Service Corporation International (SCI) 2023 Q2 法說會逐字稿

Good morning, and welcome to the SCI Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

早上好，歡迎參加 SCI 2023 年第二季度收益電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to SCI management. Please go ahead.

我現在想將會議轉交給 SCI 管理層。請繼續。

Thank you, and good morning. This is Debbie Young, Director of Investor Relations. And on behalf of the SCI team, thanks for joining us today. We're going to have some prepared remarks from Tom and Eric 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.

謝謝你，早上好。我是黛比·楊，投資者關係總監。我謹代表 SCI 團隊感謝您今天加入我們。稍後我們將聽到湯姆和埃里克準備好的發言。但在此之前，讓我快速回顧一下安全港語言。我們的管理團隊發表的任何陳述我們對未來的計劃、信念、期望或預測的評論均屬於前瞻性陳述。這些前瞻性陳述存在風險和不確定性，可能導致實際結果與此類陳述中預期的結果存在重大差異。

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 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 as well as on our website.

這些風險和不確定性包括但不限於我們的收益發布以及我們網站上向 SEC 提交的文件中確定的因素。今天，我們還將討論某些非公認會計準則財務指標。這些措施的調節可以在我們的收益發布末尾的表格以及我們的網站上找到。

I'd like to now turn it over to Tom Ryan, Chairman and CEO.

我現在想把它交給董事長兼首席執行官湯姆·瑞安 (Tom Ryan)。

Thanks, Debbie. Hello, everyone, and thank you for joining us on the call today. This morning, I'm going to begin my remarks with some high-level color on our business performance for the quarter, and then provide some greater detail around our solid funeral and cemetery results. For the second quarter, we generated adjusted earnings per share of $0.83, which was on par with our results from the prior year quarter. We were able to achieve this result despite absorbing a $19 million or $0.09 per share increase in interest expense, resulting from a more than 400 basis point rate increase in our variable rate debt.

謝謝，黛比。大家好，感謝您今天加入我們的電話會議。今天早上，我將首先對我們本季度的業務表現進行一些高層介紹，然後提供有關我們可靠的葬禮和墓地業績的更多細節。第二季度，我們的調整後每股收益為 0.83 美元，與去年同期的業績持平。儘管我們的可變利率債務增加了 400 多個基點，導致利息支出增加了 1900 萬美元或每股 0.09 美元，但我們仍然實現了這一結果。

We continue to see significant earnings per share growth over pre-pandemic results. Compared to a second quarter 2019 of $0.47 per share, we have grown earnings per share at a compounded annual growth rate of 15% over the 4-year period. Funeral metrics were strong and performed at or above our expectations. Cemetery preneed sales production increased slightly quarter-over-quarter. However, they fell short of our internal expectations as we experienced a decline in the number of contracts sold, primarily within the entry-level price-sensitive consumer segment. We believe this is predominantly attributable to a decline in discretionary consumer spending by this entry-level consumer due to the actual and perceived impact of inflation on our preneed cemetery property sales and a variety of other discretionary purchases.

我們繼續看到每股收益比大流行前的業績顯著增長。與 2019 年第二季度每股 0.47 美元相比，我們的每股收益在 4 年期間以 15% 的複合年增長率增長。葬禮指標強勁，表現達到或高於我們的預期。公墓預售產量環比略有增長。然而，它們沒有達到我們的內部預期，因為我們的銷售合同數量有所下降，主要是在入門級價格敏感的消費者群體中。我們認為，這主要歸因於入門級消費者的可自由支配消費支出下降，這是由於通貨膨脹對我們預需要的墓地房地產銷售和各種其他可自由支配購買的實際和感知影響。

Below the line, higher interest expense incurred from the spike in interest rates on our variable rate debt, reduced earnings per share by $0.09 and was partially offset by the $0.04 per share favorable impact of a lower share count.

在此線之下，我們的可變利率債務利率飆升導致利息支出增加，每股收益減少 0.09 美元，但被股票數量減少帶來的每股 0.04 美元的有利影響部分抵消。

Now let's take a deeper look into the funeral results for the quarter. Total comparable funeral revenues increased $11 million or about 2% over the prior year quarter, primarily due to an increase in core funeral revenue. Although comparable core funeral volume declined 2% compared to the prior year quarter, volumes were high, higher than we anticipated and about 9% higher than comparable second quarter 2019 levels. Our core average revenue per service grew over the prior year by an impressive 4% even after absorbing the negative effects of a 120 basis point increase in the cremation mix.

現在讓我們更深入地了解本季度的葬禮結果。可比殯葬總收入比去年同期增加了 1100 萬美元，即約 2%，這主要是由於核心殯葬收入的增加。儘管可比核心葬禮數量與去年同期相比下降了 2%，但數量很高，高於我們的預期，比 2019 年第二季度可比水平高出約 9%。即使在吸收了火葬組合增加 120 個基點的負面影響後，我們每項服務的核心平均收入仍比上一年增長了 4%，令人印象深刻。

From a profit perspective, funeral gross profit declined slightly by $2 million, while the gross profit percentage remained about 21%, well above our pre-pandemic second quarter margin of 19.5%. Inflationary fixed cost increases slightly outpaced our moderate funeral revenue growth. We incurred slightly higher inflationary staffing and selling costs, which were mitigated in part by lower transportation costs and lower bonus incentive expenses resulting in about a 4% increase in fixed costs. Preneed funeral sales production grew an impressive $12 million or about 4% over the second quarter of 2022. Both the core and the SCI Direct channels experienced sales production growth that was primarily driven by increases in sales contract velocity. We continue to see consumers awareness and openness to preplanning elevated with continued strength in marketing leads in preneed funeral sales production.

從利潤角度來看，殯葬毛利潤小幅下降了 200 萬美元，但毛利率仍保持在 21% 左右，遠高於疫情前第二季度 19.5% 的利潤率。通貨膨脹固定成本的增長略高於我們適度的葬禮收入增長。我們的員工和銷售成本通脹略有上升，但運輸成本下降和獎金激勵費用下降導致固定成本增加約 4%，部分緩解了這一影響。 Preneed 葬禮銷售產量比 2022 年第二季度增長了 1200 萬美元，增幅約為 4%。核心渠道和 SCI Direct 渠道的銷售產量均出現增長，這主要是由銷售合同速度的增加推動的。我們繼續看到，隨著預需葬禮銷售生產中營銷領先優勢的持續增強，消費者對預計劃的意識和開放性不斷提高。

Now shifting to cemetery. Comparable cemetery revenue increased $5 million or just over 1% compared to the prior year second quarter. Core revenue accounted for the preponderance of the increase as compared to the prior year, as recognized preneed revenue increased by $6 million or 2%, offset slightly by a $1 million decline in atneed revenue. Preneed cemetery sales production increased by $1 million in the second quarter. While we did see a slight growth, it was below our expectations. We saw impressive increases in our large estate property sales, particularly in both the Western and Eastern regions, and we also saw healthy increases in our core average sale across the network. However, we did see a decline in our property sales velocity over the prior year quarter, a trend we also experienced in the first quarter. Again, keep in mind, our second quarter contract velocity is still 15% above our pre-pandemic 2019 second quarter.

現在轉移到墓地。與去年第二季度相比，墓地的可比收入增加了 500 萬美元，即略高於 1%。與上一年相比，核心收入佔增長的主要部分，確認的預需收入增加了 600 萬美元，即 2%，但被預需收入減少 100 萬美元略有抵消。第二季度普雷尼德公墓銷售收入增加了 100 萬美元。雖然我們確實看到了小幅增長，​​但低於我們的預期。我們看到大型房地產銷售的顯著增長，特別是在西部和東部地區，我們還看到整個網絡的核心平均銷售量健康增長。然而，我們確實看到我們的房地產銷售速度比去年同期有所下降，這也是我們在第一季度經歷的趨勢。再次請記住，我們第二季度的合同速度仍比大流行前的 2019 年第二季度高 15%。

As we bifurcated the sales data by price tiers, we noticed that our mid- and premium level property price tiers had increases in velocity while our more entry-level price-sensitive tiers saw some unanticipated declines. Based on examining a variety of consumer discretionary data sources and from feedback from our customers as well as from our frontline sales teammate, we believe that a significant reason our sales velocity has been negatively impacted is due to a more cautious consumer, particularly consumers that are more acutely impacted by the effects of accelerated inflation.

當我們按價格層劃分銷售數據時，我們注意到我們的中高檔房地產價格層的速度有所增加，而我們對入門級價格敏感的層則出現了一些意想不到的下降。根據對各種非必需消費品數據源的檢查以及客戶和一線銷售團隊成員的反饋，我們認為，我們的銷售速度受到負面影響的一個重要原因是消費者更加謹慎，尤其是那些受通貨膨脹加速的影響更為嚴重。

Additionally, as we get further away from the acute impact of the pandemic, there seems to be a slightly diminished urgency for this specific entry-level consumer to transact at the pace we've experienced over the last 3 years. The good news is that we believe these consumers are deferred, not lost. So we're developing selective programs and payment terms to enhance this specific customers' ability to transact with us.

此外，隨著我​​們距離大流行的嚴重影響越來越遠，這個特定的入門級消費者以我們過去三年經歷的速度進行交易的緊迫性似乎略有減弱。好消息是，我們相信這些消費者是被推遲了，而不是流失了。因此，我們正在開發選擇性計劃和付款條件，以增強特定客戶與我們進行交易的能力。

Still, to put cemetery preneed sales in its proper perspective, our second quarter preneed cemetery sales production was about 47% above our 2019 second quarter, representing a 10% compounded annual growth rate over the 4-year period. Cemetery gross profits in the quarter declined by about $4 million and the gross profit percentage declined slightly to 33%, still well above our pre-pandemic second quarter gross profit percentage of just above 30%. Expected inflationary increases in our cost structure exceeded our modest revenue growth for the quarter, putting pressure on comparable cemetery profits.

儘管如此，從正確的角度來看墓地預售銷售，我們第二季度的預售墓地銷售產量比2019 年第二季度高出約47%，這意味著這4 年期間的複合年增長率為10 %。該季度公墓毛利潤下降了約 400 萬美元，毛利潤百分比小幅下降至 33%，仍遠高於疫情前第二季度略高於 30% 的毛利潤百分比。我們成本結構的預期通脹增長超過了本季度溫和的收入增長，這給可比墓地利潤帶來了壓力。

Now let's shift to a discussion about our outlook for the remainder of 2023. As you saw disclosed in our release, we have slightly reduced and narrowed the range of our annual earnings per share guidance. while slightly increasing our annual cash flow guidance, reflecting both favorable working capital trends and an expected decrease in cash taxes associated with a tax accounting method change.

現在讓我們轉向討論我們對 2023 年剩餘時間的展望。正如您在我們的新聞稿中所披露的那樣，我們略微降低並縮小了年度每股收益指導範圍。同時略微提高了我們的年度現金流指引，反映了有利的營運資金趨勢以及與稅務會計方法變更相關的現金稅的預期下降。

The primary reasons for the earnings per share change was a reduction in our preneed cemetery sales production assumption for the year as well as the higher interest expense assumption associated with our variable rate debt as the Fed continues to push short-term rates higher and communicating a willingness to maintain those rates for longer. This updated earnings guidance still reflects impressive growth within our 8% to 12% framework after considering the unique interest headwind this year and removing the beneficial COVID impact from last year.

每股收益變化的主要原因是我們預計的今年公墓銷售產量假設的減少，以及隨著美聯儲繼續推高短期利率並傳達了與我們的可變利率債務相關的更高的利息支出假設。願意更長時間地維持這些利率。考慮到今年獨特的利息阻力並消除去年新冠疫情的有利影響，這一更新後的盈利指引仍然反映出我們在 8% 至 12% 框架內的令人印象深刻的增長。

So for the rest of the year, in the funeral segment, we would expect to see low to mid-single-digit declines in funeral volume as the impact of the COVID pull forward slightly outpaces increasing volume trends. We would expect healthy low to mid-single-digit growth in our funeral average, both from atneed cases as well as preneed going atneed cases as trust fund income increases from recent strength in the financial markets, which should favorably impact our funeral sales average.

因此，在今年剩餘時間裡，在葬禮領域，我們預計葬禮數量將出現低至中個位數的下降，因為新冠疫情的影響稍稍超過了數量增長的趨勢。我們預計，隨著近期金融市場走強，信託基金收入增加，我們的葬禮平均收入將出現健康的低至中個位數增長，無論是來自需要的案件還是需要的案件，這將對我們的葬禮銷售平均產生有利的影響。

On the cemetery side, we would expect preneed sales production to range from slightly down to low single-digit growth in the back half of the year. Positive trends in large estate property sales and core averages should be tempered by lower velocity, particularly with our price-sensitive consumers. It is our hope that our pivot to enhance the customer proposition for the entry-level customer through a more consumer-friendly payment terms on cemetery property will have a favorable impact on velocity in late 2023 and into 2024. The impact from newly completed construction projects over the next 2 quarters should create favorable comparisons of recognized cemetery revenue for the third quarter and slightly negative comparisons in the fourth as the 2022 fourth quarter impact from completed construction was quite significant.

在墓地方面，我們預計今年下半年的預售產量將小幅下降至低個位數增長。大型房地產銷售和核心平均水平的積極趨勢應該會受到較低的銷售速度的影響，特別是對於我們對價格敏感的消費者而言。我們希望，通過對墓地財產更加消費者友好的付款條件來增強入門級客戶的客戶主張，將對 2023 年末和 2024 年的速度產生有利影響。 新竣工建設項目的影響未來兩個季度的公墓收入應與第三季度的確認收入相比有利，而第四季度的收入則略有負面比較，因為竣工建設對2022 年第四季度的影響相當大。

From an earnings per share perspective, we would expect to be able to deliver year-over-year growth in the back half of the year, particularly in the third quarter as the favorable impact of higher funeral sales averages, higher year-over-year cemetery revenues and the impact of our share repurchase program will more than offset the negative effects of slight volume declines and significantly higher interest expense associated with our variable rate debt.

從每股收益的角度來看，我們預計下半年能夠實現同比增長，特別是在第三季度，因為葬禮銷售平均數上升、同比上升的有利影響墓地收入和我們的股票回購計劃的影響將足以抵消銷量小幅下降和與我們的可變利率債務相關的利息支出大幅上升的負面影響。

Finally, 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 guys are what makes this company great.

最後，我要感謝整個 SCI 團隊每天為我們的客戶、社區和彼此所做的一切。你們讓這家公司變得偉大。

With that, operator, I'll now turn it over to Eric.

話務員，我現在就把它交給埃里克。

Thank you, Tom, and good morning, everybody. I guess I'll start the way that Tom just ended and really like to extend my sincere appreciation to all of our 25,000 SCI associates. Your dedication to the communities and the client families that you serve. And let's face it, in one of their greatest time of need is really truly inspiring. So thank you. Thank you for all that you do to go above and beyond.

謝謝你，湯姆，大家早上好。我想我會像 Tom 剛剛結束的那樣開始，並向我們所有 25,000 名 SCI 員工致以誠摯的謝意。您對您所服務的社區和客戶家庭的奉獻精神。讓我們面對現實吧，在他們最需要幫助的時刻之一確實非常鼓舞人心。所以謝謝。感謝您為超越所做的一切。

So this morning, I'll walk you through our cash flow results and capital investments during the second quarter. I also want to then make a few comments on our trust fund income and corporate G&A and then discuss our financial position and our recently raised cash flow guidance for 2023. So starting with the quarter, generated strong adjusted operating cash flow in the quarter of $157 million. This exceeded our expectations as more than $16 million over the prior year.

今天早上，我將向您介紹第二季度的現金流結果和資本投資。然後，我還想對我們的信託基金收入和企業G&A 發表一些評論，然後討論我們的財務狀況和最近提出的2023 年現金流指引。因此，從本季度開始，本季度產生了強勁的調整後運營現金流157 美元百萬。這超出了我們的預期，比上一年多了 1600 萬美元。

So let's talk about the factors that are driving this year-over-year increase. First, higher operating income of about $6 million, and you saw that as noted in the press release. Additionally, we had lower cash tax payments of about $23 million on lower book income during the quarter, which were able to more than offset about $20 million of higher interest payments, which, as Tom mentioned, is primarily related to our higher floating rates and slightly higher balance.

那麼讓我們來談談推動這一同比增長的因素。首先，營業收入增加約 600 萬美元，正如新聞稿中所指出的那樣。此外，由於本季度賬面收入減少，我們的現金稅款減少了約 2,300 萬美元，這足以抵消約 2,000 萬美元的較高利息支付，正如湯姆提到的，這主要與我們較高的浮動利率和餘額略高。

Finally, favorable working capital changes during the quarter yielded a net source of about $7 million, and this is primarily associated just with some timing issues as it relates to payables and other customer receivables.

最後，本季度有利的營運資本變化產生了約 700 萬美元的淨來源，這主要與一些與應付賬款和其他客戶應收賬款相關的時間問題有關。

Let me give you a little bit more color on the cash interest. So as I mentioned, interest payments are about $20 million higher on a year-over-year basis. This is primarily due to higher interest rates on our floating rate debt which slightly exceeded our projections. And as an update for full year '23, we entered the year expecting a headwind of about $55 million associated with both interest expense as well as cash interest. We now expect this will be closer to $60 million to $65 million headwind and this primarily relates to floating rates rising a little bit more than what we anticipated. And looking forward, we believe we are effectively positioned to manage this interest rate risk as we are targeting the lower end of our leverage range by limiting the amount of floating rate debt that we are utilizing. So as of quarter end, approximately 29% of our total debt was floating with a current rate of just over 7%.

讓我為您詳細介紹一下現金利息。正如我所提到的，利息支出同比增加了約 2000 萬美元。這主要是由於我們的浮動利率債務利率較高，略高於我們的預測。作為 23 年全年的更新，我們預計今年將面臨與利息支出和現金利息相關的約 5500 萬美元的阻力。我們現在預計這將接近 6000 萬至 6500 萬美元的逆風，這主要與浮動利率的上升幅度略高於我們的預期有關。展望未來，我們相信我們能夠有效地管理這種利率風險，因為我們通過限制我們正在利用的浮動利率債務金額來瞄準槓桿範圍的下限。因此，截至季度末，我們總債務的大約 29% 處於浮動狀態，當前比率略高於 7%。

So now looking at capital investment activity during the quarter, we invested a total of $258 million. This included investments into our current businesses, new growth opportunities, accretive acquisitions, in addition to capital return to our shareholders.

現在看看本季度的資本投資活動，我們總共投資了 2.58 億美元。這包括對我們當前業務的投資、新的增長機會、增值收購，以及股東的資本回報。

So let's break this down a little bit further for you this morning. We deployed $70 million back into our current businesses with $38 million of cemetery development and $32 million of maintenance capital into our facilities. We also had $20 million invested into digital systems and initiatives. Some cemetery development spend was accelerated in the quarter associated with large projects at our large Rose Hill cemetery on the West Coast. We expect the back half of this year to spend on total maintenance capital will moderate and will be within our guidance range of $290 million to $310 million for the full year of 2023. We also invested close to $10 million in growth capital related to the construction of new funeral home facilities in several states, including Virginia, California, Florida, as well as the expansion of some of our existing funeral homes and cemeteries in Ohio, Louisiana and Texas.

今天早上讓我們為您進一步分解一下。我們將 7000 萬美元重新部署到當前業務中，其中 3800 萬美元用於墓地開發，3200 萬美元用於設施維護。我們還投資了 2000 萬美元用於數字系統和計劃。本季度，與我們位於西海岸的大型玫瑰山公墓的大型項目相關的一些公墓開發支出有所加快。我們預計今年下半年的總維護資本支出將有所放緩，並將在 2023 年全年 2.9 億至 3.1 億美元的指導範圍內。我們還投資了近 1000 萬美元的與建設相關的增長資本我們在弗吉尼亞州、加利福尼亞州、佛羅里達州等多個州新建殯儀館設施，並擴建俄亥俄州、路易斯安那州和德克薩斯州的一些現有殯儀館和墓地。

On the acquisition front, we closed 3 transactions in Illinois, California and Tennessee for a total of just over $30 million, which brings our first half acquisition spend to almost $40 million. We remain positive and very optimistic about our acquisition momentum and our full year acquisition investment target range of $75 million to $125 million, which we still firmly believe in.

在收購方面，我們在伊利諾伊州、加利福尼亞州和田納西州完成了 3 筆交易，總金額略高於 3000 萬美元，這使我們上半年的收購支出達到近 4000 萬美元。我們對我們的收購勢頭保持積極且非常樂觀的態度，我們仍然堅信全年收購投資目標範圍為 7500 萬美元至 1.25 億美元。

Finally, we returned nearly $127 million of capital to shareholders in the quarter, which is really $41 million of dividends and about $86 million of share repurchases. So now I'd like to touch briefly on both trust fund income and corporate G&A. And as we noted in the release, trust fund income was favorably impacted by favorable market returns over the past 12 months as well as trust fund income retained associated with some unclaimed property processed during the quarter. Corporate G&A during the quarter was $35 million or $11 million lower than the prior year and slightly below our expectations. This decrease was primarily driven by lower incentive compensation expense versus the prior year quarter. Going forward, we anticipate that G&A expenses for the remainder of the year will fall within our expected range that I mentioned to you before of approximately $38 million to $40 million per quarter.

最後，我們在本季度向股東返還了近 1.27 億美元的資本，這實際上是 4100 萬美元的股息和約 8600 萬美元的股票回購。現在我想簡單談談信託基金收入和企業管理及行政費用。正如我們在新聞稿中指出的那樣，信託基金收入受到過去 12 個月良好市場回報以及本季度處理的一些無人認領財產相關保留的信託基金收入的有利影響。本季度的公司管理費用為 3500 萬美元，比上年減少 1100 萬美元，略低於我們的預期。這一下降主要是由於激勵薪酬費用較去年同期有所下降。展望未來，我們預計今年剩餘時間的一般管理費用將落在我之前向您提到的每季度約 3800 萬至 4000 萬美元的預期範圍內。

Now let me shift to a few comments on our financial position. We continue to have a favorable debt maturity profile and liquidity of just over $1 billion at the end of the quarter. This consists of approximately $170 million of cash on hand plus approximately $860 million available on our long-term bank credit facility. Our leverage at the end of the quarter increased slightly to about 3.6x. That's a net debt-to-EBITDA number, and we expect to continue to manage our leverage toward the lower end of our targeted range of 3.5 to 4x at least in the near term.

現在讓我談談對我們財務狀況的一些評論。截至本季度末，我們仍然擁有良好的債務到期狀況和略高於 10 億美元的流動性。這包括約 1.7 億美元的庫存現金以及約 8.6 億美元的長期銀行信貸額度。本季度末我們的槓桿率略有上升至約 3.6 倍。這是淨債務與 EBITDA 的比率，我們預計至少在短期內將繼續將槓桿率控制在 3.5 至 4 倍目標範圍的下限。

So now I want to address some changes to the full year cash flow outlook as our cash flow has continued to be resilient. First, primarily due to the net sources of preneed working capital, we are increasing the low end of our pretax adjusted cash flow from operations, excluding special items, the guidance range from $910 million to $960 million to $920 million to $960 million.

因此，現在我想談談全年現金流前景的一些變化，因為我們的現金流繼續保持彈性。首先，主要由於預需營運資金的淨來源，我們正在提高稅前調整後運營現金流的下限，不包括特殊項目，指導範圍從 9.1 億美元至 9.6 億美元至 9.2 億美元至 9.6 億美元。

So a slight change there. Secondly, we are now expecting a material reduction of cash taxes to be paid in 2023, and this is as a result of a change in tax accounting method related to the timing of recognition of cemetery property revenue for tax purposes and the tax return. Generally speaking, this tax accounting method change will result in the deferral of cash taxes into future years when the delivery of cemetery property occurs versus at the point of sale.

所以有一點小小的改變。其次，我們目前預計 2023 年繳納的現金稅將大幅減少，這是由於與確認墓地財產收入的納稅時間和納稅​​申報表相關的稅務會計方法發生了變化。一般來說，這種稅收會計方法的變化將導致現金稅推遲到未來幾年，當墓地財產交付時而不是銷售時。

We estimate the impact in 2023 as we transition to this new method will be about $80 million of lower cash taxes for '23. So we're adjusting our full year cash tax guidance from $160 million to $170 million down to $80 million to $90 million as a result. We're not really prepared to give any further guidance for '24, but we would anticipate cash tax payments in '24 at this point to also to be lower before returning to more normal levels in 2025 and beyond.

我們估計，當我們過渡到這種新方法時，到 2023 年的影響將為 23 年減少約 8000 萬美元的現金稅。因此，我們將全年現金稅收指導從 1.6 億至 1.7 億美元調整為 8,000 萬至 9,000 萬美元。我們並不真正準備好為“24”提供任何進一步的指導，但我們預計“24”目前的現金稅支付也會較低，然後在 2025 年及以後恢復到更正常的水平。

So when you take that together, we are raising our 2023 adjusted after-tax operating cash flow guidance range by $85 million from $740 million to $800 million to $830 million to $880 million with a midpoint of $855 million. This also represents a $30 million increase over the $825 million generated in 2022.

因此，綜合考慮，我們將 2023 年調整後稅後運營現金流指導範圍提高了 8500 萬美元，從 7.4 億美元至 8 億美元上調至 8.3 億美元至 8.8 億美元，中位數為 8.55 億美元。這也比 2022 年的 8.25 億美元增加了 3000 萬美元。

So our strong cash flow and balance sheet position will continue to position us well to allocate capital prudently to the highest and best use to maximize shareholder value. I would again like to thank our entire SCI team for their contributions to achieving these strong cash flow and earnings results.

因此，我們強勁的現金流和資產負債表狀況將繼續使我們能夠審慎地分配資本，以實現最高和最佳用途，從而實現股東價值最大化。我要再次感謝我們整個 SCI 團隊為實現這些強勁的現金流和盈利業績所做的貢獻。

Operator, this concludes our prepared remarks. And with that, I'd now like to open the call -- turn it back to you and open the call up for questions.

接線員，我們準備好的發言到此結束。就這樣，我現在想開始通話——將其轉回給您並開始提問。

(Operator Instructions) The first question comes from Tobey Sommer at Truist Securities.

（操作員說明）第一個問題來自 Truist Securities 的 Tobey Sommer。

I wanted to dig into that change in buying behavior of your more price-sensitive customer. Maybe could you set the stage by describing what it was like in recent years and maybe giving us some color around the -- either the price sensitivity sort of the price points at which this happens or what your field reps are learning in terms of interactions with those prospective customers?

我想深入了解對價格更敏感的客戶的購買行為的變化。也許您可以通過描述近年來的情況來奠定基礎，也許可以給我們一些顏色——要么是發生這種情況的價格點的價格敏感性，要么是您的現場代表在與客戶互動方面正在學習的內容那些潛在客戶？

Sure, Tobey. I'll give a shot at that. A couple of things that I think, be aware of. When you think about price sensitivity in the cemetery consumer, just let's look at the year-over-year comparisons. I think what happened is we saw a lot more volatility in the consumer -- in the cemetery segment versus the funeral. And I think there's a reason for that. The average consumer is younger in cemetery. We've talked about before, they tend to transact earlier. So if you go back to kind of the COVID impact, younger people started getting concerned about what was happening. And so we saw kind of, I'd say, a surge in interest, particularly around the cemetery product.

當然，托比。我會嘗試一下。我認為有幾件事需要注意。當您考慮墓地消費者的價格敏感性時，讓我們看一下同比比較。我認為發生的事情是我們看到消費者的波動性更大——在墓地領域與葬禮領域。我認為這是有原因的。墓地的消費者平均年齡偏小。我們之前談到過，他們傾向於更早進行交易。因此，如果你回顧一下新冠疫情的影響，年輕人開始擔心正在發生的事情。所以我想說，我們看到了興趣的激增，特別是圍繞墓地產品。

So what we're really seeing is a harder comparison back, let's say, relative, as an example, to a funeral customer. So part of this is just the success that we've had in trying to compare back to it. The other thing that we want to introduce is because, again, we're seeing at this level, and this is based on feedback, based upon good consumer discretionary data, got to give a shout out to John for his piece. There's a lot of correlation on that. And so I think what's happening is when you saw a lot of inflation, particularly around food and I'd say from a consumer discretionary perspective, you're getting hammered by a consumer staple, right? So as those prices went up and people had to make choices, this is a discretionary purchase, they're kind of backing away. So that's a factor that we think is impacting now that, again, should subside at some point. But I also want to make sure everybody understands some of this is the surge of volume that we saw, particularly through the cemetery segment over the last few years and comparing back to that hard number.

因此，我們真正看到的是一個更困難的比較，例如，相對於葬禮顧客。因此，這部分是我們在嘗試與之比較時所取得的成功。我們要介紹的另一件事是，我們再次看到這個水平，這是基於反饋，基於良好的消費者可自由支配數據，必須為約翰的作品大聲喝彩。這有很多相關性。所以我認為，當你看到嚴重的通貨膨脹時，特別是在食品方面，我想說，從非必需消費品的角度來看，你會受到必需消費品的打擊，對嗎？因此，隨著價格上漲，人們不得不做出選擇，這是一種可自由支配的購買，他們有點退縮。因此，我們認為這是一個正在產生影響的因素，但在某個時候應該會消退。但我也想確保每個人都明白其中一些是我們看到的數量激增，特別是通過過去幾年的墓地部分並與那個硬數字進行比較。

Appreciate that. As a follow-up, I was wondering, what does the cumulative surge over the last 3 years in this particular customer niche in cemetery sales? What does that total in how long -- over what period of time might demand need to normalize, do you think going forward?

感謝。作為後續，我想知道，在過去三年中，墓地銷售的這個特定客戶群的累計激增是多少？您認為未來需要多長時間才能實現需求正常化？

I think it's normalizing now. And if you look back, there's a lot of, again, more volatility in the cemetery than on the funeral side. But if you take a compounded growth approach to cemetery, we're about 10% annually compounded from pre-pandemic levels. And that's what we saw in the second quarter, right? And I think we're kind of stabilizing, normalizing now. So that's a pretty good level. On the funeral side, that same number is about 8%. Now the difference is funeral didn't get nearly the spikes in 2020, 2021.

我認為現在正在正常化。如果你回顧過去，你會發現墓地的波動性比葬禮方面的波動更大。但如果你對墓地採取複合增長的方式，我們會比大流行前的水平每年復合增長約 10%。這就是我們在第二季度看到的，對吧？我認為我們現在正在趨於穩定、正常化。所以這是一個相當不錯的水平。在葬禮方面，同樣的數字約為 8%。現在的區別是，葬禮在 2020 年和 2021 年並沒有達到峰值。

So if you go back and look at our cemetery sales, particularly preneed cemetery sales, and I don't have the numbers in front of me, but my memory is it was like 15% and 20% growth rates over a couple of years and now beginning to normalize in the back half of 2022, a little bit and really normalizing in 2023. So I think we feel like it is stabilizing. I do also think we are dealing with inflation, which is a new -- a newer phenomenon, but we feel really good about it.

因此，如果你回頭看看我們的墓地銷售，特別是預需要的墓地銷售，我面前沒有數字，但我的記憶是，幾年內增長率約為 15% 和 20%，現在在2022 年下半年開始正常化，到2023 年會稍微正常化。所以我認為我們感覺它正在穩定下來。我確實也認為我們正在應對通貨膨脹，這是一個新的現象，但我們對此感覺非常好。

And part of it is maybe we need to have some payment terms at this segment that are -- make it more affordable for people to begin that process because we still see an interest. It's probably not the same interest you saw 3 years ago, but we still see an interest in people taking care of this, and we're there to help them.

部分原因是我們可能需要在這個細分市場製定一些付款條件，讓人們能夠更負擔得起開始這一過程，因為我們仍然看到了興趣。這可能與您三年前看到的興趣不同，但我們仍然看到人們對解決這個問題感興趣，並且我們隨時為他們提供幫助。

The next question is from John Ransom at Raymond James.

下一個問題來自 Raymond James 的 John Ransom。

So if I -- let's just for argument sake, say that preneed cemetery production is going to be down 5% in the back half of the year. What would be the 2 -- I know this is simplistic, but if we had 2 buckets of revenue, let's say you have the high end versus the low end, what's the decline in the low end that's factored into that minus 5% versus whatever growth or trend you're seeing in the high end, just to think about the impact of the low end.

因此，如果我——為了論證起見，假設今年下半年墓地產量將下降 5%。 2 是什麼——我知道這很簡單，但是如果我們有 2 部分收入，假設你有高端和低端，那麼低端的下降是多少，與其他的相比，負 5% 的下降是多少？您在高端看到的增長或趨勢，只需考慮一下低端的影響。

Well, first, I don't think I ever said it'd be down 5% so it's hard for me to quantify for you. But we feel a little more excited about back half of the year than that. But I do think we would expect our high end to continue to grow and probably in the low kind of teen double digits, the 10%, 15% type of growth, John, that we would anticipate. And I think again, it's this lower tier of the things that we're seeing, we'd probably be looking at similar types of declines, high single digit, 10%, 12% as you think about last year. But remember, you're beginning to compare against periods that experienced some inflation. And I think that's going to be the difference. Right now, inflation, second quarter last year hadn't kicked in as hard. And I think we're going to see some more favorable comparisons, if you will, as you get to the back half.

嗯，首先，我想我從來沒有說過會下降 5%，所以我很難為你量化。但我們對今年下半年的情況感到更加興奮。但我確實認為我們預計我們的高端市場將繼續增長，並且可能會以兩位數的低水平增長，約翰，我們預計會出現 10%、15% 的增長。我再次認為，正是我們所看到的較低層的事物，我們可能會看到類似類型的下降，高個位數，如你去年所想到的 10%、12%。但請記住，您開始與經歷過一定通貨膨脹的時期進行比較。我認為這就是差異所在。目前，去年第二季度的通貨膨脹還沒有那麼嚴重。我認為，如果你願意的話，當你進入後半部分時，我們會看到一些更有利的比較。

So -- okay. So up and down the same. What's the percent of sales to the high end versus to the low end on the production side...

所以——好吧。所以上下都一樣。在生產方面，高端產品與低端產品的銷售百分比是多少？

Well, I guess you'd have to -- well, I think the high end is probably about 15%. I don't have -- because again, I think you'd have to decide where you want to cut that low end to compare to it. But I think the high end is about 15%, those are the large estate sales, I think, over -- we've categorized them over $80,000. So it's not a lot of volume, but it's a good 15% of our revenue.

嗯，我想你必須——嗯，我認為高端可能是 15% 左右。我沒有——因為我想你必須決定在哪裡削減低端來與之比較。但我認為高端約為 15%，我認為這些是大型房地產銷售，我們已將其分類為超過 80,000 美元。因此，雖然銷量不是很多，但占我們收入的 15% 相當不錯。

And so the low end, it wouldn't be 85%. Would it be some like 20% on the low end or...?

所以低端的，不會是 85%。會是低端的 20% 嗎？還是……？

Yes. I would guess it's somewhere 15% of the lower than -- if you credit at what lower than -- anything lower than $10,000 contract about 20%.

是的。我猜想，如果您將低於 10,000 美元的合約歸入大約 20% 的水平，那麼該比例將低於 15%。

Okay. So kind of similar numbers then.

好的。那麼類似的數字。

Yes. Yes. I think...

是的。是的。我認為...

At a high level -- think about the high-end growing, the low end shrinking and then that middle kind of being flat, that would seem to add up somewhat to your guidance.

在高水平上 - 考慮高端增長，低端萎縮，然後中間持平，這似乎在某種程度上增加了你的指導。

I think that's right. The middle being flat is, you're talking about velocity wise. But again, you should get some inflationary pricing to it. So think of that growing slightly in the low to mid-single-digit percentage.

我認為這是對的。中間是平坦的，你正在談論速度方面。但同樣，你應該對其進行一些通脹定價。因此，請考慮以低至中個位數的百分比略有增長。

Yes. And you're just kind of pointing to the lag effects of inflation, so -- in the behavior. The second question, the recognition rate you guys are still pointing to is mid-90s this year. Is that right on cemetery?

是的。你只是指出了通貨膨脹的滯後效應，所以——在行為上。第二個問題，你們現在指的識別率今年還是90年代中期。是在墓地那邊嗎？

Yes.

是的。

So -- it was a little bit lower in the second quarter. So anything to call out there?

所以——第二季度略有下降。那麼有什麼需要注意的嗎？

Yes. I think if you remember, we talked about particularly on the West Coast with the rains in the first half of the year. We had some kind of delays and damages going on in some of those construction projects, which delayed the completion. So we do expect those obviously will get completed probably in the latter part of this year or may push into the first quarter of next year, but that's part of the reason, John, is just surprisingly, there's some pretty severe damage because of the way the rains have fell. And so we're a little bit behind that but again that will catch up.

是的。我想如果你還記得的話，我們特別談到了西海岸上半年的降雨。我們的一些建設項目出現了某種延誤和損壞，導致竣工延遲。因此，我們確實預計這些顯然可能會在今年下半年完成，或者可能會推遲到明年第一季度，但這就是部分原因，約翰，令人驚訝的是，由於方式的原因，造成了一些相當嚴重的損害雨已經下了。所以我們有點落後，但很快就會趕上的。

[Also can I] get to stop thinking about rain, but we got to maybe think about it for 1 more quarter. That's fine. So lastly, as you know, there's been some chatter in the marketplace again about pricing in your funeral and like-for-like. Have you been able to chop any more wood on your relative pricing. And is there anything you could point to that would be quantitative or hard evidence that your prices are in line with your like-for-like competitors?

[我也可以]不再考慮下雨的事情，但我們可能還要再考慮一個季度。沒關係。最後，如您所知，市場上又出現了一些關於葬禮和同類產品定價的討論。你能在你的相對價格上砍掉更多的木頭嗎？您是否可以提出任何定量或確鑿的證據來證明您的價格與同類競爭對手一致？

John, this is Eric. I think as an update, we continue to put -- look at our prices, continue to have pricing mechanisms online, such as starting at prices and the premium price experience that I talked to you about last quarter. Just to refresh your memory, that's about 500 locations of 1,500 that kind of have starting at prices, 400 or so to have like a premium price experience that walks you through a lot of things, including cemetery in those combination facilities. And our general price lists that are out there are probably around 1,000 to 1,100. And we continue to hold market share and get good feedback. So that's not really your question, but I want to reiterate that. So everyone knows that how we kind of have level set that. The second part of your -- what you're asking though is, if you equate it to kind of like the hotel chains, as we've kind of talked about -- you and I have talked about this before. And we say that we're really playing in the middle tier and the upper tiers. We obviously have SCI Direct at the very bottom, which is a different direct-type business in that situation, as you know.

約翰，這是埃里克。我認為作為更新，我們將繼續關注我們的價格，繼續採用在線定價機制，例如從價格開始，以及我上季度與您談到的溢價體驗。順便提醒一下您，大約有 1,500 個地點中的 500 個地點的起始價格為 400 左右，可以帶您體驗很多東西，包括這些組合設施中的墓地。我們的一般價格表可能在 1,000 到 1,100 左右。我們繼續保持市場份額並獲得良好的反饋。所以這並不是你真正的問題，但我想重申這一點。所以每個人都知道我們是如何設定這一水平的。你的第二部分——你要問的是，如果你把它等同於連鎖酒店，正如我們已經討論過的——你和我之前已經討論過這一點。我們說我們實際上是在中游和上層遊戲。顯然，我們在最底層有 SCI Direct，如您所知，在這種情況下這是一種不同的直接類型業務。

But when you look at our homes and our combination facilities and you take like-for-like, we're very comfortable with that with those pricings. If you take our Ritz-Carltons and JW Marriotts and compare it to a lower-tier brand you're going to be able to identify a difference but that's not great analysis in our opinion. Our great analysis is you got to look like-for-like, you got to look at the customer satisfaction surveys. You've got to look at market share. And as we've been reiterating time and time again, I think we're very comfortable with that and with those situations.

但是，當您查看我們的房屋和組合設施並進行比較時，我們對這些價格感到非常滿意。如果您將我們的麗思卡爾頓酒店和 JW 萬豪酒店與較低級別的品牌進行比較，您將能夠發現差異，但我們認為這並不是很好的分析。我們的重要分析是，你必須看起來相似，你必須查看客戶滿意度調查。你必須看看市場份額。正如我們一再重申的那樣，我認為我們對此和這些情況感到非常滿意。

So the last 1 for me, just kind of going 1 more level on that question. So let's just take a typical urban market. And you look at your competitors, how real time is your competitor pricing data? Are they not putting stuff online? Or how do you kind of assess out what your competitors are doing? And what's the lag, if any, if they decide to have a big sale. When do you find out about that?

所以最後一個對我來說，只是在這個問題上再上一層樓。讓我們以一個典型的城市市場為例。你看看你的競爭對手，你的競爭對手定價數據的實時性如何？他們不把東西放到網上嗎？或者你如何評估你的競爭對手正在做什麼？如果他們決定進行大甩賣，那麼會有什麼延遲（如果有的話）。你什麼時候知道這件事的？

We find out about it pretty quick.

我們很快就知道了。

(inaudible) cemetery in Asheville. There's 2 for 1 plots, right? I'll send you a picture from Wells Funeral Home. They were running a little special, so what do you think of that?

（聽不清）阿什維爾的墓地。有2對1的地塊，對吧？我會給你發一張韋爾斯殯儀館的照片。他們的表現有點特別，你對此有何看法？

But we're pretty real time with our market leadership and our market management and our general managements of the combination facilities and location managers. There are independents that have pricing online, and there's a tremendous amount of independents that do not have pricing online, same with some of the consolidators. So it's very market specific, very funeral home specific as well. But even then, we're always understanding where we are in the marketplace. They're using mystery shoppers, and we perhaps are using mystery shoppers as well. But that's not an issue at all. We're very comfortable with our market management and how they understand where specifically they are within the markets.

但我們對市場領導地位、市場管理以及組合設施和地點經理的綜合管理非常實時。有些獨立商可以在線定價，也有大量獨立商沒有在線定價，一些集運商也是如此。因此，它非常針對特定市場，也非常針對殯儀館。但即便如此，我們始終了解我們在市場中的位置。他們正在使用神秘顧客，我們也許也在使用神秘顧客。但這根本不是問題。我們對我們的市場管理以及他們如何了解他們在市場中的具體位置感到非常滿意。

Next question is from A.J. Rice at Crédit Suisse.

下一個問題來自 A.J.瑞士信貸銀行的賴斯。

This is M.J. on for A.J. So my first question is, are there any updated thoughts on the pull forward. I think, you previously cited at 110,000 deaths pull-forward. Maybe 10%, 15% in '23 and down slowly and slowly with a very long tail. So are there any updated thoughts on that?

這是 M.J. 為 A.J. 配音。所以我的第一個問題是，關於前移有什麼最新的想法嗎？我想，您之前提到的死亡人數為 110,000 人。 23 年可能是 10%、15%，然後慢慢地、慢慢地下降，尾巴很長。那麼對此有什麼更新的想法嗎？

No. We really don't have those updated thoughts other than to say that it appears to us that volume is where we expected it to slightly better than kind of what we've expected. And when you say, well, let's get very specific in terms of pull forward and excess deaths. And as you know, with the data that's out there with COVID it's increasingly difficult to really have any measuring stick that's out there that anyone reports with any viability for us to compare to.

不。我們確實沒有這些更新的想法，只是說在我們看來，成交量是我們預期的，略好於我們的預期。當你說，好吧，讓我們在提前和超額死亡方面非常具體。如您所知，根據現有的新冠病毒數據，越來越難以真正找到任何人報告的任何可行的衡量標準供我們進行比較。

So there's a lot of moving pieces in terms of our same-store volume, our market share, our acquisitions, which we've done a tremendous job of adding volume, then you have your pull-forward effect. You still have an effect that's clearly out there, but perhaps less than '23, than '22 as it relates to -- as the CDC defines excess deaths, as it relates to heart and strokes and those types of things. But when you put it all together, we're somewhat comfortable with our forecast. If not, maybe it's a little bit better than what we expected.

因此，在我們的同店銷量、市場份額、收購方面，有很多變化，我們在增加銷量方面做了巨大的工作，然後你就會產生拉動效應。你仍然有一個明顯的影響，但可能小於'23，小於'22，因為它與疾病預防控制中心定義的過度死亡有關，因為它與心髒病和中風以及這些類型的事情有關。但當你把所有這些放在一起時，我們對我們的預測有些滿意。如果沒有，也許它比我們預期的要好一些。

And for example, I think, we told you in February in the original guidance that the funeral volume would be down kind of mid- to maybe higher single digits, call that 5%, 6%, 7% down. And it looks like it's more like 4% to 5% down. So it's not that much of a science, which we have a measuring stick from that perspective, but I hope that gives you an idea of where it's trending.

例如，我想，我們在 2 月份的原始指導中告訴過您，葬禮數量將下降中位數甚至更高的個位數，即下降 5%、6%、7%。看起來下降了 4% 到 5% 左右。所以這並不是一門科學，我們從這個角度有一個衡量標準，但我希望這能讓你了解它的趨勢。

Maybe one follow-up. Are there any change in the expectations to full year cemetery margins due to revision down and preneed production? And what is the gross margin on that low-end sale versus the high-end sale?

也許會有一個後續行動。由於下調和提前生產，對全年墓地利潤率的預期是否會發生變化？低端銷售與高端銷售的毛利率是多少？

Ultimately, we continue to think that cemetery is going to end up into kind of the low 30s to mid-30s. I think that's consistent with what we expected. We hope that as recognition continues for the rest of the year and production as well that, that will end up being the -- where we think it'll land. I don't think that's not a change from what we expected based on the tweak of this guidance.

最終，我們仍然認為墓地最終將達到 30 多歲到 30 多歲左右。我認為這與我們的預期是一致的。我們希望，隨著今年剩餘時間的認可和生產的繼續，這最終將成為我們認為它會落地的地方。我認為這與我們根據本指南的調整所預期的沒有變化。

The next question is from Joanna Gajuk of Bank of America.

下一個問題來自美國銀行的 Joanna Gajuk。

I might have missed it, but did you talk about the outlook for the cemetery resales production for the year? How are you thinking about this.

我可能錯過了，但你有沒有談過今年墓地轉售生產的前景？你怎麼看待這個問題。

At the end of the day, we think it's going to grow, obviously compared to prior years, kind of flat to slight growth in the back half of the year because we expect it to be the full year kind of flat to slightly down low single digits. And when you put the 15% first quarter versus this year, you're down already kind of mid- to high single-digit percentages for the first half of the year, Joanna. So for us to get to flat to slightly down in terms of mid-single digits for the full year, we're going to have to have some growth versus the prior year. I think you may see a little bit more of that growth maybe in the fourth quarter just sequentially as I think about 2022, but that's kind of generally how we see it playing out, Joanna.

歸根結底，我們認為與前幾年相比，它將會增長，下半年將持平至小幅增長，​​因為我們預計全年將持平至略有下降。數字。喬安娜，當你將第一季度 15% 與今年相比時，你會發現今年上半年的百分比已經下降到中高個位數。因此，為了使全年的中個位數持平或略有下降，我們必須比上一年有一些增長。我認為你可能會在第四季度看到更多的增長，正如我對 2022 年的看法一樣，但這就是我們通常看到的情況，喬安娜。

For the year, again, maybe slightly down year-over-year. And then how to think about this going forward in '24 and beyond in terms of the production? How you're thinking about that? You expect to grow next year? Or it's going to be -- continue to be a little bit depressed or there's going to be some catch-up?

今年，可能再次同比略有下降。那麼在製作方面如何考慮 24 年及以後的發展？你怎麼想這個？您預計明年會增長嗎？或者會——繼續有點沮喪，或者會出現一些迎頭趕上的情況？

My thoughts would be we will grow in 2024. I think the thing to kind of keep in mind on the cemetery side, this should be a little bit of a drag is going to be the volume because, again, because of the pull forward, a lot of our lead sources come from volume that are walking through our cemeteries, through our funeral homes. And so if you have that pull-forward effect that might put a little bit of damper on comparable volume, your lead sources may be a little less. Having said that, I think if inflation comes down, that could be a tailwind for us when you think about 2024 and that consumer coming back and feeling a little more confident in their ability to transact with us in other consumer discretionary things, Joanna. So I think '24 is a growth year, and there'll be some things that probably help us and some things that we just need to be aware of.

我的想法是，我們將在 2024 年實現增長。我認為在墓地方面要記住的一點是，這應該會有點拖累，因為數量會增加，因為，再一次，因為向前拉動，我們的許多線索來源都來自於我們的墓地和殯儀館。因此，如果你有一種前拉效應，可能會在相當的音量上產生一點阻尼，那麼你的潛在客戶來源可能會少一些。話雖如此，我認為如果通脹下降，當你想到2024 年時，這可能對我們來說是一個順風，消費者會回來並對他們在其他非必需消費品方面與我們進行交易的能力更有信心，喬安娜。所以我認為 24​​ 年是成長的一年，有些事情可能對我們有幫助，有些事情我們只需要注意。

Right. And I guess staying on this for a little bit on the pre-cemetery sales. Can you talk about the percentage breakdown when it comes to those transactions that you provide financing to customers? And also what type of rates, I guess, you're offering? Because I guess, last year, when you had experienced some slowdown in the lower-end consumer, sounds like you had responded to that slower demand by offering better financing options and I guess, kind of presenting a different product or different properties to kind of still attract some of these customers. So can you talk about these dynamics and maybe tell us in terms of percent of these customers that actually use financing options? .

正確的。我想在墓地前的銷售中會繼續關注這一點。您能談談為客戶提供融資的交易的百分比細目嗎？我猜你們提供什麼類型的費率？因為我想，去年，當你經歷了低端消費者的一些放緩時，聽起來你已經通過提供更好的融資選擇來應對需求放緩，我想，有點向不同的人展示不同的產品或不同的財產仍然吸引了其中一些客戶。那麼您能否談談這些動態，並告訴我們實際使用融資方案的客戶百分比？ 。

Sure. We're still seeing about approximately 70% of our consumers are utilizing financing. So to your point, Joanna, one of the things that Steve and his team are putting together now are looking at this segment of consumer. And can we go with lower down payments, can we stretch out the payment terms over longer periods. So we're going to utilize that specific to this consumer because, again, we want them to be able to have that peace of mind. And so we're hopeful that those type of incentives will work. We typically are going to look at local markets and use different things, maybe lesser down payments, more important here, lower interest rates, stretching out terms. So we really try to customize that to what we think the local market need would be.

當然。我們仍然看到大約 70% 的消費者正在利用融資。因此，就你的觀點而言，喬安娜，史蒂夫和他的團隊現在正在做的事情之一就是關注這一消費者群體。我們能否降低首付，能否延長付款期限。因此，我們將針對該消費者利用這一點，因為我們再次希望他們能夠安心。因此，我們希望此類激勵措施能夠發揮作用。我們通常會關注當地市場並使用不同的東西，也許更少的首付，更重要的是，降低利率，延長條款。因此，我們確實嘗試根據我們認為當地市場的需求進行定制。

And then what kind of rates? I guess in general, you -- because you're offering some of these financing options to the customers. So what kind of rates, I guess, you're able to offer them? If you can talk about that.

那麼什麼樣的費率呢？我想一般來說，你——因為你正在向客戶提供其中一些融資選擇。那麼我想你們能夠提供什麼樣的價格呢？如果你能談談這一點的話。

I mean they're very reasonable. I think they're going to be -- they vary, but I'd say in the low to mid kind of single-digit percentage rates is the type of financing costs that are out there today.

我的意思是他們非常有道理。我認為它們會有所不同，但我想說，中低個位數的百分比率是當今的融資成本類型。

Okay. That's helpful and last one -- yes, exactly. And I'm sorry just last one. On that pre-cemetery sales production. So I guess you talked about previously about the higher-end consumer where you actually see growth there sounds like it on the large sales. And so are you seeing any changes there? Or it kind of continues to stay for you robust because I guess some data for the broader, I guess, consumer categories, it seems like on the high end, maybe there was some [photo,] but actually the lower end is improving, I guess, maybe your industry is a little bit unique that it doesn't behave similarly. But any indication like how, I guess, this high end is tracking in terms of any crack in there or it's kind of accelerating or staying kind of stable when it comes to that consumer demand.

好的。這很有幫助，也是最後一個——是的，正是如此。我很抱歉只是最後一個。就說預售墓地生產。所以我想你之前談到過高端消費者，你實際上看到了那裡的增長，聽起來就像是大規模銷售。那麼您看到那裡有什麼變化嗎？或者它對你來說繼續保持強勁，因為我猜想更廣泛的消費者類別的一些數據，看起來像是在高端，也許有一些[照片]，但實際上低端正在改善，我猜猜，也許你的行業有點獨特，它的行為並不相似。但我猜想，任何跡象表明，這個高端產品正在跟踪其中的任何裂縫，或者當涉及到消費者需求時，它會加速或保持穩定。

I'd say pretty stable. I mean we definitely saw growth in the year-over-year second quarter. So I feel really good about it. And I think the feedback from talking to our salespeople that are dealing with those customers is they're out there and they're willing to transact. So a lot of activity, and so we feel really good about the high end. Again, we're correlating that with they're not having one to borrow the money and two, they're not competing with other consumer staples of their daily cash flow. And so that's where we're really seeing the impact is in people that probably have been very impacted by inflation and those high-end customers tend not to be. And so other things will influence their behavior. We've even in the past said it correlates sometimes with the stock market, right? Everybody at the high end feels a little richer because the market -- and that may be a bigger impact on people's willingness to transact at the high end than things like inflation.

可以說相當穩定。我的意思是，我們在第二季度確實看到了同比增長。所以我對此感覺非常好。我認為，與與這些客戶打交道的銷售人員交談後得到的反饋是，他們就在那裡並且願意進行交易。活動非常多，所以我們對高端產品感覺非常好。再次，我們將其與他們沒有一個可以藉錢和兩個相關聯，他們沒有與日常現金流的其他消費必需品競爭。因此，這就是我們真正看到的影響是那些可能受到通貨膨脹影響很大的人，而那些高端客戶往往不會受到影響。所以其他事情也會影響他們的行為。我們過去甚至說過它有時與股市相關，對吧？高端市場的每個人都感覺自己更富有了一點，因為市場的影響可能比通貨膨脹等因素對人們高端交易意願的影響更大。

And I'm sorry, did you give a number for the large sales revenues in the quarter? Because I guess, in Q1, you talked about like $37 million or so for these large sales?

抱歉，您是否給出了本季度大量銷售收入的數字？因為我猜，在第一季度，您談到的這些大額銷售額約為 3700 萬美元？

I don't have those in front of me. I can tell you that the growth was double-digit growth. But I think it's probably around -- my memory is it's just north of maybe $50 million in the quarter or something like that.

我面前沒有這些。我可以告訴你，增長是兩位數的增長。但我認為這可能是——我的記憶是，本季度的銷售額可能超過 5000 萬美元或類似的數字。

Okay. And it was double digits year-over-year?

好的。同比增長是兩位數？

Yes.

是的。

Yes, it was and it was about $50 million.

是的，確實如此，而且金額約為 5000 萬美元。

All right. Perfect. That's super helpful. And if I may just squeeze the very last one, following up to some other questions around the price competition discussions that are out there in the market. So on the funeral rule, any update on the timing for when we might hear from the FTC for these proportions? Just I know they're hosting a listening session early September. So is there any indication of the timing for when they actually could come out with a decision?

好的。完美的。這非常有幫助。我可以緊接著最後一個問題，跟進市場上有關價格競爭討論的其他一些問題。那麼，關於葬禮規則，我們何時可以收到聯邦貿易委員會關於這些比例的最新消息？我只知道他們將在九月初舉辦聽證會。那麼是否有任何跡象表明他們何時可以真正做出決定？

No, we don't have any more insight, Joanna, than you do. I mean if you remember, this started in what, late '19 or early 2020. So it's been clearly 3.5 years so far. You're right in saying that there is going to be a public workshop using their words on September 7. We'll have a seat at that table, obviously, along with everybody else that wants to participate. They kind of build that as listening to the public's comments and discussing possible changes to the rule. .

不，喬安娜，我們的洞察力並不比你多。我的意思是，如果你還記得的話，這一切始於 19 年底或 2020 年初。所以到目前為止，顯然已經過去 3.5 年了。你說得對，用他們的話來說，9 月 7 日將舉行一個公共研討會。顯然，我們將和其他所有想參加的人一起坐在那張桌子上。他們將其視為傾聽公眾的評論並討論規則可能的變化。 。

So we don't quite know what that entails, but all indications are it has to do with general price list, disclosures, onlines and those types of things. And earlier in the call, if you had an opportunity to hear this or not, I don't know if you're on from the beginning, but I kind of gave you an update and the update was really not much has changed.

所以我們不太知道這意味著什麼，但所有跡像都表明它與一般價目表、信息披露、在線和這些類型的事情有關。在電話會議的早些時候，如果您有機會聽到這一點，我不知道您是否從一開始就在聽，但我給您提供了更新，而且更新確實沒有太大變化。

We continue to have pricing online on 2/3 to 3/4 of our funeral homes as we sit here today and GPLs online from that perspective. And we continue to believe that we have price transparency for our consumers. Our consumers have told us that clearly in the J.D. Power's surveys, and we feel comfortable with where we are moving forward.

今天我們坐在這裡，我們繼續對 2/3 至 3/4 的殯儀館進行在線定價，並從這個角度在線進行 GPL。我們仍然相信我們為消費者提供價格透明度。我們的消費者在 J.D. Power 的調查中清楚地告訴我們這一點，我們對我們的前進方向感到滿意。

The next question comes from Scott Schneeberger at Oppenheimer.

下一個問題來自奧本海默的斯科特·施尼伯格。

Just have one more follow-up on the many questions on preneed cemetery. Well, I guess it's a 2-parter actually. The high end is a big focus here. I know Rose Hills you had the delay in -- because of the weather. Could you talk about when that was completed? So first part of the question is, recognition versus production? How might we think about that location specifically? Because I know that was a meaningful contributor. And then the second part of the question is, it sounds like you all are very confident that the demand will remain there for the high end. How do you work with regard to capacity because I know things like Rose Hills pop up and then you might have a [role] where before you have something new constructed that excites the potential consumers. So just curious on your capacity to keep that going.

只是對有關預需要墓地的許多問題再進行一次跟進。嗯，我想這實際上是一個2人的。高端是這裡的一大焦點。我知道您在玫瑰山 (Rose Hills) 的行程延誤了——因為天氣原因。您能談談什麼時候完成的嗎？所以問題的第一部分是，認可與生產？我們如何具體考慮該位置？因為我知道這是一個有意義的貢獻者。問題的第二部分是，聽起來你們都非常有信心高端產品的需求將保持不變。你如何處理容量方面的工作，因為我知道像玫瑰山這樣的事情會突然出現，然後你可能會扮演一個[角色]，在你建造一些新的東西來激發潛在消費者之前。所以只是對你保持這種狀態的能力感到好奇。

Okay, Scott, it's good to hear from you. So as it relates to production, and particularly, you mentioned the West Coast Rose Hills. So as you think about the first quarter, the thing that was really poor about the timing is Ching Ming. So Ching Ming sales are going to occur typically in March and in April, depending on the market. But unfortunately, that weather event occurred during those periods. And so you don't necessarily catch up, let's say, in June, July, August, as you think about production. The good news that I would look at it is if you don't have a rain event next year, you ought to have a pretty good first quarter, maybe pretty good second quarter when you think about those particular markets. .

好的，斯科特，很高興收到你的來信。因為它與生產有關，特別是您提到的西海岸玫瑰山。因此，當你思考第一季度時，真正糟糕的時機是《清明節》。因此，清明促銷通常發生在三月和四月，具體取決於市場情況。但不幸的是，那個天氣事件發生在那些時期。因此，當您考慮生產時，您不一定會趕上，比方說，在六月、七月、八月。我認為的好消息是，如果明年沒有降雨事件，那麼當您考慮到這些特定市場時，第一季度應該會相當不錯，也許第二季度也會相當不錯。 。

First, capacity goes, we're constantly developing new cemetery gardens, and we're not -- we're never going to be in a position where we don't have that available for people. So really no concerns around it. Your last piece, I think you talked about was recognition. And I mentioned this a little bit in my comments, but I'll be a little more specific for you. These can be lumpy, and Eric talked a little bit about we're not getting the recognition rates where we were. So some projects have been pushed back. As we think about the third quarter, we should see a pretty favorable comparison of recognition rate and because, again, I think we've got some projects that pushed that will get done in the third quarter. When you get to the fourth quarter, it's still going to be good, but you're comparing back against a pretty monster fourth quarter 2022.

首先，容量不斷增加，我們不斷開發新的墓地花園，我們永遠不會處於無法為人們提供墓地花園的境地。所以真的不用擔心。我想你談到的最後一篇文章是認可。我在評論中提到了這一點，但我會為您提供更具體的信息。這些可能是不穩定的，埃里克談到了我們沒有達到我們原來的識別率。因此，一些項目被推遲。當我們考慮第三季度時，我們應該看到識別率的相當有利的比較，因為我認為我們有一些項目推動這將在第三季度完成。當你進入第四季度時，它仍然會很好，但你正在與 2022 年第四季度的相當怪物進行比較。

We had a lot of projects pushed to the fourth quarter. So the comparison, when you think about recognition, it's going to be down year-over-year would be our guess at this point. And again, some of these projects, particularly on the West Coast, where we had the damage, we might even push into 2024.

我們有很多項目被推遲到第四季度。因此，當你考慮認可度時，我們目前的猜測是，它會逐年下降。再說一次，其中一些項目，特別是在我們遭受破壞的西海岸，我們甚至可能會推遲到 2024 年。

All right. Great. I want to swing it over to the funeral side now because that helped out certainly in this quarter, and then the volume cadence down just low single digits, 1%. That was a bit better than we expected. So you've seen, I think, a nicer tail during this perceived reversion period. But I heard and just -- I think it was a response to questions earlier, you said it may be some concern that, that continue to -- or that could start to fall off a bit more. So just curious what you're seeing with excess death and then how you see that trending over the back half of the year into next year?

好的。偉大的。我現在想把它轉到葬禮方面，因為這在本季度確實有所幫助，然後音量節奏下降了低個位數，1%。這比我們預期的要好一些。所以我認為，在這個感知的回歸期間，你已經看到了更好的尾巴。但我聽說——我認為這是對之前問題的回應，你說這可能是一些擔憂，這種擔憂會繼續——或者可能會開始進一步減弱。所以只是好奇你看到的死亡人數過多是什麼，然後你如何看待今年下半年到明年的趨勢？

Got it. So I think the way that we model it, someone was asking about the pull-forward effect. And again, a lot of these are assumptions, and it's really hard to track and know what it is. But the way that we model pull forward, think of it as, you got into 2023 for our base of business, it might be somewhere in the 15,000 to 20,000 cases that aren't there and that, that would diminish over time. So again, I don't want to get specific numbers. But -- so if you put that against us, you'd say, all in, we'd expect volumes to be down, call it, 5%.

知道了。所以我認為我們建模的方式，有人在問前拉效應。再說一次，其中很多都是假設，很難追踪和知道它是什麼。但我們模擬拉動的方式，可以想像一下，我們的業務基礎到了 2023 年，可能會有 15,000 到 20,000 個案例不存在，而且隨著時間的推移，這種情況會減少。再說一次，我不想得到具體的數字。但是，如果你反對我們，你會說，總而言之，我們預計銷量會下降，稱之為 5%。

I think that's 5% or -- 4% to 5% to 6%. And then you say, okay, what's happening with the death rate other than that. And so what we're experiencing is if we're right on our pull forward that we're seeing -- still continue to see deaths that are up trending other than this pull-forward effect. And I'd tell you that we continue -- the average age continues to skew a little higher.

我認為是 5% 或 4% 到 5% 到 6%。然後你說，好吧，除此之外死亡率發生了什麼。因此，我們所經歷的情況是，如果我們的推進方向正確，那麼除了這種推進效應之外，死亡人數仍然會繼續呈上升趨勢。我想告訴你，我們繼續——平均年齡繼續偏高一點。

So we're not seeing the younger deaths like we did 12, 18 months ago. I would attribute that to baby boomers, health, potentially some market share for us. So those are kind of the 3 things that we think are, I'd say, driving the higher-than-expected performance as it relates to funeral.

因此，我們不會像 12、18 個月前那樣看到較年輕的死亡人數。我將其歸因於嬰兒潮一代、健康以及我們潛在的一些市場份額。因此，我想說，我們認為這三件事推動了與葬禮相關的表現高於預期。

But again, there's an assumption about pull forward that's really hard to ever prove, right? We can do it by age bands. We believe it's pretty accurate. We've done a pretty good job of predicting but it's tough, Scott. So that's where we are. And so I don't expect a fall off. I think over time, that pull forward should diminish. We'll still have an impact, it will be lesser in '24 than it was in '23.

但同樣，有一個關於前拉的假設確實很難證明，對吧？我們可以按年齡段來做到這一點。我們相信這是相當準確的。我們在預測方面做得相當不錯，但這很困難，斯科特。這就是我們現在的處境。所以我預計不會出現下滑。我認為隨著時間的推移，這種向前的推動力應該會減弱。我們仍然會產生影響，但 24 年的影響會比 23 年要小。

All right. Tom, I appreciate that color. Just one more for Eric. It sounds like the new accounting method change with regard -- that's impacting cash taxes. It sounds discretionary. Why now as opposed to a year ago, a year from now. And thank you for the color on the call saying that it should benefit this year, it should probably benefit '24, but those taxes would be coming up for payable in '25 and '26. Is there something you're doing there, Eric, that you wanted to increase cash in the current years and I guess that's transitioning into a question of what's your view on allocation? Is there something in the pipeline for M&A coming right or want to be aggressive with buybacks? Just curious on that.

好的。湯姆，我很喜歡那個顏色。就再給埃里克一份吧。聽起來新的會計方法發生了變化——這正在影響現金稅。聽起來是隨意的。為什麼現在而不是一年前，一年後。感謝您在電話會議上的發言，稱今年應該受益，可能應該使 24 年受益，但這些稅款將在 25 年和 26 年繳納。埃里克，你在做什麼，你想在最近幾年增加現金，我想這正在轉變為你對分配有何看法的問題？正在進行的併購是否順利，或者想要積極回購？只是對此感到好奇。

Yes. I think if you look at the history of this, Scott, we've always been through looking at accounting method changes to simplify our tax accounting methods, to be honest with you. And we've done this several times over the years. We did have some interaction with the IRS and seen some guidance that allowed us a couple of years ago to start looking at this. But the truth to it is, is that, we have 2, 3 different tax accounting methods for when we recognize for tax purposes, the revenue stream of cemetery property, the one that -- we are switching the other 2 going to, if you will, T-O, going to, is 1 that's called the basis recovery method, which really is the method that's going to result in the deferral of cash taxes, but these cash taxes will eventually be paid when installment payments, when cash received from the consumers, those installment payments are received. So I don't know if that just muddied it up or not. But I just try to basically saying 2 or 3 accounting methods are going to 1.

是的。我想，如果你看看歷史，斯科特，我們一直在研究會計方法的變化，以簡化我們的稅務會計方法，老實說。這些年來我們已經多次這樣做了。我們確實與國稅局進行了一些互動，並看到了一些指導，使我們能夠在幾年前開始考慮這個問題。但事實是，我們有 2、3 種不同的稅務會計方法，當我們出於稅收目的確認墓地財產的收入來源時，我們將切換另外 2 種方法，如果您will，T-O，going to，是1，這被稱為基差回收法，這實際上是導致現金稅延期的方法，但這些現金稅最終將在分期付款時支付，當從消費者那裡收到現金時，這些分期付款已收到。所以我不知道這是否讓事情變得混亂。但我只是試圖基本上說 2 或 3 種會計方法將變成 1 種。

We had a little bit of interaction with some guidances out there that allowed us to do it. We've been working with our advisers. We're going to file our tax return to go from 2 to 3 to 1, and that's what is going to precipitate this issue where you're going to have a temporary deferral of cash taxes and you will eventually pay those cash taxes as the installment receipts come in. It's really just good blocking and tackling and getting better and being strategic as it relates to your tax accounting methods and how you maximize value in terms of the cash tax scenario, it's nothing more than that.

我們與一些指導進行了一些互動，使我們能夠做到這一點。我們一直在與我們的顧問合作。我們將提交納稅申報表，從 2 到 3 到 1，這就是會引發這個問題的原因，您將暫時推遲繳納現金稅，而您最終將支付這些現金稅分期付款收據進來了。這確實是很好的阻止和解決，變得更好，並且具有戰略性，因為它與您的稅務會計方法以及如何在現金稅方案方面實現價值最大化有關，僅此而已。

Understood. And it is going to free up some cash. So just any new considerations we should think about with the use of cash.

明白了。這將釋放一些現金。因此，我們應該考慮使用現金的任何新考慮因素。

No, not at this time.

不，現在不行。

Since there are no further questions at this time. I'd like to turn the conference back over to SCI management.

由於目前沒有進一步的問題。我想把會議轉回給 SCI 管理。

Thank you, everyone, for taking the time today. We appreciate you, and we'll talk to you again for our third quarter -- that we'll talk to you in -- I guess in early...

謝謝大家今天抽出時間。我們感謝您，我們將在第三季度再次與您交談——我想是在早些時候……

Early November.

十一月初。

Yes, early November. Thanks.

是的，十一月初。謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。