Service Corp. International (SCI) risk factors, FY2024 10-K

Other

1. 01Cautionary Statement on Forward-Looking Statements

Risks Related to Our Business

1. 02Our affiliated trust funds own investments in securities, which are affected by market conditions that are beyond our control
2. 03Combined trust funds 12.3 % 16.3 % (11.5) %
3. 04We 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
4. 05Our ability to execute our strategic plan depends on many factors, some of which are beyond our control
5. 06We may be adversely affected by the effects of inflation
6. 07Our results may be adversely affected by significant weather events, natural disasters, catastrophic events or public health crises
7. 08Our credit agreements contain covenants that may prevent us from engaging in certain transactions
8. 09If 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
9. 10The financial condition of third-party insurance companies that fund our preneed contracts may impact our future revenue
10. 11Unfavorable publicity could affect our reputation and business
11. 12Our failure to attract and retain qualified sales personnel and licensed funeral professionals could have an adverse effect on our business and financial condition
12. 13We 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
13. 14Declines 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
14. 15Our Canadian business exposes us to operational, economic, and currency risks
15. 16Our level of indebtedness could adversely affect our cash flows, 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
16. 17Any of the above listed factors could materially affect our business, financial condition, results of operations, and cash flows
17. 18A failure of a key information technology system or process could disrupt and adversely affect our business

Risks Related to Our Industry

1. 19The funeral and cemetery industry is competitive
2. 20If 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
3. 21If we are not able to respond effectively to changing consumer preferences, our market share, revenue, and/or profitability could decrease
4. 22The continuing upward trend in life expectancy and the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows
5. 23Our funeral and cemetery businesses are high fixed-cost businesses
6. 24Risks associated with our supply chain could materially adversely affect our financial performance

Regulatory and Legal Risks

1. 25Regulation and compliance could have a material adverse impact on our financial results
2. 26Unfavorable results of litigation could have a material adverse impact on our financial statements
3. 27Cemetery burial practice claims could have a material adverse impact on our financial results
4. 28The application of unclaimed property laws by certain states to our preneed funeral and cemetery backlog could have a material adverse impact on our liquidity, cash flows, and financial results
5. 29Changes in taxation, or the interpretation of tax laws or regulations, 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