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Summary of Significant Accounting Policies Level 2 (Policies) - USD ($)
$ in Thousands

6 Months Ended

Jun. 30, 2020

Dec. 31, 2019

Jun. 30, 2019

Consolidation, Policy [Policy Text Block]

Principles of Consolidation and Basis of Presentation

Our consolidated financial statements include the accounts of Service Corporation International (SCI) and all subsidiaries in which we hold a controlling financial interest. Intercompany balances and transactions have been eliminated in consolidation.

Our unaudited condensed consolidated financial statements also include the accounts of the merchandise and service trusts and cemetery perpetual care trusts in which we have a variable interest and are the primary beneficiary. We have retained the specialized industry accounting principles when consolidating the trusts. Our trusts are variable interest entities, for which we have determined that we are the primary beneficiary as we absorb a majority of the losses and returns associated with these trusts. Although we consolidate the trusts, it does not change the legal relationships among the trusts, us, or our customers. The customers are the legal beneficiaries of these trusts; therefore, their interests in these trusts represent a liability to us.

Our interim condensed consolidated financial statements are unaudited but include all adjustments, consisting of normal recurring accruals and any other adjustments, which management considers necessary for a fair statement of our results for these periods. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2019, unless otherwise disclosed herein, and should be read in conjunction therewith. The accompanying year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period.

Reclassification, Policy [Policy Text Block]

Reclassifications to Prior Period Financial Statements and AdjustmentsCertain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation with no effect on our previously reported results of operations, consolidated financial position, or cash flows, except as described below under "Accounting Standards Adopted in 2020".

Use of Estimates, Policy [Policy Text Block]

Use of Estimates in the Preparation of Financial Statements

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. As a result, actual results could differ from these estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. The carrying amounts of our cash and cash equivalents approximate fair value due to the short-term nature of these instruments.

Accounts Receivable [Policy Text Block]

Receivables, net

The components of Receivables, net in our unaudited Condensed Consolidated Balance Sheet were as follows:


	June 30, 2020
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	39,208	$	22,051	$	19,856	$	1,854	$	82,969
Reserve for credit losses	(3,573)		(1,560)		(296)		(577)		(6,006)
Receivables, net	$	35,635	$	20,491	$	19,560	$	1,277	$	76,963


	December 31, 2019
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	41,370	$	20,855	$	19,943	$	1,765	$	83,933
Allowance for doubtful accounts	(1,899)		(363)		—		—		(2,262)
Receivables, net	$	39,471	$	20,492	$	19,943	$	1,765	$	81,671

Additionally, included in Deferred charges and other assets, net were long-term miscellaneous receivables, net and notes receivable, net as follows:


	June 30, 2020		December 31, 2019
	(In thousands)
Notes receivable	$	13,421	$	14,997
Reserve for credit losses	(7,295)		—
Allowance for doubtful accounts	—		(8,374)
Notes receivable, net	$	6,126	$	6,623

Long-term miscellaneous receivables	$	6,249	$	7,287
Reserve for credit losses	(950)		—
Long-term miscellaneous receivables, net	$	5,299	$	7,287

Our atneed trade receivables primarily consist of amounts due for funeral and cemetery services already performed. We provide reserves for credit losses for our receivables. These reserves are based on an analysis of historical trends of collection activity adjusted for current conditions and forecasts. These estimates are impacted by a number of factors, including changes in the economy and demographic or competitive changes in our areas of operation. In the six months ended June 30, 2020, we increased our reserve for credit losses on trade and miscellaneous receivables as a result of the economic impact of the COVID-19 pandemic (COVID-19). Cemetery preneed receivables are collateralized by cemetery property to the extent of the fair value of the property. Prior to adoption of the guidance on credit losses for financial instruments on January 1, 2020, we provided allowances for doubtful accounts on our receivables based on an analysis of historical trends of collection activity.

Payment on atneed contracts is generally due at the time the merchandise is delivered or the services are performed. We also have preneed receivables, as disclosed in Note 3, for which payment generally occurs prior to our fulfillment of the performance obligations. Our preneed contracts may also have extended payment terms with associated financing charges. We do not accrue interest on preneed receivables if they are not paid in accordance with the contractual payment terms given the nature of our merchandise and services, the nature of our contracts with customers, and the timing of the delivery of our services. Generally, receivables are considered past due after thirty days. We do not consider preneed funeral receivables to be past due until the contract converts into an atneed contract at which time the preneed receivable is paid or reclassified as a trade receivable with payment terms of less than thirty days. Collections are generally managed by the locations or third party agencies acting on behalf of the locations, until a receivable is one hundred eighty days delinquent, at which time trade receivables are fully reserved.

The following table summarizes the activity in our reserve for credit losses by portfolio segment, excluding preneed receivables which are presented in Note 3, for the six months ended June 30, 2020:


	January 1, 2020		Provision for Expected Credit Losses		Write Offs		Recoveries		Effect of Foreign Currency		June 30, 2020
	(In thousands)
Trade receivables:
Funeral	$	(2,690)	$	(2,698)	$	2,644	$	(935)	$	106	$	(3,573)
Cemetery	(1,424)		(776)		615		(42)		67		(1,560)
Total reserve for credit losses on trade receivables	$	(4,114)	$	(3,474)	$	3,259	$	(977)	$	173	$	(5,133)

Miscellaneous receivables:
Current	$	(203)	$	(118)	$	—	$	—	$	25	$	(296)
Long-term	(715)		(235)		—		—		—		(950)
Total reserve for credit losses on miscellaneous receivables	$	(918)	$	(353)	$	—	$	—	$	25	$	(1,246)

Notes receivable	$	(9,031)	$	79	$	1,080	$	—	$	—	$	(7,872)

At June 30, 2020, the amortized cost basis of our miscellaneous and notes receivables by year of origination was as follows:


	2020		2019		2018		2017		2016		Prior		Revolving Line of Credit		Total
	(In thousands)
Miscellaneous receivables:
Current	$	18,023	$	1,227	$	386	$	160	$	55	$	5	$	—	$	19,856
Long-term	1,221		2,718		1,400		663		226		21		—		6,249
Total miscellaneous receivables	$	19,244	$	3,945	$	1,786	$	823	$	281	$	26	$	—	$	26,105

Notes receivable	$	—	$	—	$	235	$	—	$	98	$	6,648	$	8,294	$	15,275

At June 30, 2020, the payment status of our miscellaneous and notes receivables was as follows:


	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Miscellaneous receivables:
Current	$	84	$	28	$	—	$	2	$	114	$	19,742	$	19,856
Long-term	—		—		—		—		—		6,249		6,249
Total miscellaneous receivables	$	84	$	28	$	—	$	2	$	114	$	25,991	$	26,105

Notes receivable	$	1	$	2	$	2	$	1,127	$	1,132	$	14,143	$	15,275

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value Measurements

In August 2018, the FASB amended "Fair Value Measurements" to modify the disclosure requirements related to fair value. The amendment removes requirements to disclose (1) the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy, (2) our policy related to the timing of transfers between levels, and (3) the valuation processes used in level 3 measurements. It clarifies that, for investments measured at net asset value, disclosure of liquidation timing is only required if the investee has communicated the timing either to us or publicly. It also clarifies that the narrative disclosure of the effect of changes in level 3 inputs should be based on changes that could occur at the reporting date. The amendment adds a requirement to disclose the range and weighted average of the significant unobservable inputs used in level 3 measurements. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

The fair values of our long-term, fixed rate loans were estimated using market prices for those loans, and therefore they are classified within Level 2 of the fair value measurements hierarchy. The Term Loan, Bank Credit Facility, and the mortgage and other debt are classified within Level 3 of the fair value measurements hierarchy. The fair values of these instruments have been estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements.

Financing Receivable [Policy Text Block]

Financial Instruments - Credit Losses

In June 2016, the FASB issued "Financial Instruments - Credit Losses" to provide financial statement users with more decision-useful information about the expected credit losses on debt instruments and other commitments to extend credit held by a reporting entity at each reporting date. During November 2018 and April 2019, the FASB made amendments to the new standard that clarified guidance on several matters, including accrued interest, recoveries, and various codification improvements. The new standard, as amended, replaces the incurred loss impairment methodology in the previous standard with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates.

We adopted the new guidance as of January 1, 2020, applying a modified retrospective approach to credit loss reserves on our atneed, preneed, miscellaneous, and notes receivable and a prospective approach for credit loss reserves on our fixed income investments. As a result of the adoption, we recorded a $17.0 million increase to Retained earnings, which comprises a $26.4 million and a $5.8 million increase in Preneed receivables, net and trust investments and Deferred tax liability, respectively, and a $2.7 million and a $0.9 million decrease to Receivables, net and Deferred charges and other assets, net, respectively.

Accounts Receivable, before Allowance for Credit Loss, Current

$ 82,969

$ 83,933

Accounts Receivable, Allowance for Credit Loss

(6,006)

(2,262)

$ (6,006)

Accounts Receivable, Allowance for Credit Loss, Noncurrent

(18,277)

(14,757)

Receivables, net

76,963

81,671

Financing Receivable, Allowance for Credit Loss, Noncurrent

$ (8,245)

Allowance for Doubtful Accounts, Premiums and Other Receivables

(41,142)

Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy

Goodwill and Intangible Assets

In addition to our annual review, we assess the impairment of goodwill and indefinite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value may be greater than the fair value. Factors that could trigger an interim impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. As a result of the challenging economic conditions caused by the response to COVID-19, at June 30, 2020, we performed a qualitative assessment of our goodwill. Based on the qualitative assessment, we believe that it is more likely than not that the fair value of the goodwill reporting units exceeds their carrying value and no quantitative assessment of impairment is necessary at June 30, 2020.

During the six months ended June 30, 2020, we performed a quantitative assessment on certain of our tradenames. We recorded a $3.0 million impairment charge for certain of our tradenames during the first quarter of 2020. In determining the fair value of the tradenames, we used the relief from royalty method whereby we determine the fair value of the assets by discounting the cash flows that represent a savings over having to pay a royalty fee for use of the tradenames. The discounted cash flow valuation uses projections of future cash flows and includes assumptions concerning future operating performance and economic conditions that may differ from actual future cash flows. For our first quarter of 2020 test, we estimated that the pre-tax savings would range from 2.0% to 5.0% of the revenue associated with the trademark and tradenames, based primarily on our research of intellectual property valuation and licensing databases. We also assumed a terminal growth rate of 1.0% and 2.4% for our funeral and cemetery tradenames, respectively, and discounted the cash flows at a 6.95% discount rate based on the relative risk of these assets to the overall business.

Goodwill and Intangible Assets, Goodwill, Policy

Goodwill

In January 2017, the FASB amended "Goodwill" to simplify the subsequent measurement of goodwill. The amended

guidance eliminates Step 2 from the goodwill impairment test. Instead, impairment is defined as the amount by which the carrying value of the reporting unit exceeds its fair value, up to the total amount of goodwill of the reporting unit. We adopted the new standard as of January 1, 2020 and it had no impact on our consolidated results of operations, consolidated financial position, and cash flows.

Loans and Leases Receivable, Lease Financing, Policy

Leases

We have 61 operating leases where we are the lessor and the non-cancelable term is greater than one year, resulting in $0.7 million and $1.3 million in lease income for the three and six months ended June 30, 2020, respectively. We determine whether an arrangement is or contains a lease at the inception of the arrangement based on the terms of the arrangement. We lease retail space, office space and land, and we are party to cellular agreements and land easements. The underlying assets of these lease agreements are buildings and land. We generally do not have sales-type leases, direct financing leases, or lease receivables. Certain of our agreements include variable rental income based on a percentage of sales over base contractual levels. Renewal options that can be cancelled by the lessees are not included in our disclosure of future lease income, which includes only the non-cancelable terms and fixed escalation provisions. Certain lease arrangements contain options to purchase the

property at fair value at the conclusion of the lease term. Non-lease components are excluded from rental income disclosures. Future undiscounted lease income from operating leases as of June 30, 2020 was as follows (in thousands):



2020 (excluding the six months ended June 30, 2020)	$	1,833
2021	3,626
2022	3,225
2023	2,537
2024	2,163
2025 and thereafter	16,806
Total future undiscounted lease income	$	30,190