22 unchanged sentences
If the investments in our trust funds experience significant declines in 2024 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,
−Removed: 14 Service Corporation International
−Removed: 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, 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.
Financial Statements and Supplementary Data.
+Added: 14 Service Corporation International
If the fair value of these trusts, plus any other amount due to us upon delivery of the associated contracts, were to decline below the estimated costs to deliver the underlying products and services, we would record a charge to earnings to record a liability for the expected losses on the delivery of the associated contracts.
1 unchanged sentence
We may be required to replenish our affiliated funeral and cemetery trust funds to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow.
−Removed: In certain states and provinces, we have withdrawn allowable distributable earnings, including unrealized gains, prior to the maturity or cancellation of the related contract.
+Added: In certain states and provinces, we have withdrawn allowable distributable earnings, including unrealized gains, from our trust funds prior to the maturity or cancellation of the related contract.
Additionally, some states have laws that either require replenishment of investment losses under certain circumstances or impose various restrictions on withdrawals of future earnings when trust fund values drop below certain prescribed amounts.
In the event of market declines that result in a severe decrease in trust fund value, we may be required to replenish amounts in the respective trusts in some future period.
−Removed: As of December 31, 2022, we had unrealized losses of $4.1 million in the various trusts within these states;
−Removed: but no such replenishment is currently necessary.
+Added: As of December 31, 2023, we had unrealized losses of $2.6 million in the various trusts within these states, 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.
3 unchanged sentences
Our inability to leverage scale to drive cost savings, productivity improvements, preneed production, or earnings growth anticipated by management could affect our financial performance.
−Removed: Our inability to identify acquisition candidates and to complete acquisitions, divestitures, or strategic alliances as planned or to successfully integrate acquired businesses and realize expected synergies and strategic benefits could impact our financial performance.
−Removed: Our inability to deploy capital to maximize shareholder value could impact our financial performance.
+Added: Our inability to identify acquisition targets and to complete acquisitions, divestitures, or strategic alliances as planned or to successfully integrate acquired businesses and realize expected synergies and strategic benefits could impact our financial performance.
+Added: Our inability to allocate capital to maximize shareholder value could impact our financial performance.
We cannot give assurance that we will be able to execute any or all of our strategic plan.
9 unchanged sentences
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 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 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, disrupt access to scarce resources such as water supply 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.
62 unchanged sentences
Any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results, financial condition, or cash flow.
−Removed: In the ordinary course of our business, we and our vendors receive and retain certain personal information, in both physical and electronic formats, about our customers, their loved ones, our associates, and our vendors, and there is an expectation that we will adequately protect that information.
+Added: In the ordinary course of our business, we and our vendors receive and retain certain personal information, in both physical and electronic formats, about our customers, their loved ones, our associates, and our vendors.
+Added: There is an expectation that we will adequately protect that information.
In addition, our online operations at our websites depend upon the secure transmission of confidential information over public networks, including information permitting electronic payments.
−Removed: regulatory environment surrounding information security and privacy is increasingly demanding.
−Removed: New laws and regulations governing data privacy, security, cybersecurity, and the unauthorized disclosure of confidential information, including recent legislation in California, other states, and Canadian provinces, pose increasingly complex compliance challenges and potentially elevate our costs.
+Added: regulatory environment surrounding information security and privacy is dynamic and increasingly demanding.
+Added: New laws and regulations governing data privacy, security, cybersecurity, and the unauthorized disclosure of confidential information, including recent legislation in several U.S.
+Added: states and Canadian provinces, pose increasingly complex compliance challenges and potentially elevate our costs.
Any failure by us to comply with these laws and regulations, including as a result of a security or privacy breach, could result in significant penalties and liabilities for us.
−Removed: A significant theft, loss, or fraudulent use of the personally identifiable information we maintain or failure of our vendors to use or maintain such data in accordance with contractual provisions could result in significant costs, fines, and litigation.
+Added: A significant theft, loss, or fraudulent use of the personally identifiable information we maintain or failure of our vendors to use or maintain such data in accordance with contractual provisions could result in significant costs, fines, litigation, and reputational damage.
Additionally, if we acquire a company that has violated or is not in compliance with applicable data protection laws, we may incur significant liabilities and penalties as a result.
7 unchanged sentences
Our Canadian business exposes us to operational, economic, and currency risks.
−Removed: Our Canadian operations represent a significant portion of our revenue.
+Added: Our Canadian operations represent approximately 5% of our revenue.
Our ability to successfully conduct operations in Canada is affected by many of the same risks we face in our U.S.
3 unchanged sentences
dollar and the Canadian dollar may adversely affect our results of operations and cash flows.
−Removed: Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness.
+Added: Our level of indebtedness could adversely affect our cash flows, our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness.
We have a significant amount of indebtedness, which could have important consequences, including the following:
22 unchanged sentences
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: Failure to maintain effective internal control over financial reporting could adversely affect our results of operations, investor confidence, and our stock price.
−Removed: The accuracy of our financial reporting depends on the effectiveness of our internal control over financial reporting.
−Removed: Internal control over financial reporting can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements and may not prevent or detect misstatements because of its inherent limitations.
−Removed: 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.
−Removed: 18 Service Corporation International
Risks Related to Our Industry
5 unchanged sentences
If we are unable to successfully compete, our financial condition, results of operations, and cash flows could be materially adversely affected.
+Added: 18 Service Corporation International
If the number of deaths in our markets declines, our cash flows and revenue may decrease.
7 unchanged sentences
In addition, any strategies we may implement to address these trends may prove incorrect or ineffective.
−Removed: The continuing upward trend in the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows.
−Removed: There is a continuing upward trend in the number of cremations performed in North America as an alternative to traditional funeral service dispositions.
+Added: The continuing upward trend in life expectancy and the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows.
+Added: Generally, life expectancy in North America has increased steadily and is expected to continue to do so in the future, absent events related to pandemics or similar outbreaks.
+Added: Additionally, there is a continuing upward trend in the number of cremations performed in North America as an alternative to traditional funeral service dispositions.
In our operations during 2023, 62.9% of the comparable services we performed were cremation cases compared to 61.3% and 59.2% performed in 2022 and 2021, respectively.
14 unchanged sentences
For example, the funeral industry is regulated at the federal level by the FTC, which requires funeral service locations to take actions designed to protect consumers.
+Added: Although the FTC is considering updates to the Funeral Rule, the rulemaking process is ongoing.
State law regulates preneed sales and imposes licensing requirements.
26 unchanged sentences
The application of unclaimed property laws could have a material adverse effect on our liquidity, cash flows, and financial results.
−Removed: Changes in taxation as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows.
+Added: Changes in taxation, or the interpretation of tax laws or regulations, as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows.
We make judgments regarding the utilization of existing income tax credits and the potential tax effects of various financial transactions and results of operations to estimate our obligations to taxing authorities.
−Removed: Tax obligations include income, franchise, real estate, sales and use, and employment-related taxes.
−Removed: These judgments include reserves for potential adverse outcomes regarding tax positions that have been taken.
+Added: We are also subject to regular reviews, examinations, and audits by taxing authorities with respect to our taxes.
+Added: Our tax obligations include income, franchise, real estate, sales and use, and employment-related taxes and the judgments we make include reserves for potential adverse outcomes regarding tax positions that have been taken.
Changes in federal, state, or local tax laws, adverse tax audit results, or adverse tax rulings on positions taken could have a material adverse effect on the results of our operations, financial condition, or cash flows.
−Removed: Unresolved Staff Comments
−Removed: Information regarding properties is set forth in Part I, Item 1.
−Removed: Legal Proceedings
−Removed: Information regarding legal proceedings is set forth in Note 9 of Part II, Item 8.
−Removed: Financial Statements and Supplementary Data.
−Removed: Mine Safety Disclosures
−Removed: Not applicable.
−Removed: 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.