This was an improvement of more than $67 million from the negative $14.4 million of fiscal 1999. Our ongoing efforts to improve cash flow and to deal with scheduled debt maturities should help to eliminate any liquidity concerns over the long term.

Controlling capital expenditures was an important part of our strategy to enhance cash flow. In fiscal 2000, we held capital expenditures to $36.0 million, well within our $43.5 million budget.

We succeeded in maintaining our funeral business even though some had predicted that our business would erode because of the entry of low-end providers in the marketplace. Total funeral revenues grew 1.3 percent to $451.9 million from $445.9 million in fiscal 1999. While the number of families served by our domestic core funeral operations for fiscal 2000 was essentially flat, our funeral business remained strong. We experienced a 6.2 percent increase in the average revenue per domestic funeral service performed by our core operations. We attribute much of this success to two factors: the superior reputation of our funeral homes that provide high quality service, and an enhanced funeral arranger training program adopted across the United States to more effectively offer our products and to improve personalization of services in the changing business environment.

During the year, we made a variety of changes in our preneed sales program to improve our cash flow and focus our sales force on more effective marketing, while also preparing for the implementation of the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 101. While these changes will serve us well going forward, they had a negative effect on our financial performance in the short term. The impact came primarily in the fourth quarter, when reduced preneed sales caused a decline in revenues. As a result, we missed our original earnings-per-share target for the fourth quarter after having achieved our targets in each of the first three quarters. You can read more about the alterations in our preneed sales program, and about the SEC’s staff accounting bulletin in a subsequent section.

IMPROVING THE CUSTOMER EXPERIENCE
Our success as a service-oriented company depends not only on meeting customer needs but also on positively delivering the customer experience. We are accomplishing this through Project Catalyst and our training efforts.