832)		(12,863)		—		—		(15,032)
Other	42		—		1,577		—		—		—		1,619
Balance at June 30, 2019	$	186,411	$	(3,942)	$	998,794	$	535,173	$	27,792	$	(12)	$	1,744,216

FORM 10-Q 9

PART I

Service Corporation International

Condensed Consolidated Statement of Equity (Unaudited)

	Common Stock		Treasury Stock, Par Value		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Deficit)		Noncontrolling Interest		Total
	(In thousands, except per share amounts)
Balance at December 31, 2019	$	185,101	$	(3,916)	$	1,010,361	$	601,903	$	29,864	$	(58)	$	1,823,255
Cumulative effect of accounting changes	—		—		—		17,118		—		—		17,118
Comprehensive income	—		—		—		81,941		(31,200)		58		50,799
Dividends declared on common stock ($0.19 per share)	—		—		—		(34,414)		—		—		(34,414)
Stock option exercises	789		—		14,337		—		—		—		15,126
Restricted stock awards and units, net of forfeitures	168		—		(168)		—		—		—		—
Employee share-based compensation earned	—		—		3,406		—		—		—		3,406
Purchase of Company common stock	—		(2,901)		(16,202)		(103,999)		—		—		(123,102)
Other	—		—		(1,095)		—		—		—		(1,095)
Balance at March 31, 2020	$	186,058	$	(6,817)	$	1,010,639	$	562,549	$	(1,336)	$	—	$	1,751,093
Cumulative effect of accounting changes	—		—		—		(129)		—		—		(129)
Comprehensive income	—		—		—		105,508		13,736		47		119,291
Dividends declared on common stock ($0.19 per share)	—		—		—		(33,719)		—		—		(33,719)
Employee share-based compensation earned	—		—		3,638		—		—		—		3,638
Purchase of Company common stock	—		(2,277)		(12,862)		(72,327)		—		—		(87,466)
Other	47		—		1,573		—		—		—		1,620
Balance at June 30, 2020	$	186,105	$	(9,094)	$	1,002,988	$	561,882	$	12,400	$	47	$	1,754,328

(See notes to unaudited condensed consolidated financial statements)

10 Service Corporation International

PART I

Service Corporation International

Notes to Unaudited Condensed Consolidated Financial Statements

1. Nature of Operations

We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries operating in the United States and Canada. Our funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other related businesses, which enable us to serve a wide array of customer needs. We sell cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis.

Funeral service locations provide all professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles, arranging and directing services, removal, preparation, embalming, cremations, memorialization, travel protection, and catering. Funeral merchandise, including burial caskets and related accessories, urns and other cremation receptacles, outer burial containers, flowers, online and video tributes, stationery products, casket and cremation memorialization products, and other ancillary merchandise, is sold at funeral service locations.

Our cemeteries provide cemetery property interment rights, including developed lots, lawn crypts, mausoleum spaces, niches, and other cremation memorialization and interment options. Cemetery merchandise and services, including memorial markers and bases, outer burial containers, flowers and floral placement, other ancillary merchandise, graveside services, merchandise installation, and interments, are sold at our cemeteries.

2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

Our consolidated financial statements include the accounts of Service Corporation International (SCI) and all subsidiaries in which we hold a controlling financial interest. Intercompany balances and transactions have been eliminated in consolidation.

Our unaudited condensed consolidated financial statements also include the accounts of the merchandise and service trusts and cemetery perpetual care trusts in which we have a variable interest and are the primary beneficiary. We have retained the specialized industry accounting principles when consolidating the trusts. Our trusts are variable interest entities, for which we have determined that we are the primary beneficiary as we absorb a majority of the losses and returns associated with these trusts. Although we consolidate the trusts, it does not change the legal relationships among the trusts, us, or our customers. The customers are the legal beneficiaries of these trusts; therefore, their interests in these trusts represent a liability to us.

Our interim condensed consolidated financial statements are unaudited but include all adjustments, consisting of normal recurring accruals and any other adjustments, which management considers necessary for a fair statement of our results for these periods. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2019, unless otherwise disclosed herein, and should be read in conjunction therewith. The accompanying year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period.

Reclassifications to Prior Period Financial Statements and Adjustments

Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation with no effect on our previously reported results of operations, consolidated financial position, or cash flows, except as described below under "Accounting Standards Adopted in 2020".

Use of Estimates in the Preparation of Financial Statements

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. As a result, actual results could differ from these estimates.

FORM 10-Q 11

PART I

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. The carrying amounts of our cash and cash equivalents approximate fair value due to the short-term nature of these instruments.

The components of cash, cash equivalents, and restricted cash were as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Cash and cash equivalents	$	222,234	$	186,276
Restricted cash (1)
Included in Other current assets	26,309		54,293
Included in Deferred charges and other assets, net	2,052		2,051
Total restricted cash	28,361		56,344
Total cash, cash equivalents, and restricted cash	$	250,595	$	242,620

⁽¹⁾ Restricted cash in both periods primarily consists of proceeds from divestitures deposited into escrow accounts under IRS code section 1031 and collateralized obligations under certain insurance policies.

Receivables, net

The components of Receivables, net in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	39,208	$	22,051	$	19,856	$	1,854	$	82,969
Reserve for credit losses	(3,573)		(1,560)		(296)		(577)		(6,006)
Receivables, net	$	35,635	$	20,491	$	19,560	$	1,277	$	76,963

	December 31, 2019
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	41,370	$	20,855	$	19,943	$	1,765	$	83,933
Allowance for doubtful accounts	(1,899)		(363)		—		—		(2,262)
Receivables, net	$	39,471	$	20,492	$	19,943	$	1,765	$	81,671

Additionally, included in Deferred charges and other assets, net were long-term miscellaneous receivables, net and notes receivable, net as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Notes receivable	$	13,421	$	14,997
Reserve for credit losses	(7,295)		—
Allowance for doubtful accounts	—		(8,374)
Notes receivable, net	$	6,126	$	6,623
Long-term miscellaneous receivables	$	6,249	$	7,287
Reserve for credit losses	(950)		—
Long-term miscellaneous receivables, net	$	5,299	$	7,287

12 Service Corporation International

PART I

Our atneed trade receivables primarily consist of amounts due for funeral and cemetery services already performed. We provide reserves for credit losses for our receivables. These reserves are based on an analysis of historical trends of collection activity adjusted for current conditions and forecasts. These estimates are impacted by a number of factors, including changes in the economy and demographic or competitive changes in our areas of operation. In the six months ended June 30, 2020, we increased our reserve for credit losses on trade and miscellaneous receivables as a result of the economic impact of the COVID-19 pandemic (COVID-19). Cemetery preneed receivables are collateralized by cemetery property to the extent of the fair value of the property. Prior to adoption of the guidance on credit losses for financial instruments on January 1, 2020, we provided allowances for doubtful accounts on our receivables based on an analysis of historical trends of collection activity.

Payment on atneed contracts is generally due at the time the merchandise is delivered or the services are performed. We also have preneed receivables, as disclosed in Note 3, for which payment generally occurs prior to our fulfillment of the performance obligations. Our preneed contracts may also have extended payment terms with associated financing charges. We do not accrue interest on preneed receivables if they are not paid in accordance with the contractual payment terms given the nature of our merchandise and services, the nature of our contracts with customers, and the timing of the delivery of our services. Generally, receivables are considered past due after thirty days. We do not consider preneed funeral receivables to be past due until the contract converts into an atneed contract at which time the preneed receivable is paid or reclassified as a trade receivable with payment terms of less than thirty days. Collections are generally managed by the locations or third party agencies acting on behalf of the locations, until a receivable is one hundred eighty days delinquent, at which time trade receivables are fully reserved.

The following table summarizes the activity in our reserve for credit losses by portfolio segment, excluding preneed receivables which are presented in Note 3, for the six months ended June 30, 2020:

	January 1, 2020		Provision for Expected Credit Losses		Write Offs		Recoveries		Effect of Foreign Currency		June 30, 2020
	(In thousands)
Trade receivables:
Funeral	$	(2,690)	$	(2,698)	$	2,644	$	(935)	$	106	$	(3,573)
Cemetery	(1,424)		(776)		615		(42)		67		(1,560)
Total reserve for credit losses on trade receivables	$	(4,114)	$	(3,474)	$	3,259	$	(977)	$	173	$	(5,133)
Miscellaneous receivables:
Current	$	(203)	$	(118)	$	—	$	—	$	25	$	(296)
Long-term	(715)		(235)		—		—		—		(950)
Total reserve for credit losses on miscellaneous receivables	$	(918)	$	(353)	$	—	$	—	$	25	$	(1,246)
Notes receivable	$	(9,031)	$	79	$	1,080	$	—	$	—	$	(7,872)

At June 30, 2020, the amortized cost basis of our miscellaneous and notes receivables by year of origination was as follows:

	2020		2019		2018		2017		2016		Prior		Revolving Line of Credit		Total
	(In thousands)
Miscellaneous receivables:
Current	$	18,023	$	1,227	$	386	$	160	$	55	$	5	$	—	$	19,856
Long-term	1,221		2,718		1,400		663		226		21		—		6,249
Total miscellaneous receivables	$	19,244	$	3,945	$	1,786	$	823	$	281	$	26	$	—	$	26,105
Notes receivable	$	—	$	—	$	235	$	—	$	98	$	6,648	$	8,294	$	15,275

FORM 10-Q 13

PART I

At June 30, 2020, the payment status of our miscellaneous and notes receivables was as follows:

	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Miscellaneous receivables:
Current	$	84	$	28	$	—	$	2	$	114	$	19,742	$	19,856
Long-term	—		—		—		—		—		6,249		6,249
Total miscellaneous receivables	$	84	$	28	$	—	$	2	$	114	$	25,991	$	26,105
Notes receivable	$	1	$	2	$	2	$	1,127	$	1,132	$	14,143	$	15,275

Funeral and Cemetery Operations

Revenue is recognized when control of the merchandise or services is transferred to the customer. Our performance obligations include the delivery of funeral and cemetery merchandise and services and cemetery property interment rights. Control transfers when merchandise is delivered or services are performed. For cemetery property interment rights, control transfers to the customer when the property is developed and the interment right has been sold and can no longer be marketed or sold to another customer. Sales taxes collected are recognized on a net basis in our consolidated financial statements.

On our atneed contracts, we generally deliver the merchandise and perform the services at the time of need. Due to limitations on gatherings imposed to mitigate the spread of COVID-19, some customers have requested that we delay the memorial service until after the limitations are over. For these customers, we defer the revenue for the memorial service until it is performed. Memorial services frequently include promises to direct the service, provide facilities and motor vehicles, catering, flowers, and stationery products. All other promises on these contracts, including arrangement, removal, preparation, embalming, cremation, interment, and delivery of urns and caskets and related memorialization merchandise are fulfilled at the time of need. Personalized marker merchandise and marker installation services sold on atneed contracts are recognized when control is transferred to the customer, generally when the marker is delivered and installed in the cemetery.

Goodwill and Intangible Assets

In addition to our annual review, we assess the impairment of goodwill and indefinite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value may be greater than the fair value. Factors that could trigger an interim impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. As a result of the challenging economic conditions caused by the response to COVID-19, at June 30, 2020, we performed a qualitative assessment of our goodwill. Based on the qualitative assessment, we believe that it is more likely than not that the fair value of the goodwill reporting units exceeds their carrying value and no quantitative assessment of impairment is necessary at June 30, 2020.

During the six months ended June 30, 2020, we performed a quantitative assessment on certain of our tradenames. We recorded a $3.0 million impairment charge for certain of our tradenames during the first quarter of 2020. In determining the fair value of the tradenames, we used the relief from royalty method whereby we determine the fair value of the assets by discounting the cash flows that represent a savings over having to pay a royalty fee for use of the tradenames. The discounted cash flow valuation uses projections of future cash flows and includes assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows. For our first quarter of 2020 test, we estimated that the pre-tax savings would range from 2.0% to 5.0% of the revenue associated with the trademark and tradenames, based primarily on our research of intellectual property valuation and licensing databases. We also assumed a terminal growth rate of 1.0% and 2.4% for our funeral and cemetery tradenames, respectively, and discounted the cash flows at a 6.95% discount rate based on the relative risk of these assets to the overall business.

Leases

We have 61 operating leases where we are the lessor and the non-cancelable term is greater than one year, resulting in $0.7 million and $1.3 million in lease income for the three and six months ended June 30, 2020, respectively. We determine whether an arrangement is or contains a lease at the inception of the arrangement based on the terms of the arrangement. We lease retail space, office space and land, and we are party to cellular agreements and land easements. The underlying assets of these lease agreements are buildings and land. We generally do not have sales-type leases, direct financing leases, or lease receivables. Certain of our agreements include variable rental income based on a percentage of sales over base contractual levels. Renewal options that can be cancelled by the lessees are not included in our disclosure of future lease income, which includes only the non-cancelable terms and fixed escalation provisions. Certain lease arrangements contain options to purchase the

14 Service Corporation International

PART I

property at fair value at the conclusion of the lease term. Non-lease components are excluded from rental income disclosures. Future undiscounted lease income from operating leases as of June 30, 2020 was as follows (in thousands):

2020 (excluding the six months ended June 30, 2020)	$	1,833
2021	3,626
2022	3,225
2023	2,537
2024	2,163
2025 and thereafter	16,806
Total future undiscounted lease income	$	30,190

Accounting Standards Adopted in 2020

Financial Instruments - Credit Losses

In June 2016, the FASB issued "Financial Instruments - Credit Losses" to provide financial statement users with more decision-useful information about the expected credit losses on debt instruments and other commitments to extend credit held by a reporting entity at each reporting date. During November 2018 and April 2019, the FASB made amendments to the new standard that clarified guidance on several matters, including accrued interest, recoveries, and various codification improvements. The new standard, as amended, replaces the incurred loss impairment methodology in the previous standard with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates.

We adopted the new guidance as of January 1, 2020, applying a modified retrospective approach to credit loss reserves on our atneed, preneed, miscellaneous, and notes receivable and a prospective approach for credit loss reserves on our fixed income investments. As a result of the adoption, we recorded a $17.0 million increase to Retained earnings, which comprises a $26.4 million and a $5.8 million increase in Preneed receivables, net and trust investments and Deferred tax liability, respectively, and a $2.7 million and a $0.9 million decrease to Receivables, net and Deferred charges and other assets, net, respectively. The increase in Preneed receivables, net and trust investments is primarily the result of reducing the reserve for receivables that are collateralized by cemetery property down to the amount at which the amortized cost basis of the receivable exceeds the fair value of the property less costs to resell.

Goodwill

In January 2017, the FASB amended "Goodwill" to simplify the subsequent measurement of goodwill. The amended

guidance eliminates Step 2 from the goodwill impairment test. Instead, impairment is defined as the amount by which the carrying value of the reporting unit exceeds its fair value, up to the total amount of goodwill of the reporting unit. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

Fair Value Measurements

In August 2018, the FASB amended "Fair Value Measurements" to modify the disclosure requirements related to fair value. The amendment removes requirements to disclose (1) the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy, (2) our policy related to the timing of transfers between levels, and (3) the valuation processes used in level 3 measurements. It clarifies that, for investments measured at net asset value, disclosure of liquidation timing is only required if the investee has communicated the timing either to us or publicly. It also clarifies that the narrative disclosure of the effect of changes in level 3 inputs should be based on changes that could occur at the reporting date. The amendment adds a requirement to disclose the range and weighted average of the significant unobservable inputs used in level 3 measurements. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

Recently Issued Accounting Standards

Compensation - Retirement Benefits

In August 2018, the FASB amended "Compensation - Retirement Benefits" to modify the disclosure requirements for defined benefit plans. For us, the amendment requires the disclosure of the weighted average interest crediting rate used for cash balance plans and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. It removes the requirement to disclose the approximate amount of future benefits covered by insurance contracts. The guidance is effective for us with our annual filing for the year ended December 31, 2020, and we will make the required disclosure changes in that filing. Adoption will not have an impact on our consolidated results of operations, consolidated financial position, and cash flows.

FORM 10-Q 15

PART I

Reference Rate Reform

In March 2020, the FASB issued "Reference Rate Reform" to provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We currently have no hedging relationships and are evaluating our contracts and the optional expedients provided by the new standard.

3. Preneed Activities

Preneed receivables, net and trust investments

The components of Preneed receivables, net and trust investments in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Preneed receivables, net	$	977,021	$	947,232
Trust investments, at market	4,993,442		5,258,319
Insurance-backed fixed income securities and other	251,836		265,160
Trust investments	5,245,278		5,523,479
Less: Cemetery perpetual care trust investments	(1,599,599)		(1,681,149)
Preneed trust investments	3,645,679		3,842,330
Preneed receivables, net and trust investments	$	4,622,700	$	4,789,562

Preneed receivables, net comprised the following:

	June 30, 2020
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	136,880	$	900,938	$	1,037,818
Unearned finance charges	(15,583)		(26,937)		(42,520)
Preneed receivables, at amortized cost	121,297		874,001		995,298
Reserve for credit losses	(10,350)		(7,927)		(18,277)
Preneed receivables, net	$	110,947	$	866,074	$	977,021
	December 31, 2019
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	130,971	$	907,973	$	1,038,944
Unearned finance charges	(16,328)		(34,242)		(50,570)
Preneed receivables, at amortized cost	114,643		873,731		988,374
Allowance for cancellation	(1,452)		(39,690)		(41,142)
Preneed receivables, net	$	113,191	$	834,041	$	947,232

16 Service Corporation International

PART I

At June 30, 2020, the amortized cost basis of our preneed receivables by year of origination was as follows:

	2020		2019		2018		2017		2016		Prior		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	32,928	$	47,157	$	18,298	$	9,076	$	3,685	$	10,153	$	121,297
Cemetery	182,018		287,452		188,393		116,902		60,871		38,365		874,001
Total preneed receivables, at amortized cost	$	214,946	$	334,609	$	206,691	$	125,978	$	64,556	$	48,518	$	995,298

At June 30, 2020, the payment status of our preneed receivables was as follows:

	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	3,835	$	2,233	$	1,331	$	14,790	$	22,189	$	99,108	$	121,297
Cemetery	23,097		22,616		11,191		2,590		59,494		814,507		874,001
Total preneed receivables, at amortized cost	$	26,932	$	24,849	$	12,522	$	17,380	$	81,683	$	913,615	$	995,298

The following table summarizes the activity for the reserve for credit losses on preneed receivables for the six months ended June 30, 2020:

	January 1, 2020		Provision for Expected Credit Losses		Acquisitions (Divestitures), Net		Write Offs		Effect of Foreign Currency		June 30, 2020
	(In thousands)
Funeral	$	(8,057)	$	(3,777)	$	13	$	1,452	$	19	$	(10,350)
Cemetery	(6,700)		(1,498)		—		250		21		(7,927)
Total reserve for credit losses on preneed receivables	$	(14,757)	$	(5,275)	$	13	$	1,702	$	40	$	(18,277)

The table below sets forth certain investment-related activities associated with our trusts:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Deposits	$	98,341	$	112,905	$	203,894	$	213,357
Withdrawals	$	99,264	$	116,680	$	213,856	$	224,036
Purchases of securities	$	456,639	$	240,376	$	905,291	$	689,534
Sales of securities	$	441,743	$	240,599	$	793,569	$	562,390
Realized gains from sales of securities(1)	$	92,435	$	54,756	$	144,592	$	98,281
Realized losses from sales of securities(1)	$	(61,756)	$	(16,251)	$	(147,158)	$	(48,882)

⁽¹⁾All realized gains and losses are recognized in Other income (expense), net for our trust investments and are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts’ corpus.

FORM 10-Q 17

PART I

The cost and market values associated with trust investments recorded at market value are detailed below. Cost reflects the investment (net of redemptions) of control holders in the trusts. Fair value represents the value of the underlying securities held by the trusts.

		June 30, 2020
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	48,249	$	1,923	$	(249)	$	49,923
Canadian government	2	38,056		58		(727)		37,387
Corporate	2	2,351		6		(81)		2,276
Residential mortgage-backed	2	3,254		168		—		3,422
Asset-backed	2	128		3		(5)		126
Equity securities:
Preferred stock	2	386		—		(35)		351
Common stock:
United States	1	1,368,878		284,456		(118,350)		1,534,984
Canada	1	35,890		7,793		(3,547)		40,136
Other international	1	87,167		19,230		(3,647)		102,750
Mutual funds:
Equity	1	812,202		13,840		(140,573)		685,469
Fixed income	1	1,292,673		23,609		(106,397)		1,209,885
Other	3	391		33		(1)		423
Trust investments, at fair value		3,689,625		351,119		(373,612)		3,667,132
Commingled funds
Fixed income		468,268		15,647		(2,247)		481,668
Equity		261,895		33,768		(243)		295,420
Money market funds		298,674		—		—		298,674
Private equity		211,805		49,716		(10,973)		250,548
Trust investments, at net asset value		1,240,642		99,131		(13,463)		1,326,310
Trust investments, at market		$	4,930,267	$	450,250	$	(387,075)	$	4,993,442

18 Service Corporation International

PART I

		December 31, 2019
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	49,728	$	752	$	(130)	$	50,350
Canadian government	2	41,093		76		(850)		40,319
Corporate	2	9,694		28		(172)		9,550
Residential mortgage-backed	2	3,210		59		(1)		3,268
Asset-backed	2	129		3		(4)		128
Equity securities:
Preferred stock	2	6,338		804		(115)		7,027
Common stock:
United States	1	1,349,828		303,766		(36,507)		1,617,087
Canada	1	43,866		12,369		(2,075)		54,160
Other international	1	95,257		18,227		(522)		112,962
Mutual funds:
Equity	1	746,581		31,511		(54,020)		724,072
Fixed income	1	1,247,930		16,424		(32,587)		1,231,767
Other	3	7,034		1,184		—		8,218
Trust investments, at fair value		3,600,688		385,203		(126,983)		3,858,908
Commingled funds
Fixed income		444,744		5,077		(1,731)		448,090
Equity		249,980		47,631		—		297,611
Money market funds		397,461		—		—		397,461
Private equity		176,388		80,283		(422)		256,249
Trust investments, at net asset value		1,268,573		132,991		(2,153)		1,399,411
Trust investments, at market		$	4,869,261	$	518,194	$	(129,136)	$	5,258,319

Our private equity investments include several funds that invest in limited partnerships, distressed debt, real estate, and mezzanine financing. These investments can never be redeemed by the funds. Instead, due to the nature of the investments in this category, distributions are received through the liquidation of the underlying assets of the funds. The funds' managers have not communicated the timing of any liquidations.

The change in our market-based trust investments with significant unobservable inputs (Level 3) is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Fair value, beginning balance	$	418	$	7,108	$	8,218	$	9,755
Net realized and unrealized gains (losses) included in Other income (expense), net(1)	717		(322)		(257)		(1,464)
Purchases	4,559		5		4,569		5
Sales	(5,271)		(203)		(5,296)		(1,708)
Transfers	—		—		(6,811)		—
Fair value, ending balance	$	423	$	6,588	$	423	$	6,588

⁽¹⁾All net realized and unrealized gains (losses) recognized in Other income (expense), net for our trust investments are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.

FORM 10-Q 19

PART I

Maturity dates of our fixed income securities range from 2020 to 2040. Maturities of fixed income securities (excluding mutual funds) at June 30, 2020 are estimated as follows:

	Fair Value
	(In thousands)
Due in one year or less	$	57,496
Due in one to five years	26,054
Due in five to ten years	9,494
Thereafter	90
Total estimated maturities of fixed income securities	$	93,134

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $27.0 million and $29.6 million, for the three months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $17.3 million and $17.5 million for the three months ended June 30, 2020 and 2019, respectively.

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $59.2 million and $57.2 million, for the six months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $36.8 million and $37.9 million for the six months ended June 30, 2020 and 2019, respectively.

Our fixed income investment unrealized losses, their associated fair values, and the duration of unrealized losses are shown in the following tables:

	June 30, 2020
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	1,201	$	(3)	$	1,243	$	(246)	$	2,444	$	(249)
Canadian government	—		—		11,973		(727)		11,973		(727)
Corporate	54		(2)		2,235		(79)		2,289		(81)
Asset-backed	—		—		25		(5)		25		(5)
Total fixed income securities with an unrealized loss	$	1,255	$	(5)	$	15,476	$	(1,057)	$	16,731	$	(1,062)

	December 31, 2019
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	3,023	$	(36)	$	1,947	$	(94)	$	4,970	$	(130)
Canadian government	—		—		13,804		(850)		13,804		(850)
Corporate	30		—		4,826		(172)		4,856		(172)
Residential mortgage-backed	—		—		51		(1)		51		(1)
Asset-backed	—		—		28		(4)		28		(4)
Total fixed income securities with an unrealized loss	$	3,053	$	(36)	$	20,656	$	(1,121)	$	23,709	$	(1,157)

20 Service Corporation International

PART I

Deferred revenue, net

Deferred revenue, net represents future revenue, including distributed trust investment earnings associated with unperformed trust-funded preneed contracts that are not held in trust accounts. Future revenue and net trust investment earnings that are held in trust accounts are included in Deferred receipts held in trust.

The components of Deferred revenue, net in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Deferred revenue	$	2,090,129	$	2,046,000
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	(596,023)		(578,897)
Deferred revenue, net	$	1,494,106	$	1,467,103

The following table summarizes the activity for our contract liabilities, which are reflected in Deferred revenue, net and Deferred receipts held in trust:

	Six Months Ended June 30,
	2020		2019
	(In thousands)
Beginning balance — Deferred revenue, net and Deferred receipts held in trust	$	5,306,479	$	4,790,552
Net preneed contract sales	496,467		496,842
Acquisitions (dispositions) of businesses, net	12,777		(29,665)
Net investment (losses) gains(1)	(189,474)		327,819
Recognized revenue from backlog(2)	(226,663)		(212,912)
Recognized revenue from current period sales	(237,296)		(241,589)
Change in amounts due on unfulfilled performance obligations	(18,151)		(3,770)
Change in cancellation reserve	1,070		(206)
Effect of foreign currency and other	(6,891)		10,848
Ending balance — Deferred revenue, net and Deferred receipts held in trust	$	5,138,318	$	5,137,919

⁽¹⁾Includes both realized and unrealized investment (losses) gains.

⁽²⁾Includes current year trust fund income through the date of performance.

4. Income Taxes

Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete

items, which are recorded in the period in which they occur. Discrete items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or

decreases in valuation allowances on deferred tax assets. Our effective tax rate was 25.5% and 24.5% for the three months ended June 30, 2020 and 2019, respectively. Our effective tax rate was 24.3% and 22.7% for the six months ended June 30, 2020 and 2019, respectively. The effective tax rate for the three and six months ended June 30, 2020 is above the 21.0% federal statutory tax rate primarily due to state tax expense, partially offset by tax benefits recognized on the settlement of employee share-based awards.

Unrecognized Tax Benefits

As of June 30, 2020, the total amount of our unrecognized tax benefits was $1.3 million and the total amount of our

accrued interest was $0.7 million.

The federal statutes of limitation have expired for all tax years prior to 2016, and we are not currently under audit by the IRS. Various state jurisdictions are auditing years 2013 through 2017. There are currently no federal or provincial audits in Canada; however, years subsequent to 2015 remain open and could be subject to examination. It is reasonably possible that the amount of unrecognized tax benefits may change within the next twelve months. However, given the number of years that remain subject to examination and the number of matters being examined, an estimate of the range of the possible increase or decrease cannot be made.

FORM 10-Q 21

PART I

5. Debt

The components of Debt are:

	June 30, 2020		December 31, 2019
	(In thousands)
8.0% Senior Notes due November 2021	$	150,000	$	150,000
5.375% Senior Notes due May 2024	850,000		850,000
7.5% Senior Notes due April 2027	152,710		153,465
4.625% Senior Notes due December 2027	550,000		550,000
5.125% Senior Notes due June 2029	750,000		750,000
Term Loan due May 2024	617,500		633,750
Bank Credit Facility due May 2024	390,000		295,000
Obligations under finance leases	175,618		185,252
Mortgage notes and other debt, maturities through 2050	52,370		45,104
Unamortized premiums and discounts, net	5,155		5,634
Unamortized debt issuance costs	(32,377)		(34,854)
Total debt	3,660,976		3,583,351
Less: Current maturities of long-term debt	(87,267)		(69,821)
Total long-term debt	$	3,573,709	$	3,513,530

Current maturities of debt at June 30, 2020 include amounts due under our term loan, mortgage notes and other debt, and finance leases within the next year as well as the portion of unamortized premiums and discounts and debt issuance costs expected to be recognized in the next twelve months.

Our consolidated debt had a weighted average interest rate of 4.22% and 4.72% at June 30, 2020 and December 31, 2019, respectively. Approximately 68% and 69% of our total debt had a fixed interest rate at June 30, 2020 and December 31, 2019, respectively.

During the six months ended June 30, 2020 and 2019, we paid $83.9 million and $97.3 million in cash interest, respectively.

Bank Credit Facility

As of June 30, 2020, we had $390.0 million outstanding borrowings under our Bank Credit Facility due May 2024, $617.5 million of outstanding borrowings under our Term Loan due May 2024, and $34.0 million of letters of credit issued. The Bank Credit Facility provides us with flexibility for working capital, if needed, and is guaranteed by a majority of our domestic subsidiaries. The subsidiary guaranty is a guaranty of payment of the outstanding amount of the total lending commitment, including letters of credit. The bank credit agreement contains certain financial covenants, including a minimum interest coverage ratio, a maximum leverage ratio, and certain dividend and share repurchase restrictions. As of June 30, 2020, we were in compliance with all of our debt covenants. We pay a quarterly fee on the unused commitment, which was 0.20% at June 30, 2020. As of June 30, 2020, we have $576.0 million in borrowing capacity under the Bank Credit Facility.

Subsequent to June 30, 2020, we increased our outstanding borrowings by $20.0 million to $410.0 million under our Bank Credit Facility due May 2024.

Debt Issuances and Additions

During the six months ended June 30, 2020, we drew $190.0 million on our Bank Credit Facility for general corporate purposes.

During the six months ended June 30, 2019, we issued or added $854.3 million of debt including:

•$750.0 million unsecured 5.125% Senior Notes due June 2029;

•$55.0 million on our Bank Credit Facility due December 2022; and

•$49.3 million in additional proceeds from certain members of the syndicate of banks in our Bank Credit Facility.

The debt proceeds were used to pay down our Bank Credit Facility due December 2022, to partially redeem our 5.375% Senior Notes due January 2022, to fund acquisition activity, and for general corporate purposes. These transactions resulted in additional debt issuance costs of $15.5 million .

22 Service Corporation International

PART I

Debt Extinguishments and Reductions

During the six months ended June 30, 2020, we made aggregate debt payments of $112.4 million for scheduled and early extinguishment payments including:

•$95.0 million in aggregate principal of our Bank Credit Facility due May 2024;

•$16.3 million in aggregate principal of our Term Loan due May 2024;

•$0.8 million in aggregate principal of 7.5% Senior Notes due April 2027 repurchased on the open market;

•$0.1 million of premiums paid on early extinguishment; and

•$0.2 million in other debt.

Certain of the above transactions resulted in the recognition of a loss of $0.2 million recorded in Losses on early extinguishment of debt, net in our unaudited Condensed Consolidated Statement of Operations for the six months ended June 30, 2020.

During the six months ended June 30, 2019, we made aggregate debt payments of $836.8 million for scheduled and early extinguishment payments including:

•$450.0 million in aggregate principal of our Bank Credit Facility due December 2022;

•$40.5 million in aggregate principal payments to other members of our Term Loan due December 2022;

•$326.1 million in aggregate principal 5.375% Senior Notes due January 2022;

•$15.7 million in aggregate principal of 7.5% Senior Notes due April 2027;

•$4.3 million of premiums paid on early extinguishment; and

•$0.2 million in other debt.

Certain of the above transactions resulted in the recognition of a loss of $7.6 million recorded in Losses on early extinguishment of debt, net in our Consolidated Statement of Operations for the six months ended June 30, 2019.

6. Credit Risk and Fair Value of Financial Instruments

Fair Value Estimates

The fair value estimates of the following financial instruments have been determined using available market information and appropriate valuation methodologies. The carrying values of cash and cash equivalents, trade receivables, and trade payables approximate the fair values of those instruments due to the short-term nature of the instruments. The carrying values of receivables on preneed funeral and cemetery contracts approximate fair value due to the large number of diverse individual contracts with varying terms.

The fair value of our debt instruments at June 30, 2020 and December 31, 2019 was as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
8.0% Senior Notes due November 2021	$	159,294	$	165,375
5.375% Senior Notes due May 2024	867,230		879,606
7.5% Notes due April 2027	174,074		188,381
4.625% Senior Notes due December 2027	573,485		577,500
5.125% Senior Notes due June 2029	806,250		798,525
Term Loan due May 2024	617,500		633,750
Bank Credit Facility due May 2024	390,000		295,000
Mortgage notes and other debt, maturities through 2050	52,370		45,104
Total fair value of debt instruments	$	3,640,203	$	3,583,241

The fair values of our long-term, fixed rate loans were estimated using market prices for those loans, and therefore they are classified within Level 2 of the fair value measurements hierarchy. The Term Loan, Bank Credit Facility, and the mortgage and other debt are classified within Level 3 of the fair value measurements hierarchy. The fair values of these instruments have been estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. An increase (decrease) in the inputs results in a directionally opposite change in the fair value of the instruments.

FORM 10-Q 23

PART II

7. Equity

(All shares reported in whole numbers)

Share Repurchase Program

Subject to market conditions, normal trading restrictions, and limitations in our debt covenants, we may make purchases in the open market or through privately negotiated transactions under our share repurchase program. During the six months ended June 30, 2020, we repurchased 5,177,807 shares of common stock at an aggregate cost of $210.6 million, which is an average cost per share of $40.67. After these repurchases, the remaining dollar value of shares authorized to be purchased under the share repurchase program was $106.2 million at June 30, 2020.

Subsequent to June 30, 2020, we repurchased 791,744 shares for $30.4 million at an average cost per share of $38.40. After these repurchases, the remaining dollar value of shares authorized to be purchased under the share repurchase program is $75.8 million.

24 Service Corporation International

PART I

8. Segment Reporting

Our operations are both product-based and geographically-based, and the reportable operating segments presented below include our funeral and cemetery operations. Our geographic areas include the United States and Canada, where we conduct both funeral and cemetery operations.

Our reportable segment information, including disaggregated revenue, was as follows and includes a reconciliation of gross profit to our consolidated income before income taxes.

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Revenue from customers:
Funeral revenue:
Atneed revenue	$	256,166	$	245,418	$	520,954	$	504,148
Matured preneed revenue	158,357		148,584		321,940		305,034
Core funeral revenue	414,523		394,002		842,894		809,182
Non-funeral home revenue	14,146		13,121		28,597		26,094
Recognized preneed revenue	27,663		39,728		60,463		71,053
Other revenue	24,615		32,127		53,889		65,443
Total funeral revenue	480,947		478,978		985,843		971,772
Cemetery revenue:
Atneed revenue	91,102		82,286		176,145		163,737
Recognized preneed property revenue	152,117		151,875		268,199		280,487
Recognized preneed merchandise and services revenue	69,844		73,570		138,508		140,609
Core cemetery revenue	313,063		307,731		582,852		584,833
Other revenue	26,025		25,863		54,305		54,179
Total cemetery revenue	339,088		333,594		637,157		639,012
Total revenue from customers	$	820,035	$	812,572	$	1,623,000	$	1,610,784
Gross profit:
Funeral gross profit	$	115,957	$	90,590	$	219,533	$	196,008
Cemetery gross profit	102,810		100,556		178,278		186,972
Gross profit from reportable segments	218,767		191,146		397,811		382,980
Corporate general and administrative expenses	(37,169)		(29,218)		(68,982)		(72,196)
Gains (losses) on divestitures and impairment charges, net	737		(11,823)		5,282		(13,701)
Operating income	182,335		150,105		334,111		297,083
Interest expense	(41,767)		(47,317)		(86,118)		(94,707)
Losses on early extinguishment of debt, net	(11)		(7,579)		(150)		(7,579)
Other income (expense), net	1,166		874		(81)		1,594
Income before income taxes	$	141,723	$	96,083	$	247,762	$	196,391

Our geographic area information was as follows:

	United States		Canada		Total
	(In thousands)
Three Months Ended June 30,
Revenue from external customers:
2020	$	781,842	$	38,193	$	820,035
2019	$	767,394	$	45,178	$	812,572
Six Months Ended June 30,
Revenue from external customers:
2020	$	1,541,114	$	81,886	$	1,623,000
2019	$	1,521,474	$	89,310	$	1,610,784

FORM 10-Q 25

PART I

9. Commitments and Contingencies

Insurance Loss Reserves

We purchase comprehensive general liability, morticians and cemetery professional liability, automobile liability, and workers’ compensation insurance coverage structured with high deductibles. The high-deductible insurance program means we are primarily self-insured for claims and associated costs and losses covered by these policies. As of June 30, 2020 and December 31, 2019, we have self-insurance reserves of $87.2 million and $84.3 million, respectively.

Litigation and Regulatory Matters

We are a party to various litigation and regulatory matters, investigations, and proceedings. Some of the more frequent routine litigations incidental to our business are based on burial practices claims and employment-related matters, including discrimination, harassment, and wage and hour laws and regulations. For each of our outstanding legal matters, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies, and the likelihood of an unfavorable outcome. We intend to vigorously defend ourselves in the matters described herein; however, if we determine that an unfavorable outcome is probable and can be reasonably estimated, we establish the necessary accruals. We hold certain insurance policies that may reduce cash outflows with respect to an adverse outcome of certain of these matters. We accrue such insurance recoveries when they become probable of being paid and can be reasonably estimated.

Wage and Hour Claims. We are named as a defendant in various lawsuits alleging violations of federal and state laws regulating wage and hour pay, including but not limited to the Fredeen lawsuit described below.

Lisa Fredeen, an aggrieved employee and on behalf of other aggrieved employees v. California Cemetery and Funeral Services, LLC, et al; Case No. BC706930; in the Superior Court of the State of California for the County of Los Angeles. This lawsuit was filed against SCI subsidiaries on May 18, 2018 and purports to be brought on behalf of the defendants' current and former non-exempt California employees during the four years preceding the filing of the complaint. This lawsuit asserts numerous claims for alleged wage and hour pay violations under the California Labor Code and the California Private Attorneys General Act. The plaintiff seeks unpaid wages, compensatory and punitive damages, civil penalties, attorneys’ fees and costs, and interest. Given the nature of this lawsuit, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Claims Regarding Acquisition of Stewart Enterprises. We are involved in the following lawsuit.

Karen Moulton, Individually and on behalf of all others similarly situated v. Stewart Enterprises, Inc., Service Corporation International and others; Case No. 2013-5636; in the Civil District Court Parish of New Orleans, Louisiana. This case was filed as a class action in June 2013 against an SCI subsidiary in connection with SCI's acquisition of Stewart Enterprises, Inc. The plaintiffs allege that SCI aided and abetted breaches of fiduciary duties by Stewart Enterprises and its board of directors in negotiating the combination of Stewart Enterprises with a subsidiary of SCI. The plaintiffs seek damages concerning the combination. We filed exceptions to the plaintiffs’ complaint that were granted in June 2014. Thus, subject to appeals, SCI will no longer be party to the suit. The case has continued against our subsidiary Stewart Enterprises and its former individual directors. However, in October 2016, the court entered a judgment dismissing all of plaintiffs’ claims. Plaintiffs have appealed the dismissal. Given the nature of this lawsuit, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Operational Claims. We are named a defendant in various lawsuits alleging operational claims, including but not limited to the State of California and Taylor lawsuits described below.

The People of the State of California v. Service Corporation International, a Texas corporation, SCI Direct, Inc. a Florida Corporation, S.E. Acquisition of California, Inc., a California corporation dba Neptune Society of Northern California, Neptune Management Corp., a California corporation, Trident Society, Inc. a California corporation, and Does 1 through 100, inclusive, Case No. RG 19045103; in the Superior Court of the State of California in and for the County of Alameda. In July 2019, we received a letter from the Attorney General, State of California, Department of Justice (“CAAG") alleging that the allocation of prices among certain of our cremation service contracts and cremation merchandise contracts, and the related preneed trust funding, violates section 7735 of the California Business and Professions Code and that provisions of these same contracts constitute false advertising and deceptive sales practices in violation of California consumer protection laws. On November 21, 2019, we filed a complaint, S.E. Combined Services of California, Inc., a California Corporation dba Neptune Society of Northern California, Neptune Management Corp. a California Corporation, and Trident Society, Inc. v. Xavier Becerra, Attorney General of the State of California, and Does 1-50, Case No. 34-2019-00269617; in the Sacramento County Superior Court seeking declaratory relief holding, in general, that our practices, methods, and documentation utilized in the sale of preneed funeral goods and services are in all respects compliant with California law. On December 2, 2019, the CAAG filed the complaint, referenced above, seeking permanent injunction from making false statements and engaging in unfair competition, a placement of funds into preneed trusts, civil penalties, customer refunds, attorneys’ fees, and costs. We believe our contracts comply with applicable laws. Given the nature of this matter, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Nancy Taylor, on behalf of herself and others similarly situated v. Service Corporation International and others, Case No. 20-cv-60709; in the United States District Court Southern District of Florida Fort Lauderdale Division. This case was filed in April 2020

26 Service Corporation International

PART I

as a Florida class action alleging that the allocation of prices among certain of our cremation service contracts and cremation merchandise contracts, and the related preneed trust funding, and the failure to disclose commissions paid and sales practices associated with the sale of third-party travel protection plans, violate the Florida Deceptive and Unfair Trade Practices Act and constitute unjust enrichment. Plaintiff seeks refunds, general, actual, compensatory and exemplary damages, civil penalties, interest, and attorney fees. Given the nature of this lawsuit, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Unclaimed Property Audit

We received notices from a third-party auditor representing the unclaimed property departments of certain states regarding preneed funeral and cemetery contracts that were not funded by the purchase and assignment of the proceeds of insurance policies. The auditor claims that we are subject to the laws of those states concerning escheatment of unclaimed funds. The auditor seeks escheatment of funds from the portion of such contracts for which it claims that we will probably not be required to provide services or merchandise in the future. No actual audits have commenced at this time. Given the nature of this matter, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Other Potential Contingencies

In October 2018, we received a letter from the Illinois Office of the Comptroller claiming that our subsidiary improperly withdrew a total of $13.6 million from perpetual care trusts covering 24 of our cemeteries in Illinois. We believe these withdrawals were entirely proper for the ongoing care of those cemeteries under Illinois law.

We intend to vigorously defend all of the above matters; however, an adverse decision in one or more of such matters could have a material effect on us, our financial condition, results of operations, and cash flows.

10. Earnings Per Share

Basic earnings per common share excludes dilution and is computed by dividing Net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other obligations to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that participated in our earnings.

A reconciliation of the numerators and denominators of basic and diluted earnings per share is presented below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands, except per share amounts)
Amounts attributable to common stockholders:
Net income — basic and diluted	$	105,508	$	72,329	$	187,449	$	151,652
Weighted average shares:
Weighted average shares — basic	177,902		182,369		179,378		182,048
Stock options	1,740		3,278		2,221		3,418
Restricted share units	24		43		40		51
Weighted average shares — diluted	$	179,666	$	185,690	$	181,639	$	185,517
Amounts attributable to common stockholders:
Earnings per share:
Basic	$	0.59	$	0.40	$	1.04	$	0.83
Diluted	$	0.59	$	0.39	$	1.03	$	0.82

FORM 10-Q 27

PART I

The computation of diluted earnings per share excludes outstanding stock options and restricted share units in certain periods in which the inclusion of such equity awards would be antidilutive to the periods presented. Total antidilutive options and restricted stock units not currently included in the computation of diluted earnings per share are as follows (in shares):

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
	(In thousands)
Antidilutive options	2,706	105	1,486	—
Antidilutive restricted share units	67	—	49	—

11. Acquisitions and Divestiture-Related Activities

Acquisitions

We spent $59.0 million and $32.8 million, for several real estate, funeral service, and cemetery locations during the six months ended June 30, 2020 and 2019, respectively.

Divestiture-Related Activities

As divestitures occur in the normal course of business, gains or losses on the sale of such locations are recognized in the unaudited Condensed Consolidated Statement of Operations line item Gains (losses) on divestitures and impairment charges, net, which comprised the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Gains (losses) on divestitures, net	$	737	$	(9,643)	$	8,366	$	(9,097)
Impairment losses	—		(2,180)		(3,084)		(4,604)
Gains (losses) on divestitures and impairment charges, net	$	737	$	(11,823)	$	5,282	$	(13,701)

28 Service Corporation International

PART I

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company

We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries unequaled in geographic scale and reach. At June 30, 2020, we operated 1,472 funeral service locations and 483 cemeteries (including 296 funeral service/cemetery combination locations), which are geographically diversified across 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. Our funeral and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other related businesses, which enable us to serve a wide array of customer needs. We sell cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis.

Our financial position is enhanced by our $11.9 billion backlog of future revenue from both trust and insurance-funded preneed sales at June 30, 2020. Preneed selling provides us with a strategic opportunity to gain future market share. We also believe it adds to the stability and predictability of our revenue and cash flows. While revenue on the majority of preneed merchandise and service sales is deferred until the time of need, sales of preneed cemetery property provide opportunities for full current revenue recognition to the extent that the property is developed and available for use.

We have adequate liquidity and a favorable debt maturity profile, which allow us to return capital to shareholders through share repurchases and dividends.

Factors affecting our operating results include: demographic trends in terms of population growth and average age, which impact death rates and number of deaths; establishing and maintaining leading market share positions supported by strong local heritage and relationships; effectively responding to increasing cremation trends by selling complementary services and merchandise; controlling salary and merchandise costs; and exercising pricing leverage related to our atneed revenue. The average revenue per funeral contract is influenced by the mix of traditional and cremation services because our average revenue for cremations is lower than that for traditional burials. To further enhance revenue opportunities, we continue to focus on our cremation customers' preferences and remaining relevant by developing additional memorialization merchandise and services that specifically appeal to cremation customers. We believe the presentation of these additional merchandise and services through our customer-facing technology enhances our customers' experience by reducing administrative burdens and allowing them to visualize the product offerings and services, which will help drive increases in the average revenue for a cremation in future periods.

Recent Trends

During the first half of 2020, an outbreak of a novel strain of coronavirus (COVID-19) spread worldwide and was declared a global pandemic by the World Health Organization on March 11, 2020. COVID-19 poses a threat to the health and economic well-being of our employees, customers, and vendors. Our dedicated associates on the front lines are acting as first responders and providing essential services for the well-being of our client families and communities. The operation of all our facilities is critically dependent on our employees who staff these locations. To ensure the well-being of all our employees and their families, we have provided them with detailed health and safety literature on COVID-19, such as the Center for Disease Control (the “CDC”)’s industry-specific guidelines for working with the deceased who were and may have been infected with COVID-19. In addition, we provide personal protection equipment to those employees whose positions require such equipment. We have continued to add measures to help ensure client families can safely visit our locations and celebrate the life of their loved ones. We have implemented work from home policies at our corporate offices consistent with CDC and local government guidance to reduce the risks of exposure to COVID-19, while still supporting our locations and the customers they serve.

Like most businesses world-wide, COVID-19 has impacted us financially; however, we cannot, with certainty, presently predict the scope, severity, or duration with which COVID-19 will impact our business, financial condition, results of operations, and cash flows. As recently as the middle of March 2020, sales growth was continuing to trend in line and consistent with our forecast for the first quarter of 2020 and when compared to the first quarter of 2019. However, over the last two weeks of March and through April, we saw our preneed sales activity precipitously decline as North Americans began to practice social distancing while complying with multiple state and provincial shelter-in-place orders. As local governments began to reopen in the back half of the second quarter, we saw an increase in the velocity of our preneed cemetery sales. Due to the impacts of COVID-19 and uncertainty about the duration of the effects, we took a variety of actions to preserve capital, including but not limited to, reducing the base salaries for officers from the peak of the COVID -19 effects in late April 2020 until late May when the impacts eased.

The rigorous restrictions placed on gatherings and mandated by state, provincial, and local governments have posed a unique challenge for our locations. In mid-March, we quickly implemented technology solutions, including leveraging Facebook Live, which allows extended family and friends to virtually participate in the ceremony alongside the immediate family. In addition, certain locations found other ways to include families and friends in services, including giving guests the opportunity to leave condolences on balloons that are tied to chapel chairs so families can feel connected to those unable to attend in person. We also carefully designed outdoor venues to allow guests to be present, yet remain at a safe distance and even offer customers the ability to broadcast cemetery services through radio transmitters at certain locations. Atneed funeral directors are also using virtual

FORM 10-Q 29

PART I

meeting platforms to discuss and plan service details with client families. Our preneed sales teams have continued to overcome social distancing obstacles in certain areas of the country by leveraging technology with customers who may prefer to purchase cemetery property and merchandise from the safety of their home or setting up outdoor pop-up tents to discuss pre-planning from a safe distance. Although they may face challenges to meet face-to-face, our funeral directors continue to listen, understand, suggest, and plan important details for honoring a loved one’s life.

For further discussion of our key operating metrics, see our "Cash Flow" and “Results of Operations” sections below.

Financial Condition, Liquidity, and Capital Resources

Capital Allocation Considerations

We rely on cash flow from operations as a significant source of liquidity. Our cash flow from operating activities provided $364.3 million in the first six months of 2020. As of June 30, 2020, we have $576.0 million in excess borrowing capacity under our Bank Credit Facility.

Subsequent to June 30, 2020, we increased our outstanding borrowings by $20.0 million, which decreased our borrowing capacity under our Bank Credit Facility to $556.0 million.

Our Bank Credit Facility requires us to maintain certain leverage and interest coverage ratios. As of June 30, 2020, we were in compliance with all of our debt covenants. Our financial covenant requirements and actual ratios as of June 30, 2020 are as follows:

	Per Credit Agreement	Actual
Leverage ratio	4.75 (Max)	3.79
Interest coverage ratio	3.00 (Min)	5.32

We believe we have the financial strength and flexibility to reward shareholders through share repurchases and dividends while maintaining a prudent capital structure and pursuing new opportunities for profitable growth.

We believe that our unencumbered cash on hand, future operating cash flows, and the available capacity under our bank credit agreement will give us adequate liquidity to meet our short-term needs as well as our long-term financial obligations. Due to cash balances residing in Canada and minimum operating cash requirements, a portion of our cash on hand is encumbered.

We consistently evaluate the best uses of our cash flow that will yield the highest value and return on capital. Our capital deployment strategy is prioritized as follows:

Investing in Acquisitions and Building New Funeral Service Locations. We manage our footprint by focusing on strategic acquisitions and building new funeral service locations where the expected returns are attractive and exceed our weighted average cost of capital by a meaningful margin. We target businesses with favorable customer dynamics and/or where we can achieve additional economies of scale. We continue to pursue strategic acquisitions and build new funeral service locations in areas that provide us with the potential for scale.

Paying Dividends. Our quarterly dividend rate has steadily grown from $0.025 per common share in 2005 to $0.19 per common share in 2020. We target a payout ratio of 30% to 40% of after-tax earnings excluding special items and intend to grow our cash dividend commensurate with the growth in our business. While we intend to pay regular quarterly cash dividends for the foreseeable future, all future dividends are subject to limitations in our debt covenants and final determination by our Board of Directors each quarter upon review of our financial performance.

Repurchasing Shares. Absent opportunities for strategic acquisitions, we expect to continue to repurchase shares of our common stock in the open market or through privately negotiated transactions, subject to market conditions, debt covenants, and normal trading restrictions. There can be no assurance that we will buy our common stock under our repurchase program in the future.

During the six months ended June 30, 2020, we repurchased 5,177,807 shares of common stock at an aggregate cost of $210.6 million, which is an average cost per share of $40.67. After these repurchases, the remaining dollar value of shares authorized to be purchased under the share repurchase program was $106.2 million at June 30, 2020.

Subsequent to June 30, 2020, we repurchased 791,744 shares for $30.4 million at an average cost per share of $38.40. After these repurchases, the remaining dollar value of shares authorized to be purchased under the share repurchase program is $75.8 million.

Managing Debt. We will seek to make open market debt repurchases when it is opportunistic to do so relative to other capital deployment opportunities and manage our near-term debt maturity profile. We have a relatively consistent annual cash flow stream that is generally resistant to down economic cycles. This cash flow stream and our significant liquidity are available to substantially reduce our long-term debt maturities should we choose to do so. Furthermore, our capital expenditures are generally discretionary in nature and can be managed based on the availability of operating cash flow.

30 Service Corporation International

PART I

Cash Flow

We believe our ability to generate strong operating cash flow is one of our fundamental financial strengths and provides us with substantial flexibility in meeting operating and investing needs.

Operating Activities

Net cash provided by operating activities was $364.3 million and $262.9 million for the six months ended June 30, 2020 and 2019, respectively.

Excluding $6.4 million in legal settlements in the prior period, cash flow from operations increased $95.0 million for six months ended June 30, 2020 versus the same period in 2019. The 2020 increase over 2019 comprises:

•a $47.6 million decrease in cash tax payments.

•a $29.6 million decrease in vendor and other payments.

•a $13.4 million decrease in cash interest payments,

•a $10.4 million decrease in employee compensation, and

•a $3.4 million increase in cash receipts from customers, partially offset by

•a $9.4 million decrease in General Agency (GA) and other receipts.

Investing Activities

Cash flows from investing activities used $152.1 million and $142.7 million for the six months ended June 30, 2020 and 2019, respectively. The $9.4 million increase from 2020 over 2019 is primarily due to the following:

•a $21.4 million increase in cash spent on real estate acquisitions, and

•a $4.9 million increase in cash spent on business acquisitions, partially offset by

•a $8.3 million decrease in payments for Company-owned life insurance policies, net of proceeds,

•a $7.9 million decrease in capital expenditures, primarily due to the temporary deferral of certain capital expenditures as we navigate the impact of the COVID-19 pandemic, and

•a $0.7 million increase in cash receipts from divestitures and asset sales.

Financing Activities

Financing activities used $199.7 million for the six months ended June 30, 2020 compared to using $79.8 million for the same period in 2019. The $119.9 million increase from 2020 over 2019 is primarily due to:

•a $181.0 million increase in purchase of Company common stock,

•a $8.0 million decrease in proceeds from exercises of stock options.

•a $5.6 million change in bank overdrafts and acquisition-related financing, and

•a $2.4 million increase in payments of dividends, partially offset by

•a $77.1 million decrease in debt payments, net of proceeds.

FORM 10-Q 31

PART I

Financial Assurances

In support of our operations, we have entered into arrangements with certain surety companies whereby such companies agree to issue surety bonds on our behalf as financial assurance and/or as required by existing state and local regulations. The surety bonds are used for various business purposes; however, the majority of the surety bonds issued and outstanding have been used to support our preneed sales activities. The obligations underlying these surety bonds are recorded on our Consolidated Balance Sheet as Deferred revenue, net. The breakdown of surety bonds between funeral and cemetery preneed arrangements, as well as surety bonds for other activities, is described below.

	June 30, 2020		December 31, 2019
	(In millions)
Preneed funeral	$	94.3	$	94.6
Preneed cemetery:
Merchandise and services	149.6		147.6
Pre-construction	22.2		20.3
Bonds supporting preneed funeral and cemetery obligations	266.1		262.5
Bonds supporting preneed business permits	5.5		5.5
Other bonds	19.7		19.7
Total surety bonds outstanding	$	291.3	$	287.7

When selling preneed contracts, we may post surety bonds where allowed by state law. We post the surety bonds in lieu of trusting a certain amount of funds received from the customer. The amount of the bond posted is generally determined by the total amount of the preneed contract that would otherwise be required to be trusted, in accordance with applicable state law. For the six months ended June 30, 2020 and 2019, we had $3.7 million and $12.4 million, respectively, of cash receipts from sales attributable to bonded contracts. These amounts do not consider reductions associated with taxes, obtaining costs, or other costs.

Surety bond premiums are paid annually and the bonds are automatically renewable until maturity of the underlying preneed contracts, unless we are given prior notice of cancellation. Except for cemetery pre-construction bonds (which are irrevocable), the surety companies generally have the right to cancel the surety bonds at any time with appropriate notice. In the event a surety company were to cancel the surety bond, we are required to obtain replacement surety assurance from another surety company or fund a trust for an amount generally less than the posted bond amount. Management does not expect that we will be required to fund material future amounts related to these surety bonds due to a lack of surety capacity or surety company non-performance.

Preneed Activities and Backlog of Contracts

In addition to selling our products and services to client families at the time of need, we enter into price-guaranteed preneed contracts, which provide for future funeral or cemetery merchandise and services. Because preneed funeral and cemetery merchandise or services will generally not be provided until sometime in the future, most states and provinces require that all or a portion of the funds collected from customers on preneed contracts be deposited into merchandise and service trusts until the merchandise is delivered or the service is performed. In certain situations, as described above, where permitted by state or provincial laws, we may post a surety bond as financial assurance for a certain amount of the preneed contract in lieu of placing funds into trust accounts. Alternatively, we may sell a life insurance or annuity policy from third-party insurance companies.

Insurance-Funded Preneed Contracts: Where permitted by state or provincial law, we may sell a life insurance or annuity policy from third-party insurance companies, for which we earn a commission as general sales agent for the insurance company. These general agency commissions (GA revenue) are based on a percentage per contract sold and are recognized as funeral revenue when the insurance purchase transaction between the preneed purchaser and third-party insurance provider is completed. All selling costs incurred pursuant to the sale of insurance-funded preneed contracts are expensed as incurred. We do not reflect the unfulfilled insurance-funded preneed contract amounts in our Consolidated Balance Sheet. The proceeds of the life insurance policies or annuity contracts will be reflected in funeral revenue as we perform these funerals.

32 Service Corporation International

PART I

The table below details our results of insurance-funded preneed production and maturities.

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(Dollars in millions)
Preneed insurance-funded:
Sales production(1)	$	104.9	$	149.5	$	229.9	$	285.6
Sales production (number of contracts) (1)	19,353		26,215		41,448		50,127
General agency revenue	$	27.3	$	34.2	$	59.7	$	70.2
Maturities	$	94.8	$	84.2	$	188.7	$	175.3
Maturities (number of contracts)	16,553		14,365		32,473		29,978

⁽¹⁾ Amounts are not included in our Consolidated Balance Sheet

Trust-Funded Preneed Contracts: The funds collected from customers and required by state or provincial law are deposited into trusts. We retain any funds above the amounts required to be deposited into trust accounts and use them for working capital purposes, generally to offset the selling and administrative costs of our preneed programs. Although this represents cash flow to us, the associated revenues are deferred until the merchandise is delivered or services are performed (typically at maturity). The funds in trust are then invested by professional money managers with oversight by independent trustees in accordance with state and provincial laws.

The tables below detail our results of preneed production and maturities, excluding insurance contracts are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(Dollars in millions)
Funeral:
Preneed trust-funded (including bonded):
Sales production	$	79.8	$	102.9	$	169.0	$	196.1
Sales production (number of contracts)	21,677		28,257		44,856		53,349
Maturities	$	71.6	$	72.4	$	150.0	$	145.5
Maturities (number of contracts)	19,445		18,140		39,035		36,843
Cemetery:
Sales production:
Preneed	$	265.2	$	240.5	$	459.3	$	457.2
Atneed	93.8		83.5		178.4		165.5
Total sales production	$	359.0	$	324.0	$	637.7	$	622.7
Sales production deferred to backlog:
Preneed	$	116.8	$	102.3	$	211.4	$	196.2
Atneed	67.0		61.5		129.3		122.3
Total sales production deferred to backlog	$	183.8	$	163.8	$	340.7	$	318.5
Revenue recognized from backlog:
Preneed	$	76.5	$	74.3	$	142.4	$	137.5
Atneed	63.8		59.4		125.6		119.0
Total revenue recognized from backlog	$	140.3	$	133.7	$	268.0	$	256.5

Backlog of Preneed Contracts: The following table reflects our backlog of trust-funded deferred preneed contract revenue, including amounts related to Deferred receipts held in trust at June 30, 2020 and December 31, 2019. Additionally, the table reflects our backlog of unfulfilled insurance-funded contracts (which are not included in our Consolidated Balance Sheet) at June 30, 2020 and December 31, 2019. The backlog amounts presented include amounts due from customers for undelivered performance obligations on cancelable preneed contracts to arrive at our total backlog of deferred revenue. The table does not include the backlog associated with businesses that are held for sale.

FORM 10-Q 33

PART I

The table also reflects our preneed receivables and trust investments associated with the backlog of deferred preneed contract revenue including the amounts due from customers for undelivered performance obligations on cancelable preneed contracts. We believe that the table below is meaningful because it sets forth the aggregate amount of future revenue we expect to recognize as a result of preneed sales, as well as the amount of funds associated with this revenue. Because the future revenue exceeds the assets, future revenue will exceed the cash distributions actually received from the associated trusts and future collections from the customer.

	June 30, 2020				December 31, 2019
	Fair Value		Cost		Fair Value		Cost
	(In billions)
Deferred revenue, net	$	1.49	$	1.49	$	1.47	$	1.47
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	0.60		0.60		0.58		0.58
Deferred receipts held in trust	3.64		3.58		3.84		3.54
Allowance for cancellation on trust investments	(0.25)		(0.24)		(0.27)		(0.25)
Backlog of trust-funded deferred revenue, net of estimated allowance for cancellation	5.48		5.43		5.62		5.34
Backlog of insurance-funded revenue (1)	6.44		6.44		6.37		6.37
Total backlog of deferred revenue	$	11.92	$	11.87	$	11.99	$	11.71
Preneed receivables, net and trust investments	$	4.62	$	4.56	$	4.79	$	4.49
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	0.60		0.60		0.58		0.58
Allowance for cancellation on trust investments	(0.25)		(0.24)		(0.27)		(0.25)
Assets associated with backlog of trust-funded deferred revenue, net of estimated allowance for cancellation	4.97		4.92		5.10		4.82
Insurance policies associated with insurance-funded deferred revenue (1)	6.44		6.44		6.37		6.37
Total assets associated with backlog of preneed revenue	$	11.41	$	11.36	$	11.47	$	11.19

⁽¹⁾ Amounts are not included in our Consolidated Balance Sheet.

The fair value of our trust investments was based on a combination of quoted market prices, observable inputs such as interest rates or yield curves, and appraisals. As of June 30, 2020, the difference between the backlog and asset market amounts represents $0.23 billion related to contracts for which we have posted surety bonds as financial assurance in lieu of trusting, $0.08 billion collected from customers that were not required to be deposited into trusts, and $0.20 billion in allowable cash distributions from trust assets. As of June 30, 2020, the fair value of the total backlog comprised $3.12 billion related to cemetery contracts and $8.80 billion related to funeral contracts. As of June 30, 2020, the fair value of the assets associated with the backlog of trust-funded deferred revenue comprised $2.89 billion related to cemetery contracts and $2.08 billion related to funeral contracts. As of June 30, 2020, the backlog of insurance-funded contracts of $6.44 billion is equal to the proceeds we expect to receive from the associated insurance policies.

Trust Investments

In addition to selling our products and services to client families at the time of need, we enter into price-guaranteed preneed funeral and cemetery contracts, which provide for future funeral or cemetery merchandise and services. Since preneed funeral and cemetery merchandise or services will generally not be provided until sometime in the future, most states and provinces require that all or a portion of the funds collected from customers on preneed funeral and cemetery contracts be paid into trusts and/or escrow accounts until the merchandise is delivered or the service is performed. Investment earnings associated with the trust investments are expected to mitigate the inflationary costs of providing the preneed funeral and cemetery merchandise and services in the future at the prices that were guaranteed at the time of sale. Also, we are required by state and provincial law to pay a portion of the proceeds from the preneed or atneed sale of cemetery property interment rights into perpetual care trusts. For these investments, the original corpus generally remains in the trust in perpetuity and the earnings or elected distributions are withdrawn as allowed to defray the expense to maintain the cemetery property. While many states require that net capital gains or losses be retained and added to the corpus, certain states allow the net realized capital gains and losses to be included in the earnings that are distributed. Additionally, some states allow a total return distribution that may contain elements of income, capital appreciation, and principal.

Independent trustees manage and invest the majority of the funds deposited into the funeral and cemetery merchandise and services trusts as well as the cemetery perpetual care trusts. The majority of the trustees are selected based on their respective geographic footprint and qualifications per state and provincial regulations. Most of the trustees engage the same independent investment managers. These trustees, with input from SCI's wholly-owned registered investment advisor, establish an investment

34 Service Corporation International

PART I

policy that serves as an operating document to guide the investment activities of the trusts including asset allocation and manager selection. The investments are also governed by state and provincial guidelines. All of the trusts seek to control risk and volatility through a combination of asset classes, investment styles, and a diverse mix of investment managers.

Asset allocation is based on the liability structure of each funeral, cemetery, and perpetual care trust. Based on the various criteria set forth in the investment policy, the investment advisor recommends investment managers to the trustees. The primary investment objectives for the funeral and cemetery merchandise and service trusts include 1) preserving capital within acceptable levels of volatility and risk and 2) achieving growth of principal over time sufficient to preserve and increase the purchasing power of the assets. Preneed funeral and cemetery contracts generally take several years to mature; therefore, the funds associated with these contracts are often invested through several market cycles.

Historically, the cemetery perpetual care trusts' investment objectives, in accordance with state and provincial regulations, have emphasized providing a steady stream of current investment income with some capital appreciation in order to provide for the current and future maintenance and beautification of cemetery properties. However, during 2016, SCI worked with several state legislatures to adjust laws and regulations to allow for a fixed distribution rate from cemetery perpetual care trusts' assets regardless of the level of ordinary income, similar to university endowments. As a result, beginning in 2017, a significant portion of our cemetery perpetual care trust assets were liquidated and reinvested in a more growth-oriented asset allocation with investment objectives similar to the funeral and cemetery merchandise and service trusts. As of June 30, 2020, the asset allocation is almost evenly split between income and growth orientations. We expect this asset allocation shift to enhance asset growth and provide further protection to our customers. Additionally, we expect more states to adopt total return distribution legislation in the coming years.

As of June 30, 2020, approximately 88% of our trusts were under the control and custody of three large financial institutions. The U.S. trustees primarily use four managed limited liability companies (LLCs), one for each merchandise and service trust type and two for the cemetery perpetual care trust type, each with an independent trustee as custodian. Each financial institution acting as trustee manages its allocation of trust assets in accordance with the investment policy through the purchase of the appropriate LLCs' units. For those accounts not eligible for participation in the LLCs or where a particular state's regulations contain other investment restrictions, the trustee utilizes institutional mutual funds that comply with our investment policy or with such state restrictions. The U.S. trusts include a modest allocation to alternative investments. These alternative investments are held in vehicles structured as LLCs and are managed by certain trustees. The trusts that are eligible to allocate a portion of their investments to alternative investments purchase units of the respective alternative investment LLCs.

Investment Structures

Each financial institution, acting as trustee, manages its allocation of trust assets in compliance with the investment policy primarily through the purchase of one of four managed LLCs, matched to their trust type and each with a different, independent trustee acting as custodian. The managed LLCs use the following structures for investments:

Commingled Funds. These funds allow the trusts to access, at a reduced cost, some of the same investment managers and strategies used elsewhere in the portfolios.

Mutual Funds. The trust funds employ institutional share class mutual funds where operationally or economically efficient. These mutual funds are utilized to invest in various asset classes including U.S. equities, non-U.S. equities, corporate bonds, government bonds, high yield bonds, and commodities, all of which are governed by guidelines outlined in their individual prospectuses.

Separately Managed Accounts. To reduce the costs to the investment portfolios, the trusts utilize separately managed accounts where appropriate.

Asset Classes

Fixed income investments are intended to preserve principal, provide a source of current income, and reduce overall portfolio volatility. The majority of the fixed income allocation for the trusts is invested in institutional share class mutual funds. Where the trusts have direct investments in individual fixed income securities, these are primarily in government and corporate instruments.

Canadian government fixed income securities are investments in Canadian federal and provincial government instruments. In many cases, regulatory restrictions mandate that the funds from the sales of preneed funeral and cemetery contracts sold in certain Canadian jurisdictions must be invested in these instruments.

Equity investments have historically provided long-term capital appreciation in excess of inflation. The trusts have direct investments in individual equity securities primarily in domestic equity portfolios that include large, mid, and small capitalization companies of different investment styles (i.e., growth and value). The majority of the equity allocation is managed by institutional investment managers that specialize in an objective-specific area of expertise. Our equity securities are exposed to market risk; however, we believe these securities are well-diversified. As of June 30, 2020, the largest single equity position represented less than 1% of the total securities portfolio.

Private equity fund investments serve to provide high rates of return with reduced volatility and lower correlation. These investments are typically long term in duration. These investments are diversified by strategy, sector, manager, and vintage year. The investments consist of numerous limited partnerships, including but not limited to private equity, real estate, energy,

FORM 10-Q 35

PART I

infrastructure, transportation, distressed debt, and mezzanine financing. The trustees that have oversight of their respective alternative LLCs work closely with the investment advisor in making all investment decisions.

Trust Performance

During the six months ended June 30, 2020, the Standard and Poor’s 500 Index decreased 3.1% and the Barclay’s Aggregate Index increased 6.1%. This compares to the SCI trusts that declined 3.4% during the same period. SCI trusts have a diversified allocation of approximately 54% equities, 34% fixed income securities, 7% alternative and other investments with remaining 5% available in cash.

SCI, the trustees, and the investment advisor monitor the capital markets and the trusts on an on-going basis. The trustees, with input from the investment advisor, take prudent action as needed to achieve the investment goals and objectives of the trusts.

Results of Operations — Three and Six Months Ended June 30, 2020 and 2019

Three Months Ended June 30, 2020 and 2019

Management Summary

In the second quarter of 2020, we reported consolidated net income attributable to common stockholders of $105.5 million ($0.59 per diluted share) compared to net income attributable to common stockholders in the second quarter of 2019 of $72.3 million ($0.39 per diluted share). These results were impacted by certain significant items including:

	Three Months Ended June 30,
	2020		2019
	(In millions)
Pre-tax gains (losses) on divestitures and impairment charges, net	$	0.7	$	(11.8)
Pre-tax loss on early extinguishment of debt, net	$	—	$	(7.6)
Pre-tax legal settlement	$	—	$	1.6
Tax effect from special items	$	(0.1)	$	4.2
Change in uncertain tax reserves and other	$	—	$	(1.2)

In addition to the above items, the increase over the prior year quarter can be attributed to higher funeral gross profit and lower interest expense, partially offset by higher corporate general and administrative and income taxes.

36 Service Corporation International

PART I

Funeral Results

	Three Months Ended June 30,
	2020		2019
	(Dollars in millions, except average revenue per service)
Consolidated funeral revenue	$	480.9	$	479.0
Less: revenue associated with acquisitions/new construction	10.1		1.5
Less: revenue associated with divestitures	0.1		1.3
Comparable(1) funeral revenue	470.7		476.2
Less: comparable recognized preneed revenue	27.4		39.7
Less: comparable general agency and other revenue	24.6		31.9
Adjusted comparable funeral revenue	$	418.7	$	404.6
Comparable services performed	88,492		78,511
Comparable average revenue per service(2)	$	4,732	$	5,153
Consolidated funeral gross profit	$	116.0	$	90.6
Less: gross profit (loss) associated with acquisitions/new construction	3.1		(0.3)
Less: gross loss associated with divestitures	—		(0.6)
Comparable(1) funeral gross profit	$	112.9	$	91.5

⁽¹⁾ We define comparable (or same store) operations as those funeral locations owned by us for the entire period beginning January 1, 2019 and ending June 30, 2020 .

⁽²⁾ We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding general agency revenue, recognized preneed revenue, and other revenue to avoid distorting our average of normal funeral services revenue, by the comparable number of services performed during the period. Recognized preneed revenue is preneed sales of merchandise that are delivered at the time of sale, including memorial merchandise and travel protection, net, and excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.

Funeral Revenue

Consolidated revenue from funeral operations was $480.9 million for the three months ended June 30, 2020 compared to $479.0 million for the same period in 2019. This increase is primarily attributable to the $8.6 million increase in revenue contributed by acquired and newly constructed properties offset by a $5.5 million decrease in comparable revenue as described below and the loss of $1.2 million in revenue contributed by properties that have been subsequently divested.

Comparable revenue from funeral operations was $470.7 million for the three months ended June 30, 2020 compared to $476.2 million for the same period in 2019. This $5.5 million, or 1.2%, decrease was primarily attributable to a $12.3 million decrease in recognized preneed revenue and a $7.3 million decrease in comparable general agency and other revenue as both revenue decreases resulted from lower preneed sales production. These revenue decreases were somewhat offset by a 12.7% increase in services performed during the second quarter of 2020 compared to 2019 primarily due to COVID-19 pandemic related deaths. The 12.7% increase in services performed comprised a 13.2% increase in services performed by our funeral service locations and a 9.6% increase in cremations performed by our non-funeral home channel.

Average revenue per funeral service decreased 8.2% for the three months ended June 30, 2020 compared to the same period in 2019. The social distancing effects from the pandemic resulted in fewer and smaller memorial funeral services, which negatively impacted our average revenue per funeral service. Our total comparable cremation rate increased to 58.9% in 2020 from 57.1% in 2019 as the COVID-19 pandemic created a temporary shift towards direct cremation, particularly in the first half of the quarter when there were more widespread restrictions on social distancing and gathering sizes.

Funeral Gross Profit

Consolidated funeral gross profit increased $25.4 million, or 28.0%, for the three months ended June 30, 2020 compared to 2019. This increase is primarily attributable to comparable funeral gross profit of $21.4 million, or 23.4%, as well as a $3.4 million increase in gross profit from acquired and newly constructed properties. Comparable funeral gross profit increased $21.4 million to $112.9 million and the gross profit percentage increased 480 basis points to 24.0%. Growth in our core business produced healthy incremental margins that more than offset the decline in lower margin revenue streams such as recognized preneed revenue and general agency revenue. The funeral margins were also positively impacted by purposeful cost reductions implemented in late March and early April in response to the COVID-19 pandemic.

FORM 10-Q 37

PART I

Cemetery Results

	Three Months Ended June 30,
	2020		2019
	(In millions)
Consolidated cemetery revenue	$	339.1	$	333.6
Less: revenue associated with acquisitions	0.2		0.2
Less: revenue associated with divestitures	0.1		0.4
Comparable(1) cemetery revenue	$	338.8	$	333.0
Consolidated cemetery gross profit	$	102.8	$	100.6
Less: gross profit associated with acquisitions	—		0.1
Less: gross profit associated with divestitures	—		0.1
Comparable(1) cemetery gross profit	$	102.8	$	100.4

⁽¹⁾ We define comparable (or same store) operations as those cemetery locations owned by us for the entire period beginning January 1, 2019 and ending June 30, 2020.

Cemetery Revenue

Consolidated revenue from our cemetery operations increased $5.5 million, or 1.6%, for the three months ended June 30, 2020 compared to the same period in 2019 primarily due to an increase in comparable revenue. The $5.8 million, or 1.7%, increase in comparable revenue was primarily attributable to $9.0 million, or 11.0%, increase in atneed revenue. This increase in atneed revenue was driven by an increase in services performed and was somewhat offset by a $3.5 million, or 4.8%, decrease in recognized preneed merchandise and service revenue.

Cemetery Gross Profit

Consolidated cemetery gross profit increased $2.2 million, or 2.2%, in the three months ended June 30, 2020 compared to the same period in 2019, which is primarily attributable to the increase in comparable gross profit of $2.4 million, or 2.4%. Comparable cemetery gross profit increased $2.4 million to $102.8 million, and the gross profit percentage increased 10 basis points to 30.3%, which was primarily driven by growth from the cemetery revenue increases described above as well as purposeful cost reductions implemented in late March and early April in response to COVID-19.

Other Financial Statement Items

Corporate General and Administrative Expenses

Corporate general and administrative expenses were $37.2 million for the three months ended June 30, 2020 compared to $29.2 million in 2019. The prior year quarter included a reduction in legal expenses of $1.6 million. Excluding this prior year change in legal expenses, corporate general and administrative expenses increased $6.4 million primarily related to a $3.0 million charitable contribution for community outreach efforts.

Gains (Losses) on Divestitures and Impairment Charges, Net

We recognized a $0.7 million net pre-tax gain on asset divestitures and impairments, net in the second quarter of 2020 compared to a $11.8 million pre-tax loss on asset divestitures associated with non-strategic funeral and cemetery locations in the United States and Canada.

Interest Expense

Interest expense decreased $5.6 million to $41.8 million for the three months ended June 30, 2020 primarily due to lower interest rates on our floating rate debt and other debt refinancing activities over the last twelve months.

Provision for Income Taxes

Our effective tax rate was 25.5% and 24.5% for the three months ended June 30, 2020 and 2019, respectively. The effective tax rate for the three months ended June 30, 2020 is above the 21.0% federal statutory tax rate primarily due to the impact of state income taxes, partially offset by tax benefits recognized on the settlement of employee share-based awards.

Weighted Average Shares

The diluted weighted average number of shares outstanding was 179.7 million for the three months ended June 30, 2020 compared to 185.7 million for the same period in 2019. The decrease primarily reflects the impact of shares repurchased under our share repurchase program.

FORM 10-Q 38

PART I

Six Months Ended June 30, 2020 and 2019

Management Summary

In the first six months of 2020, we reported consolidated net income attributable to common stockholders of $187.4 million ($1.03 per diluted share) compared to net income attributable to common stockholders for the same period in 2019 of $151.7 million ($0.82 per diluted share). These results were impacted by certain significant items including:

	Six Months Ended June 30,
	2020		2019
	(In millions)
Pre-tax gains (losses) on divestitures and impairment charges, net	$	5.3	$	(13.7)
Pre-tax losses on early extinguishment of debt, net	$	(0.2)	$	(7.6)
Pre-tax legal settlements	$	—	$	(6.4)
Tax effect from special items	$	(1.4)	$	6.8
Change in uncertain tax reserves and other	$	0.2	$	(1.2)

In addition to the above items, the increase over the prior year can be attributed to higher funeral gross profit and lower interest expense, which was partially offset by lower cemetery gross profit and an increase in income taxes.

Funeral Results

	Six Months Ended June 30,
	2020		2019
	(Dollars in millions, except average revenue per service)
Consolidated funeral revenue	$	985.8	$	971.8
Less: revenue associated with acquisitions/new construction	17.1		2.3
Less: revenue associated with divestitures	0.1		3.2
Comparable(1) funeral revenue	968.6		966.3
Less: comparable recognized preneed revenue	60.0		71.0
Less: comparable general agency and other revenue	53.8		65.2
Adjusted comparable funeral revenue	$	854.8	$	830.1
Comparable services performed	173,661		161,805
Comparable average revenue per service(2)	$	4,922	$	5,130
Consolidated funeral gross profit	$	219.5	$	196.0
Less: gross profit associated with acquisitions/new construction	4.0		—
Less: gross losses associated with divestitures	(0.3)		(1.2)
Comparable(1) funeral gross profit	$	215.8	$	197.2

⁽¹⁾ We define comparable (or same store) operations as those funeral locations owned by us for the entire period beginning January 1, 2019 and ending June 30, 2020 .

⁽²⁾ We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding general agency revenue, recognized preneed revenue, and other revenue to avoid distorting our average of normal funeral services revenue, by the comparable number of services performed during the period. Recognized preneed revenue is preneed sales of merchandise that are delivered at the time of sale, including memorial merchandise and travel protection, net, and excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.

Funeral Revenue

Consolidated revenue from funeral operations was $985.8 million for the six months ended June 30, 2020, compared to $971.8 million for the same period in 2019. This increase is primarily attributable to the $14.8 million increase in revenue contributed by acquired and newly constructed properties and a $2.3 million increase in comparable revenue as described below, partially offset by the loss of $3.1 million in revenue contributed by properties that have been subsequently divested.

Comparable revenue from funeral operations was $968.6 million for the six months ended June 30, 2020 compared to $966.3 million for the same period in 2019. This $2.3 million, or 0.2%, increase was primarily attributable to a 7.3% increase in services performed compared to 2019 primarily due to COVID-19 pandemic related deaths. The increase in services performed comprised a 7.2% increase in services performed by our funeral service locations and a 8.3% increase in cremations performed by our non-funeral home channel. These revenue increases were partially offset by a $11.0 million decrease in recognized preneed revenue

FORM 10-Q 39

PART I

and a $11.4 million decrease in general agency and other revenue as both revenue declines resulted from lower preneed sales production.

Average revenue per funeral service decreased 4.1% for the six months ended June 30, 2020 compared to the same period in 2019. The social distancing effects from the pandemic resulted in fewer and smaller funeral services which negatively impacted our average revenue per funeral service. Our total comparable cremation rate increased 150 basis points to 58.5% in the first six months of 2020 as the COVID-19 pandemic created a temporary shift towards direct cremation, particularly in the first half of the second quarter when there were more widespread restrictions on social distancing and gathering sizes.

Funeral Gross Profit

Consolidated funeral gross profit increased $23.5 million, or 12.0%, in the first half of 2020 compared to 2019. This increase is primarily attributable to increases in comparable funeral gross profit of $18.6 million, or 9.4%, as well as a $4.0 million increase in gross profit contributed by acquired and newly constructed properties. Comparable funeral gross profit increased $18.6 million to $215.8 million and the gross profit percentage increased 190 basis points to 22.3%. Growth in our core business produced healthy incremental margins that more than offset the decline in lower margin revenue streams such as recognized preneed revenue and general agency revenue. The funeral margins were also positively impacted by purposeful cost reductions implemented in late March and early April in response to the COVID-19 pandemic.

Cemetery Results

	Six Months Ended June 30,
	2020		2019
	(In millions)
Consolidated cemetery revenue	$	637.2	$	639.0
Less: revenue associated with acquisitions	0.7		0.2
Less: revenue associated with divestitures	0.1		0.9
Comparable(1) cemetery revenue	$	636.4	$	637.9
Consolidated cemetery gross profit	$	178.3	$	187.0
Less: gross profit associated with acquisitions	0.2		0.1
Less: gross profit associated with divestitures	—		0.1
Comparable(1) cemetery gross profit	$	178.1	$	186.8

⁽¹⁾ We define comparable (or same store) operations as those cemetery locations owned by us for the entire period beginning January 1, 2019 and ending June 30, 2020.

Cemetery Revenue

Consolidated revenue from our cemetery operations decreased $1.8 million, or 0.3%, for the six months ended June 30, 2020 compared to the same period in 2019 primarily due to a decrease in comparable revenue. The $1.5 million, or 0.2%, decrease in comparable revenue was primarily attributable to a $14.4 million decrease in recognized preneed revenue due to the social distancing effects of the pandemic during late first quarter and early part of the second quarter. This revenue decrease was partially offset by a $12.7 million increase in atneed revenue driven by an increase in services performed during the latter half of the second quarter.

Cemetery Gross Profit

Consolidated cemetery gross profit decreased $8.7 million, or 4.7%, in the six months ended June 30, 2020 compared to the same period in 2019, which is primarily attributable to the decrease in comparable gross profit of $8.7 million, or 4.7%. Comparable cemetery gross profit decreased $8.7 million to $178.1 million, and the gross profit percentage decreased 130 basis points to 28.0%, which was primarily driven by the decrease in the revenue described above coupled with an increase in our selling costs as a result of the $25.1 million, or 10.4%, increase in our comparable preneed sales production during the second quarter. The gross profit decline was mitigated by purposeful cost reductions implemented in late March and early April in response to COVID-19.

Other Financial Statement Items

Corporate General and Administrative Expenses

Corporate general and administrative expenses were $69.0 million in the first six months of 2020 compared to $72.2 million in 2019. Excluding a $6.4 million legal settlement recorded in the prior year quarter, corporate general and administrative expenses increased $3.2 million primarily related to a $3.0 million charitable contribution for community outreach efforts.

40 Service Corporation International

PART I

Gains (Losses) on Divestitures and Impairment Charges, Net

We recognized a $5.3 million net pre-tax gain on asset divestitures and impairments, net in the second quarter of 2020 as $8.4 million in gains from asset divestitures associated with non-strategic funeral and cemetery locations in the United States and Canada were partially offset by $3.1 million in impairment charges, primarily related to certain tradenames.

Interest Expense

Interest expense decreased $8.6 million to $86.1 million for the six months ended June 30, 2020 primarily due to lower interest rates on our floating rate debt and other debt refinancing activities over the last twelve months.

Provision for Income Taxes

Our effective tax rate was 24.3% and 22.7% for the six months ended June 30, 2020 and 2019, respectively. The effective tax rate for the six months ended June 30, 2020 is above the 21% federal statutory tax rate primarily due to state tax expense, partially offset by tax benefits recognized on the settlement of employee share-based awards.

Weighted Average Shares

The diluted weighted average number of shares outstanding was 181.6 million for the six months ended June 30, 2020 compared to 185.5 million for the same period in 2019, The decrease primarily reflects the impact of shares repurchased under our share repurchase program.

Critical Accounting Policies, Recent Accounting Pronouncements, and Accounting Changes

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Although we base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, actual results may differ from the estimates on which our financial statements are prepared at any given point of time. Changes in these estimates could materially affect our consolidated financial position, consolidated results of operations, or cash flows. Significant items that are subject to such estimates and assumptions include revenue and expense accruals, fair value of merchandise and perpetual care trust assets, and the allocation of purchase price to the fair value of assets acquired. Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Recent Accounting Pronouncements and Accounting Changes

For discussion of recent accounting pronouncements and accounting changes, see Part I, Item 1. Financial Statements, Note 2 of this Form 10-Q.

Cautionary Statement on Forward-Looking Statements

The statements in this Form 10-Q 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 we believe are reasonable; however, many important factors could cause our actual consolidated 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. These factors are discussed below. We assume no obligation and make no undertaking 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.

•The COVID-19 pandemic has had an adverse effect on our business and results of operations and future public health threats could have additional material adverse consequences for our business and results of operations.

•Our affiliated trust funds own investments in securities, which are affected by market conditions that are beyond our control.

•We may be required to replenish our affiliated funeral and cemetery trust funds to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow.

•Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.

•Our credit agreements contain covenants that may prevent us from engaging in certain transactions.

FORM 10-Q 41

PART I

•If we lost the ability to use surety bonding to support our preneed activities, we may be required to make material cash payments to fund certain trust funds.

•Increasing death benefits related to preneed contracts funded through life insurance or annuity contracts may not cover future increases in the cost of providing a price-guaranteed service.

•The financial condition of third-party insurance companies that fund our preneed contracts may impact our future revenue and cash flows.

•Unfavorable results of litigation could have a material adverse impact on our financial statements.

•Unfavorable publicity could affect our reputation and business.

•We use a combination of insurance, self-insurance, and large deductibles in managing our exposure to certain inherent risks; therefore, we could be exposed to unexpected costs that could negatively affect our financial performance.

•Changes in taxation as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows.

•Declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future impairments to goodwill and/or other intangible assets.

•Any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results, financial condition, or cash flow.

•Our Canadian business exposes us to operational, economic, and currency risks.

•Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness.

•A failure of a key information technology system or process could disrupt and adversely affect our business.

•Failure to maintain effective internal control over financial reporting could adversely affect our results of operations, investor confidence, and our stock price.

•The application of unclaimed property laws by certain states to our preneed funeral and cemetery trust funds could have a material adverse impact on our liquidity, cash flows, and financial results.

•The funeral and cemetery industry is competitive.

•If the number of deaths in our markets declines, our cash flows and revenue may decrease. Changes in the number of deaths are not predictable from market to market or over the short term.

•If we are not able to respond effectively to changing consumer preferences, our market share, operating results, financial condition, or cash flow could decrease.

•The continuing upward trend in the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows.

•Our funeral and cemetery businesses are high fixed-cost businesses.

•Regulation and compliance could have a material adverse impact on our financial results.

•Cemetery burial practice claims could have a material adverse impact on our financial results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. The term “market” risk refers to the risk of gains or losses arising from changes in interest rates and prices of marketable securities. The disclosures are not meant to be precise indicators of expected future gains or losses, but rather indicators of reasonably possible gains or losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. All of our market risk-sensitive instruments were entered into for purposes other than trading.

42 Service Corporation International

PART I

Marketable Equity and Debt Securities — Price Risk

In connection with our preneed operations and sales, the related trust funds own investments in equity and debt securities and mutual funds, which are sensitive to current market prices. Cost and market values as of June 30, 2020 are presented in Part I, Item 1. Financial Statements, Note 3 of this Form 10-Q. Also, see Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations "Financial Condition, Liquidity and Capital Resources" section for discussion of trust investments.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of June 30, 2020, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the Securities and Exchange Commission (SEC) reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time period specified by the SEC’s rules and forms and that such information is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Based on our evaluation, our CEO and CFO have concluded that our disclosure controls and procedures are effective as of June 30, 2020 and that the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our consolidated financial condition, consolidated results of operations, and cash flows for the periods presented in conformity with US GAAP.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

FORM 10-Q 43

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings is set forth in Part I, Item 1. Financial Statements, Note 9 of this Form 10-Q, which information is hereby incorporated by reference herein.

Item 1A. Risk Factors

The COVID-19 pandemic has had an adverse effect on our business and results of operations and future public health threats could have additional material adverse consequences for our business and results of operations.

The recent spread of COVID-19 has impacted the global economy and our business and results of operations. As a result of the COVID-19 pandemic and the related adverse economic and health consequences, we have experienced and may continue to be subject to any of the following risks:

•our preneed sales have decreased;

•our preneed installment contract defaults have increased;

•the value of our preneed trust investments and related net investment income have diminished due to the disruption in the financial markets.

We may also experience the following COVID-19 related risks:

•our funeral and cemetery revenues may decrease due to reduced and deferred services, actual or perceived consumer financial constraints, government restrictions on gathering sizes and voluntary social distancing;

•illness may disrupt our workforce;

•our supply chain could be disrupted;

•our operating costs may increase due to increased overtime, health insurance claims, worker’s compensation claims, supply costs, or other effects related to COVID-19.

Any of the foregoing risks could have a material, adverse effect on our business, financial condition, and results of operations. Given the ongoing and dynamic nature of the spread of COVID-19, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain and largely outside of our control.

To the extent the COVID-19 pandemic adversely affects our business, operations, financial condition and results of operation, it may also have the effect of heightening many of the other risks. Other Risk Factors are set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes our share repurchases during the three months ended June 30, 2020:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program
April 1, 2020 — April 30, 2020	1,097,361	$	38.10	1,097,361	$	151,872,558
May 1, 2020 — May 31, 2020 (1)	369,580	$	37.24	368,922	$	138,133,132
June 1, 2020 — June 30, 2020	810,144	$	39.38	810,144	$	106,232,812
	2,277,085			2,276,427

⁽¹⁾ 658 shares purchased in May 2020 in connection with the surrender of shares by associates to satisfy certain tax withholding obligations under compensation plans. These repurchases were not part of our publicly announced program and do not affect our share repurchase program.

44 Service Corporation International

PART II

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

No other information.

Item 6. Exhibits

Exhibit Number			Description
3.1		—	Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Registration Statement No. 333-10867 on Form S-3).
3.2		—	Articles of Amendment to Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Form 10-Q for the fiscal quarter ended September 30, 1996).
3.3		—	Certificate of Amendment to Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Form 8-K filed May 25, 2018).
3.4		—	Statement of Resolution Establishing Series of Shares of Series D Junior Participating Preferred Stock, dated July 27, 1998 (Incorporated by reference to Exhibit 3.2 to Form 10-Q for the fiscal quarter ended June 30, 1998).
3.5		—	Bylaws of the Company. (Incorporated by reference to Exhibit 3.4 to Form 8-K filed May 25, 2018).
4.1		—	Senior Indenture dated as of February 1, 1993 by and between the Company and The Bank of New York, as trustee (Incorporated by reference as Exhibit 4.1 to Form S-4 filed September 2, 2004 (File No. 333-118763)).
4.2		—	Agreement of Resignation, Appointment of Acceptance, dated December 12, 2005, among the Company, The Bank of New York and The Bank of New York Trust Company, N.A., appointing a successor trustee for the Senior Indenture dated as of February 1, 1993 (Incorporated by reference to Exhibit 4.1 to Form 10-Q for the fiscal quarter ended June 30, 2005).
10.1*	*	—	First Amendment to Employment and Noncompetition Agreement, dated December 7, 2016, between OFTC, Inc. and Thomas L. Ryan.
10.2*		—	First Amendment to Employment and Noncompetition Agreement, dated December 7, 2016, between OFTC, Inc. and Eric D. Tanzberger.
10.3*		—	First Amendment to Employment and Noncompetition Agreement, dated December 7, 2016, between OFTC, Inc. and Sumner J. Waring, III.
10.4*		—	First Amendment to Employment and Noncompetition Agreement, dated December 7, 2016, between OFTC, Inc. and Gregory T. Sangalis.
10.5*		—	First Amendment Employment and Noncompetition Agreement, dated December 7, 2016, between OFTC, Inc. and Steven A. Tidwell.
10.6*		—	Eighth Amendment to 401(k) Retirement Savings Plan.
31.1		—	Certification of Thomas L. Ryan as Principal Executive Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		—	Certification of Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		—	Certification of Periodic Financial Reports by Thomas L. Ryan as Principal Executive Officer in satisfaction of Section 906 of the Sarbanes- Oxley Act of 2002.
32.2		—	Certification of Periodic Financial Reports by Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.

FORM 10-Q 45

PART II

Exhibit Number		Description
101	—	Interactive data file formatted Inline XBRL.
104	—	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Management contract, compensatory plan or arrangement.

46 Service Corporation International

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

July 30, 2020	SERVICE CORPORATION INTERNATIONAL
	By:	/s/ TAMMY MOORE
		Tammy Moore, Vice President and Corporate Controller (Principal Accounting Officer)

FORM 10-Q 47

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This First Amendment to Employment and Noncompetition Agreement (the “First Amendment”) is entered into to be effective as of April 25, 2020, by and between OFTC, Inc., a Delaware corporation (the “Company”) and Thomas L. Ryan (the “Employee”).

WHEREAS, the Company and the Employee entered into an Employment and Noncompetition Agreement dated December 7, 2016, as extended (the “Agreement”); and

WHEREAS, the Company and the Employee wish to amend the Agreement in the manner set forth below.

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Employee intending to be legally bound hereby agree to amend certain sections of the Agreement as follows:

1.Section 1.4(a) of the Agreement is amended to provide that the Employee’s salary for the Employment Term ending December 31, 2020, shall be reduced by twenty percent (20%) until the earlier of: (a) the time the Company determines that the Employee’s salary shall be restored to its prior level, and (b) the end of the Employment Term;

2.The definition of “Good Reason” found in Section 4.14 of the Agreement is amended to exclude the reduction in base salary referenced in paragraph 1 of this First Amendment;

3.Capitalized terms not otherwise defined in this First Amendment shall have the meaning given in the Agreement; and

4.Except as hereinabove specifically amended, the Agreement is and shall remain in full force and effect according to its terms and conditions.

IN WITNESS WHEREOF, the undersigned have executed and delivered this First Amendment on the date and year first above mentioned.

COMPANY: EMPLOYEE:

OFTC, Inc.

By: /s/ DANIEL KLEBAN By: /s/ THOMAS L. RYAN

Daniel Kleban, President Thomas L. Ryan

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This First Amendment to Employment and Noncompetition Agreement (the “First Amendment”) is entered into to be effective as of April 25, 2020, by and between OFTC, Inc., a Delaware corporation (the “Company”) and Eric D. Tanzberger (the “Employee”).

WHEREAS, the Company and the Employee entered into an Employment and Noncompetition Agreement dated December 7, 2016, as extended (the “Agreement”); and

WHEREAS, the Company and the Employee wish to amend the Agreement in the manner set forth below.

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Employee intending to be legally bound hereby agree to amend certain sections of the Agreement as follows:

1.Section 1.4(a) of the Agreement is amended to provide that the Employee’s salary for the Employment Term ending December 31, 2020, shall be reduced by fifteen percent (15%) until the earlier of: (a) the time the Company determines that the Employee’s salary shall be restored to its prior level, and (b) the end of the Employment Term;

2.The definition of “Good Reason” found in Section 4.14 of the Agreement is amended to exclude the reduction in base salary referenced in paragraph 1 of this First Amendment;

3.Capitalized terms not otherwise defined in this First Amendment shall have the meaning given in the Agreement; and

4.Except as hereinabove specifically amended, the Agreement is and shall remain in full force and effect according to its terms and conditions.

IN WITNESS WHEREOF, the undersigned have executed and delivered this First Amendment on the date and year first above mentioned.

COMPANY: EMPLOYEE:

OFTC, Inc.

By:  /s/ DANIEL KLEBAN  By: /s/ ERIC D. TANZBERGER 

Daniel Kleban, President Eric D. Tanzberger

EX-10.3

            Exhibit 10.3

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This First Amendment to Employment and Noncompetition Agreement (the “First Amendment”) is entered into to be effective as of April 25, 2020, by and between OFTC, Inc., a Delaware corporation (the “Company”) and Sumner J. Waring, III (the “Employee”).

WHEREAS, the Company and the Employee entered into an Employment and Noncompetition Agreement dated December 7, 2016, as extended (the “Agreement”); and

WHEREAS, the Company and the Employee wish to amend the Agreement in the manner set forth below.

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Employee intending to be legally bound hereby agree to amend certain sections of the Agreement as follows:

1.Section 1.4(a) of the Agreement is amended to provide that the Employee’s salary for the Employment Term ending December 31, 2020, shall be reduced by fifteen percent (15%) until the earlier of: (a) the time the Company determines that the Employee’s salary shall be restored to its prior level, and (b) the end of the Employment Term;

2.The definition of “Good Reason” found in Section 4.14 of the Agreement is amended to exclude the reduction in base salary referenced in paragraph 1 of this First Amendment;

3.Capitalized terms not otherwise defined in this First Amendment shall have the meaning given in the Agreement; and

4.Except as hereinabove specifically amended, the Agreement is and shall remain in full force and effect according to its terms and conditions.

IN WITNESS WHEREOF, the undersigned have executed and delivered this First Amendment on the date and year first above mentioned.

COMPANY: EMPLOYEE:

OFTC, Inc.

By:  /s/ DANIEL KLEBAN  By: /s/ SUMNER J. WARING, III 

Daniel Kleban, President Sumner J. Waring, III

EX-10.4

Exhibit 10.4

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This First Amendment to Employment and Noncompetition Agreement (the “First Amendment”) is entered into to be effective as of April 25, 2020, by and between OFTC, Inc., a Delaware corporation (the “Company”) and Gregory T. Sangalis (the “Employee”).

WHEREAS, the Company and the Employee entered into an Employment and Noncompetition Agreement dated December 7, 2016, as extended (the “Agreement”); and

WHEREAS, the Company and the Employee wish to amend the Agreement in the manner set forth below.

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Employee intending to be legally bound hereby agree to amend certain sections of the Agreement as follows:

1.Section 1.4(a) of the Agreement is amended to provide that the Employee’s salary for the Employment Term ending December 31, 2020, shall be reduced by fifteen percent (15%) until the earlier of: (a) the time the Company determines that the Employee’s salary shall be restored to its prior level, and (b) the end of the Employment Term;

2.The definition of “Good Reason” found in Section 4.14 of the Agreement is amended to exclude the reduction in base salary referenced in paragraph 1 of this First Amendment;

3.Capitalized terms not otherwise defined in this First Amendment shall have the meaning given in the Agreement; and

4.Except as hereinabove specifically amended, the Agreement is and shall remain in full force and effect according to its terms and conditions.

IN WITNESS WHEREOF, the undersigned have executed and delivered this First Amendment on the date and year first above mentioned.

COMPANY: EMPLOYEE:

OFTC, Inc.

By: /s/ DANIEL KLEBAN  By: /s/ GREGORY T. SANGALIS

Daniel Kleban, President Gregory T. Sangalis

EX-10.5

Exhibit 10.5

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

This First Amendment to Employment and Noncompetition Agreement (the “First Amendment”) is entered into to be effective as of April 25, 2020, by and between OFTC, Inc., a Delaware corporation (the “Company”) and Steven A. Tidwell (the “Employee”).

WHEREAS, the Company and the Employee entered into an Employment and Noncompetition Agreement dated December 7, 2016, as extended (the “Agreement”); and

WHEREAS, the Company and the Employee wish to amend the Agreement in the manner set forth below.

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Employee intending to be legally bound hereby agree to amend certain sections of the Agreement as follows:

1.Section 1.4(a) of the Agreement is amended to provide that the Employee’s salary for the Employment Term ending December 31, 2020, shall be reduced by fifteen percent (15%) until the earlier of: (a) the time the Company determines that the Employee’s salary shall be restored to its prior level, and (b) the end of the Employment Term;

2.The definition of “Good Reason” found in Section 4.14 of the Agreement is amended to exclude the reduction in base salary referenced in paragraph 1 of this First Amendment;

3.Capitalized terms not otherwise defined in this First Amendment shall have the meaning given in the Agreement; and

4.Except as hereinabove specifically amended, the Agreement is and shall remain in full force and effect according to its terms and conditions.

IN WITNESS WHEREOF, the undersigned have executed and delivered this First Amendment on the date and year first above mentioned.

COMPANY: EMPLOYEE:

OFTC, Inc.

By:  /s/ DANIEL KLEBAN  By: /s/ STEVEN A. TIDWELL 

Daniel Kleban, President Steven A. Tidwell

EX-10.6

Exhibit 10.6

EIGHTH AMENDMENT TO THE

SCI 401(k) RETIREMENT SAVINGS PLAN

WHEREAS, Service Corporation International (the “Employer”) adopted a restatement of the SCI 401(k) Retirement Savings Plan (the “Plan”) effective as of January 1, 2016, and subsequently amended the Plan by the First through Seventh Amendments thereto; and

WHEREAS, the Employer has the ability to amend the Plan pursuant to Article 11.1; and

WHEREAS, the Employer now desires to amend the Plan to change the Non-Safe Harbor Matching Contributions from a mandatory formula to a discretionary formula;

NOW, THEREFORE, the Employer hereby amends the Plan in the following respects, effective for payroll periods beginning after April 24, 2020:

1.Section 3.3(a) of the Plan is amended to read as follows:

(a)Contribution Formula. Except as otherwise provided in this Section, the Employer may make a Non-Safe Harbor Matching Contribution equal to a totally discretionary percentage of each Benefiting Participant's Elective Deferrals for the Allocation Period. The Employer's discretion in establishing the formula includes, but is not limited to, establishing the amount of the contribution, the rate of match, as well as establishing a maximum Non-Safe Harbor Matching Contribution per Participant (either as a dollar maximum per Participant, a maximum percentage of each Participant's Compensation, and/or a maximum amount of each Participant’s Elective Deferrals that will be recognized for matching purposes). The Employer must, on or before the due date (plus any extensions) for filing the Employer's tax return, adopt a written resolution (or other action) describing the rate of match and the maximum limitations, if any, imposed on the Non-Safe Harbor Matching Contribution for the Allocation Period.

If the Employer adopts a formula or formulas based on a Benefiting Participant’s Years of Vesting Service, then for purposes of such contribution formulas, and notwithstanding anything to the contrary herein, for a Benefiting Participant who has a termination date with the Employer (or any of its affiliates) prior to January 1, 2014 and hire date on or after July 1, 2019, (i) “Years of Vesting Service” shall include only his or her “Years of Vesting Service” accrued for periods on or after July 1, 2019, and (ii) any “Years of Vesting Service” for periods prior to January 1, 2014 shall be disregarded when determining the percentage utilized when calculating the Non-Safe Harbor Matching Contribution.”

2.In all other respects, the terms of this Plan are hereby ratified and confirmed.

The Employer may cause this Eighth Amendment to be executed in duplicate counterparts, each of which shall be considered as an original, as of the date indicated below.

SERVICE CORPORATION INTERNATIONAL

/s/ MARGARET FERREL  By: /s/ GREGORY T. SANGALIS 

Witness

(Optional unless required by State Title: SVP General Counsel/Secretary  or Commonwealth Law)

Date: April 24, 2020

SUMMARY OF MATERIAL MODIFICATIONS TO THE

SCI 401(k) RETIREMENT SAVINGS PLAN

Your Employer has amended the SCI 401(k) Retirement Savings Plan (the “Plan”), effective for payroll periods beginning after April 24, 2020. This is a brief summary of the amendment. The Plan document will govern all situations concerning the provisions of the Plan. This summary is not a part of the Plan document.

Your Summary Plan Description (“SPD”) is modified to reflect a change to the Matching Contribution formula under the Plan as describe below.

The section titled How the Contribution is Determined with respect to Matching Contributions

on page 5 of the SPD is modified to read as follows:

HOW THE CONTRIBUTION IS DETERMINED

We may also make Matching Contributions to the Plan. These contributions are not required, and whether or not we choose to make them is entirely within our discretion. If we do make them, the formula, the amount of the contribution, and the frequency of the contribution, will also be determined at our discretion.

This summary page should be filed with the Summary Plan Description booklet that has previously been distributed.

EX-31.1

Exhibit 31.1

Service Corporation International

a Texas corporation

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Section 302 Certification

I, Thomas L. Ryan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Service Corporation International, a Texas corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Thomas L. Ryan

Thomas L. Ryan
President, Chairman of the Board, and Chief Executive Officer
(Principal Executive Officer)

Date: July 30, 2020

EX-31.2

Exhibit 31.2

Service Corporation International

a Texas corporation

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Section 302 Certification

I, Eric D. Tanzberger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Service Corporation International, a Texas corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Eric D. Tanzberger

Eric D. Tanzberger
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)

Date: July 30, 2020

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

I, Thomas L. Ryan, of Service Corporation International, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Service Corporation International.

/s/  Thomas L. Ryan

Thomas L. Ryan
President, Chairman of the Board, and Chief Executive Officer
(Principal Executive Officer)

Dated: July 30, 2020

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

I, Eric D. Tanzberger, of Service Corporation International, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report on Form 10-Q for the annual period ended June 30, 2020 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Service Corporation International.

/s/  Eric D. Tanzberger

Eric D. Tanzberger
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)

Dated: July 30, 2020

XML

Cover Page Details - shares	6 Months Ended
	Jun. 30, 2020	Jul. 28, 2020
Document Information [Line Items]
Document Quarterly Report	true
Document Type	10-Q
Document Transition Report	false
Document Period End Date	Jun. 30, 2020
Entity File Number	1-6402-1
Entity Registrant Name	SERVICE CORPORATION INTERNATIONAL
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	74-1488375
Entity Address, Address Line One	1929 Allen Parkway
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77019
City Area Code	(713)
Local Phone Number	522-5141
Title of 12(b) Security	Common Stock ($1 par value)
Trading Symbol	SCI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		176,219,014

XML

Document and Entity Information Document	6 Months Ended
	Jun. 30, 2020
Document Information [Line Items]
Entity Registrant Name	SERVICE CORPORATION INTERNATIONAL
Entity Central Index Key	0000089089
Current Fiscal Year End Date	--12-31
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Shell Company	false
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes

XML

Consolidated Statement of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Product Information [Line Items]
Revenue	$ 820,035	$ 812,572	$ 1,623,000	$ 1,610,784
Costs of revenue	(601,268)	(621,426)	(1,225,189)	(1,227,804)
Gross profit	218,767	191,146	397,811	382,980
Corporate general and administrative expenses	(37,169)	(29,218)	(68,982)	(72,196)
Gains on divestitures and impairment charges, net	(737)	11,823	(5,282)	13,701
Operating income	182,335	150,105	334,111	297,083
Interest expense	(41,767)	(47,317)	(86,118)	(94,707)
Losses on early extinguishment of debt, net	(11)	(7,579)	(150)	(7,579)
Other income (expense), net	1,166	874	(81)	1,594
Income before income taxes	141,723	96,083	247,762	196,391
(Provision for) benefit from income taxes	36,170	23,570	60,208	44,665
Net income	105,553	72,513	187,554	151,726
Net income attributable to noncontrolling interests	45	184	105	74
Net income attributable to common stockholders	$ 105,508	$ 72,329	$ 187,449	$ 151,652
Basic earnings per share:
Net income attributable to common stockholders, basic	$ 0.59	$ 0.40	$ 1.04	$ 0.83
Basic weighted average number of shares	177,902	182,369	179,378	182,048
Diluted earnings per share:
Net income attributable to common stockholders, diluted	$ 0.59	$ 0.39	$ 1.03	$ 0.82
Diluted weighted average number of shares	179,666	185,690	181,639	185,517
Dividends declared per share	$ 190	$ 180
Product [Member]
Product Information [Line Items]
Revenue	$ 414,596	$ 415,492	$ 792,479	$ 796,701
Costs of revenue	(207,102)	(213,635)	(403,550)	(411,529)
Service [Member]
Product Information [Line Items]
Revenue	354,799	339,090	722,327	694,461
Costs of revenue	(173,515)	(193,378)	(371,039)	(384,191)
Product and Service, Other [Member]
Product Information [Line Items]
Revenue	50,640	57,990	108,194	119,622
Costs of revenue	$ (220,651)	$ (214,413)	$ (450,600)	$ (432,084)

XML

Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 105,553	$ 72,513	$ 187,554	$ 151,726
Foreign currency translation adjustments	13,738	6,998	(17,464)	14,399
Total comprehensive income	119,291	79,511	170,090	166,125
Total comprehensive income attributable to noncontrolling interests	(47)	(36)	(105)	(76)
Total comprehensive income attributable to common stockholders	$ 119,244	$ 79,475	$ 169,985	$ 166,049

XML

Consolidated Balance Sheet - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 222,234	$ 186,276
Receivables, net	76,963	81,671
Inventories	25,965	25,118
Other	58,474	80,488
Total current assets	383,636	373,553
Accounts Receivable, Allowance for Credit Loss	(6,006)	(2,262)
Preneed receivables, net and trust investments	4,622,700	4,789,562
Allowance for Doubtful Accounts, Premiums and Other Receivables		(41,142)
Financing Receivable, Allowance for Credit Loss, Noncurrent	(8,245)
Cemetery property	1,882,890	1,873,602
Property and equipment, net	2,098,196	2,065,433
Goodwill	1,865,401	1,864,223
Deferred charges and other assets	1,035,508	1,029,908
Accounts Receivable, Allowance for Credit Loss, Noncurrent	(18,277)	(14,757)
Cemetery perpetual care trust investments	1,599,599	1,681,149
Total assets	13,487,930	13,677,430
Current liabilities:
Accounts payable and accrued liabilities	460,718	478,545
Current maturities of long-term debt	87,267	69,821
Income taxes payable	58,840	8,353
Total current liabilities	606,825	556,719
Long-term debt	3,573,709	3,513,530
Deferred preneed revenue	1,494,106	1,467,103
Deferred Income Taxes and Other Tax Liabilities, Noncurrent	433,021	421,482
Other liabilities	381,704	378,074
Deferred receipts held in trust	3,644,212	3,839,376
Care trusts’ corpus	1,600,025	1,677,891
Commitments and contingencies (Note 9)
Equity:
Common stock, $1 per share par value, 500,000,000 shares authorized, 186,104,673 and 185,100,789 shares issued, respectively, and 177,011,040 and 181,184,963 shares outstanding, respectively	177,011	181,185
Capital in excess of par value	1,002,988	1,010,361
Accumulated deficit	561,882	601,903
Accumulated other comprehensive income	12,400	29,864
Total common stockholders’ equity	1,754,281	1,823,313
Noncontrolling interests	47	(58)
Total equity	1,754,328	1,823,255
Total liabilities and equity	$ 13,487,930	$ 13,677,430
Common stock, par or stated value per share	$ 1
Common stock, shares authorized	500,000,000
Common stock, shares, issued	186,104,673	185,100,789
Common stock, shares outstanding	177,011,040	181,184,963

XML

Consolidated Statement of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Statement of Cash Flows [Abstract]
Net income	$ 187,554	$ 151,726
Adjustments to reconcile net income to net cash provided by operating activities:
Losses on early extinguishment of debt, net	150	7,579
Depreciation and amortization	75,582	74,244
Amortization of intangibles	11,304	13,653
Amortization of cemetery property	33,696	33,523
Amortization of loan costs	2,571	2,989
Provision for expected credit losses	9,023	4,273
Provision for deferred income taxes	5,681	6,090
(Gains) losses on divestitures and impairment charges, net	(5,282)	13,701
Share-based compensation	7,044	8,013
Change in assets and liabilities, net of effects from acquisitions and divestitures:
Decrease (increase) in receivables	(2,781)	(11,608)
Increase in other assets	18,232	(18,643)
Increase (decrease) in payables and other liabilities	41,936	(55,148)
Effect of preneed funeral production and maturities:
Increase in preneed receivables, net and trust investments	16,520	(1,594)
Increase in deferred revenue, net	(39,374)	55,441
Decrease in deferred receipts held in trust	12,360	(21,346)
Net cash provided by operating activities	364,302	262,893
Cash flows from investing activities:
Capital expenditures	(104,828)	(112,714)
Business acquisitions, net of cash acquired	(26,271)	(21,418)
Payments for (Proceeds from) Deposits on Real Estate Acquisitions	(32,766)	(11,337)
Proceeds from divestitures and sales of property and equipment	12,136	11,380
Payment to Acquire Life Insurance Policy, Investing Activities	(3,848)	(8,586)
Proceeds from Life Insurance Policy	3,519	0
Net cash used in investing activities	(152,058)	(142,675)
Cash flows from financing activities
Proceeds from issuance of long-term debt	190,000	854,263
Early payments of debt	(95,897)	(828,121)
Repayments of Unsecured Debt	16,455	8,712
Principal payments on finance leases	(20,453)	(21,807)
Proceeds from exercise of stock options	15,126	23,101
Purchase of Company common stock	(210,568)	(29,574)
Payments of dividends	(68,133)	(65,691)
PaymentsToAcquireBusinessesIncludiing1031ExchangeFunds	59,000	32,800
Bank overdrafts and other	6,686	12,307
Net cash (used in) provided by financing activities	(199,694)	(79,770)
Effect of foreign currency	(4,575)	3,113
Net increase in cash, cash equivalents, and restricted cash	7,975	43,561
Cash, cash equivalents, and restricted cash at beginning of period	186,276
Cash, cash equivalents, and restricted cash at end of period	222,234
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	250,595	251,145
Payments of Debt Issuance Costs	$ 0	$ (15,536)

XML

Consolidated Statement of Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Capital in Excess of Par Value	Retained Earnings [Member]	Accumulated Other Comprehensive Income	Noncontrolling Interest
Balance at beginning of period at Dec. 31, 2018	$ 1,641,815	$ 184,721	$ (3,250)	$ 972,710	$ 474,327	$ 13,395	$ (88)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Comprehensive income	86,614	0	0	0	79,323	7,251	40
Dividends declared on common stock	(32,820)	0	0	0	32,820	0	0
Stock option exercises	15,962	950	0	15,012	0	0	0
Restricted stock awards, net of forfeitures	0	126	0	(126)	0	0	0
Employee share-based compensation earned	4,568	0	0	4,568	0	0	0
Purchase of Company common stock	(14,542)	0	(355)	(1,935)	(12,252)	0	0
Other	(1,192)	59	0	(1,251)	0	0	0
Balance at end of period at Mar. 31, 2019	1,700,405	185,856	(3,605)	988,978	508,578	20,646	(48)
Balance at beginning of period at Dec. 31, 2018	1,641,815	184,721	(3,250)	972,710	474,327	13,395	(88)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Comprehensive income	166,125
Balance at end of period at Jun. 30, 2019	1,744,216	186,411	(3,942)	998,794	535,173	27,792	(12)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Payments of Debt Issuance Costs	15,536
Balance at beginning of period at Mar. 31, 2019	1,700,405	185,856	(3,605)	988,978	508,578	20,646	(48)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Comprehensive income	$ 79,511	0	0	0	72,329	7,146	36
Dividends declared per share	$ 180
Dividends declared on common stock	$ (32,871)	0	0	0	(32,871)	0	0
Stock option exercises	7,139	513	0	6,626	0	0	0
Employee share-based compensation earned	3,445	0	0	3,445	0	0	0
Purchase of Company common stock	(15,032)	0	(337)	(1,832)	(12,863)	0	0
Other	1,619	42	0	1,577	0	0	0
Balance at end of period at Jun. 30, 2019	1,744,216	186,411	(3,942)	998,794	535,173	27,792	(12)
Balance at beginning of period at Dec. 31, 2019	1,823,255	185,101	(3,916)	1,010,361	601,903	29,864	(58)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Comprehensive income	$ 50,799	0	0	0	81,941	(31,200)	58
Dividends declared per share
Dividends declared on common stock	$ (34,414)	0	0	0	(34,414)	0	0
Stock option exercises	15,126	789	0	14,337	0	0	0
Restricted stock awards, net of forfeitures	0	168	0	(168)	0	0	0
Employee share-based compensation earned	3,406	0	0	3,406	0	0	0
Purchase of Company common stock	(123,102)	0	(2,901)	(16,202)	(103,999)	0	0
Other	(1,095)	0	0	(1,095)	0	0	0
Balance at end of period at Mar. 31, 2020	1,751,093	186,058	(6,817)	1,010,639	562,549	(1,336)	0
Balance at beginning of period at Dec. 31, 2019	1,823,255	185,101	(3,916)	1,010,361	601,903	29,864	(58)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Comprehensive income	170,090
Balance at end of period at Jun. 30, 2020	1,754,328	186,105	(9,094)	1,002,988	561,882	12,400	47
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Payments of Debt Issuance Costs	0
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	17,118	0	0	0	17,118	0	0
Balance at beginning of period at Mar. 31, 2020	1,751,093	186,058	(6,817)	1,010,639	562,549	(1,336)	0
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Comprehensive income	$ 119,291	0	0	0	105,508	13,736	47
Dividends declared per share	$ 190
Dividends declared on common stock	$ (33,719)	0	0	0	(33,719)	0	0
Employee share-based compensation earned	3,638	0	0	3,638	0	0	0
Purchase of Company common stock	(87,466)	0	(2,277)	(12,862)	(72,327)	0	0
Other	1,620	47	0	1,573	0	0	0
Balance at end of period at Jun. 30, 2020	1,754,328	186,105	(9,094)	1,002,988	561,882	12,400	47
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	$ 17,000	$ 0	$ 0	$ 0	$ (129)	$ 0	$ 0

XML

Preneed Activities Preneed Activities Receivables Net and Trust Invesments - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Investments	$ 5,245,278	$ 5,245,278	$ 5,523,479
Accounts Receivable, before Allowance for Credit Loss, Noncurrent	995,298	995,298	988,374
Beginning balance — Preneed funeral receivables and trust investments		4,789,562
Deposits to trust	98,341	203,894
Ending balance — Preneed funeral receivables and trust investments	4,622,700	4,622,700
Cemetery perpetual care trust investments	1,599,599	1,599,599	1,681,149
Deferred Discounts, Finance Charges and Interest Included in Receivables	(42,520)	(42,520)	(50,570)
Accounts Receivable, after Allowance for Credit Loss, Noncurrent	977,021	977,021	947,232
Preneed Accounts Receivable Gross	1,037,818	1,037,818	1,038,944
Allowance for Doubtful Accounts, Premiums and Other Receivables			41,142
Accounts Receivable, Allowance for Credit Loss, Noncurrent	(18,277)	(18,277)	(14,757)
Accounts Receivable, Noncurrent, Originated in Current Fiscal Year	214,946	214,946
Accounts Receivable, Noncurrent, Originated in Fiscal Year before Latest Fiscal Year	334,609	334,609
Accounts Receivable, Noncurrent, Originated Two Years before Latest Fiscal Year	206,691	206,691
Accounts Receivable, Noncurrent, Originated Three Years before Latest Fiscal Year	125,978	125,978
Accounts Receivable, Noncurrent, Originated Four Years before Latest Fiscal Year	64,556	64,556
Accounts Receivable, Noncurrent, Originated Five or More Years before Latest Fiscal Year	48,518	48,518
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Not Past Due	913,615	913,615
Accounts Receivable, Noncurrent, Past Due	81,683	81,683
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Accounts Receivable, Allowance for Credit Loss, Writeoff		1,702
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(5,275)
Accounts Receivable, Allowance for Credit Loss, Acquisitions		13
Effect of Foreign Exchange on Allowance for Credit Loss		40
Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	26,932	26,932
Financing Receivables 30 To 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	24,849	24,849
Financing Receivables 91 To180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	12,522	12,522
Financing Receivables, Equal to Greater than 180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	17,380	17,380
Funeral [Member]
Accounts Receivable, before Allowance for Credit Loss, Noncurrent	121,297	121,297	114,643
Deferred Discounts, Finance Charges and Interest Included in Receivables	(15,583)	(15,583)	16,328
Accounts Receivable, after Allowance for Credit Loss, Noncurrent	110,947	110,947	113,191
Preneed Accounts Receivable Gross	136,880	136,880	130,971
Allowance for Doubtful Accounts, Premiums and Other Receivables			1,452
Accounts Receivable, Allowance for Credit Loss, Noncurrent	(10,350)	(10,350)	(8,057)
Accounts Receivable, Noncurrent, Originated in Current Fiscal Year	32,928	32,928
Accounts Receivable, Noncurrent, Originated in Fiscal Year before Latest Fiscal Year	47,157	47,157
Accounts Receivable, Noncurrent, Originated Two Years before Latest Fiscal Year	18,298	18,298
Accounts Receivable, Noncurrent, Originated Three Years before Latest Fiscal Year	9,076	9,076
Accounts Receivable, Noncurrent, Originated Four Years before Latest Fiscal Year	3,685	3,685
Accounts Receivable, Noncurrent, Originated Five or More Years before Latest Fiscal Year	10,153	10,153
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Not Past Due	99,108	99,108
Accounts Receivable, Noncurrent, Past Due	22,189	22,189
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Accounts Receivable, Allowance for Credit Loss, Writeoff		1,452
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(3,777)
Accounts Receivable, Allowance for Credit Loss, Acquisitions		13
Effect of Foreign Exchange on Allowance for Credit Loss		19
Funeral [Member] | Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	3,835	3,835
Funeral [Member] | Financing Receivables 30 To 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	2,233	2,233
Funeral [Member] | Financing Receivables 91 To180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	1,331	1,331
Funeral [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	14,790	14,790
Cemetery [Member]
Accounts Receivable, before Allowance for Credit Loss, Noncurrent	874,001	874,001	873,731
Deferred Discounts, Finance Charges and Interest Included in Receivables	(26,937)	(26,937)	34,242
Accounts Receivable, after Allowance for Credit Loss, Noncurrent	866,074	866,074	834,041
Preneed Accounts Receivable Gross	900,938	900,938	907,973
Allowance for Doubtful Accounts, Premiums and Other Receivables			(39,690)
Accounts Receivable, Allowance for Credit Loss, Noncurrent	(7,927)	(7,927)	$ (6,700)
Accounts Receivable, Noncurrent, Originated in Current Fiscal Year	182,018	182,018
Accounts Receivable, Noncurrent, Originated in Fiscal Year before Latest Fiscal Year	287,452	287,452
Accounts Receivable, Noncurrent, Originated Two Years before Latest Fiscal Year	188,393	188,393
Accounts Receivable, Noncurrent, Originated Three Years before Latest Fiscal Year	116,902	116,902
Accounts Receivable, Noncurrent, Originated Four Years before Latest Fiscal Year	60,871	60,871
Accounts Receivable, Noncurrent, Originated Five or More Years before Latest Fiscal Year	38,365	38,365
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Not Past Due	814,507	814,507
Accounts Receivable, Noncurrent, Past Due	59,494	59,494
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Accounts Receivable, Allowance for Credit Loss, Writeoff		250
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(1,498)
Accounts Receivable, Allowance for Credit Loss, Acquisitions		0
Effect of Foreign Exchange on Allowance for Credit Loss		21
Cemetery [Member] | Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	23,097	23,097
Cemetery [Member] | Financing Receivables 30 To 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	22,616	22,616
Cemetery [Member] | Financing Receivables 91 To180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	11,191	11,191
Cemetery [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accounts Receivable, Noncurrent, Past Due	$ 2,590	$ 2,590

XML

Preneed Activities Preneed Activities Deferred Preneed Revenues - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Deferred Preneed Revenues [Roll Forward]
Deferred revenue and deferred receipts held in trust	$ 5,138,318	$ 5,137,919	$ 5,306,479	$ 4,790,552
Net preneed contract sales	496,467	496,842
Acquisitions (dispositions) of businesses, net	12,777	(29,665)
Net investment (losses) earnings	(189,474)	327,819
Change in amounts due for unfulfilled performance obligations	(18,151)	(3,770)
Recognized Revenue From Backlog	(226,663)	(212,912)
Recognized Revenue From Current Period	(237,296)	(241,589)
Change in cancellation allowance	1,070	(206)
Effect of foreign currency and other	$ (6,891)	$ 10,848

XML

Nature of Operations Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Nature of Operations [Abstract]

Nature of Operations [Text Block]

Nature of Operations

We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries operating in the United States and Canada. Our funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other related businesses, which enable us to serve a wide array of customer needs. We sell cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis.

Funeral service locations provide all professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles, arranging and directing services, removal, preparation, embalming, cremations, memorialization, travel protection, and catering. Funeral merchandise, including burial caskets and related accessories, urns and other cremation receptacles, outer burial containers, flowers, online and video tributes, stationery products, casket and cremation memorialization products, and other ancillary merchandise, is sold at funeral service locations.

Our cemeteries provide cemetery property interment rights, including developed lots, lawn crypts, mausoleum spaces, niches, and other cremation memorialization and interment options. Cemetery merchandise and services, including memorial markers and bases, outer burial containers, flowers and floral placement, other ancillary merchandise, graveside services, merchandise installation, and interments, are sold at our cemeteries.

XML

Summary of Significant Accounting Policies Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Accounting Standards Adopted in 2020

Financial Instruments - Credit Losses

In June 2016, the FASB issued "Financial Instruments - Credit Losses" to provide financial statement users with more decision-useful information about the expected credit losses on debt instruments and other commitments to extend credit held by a reporting entity at each reporting date. During November 2018 and April 2019, the FASB made amendments to the new standard that clarified guidance on several matters, including accrued interest, recoveries, and various codification improvements. The new standard, as amended, replaces the incurred loss impairment methodology in the previous standard with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates.

We adopted the new guidance as of January 1, 2020, applying a modified retrospective approach to credit loss reserves on our atneed, preneed, miscellaneous, and notes receivable and a prospective approach for credit loss reserves on our fixed income investments. As a result of the adoption, we recorded a $17.0 million increase to Retained earnings, which comprises a $26.4 million and a $5.8 million increase in Preneed receivables, net and trust investments and Deferred tax liability, respectively, and a $2.7 million and a $0.9 million decrease to Receivables, net and Deferred charges and other assets, net, respectively. The increase in Preneed receivables, net and trust investments is primarily the result of reducing the reserve for receivables that are collateralized by cemetery property down to the amount at which the amortized cost basis of the receivable exceeds the fair value of the property less costs to resell.

Goodwill

In January 2017, the FASB amended "Goodwill" to simplify the subsequent measurement of goodwill. The amended

guidance eliminates Step 2 from the goodwill impairment test. Instead, impairment is defined as the amount by which the carrying value of the reporting unit exceeds its fair value, up to the total amount of goodwill of the reporting unit. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

Fair Value Measurements

In August 2018, the FASB amended "Fair Value Measurements" to modify the disclosure requirements related to fair value. The amendment removes requirements to disclose (1) the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy, (2) our policy related to the timing of transfers between levels, and (3) the valuation processes used in level 3 measurements. It clarifies that, for investments measured at net asset value, disclosure of liquidation timing is only required if the investee has communicated the timing either to us or publicly. It also clarifies that the narrative disclosure of the effect of changes in level 3 inputs should be based on changes that could occur at the reporting date. The amendment adds a requirement to disclose the range and weighted average of the significant unobservable inputs used in level 3 measurements. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

Recently Issued Accounting Standards

Compensation - Retirement Benefits

In August 2018, the FASB amended "Compensation - Retirement Benefits" to modify the disclosure requirements for defined benefit plans. For us, the amendment requires the disclosure of the weighted average interest crediting rate used for cash balance plans and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. It removes the requirement to disclose the approximate amount of future benefits covered by insurance contracts. The guidance is effective for us with our annual filing for the year ended December 31, 2020, and we will make the required disclosure changes in that filing. Adoption will not have an impact on our consolidated results of operations, consolidated financial position, and cash flows.

Reference Rate Reform

In March 2020, the FASB issued "Reference Rate Reform" to provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We currently have no hedging relationships and are evaluating our contracts and the optional expedients provided by the new standard.

XML

Preneed Activities Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Preneed Activities [Abstract]

Preneed Activities Text Block

Preneed Activities

Preneed receivables, net and trust investments

The components of Preneed receivables, net and trust investments in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Preneed receivables, net	$	977,021	$	947,232
Trust investments, at market	4,993,442		5,258,319
Insurance-backed fixed income securities and other	251,836		265,160
Trust investments	5,245,278		5,523,479
Less: Cemetery perpetual care trust investments	(1,599,599)		(1,681,149)
Preneed trust investments	3,645,679		3,842,330
Preneed receivables, net and trust investments	$	4,622,700	$	4,789,562

Preneed receivables, net comprised the following:

	June 30, 2020
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	136,880	$	900,938	$	1,037,818
Unearned finance charges	(15,583)		(26,937)		(42,520)
Preneed receivables, at amortized cost	121,297		874,001		995,298
Reserve for credit losses	(10,350)		(7,927)		(18,277)
Preneed receivables, net	$	110,947	$	866,074	$	977,021
	December 31, 2019
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	130,971	$	907,973	$	1,038,944
Unearned finance charges	(16,328)		(34,242)		(50,570)
Preneed receivables, at amortized cost	114,643		873,731		988,374
Allowance for cancellation	(1,452)		(39,690)		(41,142)
Preneed receivables, net	$	113,191	$	834,041	$	947,232

At June 30, 2020, the amortized cost basis of our preneed receivables by year of origination was as follows:

	2020		2019		2018		2017		2016		Prior		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	32,928	$	47,157	$	18,298	$	9,076	$	3,685	$	10,153	$	121,297
Cemetery	182,018		287,452		188,393		116,902		60,871		38,365		874,001
Total preneed receivables, at amortized cost	$	214,946	$	334,609	$	206,691	$	125,978	$	64,556	$	48,518	$	995,298

At June 30, 2020, the payment status of our preneed receivables was as follows:

	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	3,835	$	2,233	$	1,331	$	14,790	$	22,189	$	99,108	$	121,297
Cemetery	23,097		22,616		11,191		2,590		59,494		814,507		874,001
Total preneed receivables, at amortized cost	$	26,932	$	24,849	$	12,522	$	17,380	$	81,683	$	913,615	$	995,298

The following table summarizes the activity for the reserve for credit losses on preneed receivables for the six months ended June 30, 2020:

	January 1, 2020		Provision for Expected Credit Losses		Acquisitions (Divestitures), Net		Write Offs		Effect of Foreign Currency		June 30, 2020
	(In thousands)
Funeral	$	(8,057)	$	(3,777)	$	13	$	1,452	$	19	$	(10,350)
Cemetery	(6,700)		(1,498)		—		250		21		(7,927)
Total reserve for credit losses on preneed receivables	$	(14,757)	$	(5,275)	$	13	$	1,702	$	40	$	(18,277)

The table below sets forth certain investment-related activities associated with our trusts:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Deposits	$	98,341	$	112,905	$	203,894	$	213,357
Withdrawals	$	99,264	$	116,680	$	213,856	$	224,036
Purchases of securities	$	456,639	$	240,376	$	905,291	$	689,534
Sales of securities	$	441,743	$	240,599	$	793,569	$	562,390
Realized gains from sales of securities(1)	$	92,435	$	54,756	$	144,592	$	98,281
Realized losses from sales of securities(1)	$	(61,756)	$	(16,251)	$	(147,158)	$	(48,882)

⁽¹⁾All realized gains and losses are recognized in Other income (expense), net for our trust investments and are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts’ corpus.

The cost and market values associated with trust investments recorded at market value are detailed below. Cost reflects the investment (net of redemptions) of control holders in the trusts. Fair value represents the value of the underlying securities held by the trusts.

		June 30, 2020
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	48,249	$	1,923	$	(249)	$	49,923
Canadian government	2	38,056		58		(727)		37,387
Corporate	2	2,351		6		(81)		2,276
Residential mortgage-backed	2	3,254		168		—		3,422
Asset-backed	2	128		3		(5)		126
Equity securities:
Preferred stock	2	386		—		(35)		351
Common stock:
United States	1	1,368,878		284,456		(118,350)		1,534,984
Canada	1	35,890		7,793		(3,547)		40,136
Other international	1	87,167		19,230		(3,647)		102,750
Mutual funds:
Equity	1	812,202		13,840		(140,573)		685,469
Fixed income	1	1,292,673		23,609		(106,397)		1,209,885
Other	3	391		33		(1)		423
Trust investments, at fair value		3,689,625		351,119		(373,612)		3,667,132
Commingled funds
Fixed income		468,268		15,647		(2,247)		481,668
Equity		261,895		33,768		(243)		295,420
Money market funds		298,674		—		—		298,674
Private equity		211,805		49,716		(10,973)		250,548
Trust investments, at net asset value		1,240,642		99,131		(13,463)		1,326,310
Trust investments, at market		$	4,930,267	$	450,250	$	(387,075)	$	4,993,442

		December 31, 2019
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	49,728	$	752	$	(130)	$	50,350
Canadian government	2	41,093		76		(850)		40,319
Corporate	2	9,694		28		(172)		9,550
Residential mortgage-backed	2	3,210		59		(1)		3,268
Asset-backed	2	129		3		(4)		128
Equity securities:
Preferred stock	2	6,338		804		(115)		7,027
Common stock:
United States	1	1,349,828		303,766		(36,507)		1,617,087
Canada	1	43,866		12,369		(2,075)		54,160
Other international	1	95,257		18,227		(522)		112,962
Mutual funds:
Equity	1	746,581		31,511		(54,020)		724,072
Fixed income	1	1,247,930		16,424		(32,587)		1,231,767
Other	3	7,034		1,184		—		8,218
Trust investments, at fair value		3,600,688		385,203		(126,983)		3,858,908
Commingled funds
Fixed income		444,744		5,077		(1,731)		448,090
Equity		249,980		47,631		—		297,611
Money market funds		397,461		—		—		397,461
Private equity		176,388		80,283		(422)		256,249
Trust investments, at net asset value		1,268,573		132,991		(2,153)		1,399,411
Trust investments, at market		$	4,869,261	$	518,194	$	(129,136)	$	5,258,319

Our private equity investments include several funds that invest in limited partnerships, distressed debt, real estate, and mezzanine financing. These investments can never be redeemed by the funds. Instead, due to the nature of the investments in this category, distributions are received through the liquidation of the underlying assets of the funds. The funds' managers have not communicated the timing of any liquidations.

The change in our market-based trust investments with significant unobservable inputs (Level 3) is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Fair value, beginning balance	$	418	$	7,108	$	8,218	$	9,755
Net realized and unrealized gains (losses) included in Other income (expense), net(1)	717		(322)		(257)		(1,464)
Purchases	4,559		5		4,569		5
Sales	(5,271)		(203)		(5,296)		(1,708)
Transfers	—		—		(6,811)		—
Fair value, ending balance	$	423	$	6,588	$	423	$	6,588

⁽¹⁾All net realized and unrealized gains (losses) recognized in Other income (expense), net for our trust investments are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.

Maturity dates of our fixed income securities range from 2020 to 2040. Maturities of fixed income securities (excluding mutual funds) at June 30, 2020 are estimated as follows:

	Fair Value
	(In thousands)
Due in one year or less	$	57,496
Due in one to five years	26,054
Due in five to ten years	9,494
Thereafter	90
Total estimated maturities of fixed income securities	$	93,134

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $27.0 million and $29.6 million, for the three months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $17.3 million and $17.5 million for the three months ended June 30, 2020 and 2019, respectively.

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $59.2 million and $57.2 million, for the six months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $36.8 million and $37.9 million for the six months ended June 30, 2020 and 2019, respectively.

Our fixed income investment unrealized losses, their associated fair values, and the duration of unrealized losses are shown in the following tables:

	June 30, 2020
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	1,201	$	(3)	$	1,243	$	(246)	$	2,444	$	(249)
Canadian government	—		—		11,973		(727)		11,973		(727)
Corporate	54		(2)		2,235		(79)		2,289		(81)
Asset-backed	—		—		25		(5)		25		(5)
Total fixed income securities with an unrealized loss	$	1,255	$	(5)	$	15,476	$	(1,057)	$	16,731	$	(1,062)

	December 31, 2019
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	3,023	$	(36)	$	1,947	$	(94)	$	4,970	$	(130)
Canadian government	—		—		13,804		(850)		13,804		(850)
Corporate	30		—		4,826		(172)		4,856		(172)
Residential mortgage-backed	—		—		51		(1)		51		(1)
Asset-backed	—		—		28		(4)		28		(4)
Total fixed income securities with an unrealized loss	$	3,053	$	(36)	$	20,656	$	(1,121)	$	23,709	$	(1,157)

Deferred revenue, net

Deferred revenue, net represents future revenue, including distributed trust investment earnings associated with unperformed trust-funded preneed contracts that are not held in trust accounts. Future revenue and net trust investment earnings that are held in trust accounts are included in Deferred receipts held in trust.

The components of Deferred revenue, net in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Deferred revenue	$	2,090,129	$	2,046,000
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	(596,023)		(578,897)
Deferred revenue, net	$	1,494,106	$	1,467,103

The following table summarizes the activity for our contract liabilities, which are reflected in Deferred revenue, net and Deferred receipts held in trust:

	Six Months Ended June 30,
	2020		2019
	(In thousands)
Beginning balance — Deferred revenue, net and Deferred receipts held in trust	$	5,306,479	$	4,790,552
Net preneed contract sales	496,467		496,842
Acquisitions (dispositions) of businesses, net	12,777		(29,665)
Net investment (losses) gains(1)	(189,474)		327,819
Recognized revenue from backlog(2)	(226,663)		(212,912)
Recognized revenue from current period sales	(237,296)		(241,589)
Change in amounts due on unfulfilled performance obligations	(18,151)		(3,770)
Change in cancellation reserve	1,070		(206)
Effect of foreign currency and other	(6,891)		10,848
Ending balance — Deferred revenue, net and Deferred receipts held in trust	$	5,138,318	$	5,137,919

⁽¹⁾Includes both realized and unrealized investment (losses) gains.

⁽²⁾Includes current year trust fund income through the date of performance.

XML

Income Taxes Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete

items, which are recorded in the period in which they occur. Discrete items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or

decreases in valuation allowances on deferred tax assets. Our effective tax rate was 25.5% and 24.5% for the three months ended June 30, 2020 and 2019, respectively. Our effective tax rate was 24.3% and 22.7% for the six months ended June 30, 2020 and 2019, respectively. The effective tax rate for the three and six months ended June 30, 2020 is above the 21.0% federal statutory tax rate primarily due to state tax expense, partially offset by tax benefits recognized on the settlement of employee share-based awards.

Unrecognized Tax Benefits

As of June 30, 2020, the total amount of our unrecognized tax benefits was $1.3 million and the total amount of our

accrued interest was $0.7 million.

The federal statutes of limitation have expired for all tax years prior to 2016, and we are not currently under audit by the IRS. Various state jurisdictions are auditing years 2013 through 2017. There are currently no federal or provincial audits in Canada; however, years subsequent to 2015 remain open and could be subject to examination. It is reasonably possible that the amount of unrecognized tax benefits may change within the next twelve months. However, given the number of years that remain subject to examination and the number of matters being examined, an estimate of the range of the possible increase or decrease cannot be made.

XML

Debt Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Debt

The components of Debt are:

	June 30, 2020		December 31, 2019
	(In thousands)
8.0% Senior Notes due November 2021	$	150,000	$	150,000
5.375% Senior Notes due May 2024	850,000		850,000
7.5% Senior Notes due April 2027	152,710		153,465
4.625% Senior Notes due December 2027	550,000		550,000
5.125% Senior Notes due June 2029	750,000		750,000
Term Loan due May 2024	617,500		633,750
Bank Credit Facility due May 2024	390,000		295,000
Obligations under finance leases	175,618		185,252
Mortgage notes and other debt, maturities through 2050	52,370		45,104
Unamortized premiums and discounts, net	5,155		5,634
Unamortized debt issuance costs	(32,377)		(34,854)
Total debt	3,660,976		3,583,351
Less: Current maturities of long-term debt	(87,267)		(69,821)
Total long-term debt	$	3,573,709	$	3,513,530

Current maturities of debt at June 30, 2020 include amounts due under our term loan, mortgage notes and other debt, and finance leases within the next year as well as the portion of unamortized premiums and discounts and debt issuance costs expected to be recognized in the next twelve months.

Our consolidated debt had a weighted average interest rate of 4.22% and 4.72% at June 30, 2020 and December 31, 2019, respectively. Approximately 68% and 69% of our total debt had a fixed interest rate at June 30, 2020 and December 31, 2019, respectively.

During the six months ended June 30, 2020 and 2019, we paid $83.9 million and $97.3 million in cash interest, respectively.

Bank Credit Facility

As of June 30, 2020, we had $390.0 million outstanding borrowings under our Bank Credit Facility due May 2024, $617.5 million of outstanding borrowings under our Term Loan due May 2024, and $34.0 million of letters of credit issued. The Bank Credit Facility provides us with flexibility for working capital, if needed, and is guaranteed by a majority of our domestic subsidiaries. The subsidiary guaranty is a guaranty of payment of the outstanding amount of the total lending commitment, including letters of credit. The bank credit agreement contains certain financial covenants, including a minimum interest coverage ratio, a maximum leverage ratio, and certain dividend and share repurchase restrictions. As of June 30, 2020, we were in compliance with all of our debt covenants. We pay a quarterly fee on the unused commitment, which was 0.20% at June 30, 2020. As of June 30, 2020, we have $576.0 million in borrowing capacity under the Bank Credit Facility.

Subsequent to June 30, 2020, we increased our outstanding borrowings by $20.0 million to $410.0 million under our Bank Credit Facility due May 2024.

Debt Issuances and Additions

During the six months ended June 30, 2020, we drew $190.0 million on our Bank Credit Facility for general corporate purposes.

During the six months ended June 30, 2019, we issued or added $854.3 million of debt including:

•$750.0 million unsecured 5.125% Senior Notes due June 2029;

•$55.0 million on our Bank Credit Facility due December 2022; and

•$49.3 million in additional proceeds from certain members of the syndicate of banks in our Bank Credit Facility.

The debt proceeds were used to pay down our Bank Credit Facility due December 2022, to partially redeem our 5.375% Senior Notes due January 2022, to fund acquisition activity, and for general corporate purposes. These transactions resulted in additional debt issuance costs of $15.5 million .

Debt Extinguishments and Reductions

During the six months ended June 30, 2020, we made aggregate debt payments of $112.4 million for scheduled and early extinguishment payments including:

•$95.0 million in aggregate principal of our Bank Credit Facility due May 2024;

•$16.3 million in aggregate principal of our Term Loan due May 2024;

•$0.8 million in aggregate principal of 7.5% Senior Notes due April 2027 repurchased on the open market;

•$0.1 million of premiums paid on early extinguishment; and

•$0.2 million in other debt.

Certain of the above transactions resulted in the recognition of a loss of $0.2 million recorded in Losses on early extinguishment of debt, net in our unaudited Condensed Consolidated Statement of Operations for the six months ended June 30, 2020.

During the six months ended June 30, 2019, we made aggregate debt payments of $836.8 million for scheduled and early extinguishment payments including:

•$450.0 million in aggregate principal of our Bank Credit Facility due December 2022;

•$40.5 million in aggregate principal payments to other members of our Term Loan due December 2022;

•$326.1 million in aggregate principal 5.375% Senior Notes due January 2022;

•$15.7 million in aggregate principal of 7.5% Senior Notes due April 2027;

•$4.3 million of premiums paid on early extinguishment; and

•$0.2 million in other debt.

Certain of the above transactions resulted in the recognition of a loss of $7.6 million recorded in Losses on early extinguishment of debt, net in our Consolidated Statement of Operations for the six months ended June 30, 2019.

XML

Credit Risk and Fair Value of Financial Instruments Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Credit Risk and Fair Value of Financial Instruments [Abstract]

Credit Risk and Fair Value of Financial Instruments [Text Block]

Credit Risk and Fair Value of Financial Instruments

Fair Value Estimates

The fair value estimates of the following financial instruments have been determined using available market information and appropriate valuation methodologies. The carrying values of cash and cash equivalents, trade receivables, and trade payables approximate the fair values of those instruments due to the short-term nature of the instruments. The carrying values of receivables on preneed funeral and cemetery contracts approximate fair value due to the large number of diverse individual contracts with varying terms.

The fair value of our debt instruments at June 30, 2020 and December 31, 2019 was as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
8.0% Senior Notes due November 2021	$	159,294	$	165,375
5.375% Senior Notes due May 2024	867,230		879,606
7.5% Notes due April 2027	174,074		188,381
4.625% Senior Notes due December 2027	573,485		577,500
5.125% Senior Notes due June 2029	806,250		798,525
Term Loan due May 2024	617,500		633,750
Bank Credit Facility due May 2024	390,000		295,000
Mortgage notes and other debt, maturities through 2050	52,370		45,104
Total fair value of debt instruments	$	3,640,203	$	3,583,241

The fair values of our long-term, fixed rate loans were estimated using market prices for those loans, and therefore they are classified within Level 2 of the fair value measurements hierarchy. The Term Loan, Bank Credit Facility, and the mortgage and other debt are classified within Level 3 of the fair value measurements hierarchy. The fair values of these instruments have been estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. An increase (decrease) in the inputs results in a directionally opposite change in the fair value of the instruments.

XML

Commitments and Contingencies Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Insurance Loss Reserves

We purchase comprehensive general liability, morticians and cemetery professional liability, automobile liability, and workers’ compensation insurance coverage structured with high deductibles. The high-deductible insurance program means we are primarily self-insured for claims and associated costs and losses covered by these policies. As of June 30, 2020 and December 31, 2019, we have self-insurance reserves of $87.2 million and $84.3 million, respectively.

Litigation and Regulatory Matters

We are a party to various litigation and regulatory matters, investigations, and proceedings. Some of the more frequent routine litigations incidental to our business are based on burial practices claims and employment-related matters, including discrimination, harassment, and wage and hour laws and regulations. For each of our outstanding legal matters, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies, and the likelihood of an unfavorable outcome. We intend to vigorously defend ourselves in the matters described herein; however, if we determine that an unfavorable outcome is probable and can be reasonably estimated, we establish the necessary accruals. We hold certain insurance policies that may reduce cash outflows with respect to an adverse outcome of certain of these matters. We accrue such insurance recoveries when they become probable of being paid and can be reasonably estimated.

Wage and Hour Claims. We are named as a defendant in various lawsuits alleging violations of federal and state laws regulating wage and hour pay, including but not limited to the Fredeen lawsuit described below.

Lisa Fredeen, an aggrieved employee and on behalf of other aggrieved employees v. California Cemetery and Funeral Services, LLC, et al; Case No. BC706930; in the Superior Court of the State of California for the County of Los Angeles. This lawsuit was filed against SCI subsidiaries on May 18, 2018 and purports to be brought on behalf of the defendants' current and former non-exempt California employees during the four years preceding the filing of the complaint. This lawsuit asserts numerous claims for alleged wage and hour pay violations under the California Labor Code and the California Private Attorneys General Act. The plaintiff seeks unpaid wages, compensatory and punitive damages, civil penalties, attorneys’ fees and costs, and interest. Given the nature of this lawsuit, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Claims Regarding Acquisition of Stewart Enterprises. We are involved in the following lawsuit.

Karen Moulton, Individually and on behalf of all others similarly situated v. Stewart Enterprises, Inc., Service Corporation International and others; Case No. 2013-5636; in the Civil District Court Parish of New Orleans, Louisiana. This case was filed as a class action in June 2013 against an SCI subsidiary in connection with SCI's acquisition of Stewart Enterprises, Inc. The plaintiffs allege that SCI aided and abetted breaches of fiduciary duties by Stewart Enterprises and its board of directors in negotiating the combination of Stewart Enterprises with a subsidiary of SCI. The plaintiffs seek damages concerning the combination. We filed exceptions to the plaintiffs’ complaint that were granted in June 2014. Thus, subject to appeals, SCI will no longer be party to the suit. The case has continued against our subsidiary Stewart Enterprises and its former individual directors. However, in October 2016, the court entered a judgment dismissing all of plaintiffs’ claims. Plaintiffs have appealed the dismissal. Given the nature of this lawsuit, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Operational Claims. We are named a defendant in various lawsuits alleging operational claims, including but not limited to the State of California and Taylor lawsuits described below.

The People of the State of California v. Service Corporation International, a Texas corporation, SCI Direct, Inc. a Florida Corporation, S.E. Acquisition of California, Inc., a California corporation dba Neptune Society of Northern California, Neptune Management Corp., a California corporation, Trident Society, Inc. a California corporation, and Does 1 through 100, inclusive, Case No. RG 19045103; in the Superior Court of the State of California in and for the County of Alameda. In July 2019, we received a letter from the Attorney General, State of California, Department of Justice (“CAAG") alleging that the allocation of prices among certain of our cremation service contracts and cremation merchandise contracts, and the related preneed trust funding, violates section 7735 of the California Business and Professions Code and that provisions of these same contracts constitute false advertising and deceptive sales practices in violation of California consumer protection laws. On November 21, 2019, we filed a complaint, S.E. Combined Services of California, Inc., a California Corporation dba Neptune Society of Northern California, Neptune Management Corp. a California Corporation, and Trident Society, Inc. v. Xavier Becerra, Attorney General of the State of California, and Does 1-50, Case No. 34-2019-00269617; in the Sacramento County Superior Court seeking declaratory relief holding, in general, that our practices, methods, and documentation utilized in the sale of preneed funeral goods and services are in all respects compliant with California law. On December 2, 2019, the CAAG filed the complaint, referenced above, seeking permanent injunction from making false statements and engaging in unfair competition, a placement of funds into preneed trusts, civil penalties, customer refunds, attorneys’ fees, and costs. We believe our contracts comply with applicable laws. Given the nature of this matter, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Nancy Taylor, on behalf of herself and others similarly situated v. Service Corporation International and others, Case No. 20-cv-60709; in the United States District Court Southern District of Florida Fort Lauderdale Division. This case was filed in April 2020

as a Florida class action alleging that the allocation of prices among certain of our cremation service contracts and cremation merchandise contracts, and the related preneed trust funding, and the failure to disclose commissions paid and sales practices associated with the sale of third-party travel protection plans, violate the Florida Deceptive and Unfair Trade Practices Act and constitute unjust enrichment. Plaintiff seeks refunds, general, actual, compensatory and exemplary damages, civil penalties, interest, and attorney fees. Given the nature of this lawsuit, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Unclaimed Property Audit

We received notices from a third-party auditor representing the unclaimed property departments of certain states regarding preneed funeral and cemetery contracts that were not funded by the purchase and assignment of the proceeds of insurance policies. The auditor claims that we are subject to the laws of those states concerning escheatment of unclaimed funds. The auditor seeks escheatment of funds from the portion of such contracts for which it claims that we will probably not be required to provide services or merchandise in the future. No actual audits have commenced at this time. Given the nature of this matter, we are unable to reasonably estimate the possible loss or ranges of loss, if any.

Other Potential Contingencies

In October 2018, we received a letter from the Illinois Office of the Comptroller claiming that our subsidiary improperly withdrew a total of $13.6 million from perpetual care trusts covering 24 of our cemeteries in Illinois. We believe these withdrawals were entirely proper for the ongoing care of those cemeteries under Illinois law.

We intend to vigorously defend all of the above matters; however, an adverse decision in one or more of such matters could have a material effect on us, our financial condition, results of operations, and cash flows.

XML

Equity Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Equity

(All shares reported in whole numbers)

Share Repurchase Program

Subject to market conditions, normal trading restrictions, and limitations in our debt covenants, we may make purchases in the open market or through privately negotiated transactions under our share repurchase program. During the six months ended June 30, 2020, we repurchased 5,177,807 shares of common stock at an aggregate cost of $210.6 million, which is an average cost per share of $40.67. After these repurchases, the remaining dollar value of shares authorized to be purchased under the share repurchase program was $106.2 million at June 30, 2020.

Subsequent to June 30, 2020, we repurchased 791,744 shares for $30.4 million at an average cost per share of $38.40. After these repurchases, the remaining dollar value of shares authorized to be purchased under the share repurchase program is $75.8 million.

XML

Segment Reporting Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Reporting

Our operations are both product-based and geographically-based, and the reportable operating segments presented below include our funeral and cemetery operations. Our geographic areas include the United States and Canada, where we conduct both funeral and cemetery operations.

Our reportable segment information, including disaggregated revenue, was as follows and includes a reconciliation of gross profit to our consolidated income before income taxes.

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Revenue from customers:
Funeral revenue:
Atneed revenue	$	256,166	$	245,418	$	520,954	$	504,148
Matured preneed revenue	158,357		148,584		321,940		305,034
Core funeral revenue	414,523		394,002		842,894		809,182
Non-funeral home revenue	14,146		13,121		28,597		26,094
Recognized preneed revenue	27,663		39,728		60,463		71,053
Other revenue	24,615		32,127		53,889		65,443
Total funeral revenue	480,947		478,978		985,843		971,772
Cemetery revenue:
Atneed revenue	91,102		82,286		176,145		163,737
Recognized preneed property revenue	152,117		151,875		268,199		280,487
Recognized preneed merchandise and services revenue	69,844		73,570		138,508		140,609
Core cemetery revenue	313,063		307,731		582,852		584,833
Other revenue	26,025		25,863		54,305		54,179
Total cemetery revenue	339,088		333,594		637,157		639,012
Total revenue from customers	$	820,035	$	812,572	$	1,623,000	$	1,610,784
Gross profit:
Funeral gross profit	$	115,957	$	90,590	$	219,533	$	196,008
Cemetery gross profit	102,810		100,556		178,278		186,972
Gross profit from reportable segments	218,767		191,146		397,811		382,980
Corporate general and administrative expenses	(37,169)		(29,218)		(68,982)		(72,196)
Gains (losses) on divestitures and impairment charges, net	737		(11,823)		5,282		(13,701)
Operating income	182,335		150,105		334,111		297,083
Interest expense	(41,767)		(47,317)		(86,118)		(94,707)
Losses on early extinguishment of debt, net	(11)		(7,579)		(150)		(7,579)
Other income (expense), net	1,166		874		(81)		1,594
Income before income taxes	$	141,723	$	96,083	$	247,762	$	196,391

Our geographic area information was as follows:

	United States		Canada		Total
	(In thousands)
Three Months Ended June 30,
Revenue from external customers:
2020	$	781,842	$	38,193	$	820,035
2019	$	767,394	$	45,178	$	812,572
Six Months Ended June 30,
Revenue from external customers:
2020	$	1,541,114	$	81,886	$	1,623,000
2019	$	1,521,474	$	89,310	$	1,610,784

XML

Earnings Per Share Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings Per Share

Basic earnings per common share excludes dilution and is computed by dividing Net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other obligations to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that participated in our earnings.

A reconciliation of the numerators and denominators of basic and diluted earnings per share is presented below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands, except per share amounts)
Amounts attributable to common stockholders:
Net income — basic and diluted	$	105,508	$	72,329	$	187,449	$	151,652
Weighted average shares:
Weighted average shares — basic	177,902		182,369		179,378		182,048
Stock options	1,740		3,278		2,221		3,418
Restricted share units	24		43		40		51
Weighted average shares — diluted	$	179,666	$	185,690	$	181,639	$	185,517
Amounts attributable to common stockholders:
Earnings per share:
Basic	$	0.59	$	0.40	$	1.04	$	0.83
Diluted	$	0.59	$	0.39	$	1.03	$	0.82

The computation of diluted earnings per share excludes outstanding stock options and restricted share units in certain periods in which the inclusion of such equity awards would be antidilutive to the periods presented. Total antidilutive options and restricted stock units not currently included in the computation of diluted earnings per share

XML

Acquisition Level 1 (Notes)

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Acquisitions

We spent $59.0 million and $32.8 million, for several real estate, funeral service, and cemetery locations during the six months ended June 30, 2020 and 2019, respectively.

Divestiture-Related Activities

As divestitures occur in the normal course of business, gains or losses on the sale of such locations are recognized in the unaudited Condensed Consolidated Statement of Operations line item Gains (losses) on divestitures and impairment charges, net, which comprised the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Gains (losses) on divestitures, net	$	737	$	(9,643)	$	8,366	$	(9,097)
Impairment losses	—		(2,180)		(3,084)		(4,604)
Gains (losses) on divestitures and impairment charges, net	$	737	$	(11,823)	$	5,282	$	(13,701)

XML

Summary of Significant Accounting Policies Level 2 (Policies) - USD ($)
$ in Thousands

6 Months Ended

Jun. 30, 2020

Dec. 31, 2019

Jun. 30, 2019

Consolidation, Policy [Policy Text Block]

Principles of Consolidation and Basis of Presentation

Our consolidated financial statements include the accounts of Service Corporation International (SCI) and all subsidiaries in which we hold a controlling financial interest. Intercompany balances and transactions have been eliminated in consolidation.

Our unaudited condensed consolidated financial statements also include the accounts of the merchandise and service trusts and cemetery perpetual care trusts in which we have a variable interest and are the primary beneficiary. We have retained the specialized industry accounting principles when consolidating the trusts. Our trusts are variable interest entities, for which we have determined that we are the primary beneficiary as we absorb a majority of the losses and returns associated with these trusts. Although we consolidate the trusts, it does not change the legal relationships among the trusts, us, or our customers. The customers are the legal beneficiaries of these trusts; therefore, their interests in these trusts represent a liability to us.

Our interim condensed consolidated financial statements are unaudited but include all adjustments, consisting of normal recurring accruals and any other adjustments, which management considers necessary for a fair statement of our results for these periods. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2019, unless otherwise disclosed herein, and should be read in conjunction therewith. The accompanying year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period.

Reclassification, Policy [Policy Text Block]

Reclassifications to Prior Period Financial Statements and AdjustmentsCertain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation with no effect on our previously reported results of operations, consolidated financial position, or cash flows, except as described below under "Accounting Standards Adopted in 2020".

Use of Estimates, Policy [Policy Text Block]

Use of Estimates in the Preparation of Financial Statements

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. As a result, actual results could differ from these estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. The carrying amounts of our cash and cash equivalents approximate fair value due to the short-term nature of these instruments.

Accounts Receivable [Policy Text Block]

Receivables, net

The components of Receivables, net in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	39,208	$	22,051	$	19,856	$	1,854	$	82,969
Reserve for credit losses	(3,573)		(1,560)		(296)		(577)		(6,006)
Receivables, net	$	35,635	$	20,491	$	19,560	$	1,277	$	76,963

	December 31, 2019
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	41,370	$	20,855	$	19,943	$	1,765	$	83,933
Allowance for doubtful accounts	(1,899)		(363)		—		—		(2,262)
Receivables, net	$	39,471	$	20,492	$	19,943	$	1,765	$	81,671

Additionally, included in Deferred charges and other assets, net were long-term miscellaneous receivables, net and notes receivable, net as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Notes receivable	$	13,421	$	14,997
Reserve for credit losses	(7,295)		—
Allowance for doubtful accounts	—		(8,374)
Notes receivable, net	$	6,126	$	6,623
Long-term miscellaneous receivables	$	6,249	$	7,287
Reserve for credit losses	(950)		—
Long-term miscellaneous receivables, net	$	5,299	$	7,287

Our atneed trade receivables primarily consist of amounts due for funeral and cemetery services already performed. We provide reserves for credit losses for our receivables. These reserves are based on an analysis of historical trends of collection activity adjusted for current conditions and forecasts. These estimates are impacted by a number of factors, including changes in the economy and demographic or competitive changes in our areas of operation. In the six months ended June 30, 2020, we increased our reserve for credit losses on trade and miscellaneous receivables as a result of the economic impact of the COVID-19 pandemic (COVID-19). Cemetery preneed receivables are collateralized by cemetery property to the extent of the fair value of the property. Prior to adoption of the guidance on credit losses for financial instruments on January 1, 2020, we provided allowances for doubtful accounts on our receivables based on an analysis of historical trends of collection activity.

Payment on atneed contracts is generally due at the time the merchandise is delivered or the services are performed. We also have preneed receivables, as disclosed in Note 3, for which payment generally occurs prior to our fulfillment of the performance obligations. Our preneed contracts may also have extended payment terms with associated financing charges. We do not accrue interest on preneed receivables if they are not paid in accordance with the contractual payment terms given the nature of our merchandise and services, the nature of our contracts with customers, and the timing of the delivery of our services. Generally, receivables are considered past due after thirty days. We do not consider preneed funeral receivables to be past due until the contract converts into an atneed contract at which time the preneed receivable is paid or reclassified as a trade receivable with payment terms of less than thirty days. Collections are generally managed by the locations or third party agencies acting on behalf of the locations, until a receivable is one hundred eighty days delinquent, at which time trade receivables are fully reserved.

The following table summarizes the activity in our reserve for credit losses by portfolio segment, excluding preneed receivables which are presented in Note 3, for the six months ended June 30, 2020:

	January 1, 2020		Provision for Expected Credit Losses		Write Offs		Recoveries		Effect of Foreign Currency		June 30, 2020
	(In thousands)
Trade receivables:
Funeral	$	(2,690)	$	(2,698)	$	2,644	$	(935)	$	106	$	(3,573)
Cemetery	(1,424)		(776)		615		(42)		67		(1,560)
Total reserve for credit losses on trade receivables	$	(4,114)	$	(3,474)	$	3,259	$	(977)	$	173	$	(5,133)
Miscellaneous receivables:
Current	$	(203)	$	(118)	$	—	$	—	$	25	$	(296)
Long-term	(715)		(235)		—		—		—		(950)
Total reserve for credit losses on miscellaneous receivables	$	(918)	$	(353)	$	—	$	—	$	25	$	(1,246)
Notes receivable	$	(9,031)	$	79	$	1,080	$	—	$	—	$	(7,872)

At June 30, 2020, the amortized cost basis of our miscellaneous and notes receivables by year of origination was as follows:

	2020		2019		2018		2017		2016		Prior		Revolving Line of Credit		Total
	(In thousands)
Miscellaneous receivables:
Current	$	18,023	$	1,227	$	386	$	160	$	55	$	5	$	—	$	19,856
Long-term	1,221		2,718		1,400		663		226		21		—		6,249
Total miscellaneous receivables	$	19,244	$	3,945	$	1,786	$	823	$	281	$	26	$	—	$	26,105
Notes receivable	$	—	$	—	$	235	$	—	$	98	$	6,648	$	8,294	$	15,275

At June 30, 2020, the payment status of our miscellaneous and notes receivables was as follows:

	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Miscellaneous receivables:
Current	$	84	$	28	$	—	$	2	$	114	$	19,742	$	19,856
Long-term	—		—		—		—		—		6,249		6,249
Total miscellaneous receivables	$	84	$	28	$	—	$	2	$	114	$	25,991	$	26,105
Notes receivable	$	1	$	2	$	2	$	1,127	$	1,132	$	14,143	$	15,275

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value Measurements

In August 2018, the FASB amended "Fair Value Measurements" to modify the disclosure requirements related to fair value. The amendment removes requirements to disclose (1) the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy, (2) our policy related to the timing of transfers between levels, and (3) the valuation processes used in level 3 measurements. It clarifies that, for investments measured at net asset value, disclosure of liquidation timing is only required if the investee has communicated the timing either to us or publicly. It also clarifies that the narrative disclosure of the effect of changes in level 3 inputs should be based on changes that could occur at the reporting date. The amendment adds a requirement to disclose the range and weighted average of the significant unobservable inputs used in level 3 measurements. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

The fair values of our long-term, fixed rate loans were estimated using market prices for those loans, and therefore they are classified within Level 2 of the fair value measurements hierarchy. The Term Loan, Bank Credit Facility, and the mortgage and other debt are classified within Level 3 of the fair value measurements hierarchy. The fair values of these instruments have been estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements.

Financing Receivable [Policy Text Block]

Financial Instruments - Credit Losses

In June 2016, the FASB issued "Financial Instruments - Credit Losses" to provide financial statement users with more decision-useful information about the expected credit losses on debt instruments and other commitments to extend credit held by a reporting entity at each reporting date. During November 2018 and April 2019, the FASB made amendments to the new standard that clarified guidance on several matters, including accrued interest, recoveries, and various codification improvements. The new standard, as amended, replaces the incurred loss impairment methodology in the previous standard with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates.

We adopted the new guidance as of January 1, 2020, applying a modified retrospective approach to credit loss reserves on our atneed, preneed, miscellaneous, and notes receivable and a prospective approach for credit loss reserves on our fixed income investments. As a result of the adoption, we recorded a $17.0 million increase to Retained earnings, which comprises a $26.4 million and a $5.8 million increase in Preneed receivables, net and trust investments and Deferred tax liability, respectively, and a $2.7 million and a $0.9 million decrease to Receivables, net and Deferred charges and other assets, net, respectively.

Accounts Receivable, before Allowance for Credit Loss, Current

$ 82,969

$ 83,933

Accounts Receivable, Allowance for Credit Loss

(6,006)

(2,262)

$ (6,006)

Accounts Receivable, Allowance for Credit Loss, Noncurrent

(18,277)

(14,757)

Receivables, net

76,963

81,671

Financing Receivable, Allowance for Credit Loss, Noncurrent

$ (8,245)

Allowance for Doubtful Accounts, Premiums and Other Receivables

(41,142)

Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy

Goodwill and Intangible Assets

In addition to our annual review, we assess the impairment of goodwill and indefinite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value may be greater than the fair value. Factors that could trigger an interim impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. As a result of the challenging economic conditions caused by the response to COVID-19, at June 30, 2020, we performed a qualitative assessment of our goodwill. Based on the qualitative assessment, we believe that it is more likely than not that the fair value of the goodwill reporting units exceeds their carrying value and no quantitative assessment of impairment is necessary at June 30, 2020.

During the six months ended June 30, 2020, we performed a quantitative assessment on certain of our tradenames. We recorded a $3.0 million impairment charge for certain of our tradenames during the first quarter of 2020. In determining the fair value of the tradenames, we used the relief from royalty method whereby we determine the fair value of the assets by discounting the cash flows that represent a savings over having to pay a royalty fee for use of the tradenames. The discounted cash flow valuation uses projections of future cash flows and includes assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows. For our first quarter of 2020 test, we estimated that the pre-tax savings would range from 2.0% to 5.0% of the revenue associated with the trademark and tradenames, based primarily on our research of intellectual property valuation and licensing databases. We also assumed a terminal growth rate of 1.0% and 2.4% for our funeral and cemetery tradenames, respectively, and discounted the cash flows at a 6.95% discount rate based on the relative risk of these assets to the overall business.

Goodwill and Intangible Assets, Goodwill, Policy

Goodwill

In January 2017, the FASB amended "Goodwill" to simplify the subsequent measurement of goodwill. The amended

guidance eliminates Step 2 from the goodwill impairment test. Instead, impairment is defined as the amount by which the carrying value of the reporting unit exceeds its fair value, up to the total amount of goodwill of the reporting unit. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

Loans and Leases Receivable, Lease Financing, Policy

Leases

We have 61 operating leases where we are the lessor and the non-cancelable term is greater than one year, resulting in $0.7 million and $1.3 million in lease income for the three and six months ended June 30, 2020, respectively. We determine whether an arrangement is or contains a lease at the inception of the arrangement based on the terms of the arrangement. We lease retail space, office space and land, and we are party to cellular agreements and land easements. The underlying assets of these lease agreements are buildings and land. We generally do not have sales-type leases, direct financing leases, or lease receivables. Certain of our agreements include variable rental income based on a percentage of sales over base contractual levels. Renewal options that can be cancelled by the lessees are not included in our disclosure of future lease income, which includes only the non-cancelable terms and fixed escalation provisions. Certain lease arrangements contain options to purchase the

property at fair value at the conclusion of the lease term. Non-lease components are excluded from rental income disclosures. Future undiscounted lease income from operating leases as of June 30, 2020 was as follows (in thousands):

2020 (excluding the six months ended June 30, 2020)	$	1,833
2021	3,626
2022	3,225
2023	2,537
2024	2,163
2025 and thereafter	16,806
Total future undiscounted lease income	$	30,190

Funeral [Member]

Accounts Receivable, Allowance for Credit Loss, Noncurrent

$ (10,350)

(8,057)

Allowance for Doubtful Accounts, Premiums and Other Receivables

(1,452)

Cemetery [Member]

Accounts Receivable, Allowance for Credit Loss, Noncurrent

(7,927)

(6,700)

Allowance for Doubtful Accounts, Premiums and Other Receivables

39,690

Trade Accounts Receivable [Member] | Funeral [Member]

Accounts Receivable, before Allowance for Credit Loss, Current

39,208

41,370

Accounts Receivable, Allowance for Credit Loss

(3,573)

(1,899)

Receivables, net

35,635

39,471

Trade Accounts Receivable [Member] | Cemetery [Member]

Accounts Receivable, before Allowance for Credit Loss, Current

22,051

20,855

Accounts Receivable, Allowance for Credit Loss

(1,560)

(363)

Receivables, net

20,491

20,492

Trade Accounts Receivable [Member] | Other Accounts Receivable Current [Member]

Accounts Receivable, before Allowance for Credit Loss, Current

19,856

19,943

Accounts Receivable, Allowance for Credit Loss

(296)

0

Receivables, net

19,560

19,943

Notes Receivable [Member] | Current [Member]

Accounts Receivable, before Allowance for Credit Loss, Current

1,854

1,765

Accounts Receivable, Allowance for Credit Loss

(577)

0

Receivables, net

$ 1,277

$ 1,765

XML

Preneed Activities Level 3 (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2019

Jun. 30, 2020

Preneed Activities [Abstract]

Investment related activities [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Deposits	$	98,341	$	112,905	$	203,894	$	213,357
Withdrawals	$	99,264	$	116,680	$	213,856	$	224,036
Purchases of securities	$	456,639	$	240,376	$	905,291	$	689,534
Sales of securities	$	441,743	$	240,599	$	793,569	$	562,390
Realized gains from sales of securities(1)	$	92,435	$	54,756	$	144,592	$	98,281
Realized losses from sales of securities(1)	$	(61,756)	$	(16,251)	$	(147,158)	$	(48,882)

Long-term receivable and investment components [Table Text Block]

	June 30, 2020		December 31, 2019
	(In thousands)
Preneed receivables, net	$	977,021	$	947,232
Trust investments, at market	4,993,442		5,258,319
Insurance-backed fixed income securities and other	251,836		265,160
Trust investments	5,245,278		5,523,479
Less: Cemetery perpetual care trust investments	(1,599,599)		(1,681,149)
Preneed trust investments	3,645,679		3,842,330
Preneed receivables, net and trust investments	$	4,622,700	$	4,789,562

Preneed receivables, net comprised the following:

	June 30, 2020
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	136,880	$	900,938	$	1,037,818
Unearned finance charges	(15,583)		(26,937)		(42,520)
Preneed receivables, at amortized cost	121,297		874,001		995,298
Reserve for credit losses	(10,350)		(7,927)		(18,277)
Preneed receivables, net	$	110,947	$	866,074	$	977,021
	December 31, 2019
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	130,971	$	907,973	$	1,038,944
Unearned finance charges	(16,328)		(34,242)		(50,570)
Preneed receivables, at amortized cost	114,643		873,731		988,374
Allowance for cancellation	(1,452)		(39,690)		(41,142)
Preneed receivables, net	$	113,191	$	834,041	$	947,232

Preneed Funeral Receivables, Net and Trust Investments [Table Text Block]

December 31, 2019

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

		December 31, 2019
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	49,728	$	752	$	(130)	$	50,350
Canadian government	2	41,093		76		(850)		40,319
Corporate	2	9,694		28		(172)		9,550
Residential mortgage-backed	2	3,210		59		(1)		3,268
Asset-backed	2	129		3		(4)		128
Equity securities:
Preferred stock	2	6,338		804		(115)		7,027
Common stock:
United States	1	1,349,828		303,766		(36,507)		1,617,087
Canada	1	43,866		12,369		(2,075)		54,160
Other international	1	95,257		18,227		(522)		112,962
Mutual funds:
Equity	1	746,581		31,511		(54,020)		724,072
Fixed income	1	1,247,930		16,424		(32,587)		1,231,767
Other	3	7,034		1,184		—		8,218
Trust investments, at fair value		3,600,688		385,203		(126,983)		3,858,908
Commingled funds
Fixed income		444,744		5,077		(1,731)		448,090
Equity		249,980		47,631		—		297,611
Money market funds		397,461		—		—		397,461
Private equity		176,388		80,283		(422)		256,249
Trust investments, at net asset value		1,268,573		132,991		(2,153)		1,399,411
Trust investments, at market		$	4,869,261	$	518,194	$	(129,136)	$	5,258,319

		June 30, 2020
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	48,249	$	1,923	$	(249)	$	49,923
Canadian government	2	38,056		58		(727)		37,387
Corporate	2	2,351		6		(81)		2,276
Residential mortgage-backed	2	3,254		168		—		3,422
Asset-backed	2	128		3		(5)		126
Equity securities:
Preferred stock	2	386		—		(35)		351
Common stock:
United States	1	1,368,878		284,456		(118,350)		1,534,984
Canada	1	35,890		7,793		(3,547)		40,136
Other international	1	87,167		19,230		(3,647)		102,750
Mutual funds:
Equity	1	812,202		13,840		(140,573)		685,469
Fixed income	1	1,292,673		23,609		(106,397)		1,209,885
Other	3	391		33		(1)		423
Trust investments, at fair value		3,689,625		351,119		(373,612)		3,667,132
Commingled funds
Fixed income		468,268		15,647		(2,247)		481,668
Equity		261,895		33,768		(243)		295,420
Money market funds		298,674		—		—		298,674
Private equity		211,805		49,716		(10,973)		250,548
Trust investments, at net asset value		1,240,642		99,131		(13,463)		1,326,310
Trust investments, at market		$	4,930,267	$	450,250	$	(387,075)	$	4,993,442

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The change in our market-based trust investments with significant unobservable inputs (Level 3) is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Fair value, beginning balance	$	418	$	7,108	$	8,218	$	9,755
Net realized and unrealized gains (losses) included in Other income (expense), net(1)	717		(322)		(257)		(1,464)
Purchases	4,559		5		4,569		5
Sales	(5,271)		(203)		(5,296)		(1,708)
Transfers	—		—		(6,811)		—
Fair value, ending balance	$	423	$	6,588	$	423	$	6,588

⁽¹⁾All net realized and unrealized gains (losses) recognized in Other income (expense), net for our trust investments are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Fair value, beginning balance	$	418	$	7,108	$	8,218	$	9,755
Net realized and unrealized gains (losses) included in Other income (expense), net(1)	717		(322)		(257)		(1,464)
Purchases	4,559		5		4,569		5
Sales	(5,271)		(203)		(5,296)		(1,708)
Transfers	—		—		(6,811)		—
Fair value, ending balance	$	423	$	6,588	$	423	$	6,588

Preneed Activities Text Block

Preneed Activities

Preneed receivables, net and trust investments

The components of Preneed receivables, net and trust investments in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Preneed receivables, net	$	977,021	$	947,232
Trust investments, at market	4,993,442		5,258,319
Insurance-backed fixed income securities and other	251,836		265,160
Trust investments	5,245,278		5,523,479
Less: Cemetery perpetual care trust investments	(1,599,599)		(1,681,149)
Preneed trust investments	3,645,679		3,842,330
Preneed receivables, net and trust investments	$	4,622,700	$	4,789,562

Preneed receivables, net comprised the following:

	June 30, 2020
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	136,880	$	900,938	$	1,037,818
Unearned finance charges	(15,583)		(26,937)		(42,520)
Preneed receivables, at amortized cost	121,297		874,001		995,298
Reserve for credit losses	(10,350)		(7,927)		(18,277)
Preneed receivables, net	$	110,947	$	866,074	$	977,021
	December 31, 2019
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	130,971	$	907,973	$	1,038,944
Unearned finance charges	(16,328)		(34,242)		(50,570)
Preneed receivables, at amortized cost	114,643		873,731		988,374
Allowance for cancellation	(1,452)		(39,690)		(41,142)
Preneed receivables, net	$	113,191	$	834,041	$	947,232

At June 30, 2020, the amortized cost basis of our preneed receivables by year of origination was as follows:

	2020		2019		2018		2017		2016		Prior		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	32,928	$	47,157	$	18,298	$	9,076	$	3,685	$	10,153	$	121,297
Cemetery	182,018		287,452		188,393		116,902		60,871		38,365		874,001
Total preneed receivables, at amortized cost	$	214,946	$	334,609	$	206,691	$	125,978	$	64,556	$	48,518	$	995,298

At June 30, 2020, the payment status of our preneed receivables was as follows:

	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	3,835	$	2,233	$	1,331	$	14,790	$	22,189	$	99,108	$	121,297
Cemetery	23,097		22,616		11,191		2,590		59,494		814,507		874,001
Total preneed receivables, at amortized cost	$	26,932	$	24,849	$	12,522	$	17,380	$	81,683	$	913,615	$	995,298

The following table summarizes the activity for the reserve for credit losses on preneed receivables for the six months ended June 30, 2020:

	January 1, 2020		Provision for Expected Credit Losses		Acquisitions (Divestitures), Net		Write Offs		Effect of Foreign Currency		June 30, 2020
	(In thousands)
Funeral	$	(8,057)	$	(3,777)	$	13	$	1,452	$	19	$	(10,350)
Cemetery	(6,700)		(1,498)		—		250		21		(7,927)
Total reserve for credit losses on preneed receivables	$	(14,757)	$	(5,275)	$	13	$	1,702	$	40	$	(18,277)

The table below sets forth certain investment-related activities associated with our trusts:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Deposits	$	98,341	$	112,905	$	203,894	$	213,357
Withdrawals	$	99,264	$	116,680	$	213,856	$	224,036
Purchases of securities	$	456,639	$	240,376	$	905,291	$	689,534
Sales of securities	$	441,743	$	240,599	$	793,569	$	562,390
Realized gains from sales of securities(1)	$	92,435	$	54,756	$	144,592	$	98,281
Realized losses from sales of securities(1)	$	(61,756)	$	(16,251)	$	(147,158)	$	(48,882)

⁽¹⁾All realized gains and losses are recognized in Other income (expense), net for our trust investments and are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts’ corpus.

The cost and market values associated with trust investments recorded at market value are detailed below. Cost reflects the investment (net of redemptions) of control holders in the trusts. Fair value represents the value of the underlying securities held by the trusts.

		June 30, 2020
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	48,249	$	1,923	$	(249)	$	49,923
Canadian government	2	38,056		58		(727)		37,387
Corporate	2	2,351		6		(81)		2,276
Residential mortgage-backed	2	3,254		168		—		3,422
Asset-backed	2	128		3		(5)		126
Equity securities:
Preferred stock	2	386		—		(35)		351
Common stock:
United States	1	1,368,878		284,456		(118,350)		1,534,984
Canada	1	35,890		7,793		(3,547)		40,136
Other international	1	87,167		19,230		(3,647)		102,750
Mutual funds:
Equity	1	812,202		13,840		(140,573)		685,469
Fixed income	1	1,292,673		23,609		(106,397)		1,209,885
Other	3	391		33		(1)		423
Trust investments, at fair value		3,689,625		351,119		(373,612)		3,667,132
Commingled funds
Fixed income		468,268		15,647		(2,247)		481,668
Equity		261,895		33,768		(243)		295,420
Money market funds		298,674		—		—		298,674
Private equity		211,805		49,716		(10,973)		250,548
Trust investments, at net asset value		1,240,642		99,131		(13,463)		1,326,310
Trust investments, at market		$	4,930,267	$	450,250	$	(387,075)	$	4,993,442

		December 31, 2019
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	49,728	$	752	$	(130)	$	50,350
Canadian government	2	41,093		76		(850)		40,319
Corporate	2	9,694		28		(172)		9,550
Residential mortgage-backed	2	3,210		59		(1)		3,268
Asset-backed	2	129		3		(4)		128
Equity securities:
Preferred stock	2	6,338		804		(115)		7,027
Common stock:
United States	1	1,349,828		303,766		(36,507)		1,617,087
Canada	1	43,866		12,369		(2,075)		54,160
Other international	1	95,257		18,227		(522)		112,962
Mutual funds:
Equity	1	746,581		31,511		(54,020)		724,072
Fixed income	1	1,247,930		16,424		(32,587)		1,231,767
Other	3	7,034		1,184		—		8,218
Trust investments, at fair value		3,600,688		385,203		(126,983)		3,858,908
Commingled funds
Fixed income		444,744		5,077		(1,731)		448,090
Equity		249,980		47,631		—		297,611
Money market funds		397,461		—		—		397,461
Private equity		176,388		80,283		(422)		256,249
Trust investments, at net asset value		1,268,573		132,991		(2,153)		1,399,411
Trust investments, at market		$	4,869,261	$	518,194	$	(129,136)	$	5,258,319

Our private equity investments include several funds that invest in limited partnerships, distressed debt, real estate, and mezzanine financing. These investments can never be redeemed by the funds. Instead, due to the nature of the investments in this category, distributions are received through the liquidation of the underlying assets of the funds. The funds' managers have not communicated the timing of any liquidations.

The change in our market-based trust investments with significant unobservable inputs (Level 3) is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Fair value, beginning balance	$	418	$	7,108	$	8,218	$	9,755
Net realized and unrealized gains (losses) included in Other income (expense), net(1)	717		(322)		(257)		(1,464)
Purchases	4,559		5		4,569		5
Sales	(5,271)		(203)		(5,296)		(1,708)
Transfers	—		—		(6,811)		—
Fair value, ending balance	$	423	$	6,588	$	423	$	6,588

⁽¹⁾All net realized and unrealized gains (losses) recognized in Other income (expense), net for our trust investments are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.

Maturity dates of our fixed income securities range from 2020 to 2040. Maturities of fixed income securities (excluding mutual funds) at June 30, 2020 are estimated as follows:

	Fair Value
	(In thousands)
Due in one year or less	$	57,496
Due in one to five years	26,054
Due in five to ten years	9,494
Thereafter	90
Total estimated maturities of fixed income securities	$	93,134

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $27.0 million and $29.6 million, for the three months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $17.3 million and $17.5 million for the three months ended June 30, 2020 and 2019, respectively.

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $59.2 million and $57.2 million, for the six months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $36.8 million and $37.9 million for the six months ended June 30, 2020 and 2019, respectively.

Our fixed income investment unrealized losses, their associated fair values, and the duration of unrealized losses are shown in the following tables:

	June 30, 2020
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	1,201	$	(3)	$	1,243	$	(246)	$	2,444	$	(249)
Canadian government	—		—		11,973		(727)		11,973		(727)
Corporate	54		(2)		2,235		(79)		2,289		(81)
Asset-backed	—		—		25		(5)		25		(5)
Total fixed income securities with an unrealized loss	$	1,255	$	(5)	$	15,476	$	(1,057)	$	16,731	$	(1,062)

	December 31, 2019
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	3,023	$	(36)	$	1,947	$	(94)	$	4,970	$	(130)
Canadian government	—		—		13,804		(850)		13,804		(850)
Corporate	30		—		4,826		(172)		4,856		(172)
Residential mortgage-backed	—		—		51		(1)		51		(1)
Asset-backed	—		—		28		(4)		28		(4)
Total fixed income securities with an unrealized loss	$	3,053	$	(36)	$	20,656	$	(1,121)	$	23,709	$	(1,157)

Deferred revenue, net

Deferred revenue, net represents future revenue, including distributed trust investment earnings associated with unperformed trust-funded preneed contracts that are not held in trust accounts. Future revenue and net trust investment earnings that are held in trust accounts are included in Deferred receipts held in trust.

The components of Deferred revenue, net in our unaudited Condensed Consolidated Balance Sheet were as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
Deferred revenue	$	2,090,129	$	2,046,000
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	(596,023)		(578,897)
Deferred revenue, net	$	1,494,106	$	1,467,103

The following table summarizes the activity for our contract liabilities, which are reflected in Deferred revenue, net and Deferred receipts held in trust:

	Six Months Ended June 30,
	2020		2019
	(In thousands)
Beginning balance — Deferred revenue, net and Deferred receipts held in trust	$	5,306,479	$	4,790,552
Net preneed contract sales	496,467		496,842
Acquisitions (dispositions) of businesses, net	12,777		(29,665)
Net investment (losses) gains(1)	(189,474)		327,819
Recognized revenue from backlog(2)	(226,663)		(212,912)
Recognized revenue from current period sales	(237,296)		(241,589)
Change in amounts due on unfulfilled performance obligations	(18,151)		(3,770)
Change in cancellation reserve	1,070		(206)
Effect of foreign currency and other	(6,891)		10,848
Ending balance — Deferred revenue, net and Deferred receipts held in trust	$	5,138,318	$	5,137,919

⁽¹⁾Includes both realized and unrealized investment (losses) gains.

⁽²⁾Includes current year trust fund income through the date of performance.

Investments Classified by Contractual Maturity Date [Table Text Block]

Maturity dates of our fixed income securities range from 2020 to 2040. Maturities of fixed income securities (excluding mutual funds) at June 30, 2020 are estimated as follows:

	Fair Value
	(In thousands)
Due in one year or less	$	57,496
Due in one to five years	26,054
Due in five to ten years	9,494
Thereafter	90
Total estimated maturities of fixed income securities	$	93,134

Schedule of Unrealized Loss on Investments [Table Text Block]

Our fixed income investment unrealized losses, their associated fair values, and the duration of unrealized losses are shown in the following tables:

	June 30, 2020
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	1,201	$	(3)	$	1,243	$	(246)	$	2,444	$	(249)
Canadian government	—		—		11,973		(727)		11,973		(727)
Corporate	54		(2)		2,235		(79)		2,289		(81)
Asset-backed	—		—		25		(5)		25		(5)
Total fixed income securities with an unrealized loss	$	1,255	$	(5)	$	15,476	$	(1,057)	$	16,731	$	(1,062)

	December 31, 2019
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	3,023	$	(36)	$	1,947	$	(94)	$	4,970	$	(130)
Canadian government	—		—		13,804		(850)		13,804		(850)
Corporate	30		—		4,826		(172)		4,856		(172)
Residential mortgage-backed	—		—		51		(1)		51		(1)
Asset-backed	—		—		28		(4)		28		(4)
Total fixed income securities with an unrealized loss	$	3,053	$	(36)	$	20,656	$	(1,121)	$	23,709	$	(1,157)

	June 30, 2020
	In Loss Position Less Than 12 Months				In Loss Position Greater Than 12 Months				Total
	Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses		Fair Market Value		Unrealized Losses
					(In thousands)
U.S. Treasury	$	1,201	$	(3)	$	1,243	$	(246)	$	2,444	$	(249)
Canadian government	—		—		11,973		(727)		11,973		(727)
Corporate	54		(2)		2,235		(79)		2,289		(81)
Asset-backed	—		—		25		(5)		25		(5)
Total fixed income securities with an unrealized loss	$	1,255	$	(5)	$	15,476	$	(1,057)	$	16,731	$	(1,062)

Deferred Preneed Funeral Revenues [Table Text Block]

The following table summarizes the activity for our contract liabilities, which are reflected in Deferred revenue, net and Deferred receipts held in trust:

	Six Months Ended June 30,
	2020		2019
	(In thousands)
Beginning balance — Deferred revenue, net and Deferred receipts held in trust	$	5,306,479	$	4,790,552
Net preneed contract sales	496,467		496,842
Acquisitions (dispositions) of businesses, net	12,777		(29,665)
Net investment (losses) gains(1)	(189,474)		327,819
Recognized revenue from backlog(2)	(226,663)		(212,912)
Recognized revenue from current period sales	(237,296)		(241,589)
Change in amounts due on unfulfilled performance obligations	(18,151)		(3,770)
Change in cancellation reserve	1,070		(206)
Effect of foreign currency and other	(6,891)		10,848
Ending balance — Deferred revenue, net and Deferred receipts held in trust	$	5,138,318	$	5,137,919

⁽¹⁾Includes both realized and unrealized investment (losses) gains.

XML

Debt Level 3 (Tables)

6 Months Ended

Jun. 30, 2020

Debt Instrument [Line Items]

Schedule of Debt [Table Text Block]

:

	June 30, 2020		December 31, 2019
	(In thousands)
8.0% Senior Notes due November 2021	$	150,000	$	150,000
5.375% Senior Notes due May 2024	850,000		850,000
7.5% Senior Notes due April 2027	152,710		153,465
4.625% Senior Notes due December 2027	550,000		550,000
5.125% Senior Notes due June 2029	750,000		750,000
Term Loan due May 2024	617,500		633,750
Bank Credit Facility due May 2024	390,000		295,000
Obligations under finance leases	175,618		185,252
Mortgage notes and other debt, maturities through 2050	52,370		45,104
Unamortized premiums and discounts, net	5,155		5,634
Unamortized debt issuance costs	(32,377)		(34,854)
Total debt	3,660,976		3,583,351
Less: Current maturities of long-term debt	(87,267)		(69,821)
Total long-term debt	$	3,573,709	$	3,513,530

XML

Credit Risk and Fair Value of Financial Instruments Level 3 (Tables)

6 Months Ended

Jun. 30, 2020

Credit Risk and Fair Value of Financial Instruments [Abstract]

Fair Value, Measurement Inputs, Disclosure [Table Text Block]

The fair value of our debt instruments at June 30, 2020 and December 31, 2019 was as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
8.0% Senior Notes due November 2021	$	159,294	$	165,375
5.375% Senior Notes due May 2024	867,230		879,606
7.5% Notes due April 2027	174,074		188,381
4.625% Senior Notes due December 2027	573,485		577,500
5.125% Senior Notes due June 2029	806,250		798,525
Term Loan due May 2024	617,500		633,750
Bank Credit Facility due May 2024	390,000		295,000
Mortgage notes and other debt, maturities through 2050	52,370		45,104
Total fair value of debt instruments	$	3,640,203	$	3,583,241

XML

Segment Reporting Level 3 (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Revenue from customers:
Funeral revenue:
Atneed revenue	$	256,166	$	245,418	$	520,954	$	504,148
Matured preneed revenue	158,357		148,584		321,940		305,034
Core funeral revenue	414,523		394,002		842,894		809,182
Non-funeral home revenue	14,146		13,121		28,597		26,094
Recognized preneed revenue	27,663		39,728		60,463		71,053
Other revenue	24,615		32,127		53,889		65,443
Total funeral revenue	480,947		478,978		985,843		971,772
Cemetery revenue:
Atneed revenue	91,102		82,286		176,145		163,737
Recognized preneed property revenue	152,117		151,875		268,199		280,487
Recognized preneed merchandise and services revenue	69,844		73,570		138,508		140,609
Core cemetery revenue	313,063		307,731		582,852		584,833
Other revenue	26,025		25,863		54,305		54,179
Total cemetery revenue	339,088		333,594		637,157		639,012
Total revenue from customers	$	820,035	$	812,572	$	1,623,000	$	1,610,784
Gross profit:
Funeral gross profit	$	115,957	$	90,590	$	219,533	$	196,008
Cemetery gross profit	102,810		100,556		178,278		186,972
Gross profit from reportable segments	218,767		191,146		397,811		382,980
Corporate general and administrative expenses	(37,169)		(29,218)		(68,982)		(72,196)
Gains (losses) on divestitures and impairment charges, net	737		(11,823)		5,282		(13,701)
Operating income	182,335		150,105		334,111		297,083
Interest expense	(41,767)		(47,317)		(86,118)		(94,707)
Losses on early extinguishment of debt, net	(11)		(7,579)		(150)		(7,579)
Other income (expense), net	1,166		874		(81)		1,594
Income before income taxes	$	141,723	$	96,083	$	247,762	$	196,391

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

Our geographic area information was as follows:

	United States		Canada		Total
	(In thousands)
Three Months Ended June 30,
Revenue from external customers:
2020	$	781,842	$	38,193	$	820,035
2019	$	767,394	$	45,178	$	812,572
Six Months Ended June 30,
Revenue from external customers:
2020	$	1,541,114	$	81,886	$	1,623,000
2019	$	1,521,474	$	89,310	$	1,610,784

XML

Earnings Per Share Level 3 (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

A reconciliation of the numerators and denominators of basic and diluted earnings per share is presented below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands, except per share amounts)
Amounts attributable to common stockholders:
Net income — basic and diluted	$	105,508	$	72,329	$	187,449	$	151,652
Weighted average shares:
Weighted average shares — basic	177,902		182,369		179,378		182,048
Stock options	1,740		3,278		2,221		3,418
Restricted share units	24		43		40		51
Weighted average shares — diluted	$	179,666	$	185,690	$	181,639	$	185,517
Amounts attributable to common stockholders:
Earnings per share:
Basic	$	0.59	$	0.40	$	1.04	$	0.83
Diluted	$	0.59	$	0.39	$	1.03	$	0.82

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
	(In thousands)
Antidilutive options	2,706	105	1,486	—
Antidilutive restricted share units	67	—	49	—

XML

Acquisition Level 3 (Tables)

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Gains (Losses) on Divestitures and Impairment Charges [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Gains (losses) on divestitures, net	$	737	$	(9,643)	$	8,366	$	(9,097)
Impairment losses	—		(2,180)		(3,084)		(4,604)
Gains (losses) on divestitures and impairment charges, net	$	737	$	(11,823)	$	5,282	$	(13,701)

XML

Summary of Significant Accounting Policies, Textuals (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Apr. 01, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Financing Receivable, Allowance for Credit Loss, Noncurrent	$ 8,245,000	$ 8,245,000
Allowance for Doubtful Accounts, Premiums and Other Receivables						$ 41,142,000
Accounts Receivable, before Allowance for Credit Loss, Current	82,969,000	82,969,000				83,933,000
Restricted Cash and Cash Equivalents	28,361,000	28,361,000				56,344,000
Restricted Cash, Current	$ 26,309,000	$ 26,309,000				54,293,000
Intangible Fair Value Inputs, Royalty Savings Rate, Low	0.020	0.020
Amortization of cemetery property		$ 33,696,000	$ 33,523,000
Depreciation		$ 75,582,000	74,244,000
Intangible Fair Value Inputs, Royalty Savings Rate	0.050	0.050
Intangibles Fair Value Inputs, Discount Rate	6.95%	6.95%
Other Assets, Current	$ 58,474,000	$ 58,474,000				80,488,000
Impairment of Intangible Assets (Excluding Goodwill)		3,000,000.0
Accounts Receivable, Allowance for Credit Loss	6,006,000	6,006,000	$ 6,006,000			2,262,000
Receivables, net	76,963,000	76,963,000				81,671,000
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Accounts Receivable, Allowance for Credit Loss, Writeoff		1,702,000
Financing Receivable, Recorded Investment, Aging [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	$ 17,000,000.0	$ 17,000,000.0		$ (129,000)	$ 17,118,000
Property Subject to or Available for Operating Lease, Number of Units	61	61
Operating Lease, Lease Income	$ 700,000	$ 1,300,000
Lessor, Operating Lease, Payments to be Received, Next Rolling Twelve Months	1,833,000	1,833,000
Lessor, Operating Lease, Payments to be Received, Rolling Year Two	3,626,000	3,626,000
Lessor, Operating Lease, Payments to be Received, Rolling Year Three	3,225,000	3,225,000
Lessor, Operating Lease, Payments to be Received, Rolling Year Four	2,537,000	2,537,000
Lessor, Operating Lease, Payments to be Received, Rolling Year Five	2,163,000	2,163,000
Lessor, Operating Lease, Payments to be Received, after Rolling Year Five	16,806,000	16,806,000
Lessor, Operating Lease, Payments to be Received	30,190,000	30,190,000
Other Receivables Noncurrent [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	2,700,000	2,700,000
Deferred Tax Liability [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	5,800,000	5,800,000
Deferred Charges And Other Assets [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	900,000	900,000
Miscellaneous accounts receivable [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	26,400,000	26,400,000
Trade Accounts Receivable [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss	(5,133,000)	(5,133,000)				(4,114,000)
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(3,474,000)
Financing Receivable, Allowance for Credit Loss, Recovery		(977,000)
Allowance For Credit Losses Foreign Currency Translation		173,000
Financing Receivable, Allowance for Credit Loss, Writeoff		3,259,000
Notes Receivable [Member]
Accounts and Financing Receivable, after Allowance for Credit Loss, Noncurrent	15,275,000	15,275,000
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss	(7,872,000)	(7,872,000)				(9,031,000)
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)		79,000
Financing Receivable, Allowance for Credit Loss, Recovery		0
Allowance For Credit Losses Foreign Currency Translation		0
Financing Receivable, Allowance for Credit Loss, Writeoff		1,080,000
Financing Receivable, Originated in Current Fiscal Year	0	0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	0	0
Financing Receivable, Originated Two Years before Latest Fiscal Year	235,000	235,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	0	0
Financing Receivable, Originated Four Years before Latest Fiscal Year	98,000	98,000
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	6,648,000	6,648,000
Revolving Line of Credit	8,294,000	8,294,000
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Not Past Due	14,143,000	14,143,000
Financing Receivable, Past Due	1,132,000	1,132,000
Notes Receivable [Member] | Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	1,000	1,000
Notes Receivable [Member] | Financing Receivables 30 To 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	2,000	2,000
Notes Receivable [Member] | Financing Receivables 91 To180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	2,000	2,000
Notes Receivable [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	1,127,000	1,127,000
Miscellaneous accounts receivable [Member]
Accounts and Financing Receivable, after Allowance for Credit Loss, Noncurrent	26,105,000	26,105,000
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss	(1,246,000)	(1,246,000)				(918,000)
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(353,000)
Financing Receivable, Allowance for Credit Loss, Recovery		0
Allowance For Credit Losses Foreign Currency Translation		25,000
Financing Receivable, Allowance for Credit Loss, Writeoff		0
Financing Receivable, Originated in Current Fiscal Year	19,244,000	19,244,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	3,945,000	3,945,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,786,000	1,786,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	823,000	823,000
Financing Receivable, Originated Four Years before Latest Fiscal Year	281,000	281,000
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	26,000	26,000
Revolving Line of Credit	0	0
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Not Past Due	25,991,000	25,991,000
Financing Receivable, Past Due	114,000	114,000
Miscellaneous accounts receivable [Member] | Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	84,000	84,000
Miscellaneous accounts receivable [Member] | Financing Receivables 30 To 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	28,000	28,000
Miscellaneous accounts receivable [Member] | Financing Receivables 91 To180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	0	0
Miscellaneous accounts receivable [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	$ 2,000	$ 2,000
Funeral [Member]
Allowance for Doubtful Accounts, Premiums and Other Receivables						1,452,000
Intangibles Fair Value Inputs, Terminal Growth Rate	1.00%	1.00%
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Accounts Receivable, Allowance for Credit Loss, Writeoff		$ 1,452,000
Funeral [Member] | Trade Accounts Receivable [Member]
Accounts Receivable, before Allowance for Credit Loss, Current	$ 39,208,000	39,208,000				41,370,000
Accounts Receivable, Allowance for Credit Loss	3,573,000	3,573,000				1,899,000
Receivables, net	35,635,000	35,635,000				39,471,000
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss	(3,573,000)	(3,573,000)				(2,690,000)
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(2,698,000)
Financing Receivable, Allowance for Credit Loss, Recovery		(935,000)
Allowance For Credit Losses Foreign Currency Translation		106,000
Financing Receivable, Allowance for Credit Loss, Writeoff		2,644,000
Other Accounts Receivable Current [Member] | Trade Accounts Receivable [Member]
Accounts Receivable, before Allowance for Credit Loss, Current	19,856,000	19,856,000				19,943,000
Accounts Receivable, Allowance for Credit Loss	296,000	296,000				0
Receivables, net	19,560,000	19,560,000				19,943,000
Current [Member] | Notes Receivable [Member]
Accounts Receivable, before Allowance for Credit Loss, Current	1,854,000	1,854,000				1,765,000
Accounts Receivable, Allowance for Credit Loss	577,000	577,000				0
Receivables, net	1,277,000	1,277,000				1,765,000
Current [Member] | Miscellaneous accounts receivable [Member]
Accounts and Financing Receivable, after Allowance for Credit Loss, Noncurrent	19,856,000	19,856,000
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss	(296,000)	(296,000)				(203,000)
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(118,000)
Financing Receivable, Allowance for Credit Loss, Recovery		0
Allowance For Credit Losses Foreign Currency Translation		25,000
Financing Receivable, Allowance for Credit Loss, Writeoff		0
Financing Receivable, Originated in Current Fiscal Year	18,023,000	18,023,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	1,227,000	1,227,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	386,000	386,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	160,000	160,000
Financing Receivable, Originated Four Years before Latest Fiscal Year	55,000	55,000
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	5,000	5,000
Revolving Line of Credit	0	0
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Not Past Due	19,742,000	19,742,000
Financing Receivable, Past Due	114,000	114,000
Current [Member] | Miscellaneous accounts receivable [Member] | Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	84,000	84,000
Current [Member] | Miscellaneous accounts receivable [Member] | Financing Receivables 30 To 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	28,000	28,000
Current [Member] | Miscellaneous accounts receivable [Member] | Financing Receivables 91 To180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	0	0
Current [Member] | Miscellaneous accounts receivable [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	2,000	2,000
Long Term [Member] | Notes Receivable [Member]
Financing Receivable, after Allowance for Credit Loss, Noncurrent	6,126,000	6,126,000				6,623,000
Financing Receivable, before Allowance for Credit Loss, Noncurrent	13,421,000	13,421,000				14,997,000
Financing Receivable, Allowance for Credit Loss, Noncurrent	7,295,000	7,295,000				8,374,000
Long Term [Member] | Miscellaneous accounts receivable [Member]
Financing Receivable, after Allowance for Credit Loss, Noncurrent	5,299,000	5,299,000				7,287,000
Financing Receivable, before Allowance for Credit Loss, Noncurrent	6,249,000	6,249,000				7,287,000
Financing Receivable, Allowance for Credit Loss, Noncurrent	950,000	950,000				0
Accounts and Financing Receivable, after Allowance for Credit Loss, Noncurrent	6,249,000	6,249,000
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss	(950,000)	(950,000)				(715,000)
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(235,000)
Financing Receivable, Allowance for Credit Loss, Recovery		0
Allowance For Credit Losses Foreign Currency Translation		0
Financing Receivable, Allowance for Credit Loss, Writeoff		0
Financing Receivable, Originated in Current Fiscal Year	1,221,000	1,221,000
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	2,718,000	2,718,000
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,400,000	1,400,000
Financing Receivable, Originated Three Years before Latest Fiscal Year	663,000	663,000
Financing Receivable, Originated Four Years before Latest Fiscal Year	226,000	226,000
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	21,000	21,000
Revolving Line of Credit	0	0
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Not Past Due	6,249,000	6,249,000
Financing Receivable, Past Due	0	0
Long Term [Member] | Miscellaneous accounts receivable [Member] | Financial Asset, 1 to 29 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	0	0
Long Term [Member] | Miscellaneous accounts receivable [Member] | Financing Receivables 30 To 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	0	0
Long Term [Member] | Miscellaneous accounts receivable [Member] | Financing Receivables 91 To180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	0	0
Long Term [Member] | Miscellaneous accounts receivable [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Past Due	$ 0	$ 0
Cemetery [Member]
Allowance for Doubtful Accounts, Premiums and Other Receivables						(39,690,000)
Intangibles Fair Value Inputs, Terminal Growth Rate	2.40%	2.40%
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Accounts Receivable, Allowance for Credit Loss, Writeoff		$ 250,000
Cemetery [Member] | Trade Accounts Receivable [Member]
Accounts Receivable, before Allowance for Credit Loss, Current	$ 22,051,000	22,051,000				20,855,000
Accounts Receivable, Allowance for Credit Loss	1,560,000	1,560,000				363,000
Receivables, net	20,491,000	20,491,000				20,492,000
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Financing Receivable, Allowance for Credit Loss	(1,560,000)	(1,560,000)				$ (1,424,000)
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease)		(776,000)
Financing Receivable, Allowance for Credit Loss, Recovery		(42,000)
Allowance For Credit Losses Foreign Currency Translation		67,000
Financing Receivable, Allowance for Credit Loss, Writeoff		615,000
Treasury Stock [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	0	0			0
Retained Earnings [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	$ (129,000)	$ (129,000)			$ 17,118,000

XML

Summary of Significant Accounting Policies Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	$ 820,035	$ 812,572	$ 1,623,000	$ 1,610,784
Gross profit	218,767	191,146	397,811	382,980
Costs of revenue	(601,268)	(621,426)	(1,225,189)	(1,227,804)
Corporate general and administrative expenses	(37,169)	(29,218)	(68,982)	(72,196)
Gains on divestitures and impairment charges, net	(737)	11,823	(5,282)	13,701
Operating income	182,335	150,105	334,111	297,083
Interest expense	(41,767)	(47,317)	(86,118)	(94,707)
Losses on early extinguishment of debt, net	11	7,579	150	7,579
Nonoperating Income (Expense)	1,166	874	(81)	1,594
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	141,723	96,083	247,762	196,391
Income Tax Expense (Benefit)	36,170	23,570	60,208	44,665
Net income	105,553	72,513	187,554	151,726
Net income attributable to noncontrolling interests	45	184	105	74
Net income attributable to common stockholders	$ 105,508	$ 72,329	$ 187,449	$ 151,652
Net income attributable to common stockholders, basic	$ 0.59	$ 0.40	$ 1.04	$ 0.83
Net income attributable to common stockholders, diluted	$ 0.59	$ 0.39	$ 1.03	$ 0.82
Change in amounts due for unfulfilled performance obligations			$ (18,151)	$ (3,770)
Financing Receivable, Allowance for Credit Loss, Noncurrent	$ (8,245)		(8,245)
Notes Receivable [Member] | Long Term [Member]
Financing Receivable, Allowance for Credit Loss, Noncurrent	$ (7,295)		$ (7,295)		$ (8,374)

XML

Preneed Activities Investment Related Activities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Preneed Activities [Abstract]
Deposits to trust	$ 98,341	$ 112,905	$ 203,894	$ 213,357
Withdrawals	99,264	116,680	213,856	224,036
Purchases of available-for-sale securities	456,639	240,376	905,291	689,534
Sales of available-for-sale securities	441,743	240,599	793,569	562,390
Realized gains from sales of available-for-sale securities	92,435	54,756	144,592	98,281
Realized losses from sales of available-for-sale securities	$ (61,756)	$ (16,251)	$ (147,158)	$ (48,882)

XML

Preneed Activities Preneed Activities Preneed Receivables and Trust Investments (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Preneed Receivables and Trust Investments [Abstract]
Preneed receivables, net and trust investments	$ 4,622,700		$ 4,789,562
Change in amounts due for unfulfilled performance obligations	$ (18,151)	$ (3,770)

XML

Preneed Activities Long-term Receivable and Investment (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Long-term receivable and investment components [Line Items]
Preneed funeral receivables, net and trust investments	$ 4,622,700	$ 4,789,562
Cemetery perpetual care trust investments	(1,599,599)	(1,681,149)
Preneed trust investments	3,645,679	3,842,330
Preneed receivables, net and trust investments, excluding allowance for cancellation	4,622,700	4,789,562
Insurance-backed fixed income securities and other [Line Items]	251,836	265,160
Investments	5,245,278	5,523,479
Accounts Receivable, after Allowance for Credit Loss, Noncurrent	977,021	947,232
Assets Held-in-trust	4,993,442	5,258,319
Funeral [Member]
Long-term receivable and investment components [Line Items]
Accounts Receivable, after Allowance for Credit Loss, Noncurrent	110,947	113,191
Cemetery [Member]
Long-term receivable and investment components [Line Items]
Accounts Receivable, after Allowance for Credit Loss, Noncurrent	$ 866,074	$ 834,041

XML

Preneed Activities Schedule of Available-for-sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	$ 3,689,625
Available-for-sale Securities, Gross Unrealized Gains	351,119
Available-for-sale Securities, Gross Unrealized Losses	(373,612)
Available-for-sale Securities, Fair Value	3,667,132
Estimate of Fair Value Measurement [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis		$ 3,600,688
Available-for-sale Securities, Gross Unrealized Gains		385,203
Available-for-sale Securities, Gross Unrealized Losses		(126,983)
Available-for-sale Securities, Fair Value		3,858,908
Fair Value, Inputs, Level 2 [Member] | US Treasury Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	48,249	49,728
Available-for-sale Securities, Gross Unrealized Gains	1,923	752
Available-for-sale Securities, Gross Unrealized Losses	(249)	(130)
Available-for-sale Securities, Fair Value	49,923	50,350
Fair Value, Inputs, Level 2 [Member] | Debt Security, Government, Non-US [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	38,056	41,093
Available-for-sale Securities, Gross Unrealized Gains	58	76
Available-for-sale Securities, Gross Unrealized Losses	(727)	(850)
Available-for-sale Securities, Fair Value	37,387	40,319
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	2,351	9,694
Available-for-sale Securities, Gross Unrealized Gains	6	28
Available-for-sale Securities, Gross Unrealized Losses	(81)	(172)
Available-for-sale Securities, Fair Value	2,276	9,550
Fair Value, Inputs, Level 2 [Member] | Residential Mortgage Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	3,254	3,210
Available-for-sale Securities, Gross Unrealized Gains	168	59
Available-for-sale Securities, Gross Unrealized Losses	0	(1)
Available-for-sale Securities, Fair Value	3,422	3,268
Fair Value, Inputs, Level 2 [Member] | Asset-backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	128	129
Available-for-sale Securities, Gross Unrealized Gains	3	3
Available-for-sale Securities, Gross Unrealized Losses	(5)	(4)
Available-for-sale Securities, Fair Value	126	128
Fair Value, Inputs, Level 2 [Member] | Preferred Stock securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	386	6,338
Available-for-sale Securities, Gross Unrealized Gains	0	804
Available-for-sale Securities, Gross Unrealized Losses	(35)	(115)
Available-for-sale Securities, Fair Value	351	7,027
Fair Value, Inputs, Level 1 [Member] | US Common Stock Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	1,368,878	1,349,828
Available-for-sale Securities, Gross Unrealized Gains	284,456	303,766
Available-for-sale Securities, Gross Unrealized Losses	(118,350)	(36,507)
Available-for-sale Securities, Fair Value	1,534,984	1,617,087
Fair Value, Inputs, Level 1 [Member] | Canada Common Stock Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	35,890	43,866
Available-for-sale Securities, Gross Unrealized Gains	7,793	12,369
Available-for-sale Securities, Gross Unrealized Losses	(3,547)	(2,075)
Available-for-sale Securities, Fair Value	40,136	54,160
Fair Value, Inputs, Level 1 [Member] | Other International Common Stock Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	87,167	95,257
Available-for-sale Securities, Gross Unrealized Gains	19,230	18,227
Available-for-sale Securities, Gross Unrealized Losses	(3,647)	(522)
Available-for-sale Securities, Fair Value	102,750	112,962
Fair Value, Inputs, Level 1 [Member] | Equity Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	812,202	746,581
Available-for-sale Securities, Gross Unrealized Gains	13,840	31,511
Available-for-sale Securities, Gross Unrealized Losses	(140,573)	(54,020)
Available-for-sale Securities, Fair Value	685,469	724,072
Fair Value, Inputs, Level 1 [Member] | Fixed Income Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	1,292,673	1,247,930
Available-for-sale Securities, Gross Unrealized Gains	23,609	16,424
Available-for-sale Securities, Gross Unrealized Losses	(106,397)	(32,587)
Available-for-sale Securities, Fair Value	1,209,885	1,231,767
Fair Value, Inputs, Level 3 [Member] | Other Investments [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	391	7,034
Available-for-sale Securities, Gross Unrealized Gains	33	1,184
Available-for-sale Securities, Gross Unrealized Losses	(1)	0
Available-for-sale Securities, Fair Value	423	8,218
Reported Value Measurement [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	1,240,642
Available-for-sale Securities, Gross Unrealized Gains	99,131
Available-for-sale Securities, Gross Unrealized Losses	(13,463)
Available-for-sale Securities, Fair Value	1,326,310
Reported Value Measurement [Member] | Commingled funds - Fixed inc [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	468,268	444,744
Available-for-sale Securities, Gross Unrealized Gains	15,647	5,077
Available-for-sale Securities, Gross Unrealized Losses	(2,247)	(1,731)
Available-for-sale Securities, Fair Value	481,668	448,090
Reported Value Measurement [Member] | Commingled funds - Equity [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	261,895	249,980
Available-for-sale Securities, Gross Unrealized Gains	33,768	47,631
Available-for-sale Securities, Gross Unrealized Losses	(243)	0
Available-for-sale Securities, Fair Value	295,420	297,611
Reported Value Measurement [Member] | Money Market Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	298,674	397,461
Available-for-sale Securities, Gross Unrealized Gains	0	0
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities, Fair Value	298,674	397,461
Reported Value Measurement [Member] | Private Equity Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	211,805	176,388
Available-for-sale Securities, Gross Unrealized Gains	49,716	80,283
Available-for-sale Securities, Gross Unrealized Losses	(10,973)	(422)
Available-for-sale Securities, Fair Value	250,548	256,249
Reported Value Measurement [Member] | Reported At Net Asset Value [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis		1,268,573
Available-for-sale Securities, Gross Unrealized Gains		132,991
Available-for-sale Securities, Gross Unrealized Losses		(2,153)
Available-for-sale Securities, Fair Value		1,399,411
Estimate of Fair Value Measurement [Member]
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Amortized Cost Basis	4,930,267	4,869,261
Available-for-sale Securities, Gross Unrealized Gains	450,250	518,194
Available-for-sale Securities, Gross Unrealized Losses	(387,075)	(129,136)
Available-for-sale Securities, Fair Value	$ 4,993,442	$ 5,258,319

XML

Preneed Activities Level 3 Activities (Details) - Other Investments [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair market value, beginning balance	$ 418	$ 7,108	$ 8,218	$ 9,755
Net realized losses included in Other income, net(2)	717	(322)	(257)	(1,464)
Purchases	4,559	5	4,569	5
Sales	(5,271)	(203)	(5,296)	(1,708)
Fair market value, ending balance	423	6,588	423	6,588
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	$ 0	$ 0	$ (6,811)	$ 0

XML

Preneed Activities Investments Classified by Contractual Maturity Date (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Preneed Activities [Abstract]
Due in one year or less	$ 57,496
Due in one to five years	26,054
Due in five to ten years	9,494
Thereafter	90
Total	$ 93,134

XML

Preneed Activities Schedule of Unrealized Loss on Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Schedule of unrealized loss on investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value		$ 3,053
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses		(36)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value		20,656
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses		(1,121)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value		23,709
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses		(1,157)
US Treasury Securities [Member]
Schedule of unrealized loss on investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	$ 1,201	3,023
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(3)	(36)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	1,243	1,947
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(246)	(94)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	2,444	4,970
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	(249)	(130)
Debt Security, Government, Non-US [Member]
Schedule of unrealized loss on investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	11,973	13,804
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(727)	(850)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	11,973	13,804
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	(727)	(850)
Corporate Debt Securities [Member]
Schedule of unrealized loss on investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	54	30
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(2)	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	2,235	4,826
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(79)	(172)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	2,289	4,856
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	(81)	(172)
Residential Mortgage Backed Securities [Member]
Schedule of unrealized loss on investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses		0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value		51
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses		(1)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value		51
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses		(1)
Asset-backed Securities [Member]
Schedule of unrealized loss on investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	25	28
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(5)	(4)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	25	28
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	(5)	$ (4)
Estimate of Fair Value Measurement [Member]
Schedule of unrealized loss on investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	1,255
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(5)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	15,476
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(1,057)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	16,731
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	$ (1,062)

XML

Preneed Activities Preneed Activities Deferred Revenue Net (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2020	Dec. 31, 2019
Deferred Revenue [Abstract]
Deferred revenue, Gross		$ 2,090,129	$ 2,046,000
Amounts Due for Unfulfilled Performance Obligations	$ (578,897)	(596,023)
Deferred Revenue		$ 1,494,106	$ 1,467,103

XML

Preneed Activities Preneed Activities, Textuals (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Preneed Activities [Abstract]
Investment Earnings, Net	$ 27.0	$ 29.6	$ 59.2	$ 57.2
Available-for-sale securities, estimated maturity date, maximum			2040
Available-for-sale securities, estimated maturity date, minimum			2020
ECF Investment Earnings, Net	$ 17.3	$ 17.5	$ 36.8	$ 37.9

XML

Income Taxes Income Taxes Level 4-Detail 1 (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Taxes [Abstract]
Total effective tax rate	25.50%	24.50%	24.30%	22.70%
Unrecognized Tax Benefits	$ 1.3		$ 1.3
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 0.7		$ 0.7
Federal Statutory Tax Rate			21.00%

XML

Debt Level 4 (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Principal payments on capital leases			$ 20,453	$ 21,807
Repayments of Debt			112,400	836,800
Repayments of Other Debt			200	200
Losses on early extinguishment of debt, net	$ (11)	$ (7,579)	(150)	(7,579)
Notes Payable to Bank, Noncurrent	617,500		617,500		$ 633,750
Total debt	3,660,976		3,660,976		3,583,351
Current maturities of long-term debt	(87,267)		(87,267)		(69,821)
Less current maturities	87,267		87,267		69,821
Total long-term debt	$ 3,573,709		$ 3,573,709		$ 3,513,530
Debt, Weighted Average Interest Rate	4.22%		4.22%		4.72%
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	68.00%		68.00%
Letters of Credit, Maximum Borrowing Capacity	$ 34,000		$ 34,000
Interest Paid, Including Capitalized Interest, Operating and Investing Activities			83,900	97,300
Unamortized Debt Issuance Expense	(32,377)	(15,500)	(32,377)	(15,500)	$ (34,854)
Bank credit facility	390,000		390,000		295,000
Redemption Premium			100	4,300
January 2022 [Member]
Debt Instrument [Line Items]
Repayments of Debt				326,100
Bank credit facility	390,000		390,000		295,000
April 2027 [Member]
Debt Instrument [Line Items]
Repayments of Debt			800	15,700
Bank Credit Facility due March 2022 [Member]
Debt Instrument [Line Items]
Repayments of Debt				450,000
Term Loan December 2022 [Member]
Debt Instrument [Line Items]
Repayments of Debt				40,500
June 2029 [Member]
Debt Instrument [Line Items]
Senior Notes		$ 750,000		$ 750,000
December 2022 [Member]
Debt Instrument [Line Items]
Notes Payable to Bank, Noncurrent	617,500		617,500
Unsecured Debt [Member]
Debt Instrument [Line Items]
Unamortized pricing discounts and other	5,155		5,155		5,634
Unsecured Debt [Member] | November 2021 [Member]
Debt Instrument [Line Items]
Senior Notes	150,000		150,000		150,000
Unsecured Debt [Member] | April 2027 [Member]
Debt Instrument [Line Items]
Senior Notes	152,710		152,710		153,465
Unsecured Debt [Member] | May 2024 [Member]
Debt Instrument [Line Items]
Senior Notes	850,000		850,000		850,000
Unsecured Debt [Member] | December 2027 [Member]
Debt Instrument [Line Items]
Senior Notes	550,000		550,000		550,000
Unsecured Debt [Member] | June 2029 [Member]
Debt Instrument [Line Items]
Senior Notes	750,000		750,000		750,000
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Obligations under capital leases	175,618		175,618		185,252
Mortgages [Member]
Debt Instrument [Line Items]
Mortgage notes and other debt, maturities through 2047	$ 52,370		$ 52,370		$ 45,104

XML

Debt Debt, Textuals (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 28, 2020	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate		4.22%		4.22%		4.72%
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate		68.00%		68.00%
Notes Payable to Bank, Noncurrent		$ 617,500		$ 617,500		$ 633,750
Line of Credit Facility, Amount Outstanding		390,000		$ 390,000		295,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage				0.20%
Letters of Credit, Maximum Borrowing Capacity		34,000		$ 34,000
Line of Credit Facility, Remaining Borrowing Capacity		576,000		576,000
Principal payments on capital leases				20,453	$ 21,807
Repayments of Other Debt				200	200
Repayments of Debt				112,400	836,800
Losses on early extinguishment of debt, net		(11)	$ (7,579)	(150)	(7,579)
Long-term Debt, Fair Value		3,640,203		3,640,203		3,583,241
Redemption Premium				100	4,300
Interest Paid, Including Capitalized Interest, Operating and Investing Activities				83,900	97,300
Line of Credit Facility, Increase (Decrease), Net					55,000
Proceeds from Issuance of Debt				190,000	854,300
Subsequent Event [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Amount Outstanding	$ 410,000
Proceeds from Issuance of Debt	$ 20,000
April 2027 [Member]
Debt Instrument [Line Items]
Repayments of Debt				800	15,700
Bank Credit Facility due March 2022 [Member]
Debt Instrument [Line Items]
Repayments of Debt					450,000
Term Loan December 2022 [Member]
Debt Instrument [Line Items]
Repayments of Debt					40,500
January 2022 [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Amount Outstanding		390,000		390,000		295,000
Repayments of Debt					326,100
May 2024 [Member]
Debt Instrument [Line Items]
Proceeds from Issuance of Debt					$ 49,300
Debt Instrument, Periodic Payment				16,300
Bank Credit Facility 2024 [Member]
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment				95,000
Unsecured Debt [Member] | November 2021 [Member]
Debt Instrument [Line Items]
Senior Notes		150,000		150,000		150,000
Unsecured Debt [Member] | April 2027 [Member]
Debt Instrument [Line Items]
Senior Notes		152,710		152,710		153,465
Unsecured Debt [Member] | December 2027 [Member]
Debt Instrument [Line Items]
Senior Notes		550,000		550,000		550,000
Unsecured Debt [Member] | May 2024 [Member]
Debt Instrument [Line Items]
Senior Notes		$ 850,000		$ 850,000		$ 850,000

XML

Credit Risk and Fair Value of Financial Instruments Level 4 (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Bank credit facility	$ 390,000	$ 295,000
Notes Payable	52,370	45,104
Long-term Debt, Fair Value	3,640,203	3,583,241
May 2024 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	867,230	879,606
November 2021 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	159,294	165,375
January 2022 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Bank credit facility	390,000	295,000
Term Loan	617,500	633,750
April 2027 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	174,074	188,381
December 2027 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	573,485	577,500
June 2029 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	$ 806,250	$ 798,525

XML

Commitments and Contingencies Level 4 (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Self Insurance Reserve	$ 87.2	$ 84.3
Loss Contingency, Damages Sought, Value	$ 13.6

XML

Equity Textuals (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended			6 Months Ended
	Jul. 28, 2020	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Common stock, shares authorized		500,000,000			500,000,000
Common stock, par or stated value per share		$ 1			$ 1
Common stock, shares, issued		186,104,673			186,104,673		185,100,789
Common stock, shares outstanding		177,011,040			177,011,040		181,184,963
Treasury Stock, Shares, Acquired					5,177,807
Treasury Stock, Value, Acquired, Par Value Method					$ 210,600
Treasury Stock Acquired, Average Cost Per Share					$ 40.67
Stock Repurchase Program, Remaining Authorized Repurchase Amount		$ 106,200			$ 106,200
Dividends declared per share		$ 190		$ 180
Payments of Dividends, Common Stock					$ 68,133	$ 65,691
Subsequent Event [Member]
Treasury Stock, Shares, Acquired	791,744
Treasury Stock, Value, Acquired, Par Value Method	$ 30,400
Treasury Stock Acquired, Average Cost Per Share	$ 38.40
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 75,800

XML

Segment Reporting Level 4 (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Restricted Cash and Cash Equivalents, Noncurrent	$ 2,052		$ 2,052		$ 2,051
Revenues	820,035	$ 812,572	1,623,000	$ 1,610,784
Interest expense	(41,767)	(47,317)	(86,118)	(94,707)
Depreciation and amortization			75,582	74,244
Amortization of intangibles			11,304	13,653
Amortization of cemetery property			33,696	33,523
Total assets	13,487,930		13,487,930		$ 13,677,430
Capital expenditures			104,828	112,714
Gross profits from reportable segments	218,767	191,146	397,811	382,980
Corporate general and administrative expenses	(37,169)	(29,218)	(68,982)	(72,196)
Gains on divestitures and impairment charges, net	737	(11,823)	5,282	(13,701)
Operating income	182,335	150,105	334,111	297,083
Losses on early extinguishment of debt, net	(11)	(7,579)	(150)	(7,579)
Other income (expense), net	1,166	874	(81)	1,594
Income from continuing operations before income taxes	141,723	96,083	247,762	196,391
UNITED STATES
Segment Reporting Information [Line Items]
Revenues	781,842	767,394	1,541,114	1,521,474
CANADA
Segment Reporting Information [Line Items]
Revenues	38,193	45,178	81,886	89,310
Funeral [Member]
Segment Reporting Information [Line Items]
Revenues	480,947	478,978	985,843	971,772
Gross profits from reportable segments	115,957	90,590	219,533	196,008
Cemetery [Member]
Segment Reporting Information [Line Items]
Revenues	339,088	333,594	637,157	639,012
Gross profits from reportable segments	102,810	100,556	178,278	186,972
Funeral Atneed Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	256,166	245,418	520,954	504,148
Funeral Matured Preneed Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	158,357	148,584	321,940	305,034
Funeral Core Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	414,523	394,002	842,894	809,182
Non-funeral Home Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	14,146	13,121	28,597	26,094
Funeral Recognized Preneed Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	27,663	39,728	60,463	71,053
Funeral Other Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	24,615	32,127	53,889	65,443
Cemetery Atneed Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	91,102	82,286	176,145	163,737
Cemetery Recognized Preneed Property Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	152,117	151,875	268,199	280,487
Cemetery Recognized Preneed Merchandise And Service Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	69,844	73,570	138,508	140,609
Cemetery Core Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	313,063	307,731	582,852	584,833
Cemetery Other Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	$ 26,025	$ 25,863	$ 54,305	$ 54,179

XML

Earnings Per Share Level 4 (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net Income (Loss) Attributable to Parent [Abstract]
Net income attributable to common stockholders	$ 105,508	$ 72,329	$ 187,449	$ 151,652
Weighted average shares (denominator):
Weighted average shares — basic	177,902	182,369	179,378	182,048
Weighted average shares — diluted	179,666	185,690	181,639	185,517
Net income attributable to common stockholders, basic	$ 0.59	$ 0.40	$ 1.04	$ 0.83
Net income attributable to common stockholders, diluted	$ 0.59	$ 0.39	$ 1.03	$ 0.82
Revenues	$ 820,035	$ 812,572	$ 1,623,000	$ 1,610,784
Stock Options [Member]
Weighted average shares (denominator):
Share based compensation	1,740	3,278	2,221	3,418
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,706,000	105,000	1,486,000	0
Restricted Stock Units (RSUs) [Member]
Weighted average shares (denominator):
Share based compensation	24	43	40	51
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	67,000	0	49,000	0

XML

Acquisition, Textuals (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Acquisitions [Abstract]
PaymentsToAcquireBusinessesIncludiing1031ExchangeFunds			$ 59,000	$ 32,800
(Losses) gains on divestitures	$ 737	$ (9,643)	8,366	(9,097)
Impairment losses	0	(2,180)	(3,084)	(4,604)
Gains on divestitures and impairment charges, net	$ (737)	$ 11,823	$ (5,282)	$ 13,701

XML

Label	Element	Value
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents	$ 242,620,000
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents	$ 207,584,000