Service Corporation International · NYSE:SCI
Service Corporation International — Bank of America 2006 Investment Conference
19 slides from Service Corporation International's conference presentation, Sep 18, 2006
Slide 1: Bank of America 2006 Investment Conference
Bank of America 2006 Investment Conference San Francisco, CA September 18, 2006 Service Corporation International
Slide 2: Forward-looking statements
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
Slide 3: SCI is well-positioned for profitable growth
SCI is well-positioned for profitable growth = Leading position in industry further strengthened by pending acquisition of the Alderwoods Group ™ Geographic scale and scope featuring a national brand at = Favorable long-term demographic trends = Strong balance sheet, cash flow and positive operation
Slide 4: SCI's long-term growth strategy
SCI’s long-term growth strategy Approach business by customer segment q Manage the footprint |
Slide 5: Approach the business by customer segment
Approach the business by customer segment = Segment our consumers based upon their needs *Needs-based approach more effective than demographics = Identified consumer segments Euneral Cemetery Quality/Prestige Premium/Prestige Customs Conscious Standard Convenience/Location Price * Tailor our busines
Slide 6: Leverage our scale & drive operating discipline
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 benchmarks and shared best practices for increas
Slide 7: Manage the footprint
Manage the footprint = Categorize our 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 st
Slide 8: Acquisition of Alderwoods: Transaction overview
Acquisition of Alderwoods Transaction overview Definitive agreement signed on April 3 *$20 per share (all cash) *Equity value $856 million plus assumption of debt of $352 million Investment returns meaningfully exceed SCI’s weighted average cost of capital Immediately accretive to operating cash flo
Slide 9: Acquisition of Alderwoods: Strategic fit
Acquisition of Alderwoods Strategic fit Fully consistent with SCI’s long-term strategy = Approach business by customer segment * Provides a broader platform to pursue customer-focused operating strategies, as well as national branding and affinity partnership initiatives = Leverage scale and drive o
Slide 10: Acquisition of Alderwoods: Funding and planned divestitures
Acquisition of Alderwoods Funding and planned divestitures = Estimated transaction funding *$550 million of cash on hand *$850 million of new debt (including requirements for recent SCI tender offer) = Planned divestitures =FTC mandated and other SCI divestitures are anticipated to generate $200 mil
Slide 11: Acquisition of Alderwoods: Cost savings
Acquisition of Alderwoods Cost savings = Expected cost savings of $60-$70 million to be realized within 18 months of closing (including $15 million in first 12 months) "Duplicate systems and infrastructure "Management structure duplication *Public company and redundant corporate costs = Systems and
Slide 12: Acquisition of Alderwoods: Selected combined pro forma information
Acquisition of Alderwoods Selected combined pro forma information Excludes impact from expected divestitures = Revenues of approx $2.5 billion (6/30/06 LTM) = Approx 15% of total market = Adjusted EBITDA“) of approx $445 million = SCI expectations for 2006 of approx $350 million plus AWGI LTM. 6/30/
Slide 13: Acquisition of Alderwoods: Target Ratios
Acquisition of Alderwoods Target Ratios Target 2008E Long-term Target Ratios Operating cash flow less certain 2.2x capex?/Interest Expense Net Debt?/Operating cash flow less 3.6x certain capex Net Debt/Total Net Capital? 40% to 45% 38% Note: 2008E assumes no share repurchases or re-financings post-c
Slide 14: SCI Q2 highlights and 2006 Guidance
SCI Q2 06 highlights and 2006 Guidance (Go milans, exept tuna seizes 2 Funeral Revenues Gross margin percentage Total funeral services performed Average revenue per funeral service Cemetery Revenues Gross margin percentage Cash Flow and Capital Expenditures Cash flow from operations Total capital ex
Slide 15: Expectations for second half of 2006
Expectations for second half of 2006 = Significant focus on closing and integration of AWGI = Recapitalization of French operations resulted in a one-time distribution of approx $11 million received in Q3 06 = Continued strong increases in funeral average due to our strategic pricing initiative (fro
Slide 16: Investment summary
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 p
Slide 17: Bank of America 2006 Investment Conference
Bank of America 2006 Investment Conference San Francisco, CA September 18, 2006 Service Corporation International
Slide 18: Non-GAAP financial terms: EBITDA, Adjusted EBITDA
Non-GAAP financial terms: EBITDA, Adjusted EBITD. EBITDA’ represents netincome (loss) plus provision (benefit) forincome tanes, interest enpense, and depreciation and amortization lass interest incomes “Adjuted EBITDA” a ured in this presentation represants EBITDA futher adjusted to flict the impact
Slide 19: Forward-looking statements
Bank of America 2006 Investment Conference San Francisco, CA September 18, 2006 Service Corporation International [LOGO OF SCI] Forward-looking statements The statements in this presentation that are not historical facts are forward-looking statements made in reliance on the “safe harbor” protection
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