What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-28 · 374 added, 445 removed, 1391 unchanged (37% of the section changed)

9 unchanged sentences

Notes to Consolidated Financial Statements

Basis of Presentation and Summary of Significant Accounting Pol icies

Re cently Issu ed A ccounting Standards

Business Com binations

Divested Operat ions

Fair Value Measurements

Trust Investments

Receivables from Preneed Funeral Trusts

Contracts Funded by Insurance

Intangibles and Other Non Current Assets

Credit Facility and Acquisition Debt

Senio r Notes

Commit ments and Contingencies

Stockholders' Equity

Earnings Per Share

Segment Reporting

Supplementary Da ta

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Carriage Services, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule included under Item 15(2) (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 26, 2026 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We have served as the Company's auditor since 2014.

Dallas, Texas

Houston, Texas

February 26, 2026

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Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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/s/ GRANT THORNTON LLP

Dallas, Texas

Houston, Texas

February 26, 2026

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(in thousands, except share data)

2025 December 31,

Current assets:

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Total liabilities and stockholders’ equity $ 1,345,905 $ 1,279,580

The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

CARRIAGE SERVICES, INC.

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(in thousands, except per share data)

Years Ended December 31,

Year ended December 31,

2025 2024 2023

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Other revenue 37,659 34,215 30,864

404,198 382,520 370,174

Total revenue 417,440 404,198 382,520

Field costs and expenses:

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Other expenses 6,146 5,921 5,828

260,808 258,225 250,948

Total field costs and expenses 270,764 260,808 258,225

Gross profit 146,676 143,390 124,295

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General, administrative, and other 48,648 59,011 42,125

Net loss on divestitures, disposals and impairments charges 2,580 1,191 2,029

Net loss on divestitures and impairment charges 371 2,580 1,191

Operating income 97,657 81,799 80,979

Interest expense 28,365 32,075 36,266

Loss on extinguishment of debt — — 190

Net gain on property damage, net of insurance claims — ( 417 ) ( 343 )

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Expense for income taxes 22,196 16,079 13,186

Expense (benefit) related to discrete income tax items 1,048 ( 170 ) ( 430 )

(Benefit) expense related to discrete income tax items ( 3,440 ) 1,048 ( 170 )

Total expense for income taxes 18,756 17,127 13,016

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Diluted 15,634 15,443 15,455

The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

CARRIAGE SERVICES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total

Balance – December 31, 2021 15,332 $ 263 $ 236,809 $ 135,462 $ ( 244,519 ) $ 128,015

Net income — — — 41,381 — 41,381

Issuance of common stock from employee stock purchase plan 52 1 1,685 — — 1,686

Issuance of common stock to directors and board advisor 12 — 435 — — 435

Exercise of stock options 10 — ( 63 ) — — ( 63 )

Restricted common stock and stock options surrendered for taxes paid ( 6 ) — ( 205 ) — — ( 205 )

Stock-based compensation expense — — 5,524 — — 5,524

Dividends on common stock — — ( 6,763 ) — — ( 6,763 )

Treasury stock acquired ( 695 ) — — — ( 34,234 ) ( 34,234 )

Other 27 — 1,358 — — 1,358

Balance – December 31, 2022 14,732 $ 264 $ 238,780 $ 176,843 $ ( 278,753 ) $ 137,134

Net income — — — 33,413 — 33,413

Issuance of common stock from employee stock purchase plan 63 — 1,494 — — 1,494

Issuance of common stock to directors and board advisor 16 — 451 — — 451

Issuance of common stock to former executive 30 — 826 — — 826

Issuance of restricted common stock 142 2 ( 2 ) — — —

Exercise of stock options 12 — ( 174 ) — — ( 174 )

Restricted common stock and stock options surrendered for taxes paid ( 3 ) — ( 78 ) — — ( 78 )

Stock-based compensation expense — — 6,426 — — 6,426

Dividends on common stock — — ( 6,708 ) — — ( 6,708 )

Other 8 — 276 — — 276

Balance – December 31, 2023 15,000 $ 266 $ 241,291 $ 210,256 $ ( 278,753 ) $ 173,060

Net income — — — 32,953 — 32,953

Issuance of common stock from employee stock purchase plan 57 — 1,187 — — 1,187

Issuance of common stock to directors and board advisor 17 — 531 — — 531

Issuance of restricted common stock 157 2 ( 2 ) — — —

Exercise of stock options 68 1 1,439 — — 1,440

Restricted common stock and stock options surrendered for taxes paid ( 76 ) — ( 593 ) — — ( 593 )

Stock-based compensation expense — — 5,989 — — 5,989

Dividends on common stock — — ( 6,807 ) — — ( 6,807 )

Other 31 — 790 — — 790

Balance – December 31, 2024 15,254 $ 269 $ 243,825 $ 243,209 $ ( 278,753 ) $ 208,550

The accompanying notes are an integral part of these Consolidated Financial Statements.

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(in thousands)

Years Ended December 31,

Year Ended December 31,

2025 2024 2023

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Stock-based compensation expense 7,806 6,520 7,703

Deferred income tax (benefit) expense ( 698 ) 3,307 3,036

Deferred income tax expense (benefit) 3,980 ( 698 ) 3,307

Amortization of intangibles 1,205 1,357 1,401

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Amortization and accretion of debt 563 539 515

Loss on extinguishment of debt — — 190

Net loss on divestitures, disposals and impairment charges 2,580 1,191 2,029

Net loss on divestitures and impairment charges 371 2,580 1,191

Net gain on property damage, net of insurance claims — ( 417 ) ( 343 )

Gain on sale of excess land — ( 1,407 ) ( 155 )

Net gain on sale of excess real property ( 993 ) — ( 1,407 )

Changes in operating assets and liabilities that provided (used) cash:

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Acquisitions of businesses and real property ( 59,026 ) — ( 44,500 )

Capital expenditures ( 20,628 ) ( 16,098 ) ( 18,039 )

Proceeds from divestitures and sale of other assets 44,483 12,057 4,132

Proceeds from insurance claims — 403 1,403

Capital expenditures ( 16,098 ) ( 18,039 ) ( 26,081 )

Net cash used in investing activities ( 35,171 ) ( 3,638 ) ( 57,004 )

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Proceeds from the exercise of stock options and employee stock purchase plan contributions 1,718 2,626 1,494

Taxes paid on restricted stock vesting and exercise of stock options ( 593 ) ( 252 ) ( 327 )

Taxes paid on restricted stock, performance award vestings, and exercise of stock options ( 8,276 ) ( 593 ) ( 252 )

Dividends paid on common stock ( 7,025 ) ( 6,807 ) ( 6,708 )

Purchase of treasury stock — — ( 36,663 )

Net cash used in financing activities ( 24,999 ) ( 48,716 ) ( 18,233 )

Net (decrease) increase in cash and cash equivalents during the year ( 358 ) 353 22

Cash and cash equivalents at beginning of year 1,523 1,170 1,148

Cash and cash equivalents at end of year $ 1,165 $ 1,523 $ 1,170

Net increase (decrease) in cash and cash equivalents 523 ( 358 ) 353

Cash and cash equivalents at beginning of period 1,165 1,523 1,170

Cash and cash equivalents at end of period $ 1,688 $ 1,165 $ 1,523

Supplemental disclosure of cash flow information:

Cash paid for interest and financing costs $ 26,820 $ 30,629 $ 34,682

Cash paid for taxes 16,990 16,654 10,448

Land purchased in exchange for debt — — 2,550

The accompanying notes are an integral part of these Consolidated Financial Statements.

CARRIAGE SERVICES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

Shares Outstanding Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total

Balance - December 31, 2022 14,732 $ 264 $ 238,780 $ 176,843 $ ( 278,753 ) $ 137,134

Net income — — — 33,413 — 33,413

Issuance of common stock from employee stock purchase plan 63 — 1,494 — — 1,494

Issuance of common stock to directors and board advisor 16 — 451 — — 451

Issuance of common stock to former executive 30 — 826 — — 826

Issuance of restricted common stock 142 2 ( 2 ) — — —

Exercise of stock options 12 — ( 174 ) — — ( 174 )

Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 3 ) — ( 78 ) — — ( 78 )

Stock-based compensation expense — — 6,426 — — 6,426

Dividends on common stock ($ 0.45 per share)

— — ( 6,708 ) — — ( 6,708 )

Other 8 — 276 — — 276

Balance - December 31, 2023 15,000 $ 266 $ 241,291 $ 210,256 $ ( 278,753 ) $ 173,060

Net income — — — 32,953 — 32,953

Issuance of common stock from employee stock purchase plan 57 — 1,187 — — 1,187

Issuance of common stock to directors and board advisor 17 — 531 — — 531

Issuance of restricted common stock 157 2 ( 2 ) — — —

Exercise of stock options 68 1 1,439 — — 1,440

Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 76 ) — ( 593 ) — — ( 593 )

Stock-based compensation expense — — 5,989 — — 5,989

Dividends on common stock ($ 0.45 per share)

— — ( 6,807 ) — — ( 6,807 )

Other 31 — 790 — — 790

Balance -December 31, 2024 15,254 $ 269 $ 243,825 $ 243,209 $ ( 278,753 ) $ 208,550

Net income — — — 51,507 — 51,507

Issuance of common stock from employee stock purchase plan 34 — 1,133 — — 1,133

Issuance of common stock to directors and board advisor 7 — 266 — — 266

Issuance of common stock 271 3 ( 3 ) — — —

Issuance of restricted common stock 115 1 ( 1 ) — — —

Exercise of stock options 132 1 584 — — 585

Restricted common stock, performance awards, and stock options surrendered for taxes paid ( 74 ) — ( 8,276 ) — — ( 8,276 )

Stock-based compensation expense — — 7,540 — — 7,540

Dividends on common stock ($ 0.45 per share)

— — ( 7,025 ) — — ( 7,025 )

Other 12 — 496 — — 496

Balance - December 31, 2025 15,751 $ 274 $ 238,539 $ 294,716 $ ( 278,753 ) $ 254,776

The accompanying notes are an integral part of these Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Carriage Services, Inc.

(“Carriage,” the “Company,” “we,” “us,” or “our”) is a leading provider of funeral and cemetery services and merchandise in the United States.

(“Carriage,” the “Company,” “we,” “us,” or “our”) is a leading provider of funeral and cemetery services and merchandise in the United States (“U.S.”).

Our operations are reported in two business segments:

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We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

We maintain cash and cash equivalents at United States financial institutions for which the combined account balances in individual institutions may exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.

We maintain cash and cash equivalents at U.S.

financial institutions for which the combined account balances in individual institutions may exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.

As of December 31, 2025, approximately $ 2.6 million of our deposits were not covered by FDIC insurance.

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Tangible and intangible assets acquired, and liabilities assumed are recorded at fair value and goodwill is recognized for any difference between the price of the acquisition and fair value.

We recognize the assets acquired, the liabilities assumed and any non-controlling interest in the acquiree at the acquisition date, measured at the fair value as of that date.

We recognize the assets acquired, the liabilities assumed, and any non-controlling interest at the fair value as of that date.

Acquisition related costs are recognized separately from the acquisition and are expensed as incurred.

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First, we perform a screen test to determine if the set is not a business.

The principle of the screen is that if substantially all of the fair value of the gross assets sold resides in a single asset or group of similar assets, the set is not a business.

The principle factor in the screen test is that if substantially all of the fair value of the gross assets sold resides in a single asset or group of similar assets, the set is not a business.

If the screen is not met, we perform an assessment to determine if the set is a business by evaluating whether the set has both inputs and a substantive process that together significantly contribute to the ability to create outputs.

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See Notes 4 and 5 to the Consolidated Financial Statements for additional information related to divestitures.

The excess of the purchase price over the fair value of identifiable net assets of funeral home businesses and cemeteries acquired is recorded as goodwill.

The excess of the purchase price over the fair value of identifiable net assets of funeral home businesses and cemeteries we acquire is recorded as goodwill.

Goodwill has an indefinite life and is not subject to amortization.

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We intend to perform a quantitative impairment test at least once every three years and perform a qualitative assessment during the remaining two years.

We conducted a quantitative assessment in 2022 and a qualitative assessment in 2023 and 2024.

In addition to our annual test, we assess the impairment of goodwill whenever events or changes in circumstances indicate that the carrying value of a reporting unit may be greater than fair value.

Factors that could trigger an interim impairment review include, but are not

We conducted qualitative assessments in 2023 and 2024;

however, we performed a quantitative assessment in 2025.

No goodwill impairment was recorded as a result of our assessments.

In addition to our annual test, we assess the impairment of goodwill whenever events or changes in circumstances indicate that the carrying value of a reporting unit may be greater than

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

limited to, significant negative industry or economic trends and significant adverse changes in the business climate, which may be indicated by a decline in our market capitalization or decline in operating results.

Factors that could trigger an interim impairment review include, but are not limited to, significant negative industry or economic trends and significant adverse changes in the business climate, which may be indicated by a decline in our market capitalization or decline in operating results.

Our quantitative goodwill impairment test involves estimates and management judgment.

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If the fair value of the reporting unit exceeds its carrying amount, the goodwill of that reporting unit is not considered impaired.

We determine fair value for each reporting unit using both an income approach, weighted 90%, and a market approach, weighted 10%.

We determine fair value for each reporting unit using an income approach, weighted 80%, and two market approaches, weighted 10% each.

Our methodology for determining an income-based fair value is based on discounting projected future cash flows.

The projected future cash flows include assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows discounted at our weighted average cost of capital based on market participant assumptions.

Our methodology for determining a market approach fair value utilizes the guideline public company method, in which we rely on market multiples of comparable companies operating in the same industry as the individual reporting units.

Our first methodology for determining a market approach fair value utilizes the guideline public company method, in which we rely on market multiples of comparable companies operating in the same industry as the individual reporting units.

Our second market approach methodology utilizes the guideline transaction method, in which transaction multiples are derived from acquisitions of controlling interests in companies engaged in the same or similar lines of business as the reporting units.

In accordance with the guidance, if the fair value of the reporting unit is less than its carrying amount an impairment charge is recorded in an amount equal to the difference.

Goodwill is only allocated to a divestiture if the set is considered to be a business.

When we divest a portion of a reporting unit that constitutes a business in accordance with GAAP, we allocate goodwill associated with that business to be included in the gain or loss on divestiture.

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Additionally, after each divestiture, we will test the goodwill remaining in the portion of the reporting unit to be retained for impairment using a qualitative assessment unless we deem a quantitative assessment to be appropriate to ensure the fair value of our reporting units is greater than their carrying value.

For the year ended December 31, 2025 and 2024, after each divestiture, we concluded that it was more-likely-than not that the fair value of our reporting units was greater than their carrying value and thus there was no impairment to goodwill.

See Notes 4 and 5 to the Consolidated Financial Statements for additional information related to goodwill.

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We intend to perform a quantitative impairment test at least once every three years and perform a qualitative assessment during the remaining two years.

We conducted a quantitative assessment in 2022 and a qualitative assessment in 2023 and 2024.

We conducted qualitative assessments in 2023 and 2024;

however, we performed a quantitative assessment in 2025.

In addition to our intangible assets annual test, we assess the impairment of intangible assets whenever certain events or changes in circumstances indicate that the carrying value of the intangible asset may be greater than the fair value.

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In accordance with the guidance, if the fair value of the tradename is less than its carrying amount, then an impairment charge is recorded in an amount equal to the difference.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our 2025 quantitative assessment did not indicate any impairment to intangible assets as a result of our testing.

As a result of our 2024 qualitative assessment, we determined that there were factors that would indicate the need to perform additional quantitative impairment tests for certain funeral home businesses.

As a result of these additional quantitative impairment tests, we recorded an impairment to the tradenames for certain funeral home businesses of $ 0.6 million, during the year ended December 31, 2024, as the carrying amount of these tradenames exceeded their fair value.

See Note 11 to the Consolidated Financial Statements for additional information related to intangible assets.

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and (iii) cemetery perpetual care trusts.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our preneed and perpetual care trust funds are reported in accordance with the principles of consolidating Variable Interest Entities (“VIEs”).

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Pursuant to this guidance, we have determined the fair value of the financial assets of the trusts are more observable and we first measure those financial assets at fair value.

Our fair value of the financial liabilities mirrors the fair value of the financial assets, in accordance with the ASC.

Any changes in fair value are recognized in earnings.

Our fair value of the financial liabilities mirrors the fair value of the financial assets.

In accordance with respective state laws, we are required to deposit a specified amount into perpetual and memorial care trust funds for each interment right and certain memorials sold.

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We have preneed funeral trust fund assets in trusts that are controlled and operated by third parties in which we do not have a controlling financial interest (less than 50%) in the trust assets.

We account for these investments at cost, reflected in our financial statements as Receivables from preneed funeral trusts, net, with a corresponding amount recognized as Deferred preneed funeral revenue .

We account for these receivables at cost, reflected in our financial statements as Receivables from preneed funeral trusts, net, with a corresponding amount recognized as Deferred preneed funeral revenue .

Under certain state regulations, we are allowed to retain certain amounts not required to be deposited to a trust or used to purchase a third-party insurance policy.

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Future revenue that are held in trust accounts are included in Deferred preneed funeral and cemetery receipts held in trust discussed above.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the year ended December 31, 2023, we withdrew $ 8.6 million of realized capital gains and earnings from our preneed funeral and cemetery trust investments.

We did not withdraw any realized capital gains and earnings from our preneed trust investments during the year ended December 31, 2024.

We did not withdraw any realized capital gains and earnings from our preneed trust investments during the year ended December 31, 2025 and 2024.

In certain states, we are allowed to make these withdrawals prior to the delivery of preneed merchandise and service contracts.

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(3) an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Company’s control extend the period of time required to sell the disposal group beyond one year;

(4) the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year;

(5) the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value;

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Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group, if material, in the line items current and non-current assets held for sale and current and long-term liabilities held for sale in the Consolidated Balance Sheets.

During the year ended December 31, 2024, the Company announced that it was exploring the divestiture of certain non-core businesses in markets that no longer aligned with its strategic objectives and is undergoing a process to find a suitable buyer of these businesses.

We expect to close on the sale of these businesses within the next twelve months.

As of December 31, 2024, the assets and liabilities of these non-core businesses, included in our funeral home and cemetery segments, have been classified as held for sale.

The table below presents the carrying amounts of the assets and liabilities included as part of the expected sale (in thousands):

December 31, 2024

Accounts receivable, net $ 833

Inventories 302

Current assets held for sale $ 1,135

Preneed cemetery trust investments $ 4,876

Preneed funeral trust investments 2,197

Preneed cemetery receivables, net 1,671

Property, plant and equipment, net 4,898

Cemetery property, net 3,362

Intangible and other non-current assets, net 215

Cemetery perpetual care trust investments 2,234

Non-current assets held for sale $ 19,453

Accounts payable $ 94

Accrued and other liabilities 146

Current liabilities held for sale $ 240

Deferred preneed cemetery revenue $ 3,517

Deferred preneed funeral revenue 1,018

Deferred preneed cemetery receipts held in trust 4,876

Deferred preneed funeral receipts held in trust 2,197

Care trusts’ corpus 2,234

Long-term liabilities held for sale $ 13,842

See Note 20 to the Consolidated Financial Statements for additional information related to assets and liabilities held for sale.

Fair Value Measurements

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This guidance defines fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).

The guidance establishes a three-level valuation hierarchy for disclosure of fair value

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

measurements.

The guidance establishes a three-level valuation hierarchy for disclosure of fair value measurements.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.

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We capitalize sales commissions and other direct selling costs related to preneed cemetery merchandise and services and preneed funeral trust contracts as these costs are incremental and recoverable costs of obtaining a contract with a customer.

Our capitalized commissions on preneed contracts are amortized on a straight-line basis over the average maturity period of ten years for our preneed funeral trust contracts and 8 years for our preneed cemetery merchandise and services contracts.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

capitalized commissions on preneed contracts are amortized on a straight-line basis over the average maturity period of ten years for our preneed funeral trust contracts and eight years for our preneed cemetery merchandise and services contracts.

The selling costs related to the sales of cemetery interment rights, which include real property and other costs related to cemetery development activities, continue to be expensed using the specific identification method in the period in which the sale of the cemetery interment right is recognized as revenue.

The selling costs related to preneed funeral insurance contracts continue to be expensed in the period incurred as these contracts are not included on our Consolidated Balance Sheets.

The selling costs related to preneed funeral insurance funded contracts continue to be expensed in the period incurred as these contracts are not included on our Consolidated Balance Sheets.

See Note 11 to the Consolidated Financial Statements for additional information related to capitalized commissions on preneed contracts.

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We recognize an impairment loss if the carrying amount of the long-lived asset is not recoverable and exceeds its fair value.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Additionally, assets to be disposed of and assets not expected to provide any future service potential are recorded at the lower of their carrying amount or fair value less estimated costs to sell.

If we determine that the carrying value is not recoverable from the proceeds of the sale, we record an impairment loss at that time.

Property, plant and equipment is comprised of the following (in thousands):

December 31, 2024 December 31, 2023

Land $ 86,609 $ 87,635

Buildings and improvements 265,231 263,522

Furniture, equipment and vehicles 72,052 74,372

Property, plant and equipment, at cost 423,892 425,529

accumulated depreciation ( 145,990 ) ( 138,045 )

Property, plant and equipment, net including HFS

$ 277,902 $ 287,484

Held for sale

Property, plant and equipment, net

$ 273,004 $ 287,484

During the year ended December 31, 2024, we sold six funeral homes and one cemetery that had a carrying value of property, plant and equipment of $ 3.1 million, which was included in the loss on sale and recorded in Net loss on divestitures, disposals and impairment charges on Consolidated Statements of Operations, more fully described in Note 5 to Consolidated Financial Statements.

Additionally, we sold real property for $ 1.1 million, with a carrying value of $ 0.8 million, resulting in a $ 0.3 million gain on the sale, which was recorded in Net loss on divestitures, disposals and impairment charges on Consolidated Statements of Operations.

During the year ended December 31, 2023, we acquired $ 12.8 million of property, plant and equipment related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements and $ 3.1 million related to the acquisition of real property.

Additionally, we sold real property for $ 3.1 million, with a carrying value of $ 1.7 million, resulting in a $ 1.4 million gain on the sale.

We also divested one funeral home that had a carrying value of property, plant and equipment of $ 0.3 million, which was included in the loss on the sale of divestitures and recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

Our growth and maintenance capital expenditures totaled $ 9.1 million, $ 10.9 million and $ 18.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, for property, plant, equipment.

In addition, we recorded depreciation expense of $ 14.3 million, $ 14.7 million and $ 13.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

See Note 20 to the Consolidated Financial Statements for additional information related to property, plant, and equipment.

Cemetery Property

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Through this thorough internal process, we are able to identify viable costs of property based on historical experience, particular markets and demographics, reasonable margins, practical retail prices and park infrastructure and condition.

Cemetery property totaled $ 112.9 million and $ 114.6 million, net of accumulated amortization of $ 72.6 million and $ 64.6 million at December 31, 2024 and 2023, respectively, which includes $ 3.4 million of cemetery property held for sale at December 31, 2024.

When cemetery property is sold, the value of the cemetery property (interment right costs) is expensed as amortization using the specific identification method in the period in which the sale of the interment right is recognized as revenue.

Our growth capital expenditures totaled $ 7.0 million, $ 7.1 million and $ 7.7 million for the years ended December 31, 2024, 2023 and 2022, respectively, for cemetery property development.

We recorded amortization expense for cemetery interment rights of $ 8.2 million, $ 6.0 million and $ 6.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

During the year ended December 31, 2024, we sold one cemetery that had a carrying value of cemetery property of $ 0.8 million, which was included in the loss on sale and recorded in Net loss on divestitures, disposals and impairment charges on Consolidated Statements of Operations, more fully described in Note 5 to Consolidated Financial Statements.

See Note 20 to the Consolidated Financial Statements for additional information related to cemetery property.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the year ended December 31, 2023, we acquired cemetery property for $ 9.0 million related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements.

We also sold two cemeteries that had a carrying value of cemetery property of $ 0.8 million, which was included in the loss on the sale of divestitures and recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

We have operating and finance leases.

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We treat the tax effects of exercised or vested awards as discrete items in the reporting period in which they occur.

For the year ended December 31, 2024, the excess tax deficiency related to share-based payments was $ 0.8 million.

We had immaterial amounts of excess tax deficiency for the years ended December 31, 2023 and 2022.

The excess tax benefit related to share-based payments was $ 2.8 million for the year ended December 31, 2025.

The excess tax deficiency related to share-based payments was $ 0.8 million for the year ended December 31, 2024.

We had immaterial amounts of excess tax deficiency for the year ended December 31, 2023.

Excess tax benefits and deficiencies are recorded within Expense (benefit) related to discrete income tax items on our Consolidated Statements of Operations and are included in operating cash flows on the Consolidated Statements of Cash Flows.

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However, we estimate an average maturity period of eight years for preneed cemetery contracts.

See Note 20 to the Consolidated Financial Statements for additional information related to revenue.

See Note 19 to the Consolidated Financial Statements for additional information related to the disaggregation of revenue by segment..

We and our subsidiaries file a consolidated U.

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and specify how reserves for uncertain tax positions should be classified on our Consolidated Balance Sheets.

Accrued interest and penalties related to uncertain tax positions is included in (Benefit) expense related to discrete income tax items on our Consolidated Statements of Operations.

See Note 16 to the Consolidated Financial Statements for additional information related to income taxes.

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See Note 18 to the Consolidated Financial Statements for additional information related to the computation of earnings per share.

Subsequent Events

We have evaluated events and transactions during the period subsequent to December 31, 2024 through the date the financial statements were issued for potential recognition or disclosure in the accompanying financial statements covered by this report.

RECENTLY ISSUED ACCOUNTING STANDARDS

Segment Reporting

In November 2023, the FASB issued ASU, Segment Reporting - Improvements to Reportable Segment Disclosures (“Topic 280”) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments in this update require that a public entity disclose, on an annual and interim basis (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss;

and (2) an amount for other segment items, as described in the amendments, by reportable segment and a description of its composition.

Additionally, the amendments require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and therefore were effective for us for our fiscal year beginning January 1, 2024 and for interim periods within our fiscal year beginning January 1, 2025.

The adoption had no material impact on our consolidated financial statements as it modified disclosure requirements only.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU, Income Taxes - Improvements to Income Tax Disclosures (“Topic 740”) to enhance the transparency about income tax information through improvements to income tax disclosures primarily related to rate reconciliation and income taxes paid information.

In December 2023, the FASB issued ASU, Income Taxes - Improvements to Income Tax Disclosures to enhance the transparency about income tax information through improvements to income tax disclosures primarily related to rate reconciliation and income taxes paid information.

The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation;

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and (2) the amount of net income taxes paid disaggregated by individual jurisdictions in which net income taxes paid is equal to or greater than five percent of total net income taxes paid.

The amendments are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

We plan to adopt the amendments of Topic 740 for our fiscal year beginning January 1, 2025.

We expect the adoption will have no material impact on our consolidated financial statements as it modifies disclosure requirements only.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The amendments are effective for annual periods beginning after December 15, 2024, and therefore were effective for us for our fiscal year beginning January 1, 2025, and for interim periods within our fiscal year beginning January 1, 2026.

The adoption has no material impact on our consolidated financial statements as it modified disclosure requirements only.

See Note 16 to the Consolidated Financial Statements for additional information related to income taxes.

Accounting Pronouncements Not Yet Adopted

Expense Disaggregation

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (“Topic 220”).

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures .

Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

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We expect the adoption will have no material impact on our consolidated financial statements as it modifies disclosure requirements only.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software.

Under the new guidance, costs associated with software developed for internal use will now be capitalized when management authorizes a project and when it is probable the project will be completed and used to perform the function intended, rather than when a project reaches the application development stage under existing guidance.

The guidance is effective beginning January 1, 2028, with early adoption permitted, and can be applied prospectively, retrospectively, or on a modified retrospective basis.

We have not determined the transition method, timing for adoption, or estimated the effect on our consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

BUSINESS COMBINATIONS

We did not acquire any businesses in 2024.

On September 9, 2025, we acquired a business consisting of six funeral homes, one cemetery, and one cremation focused business in the Orlando, FL area for approximately $ 49.0 million.

The purchase price consisted of $ 47.0 million in cash at closing and $ 2.0 million of deferred purchase price payments.

The net present value of such future deferred purchase price payments was $ 1.3 million.

We acquired substantially all of the assets and assumed certain operating liabilities of these businesses.

On September 17, 2025, we acquired a business consisting of two funeral homes in the Pensacola, FL area for $ 9.5 million in cash.

We acquired substantially all of the assets and assumed certain operating liabilities of this business.

The primary reasons for the acquisitions that contributed to the recognition of goodwill include enhancement of our footprint in strategic markets and the addition of deferred revenue that will enhance our long-term stability.

The pro forma impact of these acquisitions on prior periods is not presented, as the impact is not significant to our reported results.

The results of the acquired businesses are reflected in our Consolidated Statements of Operations from the date of acquisition.

The following table summarizes the breakdown of the preliminary purchase price allocation for the businesses described above (in thousands):

Preliminary Purchase Price Allocation

Current assets $ 3,302

Preneed trust assets 4,068

Property, plant, and equipment 23,315

Cemetery property 2,733

Goodwill 37,746

Intangible and other non-current assets 3,222

Assumed liabilities ( 1,293 )

Preneed trust liabilities ( 4,068 )

Deferred revenue ( 12,526 )

Purchase price $ 56,499

The purchase price allocation was updated for immaterial measurement-period adjustments;

no other material changes to the acquisition accounting were identified.

The purchase accounting is preliminary as we have not finalized our assessment of the fair value because there has been insufficient time between the acquisition date and the issuance of these financial statements to complete our review and the final determination of fair value.

We are also currently reviewing the allocation of goodwill between segments.

We did not acquire any businesses during the year ended December 31, 2024.

On March 22, 2023, we acquired a business consisting of three funeral homes, two cemeteries and one cremation focused business in the Bakersfield, CA area for $ 44.0 million in cash.

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The results of the acquired businesses are reflected in our Consolidated Statements of Operations from the date of acquisition.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the breakdown of the purchase price allocation for our Bakersfield, CA business acquisition (in thousands):

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Assumed liabilities ( 300 ) ( 66 ) ( 366 )

Deferred tax liability — — —

Preneed trust liabilities — ( 11,428 ) ( 11,428 )

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As of December 31, 2023, our accounting for this acquisition is complete.

The following table summarizes the fair value of the assets acquired and liabilities assumed for this business (in thousands):

Acquisition Date Type of Business Market Assets Acquired (Excluding Goodwill) Goodwill Recorded Liabilities and Debt Assumed

March 22, 2023 Three Funeral Homes, Two Cemeteries and One Cremation Focused Business Bakersfield, CA $ 44,266 $ 13,506 $ ( 13,772 )

Many of the former owners and staff of our acquired funeral homes and certain cemeteries have provided high quality service to families for generations, which often represents a substantial portion of the value of a business.

The excess of the purchase price over the fair value of identifiable net assets of funeral home businesses and cemeteries acquired is recorded as goodwill.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Many of the former owners and staff of our acquired funeral home and cemetery businesses have provided high quality service to families for generations, which often represents a substantial portion of the value of a business.

The excess of the purchase price over the fair value of identifiable net assets of acquired funeral home and cemetery businesses is recorded as goodwill.

The following table presents changes in goodwill in the accompanying Consolidated Balance Sheets (in thousands):

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Goodwill at the end of the year $ 427,897 $ 414,859

During the year ended December 31, 2024, we allocated $ 8.8 million of goodwill to the sale of six funeral homes and one cemetery for a loss recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations of which $ 7.8 million was allocated to our funeral home segment and $ 1.0 million was allocated to our cemetery segment.

During the year ended December 31, 2023, we recognized $ 13.5 million in goodwill related to our acquisition of a business located in Bakersfield, CA, of which $ 4.5 million was allocated to our cemetery segment and $ 9.0 million was allocated to our funeral home segment.

During the year ended December 31, 2025, we allocated $ 24.7 million of goodwill to the sale of thirteen funeral homes and four cemeteries which was recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations, of which $ 23.0 million was allocated to our funeral home segment and $ 1.7 million was allocated to our cemetery segment.

During the year ended December 31, 2024, we allocated $ 8.8 million of goodwill to the sale of six funeral homes and one cemetery which was recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations, of which $ 7.8 million was allocated to our funeral homes segment and $ 1.0 million was allocated to our cemetery segment.

As a result of our 2025 and 2024 annual qualitative impairment assessments, we determined that there were no factors that would indicate the need to perform an additional quantitative goodwill impairment test.

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DIVESTED OPERATIONS

During the year ended December 31, 2024, we sold six funeral homes and one cemetery for an aggregate of $ 10.9 million and merged three funeral homes with other businesses we own in existing markets.

During the year ended December 31, 2025, we sold thirteen funeral homes and four cemeteries for an aggregate of $ 40.4 million and merged two funeral homes with other businesses we own in existing markets.

During the year ended December 31, 2024, we sold six funeral homes and one cemetery for an aggregate of $ 10.9 million and merged three funeral homes with other business we own in existing markets.

During the year ended December 31, 2023, we sold two funeral homes and two cemeteries for an aggregate of $ 1.1 million and merged one funeral home with another business we own in a nearby market.

During 2022, we sold four funeral homes for an aggregate of $ 1.5 million and we merged one funeral home with another business we own in a nearby market.

The operating results of these divested funeral homes and cemeteries are reflected on our Consolidated Statements of Operations as shown in the table below (in thousands):

Years Ended December 31,

2024 2023 2022

Revenue $ 1,382 $ 242 $ 656

Operating income 141 6 54

Net loss on divestitures (1)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net loss on divestitures and impairment charges.

The components of Net loss on divestitures and impairment charges are as follows (in thousands):

Year ended December 31,

2025 2024 2023

Income tax expense 348 28 193

Net loss from divested operations, after tax $ ( 735 ) $ ( 72 ) $ ( 488 )

(1) Net loss on divestitures is recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

For the years ended December 31, 2024, 2023 and 2022, after each divestiture, we concluded that it was more-likely-than not that the fair value of our reporting units was greater than their carrying value and thus there was no impairment to goodwill.

Impairment of goodwill, intangibles, and PPE $ 1,761 $ 637 $ 454

Net (gain) loss on divestitures ( 1,451 ) 1,224 106

Net loss on disposals of fixed assets 61 719 631

Total $ 371 $ 2,580 $ 1,191

For the years ending December 31, 2025, 2024 and 2023, after each divestiture, we concluded that it was more-likely-than not that the fair value of our reporting units was greater than their carrying value and thus there was no impairment to goodwill.

See Note 1 to the Consolidated Financial Statements for a discussion of the methodology used for assessing goodwill impairment after a divestiture of a business.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accounts Receivable

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December 31, 2025

Funeral Cemetery Corporate Held for Sale Total

Column1 Funeral Cemetery Corporate Held for Sale Total

Trade and financed receivables $ 7,369 $ 31,267 $ — $ — $ 38,636

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December 31, 2024

Funeral Cemetery Corporate Held for Sale Total

Column1 Funeral Cemetery Corporate Held for Sale Total

Trade and financed receivables $ 7,085 $ 24,355 $ — $ ( 833 ) $ 30,607

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Other receivables include supplier rebates, commissions due from third-party insurance companies and perpetual care income receivables.

We do not provide an allowance for credit losses for these receivables as we have historically not had any collectability issues nor do we expect any in the foreseeable future.

The following table summarizes the activity in our allowance for credit losses by portfolio segment for the year ended December 31, 2025 (in thousands):

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Preneed cemetery receivables, net including HFS $ 67,055 $ 52,629

52,629 35,575

Held for sale — ( 1,671 )

Preneed cemetery receivables, net $ 67,055 $ 50,958

$ 50,958 $ 35,575

The following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net for the year ended December 31, 2025 (in thousands):

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As of December 31, 2025, we do not have an unfunded commitment for this investment.

Furthermore, we have six investments in real estate debt and structured credit (“alternative investments”), whose fair value has been estimated using NAV and therefore, has not been classified in the fair value hierarchy.

The investment strategy for these alternative investments is to create capital growth, income generation, and risk-adjusted returns.

Capital growth is achieved by identifying high-potential investments that are appreciated over time.

Income generation may involve dividends, rental income, or interest from various investments.

Risk-adjusted returns focus on balancing potential profits with acceptable levels of risk, often through diversification and careful asset allocation.

The real estate debt is approximately 44 % of the total alternative investment and can be liquidated with a 40-day notice period and cannot exceed 5 % of the total fund’s value.

The structured credit is approximately 56 % of the total alternative investment and can be liquidated with a 15-day notice period with no restrictions.

As of December 31, 2025, we had approximately $ 43.1 million in unfunded commitments for these investments.

We identified investments in fixed income securities, common stock, and mutual funds presented within the preneed and perpetual care trust investments categories on our Consolidated Balance Sheets as having met the criteria for fair value measurement.

Our receivables from preneed funeral trusts represent assets in trusts, which are controlled and operated by third parties in which we do not have a controlling financial interest (less than 50%) in the trust assets.

We account for these investments at cost.

We account for these receivables at cost.

The following three-level valuation hierarchy based upon the transparency of inputs is utilized in the measurement and valuation of financial assets or liabilities as of the measurement date:

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These earnings are recognized in Other revenue on our Consolidated Statements of Operations, when a service is performed or merchandise is delivered.

Trust management fees charged by CSV RIA are included as revenue in the period in which they are earned.

Trust management fees charged by our wholly owned registered investment advisory firm are included as revenue in the period in which they are earned.

Our investments are diversified across multiple industry segments using a balanced allocation strategy to minimize long-term risk.

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Changes in the fair value of our trust fund assets ( Preneed funeral, cemetery and perpetual care trust investments ) are offset by changes in the fair value of our trust fund liabilities ( Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus ) and reflected in Other, net .

There is no impact on earnings until such time the services are performed, or the merchandise is delivered, causing the contract to be withdrawn from the trust in accordance with state regulations and the gain or loss is allocated to the contract.

There is no impact on earnings until such time the services are performed, or

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the merchandise is delivered, causing the contract to be withdrawn from the trust in accordance with state regulations and the gain or loss is allocated to the contract.

We rely on our trust investments to provide funding for the various contractual obligations that arise upon maturity of the underlying preneed contracts.

Because of the long-term relationship between the establishment of trust investments and the required performance of the underlying contractual obligations, the impact of current market conditions that may exist at any given time is not necessarily indicative of our ability to generate profit on our future performance obligations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Preneed Cemetery Trust Investments

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allowance for contract cancellation ( 3,379 ) ( 3,147 )

Preneed cemetery trust investments, including HFS

102,996 96,374

Preneed cemetery trust investments $ 109,152 $ 102,996

Held for sale — ( 4,876 )

Preneed cemetery trust investments $ 109,152 $ 98,120

$ 98,120 $ 96,374

The cost and market values associated with preneed cemetery trust investments at December 31, 2025, are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

Gains Unrealized

Losses Fair Market Value

Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value

Cash and money market accounts 1 $ 15,653 $ — $ — $ 15,653

Fixed income securities:

agency obligations 2 664 1 ( 46 ) 619

Foreign debt 2 8,575 1,431 ( 8 ) 9,998

Corporate debt 2 8,500 365 ( 256 ) 8,609

Preferred stock 2 2,833 479 ( 176 ) 3,136

Certificates of deposit 2 79 — ( 5 ) 74

Common stock 1 11,599 768 ( 1,709 ) 10,658

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Fixed income 2 43,013 353 ( 50 ) 43,316

Alternative investments 29,380 374 ( 68 ) 29,686

Trust securities $ 112,624 $ 1,495 $ ( 2,199 ) $ 111,920

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Market value as a percentage of cost 99.4 %

The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands):

Due in one year or less $ 140

Due in one to five years 6,557

Due in five to ten years 4,703

Thereafter 11,036

Total fixed income securities $ 22,436

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The cost and market values associated with preneed cemetery trust investments at December 31, 2024 are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

Gains Unrealized

Losses Fair Market Value

Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value

Cash and money market accounts 1 $ 23,215 $ — $ — $ 23,215

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Preferred stock 2 2,833 479 ( 176 ) 3,136

Certificate of deposit 2 79 — ( 7 ) 72

Certificates of deposit 2 79 — ( 5 ) 74

Common stock 1 29,325 4,322 ( 3,381 ) 30,266

Limited partnership fund 3,530 84 — 3,614

3,575 — ( 3 ) 3,572

Mutual funds:

Equity 1 911 85 — 996

2 11,369 16 ( 2,759 ) 8,626

Fixed income 2 27,268 94 ( 2,376 ) 24,986

Trust securities $ 104,900 $ 6,861 $ ( 6,248 ) $ 105,513

$ 102,879 $ 11,679 $ ( 16,031 ) $ 98,527

Accrued investment income $ 630 $ 630

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Total fixed income securities with an unrealized loss $ 2,163 $ ( 144 ) $ 1,749 $ ( 347 ) $ 3,912 $ ( 491 )

There were no fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at December 31, 2025.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at December 31, 2023, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

December 31, 2023

In Loss Position Less than 12 months In Loss Position Greater than 12 months Total

Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses

Fixed income securities:

agency obligations $ — $ — $ 613 $ ( 51 ) $ 613 $ ( 51 )

Foreign debt 284 ( 5 ) 209 ( 12 ) 493 ( 17 )

Corporate debt 666 ( 62 ) 4,239 ( 3,595 ) 4,905 ( 3,657 )

Preferred stock 45 — 7,821 ( 1,572 ) 7,866 ( 1,572 )

Certificates of deposit — — 72 ( 7 ) 72 ( 7 )

Total fixed income securities with an unrealized loss $ 995 $ ( 67 ) $ 12,954 $ ( 5,237 ) $ 13,949 $ ( 5,304 )

Preneed cemetery trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

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Purchases and sales of investments in the preneed cemetery trusts are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

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allowance for contract cancellation ( 3,577 ) ( 3,305 )

Preneed funeral trust investments, including HFS

108,416 107,842

Preneed funeral trust investments $ 115,416 $ 108,416

Held for sale — ( 2,197 )

Preneed funeral trust investments $ 115,416 $ 106,219

$ 106,219 $ 107,842

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The cost and market values associated with preneed funeral trust investments at December 31, 2025 are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

Gains Unrealized

Losses Fair Market Value

Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value

Cash and money market accounts 1 $ 20,985 $ — $ — $ 20,985

Fixed income securities:

treasury debt 1 387 — ( 30 ) 357

Foreign debt 2 8,193 1,373 ( 7 ) 9,559

Corporate debt 2 7,941 351 ( 134 ) 8,158

Preferred stock 2 2,577 460 ( 218 ) 2,819

U.S agency obligations 2 306 — ( 18 ) 288

Common stock 1 11,981 793 ( 1,765 ) 11,009

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Other investments 2 1,724 — — 1,724

Alternative investments 30,344 386 ( 70 ) 30,660

Trust securities $ 119,236 $ 1,510 $ ( 2,274 ) $ 118,472

Accrued investment income $ 521 $ 521

Preneed funeral trust investments $ 111,721

Preneed cemetery trust investments $ 118,993

Market value as a percentage of cost 99.4 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands):

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Due in five to ten years 99

Thereafter 10,404

Total fixed income securities $ 288

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The cost and market values associated with preneed funeral trust investments at December 31, 2024 are detailed below (in thousands):

Fair Value Hierarchy Level Cost Unrealized

Gains Unrealized

Losses Fair Market Value

Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value

Cash and money market accounts 1 $ 33,735 $ — $ — $ 33,735

Fixed income securities:

treasury debt 1 451 — ( 34 ) 417

U.S agency obligations 2 387 — ( 30 ) 357

Foreign debt 2 8,193 1,373 ( 7 ) 9,559

3 unchanged sentences

Limited partnership fund 3,392 80 — 3,472

3,383 — ( 2 ) 3,381

Mutual funds:

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Accrued investment income $ 584 $ 584

Preneed funeral trust investments $ 111,247

Preneed cemetery trust investments $ 111,721

Market value as a percentage of cost 100.9 %

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Fixed income securities:

treasury debt $ — $ — $ 274 $ ( 30 ) $ 274 $ ( 30 )

Foreign debt — — 203 ( 7 ) 203 ( 7 )

Corporate debt 1,225 ( 133 ) — ( 1 ) 1,225 ( 134 )

Preferred stock 842 ( 4 ) 717 ( 214 ) 1,559 ( 218 )

U.S agency obligations $ — $ — $ 288 $ ( 18 ) $ 288 $ ( 18 )

Total fixed income securities with an unrealized loss $ — $ — $ 288 $ ( 18 ) $ 288 $ ( 18 )

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Fixed income securities:

treasury debt $ — $ — $ 371 $ ( 34 ) $ 371 $ ( 34 )

U.S agency obligations $ — $ — $ 274 $ ( 30 ) $ 274 $ ( 30 )

Foreign debt — — 203 ( 7 ) 203 ( 7 )

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Preneed funeral trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

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Purchases and sales of investments in the preneed funeral trusts are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

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Cemetery perpetual care trust investments, at market value $ 95,625 $ 87,337

Obligations due from trust ( 885 ) ( 980 )

Obligations due to (due from) trust ( 2,200 ) ( 885 )

Care trusts’ corpus, including HFS $ 93,425 $ 86,452

$ 86,452 $ 84,351

Held for sale — ( 2,234 )

Care trusts' corpus $ 93,425 $ 84,218

$ 84,218 $ 84,351

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2025 (in thousands):

Fair Value Hierarchy Level Cost Unrealized

Gains Unrealized

Losses Fair Market Value

Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value

Cash and money market accounts 1 $ 8,800 $ — $ — $ 8,800

Fixed income securities:

Foreign debt 2 7,770 1,262 ( 7 ) 9,025

Corporate debt 2 94 2 — 96

Preferred stock 2 2,725 418 ( 148 ) 2,995

Common stock 1 10,527 1,028 ( 1,451 ) 10,104

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Fixed income 2 39,229 319 ( 145 ) 39,403

Alternative investments 24,308 310 ( 57 ) 24,561

Trust securities $ 95,121 $ 1,875 $ ( 1,987 ) $ 95,009

Accrued investment income $ 616 $ 616

Cemetery perpetual care investments $ 87,337

Preneed cemetery trust investments $ 95,625

Market value as a percentage of cost 99.9 %

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Due in five to ten years —

Thereafter 10,119

Total fixed income securities $ 96

The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2024 (in thousands):

Fair Value Hierarchy Level Cost Unrealized

Gains Unrealized

Losses Fair Market Value

Fair Value Hierarchy Level Cost Unrealized Gains Unrealized Losses Fair Market Value

Cash and money market accounts 1 $ 14,054 $ — $ — $ 14,054

5 unchanged sentences

Limited partnership fund 3,078 73 — 3,151

3,042 — ( 2 ) 3,040

Mutual funds:

3 unchanged sentences

Accrued investment income $ 595 $ 595

Cemetery perpetual care investments $ 85,331

Preneed cemetery trust investments $ 87,337

Market value as a percentage of cost 100.5 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our fixed income securities (excluding mutual funds) within our perpetual care trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

December 31, 2024

In Loss Position Less than 12 months In Loss Position Greater than 12 months Total

Fair market value Unrealized Losses Fair market value Unrealized Losses Fair market value Unrealized Losses

Fixed income securities:

Foreign debt $ — $ — $ 184 $ ( 7 ) $ 184 $ ( 7 )

Corporate debt 1,111 ( 121 ) 316 ( 281 ) 1,427 ( 402 )

Preferred stock 764 ( 4 ) 1,086 ( 144 ) 1,850 ( 148 )

Total fixed income securities with an unrealized loss $ 1,875 $ ( 125 ) $ 1,586 $ ( 432 ) $ 3,461 $ ( 557 )

The following table summarizes our fixed income securities within our perpetual care trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

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Perpetual care trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

3 unchanged sentences

Net change in care trusts’ corpus 181 ( 6 ) 3,381

Total $ — $ — $ —

Perpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

3 unchanged sentences

Purchases and sales of investments in the perpetual care trusts are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

1 unchanged sentence

Sales $ 64,880 $ 29,967 $ 21,613

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

RECEIVABLES FROM PRENEED FUNERAL TRUSTS

9 unchanged sentences

Fair value includes unrealized gains and losses on trust assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The composition of the preneed trust funds at December 31, 2025, is as follows (in thousands):

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As such, we recognize the incentive payment in proportion to our achieved preneed funeral sales volume, net of cancellations, at each reporting period.

In each of the years ended December 31, 2024 and 2023, we recognized $ 0.2 million of the incentive payment as Other revenue.

We recognized $ 0.4 million in the year ended December 31, 2025, and $ 0.2 million in each of the years ended December 31, 2024 and 2023 of the incentive payment as Other revenue.

Generally, at the time of the sale of either the preneed insurance or preneed trust contract, the intent is that the beneficiary has made a commitment to assign the proceeds to us for the fulfillment of the service and merchandise obligations on the preneed contract at the time of need.

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December 31, 2025 December 31, 2024

Tradenames $ 28,116 $ 28,862

Trade names $ 29,867 $ 28,116

Internally developed software, net of accumulated amortization of $ 1,898 and $ 764 , respectively

3 unchanged sentences

Non-current prepaid and other intangibles, net of accumulated amortization of $ 478 and $ 109 , respectively

Deferred Compensation

Intangible and other non-current assets, net including HFS

3 unchanged sentences

$ 43,607 $ 40,427

During the year ended December 31, 2024, two of the funeral homes that we sold had a carrying value of tradenames of $ 0.2 million, which was included in the loss on sale and recorded in Net loss on divestitures, disposals and impairment charges on our Consolidated Statements of Operations.

During the year ended December 31, 2023, we increased the value of our tradenames by $ 3.5 million, with $ 1.3 million allocated to our funeral home segment and $ 2.2 million allocated to our cemetery segment, related to our acquisition of a business located in Bakersfield, CA, as more fully described in Note 3 to the Consolidated Financial Statements.

As a result of our 2024 and 2023 annual qualitative impairment assessments, we determined that there were factors that would indicate the need to perform additional quantitative impairment tests for certain funeral home businesses.

As a result of these additional quantitative impairment tests, we recorded a $ 0.6 million and a $ 0.2 million impairment to the tradenames of certain funeral homes during the years ended December 31, 2024 and 2023, respectively, as the carrying amount of these tradenames exceeded their fair value.

See Note 1 to the Consolidated Financial Statements included herein for a discussion of the methodology used for our indefinite-lived intangible asset impairment test.

During the year ended December 31, 2025, we increased the value of our trade names by $ 3.1 million, with $ 2.1 million allocated to our funeral home segment and $ 1.0 million allocated to our cemetery segment, related to our acquisition of businesses, as more fully described in Note 3 to the Consolidated Financial Statements.

During the year ended December 31, 2025, four of the funeral homes that we sold and one funeral home that was closed and subsequently sold as real property had a carrying value of trade names of $ 1.3 million, which was included in the loss on sale and recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations.

During the year ended December 31, 2024, two of the funeral homes that we sold had a carrying value of trade names of $ 0.2 million, which was included in the loss on sale and recorded in Net loss on divestitures and impairment charges on our Consolidated Statements of Operations.

See Notes See Notes 1, 3, and 5 to the Consolidated Financial Statements for additional information related to Tradenames.

Internally Developed Software

Internally developed software is typically amortized on a straight-line basis over five years .

Amortization expense was $ 0.3 million for each of the years ended December 31, 2024 and 2023, and $ 0.2 million for the year ended December 31, 2022.

Amortization expense was $ 1.1 million for each of the years ended December 31, 2025, and $ 0.3 million for each of the years ended December 31, 2024 and 2023.

Capitalized Commissions

Amortization expense was $ 0.9 million, $ 0.8 million and $ 0.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Amortization expense was $ 0.9 million for each of the years ended December 31, 2025 and 2024, and $ 0.8 million and for the year ended December 31, 2023.

Prepaid Agreements Not-to-Compete

Prepaid agreements not-to-compete are amortized over the term of the respective agreements, generally ranging from one to ten years .

Amortization expense was $ 0.5 million for the year ended December 31, 2024, and $ 0.6 million for each of the years ended December 31, 2023 and 2022.

Amortization expense was $ 0.4 million, $ 0.5 million, and $ 0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Non-current Prepaid and Other Intangibles

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Other intangible assets relate to intellectual property and are amortized on a straight-line basis, typically over three years.

Amortization expense was $ 0.1 million and $ 37 thousand for the years ended December 31, 2024 and 2023, respectively.

Amortization expense was $ 0.1 million for each of the years ended December 31, 2025 and 2024 and $ 37 thousand for the year ended December 31, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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(i) a $ 250.0 million revolving credit facility, including a $ 15.0 million subfacility for letters of credit and a $ 10.0 million swingline, and (ii) an accordion or incremental option allowing for future increases in the facility size by an additional amount of up to $ 75.0 million in the aggregate in the form of increased revolving commitments or incremental term loans.

Our obligations under the Credit Facility are unconditionally guaranteed on a joint and several basis by the same subsidiaries which guarantee the Senior Notes (as defined in Note 13) and certain of our subsequently acquired or organized domestic subsidiaries (collectively, the “Subsidiary Guarantors”).

On July 31, 2024, the Company entered into a fourth amendment, (the “Credit Facility Amendment”), to our Credit Facility, with the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent.

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and (vi) modifications to the permitted investments covenant, relating to the Company’s ability to make certain acquisitions, subject to the satisfaction of certain conditions therein.

We incurred $ 0.8 million in transactions costs related to the Credit Facility Amendment, which were capitalized and will be amortized over the remaining term of the related debt using the straight-line method.

The Credit Facility contains customary affirmative covenants, including, but not limited to, covenants with respect to the use of proceeds, payment of taxes and other obligations, continuation of the Company’s business and the maintenance of existing rights and privileges, the maintenance of property and insurance, among others.

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The interest expense and amortization of debt issuance costs related to our Credit Facility are as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

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The imputed interest expense related to our acquisition debt is as follows (in thousands):

Years ended December 31,

Year ended December 31,

2025 2024 2023

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The Senior Notes mature on May 15, 2029, unless earlier redeemed or purchased and bear interest at 4.25 % per year, which is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2021.

We may redeem the Senior Notes, in whole or in part, at the redemption price of 102.13 % on or after May 15, 2024, 101.06 % on or after May 15, 2025 and 100 % on or after May 15, 2026, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

We may redeem the Senior Notes, in whole or in part, at the redemption price of 100 % on or after May 15, 2026, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If a “change of control” occurs, holders of the Senior Notes will have the option to require us to purchase for cash all or a portion of their Senior Notes at a price equal to 101 % of the principal amount of the Senior Notes, plus accrued and unpaid interest.

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The debt discount and the debt issuance costs are being amortized using the effective interest method over the remaining term of 41 months of the Senior Notes.

The effective interest rate on the unamortized debt discount and the unamortized debt issuance costs for the Senior Notes for both the years ended December 31, 2024 and 2023 was 4.42 % and 4.30 %, respectively.

The effective interest rate on the unamortized debt discount and the unamortized debt issuance costs for the Senior Notes for each of the years ended December 31, 2025 and 2024 was 4.42 %.

The carrying value of our Senior Notes is reflected on our Consolidated Balance Sheets as follows (in thousands):

The carrying value of our 4.25 % senior notes due 2029 (the “Senior Notes”) is reflected on our Consolidated Balance Sheets as follows (in thousands):

December 31, 2025 December 31, 2024

Long-term liabilities:

Principal amount $ 400,000 $ 400,000

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Carrying value of the Senior Notes $ 397,319 $ 396,597

The fair value of the Senior Notes, which are Level 2 measurements, was $ 364.4 million at December 31, 2024.

At December 31, 2025, the fair value of the Senior Notes, which are Level 2 measurements, was $ 385.7 million.

The Senior Notes were issued under an indenture, dated as of May 13, 2021 (the “Indenture”), among the Company, the Subsidiary Guarantors and Wilmington Trust, National Association, as trustee.

The Senior Notes are unsecured, senior obligations and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally by each of the Subsidiary Guarantors.

The Indenture contains restrictive covenants limiting our ability and our Restricted Subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness or issue certain preferred shares, create liens on certain assets to secure debt, pay dividends or make other equity distributions, purchase or redeem capital stock, make certain investments, sell assets, agree to certain restrictions on the ability of Restricted Subsidiaries to make payments to us, consolidate, merge, sell or otherwise dispose of all or substantially all assets, or engage in transactions with affiliates.

The Indenture also contains customary events of default.

The interest expense and amortization of debt discount and debt issuance costs related to our Senior Notes are as follows (in thousands):

Years ended December 31,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year ended December 31,

2025 2024 2023

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Senior Notes amortization of debt issuance costs 159 153 147

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The aggregate maturities of our Senior Notes for the next five years subsequent to December 31, 2025 and thereafter are as follows (in thousands):

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2029 400,000 ( 244 ) 399,756

Thereafter — — —

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Supplemental cash flow information related to our leases is as follows (in thousands):

Years Ended December 31,

Year ended December 31,

2025 2024 2023

1 unchanged sentence

Cash paid for finance leases included in financing activities 642 1,083 1,153

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Right-of-use assets obtained in exchange for new leases are as follows (in thousands):

Years Ended December 31,

Year ended December 31,

Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,501 $ 1,224

Right-of-use assets obtained in exchange for new finance lease liabilities 3,761 1,027

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Supplemental balance sheet information related to leases is as follows (in thousands):

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Finance lease current liabilities Current portion of finance lease obligations 605 533

Total current lease liabilities $ 3,343 $ 3,305

Total current lease liabilities Total current lease liabilities $ 3,689 $ 3,343

Operating lease non-current liabilities Obligations under operating leases, net of current portion $ 10,538 $ 14,035

Finance lease non-current liabilities Obligations under finance leases, net of current portion 9,339 6,045

Total non-current lease liabilities $ 20,080 $ 21,628

Total non-current lease liabilities Total non-current lease liabilities $ 19,877 $ 20,080

Total lease liabilities $ 23,566 $ 23,423

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Interest ( 3,259 ) ( 12,461 )

Present value of lease liabilities $ 16,845 $ 6,578

Present value of lease liabilities, including HFS $ 13,622 $ 9,944

At December 31, 2025, we had no significant operating or finance leases that had not yet commenced .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

COMMITMENTS AND CONTINGENCIES

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These agreements are generally for one to ten years and provide for bi-weekly or monthly payments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We have employment agreements with our executive officers.

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(1) In connection with Mr.

Payne’s transition from Executive Chairman of the Board of Directors to serving as a special advisor to the Board of Directors, his employment agreement with the Company was terminated and he entered into a transition agreement, effective February 22, 2024.

Defined Contribution Plan

We sponsor a defined contribution plan, a 401K plan, for the benefit of our employees.

Matching contributions and plan administrative expenses totaled $ 2.9 million for the year ended December 31, 2024, and $ 2.8 million for each of the years ended December 31, 2023 and 2022.

Matching contributions and plan administrative expenses totaled $ 3.1 million, $ 2.9 million, and $ 2.8 million for the year ended December 31, 2025, 2024 and 2023, respectively.

We do not offer any post-retirement or post-employment benefits.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We are subject to taxation in the United States and various states.

income from continuing operations before income tax expense was $ 70.3 million, $ 50.1 million, and $ 46.4 million for the year ended December 31, 2025, 2024, and 2023, respectively.

The provision for income taxes consisted of the following (in thousands):

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federal (benefit) provision $ 4,507 $ ( 1,338 ) $ 2,117

State provision 640 1,190 1,313

State provision (benefit) ( 526 ) 640 1,190

Total deferred (benefit) provision $ 3,981 $ ( 698 ) $ 3,307

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Effect of state income taxes, net of federal benefit 2,961 4.2 3,655 7.3 2,396 5.2

Effect of 162(m) officer's compensation limitation

1,717 3.4 — — — —

Effect of non-deductible expenses and other, net 1,019 2.0 864 1.8 59 0.1

Effect of divestitures and impairment of businesses 219 0.5 — — 138 0.2

Change in valuation allowance, net of federal benefit ( 1 ) — ( 19 ) — ( 14 ) —

Effect of non-taxable or non-deductible expenses, net

162(m) Officers' Compensation Limitation 2,075 3.0 1,717 3.4 332 0.7

Restricted stock and performance awards ( 2,097 ) ( 3.0 ) 72 0.1 ( 4 ) —

Divestiture and impairment of business 775 1.1 219 0.4 — —

ESPP and stock options ( 376 ) ( 0.5 ) 601 1.2 157 0.3

Other adjustments 663 0.9 346 0.8 385 0.8

Total $ 18,756 26.7 % $ 17,127 34.2 % $ 13,016 28.0 %

We are subject to taxation in the U.S.

and various state jurisdictions.

In 2025, state and local income taxes in California comprise the majority of the effect of state income taxes, net of federal benefit category.

In 2024, and 2023, state and local income taxes in California and Virginia comprise the majority of the effect of state income taxes, net of federal benefit category.

Income taxes paid by jurisdiction is a follows (in thousands):

Years Ended December 31,

2025 2024 2023

federal $ 12,200 $ 13,178 $ 7,720

state and local

California 1,919 1,398 573

All other states

1,890 2,078 1,472

Total income taxes paid $ 16,990 $ 16,654 $ 10,448

(1) The blank cells indicate that the amount of income tax paid during the year is either immaterial or does not meet the 5% disaggregation threshold .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The tax effects of temporary differences from total operations that give rise to significant deferred tax assets and liabilities are as follows (in thousands):

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Depreciation and amortization $ ( 68,082 ) $ ( 69,730 )

Preneed liabilities — ( 1,070 )

Right-of-use assets ( 5,964 ) ( 3,670 )

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Total net deferred tax liabilities $ ( 55,409 ) $ ( 51,429 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our deferred tax assets and liabilities, along with related valuation allowances, are classified as non-current on our Consolidated Balance Sheets at December 31, 2025 and 2024.

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The deferred tax assets recognized for those net operating losses ( “ NOLs ”) are presented net of these unrecognized tax benefits.

At December 31, 2024, the Company’s unrecognized tax benefit (“UTB”) reserve for uncertain tax positions primarily relates to the uncertainty of receiving audit protection for revenue recognition of cemetery property for the benefit derived from carrying back losses generated in 2018 to tax years with a higher effective tax rate than the current 21.0% rate.

Our UTB reserve for the years ended December 31, 2024 and 2023 was $ 3.5 million and $ 3.4 million, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

At December 31, 2025, the Company’s unrecognized tax benefit for uncertain tax positions primarily relates to the uncertainty of receiving audit protection for revenue recognition of cemetery property for the benefit derived from carrying back losses generated in 2018 to tax years with a higher effective tax rate than the current 21.0% rate.

Our unrecognized tax benefit for the years ended December 31, 2025 and 2024 was $ 3.6 million and $ 3.5 million, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in thousands):

Years Ended December 31,

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Gross decreases - tax positions in prior period 162 — 88

Gross increases - tax positions in prior period — 88 66

Gross increases - tax positions in current period — 89 —

Unrecognized tax benefit at end of year $ 3,633 $ 3,471 $ 3,382

At December 31, 2024, we expect that the $ 3.5 million of UTB will be recognized in the next twelve months.

We accrued interest of $ 0.1 million during 2024 and in total, as of December 31, 2024, recognized a liability related to the UTB's noted above for interest of $ 0.4 million.

Our total unrecognized tax benefits that, if recognized, would affect our effective tax rates were $ 3.6 million, $ 3.5 million, and $ 3.4 million as of December 31, 2025, 2024 and 2023, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We accrued interest of $ 0.2 million during 2025 and in total, as of December 31, 2025, recognized a liability related to the unrecognized tax benefit noted above for interest of $ 0.5 million.

During 2024, we accrued interest of $ 0.1 million and in total, as of December 31, 2024, recognized a liability for interest of $ 0.4 million.

As of December 31, 2025, tax years 2013 to 2016, 2018, and 2022 to current are subject to examination by taxing authorities.

In 2017, we filed amended returns for the tax years ending December 31, 2013, 2014, 2015, resulting in $ 1.9 million in refunds.

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Additionally, losses incurred in the tax years ending December 31, 2018, and 2019 were carried back to the tax years 2015 and 2016, generating refunds exceeding $ 5.0 million, which require Joint Committee approval.

During the year ended December 31, 2024, the refunds for the tax years 2013, 2014, and 2015 were received;

however, the Joint Committee review is still pending.

At December 31, 2024, Carriage had not received final correspondence from the Internal Revenue Service indicating the completion of the audits.

As of December 31, 2024, tax years 2013 to 2023 remain subject to examination by taxing authorities.

In late 2024, the refunds for the tax years 2013, 2014, and 2015 were received;

however, the Company continues to be under examination.

STOCKHOLDERS’ EQUITY

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All stock-based plans are administered by the Compensation Committee appointed by our Board of Directors (the “Board”).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

At December 31, 2025, we had 2,740,182 shares available to issue under our 2017 Plan.

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At December 31, 2025, we had $ 7.6 million of total unrecognized compensation costs related to unvested restricted stock awards, which are expected to be recognized over a weighted average period of 1.5 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock Options

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— $ — 370,590 $ 3,830 214,191 $ 2,506

— $ — — $ — 310,000 $ 5,388

— $ — — $ — 12,600 $ 143

Cancelled 22,190 $ 273 532,266 $ 6,311 105,150 $ 1,380

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The options granted in 2024 and 2023 vest over a three-year period and have a ten-year term.

The options granted in 2022 vest over a five-year period and have a ten-year term.

These options will vest if the employee has remained continuously employed by us through the vesting period.

(2) Stock options granted during the year ended December 31, 2022 had a weighted average price of $ 49.48 .

The fair value of these options was calculated using the Black-Scholes option pricing model and vest over a seven-year period and have a ten-year term.

These options will vest if the employee has remained continuously employed by us through the vesting period.

(3) Stock options granted during the year ended December 31, 2022 had a weighted average price of $ 31.58 .

The fair value of these options was calculated using the Black-Scholes option pricing model and vest over a three-year period and have a ten-year term.

These options will vest if the employee has remained continuously employed by us through the vesting period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Additional stock option activity is as follows (in thousands, except shares):

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Exercised (1)

97,548 $ 1,439 74,200 N/A 32,196 N/A

324,497 $ 584 97,548 $ 1,439 74,200 N/A

Returned for option price (2)

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All of the options granted and outstanding under this plan have either a seven or ten-year term.

We utilized the Black-Scholes option pricing model and Monte-Carlo simulation pricing model for estimating the fair value of our stock options.

We utilized the Black-Scholes option pricing model for estimating the fair value of our stock options.

These models allow for the use of a range of assumptions related to volatility, risk-free interest rate, expected holding period and dividend yield.

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Years Ended December 31,

2024 2023 2022 2022 2022

Grant date February 21 February 22 February 23 February 23 September 27

Grant date February 21 February 22

Expected holding period (years) 6.0 4.0

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Black-Scholes value $ 10.34 $ 11.70

The fair value of the options granted using the Monte-Carlo simulation pricing model was estimated on the date of grant with the following assumptions:

Year ended December 31, 2022

Awards granted 150,000

Dividend yield 1.15 %

Expected volatility 34.08 %

Risk-free interest rate 1.29 %

A summary of the number of stock options and their weighted average exercise prices during the year ended December 31, 2025 is presented in the table below (shares in thousands):

Outstanding at January 1 1,344 $ 32.39

Granted 371 $ 24.48

Exercised ( 324 ) $ 27.46

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Non-vested at January 1 727 $ 11.98

Granted 371 $ 10.34

Vested or exercised ( 268 ) $ 11.35

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Performance Awards

During the year ended December 31, 2025, we granted performance awards to our executive leadership team payable in shares.

These awards will vest, if at all, provided that certain predetermined performance metrics related to the Company's adjusted consolidated EBITDA (adjusted earnings before interest tax depreciation and amortization) are achieved during the period commencing on the grant date, March 7, 2025, through March 31, 2028, subject to certification by the Compensation Committee of the Board of Directors (“Board”) and the individual remaining continuously employed by us through such date.

Performance award activity is as follows (in thousands, except shares):

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Granted 90,894 $ 3,508 — $ — — $ —

Returned for payroll taxes

142,070 $ 5,662 — $ — — $ —

Cancelled 58,013 $ 2,423 80,276 $ 871 54,229 $ 1,565

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

A summary of the number of performance awards and their weighted average grant date fair values during the year ended December 31, 2025 is presented in the table below:

1 unchanged sentence

At January 1 297,531 $ 22.23

Granted 90,894 $ 38.59

Vested ( 239,518 ) 17.50

Cancelled ( 58,013 ) $ 41.77

At December 31 90,894 $ 38.59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The performance awards in the table above are presented at the first predetermined growth target.

However, at December 31, 2024, certain performance criteria for the third predetermined growth target were satisfied.

Therefore, a total of 415,812 shares of common stock are expected to be awarded to participants under this program.

There was no unrecognized compensation cost related to performance awards at December 31, 2024.

At December 31, 2025, we had $ 3.5 million of total unrecognized compensation costs related to performance awards, which are expected to be recognized over a weighted average period of 2.2 years.

We recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for performance awards of $ 1.0 million, $ 1.1 million, and $ 1.6 million during the years ended December 31, 2025, 2024, and 2023, respectively.

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The expected life of the ESPP grants represents the calendar quarters from the beginning of the year to the purchase date (end of each quarter).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Former Employee

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common stock awards of $ 0.8 million, for the year ended December 31, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Good to Great Incentive Program

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(1) Common stock granted during the year ended December 31, 2025, 2024, and 2023 had a grant date stock price of $ 41.54 , $ 25.08 , and $ 32.69 , respectively.

Non-Employee Director and Board Advisor Compensation

On April 2, 2024, the Board revised the Director Compensation Policy to provide that each independent director is entitled to a quarterly retainer of $ 37,500 payable in cash and/or unrestricted shares of our common stock at the end of each quarter.

The chair of the Board, so long as he or she is an independent director, and the chair of our Audit Committee shall be entitled to an additional annual retainer of $ 20,000 , payable in quarterly installments of $ 5,000 each at the end of each quarter, and the chair of our Compensation Committee is entitled to an additional annual retainer of $ 15,000 , payable in quarterly installments of $ 3,750 each at the end of each quarter, and the chair of our Corporate Governance Committee is entitled to an additional annual retainer of $ 10,000 , payable in quarterly installments of $ 2,500 at the end of each quarter.

Any new independent director will receive upon admission to the Board a grant of $ 25,000 (in addition to the independent director annual retainer prorated at the time the new director is admitted to the Board) which can be taken in cash or unrestricted shares of our common stock.

The number of shares of such common stock will be determined by dividing the cash amount by the closing price of our common stock on the date of grant, which will be the date of admission to the Board.

Non-employee director and board advisor common stock activity is as follows (in thousands, except shares):

Years Ended December 31,

2024 2023 2022

Shares Fair Value Shares Fair Value Shares Fair Value

Board of Directors (1)

16,658 $ 510 15,059 $ 431 11,155 $ 415

Advisor to the Board (1)

647 $ 21 691 $ 20 555 $ 20

(1) Common stock granted during the years ended December 31, 2024, 2023 and 2022 had a weighted average price of $ 30.56 , $ 28.60 and $ 37.14 , respectively.

We recorded compensation expense, which is included in General, administrative and other expenses, related to annual retainers, including the value of stock granted to non-employee Directors and an advisor to our Board, of $ 1.3 million, $ 0.8 million and $ 0.7 million, during the years ended December 31, 2024, 2023 and 2022, respectively.

Cash Dividends

Our Board declared the following dividends payable on the dates below (in thousands, except per share amounts):

2024 Per Share Dollar Value

March 1st $ 0.1125 $ 1,686

June 1st $ 0.1125 $ 1,704

September 1st $ 0.1125 $ 1,708

December 1st $ 0.1125 $ 1,709

2023 Per Share Dollar Value

March 1st $ 0.1125 $ 1,661

June 1st $ 0.1125 $ 1,679

September 1st $ 0.1125 $ 1,683

December 1st $ 0.1125 $ 1,685

Share Repurchase Program

Subject to market conditions, normal trading restrictions and satisfying certain financial covenants in our Credit Facility, and in the Indenture governing our Senior Notes, we may make purchases in the open market or through privately negotiated transactions under our Board authorized share repurchase program, in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

On February 23, 2022, our Board authorized an increase in our share repurchase program to permit us to purchase up to an additional $ 75.0 million under our share repurchase program, in addition to amounts previously authorized and outstanding in accordance with Rule 10b-18 of the Exchange Act, which totaled up to $ 265.0 million in share repurchase authorizations.

Share repurchase activity is as follows (dollar value in thousands):

Years Ended December 31,

2024 2023 2022

Number of Shares Repurchased

Average Price Paid Per Share $ — $ — $ 49.22

Dollar Value of Shares Repurchased

$ — $ — $ 34,234

Our shares were purchased in the open market at times and in amounts as management determined appropriate based on factors such as market conditions, legal requirements and other business considerations.

Shares purchased pursuant to the repurchase program are currently held as treasury stock.

No shares were repurchased during the years ended December 31, 2025, 2024,and 2023.

At December 31, 2025, our share repurchase program had $ 48.9 million authorized for repurchases.

EARNINGS PER SHARE

Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and included in the computation of both basic and diluted earnings per share.

Our grants of stock awards to our employees are considered participating securities and we have prepared our earnings per share calculations to exclude earnings allocated to unvested restricted stock awards, using the two-class method, in the basic and diluted weighted average shares outstanding calculation.

The following table sets forth the computation of the basic and diluted earnings per share (in thousands, except per share data):

Years Ended December 31,

Year ended December 31,

2025 2024 2023

12 unchanged sentences

$ 3.25 $ 2.10 $ 2.14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock options excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect are as follows (in thousands):

Years Ended December 31,

Year ended December 31,

2025 2024 2023

Antidilutive stock options 223 1,143 1,208

Our performance awards are considered to be contingently issuable shares because their issuance is contingent upon the satisfaction of certain performance and service conditions.

At December 31, 2024, we had satisfied certain performance criteria for the first, second and third predetermined growth targets of our performance awards to be considered outstanding.

Therefore, we included these awards in the computation of diluted earnings per share as of the beginning of the reporting period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

SEGMENT REPORTING

1 unchanged sentence

The CODM examines variances on a monthly basis to make informed decisions regarding capital and personnel distribution among segments.

Additionally, the CODM employs segment gross profit for product pricing evaluation and uses segment adjusted operating profit to assess each segment’s performance by comparing results and return on assets against expected outcomes.

The tables below present revenue, disaggregated by major source for each of our reportable segments, as well as, significant segment expenses, other segment expenses, operating income (loss), depreciation and amortization, interest expense, income (loss) before income taxes, income tax expense (benefit), total assets, long-lived assets, goodwill, capital expenditures and number of operating locations by segment as follows, (in thousands, except number of operating locations) for the years ended December 31, 2025, 2024, and 2023, respectively:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended, December 31, 2025 Funeral Cemetery Corporate Total

15 unchanged sentences

Operating income (loss) $ 84,744 $ 61,561 $ ( 48,648 ) $ 97,657

Depreciation and amortization $ 11,736 $ 10,161 $ 993 $ 22,890

Interest expense $ 1,318 $ 17 $ 27,030 $ 28,365

Depreciation and amortization $ 11,252 $ 11,303 $ 1,952 $ 24,507

Income (loss) before income taxes $ 85,874 $ 64,413 $ ( 80,024 ) $ 70,263

5 unchanged sentences

Number of operating locations at year end 155 28 — 183

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(1) Allocated overhead costs include:

2 unchanged sentences

professional services, travel and meals expenses, computer software expenses, and office supplies.

(4) The Corporate segment's other segment expenses primarily include general, administrative and other expenses, net loss on divestitures, disposals and impairment charges and amortization and depreciation expenses.

The Funeral and Cemetery segment's other segment expenses primarily include transportation costs, other funeral costs, non-payroll related promotional costs, net loss on divestitures, disposals and impairment charges and amortization and depreciation expenses.

(3) The Corporate segment’s other segment expenses primarily include general, administrative, and other expenses, net loss on divestitures and impairment charges and amortization and depreciation expenses.

The Funeral and Cemetery segment's other segment expenses primarily include transportation costs, other funeral costs, non-payroll related promotional costs, net loss on divestitures and impairment charges, and amortization and depreciation expenses.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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Operating income (loss) $ 84,257 $ 56,583 $ ( 59,041 ) $ 81,799

Depreciation and amortization $ 12,197 $ 8,008 $ 912 $ 21,117

Interest expense $ 947 $ 27 $ 31,101 $ 32,075

Depreciation and amortization $ 11,736 $ 10,161 $ 993 $ 22,890

Income (loss) before income taxes $ 83,945 $ 56,933 $ ( 90,798 ) $ 50,080

5 unchanged sentences

Number of operating locations at year end 162 31 — 193

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(1) Allocated overhead costs include:

2 unchanged sentences

professional services, travel and meals expenses, computer software expenses, and office supplies.

The Funeral and Cemetery segment's other segment expenses primarily include transportation costs, other funeral costs, non-payroll related promotional costs, net loss on divestitures and impairment charges, and amortization and depreciation expenses.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

16 unchanged sentences

Operating income (loss) 81,306 41,923 ( 42,250 ) 80,979

Depreciation and amortization $ 11,591 $ 7,584 $ 624 $ 19,799

Interest expense 783 8 35,475 36,266

Depreciation and amortization 12,197 8,008 912 21,117

Income (loss) before income taxes 82,453 42,208 ( 78,232 ) 46,429

5 unchanged sentences

Number of operating locations at year end 171 32 — 203

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(1) Allocated overhead costs include:

3 unchanged sentences

(3) The Corporate segment's other segment expenses primarily include general, administrative, and other expenses, net loss on divestitures, disposals, and impairment charges and amortization and depreciation expenses.

The Funeral and Cemetery segment's other segment expenses primarily include transportation costs, other funeral costs, non-payroll related promotional costs, net loss on divestitures and impairment charges, and amortization and depreciation expenses.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2 unchanged sentences

The following table presents the detail of certain balance sheet accounts (in thousands):

December 31, 2025 December 31, 2024

Prepaid and other current assets:

11 unchanged sentences

Incentive compensation $ 11,020 $ 12,860

Salaries and wages 4,867 2,285

Insurance 2,876 3,584

1 unchanged sentence

Vacation 2,808 2,803

Ad valorem taxes 2,314 2,395

Interest 2,490 2,288

Perpetual care trust payable 2,143 1,358

Salaries and wages 2,853 4,867

Employee meetings and award trips 1,366 1,550

Commissions 1,218 1,144

Income tax payable 8 208

Commissions 1,244 1,218

Perpetual care trust payable 357 2,143

Ad valorem taxes 2,378 2,314

Other accrued liabilities 2,889 1,300

Total accrued and other liabilities, including HFS $ 33,922 $ 38,606

38,606 35,362

Held for sale — ( 146 )

Total accrued and other liabilities $ 33,922 $ 38,460

$ 38,460 $ 35,362

Other long-term liabilities:

Incentive compensation $ 1,496 $ 996

Deferred compensation 358 —

Other long-term liabilities — 183

Total other long-term liabilities $ 1,854 $ 1,179

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

The following information is supplemental disclosure for the Consolidated Statements of Cash Flows (in thousands):

Years Ended December 31,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Held for Sale

The table below presents the carrying amounts of the assets and liabilities included in held for sale (in thousands):

December 31, 2025 December 31, 2024

Accounts receivable, net $ — $ 833

Inventories — 302

Current assets held for sale $ — $ 1,135

Preneed cemetery trust investments $ — $ 4,876

Preneed funeral trust investments — 2,197

Preneed cemetery receivables, net — 1,671

Property, plant, and equipment, net 322 4,898

Cemetery property, net — 3,362

Intangible and other non-current assets, net — 215

Cemetery perpetual care trust investments — 2,234

Non-current assets held for sale $ 322 $ 19,453

Accounts payable $ — $ 94

Accrued and other liabilities — 146

Current liabilities held for sale $ — $ 240

Deferred preneed cemetery revenue $ — $ 3,517

Deferred preneed funeral revenue — 1,018

Deferred preneed cemetery receipts held in trust — 4,876

Deferred preneed funeral receipts held in trust — 2,197

Care trusts’ corpus — 2,234

Long-term liabilities held for sale $ — $ 13,842

Property, plant, and equipment

Property, plant, and equipment is comprised of the following (in thousands):

December 31, 2025 December 31, 2024

Land $ 92,739 $ 86,609

Buildings and improvements 268,647 265,231

Furniture, equipment, and vehicles 71,832 72,052

Property, plant, and equipment, at cost 433,218 423,892

accumulated depreciation ( 146,086 ) ( 145,990 )

Property, plant, and equipment, net including HFS

287,132 277,902

Cash paid for interest and financing costs $ 30,629 $ 34,682 $ 24,456

Cash paid for taxes 16,654 10,448 9,713

Land purchased in exchange for debt — 2,550 —

CARRIAGE SERVICES, INC.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Description Balance at beginning of year Charged to costs and expenses Deduction Balance at end of year

Year ended December 31, 2022:

Employee severance accruals $ 641 $ 1,880 $ 1,361 $ 1,160

Valuation allowance of the deferred tax asset 198 — 17 181

Year ended December 31, 2023:

Employee severance accruals $ 1,160 $ 186 $ 799 $ 547

Valuation allowance of the deferred tax asset 181 — 25 156

Year Ended December 31, 2024:

Employee severance accruals $ 547 $ 6,207 $ 4,233 $ 2,521

Valuation allowance of the deferred tax asset 156 — — 156

Held for sale

( 322 ) ( 4,898 )

Property, plant, and equipment, net

$ 286,810 $ 273,004

Cemetery property

Cemetery property is comprised of the following (in thousands):

December 31, 2025 December 31, 2024

Cemetery property, at cost

$ 194,549 $ 185,518

accumulated amortization

( 78,904 ) ( 72,580 )

Cemetery property, net including HFS

115,645 112,938

Held for sale

Cemetery property, net

$ 115,645 $ 109,576

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data