Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $1.14 for Q4 2025, an 8% increase from $1.06 in the prior year [4] - For the full year 2025, adjusted EPS was $3.85, a 9% increase compared to $3.53 in 2024 [5] - The effective tax rate increased, which negatively impacted EPS growth by $0.06 for the year [5][6] Business Line Data and Key Metrics Changes - Comparable funeral revenues increased by $3 million, or less than 1%, in Q4 2025, with core funeral revenue up by $6 million, or just over 1% [6][7] - Non-funeral home revenue increased by over $2 million, primarily due to an 11% increase in average revenue per service [8] - Comparable cemetery revenue increased by $5 million, or about 1%, driven by an $8 million increase in other revenue [11] Market Data and Key Metrics Changes - The company experienced a decline in core funeral services performed by 1.9% in Q4 2025 [6] - For the full year 2025, comparable funeral volume declined less than 1% [7] - Pre-need cemetery sales production increased by about 2% in Q4 2025, with core sales accounting for a $13 million increase [12] Company Strategy and Development Direction - The company aims to grow pre-need cemetery sales production in the low to mid-single-digit percentage range for 2026, resulting in cemetery revenue growth of about 2%-5% [15] - The focus is on managing inflationary costs and leveraging scale to drive profit growth [15] - The company plans to continue returning capital to shareholders through dividends and share repurchase programs [28] Management's Comments on Operating Environment and Future Outlook - Management expects flat to slightly down funeral volume in 2026, with average revenue per case growing at inflationary rates [14] - The company anticipates a normalized EPS range of $4.05-$4.35 for 2026, reflecting 5%-13% growth [13] - Management expressed confidence in the momentum carried into 2026, particularly in pre-need sales and core customer engagement [14][38] Other Important Information - The company generated strong adjusted operating cash flow of $213 million in Q4 2025, exceeding guidance [18] - Capital investments for Q4 2025 totaled $174 million, with a full-year total of $508 million [20] - The company returned $107 million to shareholders in Q4 2025 through share repurchases and dividends [23] Q&A Session Summary Question: Can you break down your assumptions for cemetery pre-sales production growth for 2026? - Management indicated a slight increase of 2%-3% for large sales and a more robust increase for core sales, expressing confidence in momentum [33][34] Question: How are sales tracking so far this year, particularly in the Rose Hills location? - Management reported positive trends in pre-need cemetery and funeral sales, with a focus on improving lead conversion rates [35][38] Question: What are the plans for developing and selling premium cemetery inventory? - The company plans to invest in tiered inventory offerings to cater to different customer segments, leveraging existing cemetery capacity [67][69] Question: Can you discuss the drivers of lower than inflation expense growth? - Management attributed this to effective cost management strategies, including labor efficiency and supply chain improvements [56][58] Question: What is the outlook for perpetual care trust revenue in 2026? - The company expects continued strong performance in trust funds, with a typical market return model of about 7% [85][86]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported adjusted earnings per share (EPS) of $1.14, an 8% increase from $1.06 in the prior year [4] - For the full year 2025, adjusted EPS was $3.85, a 9% increase compared to $3.53 in 2024 [5] - The company experienced solid increases in revenue, gross profit, and comparable margin percentages in both funeral and cemetery segments [5][6] Business Line Data and Key Metrics Changes - Comparable funeral revenues increased by $3 million, or less than 1%, with core funeral revenue up by $6 million, or just over 1% [6] - Non-funeral home revenue increased by $3 million, primarily due to an 11% increase in average revenue per service [7] - Comparable cemetery revenue increased by $5 million, or about 1%, driven by an $8 million increase in other revenue [12] Market Data and Key Metrics Changes - The company noted a decline in core funeral services performed by 1.9% for Q4 2025, while comparable funeral volume for the full year declined less than 1% [7] - The average revenue per service in the funeral segment grew by 3.2%, despite a modest increase in the cremation rate [6] - Pre-need cemetery sales production increased by $8 million, or about 2%, with core sales accounting for a $13 million increase [13] Company Strategy and Development Direction - The company anticipates a normalized EPS range of $4.05-$4.35 for 2026, indicating a growth of 5%-13% [14] - The strategy includes managing fixed costs below inflationary levels while focusing on productivity to drive profit growth [15] - The company plans to continue returning capital to shareholders through dividends and share repurchase programs [29] Management's Comments on Operating Environment and Future Outlook - Management expects flat to slightly down funeral volume in 2026, with average revenue per case growing at inflationary rates [15] - The company is optimistic about pre-need sales production growth in both core and SCI Direct businesses [16] - Management highlighted a strong financial position and liquidity, allowing for opportunistic investments in 2026 [30] Other Important Information - The company generated strong adjusted operating cash flow of $213 million in Q4 2025, exceeding guidance [20] - Capital investments for the quarter totaled $174 million, with a full-year total of $508 million [22] - The company returned $107 million to shareholders in Q4 2025 through share repurchases and dividends [24] Q&A Session Summary Question: Can you break down your assumptions for cemetery pre-sales production growth? - Management indicated a slight increase of 2%-3% for large sales and a more robust increase for core sales, expressing confidence in momentum heading into 2026 [34] Question: How are sales tracking in your Rose Hills location? - Management reported positive trends in pre-need cemetery and funeral sales, with a focus on improving lead conversion rates [36] Question: What are the opportunities for growing cemetery sales for cremation customers? - The company is piloting initiatives to enhance visibility and awareness for cremation customers, with plans to roll out these efforts across more markets [41] Question: Can you discuss the drivers of lower than inflation expense growth? - Management attributed this to effective supply chain management and labor efficiency initiatives, allowing for better cost control [56] Question: What is the outlook for perpetual care trust revenue? - The company expects continued strong performance in trust funds, with a typical market return modeled at around 7% [84]

Core Insights - McKesson has reported strong performance in the second quarter, achieving a 10% revenue growth, a 26% increase in adjusted operating profit, and a 39% rise in adjusted earnings per share [2] - The company has raised its guidance for the full year based on its strong performance and confidence in continued growth [3] - McKesson is generating robust cash flow and is well-positioned for sustained performance [3]

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $7.46, marking the 23rd consecutive year of earnings per share growth and the 41st consecutive year of dividend growth [3][10] - Consolidated capital spending increased to $3.6 billion, with 87% dedicated to improving safety and reliability [10] - Rate base increased by 14% to an estimated $21 billion as of September 30 [10] Business Line Data and Key Metrics Changes - Approximately 57,000 residential customers were added during Fiscal 2025, with over 44,000 located in Texas [4] - Nearly 3,200 commercial customers and 29 industrial customers were added, with anticipated annual gas consumption of approximately 4 BCF from industrial customers [4] - Over the last five years, the company has added nearly 300,000 residential and commercial customers and 225 industrial customers, with an estimated annual load of 63 BCF when fully operational [4] Market Data and Key Metrics Changes - Texas added jobs at a faster rate than the nation, growing at a rate of 1.14% [5] - The current population estimate for the Texas metroplex is approximately 8.6 million, projected to be the third largest metropolitan area in the U.S. by 2030 [5] Company Strategy and Development Direction - The company plans to invest $26 billion over the next five years, with approximately 85% allocated to safety and reliability [7][14] - The five-year plan reflects the impact of Texas House Bill 4384, allowing for quicker capital recovery [8][15] - The company anticipates earnings per share growth of 6-8% from the midpoint of its rebased Fiscal 2026 guidance [8][13] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of safety, reliability, and modernization of natural gas systems to meet customer and community expectations [18][19] - The company maintains a strong balance sheet with a weighted average cost of debt of 4.2% and approximately $4.9 billion in liquidity [20] Other Important Information - The board of directors approved a 15% increase in the annual dividend to $4.00, reflecting the rebasing of the dividend to align with earnings per share growth [13][52] - The company expects to recover over 95% of its capital spending within six months due to the new legislation [8][15] Q&A Session Summary Question: Can you talk about the larger load customers and the Refresh Capital plan? - Management indicated that 85% of spending is dedicated to safety and reliability, with modest growth included in the plan [24] Question: Can you elaborate on capital recovery and its impact on growth? - Management stated that the capital recovery process has been part of their planning since 2011, focusing on safety, reliability, and growth needs [26] Question: How does the Texas House Bill 4384 impact your guidance? - The annual impact from the legislation was clarified, with a full-year impact expected to be reflected in the rebased guidance [46] Question: What is the expected split between debt and equity in the five-year plan? - Management indicated a balanced approach with roughly 50% of funding coming from equity and 50% from debt [47] Question: Will the 60/40 split of HB 4384 benefits change year over year? - Management confirmed that they do not expect significant changes to the split due to their consistent five-year planning process [50]