Good day, and welcome to the SCI Fourth Quarter 2025 Earnings Conference Call. All participants will be in 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 a touch-tone phone. 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 Trey Bocage, AVP of Treasury and Investor Relations. I'd like to welcome everyone to our fourth quarter earnings call. We will have some prepared remarks about the quarter from Tom and Eric in just a minute, but before that, let me go over our safe harbor, 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. Today, we might 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 on our website. I will now turn the call over to Tom Ryan, Chairman and CEO. Thank you, Trey. Hello, everyone, and thank you for joining us today on the call. This morning, I'm gonna begin my remarks with some high-level color on our business performance for the quarter, then provide some greater detail around our funeral and cemetery results. I will then close with some thoughts about our 2026 business and financial outlook. For the fourth quarter, we generated adjusted earnings per share of $1.14, which was an 8% increase compared to $1.06 in the prior year. We saw moderate increases in revenues and gross profit in both the funeral and cemetery segments, driven by strength in comparable and non-comparable operations, as well as slightly lower adjusted corporate general and administrative expense, which, when combined, resulted in $0.04 of earnings per share growth from operating income. Below the line, the favorable impact of a lower share count contributed an additional $0.04 of earnings per share growth. For the year, we generated adjusted earnings per share of $3.85, which was a 9% increase compared to $3.53 in the prior year. We saw solid increases in revenue, gross profit, and comparable margin percentages in both the funeral and cemetery segments, contributing $0.26 to adjusted earnings per share growth from operating income. Below the line, the favorable impact of a lower share count and slightly lower interest expense was somewhat negated by a higher effective tax rate, resulting in a net $0.06 favorable impact on earnings per share growth for the year. If the effective tax rate had remained constant, we would have had an additional $0.07 in earnings per share for the year, resulting in $3.92 or 11% earnings per share growth over the prior year quarter. Now, let's take a deeper look into the funeral results for the quarter. Total comparable funeral revenues increased $3 million or just less than 1% over the prior year quarter, as growth in core and non-funeral home revenue was somewhat negated by lower core general agency revenue. Comparable core funeral revenue increased by $6 million, or just more than 1%, primarily due to a healthy 3.2% growth in the core average revenue per service. This core average growth was achieved despite a modest increase of 30 basis points in the core cremation rate. The favorable impact from the average revenue per service growth was muted by a 1.9% decrease in core funeral services performed for the quarter. For the full year 2025, comparable funeral volume declined less than 1%, as we believe the impact of the COVID pull-forward effect continues to diminish. Non-funeral home revenue increased by $3 million, primarily due to a more than 11% increase in the average revenue per service. We expect this impressive growth in the average revenue per service to continue as older pre-need contracts that are maturing out of our backlog have higher cumulative trust earnings, and more recent pre-need contracts written will mature with higher value in the backlog due to our operational decision to no longer deliver pre-need merchandise at the time of sale. Non-funeral home pre-need sales revenue increased over $2 million, or more than 11%, as increased sales production with a higher percentage underwritten on insurance-funded pre-need contracts generated more than an $8 million increase in general agency revenue. This was partially offset by a $6 million reduction in revenue recognized from merchandise deliveries in the prior year quarter. Core general agency and other revenue declined by $8 million, or almost 13%, primarily due to a lower general agency commission rate versus the prior year quarter. That was impacted by changes in product mix and higher cancellations, resulting from the impact of our insurance partner transition. We believe the general agency commission rate to be stabilized now in the mid-30s% range moving forward. Funeral gross profit declined by almost $4 million, while the gross profit percentage declined by 70 basis points to just about 21%. A modest increase in revenue was more than offset by a $5 million increase in recognized selling compensation costs. While the cash rate expended for selling costs was flat versus the prior year, recognized selling costs increased for both the core and non-funeral home segments. For core, we have shifted our sales counselor compensation to more fixed versus variable, resulting in less being deferred for pre-need trust sales production. On the SCI Direct front, our conversion from trust-funded products to insurance-funded products compels the immediate recognition of the general agency commission and the related selling costs. This has the effect of replacing high-margin merchandise revenues in the prior year with lower-margin general agency commissions, therefore, putting downward pressure on SCI Direct's margins as we compare to the prior periods. The team managed fixed cost growth to less than 1% for the quarter, which had the effect of moderating the impact of the recognized selling cost increase. Pre-need sales production increased by $29 million, or about 11% over the fourth quarter of 2024. Core pre-need funeral sales production increased by $25 million or 12%. Non-funeral home pre-need sales production increased by over $4 million or 8% over the prior year quarter. We feel great about our momentum in both channels. Now, having had the time to work out the kinks of the insurance partner transition in the core segment, and as of the end of 2025, we have now rolled the insurance product into 100% of our SCI Direct locations. Now shifting to cemetery. Comparable cemetery revenue increased by $5 million or about 1%, primarily due to an $8 million increase in other revenue, slightly offset by a $3 million decline in core revenue. The core revenue decline was primarily due to a $3 million decline in at-need revenue. Total recognized pre-need revenue was essentially flat, as a $6 million increase in pre-need merchandise and service revenue was offset by a $6 million decline in recognized pre-need property revenue. Pre-need merchandise and service sales production was up $15 million over the prior year number, growing the pre-need sales backlog by over $9 million. Other revenue was higher by $8 million compared to the prior year quarter, primarily from an increase in endowment care trust fund income. Comparable pre-need cemetery sales production increased by $8 million, or about 2%. Core sales accounted for a $13 million sales production increase, powered by impressive velocity growth, which was slightly offset by a $5 million decline in large property sales, which was comparing against a very strong prior year large property sale quarter. For the full year 2025, pre-need cemetery sales production grew by about 4%. We feel very good about the momentum our team carries into 2026. Cemetery gross profit in the quarter grew by $5 million, or about 3%, and the gross profit percentage increased by 70 basis points, generating an operating margin percentage over 36%. While recognized revenue growth was 1%, high-margin trust income was slightly offset by lesser-margin core revenue declines. When combined with our team managing fixed cost growth slightly higher than 1%, this resulted in gross profit growth and margin percentage expansion. Now, let's shift to a discussion about our outlook for 2026. As you saw in our earnings release, we provided a normalized earnings per share range of $4.05-$4.35 for 2026, or a midpoint of $4.20. The 2026 range is 5%-13% growth, with a 9% growth at the midpoint. Within our funeral segment, we expect flat to slightly down funeral volume compared to 2025, with the average revenue per case growing at inflationary rates, slightly negated by the effect of a modest cremation mix increase. We do expect to see higher general agency revenue from increased pre-need sales production, as well as slightly higher selling costs recognized from the effect of the shift to a higher percentage of fixed compensation that does not get deferred. Finally, we believe we can continue managing fixed costs slightly below inflationary levels with higher productivity, which all in should drive profit growth for the funeral segment, increasing the gross market percentage by 20-60 basis points. We expect pre-need funeral production for both the core and SCI Direct businesses to grow in the low- to mid-single-digit percentage range. For the cemetery segment, we anticipate that we can grow pre-need cemetery sales production in the low to mid-single-digit percentage range, resulting in cemetery revenue growth of about 2%-5%. This, combined with our continued focus on managing inflationary costs, should result in impressive segment profit dollar growth, expanding our gross margin percentages by 30-60 basis points as compared to 2025. Below the line, we expect a net favorable impact on earnings per share, as the positive effect of a lower share count is slightly offset by higher interest expense and a slightly higher tax rate as compared to 2025. For our shareholders, know that we are laser-focused on growing your great company as best we can for the long term, growing revenues, leveraging our scale, and deploying capital to its highest and best use. In conclusion, I want to acknowledge and thank the entire SCI team for their daily commitment to our customers, our communities, and to one another. Your dedication is the foundation of our success. Thank you for making a difference every day. With that, operator, I will now turn it over to Eric. Thank you, Tom. Good morning, everybody. Thanks for joining us today. Before I begin, I'm gonna continue Tom's last thought, and want to take a moment to really sincerely thank our more than 25,000 associates at SCI across our entire network. Your dedication, your compassion, your commitment to excellence truly make a difference each and every day. We are deeply grateful for the care you provide, the families we are honored to serve, and the positive impact you continue to have in the communities that we are lucky enough to serve. So today, I'm going to start by reviewing our cash flow results and capital investments for the fourth quarter, followed by a recap of our full year performance in 2025. After that, I'll provide an outlook for our 2026 cash flow and capital investments, and then I'll conclude with an update on our overall very positive financial position. So in the fourth quarter, we generated strong adjusted operating cash flow of $213 million. This exceeded the high end of our most recent guidance range for the quarter. Compared to the prior year, neutralizing for an expected $21 million increase in cash taxes, our adjusted operating cash flow decreased $34 million. So breaking this down a little further. Adjusted operating cash flow was positively impacted by higher adjusted operating income of $8 million, highlighting the strength in our underlying funeral and cemetery operations during the quarter. However, cash interest was higher by $24 million, primarily due to the timing of a lower interest in the prior year quarter due to the bond financing and reduction of our drawn bank credit facility that we completed in September of 2024. Additionally, during the quarter, with a net $18 million dollar use of other working capital, primarily due to the timing of payroll funded in the current year quarter. For the year, for the full year, we finished 2025 with impressive adjusted operating cash flow of $966 million dollars. Compared to 2024, when you exclude cash taxes and special items in both years, 2025 cash provided by operating activities increased an impressive $108 million dollars, or 11%. So going back to the fourth quarter, we invested $174 million of capital into our funeral homes and cemeteries, new growth opportunities, business acquisitions, and real estate, all of which resulted in our full-year capital investment in these categories of $508 million. So in the quarter, we invested $107 million of maintenance capital back into our current businesses, with $47 million allocated to high return in cemetery development projects, $51 million into our funeral and cemetery locations, and $8 million into our digital strategy and other corporate investments. For the full year, we invested a total of $328 million in maintenance CapEx, slightly below prior year and ahead of the high end of our guidance range. We dedicated a portion of the strong cash flow from operations during the fourth quarter toward reinvestment into the maintenance of our funeral homes to improve the customer event experience and into cemetery development, creating new tiered options for our customers. We also invested $31 million of growth capital in the quarter towards the construction of new funeral homes, the expansion of existing funeral homes, as well as the purchase of real estate for future new build and expansion opportunities.... This brought total 2025 growth capital to $79 million, which is down about $25 million from 2024, which was anticipated. So turning to acquisitions, we invested $36 million into business acquisitions in the fourth quarter, and in locations in North Carolina, Arizona, Florida, and Canada. In total, we finished the year with $101 million of acquisition spend, which was in the middle of our annual guidance target of $75 million-$125 million. We are really thrilled about these high-quality funeral homes and cemeteries joining our company, and we're happy to welcome all of these new associates to our SCI family. Moving on to capital distributions. We returned $107 million of capital to shareholders in the quarter, through $59 million of share repurchases and $48 million of dividends. We repurchased just under 1 million shares during the quarter at an average price of about $79 per share. For the year, we returned $645 million to shareholders, through $461 million of share repurchases and $184 million of dividends, bringing the number of shares outstanding today to just under 140 million shares. Subsequent to year-end, we repurchased another 500,000 shares for about a $40 million investment at an average price of about $80 per share. So before we get into our 2026 outlook, I want to make a brief comment about our corporate G&A expense during the quarter. Corporate G&A expense increased $19 million over the prior year quarter to $34 million. This was primarily a result of the prior year quarter having benefited from the reduction of a legal reserve of about $20 million. So when you exclude this prior year impact, G&A expenses actually declined about $1 million quarter over quarter. As we look forward to next year, 2026, I should say, we expect that corporate G&A expense will average around $40-$42 million per quarter, with, again, a reminder that this rate could be impacted one way or the other by the timing of our accruals related to our short-term and long-term compensation plans. So shifting now to outlook for cash flow. As you saw disclosed in the press release, our 2026 adjusted operating cash flow guidance range consists of a $60 million range from about $1.0 billion to $1.06 billion. The midcount, excuse me, the midpoint of this range assumes the following: We expect our cash earnings at the midpoint of our EPS guidance range to grow about $70 million, reflecting growth in our underlying funeral and cemetery operations. Cash taxes are actually expected to decline by about $20 million, which will result in $120 million of cash taxes, as the impact of higher expected earnings on cash taxes are being more than offset by an anticipated tax benefit from an investment in renewable energy projects. As we look beyond 2026, though, we anticipate returning to a normalized cash tax rate of about 24%-25%, absent additional tax planning strategies or regulatory additional changes. From an effective tax rate perspective on our income statement, we expect 2026 to really trend in line with 2025, which is about a 25%-26% effective tax rate. And then lastly, we expect a modest decrease in cash paid for interest this year due to higher average balances being more than offset by lower rates. So now let's talk about capital investment in 2026. We expect maintenance CapEx in 2026 to be about $325 million, which is generally in line and flat with the levels we incurred in 2025. Of this target spend, we expect to invest $135 million into improving our funeral homes and cemeteries, $165 million into cemetery development projects with high rates of return, and $25 million into our digital strategy investments and other corporate investments. We expect to invest again an additional $75 million-$125 million towards acquisitions, which is in line with kind of the annual acquisition spend target we've had in the last couple of years. In addition to the maintenance CapEx and acquisition spend targets, we also plan to spend roughly $70 million-$80 million of growth capital on a new funeral home construction and real estate opportunities, which together drive low to mid-teen after-tax internal rates of return. Finally, as has been our strategy for many years, we plan to continue returning capital to our shareholders through dividends and our share repurchase program in a very consistent and disciplined manner, absent other higher return investment opportunities. So in closing, I'd like to provide some commentary about our current liquidity and our financial position. I'd first like to note that in November- ... We entered into a new $2.5 billion bank credit facility, which consists of a funded $750 million term loan and a $1.7 billion revolving credit facility, both now maturing in November of 2030. This transaction increased our liquidity by over $350 million, and our current liquidity today is about $1.7 billion. Our leverage ended 2025, generally in line with prior year-end, just above 3.65 times, which is at the lower end of our long-term net debt to EBITDA leverage target range of 3.5-4 times. Our strong balance sheet, this enhanced liquidity position that I just mentioned, and consistent and predictable cash flows, continue to support our capital deployment program, which gives us remarkable flexibility as we enter 2026, to invest opportunistically for the long-term benefit of SCI, our associates, and our shareholders. So with that, operator, this concludes our prepared remarks, and so I'm now going to turn it back to you to open the call for questions. We will now begin the question and answer session. To ask a question, you may press Star, then one on your touch tone phone. 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'd like to withdraw the question, please press Star then two. Our first question comes from Joanna Gajuk from Bank of America. Please go ahead. Oh, hi, good morning. Thanks for taking the question. So first, on the cemetery pre-sales production, sounds like you expect low- to mid-single-digits growth for 2026. So, can you kind of break down your assumptions in there for the large sales versus the core? I mean, sounds like in Q4, you know, large sales declining year-over-year because of the comp, but, you know, sounds like the number must have been good. So if you can give us a sense of the magnitude of, you know, the amount for the, for the year, for 2025, and then what do you assume, you know, for 2026, I guess. Thank you. Sure, Joanna, thank you. So on that, you're right. In the fourth quarter, we were slightly down comparing against a tougher number. I think for the year, we're slightly up around, you know, 2% or so on the large sales, maybe 3% year-over-year. As we think about next year, I tell you, I feel very confident about the momentum we carry into 2026. We feel really good about our start, and both on the large sale and on the core sales. So, you know, I think, again, as you think about large sales, it's always really hard to predict, as you can imagine. But think of that as being, you know, slightly lower, so maybe a 2%-3% increase there, and then maybe a more robust increase as you think about the core customer. But as you well know, you know, large sales are tough to predict. It could be... That's the piece that can be a little bit volatile to the upside, and then, you know, and in times of stress, you know, may be something that isn't there. Thank you. If I may, in the current period, any indications, you know, how things are tracking so far this year, specifically in your Rose Hills location and maybe elsewhere, if you can comment, any disruption to the sales process and such, because of the, you know, some winter storms in some of the markets? Yeah, we continue to see very positive trends on both pre-need cemetery sales and on funeral sales. You know, we've had a real focus. Our sales team is really focused around three things this year, and this plays a little bit into something we've talked about. You know, we've shifted more compensation to fixed from variable, that we talked a little bit about in my comments, and that was a strategic decision to focus on people power, focus on retention of our key employees by giving them the stability of that higher guaranteed pay. So the four things we're working on are, you know, people power, or call it people retention. We believe if we can increase the number of pre-need seminars that are out there, it's going to increase the number of good leads. And then once we have those leads, a real focus on the lead- to- sale rate, which is really the conversion of the leads. And then finally, really focused big time on large sales, making sure we have the inventory, making sure we have the presentations right, that we're finding you know people that could be customers in this category. So those four things really drive our sales, and we're laser-focused. Jay's got everybody laser-focused on those things, and we're seeing great results. We're seeing both at the high end and at the core level on funeral and cemetery. Any color on Rose Hills activity so far? Well, again, I don't want to give percentages, but as you think about January, you know, two things to keep in mind. One is, you know, funeral volume last year was pretty strong, so we're comparing against a pretty tough number. We've not seen. It's been a bit sluggish when you think about volume. But on the sales side, we're seeing tremendous out of the gate results, both on funeral and cemetery, particularly cemetery. But again, you know, one month is not a year make, so we're excited about it. We love. I think the people, you know, the team is focused on the right things, and we feel very good about our opportunities for 2026. ... Great, thank you. First, quick, last one, I guess, staying on, on the cemetery side, can you talk a little bit more about the opportunities, to grow cemetery for cremation customers? So, you noted the shift to cremation is slowing down, but, you know, it's 65% of services are cremations, and I guess you kind of talked last time about, you know, opportunities to grow, cemetery, I guess, so for the cremation customers. So can you give us an update where things stand and kind of, what are your goals for this year? Thank you. Sure, Joanna. We actually have piloted in a few markets now and in the process of rolling out to more, a specific focus on that cremation consumer. And some of that is putting, you know, videos into, you know, our locations that can show the opportunities to the cremation customer and just making it more visible to our visitors and to our, the clients that we're serving. So yes, we're doing a lot of things as it relates to media and the like, to create that awareness and hopefully, you know, drive some opportunities in that market. It's the early days, we feel very good about it, and it's gonna take a while to roll it out to the entire network, but, we're in the beginnings of doing that now and are excited about the results to come. Great. Thank you so much. Thank you, Joanna. Up next, we have A.J. Rice with UBS. Please go ahead. Hi, thanks. Hello, everybody. First of all, just on the comments that Eric made on G&A, you explained 4Q's impact, but I think your 4Q of 2024, the comp, but 4Q of 2025, you're only at about $34 million. I think we had been thinking you'd be more like $38 million-$40 million, based on the third quarter call. What drove the better performance on G&A? Two things, really, AJ. The first one is that we have short-term and long-term ICP accruals, and this is primarily a long-term situation, an LTIP situation. Just to remind you, we have some performance units that get compared to the S&P MidCap 400, and that's gonna move quarter to quarter, which is what I was trying to say during my conference call remarks. Sometimes you have, you know, a $2-$4 million headwind, and sometimes you have a $2-$4 million tailwind, and that's what occurred during the fourth quarter. Absent that kind of volatility on LTIP, you should see a $40-$42 million-ish per quarter G&A expense as we move forward. That's kind of the middle-of-the-road expectations as we move forward. The other thing that can move it, that you kind of have seen us talk about in the last few quarters, is sometimes you have some positives and negatives related to some of the insurance being self-insured. This primarily could be workers' comp, sometimes general liability, sometimes auto liability, sometimes even the healthcare accruals. Generally, those aren't moving as much as we've seen kind of the LTIP accruals moving, but any of those at any point in time can do that, and we'll explain that to you. But in terms of modeling, I think I'm pretty comfortable with that $40 million-$42 million a quarter right now. Okay. When you think about the changeover toward more insurance, you've got you've called out commission normalization, and then you also talked about the impact of SCI and SCI Direct. Are we pretty much gonna have more straightforward going forward? And what are the implications on the commission run rate? It sounds like it's a little lower in the back half of 2025. Do we have to annualize that in the first half of 2026 or something else? And then SCI Direct go forward from here. It sounds like the restructuring of that is done, and we should have more normalized trends, but I just wanna make sure of that. Yeah, that's correct, A.J. Answering the SCI Direct piece, we are 100% implemented in having the insurance product in those markets. There'll still be some trust sales because some people aren't insurable, but I would say over 90% of the sales are gonna be insurance, and therefore, generate a commission and generate the associated selling costs. So as we think about SCI Direct, it's gonna trend in a positive direction year-over-year, and it's been a while since that's happened, so we're excited about it. You know, on the other commission fronts, you know, as you think about selling costs and you look at the what we talked about, when you looked at funeral, remember, we had 11% pre-need sales production growth. So part of our selling cost increase is the fact that we're selling a lot more, that's driving that cost up. We also saw a slight bit of transition to a fixed cost plan that I mentioned before, as opposed to variable. And so as you think about the trust product that we sell, not the insurance, less is getting deferred and more is getting recognized. No cash increase, just the type of compensation that occurs. And yeah, I think as you think about SCI Direct, like I said, positive from here, as you think about trends, trend-wise. Okay. And you also called out, I think this may be the second straight quarter of the improvement in velocity you're seeing in the cemetery production area. Can you just maybe drill down a little bit more about what you're seeing there and what's driving that, and what the implications of that might be? ... Yeah, I think I did a lot of that back to those four metrics or, you know, particularly the first three. Having one, the aim to try to have higher retention of our good people and getting them quality leads, and then really focusing on the training to take that lead and convert it to a sale. So as I think about our success in being able to do that and focusing on those types of things, we're seeing again the trends that we really like. So we are seeing velocity drive our success as we think about the core cemetery sales. So I just attribute that to focus. You know, you mentioned the cremation consumer before. We are seeing a higher lift of people, cremation consumers, choosing to buy into our cemeteries. So all those cumulatively bode very well as we think about cemetery production going forward. Okay, thanks so much. Thank you. Our next question comes from Tobey Sommer with Truist. Please go ahead. Thank you. I was wondering if you could talk about the drivers of lower than inflation expense growth. That's pretty impressive, particularly if you think that your ability to achieve that has legs. Thanks. Sure. Some of the things that are happening within the current year, 2025, is our focus on, you know, the products that we sell and, and the things that we're selling, the types of products we sell, who we're buying from. And so our supply chain team, you know, led by Michael Johnson, have done a lot of great things as we think about the products that we retail to consumers, and, and how we price those, and how, and how, again, we're what types of products we're buying and selling. So we've seen on that, really on the merchandising cost side, some enhancements as we think about it. The other thing that I think is probably the most powerful, and it gets back to kind of labor efficiency. So we utilize, we empower our operators really to proactively managing staffing levels and giving them the tools to do it, as you think about overtime, part-time roles. They're using metrics. They've got daily dashboards. And so what it allows us to do with those labor efficiency metrics is manage that, and then as a team, we're, you know, taking best practices and sharing those across the entire portfolio. So think of it that way. And then at the very top, you know, we've got a cross-functional margin improvement committee that's been in place for a number of years now, that really focus on dissemination of these best practices. So we think we've got a pretty good grip as we think about volumes aren't as high as we thought they were. We're gonna manage the variable costs, particularly around staffing. So really a testament to our great operations management team and how they're utilizing those tools to manage costs effectively. So would you say that you think that this, you know, sort of spread could be achieved beyond 2026, or take it one year at a time at this stage? I think it's kind of a one year at a time. I mean, I do believe that's true, but it kind of gets back to volume, right? If we begin to see volumes ticking up, it becomes a little more complicated. As you think about staffing costs, you're gonna see some rises in that, because, again, these are variable costs. But at the same time, I think it really allows us, in the challenging volume periods, to manage costs as low as you see us do it. But I'd expect those to get, you know, trend back up as volumes begin to increase, as we anticipate, over the coming years. If I could sneak one more in from an acquisition perspective. You closed out the year and, you know, right down the fairway for your total capital deployed. When you look at the pipeline, is there any change in the composition, such that something might be a little bit bigger this year? I think we're seeing a similar type pipeline, Tobey. I think we're very excited about it. As I've said before, it's generally gonna be, you know, more of larger, independent-type transactions that are both funeral and cemetery. And, you know, the best that we could do in those situations were places that we already exist and already have local scale. And that's the best of both opportunities for our company, as well as those independent funeral homes that decided to join our company, and we can continue the great service and the way they're treating their consumer in those markets that we are already in and guarantee that, really. But the pipeline's good, the pipeline's healthy. We're very busy. I think I've been saying that for a couple quarters now, and I think I'm gonna still say the same thing. I think it's pretty good and pretty busy, and we're excited about it. Thank you. Our next question comes from Tomohiko Sano with JP Morgan Chase. Please go ahead. Morning, this is Tomo, from JP Morgan. Thank you for taking my questions. Hi, Tomo. Hi, thank you. Could you talk about the plans for developing and selling premium cemetery inventory and your outlook for recognition rates? Could you talk about how, how do you view price elasticity as well, please? You know, we're gonna deploy capital, which is the first part of your question, similar to last year, which our metric right now is about $165 million of very high return on opportunities. As what you're describing, you saw Memorial Oaks during your tour, you know, we're gonna invest in tiered-type inventory at each of our cemeteries. They're gonna give offerings all the way to the higher end in terms of families that want, like, private estates and such, then you go all the way down to the semi-private areas, and then you get to, you know, some of the initial more lower-tier type offerings. I think that it continues, coupled with our sales force, you know, to be the best value opportunity that we can get and the highest return opportunities we can get for that type of capital. In terms of the cemeteries themselves, there's relatively high barriers to entry. We're very lucky to have this 35,000 acres that we have, that were built over many, many decades by, you know, really the founder of this company, over a long period of time, where metropolitan areas have grown around these cemeteries, but yet we still have a tremendous amount of capacity and years left within these cemeteries. What you saw in Memorial Oaks, which Houston has now grown out and surrounded, still has many years left, many decades left in terms of inventory. For those of you all on the call have been to Rose Hills, that's a similar situation where L.A. has grown around it, and many years left in that. So we're very lucky to have it. We have good barriers to entry. We're gonna price it based on the tiering effect and, and type the value proposition that exists, that we've always had. We feel that there's a lot of opportunity with a strong cemetery consumer, especially as the demographics over the long term, turn our way over a period of time. Very helpful. Thank you. Just one, follow-up on the M&A pipeline in 2026. Could you talk about, prioritizations for expansion, especially wider of the recent acquisition in locations of North Carolina, Arizona, Florida, and Canada? And are you continuing to target these locations or more broader base than Monday? Thank you. No, it's gonna continue to be as I said, we want to be in markets that we already exist in as the first stack ranking, because we already have-- we carry the national scale anywhere that we're buying. But when we already have that local scale, you know, it can really make two plus two, you know, equal five, so to speak, when we have these larger, really nice independents joining our company. So we'll continue. You know, we have a broad base across the United States. We also have a wonderful business in Canada, you know, really from anchored in the West all the way over to the East, especially in Toronto. And you'll continue to-- for us to develop very long-term relationships with a valuable pipeline that we have with those relationships. As those individual businesses and their owners and their families, you know, kind of raise their hand and are interested in discussing the next step and discussing liquidity event, we have the advantage of having tremendous liquidity and speed and really making it a win-win situation with our independent partners. Thank you very much. Our next question comes from Parker Snure with Raymond James. Please go ahead. Hey, good morning. Just wanted to drill down on the GA revenue in the funeral segment a little bit more. With your core pre-need funeral production up 12, but the GA commissions were down just a bit, maybe just talk us through some of the drivers there. I know there were some comments on the commission rate. I know you previously made some comments on a flex product that comes in with a lower commission. Maybe just drill down on some of the dynamics driving that. Sure, Parker, I'll take that. So as you think about the timing of all this, you know, the fourth quarter of 2024, we're relatively new into the new contract, you know, with our new insurance partner. And so at the time, you know, we're really hesitant to talk about what we think the rate's gonna be, because there's so many factors that play into that. You know, any kind of new plan is gonna have new pricing, new learning, new forms, new processes, new rules. So there's just a lot of change management engaging in there. So the two things I mentioned on the call, Parker, were, you know, product. And so as you think about that, you rightly pointed out that we opened up the flex product in the mid part of 2025, that we didn't offer at the end of 2024. So some of this is we're offering a flex product with a dramatically lower commission rate than the traditional insurance. That's a little piece. Another one is kind of what we call early payoffs. You try to predict who's gonna sign up for these things and then pay off within a year. Well, the early payoff rate is slightly higher, and that, again, would drive it down. The other factor is, if someone pays a single pay up front versus a multi-pay over time, there's different commission rates there. So we're trying to predict how many people are gonna buy a single pay, how many people are gonna buy a multi-pay. So those are the three things that kinda impacted the product piece. Then the other thing we mentioned was cancellation rate. Again, two things there. One is, you've got cancellation rate from the old insurance provider in that business. ... and we saw an increase of older contracts from the previous supplier. That, you know, again, kind of happens from time to time, and it isn't as predictable, and I don't think that's gonna continue at those rates. And then finally, we're seeing a slightly higher cancellation rate than we used to experience with the previous insurance provider. I would attribute that to, again, the new plan learning. We're learning how the, you know, what are the points where customers are frustrated with processes, rules, forms, and so I think we'll get better at that as time goes on. So we came out and said, "Let's look for kind of a mid, you know, 30s type of percentage rate going forward." We think that's probably a fair way to think about it as you model 2026, 2027. Hopefully, we'll get a little better over time at some of these things like cancellation, but we're very comfortable that now we're in a place that we understand it, and we should, you know, try to improve from here. Okay, great. That's super helpful. And, yeah, just to follow up on that. Yeah, on the, it sounds like there was almost like a bad debt, you know, accrual for the cancellation rate. Is, is maybe if you could just help us, like, give us a, a number for the, you know, the magnitude of that, and is that expected to be a one-time item, or is that gonna be kind of an ongoing accrual that's constantly flowing through the numbers? Well, I think it's, you know, like you said, the cancellation rate experience we're having is a little higher than we thought, which, you know, requires us to understand, when you're making estimations, to catch up. So, you know, maybe think about, you know, 200 basis points as being the impact of catching up this quarter, which, again, we've factored into going forward, what we think about 2026. So as you model, I'd just go back to that kind of mid-thirties, and that would encompass any catch-up that we think we need to have. And like I said, I hope operationally over time, and I believe this is true, we're gonna get better at this because there's typically a reason, and again, this gets back to new products, forms, processes, people, us getting used to them. So, I expect this over a period of time to get better. It's just that the part of change management that's tough. But look, at the end of the day, we've got a better product for our customers. We're generating higher commission rates, so we're very, very pleased with our partnership and expect it to continue to trend to the positive. Yeah, absolutely. Understood. And then just, just if I can squeeze in one more. On the perpetual care trust, that was up $8 million year-over-year. I think for the full year, it was up about $16 million. Maybe just help us, what, you know, what is expected in your guidance for 2026 for perpetual care trust revenue? And maybe just remind us on the accounting treatment of how that portfolio is accounted for. Yeah, we had a great year across all the trust funds, as you saw, Parker, at a 15% return. We normally expect and model kind of about half that, kind of about a 7%-ish, you know, type market return in the trust funds. That's true for the endowment care funds, just like it's true for, the MST funds. The endowment care fund, is really split into, into two components. One is a, a prudent person approach, which is the same, you know, 60% equity, 30% fixed income, 10% alternatives type, you know, mix that you would expect from that type of, of portfolio. There's still, though, a few states in the endowment care fund which don't follow that method and primarily are invested in fixed income securities. When that occurs, when there are gains or losses from those portfolios, that flow through that particular line. The issue was not during the fourth quarter of 2025, but in the fourth quarter of 2024, we had a liquidation related to a portfolio manager, and that created a $4-$6 million loss that came through. So it's not that the portfolio looks so much better than last year, is that last year was pressured by that particular event in the internal care funds. Okay, great. Super helpful. Thank you. Our next question comes from Scott Schneeberger with Oppenheimer. Please go ahead. Thanks, very much. Good morning, everyone. I have probably a total of three questions. I'm gonna ask the first two upfront. We heard a lot about the flu in the fourth quarter, certainly carry over into the first quarter, but funeral volumes were pretty light in the fourth quarter. Just kind of curious what you're seeing on the flu front. And then the second part of the question is, the guide for 2026 on funeral volume, flat or slightly down. When are we gonna see that? I mean, that's kind of been the trend, but is there conservatism in there, or is that the trend? I was thinking we might be seeing that start to improve a bit. So just thoughts on those. Thanks. You bet, Scott. So as it relates to flu, you're correct. We did. You hear about the cases. I think as it relates to creating, you know, funeral volume, that we're not seeing any of that. We're not hearing any of that. And as we think about trends in volume, you know, it's probably good to take a step back for a second. So we know that the COVID impact occurred. We knew that we were gonna have the COVID pull-forward effect, and we've modeled that, and we think we've got a little bit of diminishment there, but less year-over-year. The other thing, just to point out, that we don't talk about as much, but you'll recall us talking about it during COVID, was the term excess deaths. And what did that mean? And we said that was kind of the ripple effect of COVID. We saw increases in drug overdose, suicide, traffic fatalities, murders, lack of cancer screening, screenings. And so we couldn't explain this excess volume that has occurred even beyond COVID. And I think as you look at the statistics now, and this is a positive for us as a society, thank goodness, right? Drug overdose, down. Suicide, down. Traffic fatalities, down. Murders, down. Cancer screenings, back to levels, and you're seeing deaths from cancers trend down. So as you look at the national data, and again, it's not perfect, you know, as a country, volumes were down in 2024. Preliminary 2025, they're down. So I think what we're going through is a little bit of a trying to normalize out of this, you know, strange period. The other thing that we do is we go back and look at the CAGR off the 2019 numbers. So if you go back and look at pre-COVID, and you said, "Let's expect volumes to increase 1% over the next few years," if you do that and look at our current volumes, you'd be very pleased about where we stand as you think about market share, as you think about demographics. So it's very confusing, and I understand why it is. It's frustrating for us sometimes, too. And, you know, look, we're paranoid. We're gonna fight for volume, for market share. You know, are there markets we could do better, you know, as you think of cremation pricing? Maybe. And we're doing that every day and trying to fix it. But I think if you really take a step back and do the compounded impact of 19, you'd feel very good about the volumes that we're experiencing today. We still believe the demographics of this business, just the pure aging of society, is going to have an impact, and it's just challenging to understand exactly when you're gonna be able to see that, that isn't being clouded by some of these other trends. But again, we're gonna manage our costs. We're ready to take care of that. On the good news front. So as I think about 2026, yeah, we think it's probably gonna be flat to slightly down. January's a little soft, as we mentioned earlier, but, we'd expect it to trend back towards flat. I think as you get out to 2027, 2028, 2029, we expect to see funeral volumes increase, the way our models are working. So we think we're close. We're poised and ready to do it. I'd say on the positive front, on the cemetery side, we're seeing a lot of great things in our sales activity, both in large sales and in core. So still feeling good about 2026. Volumes could be slightly down to flat, like we said. Great, thanks. Appreciate that color, Tom. And then the last question, it kind of, kind of dovetails off all that. The guide for 2026, the EPS, is growth of 5%-13%. That certainly encompasses your, your 8-12 midpoint, kind of in the bottom half of that. It feels about right. But just curious, what has you concerned that the, you know, that could put you at the lower end? What are the drivers that could put you up at the higher end or above? Thanks. Yeah, so I think at the lower end right now, I think we'd think that would be continued soft funeral volumes. If we saw volumes that, you know, came in at down, and down, let's say, you know, 200 basis points or something, that's, you know, tough to overcome. If we get flat, I think we feel very good about the higher end, because again, what we're seeing in our, you know, through the windshield is a lot of sales activity and feeling really, really good about it. I think we feel good about SCI Direct trending the other direction. I think we feel good about our arms around the expense category. So to me, you know, the part that would put you challenging to the lower end would be a continued, you know, year-over-year decline in volumes. You know, again, we're gonna do everything we can to push you towards the higher end of that EPS guidance. But that's probably the most, you know, difficult one for us to overcome if it's not there. Great. Thanks, appreciate it. This concludes our question and answer session. I would like to turn the conference back over to SCI Management for any closing remarks. We want to thank everybody for being on the call today. We look forward to speaking to you again soon. I guess next call will be at the end of April. Everybody, be safe out there. Thanks again. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.