{"url_path":"/sec/csv/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-26","source_url":"https://www.sec.gov/Archives/edgar/data/1016281/0001016281-26-000021-index.html","accession_number":"0001016281-26-000021","cik":"0001016281","ticker":"CSV","issuer_name":"CARRIAGE SERVICES INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1016281/0001016281-26-000021-index.html","primary_entity_key":"0001016281","primary_entity_name":"CARRIAGE SERVICES INC"},"word_count":22585,"has_tables":true,"body_markdown":"Item 8.    Financial Statements and Supplementary Data\n\nCARRIAGE SERVICES, INC.\n\nINDEX TO CONSOLIDATED FINANCIAL STATEMENTS\n\n \n\n Page\n\nCONSOLIDATED FINANCIAL STATEMENTS:\n\n[Reports of Independent Registered Public Accounting Firm](#i4443665aa8f84fa09ac7bee378fd43ca_67) (PCAOB ID Number 248)\n\n[36](#i4443665aa8f84fa09ac7bee378fd43ca_67)\n\n[Consolidated Balance Sheet](#i4443665aa8f84fa09ac7bee378fd43ca_73)[s](#i4443665aa8f84fa09ac7bee378fd43ca_73)[as of December 31, 202](#i4443665aa8f84fa09ac7bee378fd43ca_73)[5](#i4443665aa8f84fa09ac7bee378fd43ca_73)[and 202](#i4443665aa8f84fa09ac7bee378fd43ca_73)4\n\n[38](#i4443665aa8f84fa09ac7bee378fd43ca_73)\n\n[Consolidated Statements of Operations for the Years Ended December 31,](#i4443665aa8f84fa09ac7bee378fd43ca_76)[202](#i4443665aa8f84fa09ac7bee378fd43ca_76)[5](#i4443665aa8f84fa09ac7bee378fd43ca_76)[, 202](#i4443665aa8f84fa09ac7bee378fd43ca_76)[4](#i4443665aa8f84fa09ac7bee378fd43ca_76)[,](#i4443665aa8f84fa09ac7bee378fd43ca_76)[and 202](#i4443665aa8f84fa09ac7bee378fd43ca_76)3\n\n[39](#i4443665aa8f84fa09ac7bee378fd43ca_76)\n\n[Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 202](#i4443665aa8f84fa09ac7bee378fd43ca_79)[5](#i4443665aa8f84fa09ac7bee378fd43ca_79)[, 202](#i4443665aa8f84fa09ac7bee378fd43ca_79)[4](#i4443665aa8f84fa09ac7bee378fd43ca_79)[,](#i4443665aa8f84fa09ac7bee378fd43ca_79)[and 202](#i4443665aa8f84fa09ac7bee378fd43ca_79)3\n\n[41](#i4443665aa8f84fa09ac7bee378fd43ca_79)\n\n[Consolidated Statements of Cash Flows for the Years Ended December 31, 202](#i4443665aa8f84fa09ac7bee378fd43ca_82)[5](#i4443665aa8f84fa09ac7bee378fd43ca_82)[, 202](#i4443665aa8f84fa09ac7bee378fd43ca_82)[4](#i4443665aa8f84fa09ac7bee378fd43ca_82)[,](#i4443665aa8f84fa09ac7bee378fd43ca_82)[and 202](#i4443665aa8f84fa09ac7bee378fd43ca_82)3\n\n[40](#i4443665aa8f84fa09ac7bee378fd43ca_82)\n\n[Notes to Consolidated Financial Statements](#i4443665aa8f84fa09ac7bee378fd43ca_85)\n\n[42](#i4443665aa8f84fa09ac7bee378fd43ca_85)\n\n1.[Basis of Presentation and Summary of Significant Accounting Pol](#i4443665aa8f84fa09ac7bee378fd43ca_88)[icies](#i4443665aa8f84fa09ac7bee378fd43ca_88)\n\n[42](#i4443665aa8f84fa09ac7bee378fd43ca_88)\n\n       2. [Re](#i4443665aa8f84fa09ac7bee378fd43ca_94)[cently Issu](#i4443665aa8f84fa09ac7bee378fd43ca_94)[ed A](#i4443665aa8f84fa09ac7bee378fd43ca_94)[ccounting Standards](#i4443665aa8f84fa09ac7bee378fd43ca_94)\n\n[50](#i4443665aa8f84fa09ac7bee378fd43ca_94)\n\n3. [Business Com](#i4443665aa8f84fa09ac7bee378fd43ca_97)[binations](#i4443665aa8f84fa09ac7bee378fd43ca_97)\n\n[51](#i4443665aa8f84fa09ac7bee378fd43ca_97)\n\n4. [Goodwill](#i4443665aa8f84fa09ac7bee378fd43ca_100)\n\n[52](#i4443665aa8f84fa09ac7bee378fd43ca_100)\n\n5. [Divested Operat](#i4443665aa8f84fa09ac7bee378fd43ca_103)[ions](#i4443665aa8f84fa09ac7bee378fd43ca_103)\n\n[52](#i4443665aa8f84fa09ac7bee378fd43ca_103)\n\n6. [Receivables](#i4443665aa8f84fa09ac7bee378fd43ca_106)\n\n[53](#i4443665aa8f84fa09ac7bee378fd43ca_106)\n\n[7](#i4443665aa8f84fa09ac7bee378fd43ca_109)[.](#i4443665aa8f84fa09ac7bee378fd43ca_109)[Fair Value Measurements](#i4443665aa8f84fa09ac7bee378fd43ca_109)\n\n[54](#i4443665aa8f84fa09ac7bee378fd43ca_109)\n\n8. [Trust Investments](#i4443665aa8f84fa09ac7bee378fd43ca_112)\n\n[55](#i4443665aa8f84fa09ac7bee378fd43ca_112)\n\n[9](#i4443665aa8f84fa09ac7bee378fd43ca_115)[.](#i4443665aa8f84fa09ac7bee378fd43ca_115)[Receivables from Preneed Funeral Trusts](#i4443665aa8f84fa09ac7bee378fd43ca_115)\n\n[62](#i4443665aa8f84fa09ac7bee378fd43ca_115)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_118)[0.](#i4443665aa8f84fa09ac7bee378fd43ca_118)[Contracts](#i4443665aa8f84fa09ac7bee378fd43ca_118)[Funded by Insurance](#i4443665aa8f84fa09ac7bee378fd43ca_118)\n\n[63](#i4443665aa8f84fa09ac7bee378fd43ca_118)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_121)[1.](#i4443665aa8f84fa09ac7bee378fd43ca_121)[Intangibles and Other Non Current Assets](#i4443665aa8f84fa09ac7bee378fd43ca_121)\n\n[64](#i4443665aa8f84fa09ac7bee378fd43ca_121)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_124)[2.](#i4443665aa8f84fa09ac7bee378fd43ca_124)[Credit Facility and Acquisition](#i4443665aa8f84fa09ac7bee378fd43ca_124)[Debt](#i4443665aa8f84fa09ac7bee378fd43ca_124)\n\n[65](#i4443665aa8f84fa09ac7bee378fd43ca_124)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_5887)[3.](#i4443665aa8f84fa09ac7bee378fd43ca_5887)[Senio](#i4443665aa8f84fa09ac7bee378fd43ca_5887)[r Notes](#i4443665aa8f84fa09ac7bee378fd43ca_5887)\n\n[67](#i4443665aa8f84fa09ac7bee378fd43ca_4335)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_133)[4.](#i4443665aa8f84fa09ac7bee378fd43ca_133)[Leases](#i4443665aa8f84fa09ac7bee378fd43ca_133)\n\n[68](#i4443665aa8f84fa09ac7bee378fd43ca_133)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_139)[5.](#i4443665aa8f84fa09ac7bee378fd43ca_139)[Commit](#i4443665aa8f84fa09ac7bee378fd43ca_139)[ments and Contingencies](#i4443665aa8f84fa09ac7bee378fd43ca_139)\n\n[70](#i4443665aa8f84fa09ac7bee378fd43ca_139)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_142)[6.](#i4443665aa8f84fa09ac7bee378fd43ca_142)[Income Taxes](#i4443665aa8f84fa09ac7bee378fd43ca_142)\n\n[71](#i4443665aa8f84fa09ac7bee378fd43ca_142)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_145)[7.](#i4443665aa8f84fa09ac7bee378fd43ca_145)[Stockholders'](#i4443665aa8f84fa09ac7bee378fd43ca_145)[Equity](#i4443665aa8f84fa09ac7bee378fd43ca_145)\n\n[73](#i4443665aa8f84fa09ac7bee378fd43ca_145)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_154)[8.](#i4443665aa8f84fa09ac7bee378fd43ca_154)[Earnings Per Share](#i4443665aa8f84fa09ac7bee378fd43ca_154)\n\n[77](#i4443665aa8f84fa09ac7bee378fd43ca_154)\n\n[1](#i4443665aa8f84fa09ac7bee378fd43ca_157)[9.](#i4443665aa8f84fa09ac7bee378fd43ca_157)[Segment Reporting](#i4443665aa8f84fa09ac7bee378fd43ca_157)\n\n[78](#i4443665aa8f84fa09ac7bee378fd43ca_157)\n\n[2](#i4443665aa8f84fa09ac7bee378fd43ca_160)[0.](#i4443665aa8f84fa09ac7bee378fd43ca_160)[Supplementary Da](#i4443665aa8f84fa09ac7bee378fd43ca_160)ta\n\n[82](#i4443665aa8f84fa09ac7bee378fd43ca_160)\n\n35\n\nReport of Independent Registered Public Accounting Firm\n\nBoard of Directors and Stockholders\n\nCarriage Services, Inc.\n\nOpinion on the financial statements\n\nWe have audited the accompanying consolidated balance sheets of Carriage Services, Inc. (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.\n\nWe 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.\n\nBasis for opinion\n\nThese 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical audit matters\n\nCritical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.\n\n/s/ GRANT THORNTON LLP\n\nWe have served as the Company's auditor since 2014.\n\nHouston, Texas\n\nFebruary 26, 2026\n\n36\n\nReport of Independent Registered Public Accounting Firm\n\nBoard of Directors and Stockholders\n\nCarriage Services, Inc.\n\nOpinion on internal control over financial reporting\n\nWe have audited the internal control over financial reporting of Carriage Services, Inc., (a Delaware corporation) and subsidiaries (the “Company”) 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”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 26, 2026 expressed an unqualified opinion on those financial statements.\n\nBasis for opinion\n\nThe 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. 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and limitations of internal control over financial reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ GRANT THORNTON LLP\n\nHouston, Texas\n\nFebruary 26, 2026\n\n37\n\nCARRIAGE SERVICES, INC.\n\nCONSOLIDATED BALANCE SHEETS\n\n(in thousands, except share data)\n\nDecember 31,\n2025December 31,\n2024\n\nASSETS\n\nCurrent assets:\n\nCash and cash equivalents$1,688 $1,165 \n\nAccounts receivable, net40,647 30,193 \n\nInventories7,763 7,920 \n\nPrepaid and other current assets5,978 4,123 \n\nCurrent assets held for sale— 1,135 \n\nTotal current assets56,076 44,536 \n\nPreneed cemetery trust investments109,152 98,120 \n\nPreneed funeral trust investments115,416 106,219 \n\nPreneed cemetery receivables, net67,055 50,958 \n\nReceivables from preneed funeral trusts, net16,255 22,372 \n\nProperty, plant, and equipment, net286,810 273,004 \n\nCemetery property, net115,645 109,576 \n\nGoodwill427,897 414,859 \n\nIntangible and other non-current assets, net43,607 40,427 \n\nOperating lease right-of-use assets12,045 14,953 \n\nCemetery perpetual care trust investments95,625 85,103 \n\nNon-current assets held for sale322 19,453 \n\nTotal assets$1,345,905 $1,279,580 \n\nLIABILITIES AND STOCKHOLDERS' EQUITY\n\nCurrent liabilities:\n\nCurrent portion of debt and lease obligations$4,296 $3,914 \n\nAccounts payable18,999 15,427 \n\nAccrued and other liabilities33,922 38,460 \n\nCurrent liabilities held for sale— 240 \n\nTotal current liabilities57,217 58,041 \n\nAcquisition debt, net of current portion5,581 4,895 \n\nLong-term liabilities held for sale— 13,842 \n\nCredit facility125,435 135,382 \n\nSenior notes397,319 396,597 \n\nObligations under finance leases, net of current portion9,339 6,045 \n\nObligations under operating leases, net of current portion10,538 14,035 \n\nDeferred preneed cemetery revenue76,781 61,767 \n\nDeferred preneed funeral revenue33,663 39,261 \n\nDeferred tax liability55,409 51,429 \n\nOther long-term liabilities1,854 1,179 \n\nDeferred preneed cemetery receipts held in trust109,152 98,120 \n\nDeferred preneed funeral receipts held in trust115,416 106,219 \n\nCare trusts’ corpus93,425 84,218 \n\nTotal liabilities1,091,129 1,071,030 \n\nCommitments and contingencies:\n\nStockholders’ equity:\n\nCommon stock, $0.01 par value; 80,000,000 shares authorized and 27,378,870 and 26,881,355 shares issued, respectively and 15,751,052 and 15,253,537 shares outstanding, respectively\n274 269 \n\nAdditional paid-in capital238,539 243,825 \n\nRetained earnings294,716 243,209 \n\nTreasury stock, at cost; 11,627,818 shares\n(278,753)(278,753)\n\nTotal stockholders’ equity254,776 208,550 \n\nTotal liabilities and stockholders’ equity$1,345,905 $1,279,580 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n38\n\nCARRIAGE SERVICES, INC.\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(in thousands, except per share data)\n\nYear ended December 31,\n\n202520242023\n\nRevenue:\n\nService revenue$191,278 $183,051 $182,166 \n\nProperty and merchandise revenue188,503 186,932 169,490 \n\nOther revenue37,659 34,215 30,864 \n\n        Total revenue417,440 404,198 382,520 \n\nField costs and expenses:\n\nCost of service95,220 90,704 91,799 \n\nCost of merchandise129,096 126,922 123,817 \n\nCemetery property amortization9,388 8,168 6,039 \n\nField depreciation expense13,167 13,729 14,166 \n\nRegional and unallocated funeral and cemetery costs17,747 15,364 16,576 \n\nOther expenses6,146 5,921 5,828 \n\n       Total field costs and expenses270,764 260,808 258,225 \n\nGross profit146,676 143,390 124,295 \n\nCorporate costs and expenses:\n\nGeneral, administrative, and other48,648 59,011 42,125 \n\nNet loss on divestitures and impairment charges371 2,580 1,191 \n\nOperating income97,657 81,799 80,979 \n\nInterest expense28,365 32,075 36,266 \n\nNet gain on property damage, net of insurance claims— (417)(343)\n\nOther, net(971)61 (1,373)\n\nIncome before income taxes70,263 50,080 46,429 \n\nExpense for income taxes22,196 16,079 13,186 \n\n(Benefit) expense related to discrete income tax items(3,440)1,048 (170)\n\nTotal expense for income taxes18,756 17,127 13,016 \n\nNet income$51,507 $32,953 $33,413 \n\nBasic earnings per common share:$3.29 $2.17 $2.24 \n\nDiluted earnings per common share:$3.25 $2.10 $2.14 \n\nDividends declared per common share:$0.45 $0.45 $0.45 \n\nWeighted average number of common and common equivalent shares outstanding:\n\nBasic15,428 14,971 14,803 \n\nDiluted15,634 15,443 15,455 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n39\n\nCARRIAGE SERVICES, INC.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(in thousands)\n\nYear Ended December 31,\n\n202520242023\n\nCash flows from operating activities:\n\nNet income$51,507 $32,953 $33,413 \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\nDepreciation and amortization24,507 22,890 21,117 \n\nProvision for credit losses3,576 3,351 3,050 \n\nStock-based compensation expense7,806 6,520 7,703 \n\nDeferred income tax expense (benefit)3,980 (698)3,307 \n\nAmortization of intangibles1,205 1,357 1,401 \n\nAmortization of debt issuance costs512 622 699 \n\nAmortization and accretion of debt563 539 515 \n\nNet loss on divestitures and impairment charges371 2,580 1,191 \n\nNet gain on property damage, net of insurance claims— (417)(343)\n\nNet gain on sale of excess real property(993)— (1,407)\n\nChanges in operating assets and liabilities that provided (used) cash:\n\nAccounts and preneed receivables(28,151)(24,620)(8,122)\n\nInventories, prepaid, and other current assets(1,687)1,056 (72)\n\nIntangible and other non-current assets(3,547)(4,402)(3,246)\n\nPreneed funeral and cemetery trust investments(17,724)1,390 (775)\n\nAccounts payable(369)1,616 169 \n\nAccrued and other liabilities(1,764)3,590 2,988 \n\nDeferred preneed funeral and cemetery revenue(1,752)6,866 14,968 \n\nDeferred preneed funeral and cemetery receipts held in trust22,653 (3,197)(966)\n\nNet cash provided by operating activities60,693 51,996 75,590 \n\nCash flows from investing activities:\n\nAcquisitions of businesses and real property(59,026)— (44,500)\n\nCapital expenditures(20,628)(16,098)(18,039)\n\nProceeds from divestitures and sale of other assets44,483 12,057 4,132 \n\nProceeds from insurance claims— 403 1,403 \n\nNet cash used in investing activities(35,171)(3,638)(57,004)\n\nCash flows from financing activities:\n\nBorrowings from the credit facility137,525 54,900 86,100 \n\nPayments against the credit facility(147,825)(97,000)(97,700)\n\nPayment of debt issuance costs for the credit facility— (781)— \n\nPayments on acquisition debt and obligations under finance leases(1,116)(1,061)(1,167)\n\nProceeds from the exercise of stock options and employee stock purchase plan contributions1,718 2,626 1,494 \n\nTaxes paid on restricted stock, performance award vestings, and exercise of stock options(8,276)(593)(252)\n\nDividends paid on common stock(7,025)(6,807)(6,708)\n\nNet cash used in financing activities(24,999)(48,716)(18,233)\n\nNet increase (decrease) in cash and cash equivalents523 (358)353 \n\nCash and cash equivalents at beginning of period1,165 1,523 1,170 \n\nCash and cash equivalents at end of period$1,688 $1,165 $1,523 \n\nSupplemental disclosure of cash flow information:\n\nCash paid for interest and financing costs$26,820 $30,629 $34,682 \n\nCash paid for taxes16,990 16,654 10,448 \n\nLand purchased in exchange for debt— — 2,550 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n40\n\nCARRIAGE SERVICES, INC.\n\nCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY\n\n(in thousands)\n\nShares OutstandingCommon StockAdditional Paid-in CapitalRetained EarningsTreasury StockTotal\n\nBalance - December 31, 202214,732 $264 $238,780 $176,843 $(278,753)$137,134 \n\nNet income— — — 33,413 — 33,413 \n\nIssuance of common stock from employee stock purchase plan63 — 1,494 — — 1,494 \n\nIssuance of common stock to directors and board advisor16 — 451 — — 451 \n\nIssuance of common stock to former executive30 — 826 — — 826 \n\nIssuance of restricted common stock142 2 (2)— — — \n\nExercise of stock options12 — (174)— — (174)\n\nRestricted common stock, performance awards, and stock options surrendered for taxes paid(3)— (78)— — (78)\n\nStock-based compensation expense— — 6,426 — — 6,426 \n\nDividends on common stock ($0.45 per share)\n— — (6,708)— — (6,708)\n\nOther8 — 276 — — 276 \n\nBalance - December 31, 202315,000 $266 $241,291 $210,256 $(278,753)$173,060 \n\nNet income— — — 32,953 — 32,953 \n\nIssuance of common stock from employee stock purchase plan57 — 1,187 — — 1,187 \n\nIssuance of common stock to directors and board advisor17 — 531 — — 531 \n\nIssuance of restricted common stock157 2 (2)— — — \n\nExercise of stock options68 1 1,439 — — 1,440 \n\nRestricted common stock, performance awards, and stock options surrendered for taxes paid(76)— (593)— — (593)\n\nStock-based compensation expense— — 5,989 — — 5,989 \n\nDividends on common stock ($0.45 per share)\n— — (6,807)— — (6,807)\n\nOther31 — 790 — — 790 \n\nBalance -December 31, 202415,254 $269 $243,825 $243,209 $(278,753)$208,550 \n\nNet income— — — 51,507 — 51,507 \n\nIssuance of common stock from employee stock purchase plan34 — 1,133 — — 1,133 \n\nIssuance of common stock to directors and board advisor7 — 266 — — 266 \n\nIssuance of common stock271 3 (3)— — — \n\nIssuance of restricted common stock115 1 (1)— — — \n\nExercise of stock options132 1 584 — — 585 \n\nRestricted common stock, performance awards, and stock options surrendered for taxes paid(74)— (8,276)— — (8,276)\n\nStock-based compensation expense— — 7,540 — — 7,540 \n\nDividends on common stock ($0.45 per share)\n— — (7,025)— — (7,025)\n\nOther12 — 496 — — 496 \n\nBalance - December 31, 202515,751 $274 $238,539 $294,716 $(278,753)$254,776 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n41\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\nThe Company\n\nCarriage Services, Inc. (“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: Funeral Home Operations, which currently accounts for approximately 65% of our total revenue and Cemetery Operations, which currently accounts for approximately 35% of our total revenue. At December 31, 2025, we operated 155 funeral homes in 24 states and 28 cemeteries in 9 states.\n\nOur funeral home operations are principally service businesses that generate revenue from sales of burial and cremation services and related merchandise, such as caskets and urns. Funeral services include consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and memorial services and transportation services. We provide funeral services and products on both an “atneed” (time of death) and “preneed” (planned prior to death) basis.\n\nOur cemetery operations generate revenue primarily through sales of cemetery interment rights (primarily grave sites, lawn crypts, mausoleum spaces and niches), related cemetery merchandise (such as memorial markers, outer burial containers and monuments) and services (interments, inurnments and installation of cemetery merchandise). We provide cemetery services and products on both an atneed and preneed basis.\n\nPrinciples of Consolidation\n\nThe accompanying Consolidated Financial Statements include the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.\n\nUse of Estimates\n\nThe preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses. On an ongoing basis, we evaluate our critical estimates and judgments, which include those related to the impairment of goodwill and the fair value measurements used in business combinations. These policies are considered critical because they may result in fluctuations in our reported results from period to period due to the significant judgments, estimates, and assumptions about complex and inherently uncertain matters and because the use of different judgments, assumptions, or estimates could have a material impact on our financial condition or results of operations. Actual results may differ from these estimates and such estimates may change if the underlying conditions or assumptions change. Historical performance should not be viewed as indicative of future performance because there can be no assurance the margins, operating income, and net earnings, as a percentage of revenue, will be consistent from period to period.\n\nCash and Cash Equivalents\n\nWe 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 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. We have not experienced any losses and believe we are not exposed to any significant risk with such accounts.\n\nFuneral and Cemetery Receivables\n\nOur funeral receivables are recorded in Accounts receivable, net and primarily consist of amounts due for funeral services already performed.\n\nAtneed cemetery receivables and preneed cemetery receivables with payments expected to be received within one year from the balance sheet date are also recorded in Accounts receivable, net. Preneed cemetery receivables with payments expected to be received beyond one year from the balance sheet date are recorded in Preneed cemetery receivables, net. Our cemetery receivables generally consist of preneed sales of cemetery interment rights and related products and services, which are typically financed through interest-bearing installment sales contracts, generally with terms of up to five years, with such interest income reflected as Other revenue. In substantially all cases, we receive an initial down payment at the time the contract is signed. \n\nFor our funeral and atneed cemetery receivables, we have a collections policy where statements are sent to the customer at 30 days past due. Past due notification letters are sent at 45 days and continue until payment is received or the contract is placed\n\n42\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nwith a third-party collections agency. For our preneed cemetery receivables, we have a collections policy where past due notification letters are sent to the customer beginning at 15 days past due and periodically thereafter until payment is received or the contract is cancelled.\n\nOur allowance for credit losses reflects our best estimate of expected credit losses over the term of both our funeral and cemetery receivables. Our policy is to write off receivables when we have determined they will no longer be collectible. Write-offs are applied as a reduction to the allowance for credit losses and any recoveries of previous write-offs are netted against bad debt expense in the period recovered.\n\nWe determine our allowance for credit losses by using a loss-rate methodology, in which we assess our historical write-off of receivables against our total receivables over several years. From this historical loss-rate approach, we also consider the current and forecasted economic conditions expected to be in place over the life of our receivables. These estimates are impacted by a number of factors, including changes in the economy, demographics, and competition in our local communities. We monitor our ongoing credit exposure through an active review of our customers’ receivables balance against contract terms and due dates. Our activities include timely performance of our accounts receivable reconciliations, assessment of our aging of receivables, dispute resolution, and payment confirmation. We monitor any change in our historical write-off of receivables utilized in our loss-rate methodology and assess forecasted changes in market conditions within our credit reserve.\n\nSee Note 6 to the Consolidated Financial Statements for additional information related to our funeral and cemetery receivables.\n\nInventory\n\nInventory consists primarily of caskets, outer burial containers, and cemetery monuments and markers and is recorded at the lower of its cost basis or net realizable value. Inventory is relieved using specific identification in fulfillment of performance obligations on our contracts.\n\nBusiness Combinations\n\nTangible 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 at the fair value as of that date. Acquisition related costs are recognized separately from the acquisition and are expensed as incurred. We customarily estimate related transaction costs known at closing. To the extent that information not available to us at the closing date subsequently becomes available during the allocation period, we may adjust goodwill, intangible assets, assets or liabilities associated with the acquisition.\n\nSee Note 3 to the Consolidated Financial Statements for additional information related to acquisitions.\n\nDivested Operations\n\nPrior to divesting a funeral home or cemetery, we first determine whether the sale of the net assets and activities (together referred to as a “set”) qualifies as a business. First, we perform a screen test to determine if 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. When both inputs and a substantive process are present then the set is determined to be a business, and we consider the accounting treatment of goodwill for that set (see discussion of Goodwill below). Goodwill is only allocated to the sale if the set is considered to be a business.\n\nSee Notes 4 and 5 to the Consolidated Financial Statements for additional information related to divestitures.\n\nGoodwill\n\nThe 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. As such, we test goodwill for impairment on an annual basis as of August 31st each year. Under current guidance, we are permitted to first assess qualitative factors to determine whether it is more-likely-than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.\n\nWe performed our most recent annual goodwill impairment test as of August 31, 2025. 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 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\n\n43\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nfair value. 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.\n\nOur quantitative goodwill impairment test involves estimates and management judgment. In the quantitative analysis, we compare the fair value of each reporting unit to its carrying value, including goodwill. 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 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 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.\n\nWhen 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. The goodwill allocated is based on the relative fair value of the business being divested and the portion of the reporting unit that will be retained. 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.\n\nFor 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.\n\nSee Notes 4 and 5 to the Consolidated Financial Statements for additional information related to goodwill.\n\nIntangible Assets\n\nOur intangible assets include tradenames resulting from acquisitions and are included in Intangible and other non-current assets, net on our Consolidated Balance Sheets. Our tradenames are considered to have an indefinite life and are not subject to amortization. As such, we test our intangible assets for impairment on an annual basis as of August 31st each year. Under current guidance, we are permitted to first assess qualitative factors to determine whether it is more-likely-than not that the fair value of the tradename is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative impairment test.\n\nWe performed our most recent annual intangible assets impairment test as of August 31, 2025. 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 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. Factors that could trigger an interim impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results and significant negative industry or economic trends.\n\nOur quantitative intangible asset impairment test involves estimates and management judgment. Our quantitative analysis is performed using the relief from royalty method, which measures the tradenames by determining the value of the royalties that we are relieved from paying due to our ownership of the asset. We determine the fair value of the asset by discounting the cash flows that represent a savings in lieu of paying a royalty fee for use of the tradename. 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 and the determination and application of an appropriate royalty rate and discount rate. To estimate the royalty rates for the individual tradename, we mainly rely on the profit split method, but also consider the comparable third-party license agreements and the return on asset method. A scorecard is used to assess the relative strength of the individual tradename to further adjust the royalty rates selected under the profit-split method for qualitative factors. 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.\n\n44\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nOur 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.\n\nSee Note 11 to the Consolidated Financial Statements for additional information related to intangible assets.\n\nPreneed and Perpetual Care Trust Funds\n\nPreneed sales generally require deposits to a trust or purchase of a third-party insurance product. We have established a variety of trusts in connection with funeral home and cemetery operations as required under applicable state laws. Such trusts include (i) preneed funeral trusts; (ii) preneed cemetery merchandise and service trusts; and (iii) cemetery perpetual care trusts.\n\nOur preneed and perpetual care trust funds are reported in accordance with the principles of consolidating Variable Interest Entities (“VIEs”). In the case of preneed trusts, the customers are the legal beneficiaries. In the case of perpetual care trusts, we do not have a right to access the corpus in the perpetual care trusts.\n\nOur trust fund assets are reflected in our financial statements as Preneed cemetery trust investments, Preneed funeral trust investments, and Cemetery perpetual care trust investments. We have recognized financial interests of third parties in the trust funds in our financial statements as Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus.\n\nFixed income securities are classified as trading securities and accounted for at fair value. Equity securities with readily determinable market values are accounted for at fair value. The fair value of our trust fund assets is accounted for as Collateralized Financing Entities (“CFEs”) in ASC Topic 810. The accounting guidance for CFEs allows companies to elect to measure both the financial assets and financial liabilities using the more observable of the fair value of the financial assets or fair value of the financial liabilities. 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.\n\nIn 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. Income from the trust funds is distributed to us and used to provide for the care and maintenance of the cemeteries and mausoleums. Trust fund income is recognized as revenue when realized by the trust and distributable to us. We are restricted from withdrawing any of the principal balances of these funds.\n\nAn enterprise is required to perform an analysis to determine whether the enterprise’s variable interest(s) give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Our analysis continues to support our position as the primary beneficiary in the majority of our funeral and cemetery trust funds.\n\nOur preneed funeral and preneed cemetery merchandise and service trusts, as well as the corresponding trust liabilities, are reflected in our financial statements net of an allowance for contract cancellations. We determine this allowance based on our five-year historical experience of contract cancellations. On an ongoing basis, we monitor our historical trend and adjust our allowance accordingly.\n\nSee Notes 8 and 9 to the Consolidated Financial Statements for additional information related to preneed and perpetual care trust funds.\n\nDeferred Revenue\n\nWe 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 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.\n\nUnder 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. These amounts we retain represent future revenue that are not held in trust accounts and are recorded in Deferred preneed funeral and cemetery revenue. Future revenue that are held in trust accounts are included in Deferred preneed funeral and cemetery receipts held in trust discussed above.\n\n45\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nDuring 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, 2025 and 2024. In certain states, we are allowed to make these withdrawals prior to the delivery of preneed merchandise and service contracts. The realized capital gains and earnings withdrawn increase our cash flow from operations, but are not recognized as revenue in our Consolidated Statements of Operations, however, they reduce our Preneed funeral trust investments and Preneed cemetery trust investments and increase our Deferred preneed funeral revenue and Deferred preneed cemetery revenue.\n\nHeld for Sale\n\nThe Company classifies assets and liabilities (disposal groups) to be sold as held for sale (“HFS”) in the period in which all of the following criteria are met: (1) management, having the authority to approve the action, commits to a plan to sell the disposal group; (2) the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; (3) an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; (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; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.\n\nThe Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale. Additionally, depreciation is not recorded during the period in which the long-lived assets, included in the disposal group, are classified as held for sale.\n\nUpon 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.\n\nSee Note 20 to the Consolidated Financial Statements for additional information related to assets and liabilities held for sale.\n\nFair Value Measurements\n\nWe measure the securities held by our funeral merchandise and service, cemetery merchandise and service, and cemetery perpetual care trusts at fair value on a recurring basis in accordance with ASC Topic 820. 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 measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.\n\nWe disclose the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. We currently do not have any assets that have fair values determined by Level 3 inputs and no liabilities measured at fair value.\n\nIn the ordinary course of business, we are typically exposed to a variety of market risks. Currently, these are primarily related to changes in fair market values related to outstanding debts and changes in the values of securities associated with the preneed and perpetual care trusts. Management is actively involved in monitoring exposure to market risk and developing and utilizing risk management techniques when appropriate and when available for a reasonable price.\n\nSee Notes 7 and 8 to the Consolidated Financial Statements for additional required disclosures related to the fair value measurement of our financial assets and liabilities.\n\nCapitalized Commissions on Preneed Contracts\n\nWe 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\n\n46\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\ncapitalized 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.\n\nThe 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 funded contracts continue to be expensed in the period incurred as these contracts are not included on our Consolidated Balance Sheets.\n\nSee Note 11 to the Consolidated Financial Statements for additional information related to capitalized commissions on preneed contracts.\n\nInternally Developed Software\n\nWe capitalize costs incurred during the “application development stage” of an internally developed software project, meaning only costs directly related to designing, coding, and testing the software are capitalized, while preliminary project costs and post-implementation activities are expensed, and the capitalized software is then amortized over its estimated useful life, typically ranging from two to five years.\n\nSee Note 11 to the Consolidated Financial Statements for additional information related to internally developed software.\n\nProperty, Plant, and Equipment\n\nProperty, plant, and equipment are stated at cost. The costs of ordinary maintenance and repairs are charged to operations as incurred, while renewals and major replacements that extend the useful economic life of the asset are capitalized. Depreciation of property, plant, and equipment is computed based on the straight-line method over the following estimated useful lives of the assets: \n\n Years\n\nBuildings and improvements\n15 to 40\n\nFurniture and fixtures\n5 to 10\n\nMachinery and equipment\n3 to 15\n\nVehicles\n5 to 7\n\nLong-lived assets, such as property, plant, and equipment and right-of-use assets (see discussion of Leases below) are reported at the lower of their carrying amount or fair value and are reviewed for impairment whenever events, such as significant negative industry or economic trends or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Factors that could trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results. We test the recoverability of our long-lived assets by comparing their carrying value to the sum of the undiscounted cash flows expected to result from the use of the assets over their remaining useful lives. We recognize an impairment loss if the carrying amount of the long-lived asset is not recoverable and exceeds its fair value.\n\nAdditionally, 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.\n\nSee Note 20 to the Consolidated Financial Statements for additional information related to property, plant, and equipment.\n\nCemetery Property\n\nWhen we acquire a cemetery, we utilize an internal and external approach to determine the fair value of the cemetery property. From an external perspective, we obtain an accredited appraisal to provide reasonable assurance for property existence, property availability (unrestricted) for development, property lines, available spaces to sell, identifiable obstacles or easements, and general valuation inclusive of known variables in that market. From an internal perspective, we conduct a detailed analysis of the acquired cemetery property using other cemeteries in our portfolio as a benchmark. This provides the added benefit of relevant data that is not available to third-party appraisers. 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.\n\nWhen 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.\n\nSee Note 20 to the Consolidated Financial Statements for additional information related to cemetery property.\n\n47\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nLeases\n\nWe have operating and finance leases. We lease certain office facilities, certain funeral homes, vehicles, and equipment under operating leases with original terms ranging from one to twenty years. Many leases include one or more options to renew, some of which include options to extend the leases for up to forty years. We lease certain funeral homes, vehicles, and equipment under finance leases with original terms ranging from three and a half to forty years. We do not have any material lease agreements with residual value guarantees, sale-leaseback terms, material restrictive covenants, related parties or sublease arrangements.\n\nWe determine if an arrangement is a lease at inception based on the facts and circumstances of the agreement. A right-of-use (“ROU”) asset represents our right to use the underlying asset for the lease term and the lease liability represents our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized on our Consolidated Balance Sheets at the lease commencement date based on the present value of lease payments over the lease term. For our leases that do not provide an implicit interest rate in the agreement, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. The lease terms used to calculate the ROU asset and related lease liability include options to extend the lease when it is reasonably certain that we will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense, while the expense for finance leases is recognized as depreciation expense and interest expense using the effective interest method of recognition. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities. These are expensed as incurred and recorded as variable lease expense. We have real estate lease agreements which require payments for lease and non-lease components, and we account for these as a single lease component. Leases with an initial term of 12 months or less, that do not include an option to renew the underlying asset, are not recorded on our Consolidated Balance Sheets and expense is recognized on a straight-line basis over the lease term.\n\nOperating lease ROU assets are included in Operating lease right-of-use assets and operating lease liabilities are included in Current portion of operating lease obligations and Obligations under operating leases, net of current portion on our Consolidated Balance Sheets. Finance lease ROU assets are included in Property, plant, and equipment, net and finance lease liabilities are included in Current portion of finance lease obligations and Obligations under finance leases, net of current portion on our Consolidated Balance Sheets.\n\nSee Note 14 to the Consolidated Financial Statements for additional information related to leases.\n\nEquity Plans and Stock-Based Compensation\n\nWe have equity-based employee and director compensation plans under which we have granted stock awards, stock options, and performance awards. We also have an employee stock purchase plan (the “ESPP”). We recognize compensation expense in an amount equal to the fair value of the stock-based awards expected to vest or to be purchased over the requisite service period. We recognize the effect of forfeitures in compensation cost when they occur and any previously recognized compensation cost for an award is reversed in the period that the award is forfeited.\n\nFair value is determined on the date of the grant. The fair value of restricted stock is determined using the stock price on the grant date. The fair value of options or awards containing options is determined using the Black-Scholes valuation model or the Monte-Carlo simulation pricing model. The fair value of the performance awards related to market performance conditions is determined using the Monte-Carlo simulation pricing model. The fair value of the ESPP is determined based on the discount element offered to employees and the embedded option element, which is determined using an option calculation model.\n\nWe recognize all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) as income tax benefit or expense in the income statement. We treat the tax effects of exercised or vested awards as discrete items in the reporting period in which they occur. 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.\n\nSee Note 17 to the Consolidated Financial Statements for additional information related to equity plans and stock-based compensation.\n\n48\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nRevenue Recognition\n\nFuneral and Cemetery Operations Revenue is recognized when control of the merchandise or services is transferred to the customer. Our performance obligations include the delivery of funeral and cemetery merchandise and services and cemetery property interment rights. Control transfers when merchandise is delivered or services are performed. For cemetery property interment rights, control transfers to the customer when the property is developed and the interment right has been sold and can no longer be marketed or sold to another customer. On our atneed contracts, we generally deliver the merchandise and perform the services at the time of need.\n\nMemorial services frequently include performance obligations to direct the service, provide facilities and motor vehicles, catering, flowers, and stationary products. All other performance obligations on these contracts, including arrangement, removal, preparation, embalming, cremation, interment, and delivery of urns and caskets and related memorialization merchandise are fulfilled at the time of need. Personalized marker merchandise and marker installation services sold on atneed contracts are recognized when control is transferred to the customer, generally when the marker is delivered and installed in the cemetery.\n\nSome of our contracts with customers include multiple performance obligations. For these contracts, we allocate the transaction price to each performance obligation based on its relative standalone selling price, which is based on prices charged to customers per our general price list. We recognize revenue when the merchandise is transferred or the service is performed, in satisfaction of the corresponding performance obligation. Sales taxes collected are recognized on a net basis in our Consolidated Financial Statements.\n\nAncillary funeral service revenue, which is recorded in Other revenue, represents revenue from our flower shop, pet cremation business, and online cremation businesses. Revenue is recognized when control of the merchandise or services is transferred to the customer and are primarily sold on an atneed basis.\n\nThe earnings from our preneed trust investments, as well as trust management fees charged by our wholly owned registered investment advisory firm CSV RIA are recorded in Other revenue. At December 31, 2025, CSV RIA provided investment management and advisory services to approximately 80% of our trust assets, for a fee based on the market value of trust assets. Under state trust laws, we are allowed to charge the trust a fee for advising on the investment of the trust assets and these fees are recognized as income in the period in which services are provided.\n\nBalances due on undelivered preneed funeral trust contracts have reduced Deferred preneed funeral revenue by $11.3 million and $10.2 million at December 31, 2025 and 2024, respectively. As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods. However, we estimate an average maturity period of 10 years for preneed funeral contracts.\n\nBalances due from customers on delivered preneed cemetery contracts are included in Accounts receivable, net and Preneed cemetery receivables, net on our Consolidated Balance Sheets. Balances due on undelivered preneed cemetery contracts have reduced Deferred preneed cemetery revenue on our Consolidated Balance Sheets by $16.6 million and $13.6 million at December 31, 2025 and 2024, respectively. As these performance obligations are to be completed after the date of death, we cannot quantify the recognition of revenue in future periods. However, we estimate an average maturity period of eight years for preneed cemetery contracts.\n\nSee Note 19 to the Consolidated Financial Statements for additional information related to the disaggregation of revenue by segment..\n\nIncome Taxes\n\nWe and our subsidiaries file a consolidated U. S. federal income tax return, separate income tax returns in 14 states in which we operate and combined or unitary income tax returns in 10 states in which we operate. We record deferred taxes for temporary differences between the tax basis and financial reporting basis of assets and liabilities. We classify our deferred tax liabilities and assets as non-current on our Consolidated Balance Sheets.\n\nWe record a valuation allowance to reflect the estimated amount of deferred tax assets for which realization is uncertain. Management reviews the valuation allowance at the end of each quarter and makes adjustments if it is determined that it is more-likely-than not that the tax benefits will be realized.\n\nWe analyze tax benefits for uncertain tax positions and how they are to be recognized, measured, and derecognized in the financial statements; provide certain disclosures of uncertain tax matters; 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.\n\nSee Note 16 to the Consolidated Financial Statements for additional information related to income taxes.\n\n49\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nComputation of Earnings Per Common Share\n\nBasic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares consist of stock options and performance awards.\n\nShare-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are recognized as participating securities and included in the computation of both basic and diluted earnings per share. Our grants of restricted stock awards to our employees and directors are considered participating securities, and we have prepared our earnings per share calculations attributable to common stockholders to exclude outstanding unvested restricted stock awards, using the two-class method, in both the basic and diluted weighted average shares outstanding calculation. \n\nOur performance awards are considered to be contingently issuable shares because their issuance is contingent upon the satisfaction of certain performance and service conditions. In accordance with ASC 260, we have included in the computation of diluted earnings per share the number of performance awards that would have been issuable as if the end of the reporting period was the end of the contingency period. These shares are considered to be outstanding at the beginning of the reporting period.\n\nSee Note 18 to the Consolidated Financial Statements for additional information related to the computation of earnings per share.\n\n2. RECENTLY ISSUED ACCOUNTING STANDARDS\n\nIncome Taxes\n\nIn 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; and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). The amendments in this update also require that all entities disclose on an annual basis (1) the amount of net income taxes paid disaggregated by federal and state taxes; 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, 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.\n\nAccounting Pronouncements Not Yet Adopted\n\nExpense Disaggregation\n\nIn 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. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The amendments in this update require, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. We expect the adoption will have no material impact on our consolidated financial statements as it modifies disclosure requirements only.\n\nInternal-Use Software\n\nIn 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.\n\n50\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\n3. BUSINESS COMBINATIONS\n\nOn 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.\n\nOn 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.\n\nThe 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.\n\nThe 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.\n\nThe following table summarizes the breakdown of the preliminary purchase price allocation for the businesses described above (in thousands):\n\nPreliminary Purchase Price Allocation\n\nCurrent assets$3,302 \n\nPreneed trust assets4,068 \n\nProperty, plant, and equipment23,315 \n\nCemetery property2,733 \n\nGoodwill37,746 \n\nIntangible and other non-current assets3,222 \n\nAssumed liabilities(1,293)\n\nPreneed trust liabilities(4,068)\n\nDeferred revenue(12,526)\n\nPurchase price$56,499 \n\nThe 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.\n\nWe 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. We acquired substantially all of the assets and assumed certain operating liabilities of this business.\n\nThe 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.\n\n51\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe following table summarizes the breakdown of the purchase price allocation for our Bakersfield, CA business acquisition (in thousands):\n\nInitial Purchase Price AllocationAdjustmentsAdjusted Purchase Price Allocation\n\nCurrent assets$7,087 $131 $7,218 \n\nPreneed trust assets— 11,428 11,428 \n\nProperty, plant & equipment12,577 245 12,822 \n\nCemetery property9,035 — 9,035 \n\nGoodwill13,612 (106)13,506 \n\nIntangible and other non-current assets3,763 — 3,763 \n\nAssumed liabilities(300)(66)(366)\n\nDeferred tax liability— — — \n\nPreneed trust liabilities— (11,428)(11,428)\n\nDeferred revenue(1,774)(204)(1,978)\n\nPurchase price$44,000 $— $44,000 \n\nThe current assets relate to accounts receivable and inventory. The intangible and other non-current assets relate to the fair value of tradenames and right-of-use operating lease assets. The assumed liabilities relate to operating lease obligations and commissions payable. As of December 31, 2023, our accounting for this acquisition is complete.\n\n4. GOODWILL\n\nMany 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.\n\nThe following table presents changes in goodwill in the accompanying Consolidated Balance Sheets (in thousands): \n\nDecember 31, 2025December 31, 2024\n\nGoodwill at the beginning of the year$414,859 $423,643 \n\nIncrease in goodwill related to acquisitions37,746 — \n\nDecrease in goodwill related to divestitures(24,708)(8,784)\n\nGoodwill at the end of the year$427,897 $414,859 \n\nDuring 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.\n\nDuring 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.\n\nAs 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. We concluded that it is more-likely-than-not that the fair value of our reporting units is greater than their carrying value and thus there was no impairment to goodwill.\n\nSee Notes 1, 3, and 5 to the Consolidated Financial Statements for a discussion of the methodology used for our annual goodwill impairment test and a discussion of our acquisitions and divestitures.\n\n5. DIVESTED OPERATIONS\n\nDuring 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.\n\n52\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nNet loss on divestitures and impairment charges. The components of Net loss on divestitures and impairment charges are as follows (in thousands):            \n\nYear ended December 31,\n\n202520242023\n\nImpairment of goodwill, intangibles, and PPE$1,761$637$454\n\nNet (gain) loss on divestitures(1,451)1,224106\n\nNet loss on disposals of fixed assets61719631\n\nTotal$371$2,580$1,191\n\nFor 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.\n\nSee Note 1 to the Consolidated Financial Statements for a discussion of the methodology used for assessing goodwill impairment after a divestiture of a business.\n\n6. RECEIVABLES\n\nAccounts Receivable\n\nAccounts receivable is comprised of the following (in thousands):\n\nDecember 31, 2025\n\nColumn1FuneralCemeteryCorporateHeld for SaleTotal\n\nTrade and financed receivables$7,369 $31,267 $— $— $38,636 \n\nOther receivables1,245 2,614 1,726 — 5,585 \n\nAllowance for credit losses(363)(3,211)— — (3,574)\n\nAccounts receivable, net$8,251 $30,670 $1,726 $— $40,647 \n\nDecember 31, 2024\n\nColumn1FuneralCemeteryCorporateHeld for SaleTotal\n\nTrade and financed receivables$7,085 $24,355 $— $(833)$30,607 \n\nOther receivables557 345 — — 902 \n\nAllowance for credit losses(302)(1,014)— — (1,316)\n\nAccounts receivable, net$7,340 $23,686 $— $(833)$30,193 \n\nOther receivables include supplier rebates, commissions due from third-party insurance companies and perpetual care income receivables.\n\nThe following table summarizes the activity in our allowance for credit losses by portfolio segment for the year ended December 31, 2025 (in thousands):\n\nJanuary 1, 2025Provision for Credit LossesWrite OffsRecoveriesDecember 31, 2025\n\nTrade and financed receivables:\n\nFuneral$(302)$(1,021)$1,811 $(851)$(363)\n\nCemetery(1,014)(999)(1,198)— (3,211)\n\nTotal allowance for credit losses on trade and financed receivables$(1,316)$(2,020)$613 $(851)$(3,574)\n\nCemetery Receivables\n\nOur cemetery receivables are comprised of the following (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nInterment rights$99,741 $79,436 \n\nMerchandise and services17,761 13,128 \n\nUnearned finance charges4,805 4,983 \n\nCemetery receivables$122,307 $97,547 \n\n53\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe components of our cemetery receivables are as follows (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nCemetery receivables$122,307 $97,547 \n\nLess: unearned finance charges(4,805)(4,983)\n\nCemetery receivables, at amortized cost$117,502 $92,564 \n\nLess: allowance for contract cancellation and credit losses(5,812)(3,018)\n\nLess: balances due on undelivered cemetery preneed contracts(16,579)(13,576)\n\nLess: amounts in accounts receivable(28,056)(23,341)\n\nPreneed cemetery receivables, net including HFS$67,055 $52,629 \n\nLess: Held for sale— (1,671)\n\nPreneed cemetery receivables, net$67,055 $50,958 \n\nThe following table summarizes the activity in our allowance for credit losses for Preneed cemetery receivables, net for the year ended December 31, 2025 (in thousands):\n\nJanuary 1, 2025Provision for Credit LossesWrite OffsDecember 31, 2025\n\nTotal allowance for credit losses on Preneed cemetery receivables, net\n$(2,004)$(1,556)$959 $(2,601)\n\nThe amortized cost basis of our cemetery receivables by year of origination as of December 31, 2025 is as follows (in thousands):\n\n20252024202320222021PriorTotal\n\nTotal cemetery receivables, at amortized cost$60,523 $32,912 $13,978 $6,886 $2,254 $949 $117,502 \n\nThe aging of past due cemetery receivables as of December 31, 2025 is as follows (in thousands): \n\n31-60 Past Due61-90 Past Due91-120 Past Due>120 Past DueTotal Past DueCurrentTotal\n\nRecognized revenue$2,523 $1,174 $460 $4,345 $8,502 $92,421 $100,923 \n\nDeferred revenue575 236 258 4,226 5,295 16,089 21,384 \n\nTotal contracts$3,098 $1,410 $718 $8,571 $13,797 $108,510 $122,307 \n\nThe aging of past due preneed cemetery receivables as of December 31, 2024 is as follows (in thousands): \n\n31-60 Past Due61-90 Past Due91-120 Past Due>120 Past DueTotal Past DueCurrentTotal\n\nRecognized revenue$1,599 $1,065 $832 $2,578 $6,074 $72,914 $78,988 \n\nDeferred revenue302 160 105 612 1,179 17,380 18,559 \n\nTotal contracts$1,901 $1,225 $937 $3,190 $7,253 $90,294 $97,547 \n\n7. FAIR VALUE MEASUREMENTS\n\nWe evaluated our financial assets and liabilities for those that met the criteria of the disclosure requirements and fair value framework. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate the fair values of those instruments due to the short-term nature of the instruments. The fair values of our receivables on preneed cemetery contracts are impracticable to estimate because of the lack of a trading market and the diverse number of individual contracts with varying terms. Our acquisition debt and Credit Facility (as defined in Note 12) and Senior Notes (as defined in Note 13) are classified within Level 2 of the Fair Value Measurements hierarchy.\n\nAt December 31, 2025, the carrying value and fair value of our Credit Facility was $126.7 million. We believe that our Credit Facility bears interest at a rate that approximates prevailing market rates for instruments with similar characteristics and therefore, the carrying value of our Credit Facility approximates fair value. We estimate the fair value of our acquisition debt utilizing an income approach, which uses a present value calculation to discount payments based on current market rates as of the reporting date. At December 31, 2025, the carrying value of our acquisition debt was $6.2 million, which approximated its fair value. The fair value of our Senior Notes was $385.7 million at December 31, 2025, based on the last traded or broker quoted price.\n\n54\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nIn addition, we have an investment in a limited partnership fund, whose fair value has been estimated using the net asset value per share practical expedient described in ASC 820-10-35-59, Fair Value Measurement of Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) and therefore, has not been classified in the fair value hierarchy. The investment strategy of this fund is to generate attractive risk-adjusted returns over a multi-year performance period through the construction of a concentrated portfolio of investments possessing certain distinct business attributes that suggest the potential for long-term value creation. The value of the investments in this fund cannot be liquidated at December 31, 2025 because the investments include restrictions that do not allow for liquidation until 2027. As of December 31, 2025, we do not have an unfunded commitment for this investment.\n\nFurthermore, 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.\n\nWe 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 receivables at cost.\n\nThe 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:\n\n•Level 1—Fair value of securities based on unadjusted quoted prices for identical assets or liabilities in active markets. Our investments classified as Level 1 securities include cash, U.S. treasury debt, common stock and equity mutual funds;\n\n•Level 2—Fair value of securities estimated based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation. These inputs include interest rates, yield curves, credit risk, prepayment speeds, rating and tax-exempt status. Our investments classified as Level 2 securities include U.S. agency obligations, foreign debt, corporate debt, preferred stocks, certificates of deposit and fixed income mutual funds and other investments.\n\n•Level 3—Unobservable inputs based upon the reporting entity’s internally developed assumptions, which market participants would use in pricing the asset or liability. As of December 31, 2025 and 2024, we did not have any assets that had fair values determined by Level 3 inputs and no liabilities measured at fair value.\n\nSee Notes 8 and 9 to our Consolidated Financial Statements for the fair value hierarchy levels of our trust investments.\n\n8. TRUST INVESTMENTS\n\nPreneed trust investments represent trust fund assets that we are generally permitted to withdraw as the services and merchandise are provided to customers. Preneed funeral and cemetery contracts are secured by payments from customers, less amounts not required by law to be deposited into trust. 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 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. We do not intend to sell and it is likely that we will not be required to sell the securities prior to their anticipated recovery.\n\nCemetery perpetual care trust investments represent a portion of the proceeds from the sale of cemetery property interment rights that we are required by various state laws to deposit into perpetual care trust funds. The income earned from these perpetual care trusts offsets maintenance expenses for cemetery property and memorials. This trust fund income is recognized in Other revenue.\n\nChanges 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\n\n55\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nthe 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.\n\nWe 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.\n\nPreneed Cemetery Trust Investments\n\nThe components of Preneed cemetery trust investments on our Consolidated Balance Sheets are as follows (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nPreneed cemetery trust investments, at market value$112,531 $106,143 \n\nLess: allowance for contract cancellation(3,379)(3,147)\n\nPreneed cemetery trust investments$109,152 $102,996 \n\nLess: Held for sale— (4,876)\n\nPreneed cemetery trust investments$109,152 $98,120 \n\nThe cost and market values associated with preneed cemetery trust investments at December 31, 2025, are detailed below (in thousands):\n\nFair Value Hierarchy LevelCostUnrealized GainsUnrealized LossesFair Market Value\n\nCash and money market accounts1$15,653 $— $— $15,653\n\nCommon stock111,599 768 (1,709)10,658\n\nLimited partnership fund3,496 — (93)3,403\n\nMutual funds:\n\nEquity19,483 — (279)9,204\n\nFixed income243,013 353 (50)43,316\n\nAlternative investments29,380 374 (68)29,686\n\nTrust securities$112,624 $1,495 $(2,199)$111,920\n\nAccrued investment income$611 $611\n\nPreneed cemetery trust investments$112,531\n\nMarket value as a percentage of cost99.4 %\n\n56\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe cost and market values associated with preneed cemetery trust investments at December 31, 2024 are detailed below (in thousands):\n\nFair Value Hierarchy LevelCostUnrealized GainsUnrealized LossesFair Market Value\n\nCash and money market accounts1$23,215 $— $— $23,215\n\nFixed income securities:\n\nU.S. agency obligations2664 1 (46)$619\n\nForeign debt28,575 1,431 (8)9,998\n\nCorporate debt28,500 365 (256)8,609\n\nPreferred stock22,833 479 (176)3,136\n\nCertificates of deposit279 — (5)74\n\nCommon stock129,325 4,322 (3,381)30,266\n\nLimited partnership fund3,530 84 — 3,614\n\nMutual funds:\n\nEquity1911 85 — 996\n\nFixed income227,268 94 (2,376)24,986\n\nTrust securities$104,900 $6,861 $(6,248)$105,513\n\nAccrued investment income$630 $630\n\nPreneed cemetery trust investments$106,143\n\nMarket value as a percentage of cost100.6 %\n\nThe following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):\n\nDecember 31, 2024\n\nIn Loss Position Less than 12 monthsIn Loss Position Greater than 12 monthsTotal\n\nFair market valueUnrealized LossesFair market valueUnrealized LossesFair market valueUnrealized Losses\n\nFixed income securities:\n\nU.S. agency obligations$— $— $479 $(46)$479 $(46)\n\nForeign debt— — 211 (8)211 (8)\n\nCorporate debt1,274 (139)94 (117)1,368 (256)\n\nPreferred stock889 (5)891 (171)1,780 (176)\n\nCertificates of deposit— — 74 (5)74 (5)\n\nTotal fixed income securities with an unrealized loss$2,163 $(144)$1,749 $(347)$3,912 $(491)\n\nThere were no fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at December 31, 2025.\n\n57\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nPreneed cemetery trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):\n\n Year ended December 31,\n\n 202520242023\n\nInvestment income$2,712 $2,834 $2,479 \n\nRealized gains12,008 11,600 3,492 \n\nRealized losses(7,784)(14,191)(2,507)\n\nUnrealized gains (losses), net(704)613 (4,352)\n\nExpenses and taxes(1,951)(2,175)(1,653)\n\nNet change in deferred preneed cemetery receipts held in trust(4,281)1,319 2,541 \n\n$— $— $— \n\nPurchases and sales of investments in the preneed cemetery trusts are as follows (in thousands):\n\n Year ended December 31,\n\n 202520242023\n\nPurchases$(70,979)$(25,246)$(22,478)\n\nSales72,597 33,725 18,378 \n\nPreneed Funeral Trust Investments\n\nPreneed funeral trust investments represent trust fund assets that we are permitted to withdraw as services and merchandise are provided to customers. Preneed funeral contracts are secured by payments from customers, less retained amounts not required to be deposited into trust.\n\nThe components of Preneed funeral trust investments on our Consolidated Balance Sheets are as follows (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nPreneed funeral trust investments, at market value$118,993 $111,721 \n\nLess: allowance for contract cancellation(3,577)(3,305)\n\nPreneed funeral trust investments$115,416 $108,416 \n\nLess: Held for sale— (2,197)\n\nPreneed funeral trust investments$115,416 $106,219 \n\nThe cost and market values associated with preneed funeral trust investments at December 31, 2025 are detailed below (in thousands):\n\nFair Value Hierarchy LevelCostUnrealized GainsUnrealized LossesFair Market Value\n\nCash and money market accounts1$20,985 $— $— $20,985\n\nFixed income securities:\n\nU.S agency obligations2306 — (18)288\n\nCommon stock111,981 793 (1,765)11,009\n\nLimited partnership fund3,611 — (97)3,514\n\nMutual funds:\n\nEquity19,226 — (276)8,950\n\nFixed income241,059 331 (48)41,342\n\nOther investments21,724 — — 1,724\n\nAlternative investments30,344 386 (70)30,660\n\nTrust securities$119,236 $1,510 $(2,274)$118,472\n\nAccrued investment income$521 $521\n\nPreneed cemetery trust investments$118,993\n\nMarket value as a percentage of cost99.4 %\n\n58\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands):\n\nDue in one year or less$— \n\nDue in one to five years189 \n\nDue in five to ten years99 \n\nThereafter— \n\nTotal fixed income securities$288 \n\nThe cost and market values associated with preneed funeral trust investments at December 31, 2024 are detailed below (in thousands):\n\nFair Value Hierarchy LevelCostUnrealized GainsUnrealized LossesFair Market Value\n\nCash and money market accounts1$33,735 $— $— $33,735\n\nFixed income securities:\n\nU.S agency obligations2387 — (30)357\n\nForeign debt28,193 1,373 (7)9,559\n\nCorporate debt27,941 351 (134)8,158\n\nPreferred stock22,577 460 (218)2,819\n\nCommon stock126,293 3,989 (2,876)27,406\n\nLimited partnership fund3,392 80 — 3,472\n\nMutual funds:\n\nEquity1763 41 — 804\n\nFixed income224,952 83 (2,118)22,917\n\nOther investments21,910 — — 1,910\n\nTrust securities$110,143 $6,377 $(5,383)$111,137\n\nAccrued investment income$584 $584\n\nPreneed cemetery trust investments$111,721\n\nMarket value as a percentage of cost100.9 %\n\nThe following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at December 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):\n\nDecember 31, 2025\n\nIn Loss Position Less than 12 monthsIn Loss Position Greater than 12 monthsTotal\n\nFair market valueUnrealized LossesFair market valueUnrealized LossesFair market valueUnrealized Losses\n\nFixed income securities:\n\nU.S agency obligations$— $— $288 $(18)$288 $(18)\n\nTotal fixed income securities with an unrealized loss$— $— $288 $(18)$288 $(18)\n\n59\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):\n\nDecember 31, 2024\n\nIn Loss Position Less than 12 monthsIn Loss Position Greater than 12 monthsTotal\n\nFair market valueUnrealized LossesFair market valueUnrealized LossesFair market valueUnrealized Losses\n\nFixed income securities:\n\nU.S agency obligations$— $— $274 $(30)$274 $(30)\n\nForeign debt— — 203 (7)203 (7)\n\nCorporate debt1,225 (133)— (1)1,225 (134)\n\nPreferred stock842 (4)717 (214)1,559 (218)\n\nTotal fixed income securities with an unrealized loss$2,067 $(137)$1,194 $(252)$3,261 $(389)\n\nPreneed funeral trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):\n\n Year ended December 31,\n\n 202520242023\n\nInvestment income2,174 2,177 2,004 \n\nRealized gains16,311 10,722 3,354 \n\nRealized losses(8,420)(12,947)(2,170)\n\nUnrealized gains (losses), net(764)994 (3,104)\n\nExpenses and taxes(1,197)(1,120)(848)\n\nNet change in deferred preneed funeral receipts held in trust(8,104)174 764 \n\n$— $— $— \n\nPurchases and sales of investments in the preneed funeral trusts are as follows (in thousands):\n\n Year ended December 31,\n\n 202520242023\n\nPurchases(63,188)(23,799)(21,425)\n\nSales85,178 31,038 17,300 \n\nCemetery Perpetual Care Trust Investments\n\nCare trusts’ corpus on our Consolidated Balance Sheets represent the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus are as follows (in thousands): \n\nDecember 31, 2025December 31, 2024\n\nCemetery perpetual care trust investments, at market value$95,625 $87,337 \n\nObligations due to (due from) trust(2,200)(885)\n\nCare trusts’ corpus, including HFS$93,425 $86,452 \n\nLess: Held for sale— (2,234)\n\nCare trusts' corpus$93,425 $84,218 \n\n60\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe 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):\n\nFair Value Hierarchy LevelCostUnrealized GainsUnrealized LossesFair Market Value\n\nCash and money market accounts1$8,800 $— $— $8,800\n\nFixed income securities:\n\nCorporate debt294 2 — 96\n\nCommon stock110,527 1,028 (1,451)10,104\n\nLimited partnership fund2,892 — (77)2,815\n\nMutual funds:\n\nEquity19,271 216 (257)9,230\n\nFixed income239,229 319 (145)39,403\n\nAlternative investments24,308 310 (57)24,561\n\nTrust securities$95,121 $1,875 $(1,987)$95,009\n\nAccrued investment income$616 $616\n\nPreneed cemetery trust investments$95,625\n\nMarket value as a percentage of cost99.9 %\n\nThe estimated maturities of the fixed income securities (excluding mutual funds) included above are as follows (in thousands):\n\nDue in one year or less$25 \n\nDue in one to five years71 \n\nDue in five to ten years— \n\nThereafter— \n\nTotal fixed income securities$96 \n\nThe 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): \n\nFair Value Hierarchy LevelCostUnrealized GainsUnrealized LossesFair Market Value\n\nCash and money market accounts1$14,054 $— $— $14,054\n\nFixed income securities:\n\nForeign debt27,770 1,262 (7)9,025\n\nCorporate debt27,942 357 (402)7,897\n\nPreferred stock22,725 418 (148)2,995\n\nCommon stock125,563 3,866 (3,036)26,393\n\nLimited partnership fund3,078 73 — 3,151\n\nMutual funds:\n\nEquity1789 68 — 857\n\nFixed income224,374 111 (2,115)22,370\n\nTrust securities$86,295 $6,155 $(5,708)$86,742\n\nAccrued investment income$595 $595\n\nPreneed cemetery trust investments$87,337\n\nMarket value as a percentage of cost100.5 %\n\n61\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe following table summarizes our fixed income securities within our perpetual care trust investment in an unrealized loss position at December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):\n\nDecember 31, 2024\n\nIn Loss Position Less than 12 monthsIn Loss Position Greater than 12 monthsTotal\n\nFair market valueUnrealized LossesFair market valueUnrealized LossesFair market valueUnrealized Losses\n\nFixed income securities:\n\nForeign debt$— $— $184 $(7)$184 $(7)\n\nCorporate debt1,111 (121)316 (281)1,427 (402)\n\nPreferred stock764 (4)1,086 (144)1,850 (148)\n\nTotal fixed income securities with an unrealized loss$1,875 $(125)$1,586 $(432)$3,461 $(557)\n\nPerpetual care trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):\n\n Year ended December 31,\n\n 202520242023\n\nRealized gains1,897 1,432 1,025 \n\nRealized losses$(1,966)$(1,873)$(639)\n\nUnrealized gains (losses), net(112)447 (3,767)\n\nNet change in care trusts’ corpus181 (6)3,381 \n\n$— $— $— \n\nPerpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands):\n\n Year ended December 31,\n\n202520242023\n\nInvestment income$10,664 $14,806 $12,824 \n\nRealized losses(888)(3,589)(1,583)\n\nTotal$9,776 $11,217 $11,241 \n\nPurchases and sales of investments in the perpetual care trusts are as follows (in thousands):\n\nYear ended December 31,\n\n 202520242023\n\nPurchases$(64,928)$(21,441)$(18,024)\n\nSales$64,880 $29,967 $21,613 \n\n9. RECEIVABLES FROM PRENEED FUNERAL TRUSTS\n\nOur 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. Receivables from preneed funeral trusts are as follows (in thousands): \n\nDecember 31, 2025December 31, 2024\n\nPreneed funeral trust funds, at cost$16,758 $23,063 \n\nLess: allowance for contract cancellation(503)(691)\n\nReceivables from preneed funeral trusts, net$16,255 $22,372 \n\nThe following summary reflects the composition of the assets held in trust and controlled by third parties to satisfy our future obligations related to the underlying preneed funeral contracts at December 31, 2025 and 2024. The cost basis includes reinvested interest and dividends that have been earned on the trust assets. Fair value includes unrealized gains and losses on trust assets. \n\n62\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe composition of the preneed trust funds at December 31, 2025, is as follows (in thousands):\n\nHistorical Cost BasisFair Value\n\nCash and cash equivalents$2,220 $2,220 \n\nFixed income investments11,108 11,108 \n\nMutual funds and common stocks3,426 3,306 \n\nAnnuities4 4 \n\nTotal$16,758 $16,638 \n\nThe composition of the preneed trust funds at December 31, 2024, is as follows (in thousands):\n\nHistorical Cost BasisFair Value\n\nCash and cash equivalents$6,826 $6,826 \n\nFixed income investments12,998 12,998 \n\nMutual funds and common stocks3,235 2,999 \n\nAnnuities4 4 \n\nTotal$23,063 $22,827 \n\n10. CONTRACTS FUNDED BY INSURANCE\n\nWhen preneed funeral contracts are funded through third-party insurance policies, we earn a commission on the sale of the policies, which are recorded in Other revenue. These insurance commissions are subject to refund (charge-back) if the preneed policy is cancelled within a year or if there is an imminent death of beneficiary before the first year anniversary of the policy. Approximately 10% of our preneed funeral contracts are cancelled before the first year anniversary of the policy. As such, we recognize 90% of our commissions revenue at the time that it is earned. Based on our historical cancellation rate, we defer 10% of the commissions revenue earned for twelve months until the commission is no longer subject to refund. All selling costs incurred pursuant to the sale of the insurance funded preneed contracts are expensed as incurred.\n\nAdditionally, during the year ended December 31, 2023, we received a $6.0 million incentive payment from a vendor for entering into a strategic partnership agreement to market and sell prearranged funeral services in the future, which increased our cash flow from operations and Deferred preneed funeral revenue. The incentive payment is subject to partial claw-back if certain preneed funeral sales volumes are not met within the ten-year term of the agreement. As such, we recognize the incentive payment in proportion to our achieved preneed funeral sales volume, net of cancellations, at each reporting period. 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.\n\nGenerally, 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. However, this commitment is generally revocable and the proceeds from the policy are portable, so the customer can choose to use an alternative provider at the time of need.\n\nPreneed funeral contracts to be funded at maturity by third-party insurance policies totaled $420.4 million and $421.3 million at December 31, 2025 and 2024, respectively, and are not recorded as assets or liabilities on our Consolidated Balance Sheets.\n\n63\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\n11. INTANGIBLE AND OTHER NON-CURRENT ASSETS\n\nIntangible and other non-current assets are as follows (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nTrade names$29,867 $28,116 \n\nInternally developed software, net of accumulated amortization of $1,898 and $764, respectively\n6,948 5,601 \n\nCapitalized commissions on preneed contracts, net of accumulated amortization\n\nof $5,288 and $4,653, respectively\n5,151 4,991 \n\nPrepaid agreements not-to-compete, net of accumulated amortization of $3,875 and $3,543, respectively\n650 923 \n\nNon-current prepaid and other intangibles, net of accumulated amortization of $478 and $109, respectively\n654 1,011 \n\nDeferred Compensation\n337 — \n\nIntangible and other non-current assets, net including HFS\n$43,607 $40,642 \n\nLess: Held for sale— (215)\n\nIntangible and other non-current assets, net\n$43,607 $40,427 \n\nTrade names\n\nDuring 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.\n\nDuring 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.\n\nDuring 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.\n\nSee Notes See Notes 1, 3, and 5 to the Consolidated Financial Statements for additional information related to Tradenames.\n\nInternally Developed Software\n\nInternally developed software is typically amortized on a straight-line basis over five years. 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.\n\nCapitalized Commissions\n\nAmortization 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.\n\nPrepaid Agreements Not-to-Compete\n\nPrepaid agreements not-to-compete are amortized over the term of the respective agreements, generally ranging from one to ten years. Amortization expense was $0.4 million, $0.5 million, and $0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nNon-current Prepaid and Other Intangibles\n\nNon-current prepaid agreements are related to software licenses that have been prepaid for multiple years. These agreements are amortized on a straight-line basis over the term of the respective agreements, generally ranging from two to three years. 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 for each of the years ended December 31, 2025 and 2024 and $37 thousand for the year ended December 31, 2023.\n\n64\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe aggregate amortization expense for our capitalized commissions, prepaid not-to-compete agreements, internal-use software and non-current prepaid and other agreements as of December 31, 2025 is as follows (in thousands):\n\nCapitalized CommissionsPrepaid Agreements Not-to-competeInternally Developed SoftwareNon-current Prepaid and Other Intangibles\n\nYears ending December 31,\n\n2026$964 $306 $1,701 $85 \n\n2027906 182 1,704 488 \n\n2028830 118 1,367 51 \n\n2029727 30 1,090 30 \n\n2030623 5 1,086 — \n\nThereafter1,101 9 — — \n\nTotal amortization expense$5,151 $650 $6,948 $654 \n\n12. CREDIT FACILITY AND ACQUISITION DEBT\n\nAt December 31, 2025, our senior secured revolving credit facility (as amended, the “Credit Facility”) was comprised of: (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.\n\nOur 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”).\n\nOn 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. The Credit Facility Amendment provided, among other things, for (i) the extension of the maturity date of the Credit Facility to July 31, 2029, provided that, if the Senior Notes (as defined in the Credit Facility) have a stated maturity date that is prior to July 31, 2029, then the maturity date shall instead be the date that is 91 days prior to the stated maturity date of the Senior Notes; (ii) the establishment of Term Secured Overnight Financing Rate (“SOFR”) as a benchmark rate and the removal of BSBY from the Credit Facility, including conforming revisions to certain defined terms under the Credit Facility; (iii) the conversion of each existing BSBY Rate Loan (as defined in the Credit Facility prior to giving effect to the Credit Facility Amendment) to a Term SOFR Loan (as defined in the Credit Facility); (iv) modifications to the definitions of “Applicable Rate” and “Applicable Fee Rate” to change the applicable rates and pricing levels set forth in each pricing grid; (v) the removal of certain mandatory prepayments arising from the issuance of either Equity Interests or Debt (as both are defined by the Credit Facility); 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.\n\nThe 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.\n\nIn addition, the Credit Facility also contains customary negative covenants, including, but not limited to, covenants that restrict (subject to certain exceptions) the ability of the Company and the Subsidiary Guarantors to incur indebtedness, grant liens, make investments, engage in mergers and acquisitions, and pay dividends and other restricted payments, and certain financial maintenance covenants. At December 31, 2025, we were subject to the following financial covenants under our Credit Facility: (A) a Total Leverage Ratio not to exceed 5.00 to 1.00 and (B) a Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.20 to 1.00 as of the end of any period of four consecutive fiscal quarters. These financial maintenance covenants are calculated for the Company and its subsidiaries on a consolidated basis. We were in compliance with all of the covenants contained in our Credit Facility at December 31, 2025.\n\n65\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nOur Credit Facility and acquisition debt consisted of the following (in thousands): \n\nDecember 31, 2025December 31, 2024\n\nCredit Facility$126,700 $137,000 \n\nDebt issuance costs, net of accumulated amortization of $3,300 and $2,947, respectively\n(1,265)(1,618)\n\nTotal Credit Facility$125,435 $135,382 \n\nAcquisition debt$6,188 $5,466 \n\nLess: current portion(607)(571)\n\nTotal acquisition debt, net of current portion$5,581 $4,895 \n\nAt December 31, 2025, we had outstanding borrowings under the Credit Facility of $126.7 million. We also had one letter of credit for $2.2 million under the Credit Facility. The letter of credit will expire on November 25, 2026, and is expected to automatically renew annually and secures our obligations under our various self-insured policies. At December 31, 2025, we had $121.1 million of availability under the Credit Facility.\n\nOutstanding borrowings under our Credit Facility bear interest at a prime rate or the SOFR rate, plus an applicable margin based on our leverage ratio. At December 31, 2025, the prime rate margin was equivalent to 1.13% and the SOFR term margin was 2.50%. The weighted average interest rate on our Credit Facility was 6.7% and 8.7% for the years ended December 31, 2025 and 2024, respectively.\n\nWe have no material assets or operations independent of the Subsidiary Guarantors, as all of our assets and operations are held and conducted by the Subsidiary Guarantors. Additionally, we do not currently have any significant restrictions on our ability to receive dividends or loans from any Subsidiary Guarantors.\n\nThe interest expense and amortization of debt issuance costs related to our Credit Facility are as follows (in thousands):\n\nYear ended December 31,\n\n202520242023\n\nCredit Facility interest expense$8,948 $13,390 17,251 \n\nCredit Facility amortization of debt issuance costs353 469 552 \n\nAcquisition debt consists of deferred purchase price and promissory notes payable to sellers. A majority of the deferred purchase price and notes bear no interest and are discounted at imputed interest rates ranging from 6.5% to 8.5%. Original maturities typically range from nine to twenty years.\n\nThe imputed interest expense related to our acquisition debt is as follows (in thousands):\n\nYear ended December 31,\n\n202520242023\n\nAcquisition debt imputed interest expense367 406 291 \n\nThe aggregate maturities of our Credit Facility and acquisition debt for the next five years subsequent to December 31, 2025 and thereafter, excluding debt issuance costs, are as follows (in thousands):\n\nCredit FacilityAcquisition Debt\n\nYears ending December 31,\n\n2026$— $691 \n\n2027— 691 \n\n2028— 691 \n\n2029126,700 691 \n\n2030— 691 \n\nThereafter— 5,947 \n\nTotal Credit Facility and acquisition debt$126,700 $9,402 \n\nLess: Interest— (3,214)\n\nPresent value of Credit Facility and acquisition debt$126,700 $6,188 \n\n66\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\n13. SENIOR NOTES\n\nAt December 31, 2025, we had $400.0 million in aggregate principal amount of 4.25% Senior Notes due 2029 (the “Senior Notes”) and related guarantees by the Subsidiary Guarantors, which were issued in a private offering under Rule 144A and Regulation S of the Securities Act.\n\nThe 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 (“Collateral 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 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.\n\nWe 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.\n\nIf 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. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the Senior Notes at a price equal to 100% of the principal amount of the Senior Notes, plus accrued and unpaid interest.\n\nThe 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.\n\nThe 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 each of the years ended December 31, 2025 and 2024 was 4.42%.\n\nThe carrying value of our Senior Notes is reflected on our Consolidated Balance Sheets as follows (in thousands):\n\nThe carrying value of our 4.25% senior notes due 2029 (the “Senior Notes”) is reflected on our Consolidated Balance Sheets as follows (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nPrincipal amount$400,000 $400,000 \n\nDebt discount, net of accumulated amortization of $2,411 and $1,848, respectively\n(2,089)(2,652)\n\nDebt issuance costs, net of accumulated amortization of $685 and $526, respectively\n(592)(751)\n\nCarrying value of the Senior Notes$397,319 $396,597 \n\nAt December 31, 2025, the fair value of the Senior Notes, which are Level 2 measurements, was $385.7 million.\n\nThe 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 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.\n\nThe 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.\n\nThe interest expense and amortization of debt discount and debt issuance costs related to our Senior Notes are as follows (in thousands):\n\n67\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nYear ended December 31,\n\n202520242023\n\nSenior Notes interest expense$17,000 $17,000 $17,000 \n\nSenior Notes amortization of debt discount563 539 515 \n\nSenior Notes amortization of debt issuance costs159 153 147 \n\nThe aggregate maturities of our Senior Notes for the next five years subsequent to December 31, 2025 and thereafter are as follows (in thousands):\n\nPrincipal MaturityDiscount AmortizationCarrying Value\n\nYears ending December 31,\n\n2026$— $(588)$(588)\n\n2027— (615)(615)\n\n2028— (642)(642)\n\n2029400,000 (244)399,756 \n\n2030— — — \n\nThereafter— — — \n\nTotal$400,000 $(2,089)$397,911 \n\n14. LEASES\n\nOur lease obligations consist of operating and finance leases related to real estate, vehicles and equipment. The components of lease cost are as follows (in thousands):\n\nYears Ended December 31,\n\nIncome Statement Classification202520242023\n\nOperating lease cost\nFacilities and grounds expense(1)\n$3,865 $3,998 $3,526 \n\nShort-term lease cost\nFacilities and grounds expense(1)\n277 232 372 \n\nVariable lease cost\nFacilities and grounds expense(1)\n183 380 234 \n\nFinance lease cost:\n\nDepreciation of leased assets\nDepreciation and amortization(2)\n$543 511 541 \n\nInterest on lease liabilitiesInterest expense967 506 500 \n\nTotal finance lease cost1,510 1,017 1,041 \n\nTotal lease cost$5,835 $5,627 $5,173 \n\n(1)\nFacilities and grounds expense is included within Cost of service and General, administrative, and other on our Consolidated Statements of Operations.\n\n(2)\nDepreciation and amortization expense is included within Field depreciation expense and General, administrative, and other on our Consolidated Statements of Operations.\n\nSupplemental cash flow information related to our leases is as follows (in thousands):\n\nYear ended December 31,\n\n202520242023\n\nCash paid for operating leases included in operating activities$4,833 $4,325 $3,779 \n\nCash paid for finance leases included in financing activities642 1,083 1,153 \n\n68\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nRight-of-use assets obtained in exchange for new leases are as follows (in thousands):\n\nYear ended December 31,\n\n20252024\n\nRight-of-use assets obtained in exchange for new operating lease liabilities$1,501 $1,224 \n\nRight-of-use assets obtained in exchange for new finance lease liabilities3,761 1,027 \n\nSupplemental balance sheet information related to leases is as follows (in thousands):\n\nLease TypeBalance Sheet ClassificationDecember 31, 2025December 31, 2024\n\nOperating lease right-of-use assetsOperating lease right-of-use assets$12,045 $14,953 \n\nFinance lease right-of-use assetsProperty, plant, and equipment, net$12,174 $8,564 \n\nAccumulated depreciationProperty, plant, and equipment, net(3,817)(3,214)\n\nFinance lease right-of-use assets, net$8,357 $5,350 \n\nOperating lease current liabilitiesCurrent portion of operating lease obligations$3,084 $2,810 \n\nFinance lease current liabilitiesCurrent portion of finance lease obligations605 533 \n\nTotal current lease liabilitiesTotal current lease liabilities$3,689 $3,343 \n\nOperating lease non-current liabilitiesObligations under operating leases, net of current portion$10,538 $14,035 \n\nFinance lease non-current liabilitiesObligations under finance leases, net of current portion9,339 6,045 \n\nTotal non-current lease liabilitiesTotal non-current lease liabilities$19,877 $20,080 \n\nTotal lease liabilities$23,566 $23,423 \n\nThe average lease terms and discount rates at December 31, 2025 are as follows:\n\nWeighted-average remaining lease term (years)Weighted-average discount rate\n\nOperating leases6.08.2 %\n\nFinance leases22.48.7 %\n\nThe aggregate future lease payments for non-cancelable operating and finance leases at December 31, 2025 are as follows (in thousands):\n\nOperatingFinance\n\nLease payments due:\n\n2026$4,008 $1,681 \n\n20273,838 1,676 \n\n20283,518 1,184 \n\n20292,873 1,093 \n\n2030813 1,108 \n\nThereafter1,831 15,663 \n\nTotal lease payments$16,881 $22,405 \n\nLess: Interest(3,259)(12,461)\n\nPresent value of lease liabilities, including HFS$13,622 $9,944 \n\nAt December 31, 2025, we had no significant operating or finance leases that had not yet commenced.\n\n69\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\n15. COMMITMENTS AND CONTINGENCIES\n\nNon-Compete, Consulting, and Employment Agreements\n\nWe have various non-compete agreements with former owners and employees. These agreements are generally for one to ten years and provide for periodic future payments over the term of the agreements.\n\nWe have various consulting agreements with former owners of businesses we have acquired. Payments for such agreements are generally not made in advance. These agreements are generally for one to ten years and provide for bi-weekly or monthly payments.\n\nWe have employment agreements with our executive officers. These agreements are generally for two to five years and provide for participation in various incentive compensation arrangements. These agreements generally renew automatically on an annual basis after their initial term has expired.\n\nAt December 31, 2025, the maximum estimated future cash commitments under these agreements with remaining commitment terms, and with original terms of more than one year, are as follows (in thousands):\n\nNon-Compete\nConsulting(1)\n\nEmployment(1)\nTotal\n\nYears ending December 31,\n\n2026$1,226 $1,017 $3,754 $5,997 \n\n2027795 685 — 1,480 \n\n2028361 391 — 752 \n\n2029240 20 — 260 \n\n2030145 20 — 165 \n\nThereafter363 35 — 398 \n\nTotal$3,130 $2,168 $3,754 $9,052 \n\n(1)\nIn 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, dated effective February 22, 2024.\n\nDefined Contribution Plan\n\nWe sponsor a defined contribution plan, a 401K plan, for the benefit of our employees. 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.\n\nLitigation\n\nWe are a party to various litigation matters and proceedings. For each of our outstanding legal matters, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies, and the likelihood of an unfavorable outcome. If we determine that an unfavorable outcome is probable and can be reasonably estimated, we establish the necessary accruals. We hold certain insurance policies that may reduce cash outflows with respect to an adverse outcome of certain of these litigation matters.\n\nDenning v. Carriage Services, Inc., et al., Superior Court of California, Ventura County, Case No. 2024 CU OE 028098. On July 29, 2024, a wage and hour class action was filed against the Company and several of its subsidiaries. Plaintiff, a former employee, seeks monetary damages on behalf of herself and other similarly situated current and former non-exempt employees as the putative class for the alleged failure to pay legally mandated compensation and reimbursement expenses. As of December 31, 2025, we are unable to reasonably estimate the possible loss or ranges of loss, if any. The prospective class has not been certified by a court of competent jurisdiction and the Company intends to vigorously defend itself in all respects.\n\nFrost v. Rolling Hills Memorial Park, Superior Court of California, Contra Costa County, Case No. C24-02653. On October 4, 2024, a consumer class action was filed against the Company’s subsidiary, Rolling Hills Memorial Park. Plaintiff, an owner of an interment right and purchaser of merchandise and services from Rolling Hills Memorial Park, seeks monetary damages on behalf of herself and other similarly situated current and former consumers and owners of interment rights as the putative class for the alleged failure to properly set cemetery merchandise and maintain the perpetual care cemetery. As of December 31, 2025, we are unable to reasonably estimate the possible loss or ranges of loss, if any. The prospective class has not been certified by a court of competent jurisdiction and the Company intends to vigorously defend itself in all respects.\n\n70\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\n16. INCOME TAXES\n\nU.S. 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): \n\n Years Ended December 31,\n\n 202520242023\n\nCurrent:\n\nU.S. federal provision$10,500 $13,902 $7,862 \n\nState provision4,275 3,923 1,847 \n\nTotal current provision$14,775 $17,825 $9,709 \n\nDeferred:\n\nU.S. federal (benefit) provision$4,507 $(1,338)$2,117 \n\nState provision (benefit)(526)640 1,190 \n\nTotal deferred (benefit) provision$3,981 $(698)$3,307 \n\nTotal income tax provision$18,756 $17,127 $13,016 \n\nA reconciliation of income taxes calculated at the U.S. federal statutory rate to those reflected in the Consolidated Statements of Operations is as follows (dollars in thousands): \n\nYears Ended December 31,\n\n202520242023\n\nAmountPercentAmountPercentAmountPercent\n\nFederal statutory rate$14,755 21.0 %$10,517 21.0 %$9,750 21.0 %\n\nEffect of state income taxes, net of federal benefit2,961 4.2 3,655 7.3 2,396 5.2 \n\nEffect of non-taxable or non-deductible expenses, net\n\n162(m) Officers' Compensation Limitation2,075 3.0 1,717 3.4 332 0.7 \n\nRestricted stock and performance awards(2,097)(3.0)72 0.1 (4)— \n\nDivestiture and impairment of business775 1.1 219 0.4 — — \n\nESPP and stock options(376)(0.5)601 1.2 157 0.3 \n\nOther adjustments663 0.9 346 0.8 385 0.8 \n\nTotal$18,756 26.7 %$17,127 34.2 %$13,016 28.0 %\n\nWe 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):\n\nYears Ended December 31,\n\n202520242023\n\nU.S. federal$12,200 $13,178 $7,720 \n\nU.S. state and local\n\n     California1,919 1,398 573 \n\n     Virginia(1)\n981 — 683 \n\n     All other states\n1,890 2,078 1,472 \n\nTotal income taxes paid$16,990 $16,654 $10,448 \n\n(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.\n\n71\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nThe tax effects of temporary differences from total operations that give rise to significant deferred tax assets and liabilities are as follows (in thousands):\n\nYears Ended December 31,\n\n20252024\n\nDeferred income tax assets:\n\nNet operating loss carryforwards$435 $483 \n\nInterest expense limitation5,281 7,350 \n\nTax credit carryforwards51 51 \n\nState depreciation913 1,096 \n\nAccrued and other liabilities7,738 9,787 \n\nAmortization of non-compete agreements803 875 \n\nPreneed assets, net373 312 \n\nLease liabilities5,726 4,135 \n\nTotal deferred income tax assets21,320 24,089 \n\nLess: valuation allowance(111)(156)\n\nTotal deferred income tax assets21,209 23,933 \n\nDeferred income tax liabilities:\n\nDepreciation and amortization$(68,082)$(69,730)\n\nRight-of-use assets(5,964)(3,670)\n\nPrepaid assets and other(2,572)(1,962)\n\nTotal deferred income tax liabilities(76,618)(75,362)\n\nTotal net deferred tax liabilities$(55,409)$(51,429)\n\nOur 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. We record a valuation allowance to reflect the estimated amount of deferred tax assets for which realization is uncertain. Management reviews the valuation allowance at the end of each quarter and makes adjustments if it is determined that it is more-likely-than not that the tax benefits will be realized. We recognized an immaterial net decrease in our valuation allowance during the years ended December 31, 2025 and 2024.\n\nFor state reporting purposes, we have $8.7 million of net operating loss carryforwards that will expire between 2026 and 2043, if not utilized. Based on management’s assessment of the various state net operating losses, it was determined that it is more-likely-than not that we will be able to realize tax benefits on some portion of the amount of the state losses. The valuation allowance at December 31, 2025 was attributable to the deferred tax asset related to a portion of the state operating losses.\n\nWe analyze tax benefits for uncertain tax positions and how they are to be recognized, measured, and derecognized in financial statements; provide certain disclosures of uncertain tax matters; and specify how reserves for uncertain tax positions should be classified on our Consolidated Balance Sheets. The deferred tax assets recognized for those net operating losses (“NOLs”) are presented net of these unrecognized tax benefits.\n\nAt 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.\n\nA reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in thousands):\n\nYears Ended December 31,\n\n202520242023\n\nUnrecognized tax benefit at beginning of year$3,471 $3,382 $3,294 \n\nGross decreases - tax positions in prior period162 — 88 \n\nGross increases - tax positions in current period— 89 — \n\nUnrecognized tax benefit at end of year$3,633 $3,471 $3,382 \n\nOur 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.\n\n72\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nWe 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.\n\nAs 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. These amended returns were selected for a limited scope audit. 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. In late 2024, the refunds for the tax years 2013, 2014, and 2015 were received; however, the Company continues to be under examination.\n\n17. STOCKHOLDERS’ EQUITY\n\nShare Authorization\n\nWe are authorized to issue 80,000,000 shares of common stock, $0.01 per share par value. We had 27,378,870 and 26,881,355 shares issued and 15,751,052 and 15,253,537 shares outstanding, net of 11,627,818 shares held in treasury at par, at December 31, 2025 and 2024, respectively.\n\nStock Based Compensation Plans\n\nDuring the year ended December 31, 2025, we had two stock benefits plans in effect under which stock, restricted stock, stock options, and performance awards have been granted or remain outstanding: the Second Amended and Restated 2006 Long-Term Incentive Plan (as amended, the “Amended and Restated 2006 Plan”) and the 2017 Omnibus Incentive Plan (as amended, the “2017 Plan”). The Amended and Restated 2006 Plan was terminated upon the approval of the 2017 Plan at the annual stockholders meeting on May 17, 2017. The 2017 Plan expires on May 17, 2027. All stock-based plans are administered by the Compensation Committee appointed by our Board of Directors (the “Board”).\n\nAt December 31, 2025, we had 2,740,182 shares available to issue under our 2017 Plan. The termination of the Amended and Restated 2006 Plan does not affect the awards previously issued and outstanding.\n\nRestricted Stock\n\nRestricted stock activity is as follows (in thousands, except shares):\n\nYears Ended December 31,\n\n202520242023\n\nSharesFair ValueSharesFair ValueSharesFair Value\n\nGranted(1)\n114,684 $4,764 156,630 $3,834 142,020 $4,634 \n\nReturned for payroll taxes28,656 $1,168 16,354 $419 1,473 $50 \n\nCancelled10,004 $357 55,050 $1,623 1,826 $61 \n\n(1)\nRestricted stock granted during the year ended December 31, 2025, 2024 and 2023 will vest over a three-year period, if the employee has remained continuously employed by us during the vesting period, at a weighted average stock price of $41.54, $24.48 and $32.63, respectively.\n\nA summary of the number of unvested restricted stock awards and their weighted average grant date fair values during the year ended December 31, 2025 is presented in the table below: \n\nRestricted stock awardsSharesWeighted Average\nGrant Date\nFair Value\n\nUnvested at January 1196,480 $27.01 \n\nGranted 114,684 $41.54 \n\nVested(75,600)$27.77 \n\nCancelled(10,004)$35.73 \n\nUnvested at December 31225,560 $33.76 \n\nWe recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for restricted stock awards of $3.3 million, $2.0 million and $1.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nAt 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.\n\n73\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nStock Options\n\nStock option grants and cancellations are as follows (in thousands, except shares):\n\nYears Ended December 31,\n\n202520242023\n\nSharesFair ValueSharesFair ValueSharesFair Value\n\nGranted(1)\n— $— 370,590 $3,830 214,191 $2,506 \n\nCancelled22,190 $273 532,266 $6,311 105,150 $1,380 \n\n(1)\nStock options granted during the years ended December 31, 2024 and 2023 had a weighted average price of $24.48 and $32.69, respectively. The fair value of these options was calculated using the Black-Scholes option pricing model. The options granted in 2024 and 2023 vest over a three-year period and have a ten-year term.\n\nAdditional stock option activity is as follows (in thousands, except shares):\n\nYears Ended December 31,\n\n202520242023\n\nSharesCashSharesCashSharesCash\n\nExercised(1)\n324,497 $584 97,548 $1,439 74,200 N/A\n\nReturned for option price(2)\n191,280 $8,547 28,882 $1,113 56,957 $— \n\nReturned for payroll taxes(3)\n34,969 $1,446 4,482 $174 5,486 $174 \n\n(1)\nStock options exercised during the years ended December 31, 2025, 2024, and 2023 had a weighted average exercise price of $27.46, $26.12 and $23.98, respectively.\n\n(2)Represents shares withheld/cash received for the payment of the option price.\n\n(3)Represents shares withheld/cash paid for the payment of payroll taxes.\n\nStock options are granted with an exercise price equal to the closing price of our common stock on the date of grant. 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 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. The expected volatility utilized in these valuation models is based on the historical volatility of our stock price. The dividend yield and expected holding period are based on historical experience and management's estimate of future events. The risk-free interest rate is derived from the U.S. Treasury yield curve based on the expected life of the option in effect at the time of grant.\n\nThe fair value of the options granted using the Black-Scholes option pricing model was estimated on the date of grant with the following assumptions:\n\nYears Ended December 31,\n\n20242023\n\nGrant dateFebruary 21February 22\n\nExpected holding period (years)6.04.0\n\nAwards granted370,590214,191\n\nDividend yield1.79 %1.38 %\n\nExpected volatility43.59 %43.68 %\n\nRisk-free interest rate4.31 %4.27 %\n\nBlack-Scholes value$10.34$11.70\n\nA 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): \n\nSharesWtd. Avg.\nEx. Price\n\nOutstanding at January 11,344 $32.39 \n\nExercised(324)$27.46 \n\nForfeited or expired(23)$36.97 \n\nOutstanding at December 31997 $33.89 \n\nExercisable at December 31556 $34.08 \n\n74\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nA summary of the number of stock options and their weighted average grant date fair values during the year ended December 31, 2025 is presented in the table below (shares in thousands): \n\nSharesWtd. Avg.\nFair Value\n\nNon-vested at January 1727 $11.98 \n\nVested or exercised(268)$11.35 \n\nForfeited(18)$11.45 \n\nNon-vested at December 31441 $12.34 \n\nA summary of the intrinsic value of stock options exercised and the fair value of stock options vested for the three years ended December 31, 2025 is presented in the table below (in thousands): \n\nYears Ended December 31,\n\n202520242023\n\nIntrinsic value of options exercised$5,053 $647 $538 \n\nFair value of stock options vested\n6,258 5,825 6,003 \n\nThe following table further describes our outstanding stock options at December 31, 2025:\n\n Options OutstandingOptions Exercisable\n\nActual Ranges of Exercise PricesNumber Outstanding at 12/31/25Weighted-Average\nRemaining\nContractual LifeWeighted-Average\nExercise PriceNumber Exercisable at 12/31/25Weighted-Average\nRemaining\nContractual LifeWeighted-Average\nExercise Price\n\n$18.02 - $18.02\n13,333 4.48$18.02 13,333 4.48$18.02 \n\n$20.06 - $26.54\n353,520 7.10$24.75 145,220 5.61$25.14 \n\n$31.58 - $31.58\n12,600 6.74$31.58 12,600 6.74$31.58 \n\n$32.69 - $49.48\n617,945 5.88$39.51 385,246 5.77$38.08 \n\n$18.02 - $49.48\n997,398 6.31$33.89 556,399 5.72$34.08 \n\nThe aggregate intrinsic value of the outstanding and exercisable stock options were both $10.0 million and $5.3 million, respectively, at December 31, 2025. We had $3.0 million of unrecognized compensation cost related to unvested stock options expected to be recognized over a weighted average period of 2.1 years at December 31, 2025.\n\nWe recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for stock options $2.9 million, $2.5 million, and $2.9 million, for the years ended December 31, 2025, 2024, and 2023, respectively.\n\nPerformance Awards\n\nDuring 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.\n\nPerformance award activity is as follows (in thousands, except shares):\n\nYears Ended December 31,\n\n202520242023\n\nSharesFair ValueSharesFair ValueSharesFair Value\n\nGranted90,894 $3,508 — $— — $— \n\nReturned for payroll taxes\n142,070 $5,662 — $— — $— \n\nCancelled58,013 $2,423 80,276 $871 54,229 $1,565 \n\n75\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nA 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: \n\nPerformance AwardsSharesWeighted Average\nGrant Date\nFair Value\n\nAt January 1297,531 $22.23 \n\nGranted 90,894 $38.59 \n\nVested(239,518)17.50 \n\nCancelled(58,013)$41.77 \n\nAt December 3190,894 $38.59 \n\nAt 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.\n\nWe 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.\n\nEmployee Stock Purchase Plan\n\nWe provide all employees the opportunity to purchase common stock through payroll deductions in our ESPP. Purchases are made quarterly; the price being 85% of the lower of the price on the first day of the plan entry date (beginning of the fiscal year) or the actual date of purchase (end of quarter).\n\nESPP activity is as follows:\n\nYears Ended December 31,\n\n202520242023\n\nSharesPriceSharesPriceSharesPrice\n\nESPP34,208 $33.09 55,850 $21.26 63,372 $23.58 \n\nWe recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for our ESPP of $0.3 million, $0.4 million, and $0.6 million during the years ended December 31, 2025, 2024, and 2023, respectively.\n\nThe fair values of the right to purchase shares under the ESPP are estimated at the date of purchase with the four quarterly purchase dates using the following assumptions:\n\nYears Ended December 31,\n\n202520242023\n\nDividend yield1.05 %1.51 %1.30 %\n\nExpected volatility28.8 %41.2 %53.5 %\n\nRisk-free interest rate\n4.36%, 4.25%, 4.21%, 4.17%\n\n5.46%, 5.24%, 5.02%,4.80%\n\n4.53%, 4.77%, 4.75%, 4.72%\n\nExpected life (years)\n0.25, 0.50, 0.75, 1.00\n\n0.25, 0.50, 0.75, 1.00\n\n0.25, 0.50, 0.75, 1.00\n\nExpected volatilities are based on the historical volatility during the previous twelve months of the underlying common stock. The risk-free rate for the quarterly purchase periods is based on the U.S. Treasury yields in effect at the time of purchase. 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).\n\n76\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nCommon Stock\n\nFormer Employee\n\nCommon stock activity is as follows (in thousands, except shares):\n\nYears Ended December 31,\n\n202520242023\n\nSharesFair ValueSharesFair ValueSharesFair Value\n\nGranted(1)\n— $— — $— 30,000 $826 \n\nReturned for payroll taxes— $— — $— 1,001 $28 \n\n(1)\nDuring the year ended December 31, 2023, we issued 30,000 shares of common stock to a former executive at a stock price of $27.54, in accordance with his Separation and Release Agreement pertaining to his resignation from his position as the Company’s Executive Vice President, Chief Financial Officer & Treasurer effective January 2, 2023.\n\nWe recorded stock-based compensation expense, which is included in General, administrative, and other expenses, for\n\ncommon stock awards of $0.8 million, for the year ended December 31, 2023.\n\nGood to Great Incentive Program\n\nCommon stock issued to certain employees under this incentive program is as follows (in thousands, except shares):\n\nYears Ended December 31,\n\n202520242023\n\nSharesFair ValueSharesFair ValueSharesFair Value\n\n11,958 $497 31,470 $790 8,444 $276 \n\n(1)\nCommon 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.\n\nShare Repurchase Program\n\nOur 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.\n\n18. EARNINGS PER SHARE\n\nThe following table sets forth the computation of the basic and diluted earnings per share (in thousands, except per share data): \n\nYear ended December 31,\n\n202520242023\n\nNumerator for basic and diluted earnings per share:\n\nNet income$51,507 $32,953 $33,413 \n\nLess: Earnings allocated to unvested restricted stock(687)(432)(306)\n\nIncome attributable to common stockholders$50,820 $32,521 $33,107 \n\nDenominator:\n\nDenominator for basic earnings per common share – weighted average shares outstanding15,428 14,971 14,803 \n\nEffect of dilutive securities:\n\nStock options206 56 55 \n\nPerformance awards— 416 597 \n\nDenominator for diluted earnings per common share – weighted average shares outstanding15,634 15,443 15,455 \n\nBasic earnings per common share:$3.29 $2.17 $2.24 \n\nDiluted earnings per common share:$3.25 $2.10 $2.14 \n\n77\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nStock 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):\n\nYear ended December 31,\n\n202520242023\n\nAntidilutive stock options223 1,143 1,208 \n\nShare-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.\n\n19. SEGMENT REPORTING\n\nOur Chief Operating Decision Maker (the “CODM”), who is the Chief Executive Officer, utilizes segment operating income (loss) for resource allocation across segments, particularly during the annual budgeting and forecasting processes. The CODM examines variances on a monthly basis to make informed decisions regarding capital and personnel distribution among segments.\n\nThe 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:\n\n78\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nYear Ended, December 31, 2025FuneralCemeteryCorporateTotal\n\nRevenue\n\nServices$171,118 $20,160 $— $191,278 \n\nMerchandise76,649 17,100 — 93,749 \n\nCemetery property— 94,754 — 94,754 \n\nOther revenue21,445 16,214 — 37,659 \n\nTotal revenue269,212 148,228 — 417,440 \n\nLess:\n\nSalaries, benefits, and commission expenses\n70,414 42,147 — 112,561 \n\nCost of merchandise21,160 8,194 — 29,354 \n\nAllocated overhead costs(1)\n12,658 5,127 — 17,785 \n\nFacilities and grounds expenses11,316 6,204 — 17,520 \n\nGeneral and administrative expenses(2)\n11,176 3,840 — 15,016 \n\nOther segment expenses(3)\n57,744 21,155 48,648 127,547 \n\nOperating income (loss)$84,744 $61,561 $(48,648)$97,657 \n\nInterest expense$1,318 $17 $27,030 $28,365 \n\nDepreciation and amortization$11,252 $11,303 $1,952 $24,507 \n\nIncome (loss) before income taxes$85,874 $64,413 $(80,024)$70,263 \n\nIncome tax expense (benefit)$22,924 $17,195 $(21,363)$18,756 \n\nTotal assets$786,968 $534,403 $24,534 $1,345,905 \n\nLong-lived assets$634,568 $228,898 $10,816 $874,282 \n\nGoodwill$355,752 $72,145 $— $427,897 \n\nCapital expenditures$3,826 $13,600 $3,202 $20,628 \n\nNumber of operating locations at year end155 28 — 183 \n\n(1) Allocated overhead costs include: property insurance costs, property tax expenses, and corporate overhead fees allocated to the field, such as information technology, human resources, legal, and finance.\n\n(2) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses, and office supplies.\n\n(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.\n\n79\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nYear Ended December 31, 2024FuneralCemeteryCorporateTotal\n\nRevenue\n\nServices$163,696 $19,355 $— $183,051 \n\nMerchandise81,036 17,482 — 98,518 \n\nCemetery property— 88,414 — 88,414 \n\nOther revenue18,382 15,833 — 34,215 \n\nTotal revenue263,114 141,084 — 404,198 \n\nLess:\n\nSalaries, benefits, and commission expenses\n69,552 37,958 — 107,510 \n\nCost of merchandise27,831 8,058 — 35,889 \n\nAllocated overhead costs(1)\n13,135 4,883 — 18,018 \n\nFacilities and grounds expenses10,561 6,527 — 17,088 \n\nGeneral and administrative expenses(2)\n10,324 3,616 — 13,940 \n\nOther segment expenses(3)\n47,454 23,459 59,041 129,954 \n\nOperating income (loss)$84,257 $56,583 $(59,041)$81,799 \n\nInterest expense$947 $27 $31,101 $32,075 \n\nDepreciation and amortization$11,736 $10,161 $993 $22,890 \n\nIncome (loss) before income taxes$83,945 $56,933 $(90,798)$50,080 \n\nIncome tax expense (benefit)$28,709 $19,471 $(31,053)$17,127 \n\nTotal assets$781,006 $477,487 $21,087 $1,279,580 \n\nLong-lived assets$628,681 $207,427 $10,232 $846,340 \n\nGoodwill$356,869 $57,990 $— $414,859 \n\nCapital expenditures$5,724 $8,814 $1,560 $16,098 \n\nNumber of operating locations at year end162 31 — 193 \n\n(1) Allocated overhead costs include: property insurance costs, property tax expenses, and corporate overhead fees allocated to the field, such as information technology, human resources, legal, and finance.\n\n(2) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses, and office supplies.\n\n(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.\n\n80\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nYear Ended December 31, 2023FuneralCemeteryCorporateTotal\n\nRevenue\n\nServices163,600 18,566 — 182,166 \n\nMerchandise85,795 16,385 — 102,180 \n\nCemetery property— 67,310 — 67,310 \n\nOther revenue15,381 15,483 — 30,864 \n\nTotal revenue264,776 117,744 — 382,520 \n\nLess:\n\nSalaries, benefits and commission expenses\n72,210 33,962 — 106,172 \n\nCost of merchandise29,387 7,445 — 36,832 \n\nAllocated overhead costs(1)\n12,767 4,147 — 16,914 \n\nFacilities and grounds expenses10,063 5,578 — 15,641 \n\nGeneral and administrative expenses(2)\n10,301 3,253 — 13,554 \n\nOther segment expenses(3)\n48,742 21,436 42,250 112,428 \n\nOperating income (loss)81,306 41,923 (42,250)80,979 \n\nInterest expense783 8 35,475 36,266 \n\nDepreciation and amortization12,197 8,008 912 21,117 \n\nIncome (loss) before income taxes82,453 42,208 (78,232)46,429 \n\nIncome tax expense (benefit)23,115 11,833 (21,932)13,016 \n\nTotal assets802,368 448,018 17,666 1,268,052 \n\nLong-lived assets648,253 209,401 5,732 863,386 \n\nGoodwill364,639 59,004 — 423,643 \n\nCapital expenditures7,483 10,061 495 18,039 \n\nNumber of operating locations at year end171 32 — 203 \n\n(1) Allocated overhead costs include: property insurance costs, property tax expenses and corporate overhead fees allocated to the field, such as information technology, human resources, legal, and finance.\n\n(2) General and administrative expenses include: professional services, travel and meals expenses, computer software expenses, and office supplies.\n\n(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.\n\n81\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\n20. SUPPLEMENTARY DATA\n\nBalance Sheets\n\nThe following table presents the detail of certain balance sheet accounts (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nPrepaid and other current assets:\n\nPrepaid expenses$3,528 $3,987 \n\nFederal income tax receivable1,709 — \n\nState income tax receivable600 — \n\nOther current assets141 136 \n\nTotal prepaid and other current assets$5,978 $4,123 \n\nCurrent portion of debt and lease obligations:\n\nAcquisition debt$607 $571 \n\nFinance lease obligations605 533 \n\nOperating lease obligations3,084 2,810 \n\nTotal current portion of debt and lease obligations$4,296 $3,914 \n\nAccrued and other liabilities:\n\nIncentive compensation$11,020 $12,860 \n\nInsurance2,876 3,584 \n\nUnrecognized tax benefit3,633 3,471 \n\nVacation2,808 2,803 \n\nInterest2,490 2,288 \n\nSalaries and wages2,853 4,867 \n\nEmployee meetings and award trips1,366 1,550 \n\nIncome tax payable8 208 \n\nCommissions1,244 1,218 \n\nPerpetual care trust payable357 2,143 \n\nAd valorem taxes2,378 2,314 \n\nOther accrued liabilities2,889 1,300 \n\nTotal accrued and other liabilities, including HFS$33,922 $38,606 \n\nLess: Held for sale— (146)\n\nTotal accrued and other liabilities$33,922 $38,460 \n\nOther long-term liabilities:\n\nIncentive compensation$1,496 $996 \n\nDeferred compensation358 — \n\nOther long-term liabilities— 183 \n\nTotal other long-term liabilities$1,854 $1,179 \n\n82\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)\n\nHeld for Sale\n\nThe table below presents the carrying amounts of the assets and liabilities included in held for sale (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nAccounts receivable, net$— $833 \n\nInventories— 302 \n\nCurrent assets held for sale$— $1,135 \n\nPreneed cemetery trust investments$— $4,876 \n\nPreneed funeral trust investments— 2,197 \n\nPreneed cemetery receivables, net— 1,671 \n\nProperty, plant, and equipment, net322 4,898 \n\nCemetery property, net — 3,362 \n\nIntangible and other non-current assets, net— 215 \n\nCemetery perpetual care trust investments— 2,234 \n\nNon-current assets held for sale$322 $19,453 \n\nAccounts payable$— $94 \n\nAccrued and other liabilities— 146 \n\nCurrent liabilities held for sale$— $240 \n\nDeferred preneed cemetery revenue$— $3,517 \n\nDeferred preneed funeral revenue— 1,018 \n\nDeferred preneed cemetery receipts held in trust— 4,876 \n\nDeferred preneed funeral receipts held in trust— 2,197 \n\nCare trusts’ corpus— 2,234 \n\nLong-term liabilities held for sale$— $13,842 \n\nProperty, plant, and equipment\n\nProperty, plant, and equipment is comprised of the following (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nLand$92,739 $86,609 \n\nBuildings and improvements268,647 265,231 \n\nFurniture, equipment, and vehicles71,832 72,052 \n\nProperty, plant, and equipment, at cost433,218 423,892 \n\nLess: accumulated depreciation(146,086)(145,990)\n\nProperty, plant, and equipment, net including HFS\n287,132 277,902 \n\nLess: Held for sale\n(322)(4,898)\n\nProperty, plant, and equipment, net\n$286,810 $273,004 \n\nCemetery property\n\nCemetery property is comprised of the following (in thousands):\n\nDecember 31, 2025December 31, 2024\n\nCemetery property, at cost\n$194,549 $185,518 \n\nLess: accumulated amortization\n(78,904)(72,580)\n\nCemetery property, net including HFS\n115,645 112,938 \n\nLess: Held for sale\n— (3,362)\n\nCemetery property, net\n$115,645 $109,576 \n\n83\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)"}