Non-GAAP Financial Measures

October 27, 2021

Definitions: Non-GAAP Financial Measures

2

Adjusted EPS

(In millions, except diluted EPS)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net

Diluted

Net

Diluted

Net

Diluted

Net

Diluted

Income

EPS

Income

EPS

Income

EPS

Income

EPS

Net income attributable to common stockholders, as reported

$ 209.9

$

1.23

$ 127.4

$

0.72

$ 596.4

$

3.49

$ 314.9

$

1.74

Pre-tax reconciling items:

Gains on divestitures and impairment charges, net

(7.8)

(0.05)

(0.5)

-

(15.2)

(0.09)

(5.8)

(0.03)

Losses on early extinguishment of debt, net

-

-

18.3

0.10

5.2

0.03

18.4

0.10

Vendor waiver and release agreement cash receipts

(8.3)

(0.05)

-

-

(8.3)

(0.05)

-

-

Tax reconciling items:

Tax effect from special items

3.9

0.03

(4.6)

(0.03)

4.9

0.03

(3.4)

(0.01)

Diluted earnings per share excluding special items (Adjusted EPS)

$ 197.7

$

1.16

$ 140.6

$

0.79

$ 583.0

$

3.41

$ 324.1

$

1.80

Diluted weighted average shares outstanding

170.0

178.1

171.1

180.5

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Adjusted Cash Flow from Operations & Free Cash Flow

Three Months Ended

Nine Months Ended

(In millions)

September 30,

September 30,

2021

2020

2021

2020

Net cash provided by operating activities

$

240.6

$

195.1

$

730.4

$

559.4

Vendor waiver and release agreement cash receipts

(8.3)

(8.3)

Net cash provided by operating activities excluding special items

$

232.3

$

195.1

$

722.1

$

559.4

(Adjusted cash flow from operations)

Capital improvements at existing operating locations

(39.9)

(20.6)

(100.1)

(63.8)

Development of cemetery property

(25.4)

(20.1)

(50.0)

(65.4)

Free cash flow

$

167.0

$

154.4

$

572.0

$

430.2

Net cash used in investing activities

$

(72.1)

$

(73.3)

$

(180.7)

$

(225.4)

Net cash provided by (used in) financing activities

$

(192.1)

$

(151.5)

$

(368.6)

$

(351.2)

Cash taxes included in Adjusted operating cash flow

$

66.8

$

95.2

$

168.8

$

96.9

4

Financial Outlook

Outlook Commentary

In Millions, except Adjusted EPS

2021

2022

2023

Low

Midpoint

High

Low

Midpoint

High

Low

Midpoint

High

Net cash provided by operating activities

$850

$888

$925

Adjusted cash flow from operations

Capital improvements at existing locations & Development of

$235

$245

$255

Cemetery Property

Diluted earnings per share excluding special items

$4.15

$4.30

$4.45

$2.60

$2.75

$2.90

$3.00

$3.13

$3.25

Adjusted EPS

Cash taxes included in Adjusted cash flow from operations

$260

Reconciliations from GAAP Net cash provided by operating activities are not provided for these forward-looking estimates because GAAP net cash provided by operating activities for the fiscal years ending December 31, 2021- 2023, is not accessible and reconciling information is not available without unreasonable effort. We are unable to predict changes in assets and liabilities; future acquisition and transition costs; system and process transitions costs; potential tax adjustments to reserves, payments, credits or refunds; potential legal defense costs or settlements of litigation or the recognition of receivables for insurance recoveries associated with litigation, and these amounts could be material such that the amount of net cash provided by operating activities would vary substantially from the amount of projected net cash provided by operating activities excluding special items.

Reconciliations from GAAP Net income per share are not provided for these forward-looking estimates because GAAP Net income per share for the fiscal years ending December 31, 2021-2023 is not accessible and reconciling information is not available without unreasonable effort. We are not able to predict future system and process transition costs; acquisition and transition costs; gains/losses and impairment charges associated with asset dispositions; gains/losses associated with the early extinguishment of debt or foreign currency transactions; potential tax adjustments to reserves, payments, credits or refunds; potential costs associated with settlements of litigation or the recognition of receivables for insurance recoveries associated with litigation, and these amounts could be material, such that the amount of Net income per share would vary substantially from the amount of projected Adjusted earnings per share.

Our outlook for years 2021-2023 reflects management's current views and estimates regarding the impact on results from the Covid pandemic, future economic and financial market conditions, company performance and financial results, business prospects, the competitive environment, and other events. These views and estimates that support the outlook provided are subject to a number of risks and uncertainties, many of which are beyond the control of SCI, that could cause actual results to differ materially from the potential results.

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SCI - Service Corporation International published this content on 27 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 08:12:01 UTC.