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Preneed Activities (Notes) | 9 Months Ended
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Sep. 30, 2018
Preneed Activities [Abstract] |
Preneed Activities | 3. Preneed Activities Preneed receivables, net and trust investments The components of Preneed receivables, net and trust investments in our unaudited Condensed Consolidated Balance Sheet at September 30, 2018 and December 31, 2017 are as follows:
| September 30, 2018 |  | December 31, 2017
| (In thousands)
Preneed funeral receivables(1) | $ | 117,730 |  |  | $ | 336,925 |
Preneed cemetery receivables(1) | 856,637 |  |  | 1,118,146 |
Preneed receivables from customers(1) | 974,367 |  |  | 1,455,071 |
Unearned finance charge | (46,273 | ) |  | (45,515 | )
Allowance for cancellation (1) | (48,667 | ) |  | (107,749 | )
Preneed receivables, net | $ | 879,427 |  |  | $ | 1,301,807 |
Trust investments, at market | $ | 5,023,407 |  |  | $ | 4,749,548 |
Insurance-backed fixed income securities and other | 262,178 |  |  | 259,654 |
Trust investments | 5,285,585 |  |  | 5,009,202 |
Less: Cemetery perpetual care trust investments | (1,596,542 | ) |  | (1,532,167 | )
Preneed trust investments | $ | 3,689,043 |  |  | $ | 3,477,035 |
Preneed receivables, net and trust investments | $ | 4,568,470 |  |  | $ | 4,778,842 |
(1) | Upon adoption of "Revenue from Contracts with Customers" on January 1, 2018, we reclassified amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts as a reduction in Deferred revenue, net. As a result of this reclassification, we eliminated the allowance for cancellation on these performance obligations.
The table below sets forth certain investment-related activities associated with our trusts:
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In thousands)
Deposits | $ | 96,539 |  |  | $ | 86,028 |  |  | $ | 296,651 |  |  | $ | 277,286 |
Withdrawals | $ | 97,525 |  |  | $ | 99,872 |  |  | $ | 318,818 |  |  | $ | 297,595 |
Purchases of securities | $ | 265,125 |  |  | $ | 886,732 |  |  | $ | 1,273,683 |  |  | $ | 1,792,190 |
Sales of securities | $ | 295,983 |  |  | $ | 509,675 |  |  | $ | 1,331,981 |  |  | $ | 1,742,860 |
Realized gains (1) | $ | 70,095 |  |  | $ | 79,971 |  |  | $ | 216,241 |  |  | $ | 185,897 |
Realized losses (1) | $ | (20,358 | ) |  | $ | (17,707 | ) |  | $ | (50,210 | ) |  | $ | (62,657 | )
(1) | All realized gains and losses are recognized in Other income (expense), net for our trust investments and are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.
The costs and values associated with trust investments recorded at fair value at September 30, 2018 and December 31, 2017 are detailed below. Cost reflects the investment (net of redemptions) of control holders in the trusts. Fair value represents the value of the underlying securities held by the trusts.
| September 30, 2018
| Value Hierarchy Level |  | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Value
|  |  |  |  | (In thousands) |  |
Fixed income securities: |  |  |  |  |  |  |  |  |
U.S. Treasury | 2 |  | $ | 49,924 |  |  | $ | 14 |  |  | $ | (621 | ) |  | $ | 49,317 |
Canadian government | 2 |  | 59,507 |  |  | 36 |  |  | (1,738 | ) |  | 57,805 |
Corporate | 2 |  | 24,962 |  |  | 67 |  |  | (336 | ) |  | 24,693 |
Residential mortgage-backed | 2 |  | 3,809 |  |  | 10 |  |  | (91 | ) |  | 3,728 |
Asset-backed | 2 |  | 142 |  |  | 2 |  |  | (10 | ) |  | 134 |
Equity securities: |  |  |  |  |  |  |  |  |
Preferred stock | 2 |  | 10,080 |  |  | 891 |  |  | (186 | ) |  | 10,785 |
Common stock: |  |  |  |  |  |  |  |  |
United States | 1 |  | 1,208,054 |  |  | 295,891 |  |  | (42,913 | ) |  | 1,461,032 |
Canada | 1 |  | 36,162 |  |  | 11,804 |  |  | (1,425 | ) |  | 46,541 |
Other international | 1 |  | 75,039 |  |  | 10,707 |  |  | (4,613 | ) |  | 81,133 |
Mutual funds: |  |  |  |  |  |  |  |  |
Equity | 1 |  | 728,307 |  |  | 45,012 |  |  | (12,089 | ) |  | 761,230 |
Fixed income | 1 |  | 1,231,818 |  |  | 3,492 |  |  | (46,257 | ) |  | 1,189,053 |
Other | 3 |  | 14,726 |  |  | 4,228 |  |  | — |  |  | 18,954 |
Trust investments, at fair value |  |  | 3,442,530 |  |  | 372,154 |  |  | (110,279 | ) |  | 3,704,405 |
Commingled funds |  |  |  |  |  |  |  |  |
Fixed income |  |  | 427,226 |  |  | 2,462 |  |  | (17,359 | ) |  | 412,329 |
Equity |  |  | 206,040 |  |  | 40,558 |  |  | (2 | ) |  | 246,596 |
Money market funds |  |  | 380,743 |  |  | — |  |  | — |  |  | 380,743 |
Private equity |  |  | 212,462 |  |  | 68,388 |  |  | (1,516 | ) |  | 279,334 |
Trust investments, at net asset value |  |  | 1,226,471 |  |  | 111,408 |  |  | (18,877 | ) |  | 1,319,002 |
Trust investments, at market |  |  | $ | 4,669,001 |  |  | $ | 483,562 |  |  | $ | (129,156 | ) |  | $ | 5,023,407 |
| December 31, 2017
| Value Hierarchy Level |  | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Value
|  |  |  |  | (In thousands) |  |
Fixed income securities: |  |  |  |  |  |  |  |  |
U.S. Treasury | 2 |  | $ | 48,805 |  |  | $ | 14 |  |  | $ | (117 | ) |  | $ | 48,702 |
Canadian government | 2 |  | 81,500 |  |  | 160 |  |  | (1,089 | ) |  | 80,571 |
Corporate | 2 |  | 13,540 |  |  | 327 |  |  | (170 | ) |  | 13,697 |
Residential mortgage-backed | 2 |  | 3,279 |  |  | 16 |  |  | (14 | ) |  | 3,281 |
Asset-backed | 2 |  | 320 |  |  | 15 |  |  | (10 | ) |  | 325 |
Equity securities: |  |  |  |  |  |  |  |  |
Preferred stock | 2 |  | 7,834 |  |  | 385 |  |  | (139 | ) |  | 8,080 |
Common stock: |  |  |  |  |  |  |  |  |
United States | 1 |  | 1,161,015 |  |  | 266,822 |  |  | (24,739 | ) |  | 1,403,098 |
Canada | 1 |  | 30,762 |  |  | 12,545 |  |  | (522 | ) |  | 42,785 |
Other international | 1 |  | 63,510 |  |  | 13,174 |  |  | (2,834 | ) |  | 73,850 |
Mutual funds: |  |  |  |  |  |  |  |  |
Equity | 1 |  | 613,934 |  |  | 59,100 |  |  | (4,312 | ) |  | 668,722 |
Fixed income | 1 |  | 1,230,196 |  |  | 11,897 |  |  | (23,943 | ) |  | 1,218,150 |
Other | 3 |  | 5,953 |  |  | 3,114 |  |  | — |  |  | 9,067 |
Trust investments, at fair value |  |  | 3,260,648 |  |  | 367,569 |  |  | (57,889 | ) |  | 3,570,328 |
Commingled funds |  |  |  |  |  |  |  |  |
Fixed income |  |  | 454,242 |  |  | 235 |  |  | (5,860 | ) |  | 448,617 |
Equity |  |  | 214,000 |  |  | 12,826 |  |  | — |  |  | 226,826 |
Money market funds |  |  | 287,435 |  |  | — |  |  | — |  |  | 287,435 |
Private equity |  |  | 166,860 |  |  | 51,631 |  |  | (2,149 | ) |  | 216,342 |
Trust investments, at net asset value |  |  | 1,122,537 |  |  | 64,692 |  |  | (8,009 | ) |  | 1,179,220 |
Trust investments, at market |  |  | $ | 4,383,185 |  |  | $ | 432,261 |  |  | $ | (65,898 | ) |  | $ | 4,749,548 |
As of September 30, 2018, our unfunded commitment for our private equity and other investments was $96.3 million which, if called, would be funded by the assets of the trusts. The change in our market-based trust investments with significant unobservable inputs (Level 3) is as follows:
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In thousands)
Fair value, beginning balance | $ | 20,194 |  |  | $ | 7,924 |  |  | $ | 9,067 |  |  | $ | 7,163 |
Net unrealized gains (losses) included in Other income (expense), net(1) | 1,020 |  |  | (116 | ) |  | 750 |  |  | 694 |
Purchases | 36 |  |  | 1,881 |  |  | 43 |  |  | 1,909 |
Sales | (9 | ) |  | (854 | ) |  | (9 | ) |  | (931 | )
Acquisitions | (2,287 | ) |  | — |  |  | 9,103 |  |  | — |
Fair value, ending balance | $ | 18,954 |  |  | $ | 8,835 |  |  | $ | 18,954 |  |  | $ | 8,835 |
(1) | All net unrealized gains (losses) recognized in Other income (expense), net for our trust investments are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.
Maturity dates of our fixed income securities range from 2018 to 2077. Maturities of fixed income securities (excluding mutual funds) at September 30, 2018 are estimated as follows:
| Fair Value
| (In thousands)
Due in one year or less | $ | 64,152 |
Due in one to five years | 59,940 |
Due in five to ten years | 10,290 |
Thereafter | 1,295 |
| $ | 135,677 |
Recognized trust fund income (realized and unrealized) related to these trust investments was $50.2 million and $39.1 million for the three months ended September 30, 2018 and 2017, respectively. Recognized trust fund income (realized and unrealized) related to these trust investments was $147.3 million and $122.6 million for the nine months ended September 30, 2018 and 2017, respectively. We have determined that the unrealized losses in our fixed income investments are considered temporary in nature, as the unrealized losses were due to temporary fluctuations in interest rates. We believe that none of the securities are other-than-temporarily impaired based on our analysis of the investments. Our analysis included a review of the portfolio holdings and discussions with the individual money managers as to the credit ratings and the severity and duration of the unrealized losses. Our fixed income investment unrealized losses, their associated values, and the duration of unrealized losses as of September 30, 2018 and December 31, 2017, respectively, are shown in the following tables:
| September 30, 2018
| In Loss Position Less Than 12 Months |  | In Loss Position Greater Than 12 Months |  | Total
| Value |  | Unrealized Losses |  | Value |  | Unrealized Losses |  | Value |  | Unrealized Losses
|  |  |  |  | (In thousands) |  |  |  |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 25,192 |  |  | $ | (576 | ) |  | $ | 3,119 |  |  | $ | (45 | ) |  | $ | 28,311 |  |  | $ | (621 | )
Canadian government | — |  |  | — |  |  | 26,469 |  |  | (1,738 | ) |  | 26,469 |  |  | (1,738 | )
Corporate | 9,332 |  |  | (65 | ) |  | 6,089 |  |  | (271 | ) |  | 15,421 |  |  | (336 | )
Residential mortgage-backed | 3,378 |  |  | (89 | ) |  | 100 |  |  | (2 | ) |  | 3,478 |  |  | (91 | )
Asset-backed | — |  |  | — |  |  | 99 |  |  | (10 | ) |  | 99 |  |  | (10 | )
Total temporarily fixed income impaired securities | $ | 37,902 |  |  | $ | (730 | ) |  | $ | 35,876 |  |  | $ | (2,066 | ) |  | $ | 73,778 |  |  | $ | (2,796 | )
| December 31, 2017
| In Loss Position Less Than 12 Months |  | In Loss Position Greater Than 12 Months |  | Total
| Value |  | Unrealized Losses |  | Value |  | Unrealized Losses |  | Value |  | Unrealized Losses
|  |  |  |  | (In thousands) |  |  |  |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury | $ | 29,014 |  |  | $ | (115 | ) |  | $ | 106 |  |  | $ | (2 | ) |  | $ | 29,120 |  |  | $ | (117 | )
Canadian government | 20,947 |  |  | (639 | ) |  | 6,370 |  |  | (450 | ) |  | 27,317 |  |  | (1,089 | )
Corporate | 2,423 |  |  | (31 | ) |  | 4,453 |  |  | (139 | ) |  | 6,876 |  |  | (170 | )
Residential mortgage-backed | 2,880 |  |  | (12 | ) |  | 151 |  |  | (2 | ) |  | 3,031 |  |  | (14 | )
Asset-backed | — |  |  | — |  |  | 74 |  |  | (10 | ) |  | 74 |  |  | (10 | )
Total temporarily impaired fixed income securities | $ | 55,264 |  |  | $ | (797 | ) |  | $ | 11,154 |  |  | $ | (603 | ) |  | $ | 66,418 |  |  | $ | (1,400 | )

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- Definition Preneed Activities. + References No definition available. + Details
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- Definition This note represents disclosures relating to preneed activity and major accounts which also include: (1) fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments; (2) variable interest entities; and (3)all other required (as defined) and desired information. + References No definition available. + Details
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