Test of New Master

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Bank of America2006 Healthcare ConferenceMay
16, 2006
Service Corporation International
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Forward-looking statements

• The statements in this presentation 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 that convey the uncertainty
  of future events or outcomes. These statements
  are based on assumptions that the Company
  believes are reasonable however, many important
  factors could cause the Companys actual 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.
• For further information on these and other risks
  and uncertainties, see our Securities and
  Exchange Commission filings, including our 2005
  Annual Report on Form 10-K. Copies of this
  document as well as other SEC filings can be
  obtained from our website at www.sci-corp.com. We
  assume no obligation to publicly update or revise
  any forward-looking statements made herein or any
  other forward-looking statements made by us,
  whether as a result of new information, future
  events or otherwise.

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SCI is well-positioned for profitable growth

• Leading position in industry
• Geographic scale and scope featuring a national
  brand
• Favorable long-term demographic trends
• Strong balance sheet, cash flow and positive
  operational outlook
• Infrastructure (point of sale system, accounting
  and management systems) overhaul is complete and
  capable of expansion
• Improved internal control structure and corporate
  governance standards
• Customer-focused business model
• Demonstrated commitment to returning value to
  shareholders

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SCI Outperforms Peers and Other Indices
Total return data assumes the reinvestment of
dividends. The Peer Group is comprised of
Alderwoods Group, Inc., Carriage Services Inc.,
Hillenbrand Industries, Inc., Matthews
International Corp., Rock of Ages Corporation and
Stewart Enterprises, Inc. Alderwoods Group, Inc.
is included in the Peer Group beginning
January 1, 2002, when it emerged from bankruptcy.
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First quarter highlights and outlook for 2006
(In millions, except funeral services performed,
average revenue per funeral service and gross
margin percentage)

• Includes a 29M tax refund received.
• Includes 16.5M of long-term incentive
  compensation payments related to a 2003 award
  program which was 100 cash based. The long-term
  incentive compensation plan was subsequently
  modified to include a combination of cash,
  restricted stock and stock options. Future cash
  payments for long-term incentive compensation are
  expected to be substantially less in future years.

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SCI announces plans to acquire Alderwoods
Right Transaction at the Right Time

• Combines the two premier funeral and cemetery
  services providers in North America
• Consistent with our objective to increase scale
  and to increase shareholder value
• Investment returns meaningfully exceed SCIs
  weighted average cost of capital
• Easily identifiable and significant cost-saving
  synergies
• Accretive to operating cash flow and earnings per
  share excluding one-time implementation costs
• Systems and infrastructure are compatible for
  ease of integration

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Profile of the two companies
(Dollars in millions except per funeral amounts)
FYE 2005
(1) Includes 183 combinations facilities at SCI
and 60 at Alderwoods
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Significant synergy opportunities
We expect to realize 60-70 million of annual
synergies

• Duplicate systems and infrastructure
• Full IT systems and infrastructure
• Duplicate accounting, finance, legal and other
  systems
• Management structure duplication
• Overlapping market management
• Management span of control efficiencies
• Senior executive and public company costs
• Two senior management teams
• Two Boards of Directors
• Two auditors and fees

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Selected pro forma financial information
The combined company would have

• Revenues of approximately 2.5 billion (based on
  2005 financial results)
• EBITDA of approximately 470 million (based on
  2005 financial results), which includes 65
  million of pre-tax cost savings to be achieved
  within 12 - 18 months of closing(1)
• Projected cash flow from operations of
  approximately 400 million with full realization
  of synergies(1)
• Neither company are current cash taxpayers.
  Management estimates becoming a cash taxpayer in
  late 2007.

(1) Excludes one-time implementation costs
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Target ratios
(Dollars in millions)
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The transformation begins
Our strategy to deliver profitable growth is
supported by three structural components
Approach business by customer segment
Profitable growth
Leverage scale and drive operating discipline
Manage the footprint
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Approach the business by customer segment

• Segment our consumers based upon their needs
• Needs-based approach more effective than
  demographics
• Identified consumer segments
• Tailor our business operating strategies to
  consumer segments
• Drop our one-size-fits-all approach
• Focus resources on most profitable segments
• Respond better to changing demographic trends

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Leverage our scale drive operating discipline

• Align pricing strategies with customer segments
  centralize and simplify pricing process
• Focus pricing on service and cemetery property,
  our competitive advantages
• Implement operating standards
• Develop clear yet flexible benchmarks for
  productivity and shared best practices to support
  higher productivity
• Focus preneed efforts on right product for right
  customer
• Align incentives with product value to SCI
  reward incrementality
• Pursue affinity opportunities and more fully
  utilize our purchasing power

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Manage the footprint

• Categorize our current footprint based on
  customer segmentation model
• Target expansion growth differentially focusing
  on highest return segments
• FUNERAL Target segments that value high quality
  service/memorialization, our core competency
• CEMETERY Target combos and attractive
  stand-alones
• Prioritize capital spending according to consumer
  model
• Proactive funeral home facility CAPEX to ensure
  facilities meet consumer expectations
• Cemetery maintenance standards based on revenue,
  life-cycle stage and endowment care trust fund
  levels

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Investment summary

• Predominant leader in a stable industry
• Significant cash flows, liquidity and financial
  flexibility
• Short-term growth opportunity
• Successfully integrating the Alderwoods
  acquisition
• Utilizing more centralization and standardization
  to take advantage of our scale
• Aligning preneed and pricing strategies with
  customer segments and our competitive advantages
• Long-term differential growth opportunity
• Tailoring our business approach by customer
  segment
• Footprint expansion in customer segments that we
  excel