You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: This is Debbie Young, director of investor relations at SCI.
With that out of the way, I'll now pass it on to our chairman and CEO, Tom Ryan.
I'm so very proud of your resolve.
You've never wavered from your mission.
You've continued to do what we do best, helping our client families gain closure, comfort, and healing through the process of grieving, remembrance, and celebration.
And a special shoutout to our frontline teammates, who provide peace of mind to our preneed customers, comfort and support to our grieving families, and to our maintenance teams that make every effort to ensure our locations and parks are world class.
Our team gets it.
It's the details that matter.
Now to the business at hand.
Then I will offer some commentary on our 2022 outlook.
Keeping in mind, we must be flexible as we navigate the uncertainty of another year impacted by COVID.
First, in terms of the full year 2021 results.
We ended the year with a strong performance in both our cemetery and funeral segments.
For the year, we grew revenue $632 million, or 18%; and adjusted earnings per share to $4.57, or 57% compared to the prior year.
While we saw 4% comparable funeral volume growth, even growing over a COVID-impacted 2020, the primary drivers of our revenue was mid-20% growth in both preneed and atneed cemetery revenues, combined with a strong 7% increase in our funeral sales average.
Timely, meaningful action in our share repurchase program and debt refinancing also drove healthy increases in our full year 2021 earnings per share.
Now, shifting to the fourth quarter.
We generated adjusted earnings per share of $1.17, a 4% increase over the prior year quarter and a 95% increase over a pre-pandemic fourth quarter of 2019.
Compared to the 2020 fourth quarter, funeral results drove the earnings per share increase as a healthy 8% increase in the funeral sales average offset slightly lower volumes and cost increases associated with staffing and energy.
On the cemetery side, profitability was relatively flat as revenue growth from atneed cemetery sales and preneed cemetery sales was offset by lower impact from new construction on cemetery projects and increased costs from staffing and maintenance.
Below the line, the benefit of fewer shares outstanding offset higher general and administrative, and interest expense, as well as a higher tax rate.
Now, let's take a deeper look into the funeral results for the quarter.
Total comparable funeral revenues grew $47 million, or about 9% over the prior year quarter, exceeding our expectations as core revenues, non-funeral revenues from SCI Direct and general agency revenues all saw impressive growth in the fourth.
Comparable core funeral revenues were $32 million, led by an impressive 8.4% increase in the comparable funeral sales average, The core sales average continues to climb sequentially and is up about 5% over the 2019 pre-COVID fourth quarter.
Our percentage of families selecting to have funerals and celebrations of life has essentially returned to pre-COVID levels, and the funeral sales average is being further positively impacted by an uptick in ancillary revenues, such as flowers and catering.
This increase in average was achieved despite a 120-basis-point increase in the core cremation rate.
Comparable core funeral volume declined 1.5% compared to the prior year quarter, slightly offsetting the positive impact of the funeral sales average.
Keep in mind, the 2020 fourth quarter we were comparing against was acutely impacted by COVID and saw a 17% higher core funeral volume increase over the 2019 fourth quarter.
From a profit perspective, general gross profit increased $10 million while the gross profit percentage dropped 60 basis points to 27%.
Fixed costs in the funeral segment include salaries, fringe, vehicles, facilities, and general and administrative expenses.
In the fourth quarter of 2020, those costs were actually down 2% versus the 2019 fourth quarter even with 17% more volume as the pre-vaccine era of the virus restricted both the consumers and our ability to provide a full service funeral.
In the 2021 fourth quarter, these costs increased by 8% compared to the 2020 fourth quarter.
So overall, our fixed costs have increased 6% over the two-year period, or let's say, 3% on a compounded annual basis while we are caring for 17% more customers than we did in 2019.
So bottom line, I believe we're managing our costs very well against an unusual and difficult 2020 fourth quarter comparison.
Preneed funeral sales production for the quarter exceeded our expectations, growing $30 million from nearly 14% over the fourth quarter of 2020.
Both our core funeral homes and SCI Direct businesses posted strong production increases against an easier fourth quarter comparison in 2020.
Our core preneed funeral average revenue per contract [Inaudible] the backlog now is over $6,300.
This is an 8% increase over 2020 and more than $300 higher than our atneed average for the quarter.
We continue to see positive momentum in generating significantly more high-quality marketing leads at a lower cost through increased focus on digital leads, as well as more sophisticated data targeting for our direct mail and seminar programs.
Now shifting to cemetery.
Comparable cemetery revenue increased $21 million, or 5%, in the fourth quarter.
In terms of the breakdown, atneed cemetery revenue generated $13.5 million of the growth, driven by a higher quality core average sale and a modest increase in contract velocity.
Recognized preneed revenues generated about $8 million of the revenue growth, primarily due to higher recognized preneed merchandise and service growth.
So preneed cemetery sales production grew 30 -- $39 million or 13% in the fourth quarter.
This growth is on top of a 2020 fourth quarter, which grew by 16% over 2019.
A higher core sales average accounted for the majority of the increase.
However, we were still able to grow the velocity of contract sold by almost 5%, which accounted for the remainder of the sales production.
As I mentioned in my preneed funeral discussion earlier, we continue to see production growth from marketing generated leads program that very successfully led to preneed sales production.
Additionally, we're seeing improvements in key sales metrics, such as the number of appointments set and our close rate.
I want to take a moment to recognize the tremendous efforts of our entire cemetery sales team.
For the full year 2021, they produced $1.3 billion cemetery preneed sales production.
This represents a 28% increase over and above the very strong 15% growth in 2020.
This could not be accomplished without a tremendous sales organization that is supported by the tireless efforts for cemetery management, administration, and especially our talented grounds maintenance associates that keep our parks beautiful.
Cemetery gross profits in the quarter declined slightly by $1 million and the gross profit percentage dropped 200 basis points to 36.8%.
Recall that in the prior year quarter, no vaccine exists and we saw fewer visitors to our cemeteries, so labor and maintenance costs were temporarily low.
Now, as we normalized staffing levels and make enhancements in our park's appearance, these costs combined with higher selling costs, higher energy costs, reduced margins as compared to the prior year.
Now let's shift to a discussion about our outlook for 2022.
At the midpoint, this represents a 20% increase from our previously mentioned model midpoint $2.80 in our third quarter conference call.
The $3 midpoint reflects a $0.165 compounded annual growth rate over the pre-COVID earnings per share base in 2019 of $1.90, well above our historical guidance range.
As you think about the cadence for the year as we compare back to a $4.57 2021, we would expect negative comparisons for each quarter.
We should see continued elevated earnings in the first quarter due to COVID as we are continuing to experience increased demand with funeral volume and atneed cemetery sales.
As the year goes on, we would anticipate that the COVID impact becomes immaterial and that we should begin to see the pull-forward impact from 2020 and 2021 having a mildly negative effect on funeral volumes and atneed cemetery revenue, thereby making the quarterly comparisons increasingly more difficult.
For the year, we believe the favorable COVID impact from the fourth quarter and the pull-forward effect later should effectively offset into an impact that will not be material.
So how are we going to grow earnings per share at a 16.5% compounded annual growth rate from the 2019 base?
First, we reduce the share count with accelerated share repurchases during the uncertainty of the last two years.
The pandemic also forced us to quickly leverage and implement technology in ways that would have taken many years to take hold in an organization of our size.
We believe these accelerated changes have made us more productive with our processes, staffing, and other efficiencies.
On the sales side, we had to lean on our technological tools to manage, allocate leads, and develop and train our counselors, which has resulted in a much more productive organization.
Now, let's discuss some of the segment assumptions.
Within our funeral segment, we know we're going to have to transition period where volumes are affected by the pull-forward of services into 2020 and 2021 that I just described.
Our expectations for the pull forward continue to diminish as we see a larger number of the younger population being affected by these latest surges in COVID and COVID-related mortality.
For funeral volumes, we're anticipating a possible volume decrease in the mid-teen percentage range from 2021, but at levels that are flattish to a pre-COVID 2019 after considering the full-forward impact.
Meanwhile, we expect the average revenue per case to continue to compare favorably, growing at a low single digit range.
And finally, we forecast preneed funeral sales production to grow in a 3% to 5% range for the year.
On the cemetery side of the business, cemetery atneed revenue should correlate strongly with funeral volume so we expect them to also be down in the mid-teen percentage range.
We expect preneed cemetery sales production to fare much better as we can drive activity with marketing leads so e expect a decline in the mid to high single digit percentage range when compared to a very robust 2020 and then returning to a more normalized growth in 2023 but on a much higher base.
Beyond 2022, as I just mentioned, we believe the pull-forward effects will wane, and the trend of year-over-year growth should begin as we approach this aging baby boomer cohort with a leaner, more technologically efficient, and effective operating model.
We continue to believe that after establishing a new base here in 2022, we will return to earnings growth in the 8% to 12% range in 2023.
And with demographic tailwinds and the improvements we have made and planned to continue to make to our operating platform, we expect to capture upside opportunities in the years ahead.
As we reflect over the past seven or eight quarters during this pandemic, we're so proud of all of our associates, especially those who have been on the frontlines with the families and communities we've had the privilege to serve.
We're all hopeful we are closer to the end of this pandemic, which will enable us to return to some form of normalcy for all of us.
So with that, I'd now like to transition to walking you through our cash flow results and capital for the quarter and full year of '21 and then provide some comments on our outlook for 2022.
So operating cash flow is approximately $190 million in the current quarter, compared to $245 million in the prior year with the primary decline due to an increase in cash tax payments during the quarter of $97 million versus the $36 million in the fourth quarter of last year.
Excluding cash taxes in both periods, operating cash flow before taxes increased almost $6 million to $287 million in the fourth quarter, driven by modest increases in earnings and favorable working capital, partially offset by $6 million of higher cash interest payments.
So as we step back and look at the full year of 2021, we generated $912 million in adjusted operating cash flow, representing a substantial increase of $108 million or 13% over the prior year.
Deducting recurrent capex of $260 million, which again represents maintenance, capex and cemetery development capex, we calculate free cash flow for the full year to be an impressive $652 million in 2021, up $33 million from $619 million in 2020.
So capital deployment has really been a highlight all year for us.
And the fourth quarter was no exception, deploying nearly $500 million, which is the highest quarterly capital deployment we have seen in recent history.
This capital went to reinvesting in our businesses first, expanding our footprint through key acquisitions and new funeral home builds and returning capital to shareholders.
Now let's talk about the breakdown.
We invested $110 million in our businesses with $65 million of maintenance capital and $45 million of cemetery development capital spend during the fourth quarter.
From a growth capital perspective, and as I mentioned on our October call, recall that we were very excited about the acquisition candidates we're working with late in 2021.
So I'm happy to report, as you've seen, that those acquisitions closed, bringing the total investments during the quarter to $112 million and again expecting low double digit to mid-teen IRRs on each of these transactions.
These businesses added almost $40 million of full year revenues from 28 funeral homes and two cemeteries in Ohio, California, Illinois, Oregon, and Rhode Island.
We also deployed about $16 million toward new builds in Texas, Colorado, Washington, and Florida.
This brings total 2021 spend on new builds to $43 million with again low double digit to maintain IRRs, which also helped drive additional earnings and cash flow growth for the company.
Finally, we deployed $248 million of capital during the quarter to shareholders through dividends and share repurchases and $700 billion for the full year of 2021.
For the last two years alone, we meaningfully reduced our outstanding shares by about 10% through timely execution on our repurchasing strategy.
Since the inception of our repurchase program, we have now reduced our shares outstanding by just over 50%.
So now let's shift to our outlook for '22 in terms of cash flow and capital.
As Tom mentioned, at the midpoint of our earnings guidance range of $3, we expect to meaningfully exceed our 8% to 12% earnings growth framework for earnings per share when comparing back to pre-COVID 2019 base of $1.09.
So from a cash flow perspective, our 8% to 12% earnings growth framework generally translate historically into about a 4% growth in adjusted cash flow before cash taxes.
So adjusting for $150 million of expected cash taxes in '22, our adjusted cash flow from operations before cash taxes is expected to be about an $850 million at the midpoint.
This equates to a 6.5% CAGR over our pre-COVID 2019 adjusted cash flow from operations before cash taxes of $700 million, which is similarly in excess of this normalized 4% annual growth that we normally expect.
So there are also a couple of items that I'd like to highlight when we think about our adjusting cash flow in 2022.
First, we'll be required to pay the remaining half for about $20 million of payroll taxes that were deferred in 2020 as allowed under the CARES Act.
And as I just mentioned, cash tax payments in '22 are anticipated to be about $150 million based on the midpoint of our earnings guidance, or $115 million lower than the $265 million of 2021.
And from an effective tax rate standpoint, we continue to model in the range of 24% to 25% in 2022.
One other topic I'd like to address for 2022 as we look forward for the full year is our corporate G&A expectations.
Now historically, we've guided to around $125 million to $130 million of annual recurring corporate general administrative expenses.
Recently, we have begun a process to reevaluate our overhead structure with all of the initiatives we currently have underway.
As a result of this review that is ongoing, we have identified about $20 million to $25 million of costs, which we believe may be more appropriately characterized as corporate in nature versus field-related expenses that is primarily related to certain technology, risk, and governance areas.
Therefore, when you're modeling 2022 at this point, I would expect annual corporate G&A to increase to maybe around $145 million to $150 million per year with the corresponding dollar for dollar decrease in costs and the segment margins.
So therefore, with no effect on our bottom line or our cash flows.
So looking forward to 2023, we expect to return to a normalized cash flow growth trajectory with an expected 4% growth and adjusted cash flow from operations before cash taxes, which again is in line with our 8% to 12% earnings growth framework per share that we just mentioned.
So in terms of capital deployment, moving on to some thoughts in 2022.
Our expectations for maintenance and cemetery development capital spending is $270 million to $290 million for the year.
At the midpoint, cemetery development capex comprises about $120 million of this amount, and maintenance capex makes up the remaining $160 million.
This maintenance capex of $160 million includes about $110 million of normal routine maintenance capital used at our funeral and cemetery operating locations, as well as another $50 million for field and corporate support capital.
This $50 million is primarily being deployed toward technology to not only improve the customer experience with ultimately customer-facing technology, but also toward network infrastructure at our operating locations.
In addition to these recurring capital expenditures of $280 million at the midpoint, we expect to deploy $50 million to $100 million toward acquisitions, and roughly $50 million more in new funeral home construction opportunities, which together, as I continue to say, drive meaningful after-tax IRRs, well in excess of our cost of capital.
So to summarize this for a capital deployment strategy for 2022, we really expect to continue much of the same as you've seen from us over the past several years.
We follow a disciplined and balanced approach, deploying capital to the highest relative value for our shareholders.
And of course, this strategy is predicated on our stable free cash flow, our robust liquidity, which is over $1 billion at the end of the year, as well as our favorable debt maturity profile.
Lending additional support to this strategy, our leverage ratio at the end of the quarter landed just under 2.6 times from a net debt to EBITDA perspective.
And as we've noted in the past, looking beyond the impacts of this pandemic, we continue to expect to increase back to our targeted leverage range of 3.5 to 4 times toward the latter part of this year as we lap stronger EBITDA quarters moving forward.
So in closing, after a very strong 2020, we're very pleased that we exceeded those results in 2021.
We are most proud of our team has persevered over the last two very challenging years.
The compassion and professionalism our teams have demonstrated is truly remarkable and we appreciate each and every one of our team members.
As we look forward to another year, I'm very excited about the momentum we have moving forward into 2022.

user
q4 adjusted earnings per share $1.17.
qtrly revenue grew $73 million, or 8%, over prior year quarter to $1,043 million.
sees 2022 adjusted earnings per share $2.80 - $3.20.

assistant