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Service Corporation International

Merrill Lynch Health Services Investor ConferenceNew York, NYNovember 28, 2006

Service Corporation International

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Tom RyanPresident and CEO

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SCI strengths and investment considerations

Market leader in the death care industry further strengthened by pending acquisition of Alderwoods. Combined company will have

Pro forma revenues of $2.3 billion

Pro forma adjusted EBITDA of $465 million, including estimated synergies of $65M

More than 2,000 funeral homes & cemeteries

Competitive advantage due to size, unparalleled network and national brand strategy

Diverse geographic exposure

Reputation and service excellence

Strong industry fundamentals

Attractive financial profile

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Today SCI is well-positioned for profitable growth

LEVERAGEscale and drive operating discipline

APPROACHbusiness by customer segment

MANAGEfootprint of businesses

Profitable growth

Profitable growth

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Approach the business by customer segment

Consumer landscape is changing

From products to experience/value

Segment our consumers based upon their needs

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

Funeral Cemetery

Quality/Prestige Premium/Prestige

Customs Conscious Standard

Convenience/Location

Price

Manage footprint

Leverage scale

Customer segmentation

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Leverage 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 and shared best practices for increased 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

Manage footprint

Leverage scale

Customer segmentation

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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

Manage footprint

Leverage scale

Customer segmentation

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Alderwoods AcquisitionCompelling transaction

Two largest companies in the North American deathcare industry – 14% market share

Fully consistent with SCI’s long-term strategy

Significant synergies of $60 - $70 million within 18 months

Investment returns meaningfully exceed SCI’s weighted average cost of capital

Accretive to operating cash flow and earnings per share excluding one-time costs

Strong cash flow generation and planned divestitures reduce financial risk

Increased preneed backlog to almost $7 billion enhances long-term revenue stability

Expect to be within desired leveraged ratios by 2008

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Alderwoods AcquisitionStrong North American presence

3

32

124

99

44

2

38 306

12

26

20

6

7

20

92

53

27

227

2

44

141

1

26

2649

62

11

18

4

19

9

9

19

13

2

21 10

3

2

4

12

13

3

6

7

19

1

2

3

4

26

1

Funeral Homes

36

Cemeteries

32

10

38

8

11 3

1

2

4

5

4

4

5

9

6

12

33

2

32 5 10

11

3 1 2

3 1

9 1 14

2

5

1

3 5 2

Combination

7

11 3

12 1 3

30

3

4

12 7 1

14 17 2

308

45

4 2

29

10

12

33 3 3

5

7 2

22 1 10

1 Pro forma Revenues and Adj. EBITDA reflects pro forma results for LTM June 30, 2006; includes impact of expected acquisition and divestitures

2 PF LTM Adjusted EBITDA of $399.6mm plus $65mm of synergies

Combined company: 46 States, 8 Canadian provinces, District of Columbia and Puerto Rico

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Alderwoods AcquisitionSignificant synergy opportunities

We expect to realize $60 to $70 million within 18 months

Duplicate systems and infrastructure

Management structure duplication

Senior executive and public company costs

Increased purchasing scale

One-time costs to achieve synergies of approximately $60 million

$30-35 million in 2006 and the remainder in 2007

Other one-time costs (financing and other deal costs, legal and accounting costs) of approx $75 million

Includes $25 million of tender fees for SCI and Alderwoods debt

Detailed integration plan in place and integration teams have been very active

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SCI Q3 06 highlights

Q3 06 Q3 05 Change

Comparable North America

Funeral

Revenues $258.8 $248.8 4.0%

Gross margin percentage 20.6% 14.5%

Total funeral services performed 51,556 54,791 -5.9%

Average revenue per funeral service $4,848 $4,317 12.3%

Cemetery

Revenues $135.3 $138.9 -2.6%

Gross margin percentage 14.3% 17.1%

Cash Flow and Capital Expenditures

Cash flow from operations (1) $113.7 $68.1 67.0%

Total capital expenditures $22.7 $28.4 -20.1%

(In millions, except funeral services performed, average revenue per funeral service and gross margin percentage)

(1) Includes the receipt and recognition of $10.9M of interest income in Q3 06 from the redemption of convertible preferred equity certificates received in connection with the original disposition of our operations in France. Also there was one additional payroll period (~$18M) in Q3 05 compared to Q3 06.

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Near term expectations

Significant focus on integration of Alderwoods

Volume and revenue loss due to planned asset sales, but not expected to impact EBITDA materially

Continued volume loss associated with low priced immediate cremation activities in certain markets

Continued strong increases in funeral averages due to strategic pricing initiatives

Favorable impact from operating staffing metrics

Improvements in cemetery sales production and efficiencies in selling cost metrics

Service Corporation International

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Eric TanzbergerSenior VP and CFO

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Strong financial position

Expect to be at high end or exceed our guidance ranges for EPS and cash flow from operations

Guidance for EPS of $.30 - $.34 ($.32 - $.36 revised for France distribution)

Guidance for cash flow from operations of $295 - $315 million

Cash on hand at 11/8/06 of approximately $635 million

Debt at 9/30/06 stable at $1.3 billion, with only $30M of current maturities

Build up of net cash balances in near term due to asset sales and cash flows

FTC mandated and other SCI divestitures are anticipated to generate $200 million of proceeds in the near future

Comprehensive review of combined properties after close expected to result in additional divestitures

Quarterly cash dividend increased 20% to $.03 from $.025

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Financing in place for Alderwoods transaction

$56

$300

$250

$342

$195

$140

100

200

300

400

$500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Senior Notes Debentures

Existing Maturity schedule ($ in mm)Existing Maturity schedule ($ in mm)

Pro Forma Maturity schedule ($ in mm)Pro Forma Maturity schedule ($ in mm)

$150

$250 $250$195

$14

$197$250

$300

$200

$560

100

200

300

400

$500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Existing Senior Notes New Term Loan¹ New Private Placement Debentures New Senior Notes

1 Term loan anticipated to be retired with asset sales proceeds and free cash flowNote: Schedules exclude approx. $21mm in convertible debentures maturing through 2013 and approx. $121mm of other debt consisting primarily of capital leases, mortgage notes and unamortized discounts

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Combined company pro forma overview

LTM as of J une 30, 2006

($ mm) SCI Alderwoods Adj. for the Acquisition

Adj. for the Divestitures Pro forma

Revenue $1,709.6 $742.5 ($1.8) ($94.3) $2,356.0 Gross profit 298.0 108.9 (8.4) (13.2) 385.3 Adj. EBITDA1 323.2 92.3 (2.7) (13.2) 399.6 Midpoint of synergies 65.0

Adj. EBITDA with synergies 464.6

1 See definition and calculation of adjusted EBITDA at the end of this presentation.

Initial Leverage RatioInitial Leverage Ratio

Debt at 9/30/06 $1,296

New debt from Alderwoods 850

Tender offer for 2009 notes (145)

Pro forma debt $2,001

Pro forma Debt/Adjusted EBITDA 4.3x

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Target 2008E

Target Ratios

Operating cash flow less certain capex1/Interest Expense

>1.5x 2.2x

Net Debt2/Operating cash flow less certain capex

5x to 7x 3.6x

Net Debt/Total Net Capital3 40% to 45% 38%

Note: 2008E assumes no share repurchases or debt re-financings

Target Ratios

1 Cash flows from operations (excluding unusual items) less capital expenditures (excluding expenditures to construct new funeral home facilities and other growth capital)

2 Total debt less cash on hand

3 Net debt (as defined above) plus stockholders’ equity

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A bright future ahead

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

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Service Corporation International

Merrill Lynch Health Services Investor ConferenceNew York, NYNovember 28, 2006

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Non-GAAP financial terms: EBITDA, Adjusted EBITDA

“EBITDA” presented in this table represents income from continuing operations plus (i) provision for income taxes, (ii) interest expense, and (iii) depreciation and amortization less (iv) interest income.

“Adjusted EBITDA” presented in this table represents EBITDA further adjusted to reflect the impact of (i) gains and losses on dispositions and impairment charges, (ii) an adjustment for capital leases (described in note (a) below), and (iii) legal expenses related to the acquisition.

We believe EBITDA and Adjusted EBITDA facilitate company to company performance comparisons by removing potential differences caused by variations in capital structure (affecting interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to general performance or liquidity. Our calculations of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled measures of other companies.

EBITDA and Adjusted EBITDA are not measures of performance or liquidity under GAAP and should not be used in isolation or as a substitute for net income (loss), cash flows from operating activities or other income or cash flow statement data prepared in accordance with GAAP or as a measure of profitability or liquidity.

We have included information concerning EBITDA and Adjusted EBITDA as performance-based analytical tools and you should not consider these measures in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

EBITDA and Adjusted EBITDA do not reflect our current cash expenditure requirements, or future requirements, for capital

expenditures or contractual commitments;

EBITDA and Adjusted EBITDA do not reflect the changes in, or cash requirements for, our working capital needs;

EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacement; and

Our measure of EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential

inconsistencies in the methods of calculation.

Because of these limitations, EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally.

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SCI EBITDA reconciliation

For the year ended December 31, Six months ended J une 30,

(Dollars in thousands) 2003 2004 2005 2005 2006

Income (loss from continuing operations before cumulative effect of accounting changes $69,265 $119,670 $55,474 $42,192 $52,614

Provision (benefit) for income taxes 26,402 (7,650) 33,233 27,073 31,282

Interest expense 139,964 119,293 103,733 51,229 53,337

Interest income (6,215) (13,453) (16,706) (7,950) (12,763)

Depreciation and Amortization 152,206 135,142 77,097 37,521 49,526

EBITDA $381,622 $353,002 $252,831 $150,065 $173,996

(Gain) loss on dispositions and impairment charges - net (50,677) (25,797) 26,093 1,213 7,391

Other operating expense 9,004 - - - -

(Gain) loss on early extinguishment of debt (1,315) 16,770 14,258 14,258 -

Adjustment for capital leases1 24,652 27,151 28,430 14,303 -

Adjustment for pre need selling costs2 (68,053) (73,558) - - -

Adjusted EBITDA $295,233 $297,568 $321,612 $179,839 $181,387

The following table provides a reconciliation from income from continuing operations before cumulative effect of accounting changes to EBITDA and Adjusted EBITDA for the periods indicated:

1 Adjustment for capital leases represents the operating lease expense for certain leased transportation equipment. The terms of these leases were amended in 2006 and, based on these amendments, the leases are now classified as capital leases.

2 Effective January 1, 2005, SCI changed its method of accounting for direct selling costs related to the acquisition of preneed funeral and preneed cemetery contracts. The adjustment for preneed selling costs in the respective periods represents the selling costs previously deferred but which are now expensed under SCI’s current accounting policy.

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Alderwoods EBITDA reconciliation

53 weeks

ended 52 weeks

ended 52 weeks

ended 24 weeks ended

(Dollars in thousands) J anuary 3,

2004 J anuary 1,

2005 December

31, 2005 J une 18,

2005 J une 17,

2006

Net income (loss) from continuing operations $8,359 $(3,564) $42,861 $26,895 $5,898

Income taxes (6,485) (1,453) 4,815 18,193 7,318

Interest on long-term debt and refinancing costs 76,453 78,079 30,069 14,528 12,949

Depreciation and Amortization 40,222 42,093 44,598 21,095 20,862

EBITDA $118,549 $115,155 $122,343 $80,711 $47,027

Provision (benefit) for asset impairment 5,229 1,787 (1,379) (1,627) -

(Gain) loss on dispositions1 1,056 (3,529) (4,964) (5,447) 80

One time gains in general and administrative expenses2 - - (11,800) (11,800) -

Legal expenses related to the acquisition - - - - 2,800

Adjusted EBITDA $124,834 $113,413 $104,200 $61,837 $49,907

The following table provides a reconciliation from net income (loss) from continuing operations to EBITDA and Adjusted EBITDA for the periods indicated:

1Gain or loss on dispositions is included in other (expense) income — net.

2One-time gains in general and administrative expenses primarily relate to the recovery of a corporate receivable that was previously fully reserved.

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Pro forma EBITDA reconciliation

1Adjustment for leases represents the operating lease expense for certain leased transportation equipment. The terms of these leases were amended in 2006 and, based on these amendments, the leases are now classified as capital leases.

The following table provides a reconciliation from income from continuing operations to EBITDA and Adjusted EBITDA: