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We assume no obligation and make no undertaking to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the Company, whether as a result of new information, future events, or otherwise.
−Removed: 14 Service Corporation International
Risks Related to Our Business
14 unchanged sentences
If the investments in our trust funds experience significant declines in 2023 or subsequent years or in a high inflation environment, there could be insufficient funds in the trusts to cover the costs of delivering merchandise and services or maintaining our cemeteries in the future.
−Removed: We may be required to cover any such shortfall with cash flows from operations, which could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: We may be required to cover any such shortfall with cash flows from operations,
+Added: 14 Service Corporation International
+Added: which could have a material adverse effect on our financial condition, results of operations, and cash flows.
For more information related to our trust investments, see Note 3 in Part II, Item 8.
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As of December 31, 2022, we had unrealized losses of $4.1 million in the various trusts within these states;
+Added: but no such replenishment is currently necessary.
Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.
−Removed: Our strategic plan is focused on growing our revenue, leveraging our scale, and deploying our capital.
+Added: Our strategic plan is focused on growing our revenue, leveraging our scale, and investing our capital.
Many of the factors that impact our ability to execute our strategic plan, such as the number of deaths and general economic conditions, are beyond our control.
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Failure to execute any or all of our strategic plan could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: We may be adversely affected by the effects of inflation.
+Added: Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure or by reducing the amount of discretionary income consumers have available to spend on our services.
+Added: The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, components, manufacturing and shipping, as well as weakening exchange rates and other similar effects.
+Added: As a result of inflation, we have already experienced modest cost increases and surcharges from our vendors and suppliers on merchandise and goods and may continue to experience additional cost increases in the future, which could be of greater magnitude than those experienced to date.
+Added: In addition, the impacts of inflation are also felt by consumers who face rising prices for a variety of goods and services, which could reduce the amount of discretionary spending that would otherwise be available to our client families and potential client families to spend on our services.
+Added: Although we may take measures to mitigate the effects of inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected.
+Added: Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred.
Our results may be adversely affected by significant weather events, natural disasters, catastrophic events or public health crises.
Three of our largest states by total revenue are California, Texas, and Florida, areas where natural disasters are more prevalent.
−Removed: Significant weather events in these states or other key areas where our operations are concentrated, natural or other disasters, and unforeseen public health crises, such as pandemics and epidemics (including the ongoing COVID-19 pandemic), could disrupt our business through injury or illness to our associates or client families, physical damage, closure or destruction of one or more of our locations, data centers or office facilities, or disrupt the delivery of goods or services by one
−Removed: or more of our vendors, any or all of which could adversely impact our operations or increase our costs, which would adversely affect our financial results.
+Added: Significant weather events in these states or other key areas where our operations are concentrated, natural or other disasters, and unforeseen public health crises, such as pandemics and epidemics (including the ongoing COVID-19 pandemic), could disrupt our business through injury or illness to our associates or client families, physical damage, closure or destruction of one or more of our locations, data centers or office facilities, or disrupt the delivery of goods or services by one or more of our vendors, any or all of which could adversely impact our operations or increase our costs, which would adversely affect our financial results.
Our credit agreements contain covenants that may prevent us from engaging in certain transactions.
−Removed: Our Bank Credit Facility contains, among other things, various affirmative and negative covenants that may prevent us from engaging in certain transactions that might otherwise be considered beneficial to us.
+Added: Our Bank Credit Facilities contain, among other things, various affirmative and negative covenants that may prevent us from engaging in certain transactions that might otherwise be considered beneficial to us.
The covenants limit, among other things, our and our subsidiaries’ ability to:
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• Change our lines of business.
−Removed: Our Bank Credit Facility requires us to maintain certain leverage and interest coverage ratios.
−Removed: These covenants and coverage ratios may require us to take actions to reduce our indebtedness or act in a manner contrary to our strategic plan and business objectives.
−Removed: In addition, events beyond our control, including changes in general economic and business conditions, may affect our ability to satisfy these covenants.
−Removed: A breach of any of these covenants could result in a default of our indebtedness.
−Removed: If we breach certain affirmative covenants or any negative covenants contained in our Bank Credit Facility, then, immediately upon notice from the administrative agent, an event of default will have occurred and the lenders could elect to declare all amounts outstanding thereunder, together with accrued interest, immediately due and payable.
−Removed: If we breach any of the other affirmative covenants contained in our Bank Credit Facility, and such breach continues unremedied for 30 days after receipt of notice thereof, then an event of default will have occurred and the lenders party thereto could elect to declare all amounts outstanding thereunder, together with accrued interest, immediately due and payable.
+Added: Our Bank Credit Facilities require us to maintain a leverage ratio.
+Added: This covenant may require us to take actions to reduce our indebtedness or act in a manner contrary to our strategic plan and business objectives.
+Added: In addition, events beyond our control, including changes in general economic and business conditions, may affect our ability to satisfy this covenant.
+Added: A breach of this covenant could result in a default of our indebtedness.
+Added: If we breach certain affirmative covenants or the negative covenant contained in our Bank Credit Facilities, then, immediately upon notice from the applicable administrative agent, an event of default will have occurred and the lenders could elect to declare all amounts outstanding thereunder, together with accrued interest, immediately due and payable.
+Added: If we breach any of the other affirmative covenants contained in our Bank Credit Facilities, and such breach continues unremedied for 30 days after receipt of notice thereof, then an event of default will have occurred and the lenders party thereto could elect to declare all amounts outstanding thereunder, together with accrued interest, immediately due and payable.
Any such declaration would also result in an event of default under our Senior Indenture governing our various senior notes.
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There is no guarantee that the increasing death benefit will cover future increases in the cost of providing a price-guaranteed service and merchandise, and any such excess cost could be materially adverse to our financial condition, results of operations, and cash flows.
−Removed: 16 Service Corporation International
The financial condition of third-party insurance companies that fund our preneed contracts may impact our future revenue.
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Unfavorable publicity about our business generally or in relation to any specific location could affect our reputation and customers’ trust and confidence in our products and services, thereby having an adverse impact upon our sales and financial results.
+Added: 16 Service Corporation International
+Added: Our failure to attract and retain qualified sales personnel could have an adverse effect on our business and financial condition.
+Added: Our ability to attract and retain a qualified sales force and other personnel is an important factor in achieving future success.
+Added: Buying cemetery and funeral home products and services, especially at-need products and services, is very emotional for most customers, so our sales force must be particularly sensitive to our customers’ needs.
+Added: We cannot give assurance that we will be successful in our efforts to attract and retain a skilled sales force.
+Added: If we are unable to maintain a qualified and productive sales force, our revenues may decline and our cash available for distribution may decrease.
We use a combination of insurance, self-insurance, and large deductibles in managing our exposure to certain inherent risks;
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• It could make us more vulnerable to downturns in general economic or industry conditions or in our business, or prevent us from carrying out activities that are important to our growth.
−Removed: • It could increase our interest expense if interest rates in general increase because a portion of our indebtedness, including all of our indebtedness under our senior credit facilities, bears interest at floating rates.
+Added: • It could increase our interest expense if interest rates in general increase because a portion of our indebtedness, including all of our indebtedness under our Bank Credit Facilities, bears interest at floating rates.
• It could make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including any financial and other restrictive covenants, could result in an event of default under the agreements governing our other indebtedness which, if not cured or waived, could result in the acceleration of our indebtedness.
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As a result, we or our service providers could experience errors, interruptions, delays, or cessations of service in key portions of our information technology infrastructure, which could significantly disrupt our operations and be costly, time consuming, and resource-intensive to remedy.
−Removed: 18 Service Corporation International
Failure to maintain effective internal control over financial reporting could adversely affect our results of operations, investor confidence, and our stock price.
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If we do not maintain effective internal control over financial reporting or implement controls sufficient to provide reasonable assurance with respect to the preparation and fair presentation of our financial statements, we could be unable to file accurate financial reports on a timely basis, and our results of operations, investor confidence, and stock price could be materially adversely affected.
+Added: 18 Service Corporation International
Risks Related to Our Industry
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Unresolved Staff Comments
−Removed: 20 Service Corporation International
Information regarding properties is set forth in Part I, Item 1.
4 unchanged sentences
Not applicable.
+Added: 20 Service Corporation International
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.