Good day, and welcome to the SCI Fourth Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on your telephone keypad. To withdraw your question, please press Star, then two. Please note this event is being recorded. I would now like to turn the conference over to SCI Management. Please go ahead. Good morning. This is Debbie Young. Welcome today to our fourth quarter earnings call. We're gonna have some prepared remarks about the quarter, as well as our outlook for this year in just a moment. But before that, let me quickly go over the Safe Harbor language. Any comments made by our management team that state our plans, beliefs, expectations, or projections for the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such statements. These risks and uncertainties include, but are not limited to, those factors identified in our earnings release and in our filings with the SEC that are available on our website. During this call, we will also discuss certain non-GAAP financial measures. A reconciliation of these measures can be found in the tables at the end of our earnings release and also on our website. With that, I'll now turn it over to Tom Ryan, Chairman and CEO. Thanks, Debbie. Hello, everyone, and thank you for joining us on the call today. This morning, I'm gonna begin my remarks with some high-level color on our business performance for the quarter and provide some greater detail around our solid funeral and cemetery results. I will then close with some thoughts about our 2024 financial outlook. For the fourth quarter, we generated adjusted earnings per share of $0.93, which compares to $0.92 in the prior year. We were able to generate growth in earnings per share over the prior year as higher cemetery revenues, driven by a 9% increase in pre-need cemetery sales and a strong funeral sales average, together more than overcame the effects of the anticipated funeral volume decline, resulting in a $0.04 increase in earnings per share from operations. Below the line, the 280 basis point rise in interest rates on our variable rate debt and a higher debt balance increased our interest expense, reducing earnings per share by $0.08. This higher interest rate expense was partially offset by a lower tax rate and the favorable impact of a lower share count as we accelerated our share repurchase cadence during the fourth quarter, utilizing $204 million to repurchase some 3.6 million shares at an average price of just above $57. Now, let's take a deeper look into the funeral results for the quarter. Total comparable funeral revenues declined $13 million, or about 2% over the prior year quarter, primarily due to an expected decrease in core funeral volume. Although core funeral volume declined 6% compared to the prior year quarter, we believe due to the COVID pull-forward effects, volumes were in line with what we'd anticipated. Notably, funeral volumes were about 10% higher than fourth quarter 2019 levels. Our core average revenue per service grew over the prior year quarter by an impressive 4%, even after absorbing the negative effects of a modest 50 basis points increase in the cremation mix. From a profit perspective, funeral gross profit declined by $8 million, while the gross profit percentage decreased by 100 basis points to about 22%. Lower fixed costs and reduced incentive compensation expense over the prior year quarter slightly negated the negative impact from the revenue decline. Pre-need funeral sales production grew an impressive $12 million or about 4% over the fourth quarter of 2022. Both the core and the SCI Direct channels experienced impressive sales production growth. Now shifting to cemetery. Comparable cemetery revenue increased by an impressive $35 million or about 8% compared to the prior year fourth quarter. Recognized pre-need revenue accounted for the preponderance of the increase, growing by $33 million or 11%. This growth is primarily due to the growth in pre-need cemetery sales production of $30 million or more than 9% over the prior year quarter. We also saw increased pre-need merchandise and service revenue generated from higher delivered units and contract averages as compared to the prior year quarter. The $30 million increase in pre-need cemetery sales production was generated from both large sales and from core cemetery production, each contributing about half of the pre-need cemetery sales production growth. While sales contract velocity was slightly down over the prior year quarter, we are still 8% higher than 2019 levels, and production is being generated by a smaller, more effective and efficient sales team. Cemetery gross profits in the quarter increased by $17 million, and the gross profit percentage grew by 110 basis points to over 34%, primarily due to the increase in cemetery revenue. Now, let's shift to a discussion about our outlook for 2024. As you saw in our earnings release, we provided a normalized earnings per share guidance range of $3.50-$3.80 for 2024, or a midpoint of $3.65. As we explained last quarter, this is slightly ahead of our projections that we provided at our Investor Day in May 2022, after accounting for the unanticipated material increase in interest rates on our variable rate debt. At the time, we had assumed the 2% rate would grow to 3.5% in 2023 and continue into 2024, based on the Fed dot plot at the time. Our current rate approximates 7.5%, so we were very wrong, but we did have a lot of company. As we think about comparing 2024 expectations to our 2023 normalized earnings per share, the midpoint we are guiding to is closer to 5% growth versus the standard 10% historical midpoint expectation. The waning effect of excess deaths, including COVID, impacts not only funeral volume, but at-need cemetery revenue, and slightly reduces the normalized growth expectation in pre-need cemetery sales production, as we talked about last quarter. This, coupled with a higher year-over-year interest rate backdrop, particularly in the early part of the year, will have a dampening effect on our annual earnings per share growth expectations for 2024. We believe that in 2025, we should return to our normalized earnings per share growth expectation of 8%-12%. We expect to capitalize on opportunities during 2024 by further utilizing our scale. That should enhance the margins in both our funeral and cemetery segments into 2025 and beyond. We're also excited about continuing to invest capital to grow our network. We are investing in our existing funeral locations, renovating and modernizing our venues to create a more celebratory and contemporary setting. We're increasing our cemetery inventory options with both the casketed and cremation consumer to accommodate an increasingly diverse customer base that values a variety of unique memorialization offerings. The acquisition pipeline looks very good at this point, and we continue to increase new market share opportunities through the construction of new funeral home facilities, and in certain instances, establish new cemeteries in our existing high-growth areas across North America. Finally, we expect to continue to enhance shareholder value through growing our dividend and continuing our opportunistic approach to shrinking our equity base, while protecting our strong balance sheet by managing the debt maturity profile and leverage ratios. In conclusion, I'd like to thank the entire SCI team for all that you continue to do every day for our customers, our communities, and each other. You are what makes our company great. With that, operator, I'll now turn the call over to Eric. Thanks, Tom. I'm going to start really where you just left off and begin my remarks, as I usually do, by expressing my gratitude and all of our gratitude to each of our 25,000+ associates. Thank you for all that you do to provide outstanding service to our over 600,000 client families that our company served in 2023 during the customers' most difficult and trying times in these situations. Thank you for providing superior service to both our customers and our communities. So with that, I'd like to say good morning to everyone on the call. Today, as usual, I'll first discuss our cash flow results and capital investments for the quarter and the full year of 2023. I'll then provide details of our 2024 cash flow and capital investment outlook, and we'll include some comments on our financial position as we conclude our prepared remarks. In the fourth quarter, we generated strong adjusted operating cash flow of $278 million. This was $107 million higher than the prior year. This exceeded our expectations for the quarter and enabled us to finish the year just above the high end of our most recent annual guidance range of $225 million-$275 million. The largest factors driving this year-over-year increase include about $75 million of favorable working capital, primarily associated with stronger cash receipts on prior period installment sales and the timing of certain payables. Also included, though, in the $75 million, is the timing of a payroll tax payment that occurred last year, if you remember, related to the CARES Act of 2020, which resulted in just over a $20 million benefit this year to cash flow. Cash tax payments of $4 million during the quarter were also lower than the prior year by about $33 million. We expected that, and again, that's due to a tax accounting method change that I've discussed in prior quarters. These sources of cash flow more than offset million dollars of higher interest payments, primarily caused by higher interest rates on the floating rate portion of our total debt. So on a full-year basis, we ended 2023 with adjusted operating cash flow of $882 million, at 7% or $57 million higher than the prior year. This additional cash flow was reinvested into our company and also returned to our shareholders, which now I'll touch on. So in the fourth quarter, we invested a total of $109 million into our current facilities, new growth opportunities, and real estate. So let's go ahead and break this down. We invested $82 million of Maintenance Capital back into our current businesses, with $41 million of cemetery development, $31 million into our funeral and cemetery locations, and $9 million into our digital strategies and other corporate investments. For the full year, we invested a total of $324 million, which was down $10 million from the prior year, but about $14 million or so above the high end of the guidance range that we talked about last quarter. This really occurred because our cemetery development spend was higher than expected in this fourth quarter, as we accelerated some spend during the fourth quarter to position our cemeteries with relevant, high-return inventory as we enter 2024. We also invested $27 million of growth capital in the quarter towards the purchase of real estate, construction of new funeral homes, and the expansion of existing funeral homes and cemeteries. This brought our total 2023 growth capital spend to about $94 million, which was up $40 million from 2022, as we identified meaningful opportunities to invest in future Greenfield Cemetery, as well as funeral projects for the future. Turning to acquisitions, while we did not make any investments in the fourth quarter, we believe the pipeline again remains robust. We have been actively investing already this year in the first quarter with $14 million of acquisition investments in January, and we anticipate more investments in the coming months. In total, we ended 2023 with $72 million in acquisition spend, and we're very pleased with the quality of these businesses that have joined SCI, and more importantly, have welcomed many new associates to our SCI family. In addition to the investments in CapEx and acquisitions that we just talked about, we returned $247 million of capital to shareholders in the quarter, through $42 million of dividends and just over $200 million of share repurchases. This brought the number of shares outstanding to just above 146 million shares. As Tom just already mentioned, we purchased 3.6 million shares at an average price of about $57 during the quarter. So before I shift to the 2024 outlook, I want to make a brief comment about our corporate G&A expense during the quarter of about $45 million. This was higher than our expected range of $38 million-$40 million, driven primarily by higher incentive compensation expense, which was specifically tied to our long-term compensation plans that, again, are based on total shareholder returns relative to a designated peer group. So shifting to 2024, and you saw this in the press release, our 2024 adjusted operating cash flow guidance range is $900 million-$960 million, with a midpoint of $930 million. The midpoint of this range assumes the following: We expect our base case cash flows at the midpoint of our guidance to grow about $35 million, comprised of about $55 million of cash flow growth from our underlying funeral and cemetery operations, offset by an anticipated $20 million headwind or increase from interest expense, as higher rates and balances continue to impact earnings and cash flows. We anticipate having a more normalized use of working capital of $30 million-$50 million of use, driven by growth and preneed cemetery sales, timing of payables, partially offset by reduced incentive compensation payments in 2024. We expect cash taxes to range between $25 million-$35 million, which is a decrease of just over $40 million from 2023, but about $150 million lower than normalized levels. This, again, is as a result of the tax accounting change I've discussed over the last couple of quarters. We also anticipate an effective tax rate between 24% and 25% in 2024. So shifting to capital investments during the oncoming year. We expect maintenance CapEx to remain flat at about $325 million. To break that down and give you a little bit more color, we expect to invest $125 million in our funeral and cemetery facilities, $165 million into high-return and cemetery development projects, and $35 million into our digital strategy investments and some other corporate investments. In addition to this maintenance CapEx, we expect to invest $75 million-$125 million towards acquisitions and roughly $45 million-$50 million in new funeral home construction and real estate-... Which together, to remind you, drive low- to mid-teen after-tax internal rates of return, which again, is well in excess of our cost of capital. Finally, absent other high return investment opportunities, we will continue returning capital to our shareholders through our share buyback program in a consistent and disciplined manner, as you've seen us do over the years. So I'll now conclude by making a few comments on our financial position. We have a very favorable debt maturity profile and have liquidity of right now, around $900 million at the end of the quarter, consisting of approximately $220 million of cash on hand, plus approximately $670 million available on our long-term bank credit facility. Our leverage at the end of the quarter remained somewhat consistent with the third quarter at 3.58x. That's net debt to EBITDA. We continue to have a bias towards the lower end of our usual target range of 3.5x-4x, and I call that in the near term, until we have more clarity as to exactly where interest rates will go from here. So in closing, our strong balance sheet continues to underpin our capital deployment approach, which gives us flexibility to execute on high return investment opportunities. We are very proud of our team, most importantly, and the way we finished 2023. As we enter 2024, our solid balance sheet, great liquidity, and strong and predictable cash flows will again provide opportunities to invest capital to the highest and best use, and ultimately to maximize shareholder value. So with that, operator, that concludes our prepared remarks, and I'll now turn it back to you. Open the call up to questions. Thank you. We will now begin the question and answer session. To ask a question, you may press Star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. The first question comes from A.J. Rice of UBS. Please go ahead. Thanks. Hi, everybody. Maybe a couple of quick questions here. First of all, I think you guys are mentioning that you see sort of a skew to the earnings, quarterly progression, and maybe some of that seasonality, maybe some other factors. I just wanna make sure we leave the call knowing exactly what you, what you're looking at, maybe first half, second half, first quarter. Any comments specifically on how the progression would play out over the year? Sure, A.J. I think for the most part, when you get out to the last three quarters of the year, our expectations would be that you'd see historically impressive growth. The challenging quarter is gonna probably be the first quarter, and there's two reasons for that. It's one, the most challenging as you think about from an interest rate comparison. I think it's somewhere around, and again, depends on the level, but somewhere called the $0.06-$0.07 of headwind as you think about interest expense year-over-year, that you must overcome. The other thing that we would anticipate, and you'll recall, that completed construction projects on cemetery. When you think of the comparison as this first quarter versus last year's first quarter, that should be a negative effect, because we're gonna have less completed project revenue. So those are the two things that I think are gonna cause a more challenging first quarter comparison. And as you get to the last three quarters, I think it looks really good quarter over quarter. Again, for the year, I think some impressive growth, factoring in some of the things we mentioned before, which are slightly higher interest expense, and it just kinda continued pull forward effect that impacts slightly both the funeral and the cemetery segments. Okay, thanks. Wanted to just ask, as well, if I'm looking at the trend year to year in the at-need funeral versus pre-need maturing, it looks like pre-need maturing is hanging in there even better on volumes than at-need. Is that, you think, some indication that maybe some of this lengthy investment you've been doing in pre-need over the last decade is starting to drive market share, and you're getting an increasing percentage of people that are coming in that have these pre-need arranged contracts in hand? We do, A.J. Exactly. We, we watch that same metric, and we believe that represents the, your, your exact thought. Okay, maybe one last question then. I know it sounds like, you start out with some deals on the acquisition front. I understand that, the 10-year standstill arrangement that you did with the FTC when you closed the Stewart deal, years ago, is gonna expire in the spring. I wonder, can you sort of size what that creates as an opportunity? And, do you think, we'll see a pickup in pacing on deals, when that FTC standstill agreement expires? We do, A.J. I think, it, it's hard to size it, but, you know, but it is a significant amount of markets that, you know, we've been really precluded from participating in for the last two-... by those prior notice agreements, which expire in May. So, you know, it's very difficult to predict when or what, but we're excited about it. We do think it kind of, allows us to, to be a little more active as it relates to acquisitions and, and get back involved in some of those markets. So we're excited about it. We think it will create some momentum. But again, I think, you know, deals come when deals come, so, so it's hard to predict the timing and the, and the size, but, but, we're, we're glad it's, it's coming to an end. Can you just remind us how, how many markets it involves and, or how, yeah, how much of a constraint it's been? And then, can you have discussions in those markets prior to the, expiration, or you have to wait for the expiration to have discussions? Well, I think you can always have discussions. It's about when, when you could possibly, you know, go to, you know, closing a contract. So, so again, you know, we've always been active in these markets in the sense of developing relationships and not so much around the deal, but getting to know people, getting to know what their plans are. So it isn't like we're gonna, for the first time, begin to talk to people. We've been out there just being a good neighbor. So, so again, you know, as far as numbers of markets, I don't have them in front of me, but, you know, think of them as being mainly in some major markets. My guess is probably somewhere that we'd be interested in, you know, 15-25 type of markets that are out there, that, you know, we've not had the ability really to think too heavily as it relates to growing through acquisitions. Okay, great. Thanks so much. Yeah. The next question comes from Tobey Sommer of Truist. Please go ahead. Thanks. Wanted to ask you about the rate of at-need activity in how you think about it having, you know, sort of mostly, but not entirely normalized post-COVID, and maybe characterize what, if any, kind of headwind you think remains in the business? Hi, Toby, this is Eric. You know, there continues to be, you know, a headwind as it relates to COVID-19. It's getting better every year, and you can see that in the fact that the total funeral volumes, you know, were down mid-single digits, and now we're really calling it relatively flat. I mean, I think the official guidance is flat to down 1%-2%, but let's just call it flat for purposes of this explanation. What you're seeing in the positive is the natural growth that's occurring, you know, in North America. You know, you can call that 1% or so per year in terms of just the growth of the population, and that population aging, and that population needing services of this particular industry. Specific to our company, you have to also take into account acquisitions. You know, and acquisitions, you know, it depends on the particular year, whether our acquisitions are heavy funeral or heavy cemetery. But ultimately, you could add, you know, call it 2,000-4,000 funeral services in a particular year related to a full amount of, of acquisitions. So you have that natural effect, you have the acquisition effect, which is specific to our company. And what is being washed in this situation, specifically in 2024, is the pull-forward effect related to COVID. And remember, you had some noise the last couple of years with excess deaths as well, coming out of COVID, and that's impossible at this point to differentiate, really. There's, there's not the data out there to make any further comment on that. But the COVID pull-forward effect, excess death pull-forward effect, is kind of washing the natural progression of the baby boomers, coupled with our acquisitions and calling us kind of flattish. I think that's better, those particular factors, than they were last year. That drove us down mid-single digits, and we hope, and we'll give you better of a comment as the year progresses, that you'll start seeing, you know, a little bit of an uptick in net volumes, as I described it to you this morning, as we move forward in future years. If you are able to be a little bit more active on the acquisition front after the standstill agreement, what... And you mentioned some markets that you know would find attractive but haven't really been focusing on recently. What would that entrance into those markets and sort of fleshing those out do to the contours of profitability at the firm? Is that something that would be observable or so small as to not really have an influence? Well, I think it's built into the growth framework. When you think of the 8%-12% earnings per share growth, you know, you're looking at some acquisitions and share repurchases could be up to, you know, maybe half of that growth. The rest being organic, currently being driven by better average for sales at the funeral, at the funeral homes, and most importantly, the significant preneed cemetery growth that we've seen lately and over, and over the years that we've talked about, you know, at length. I've already kind of given you, you know, a statistic that said, you know, that any time we're growing, depends on the year, you know, you could add 2,000-4,000 cases of per year for the full load of acquisitions and such. So is it material? Of course, of course, it's material, but we don't think that the new markets after the FTC, you know, the, with Stewart situation, you know, expires, is gonna be an absolute game changer. I mean, this is a situation where we have very long-term relationships. Our field operations, our management here, has done a very good job having long-term relationships with independents that certainly we would love to talk to. And what Tom said, just to reiterate, we talk to them now. It just is gonna be their decision when they want a liquidity event for their generational planning and for their particular family. And trust me, they don't have any idea, in my opinion, that whether a FTC mandate is coming due or not coming due for FTC. Toby, maybe the better way to think about it is what's happened in the past is if it was a competitive situation where we would be asked to look at a business, we were at a competitive disadvantage because the seller would know that we'd have to get prior permission. Maybe that's the better way to think about it, is we were kind of behind the eight ball because we introduced risk into a transaction that our competitors didn't have to deal with, and that should become more competitive as we move through this May date. Very helpful. And last thing for me, is there any change in the increasing pace of adoption of cremation? Anything to think about, or is that, you know, sort of steady state? Just thought I'd touch base on that. Yeah, I think it's steady state. You know, we saw a contraction of the rate, but again, I think if you look over long periods of time, you're gonna have quarterly fluctuations, but we still stick by the 100-150 basis point expectation. Thank you very much. The next question comes from John Ransom of Raymond James. Please go ahead. Hey, good morning, guys. Just turning to your guidance, could you talk about just your expectations for pre-need cemetery production and recognition rate compared to 2023? Yeah. So I think on the production side, John, if you think back, you know, we historically have said we think we could grow cemetery pre-need cemetery sales production in the, call it, 3%-6% range. That's kind of steady state, same store. Obviously, there's times when we went above that range, there's times we've been below that range. I think the way to think about next year is instead of a 3%-6%, we're just dialing it down a tiny bit and calling it 2%-5%. And the reason for that is we get a lot of leads through funeral volume traffic and traffic through the cemeteries. So as you think about the pull-forward effect, we're gonna have slightly less leads to follow up on, and that's what we're factoring into our numbers. Now, again, can we surprise to the upside? I think so. But we need to get through the year to understand better where we are, if that makes sense. John, from a recognition rate perspective, as you know, we talked about that on the last call as well, and we thought it would be, you know, in the upper 90s for the fourth quarter, and it was. You know, generally, you know, we look at a full year right now, kind of in the mid-90s from a recognition rate, you know, so the 95% ZIP Code from that. Remember, that can move over the quarters, though. It usually, you know, starts off somewhat light in the low 90s and works its way as we complete projects during the summer months and towards into the fall, where it could be as high as what you saw in the fourth quarter, 98% or even a hundred. But generally, we think it's... We're to the point now where I think it's somewhat stabilized. You know, when you're modeling, I think it's about 95%-ish of the production should come through the income statement in a full year period for cemetery. Great. And just another, this may be a little too wonky, but you talked about the 10% CAGR in funeral volumes since 2019. What do you think? What's the M&A effect of that? So if you hadn't done any M&A, what do you think the funeral CAGR would have been from 2019 to 2023? Is that about a point a year? Is that the easy way to think about it? Yeah, I think it's fair to say that, you know, maybe 3%-4% of that is acquisition, and the rest of it's organic. Right. So therefore, 6% growth, so yeah, a little over 1% a year CAGR. So that's not crazy. So, so I guess that underscores we probably are at the tail end of the COVID pull forward. And so you think that 2025, you'll get some small growth, kind of go from maybe some minus low single digit in 2024 to a low single digit in 2025 for funeral. Is that a fair way to think about it? That's kind of our expectation right now, John. Yes. Okay. And then just two last ones. Any early read on Qingming? The weather. I hate to write about the weather again, but, you know- I think one of the things I understand about the weather from last year, last year, the real problem was we had we basically had inventory that was destroyed, and by destroying potential inventory, it delayed any possibility of sale for a matter of months until you could get that inventory repurposed. As bad as the rains were again this year, to our knowledge, we have not had any kind of event like that. So while you may have had a few days out of the market, I think it's our belief that the customers are there, and we'll get in front of them, and we've got great inventory to show our customer base. So, so yeah, we don't, we don't anticipate as pronounced an effect as we had last year because of the weather. Do you guys, like, put tarps in the CapEx budget this year, the blue tarps? We did. We did. Okay. All right, and then lastly, you know, we correlated your pre-need cemetery to a basket of consumer stocks, and it was pretty close in the third quarter, but you definitely outperformed kind of the basket of comps that we thought correlated, so we got to go back to work on that. But why do you think, you know, even in the face of not great consumer comps and not great funeral volume, what do you think led to the outperformance in cemetery pre-need in the fourth quarter? You know, sometimes, John, it's a matter of timing, but I think, again, I give the credit to our sales force, I give the credit to our inventory teams. We've got fabulous inventory to sell and the best sales force in the world. So, I give the credit where credit is due. What's the size of your sales force now? We're about now 3,700-3,800 salespeople, down from- Mm-hmm. - I think pre-COVID, 4,300. So, you know, we're able to- You're up off the bottom. Are you up off the bottom, though? Have you had the people from the bottom, the post-COVID bottom? You know, actually, we're about the same. I mean, maybe up slightly- Okay. But I'd say we kind of adapted during COVID to 15% less headcount, and you see the results. We've got compounded growth rates at around 10%. So very efficient- Okay. throughput, great use of technology, great leadership. Okay. Thanks so much. Thanks, John. The next question comes from Scott Schneeberger of Oppenheimer. Please go ahead. Thanks very much. Good morning. Guys, on pre-need cemetery, it sounds like you're getting a lot of nice pricing. You've developed a lot of nice products, and it seems like that's gonna be the growth driver. I'm curious about contract velocity. Is that gonna remain negative in 2024? And to what magnitude? And I'll follow up with something on that, but just if you could address that, please. Sure, Scott. I think if you, if you take a year as an example, our velocity, you know, again, is, is slightly flat for the fourth quarter this year. But if you go back to 2019 levels on a year-over-year basis, we're actually up in velocity 11%. So I think sometimes we get so caught up in this velocity, Scott, I believe we've flattened out. I think velocity should now correlate a little better to flat, to slightly grow as we think about future. And so, you know, if you, if you've got 1%-2% in velocity and you got 4%-5% in pricing, you know, that's probably the way to think about what we can do in cemetery sales as we push forward over the next few years. So, yeah, I would anticipate that stabilizes from here and continues to grow off this, you know, 11% growth from 2019 levels that we are operating on today. Thanks. And on, still on pre-need cemetery, kind of a two-parter. Just how would you qualify consumer behavior, kind of, low end, mid, high end of the range? And then the follow-up question on that is, cemetery margin in 2024, just your thoughts there. Thanks. Yes. So I think on consumer behavior, you know, if you take the high end, we continue to see the high end going strong. And some of that's average price, and remember, these are over $80,000 sales. But to give you some perspective, we probably had about 400 of those that averaged around, call it, you know, $200,000 sale back in 2019, 2000, you know, around that era. We've almost doubled the number of contracts. So going from 400 contracts at that level to 800, slightly up on the average, too. And so that seems a pretty significant growth and continues to look strong. And again, we've always said that probably correlates best with housing and stock market. I'd say if there's anywhere we're not seeing as robust an activity as we like it, is at that lower end. And again, I think that correlates with a lot of other discretionary retailers out there that are seeing a little bit of a stall when you think about that consumer that may or may not be dipping into their savings a little harder, may or may not have the same access to credit, particularly not at attractive rates. So, you know, that's where we are. And I think, you know, as far as margins, I think you asked about, Scott, you know, our margins continue to grow. I think we've been operating in this kind of, you know, mid-30% range, and I think we'll continue to expect those to push up slightly year-over-year, when you think about 2024, the... You know, I think it's 33%-35% range, somewhere in there. Great. Thanks. One last one from me. Just on digital investment, the CapEx, a little bit lower this year than last. Just if you could, maybe Eric, speak to what these investments have been and the benefits you may have garnered, and are we now, is that gonna start to wane? Has the brunt of that occurred? And just curious how, what you're realizing regarding benefit on the tail end. Thanks. You know, you know, Scott, we, we've said all along that we're huge believers in digital investment, especially customer-facing technology. We've also been making some investments that are not customer-facing technology, that are gonna help us become better, more effective, and more efficient at our funeral homes and cemeteries. So what you really saw us is really push that through the last couple of years, and that's what pushed that digital CapEx, you know, up into the $50-$60 million range. I think this $35 million range, you know, it could ebb and flow, but I think it's a better number as we move forward. You know, you're always offsetting that with what do the funeral homes and cemeteries need from a maintenance capital perspective, 'cause that's gonna come first. And what do the cemeteries need from a cemetery development CapEx perspective? Because our great sales force, that Tom just mentioned, needs inventory, you know, to sell. So that will always come first. But I do think that this is both a combination of some non-customer, make us more efficient CapEx in terms of systems and processes, that probably will wane a little bit as we move forward, and that will be replaced with better customer-facing technology and digital investments that way. But I think it's gonna end up being around this $30 million-$40 million as we move forward. Okay, got it. Thank you both. The next question comes from Joanna Gajuk of Bank of America. Please go ahead. Good morning. Thanks for taking the questions here. So I guess the first, the follow-up on some numbers. So G&A this quarter higher, how does should we think about that, for 2024 on G&A progression? Is this 45 kind of elevated numbers, so it's gonna come down? Yeah, I think 45 is a little elevated, is what I was trying to imply in the conference call remarks, Joanna. You know, we had some movement, obviously, in the share price, during the last few months of the year, and that adjusts more of the long-term compensation plans, which are based on total shareholder return or TCR, versus a peer group. And, you know, so we had to catch up some accruals, so to speak, related to those in the fourth quarter, and that made the G&A, which normally should be $38 million-$40 million-ish a quarter into that mid-$40s for the particular fourth quarter. But absent any other new information, I think from a framework perspective, we still like the, you know, call it $37 million to $38 million to $40 million a quarter for the corporate G&A expense. Thank you. Another follow-up, I guess, on the preneed cemetery sales production rates of this quarter were much better than expectations. You're talking about growing, I guess, for 2024, for the full year, low single digits. So just wanna make sure that I understand here. So was there any sort of transaction that were pulled forward, so to speak, from Q1 into Q4? Or is that gonna still, you know, the look for the year maybe seems conservative based on that growth that you're experiencing Q4? Yeah, I think it's so hard to predict, Joanna. I think all we're noticing is that a lot of our lead sources come from activity. So when you have less activity on the funeral home side and in the burials and the cemeteries, it can put some pressure on the number of leads that you have to generate and give to our sales force. So we're just acknowledging the fact that if we believe there's a little bit still of a pull-forward effect, that it may have a somewhat dampening effect on that lead source. Having said that, you know, the rates that we're closing at are going up. We're getting leads, a big growth in digital leads that are very different, not coming off that traffic in the funeral homes and cemeteries. So again, I wanna be, you know, optimistic. It's very possible that we could have a very strong preneed cemetery sales. I think we're just acknowledging the fact that, traditional leads have come from this activity, and we expect that activity to be slightly down. We feel great about the sales force, we feel great about our digital lead growth, and we've got inventory in the cemeteries to sell. So, we're optimistic about 2024 and even more so as we get into 2025 and 2026. Thank you. And I guess on a different topic, you know, we're still waiting, I guess, to hear from the FTC on those potential changes to the Funeral Rule. And I guess on that front, can you kind of give us a sense of, you know, over the last years, you know, how I guess your locations have been faring when it comes to compliance with those requirements of the Funeral Rule? You know, on average, you know, how many locations are noncompliant, and has there been a trend where you're seeing, you know, fewer or more over time of these locations noncompliant? And I guess, there's been some discussion around, you know, some other elements of the Funeral Rule, when it comes to the fines and the training that's required. So do you expect any, any changes to those other elements of the Funeral Rule that could potentially also happen? Because I guess the base, the base case assumption is that gonna be about, you know, the only price requirement, but would you expect other changes to that Funeral Rule? Thank you. Yeah, Joanna. You know, I think you're right. It's like, I think the base assumption is that it's gonna create situations with online GPLs in those situations, and nothing has changed from our perspective on that. We continue to work through that. We continue to test that. I think we have about, you know, 1,000 or 1,100, something in that ballpark, at any point in time of our 1,500 funeral homes and GPLs online. We mix and match that and test it. You know, we're tiered a lot of ways that I've described before on previous calls in terms of pricing tiers in particular markets, and we're playing with that as well, from starting at prices to a full premium pricing experience that's now hopefully starting to pull in cemetery as well on the, on the digital sites. So no change there. If that's the expectation that's out there and that occurs, you know, again, I think we're gonna be there anyway. And we don't think that's gonna have any negative effect to our business. If anything, you know, it's flat to maybe even slightly positive from a preneed perspective as we move forward. You know, from a compliance perspective, we take that extremely seriously. You know, we have really good beefed up training already in place on compliance with the Funeral Rule and all the intricacies of it and such. And when you give a price list to a consumer, you know, let's start, though, about what we do as an industry and what we do as a company. We serve families at a real dire time in their particular lives, and so there's obviously a human element when you're first in touch with a family for the first time, that you have to take into account the caring and compassionate nature of our industry and our particular associates being second to none in that situation. So then you're starting to figure out subjectively, you know, when to introduce the GPL, and therefore, if it's subjective to start with, the compliance is gonna be a little bit subjective as well, and that's where a little bit of the gray area comes into play. We're very proud of our training. We're very proud of our compliance related to the FTC, and we're very supportive of the Funeral Rule and want the entire industry following that particular part of the rule, and we'll continue to do that. If something else comes down, you know, from the FTC, we'll look at it at that particular time, but nothing new has been mentioned to us, or more appropriately, we haven't been asked to comment on anything new recently as it relates to the compliance side of the Funeral Rule. Yeah, that's, I guess, the fair point of these questions that were posed to the industry, the diagnosis of where they talk about changes to the fines or, or things like that. But I guess, is there any way to quantify, like, on average, how many locations of yours, you know, get, I guess, fined or, or found non-compliant, on average, and has that kind of, you know, changed over the years, to your point about, how, I guess, you're very proud of the, of the training that you provide to your associates? Yeah, I mean, if you're talking about from the FTC perspective, it's very small. You know, I think we're well, well into compliance. I think when you look at the period of the rule itself, we may have one to two, two to three locations out of 1,500 in any particular year that may not be in some form of compliance. Again, I'm gonna emphasize that that's subjective to some degree because what our associates are trying to do first and foremost is care and be compassionate for that family. So it can get complicated when you're doing that. And then, of course, at some point you're introducing or the consumer is introducing price into the equation, and at that particular time is when, you know, the Funeral Rule and the GPL and such, you know, kicks in from that perspective. If you take one to two locations out of 1,500 at any particular time, and it's a pretty long sample set, you know, I'm talking about 30 years-35 years, I think you should say that we are very, very much in compliance with the Funeral Rule and will continue to be, and our training, our culture, and our tone at the top operationally will continue to have those results as we move forward. No, I appreciate it. That's very helpful. And granted, yeah, it's a large platform, so even if it's three locations at the high end, you mentioned that, that's not even that meaningful. And just last one on this one, any indication of the timing when we will hear from FTC or just nothing really out there? I don't have any update on their particular timing. That would be in their court. Right. Right. No, thank you. Thank you so much. This concludes our question and answer session. I would like to turn the conference back over to SCI Management for closing remarks. Thank you, everyone, for being on the call today. We look forward to talking to you again with our first quarter results. Have a great week. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.