Service Corporation International

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For other uses of the acronym SCI, see SCI

Service Corporation International
Type	Public (NYSE: SCI)
Founded	1962
Headquarters	Houston, Texas, USA
No. of locations	1,613 (2006)
Industry	End of Life
Products	Funerals, Cremations, Pre-planning
Revenue	$1.747 billion USD (2006) ^[1]
Net income	$344 million USD (2006) ^[1]
Employees	~22,000
Slogan	Celebrating Life with Dedication Excellence & Innovation
Website	www.sci-corp.com

Service Corporation International (NYSE: SCI) is North America’s largest provider of end-of-life arrangements and services. Based in Houston, Texas, United States, SCI operates more than 1,500 funeral homes and 400 cemeteries in 48 states, eight Canadian provinces, and Puerto Rico.

1 Business model
2 History
3 Financial Stability
4 Recent news
- 4.1 Scandals
  - 4.1.1 Texas
  - 4.1.2 Florida
5 Notes
6 References
7 External links

SCI's network of funeral homes consists almost entirely of existing businesses that the company acquired. SCI tends to buy successful funeral homes that are firmly settled and already well-known in their community. The company retains the home's original name, often along with former owners who are kept on as management. Therefore, a typical funeral home that is owned by SCI will not contain advertisements or logos for the corporation, with the exception, perhaps, of pins on staff lapels. As a consequence, most North American consumers are unfamiliar with the company. SCI's funeral homes include Joseph Gawler's Sons, Washington DC - "The funeral home to the presidents" - and the Frank E. Campbell Funeral Home in NYC which claims to have served "Heads of State, United Nations Ambassadors, Dignitaries, Royalty of many nations, members of the arts and entertainment world"^[2]

It was founded in 1962 by Robert L. Waltrip, a licensed funeral director who grew up in his family’s funeral business and who still serves as chairman of the Company’s board of directors.^[3]

As SCI grew its offshore presence, it continued to acquire businesses in North America—a marketplace that, by the late 1990s, had become extremely competitive among companies seeking to buy death care businesses. Purchase prices became inflated, corporate debt levels grew, access to financial markets disappeared, and it became apparent to all players that the dynamics of the business expansion model had changed. Facing these facts, SCI realigned its priorities and, over the next few years, implemented numerous initiatives to reduce overhead, pay down debt, and increase cash flow. In the process, the Company reassessed the value of its global expansion.^[4] While foreign operations had once shown promise, it was clear that nearly 70 percent of SCI’s revenues were generated by operations in the United States and Canada. Beginning in 2000, SCI went through a period of change during which it divested most of its offshore businesses and many North American funeral homes and cemeteries that were either underperforming or did not fit SCI’s long-term strategy.^[5] The former Australian and UK divisions now trade as Invocare Limited and Dignity plc respectively.

In 1999, the Company introduced the first transcontinental brand of death care services and products—Dignity Memorial®.^[6] National branding was commonplace among overseas death care operations, and it was a natural fit for SCI operations in the United States and Canada. The Company’s original policy was to run acquired businesses under by their “heritage” identities, most commonly the names of founding families. By unifying their network under one brand name, SCI believed a recognizable entity could represent value, quality, integrity and uncompromising standards of service that could be marketed from coast to coast.^[5]

Between 2002 and 2006, SCI reduced its net debt (total debt minus cash) by more than $1.0 billion, increased operating cash flow, and simplified its field management organization to enhance efficiency, performance, and accountability. It also improved business and sales processes, tightened internal controls, strengthened corporate governance standards, and established the finest training and development system in its industry. For its shareholders, SCI returned value through more than $335 million in share repurchases, and it resumed payment of a regular quarterly dividend in early 2005, the first since 1999.^[7] In November 2006 SCI acquired its biggest competitor, Alderwoods Group6. The addition of more than 600 funeral homes and cemeteries in the Alderwoods network provided an expanded geographic footprint to serve families in 46 states, eight Canadian provinces, the District of Columbia and Puerto Rico.^[6]

SCI made news in 2005 when its wholly owned subsidiary Kenyon International was awarded a no-bid contract by the state of Louisiana to count and collect corpses in Louisiana after Hurricane Katrina.^[8]

In 2006 the company garnered attention when its proposed acquisition of another chain of cemeteries, Alderwoods Group Inc., was temporarily blocked by the Federal Trade Commission over concerns that the merger of the nation's two largest funeral homes would unfairly reduce consumer choice.^[9] After agreeing to sell funeral homes and cemeteries in dozens of markets and end licensing agreements with some other funeral homes, SCI was allowed to proceed with the acquisition.

In the late 1990s, SCI was involved in a scandal involving alleged violations of state embalming laws which took a political dimension due to the friendship of company chairman Robert Waltrip with the family of then Governor George W. Bush and Waltrip's campaign contributions to various members of the Bush family.^[10] The scandal, often called "funeralgate" or "formaldegate", was widely publicized when Eliza May—a director with the Texas Funeral Service Commission (TFSC)—was fired while investigating SCI. She alleged in a lawsuit that she was fired because she refused to halt the investigation despite pressure to do so from Governor Bush. However, other members of the commission indicated that she was fired because others in the office had lost confidence in her and that she was using her authority inappropriately.

May's lawyers tried to compel Bush to testify at the trial,^[11] but Texas Judge John K. Dietz threw out the subpoena that would have required Bush to give a deposition on a finding that the then-governor was not in position to have enough specialized information to require his involvement.^[12]

May's lawsuit was settled in 2001 for more than $200,000, with the funds being paid jointly by the state of Texas and SCI.^[13] On January 23, 2004, the TFSC fined SCI $21,000 for the charges May had levied against it.^[13]

In December of 2001, the news media reported that two Jewish Florida cemeteries called Menorah Gardens, owned by SCI, had mishandled bodies and in several instances disinterred bodies to place other people in the graves.^[14] The general manager of Menorah Gardens, Peter Hartman, died by apparent suicide on December 27, 2001.^[15] The State of Florida filed first a civil complaint and then felony charges against SCI in connection with these events in 2002 and 2003.^[16]^[17] Following a class action suit filed by over 2,000 families, SCI agreed to a settlement of $100 million.^[18]