Service International : Non-GAAP Financial Measures February 2020

(In millions, except diluted EPS)	Three Months Ended December 31,		Twelve Months Ended December 31,
	2019				2018		2019		2018
	Net	Diluted		Net	Diluted		Net	Diluted		Net	Diluted
	Income		EPS		Income		EPS		Income		EPS		Income		EPS
Net income attributable to common stockholders, as reported	$147.2	$	0.79	$	193.0	$	1.04	$369.6	$	1.99	$447.2	$	2.39
Pre-tax reconciling items:
Gains on divestitures and impairment charges, net	(48.1)		(0.26)			(0.6)		-	(32.9)		(0.18)	(15.9)		(0.09)
Loss on early extinguishment of debt, net	-		-			-		-	16.6		0.09	10.1		0.05
Legal settlements	-		-			-		-	6.4		0.03		-		-
Tax reconciling items:
Tax effect from special items	13.1		0.07			0.2		-	4.1		0.02	1.6		0.01
Change in certain tax reserves and other	(0.9)		-		(93.0)		(0.50)		(10.9)		(0.05)		(107.8)		(0.57)
Diluted earnings per share excluding special items	$111.3	$	0.60	$	99.6	$	0.54	$352.9	$	1.90	$335.2	$	1.79
(Adjusted EPS)
Diluted weighted average shares outstanding (in thousands)		185,193				185,676			185,523			186,972

2019 is impacted by the reduction in tax liability as a result of the expiration of statute of limitations. 2018 is impacted by the remeasurement of deferred taxes resulting from a change in estimate related to the finalization of the 2017 return.

				Three Months Ended			Twelve Months Ended
		(In millions)			December 31,				December 31,
					2019				2018		2019		2018
		Net cash provided by operating activities		$	156.6	$	163.5	$	628.8	$	615.8
		Legal settlement payments			-				-				6.4				-
		IRS tax settlement refund received			-				-				-				(5.6)
		Net cash provided by operating activities excluding	special items	$	156.6	$	163.5	$	635.2	$	610.2
		(Adjusted operating cash flow)
		Capital improvements at existing operating locations			(34.7)				(37.0)				(126.5)				(124.8)
		Development of cemetery property			(19.5)				(21.9)				(77.9)				(78.7)
		Free cash flow		$	102.4		$	104.6		$	430.8		$	406.7
		Net cash used in investing activities		$	(38.8)	$	(67.9)	$	(278.5)	$	(414.6)
		Net cash used in financing activities		$	(77.1)	$	(50.1)	$	(319.1)	$	(329.2)
		Cash taxes included in Adjusted operating cash flow		$	11.8	$	3.8	$	65.8	$	59.8

In millions, except diluted EPS	Low	Midpoint	High
Net cash provided by operating activities excluding special items (A)	$590	$615	$640
Adjusted Operating Cash Flow
Capital improvements at existing locations and development of cemetery	$230	$230	$230
property
Diluted earnings per share excluding special items (B)	$1.96	$2.06	$2.16
Adjusted EPS

1. Reconciliations from GAAP Net cash provided by operating activities are not provided for theseforward-looking estimates because GAAP net cash provided by operating activities for the fiscal year ending December 31, 2020, 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.
2. Reconciliations from GAAP Net income per share are not provided for theseforward-looking estimates because GAAP Net income per share for the fiscal year ending December 31, 2020 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 2020 reflects management's current views and estimates regarding 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.