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Preneed Activities Level 1 (Notes) | 6 Months Ended
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Jun. 30, 2020
Preneed Activities [Abstract] |
Preneed Activities Text Block | Preneed Activities Preneed receivables, net and trust investments The components of Preneed receivables, net and trust investments in our unaudited Condensed Consolidated Balance Sheet were as follows:
| June 30, 2020 |  | December 31, 2019
| (In thousands) |  |
Preneed receivables, net | $ | 977,021 |  |  | $ | 947,232 |
Trust investments, at market | 4,993,442 |  |  | 5,258,319 |
Insurance-backed fixed income securities and other | 251,836 |  |  | 265,160 |
Trust investments | 5,245,278 |  |  | 5,523,479 |
Less: Cemetery perpetual care trust investments | (1,599,599) |  |  | (1,681,149) |
Preneed trust investments | 3,645,679 |  |  | 3,842,330 |
Preneed receivables, net and trust investments | $ | 4,622,700 |  |  | $ | 4,789,562 |
Preneed receivables, net comprised the following:
| June 30, 2020 |  |  |  |
| Funeral |  | Cemetery |  | Total
| (In thousands) |  |  |  |
Preneed receivables | $ | 136,880 |  |  | $ | 900,938 |  |  | $ | 1,037,818 |
Unearned finance charges | (15,583) |  |  | (26,937) |  |  | (42,520) |
Preneed receivables, at amortized cost | 121,297 |  |  | 874,001 |  |  | 995,298 |
Reserve for credit losses | (10,350) |  |  | (7,927) |  |  | (18,277) |
Preneed receivables, net | $ | 110,947 |  |  | $ | 866,074 |  |  | $ | 977,021 |
| December 31, 2019 |  |  |  |
| Funeral |  | Cemetery |  | Total
| (In thousands) |  |  |  |
Preneed receivables | $ | 130,971 |  |  | $ | 907,973 |  |  | $ | 1,038,944 |
Unearned finance charges | (16,328) |  |  | (34,242) |  |  | (50,570) |
Preneed receivables, at amortized cost | 114,643 |  |  | 873,731 |  |  | 988,374 |
Allowance for cancellation | (1,452) |  |  | (39,690) |  |  | (41,142) |
Preneed receivables, net | $ | 113,191 |  |  | $ | 834,041 |  |  | $ | 947,232 |
At June 30, 2020, the amortized cost basis of our preneed receivables by year of origination was as follows:
| 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Total
| (In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Preneed receivables, at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |
Funeral | $ | 32,928 |  |  | $ | 47,157 |  |  | $ | 18,298 |  |  | $ | 9,076 |  |  | $ | 3,685 |  |  | $ | 10,153 |  |  | $ | 121,297 |
Cemetery | 182,018 |  |  | 287,452 |  |  | 188,393 |  |  | 116,902 |  |  | 60,871 |  |  | 38,365 |  |  | 874,001 |
Total preneed receivables, at amortized cost | $ | 214,946 |  |  | $ | 334,609 |  |  | $ | 206,691 |  |  | $ | 125,978 |  |  | $ | 64,556 |  |  | $ | 48,518 |  |  | $ | 995,298 |
At June 30, 2020, the payment status of our preneed receivables was as follows:
| Past Due |  |  |  |  |  |  |  |  |  |  |  |
| <30 Days |  | 30-90 Days |  | 90-180 Days |  | >180 Days |  | Total |  | Current |  | Total
| (In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Preneed receivables, at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |  |
Funeral | $ | 3,835 |  |  | $ | 2,233 |  |  | $ | 1,331 |  |  | $ | 14,790 |  |  | $ | 22,189 |  |  | $ | 99,108 |  |  | $ | 121,297 |
Cemetery | 23,097 |  |  | 22,616 |  |  | 11,191 |  |  | 2,590 |  |  | 59,494 |  |  | 814,507 |  |  | 874,001 |
Total preneed receivables, at amortized cost | $ | 26,932 |  |  | $ | 24,849 |  |  | $ | 12,522 |  |  | $ | 17,380 |  |  | $ | 81,683 |  |  | $ | 913,615 |  |  | $ | 995,298 |
The following table summarizes the activity for the reserve for credit losses on preneed receivables for the six months ended June 30, 2020:
| January 1, 2020 |  | Provision for Expected Credit Losses |  | Acquisitions (Divestitures), Net |  | Write Offs |  |  |  | Effect of Foreign Currency |  | June 30, 2020
| (In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Funeral | $ | (8,057) |  |  | $ | (3,777) |  |  | $ | 13 |  |  | $ | 1,452 |  |  |  |  | $ | 19 |  |  | $ | (10,350) |
Cemetery | (6,700) |  |  | (1,498) |  |  | — |  |  | 250 |  |  |  |  | 21 |  |  | (7,927) |
Total reserve for credit losses on preneed receivables | $ | (14,757) |  |  | $ | (5,275) |  |  | $ | 13 |  |  | $ | 1,702 |  |  |  |  | $ | 40 |  |  | $ | (18,277) |
The table below sets forth certain investment-related activities associated with our trusts:
| Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
| 2020 |  | 2019 |  | 2020 |  | 2019
| (In thousands) |  |  |  |  |  |
Deposits | $ | 98,341 |  |  | $ | 112,905 |  |  | $ | 203,894 |  |  | $ | 213,357 |
Withdrawals | $ | 99,264 |  |  | $ | 116,680 |  |  | $ | 213,856 |  |  | $ | 224,036 |
Purchases of securities | $ | 456,639 |  |  | $ | 240,376 |  |  | $ | 905,291 |  |  | $ | 689,534 |
Sales of securities | $ | 441,743 |  |  | $ | 240,599 |  |  | $ | 793,569 |  |  | $ | 562,390 |
Realized gains from sales of securities(1) | $ | 92,435 |  |  | $ | 54,756 |  |  | $ | 144,592 |  |  | $ | 98,281 |
Realized losses from sales of securities(1) | $ | (61,756) |  |  | $ | (16,251) |  |  | $ | (147,158) |  |  | $ | (48,882) |
(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 cost and market values associated with trust investments recorded at market value 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.
|  | June 30, 2020 |  |  |  |  |  |
| Fair Value Hierarchy Level | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Value
|  |  |  | (In thousands) |  |  |  |
Fixed income securities: |  |  |  |  |  |  |  |
U.S. Treasury | 2 | $ | 48,249 |  |  | $ | 1,923 |  |  | $ | (249) |  |  | $ | 49,923 |
Canadian government | 2 | 38,056 |  |  | 58 |  |  | (727) |  |  | 37,387 |
Corporate | 2 | 2,351 |  |  | 6 |  |  | (81) |  |  | 2,276 |
Residential mortgage-backed | 2 | 3,254 |  |  | 168 |  |  | — |  |  | 3,422 |
Asset-backed | 2 | 128 |  |  | 3 |  |  | (5) |  |  | 126 |
Equity securities: |  |  |  |  |  |  |  |
Preferred stock | 2 | 386 |  |  | — |  |  | (35) |  |  | 351 |
Common stock: |  |  |  |  |  |  |  |
United States | 1 | 1,368,878 |  |  | 284,456 |  |  | (118,350) |  |  | 1,534,984 |
Canada | 1 | 35,890 |  |  | 7,793 |  |  | (3,547) |  |  | 40,136 |
Other international | 1 | 87,167 |  |  | 19,230 |  |  | (3,647) |  |  | 102,750 |
Mutual funds: |  |  |  |  |  |  |  |
Equity | 1 | 812,202 |  |  | 13,840 |  |  | (140,573) |  |  | 685,469 |
Fixed income | 1 | 1,292,673 |  |  | 23,609 |  |  | (106,397) |  |  | 1,209,885 |
Other | 3 | 391 |  |  | 33 |  |  | (1) |  |  | 423 |
Trust investments, at fair value |  | 3,689,625 |  |  | 351,119 |  |  | (373,612) |  |  | 3,667,132 |
Commingled funds |  |  |  |  |  |  |  |
Fixed income |  | 468,268 |  |  | 15,647 |  |  | (2,247) |  |  | 481,668 |
Equity |  | 261,895 |  |  | 33,768 |  |  | (243) |  |  | 295,420 |
Money market funds |  | 298,674 |  |  | — |  |  | — |  |  | 298,674 |
Private equity |  | 211,805 |  |  | 49,716 |  |  | (10,973) |  |  | 250,548 |
Trust investments, at net asset value |  | 1,240,642 |  |  | 99,131 |  |  | (13,463) |  |  | 1,326,310 |
Trust investments, at market |  | $ | 4,930,267 |  |  | $ | 450,250 |  |  | $ | (387,075) |  |  | $ | 4,993,442 |
|  | December 31, 2019 |  |  |  |  |  |
| Fair Value Hierarchy Level | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Value
|  |  |  | (In thousands) |  |  |  |
Fixed income securities: |  |  |  |  |  |  |  |
U.S. Treasury | 2 | $ | 49,728 |  |  | $ | 752 |  |  | $ | (130) |  |  | $ | 50,350 |
Canadian government | 2 | 41,093 |  |  | 76 |  |  | (850) |  |  | 40,319 |
Corporate | 2 | 9,694 |  |  | 28 |  |  | (172) |  |  | 9,550 |
Residential mortgage-backed | 2 | 3,210 |  |  | 59 |  |  | (1) |  |  | 3,268 |
Asset-backed | 2 | 129 |  |  | 3 |  |  | (4) |  |  | 128 |
Equity securities: |  |  |  |  |  |  |  |
Preferred stock | 2 | 6,338 |  |  | 804 |  |  | (115) |  |  | 7,027 |
Common stock: |  |  |  |  |  |  |  |
United States | 1 | 1,349,828 |  |  | 303,766 |  |  | (36,507) |  |  | 1,617,087 |
Canada | 1 | 43,866 |  |  | 12,369 |  |  | (2,075) |  |  | 54,160 |
Other international | 1 | 95,257 |  |  | 18,227 |  |  | (522) |  |  | 112,962 |
Mutual funds: |  |  |  |  |  |  |  |
Equity | 1 | 746,581 |  |  | 31,511 |  |  | (54,020) |  |  | 724,072 |
Fixed income | 1 | 1,247,930 |  |  | 16,424 |  |  | (32,587) |  |  | 1,231,767 |
Other | 3 | 7,034 |  |  | 1,184 |  |  | — |  |  | 8,218 |
Trust investments, at fair value |  | 3,600,688 |  |  | 385,203 |  |  | (126,983) |  |  | 3,858,908 |
Commingled funds |  |  |  |  |  |  |  |
Fixed income |  | 444,744 |  |  | 5,077 |  |  | (1,731) |  |  | 448,090 |
Equity |  | 249,980 |  |  | 47,631 |  |  | — |  |  | 297,611 |
Money market funds |  | 397,461 |  |  | — |  |  | — |  |  | 397,461 |
Private equity |  | 176,388 |  |  | 80,283 |  |  | (422) |  |  | 256,249 |
Trust investments, at net asset value |  | 1,268,573 |  |  | 132,991 |  |  | (2,153) |  |  | 1,399,411 |
Trust investments, at market |  | $ | 4,869,261 |  |  | $ | 518,194 |  |  | $ | (129,136) |  |  | $ | 5,258,319 |
Our private equity investments include several funds that invest in limited partnerships, distressed debt, real estate, and mezzanine financing. These investments can never be redeemed by the funds. Instead, due to the nature of the investments in this category, distributions are received through the liquidation of the underlying assets of the funds. The funds' managers have not communicated the timing of any liquidations. The change in our market-based trust investments with significant unobservable inputs (Level 3) is as follows:
|  | Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
|  | 2020 |  | 2019 |  | 2020 |  | 2019
|  | (In thousands) |  |  |  |  |  |
Fair value, beginning balance |  | $ | 418 |  |  | $ | 7,108 |  |  | $ | 8,218 |  |  | $ | 9,755 |
Net realized and unrealized gains (losses) included in Other income (expense), net(1) |  | 717 |  |  | (322) |  |  | (257) |  |  | (1,464) |
Purchases |  | 4,559 |  |  | 5 |  |  | 4,569 |  |  | 5 |
Sales |  | (5,271) |  |  | (203) |  |  | (5,296) |  |  | (1,708) |
Transfers |  | — |  |  | — |  |  | (6,811) |  |  | — |
Fair value, ending balance |  | $ | 423 |  |  | $ | 6,588 |  |  | $ | 423 |  |  | $ | 6,588 |
(1)All net realized and 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 2020 to 2040. Maturities of fixed income securities (excluding mutual funds) at June 30, 2020 are estimated as follows:
| Fair Value
| (In thousands)
Due in one year or less | $ | 57,496 |
Due in one to five years | 26,054 |
Due in five to ten years | 9,494 |
Thereafter | 90 |
Total estimated maturities of fixed income securities | $ | 93,134 |
Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $27.0 million and $29.6 million, for the three months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $17.3 million and $17.5 million for the three months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $59.2 million and $57.2 million, for the six months ended June 30, 2020 and 2019, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $36.8 million and $37.9 million for the six months ended June 30, 2020 and 2019, respectively. Our fixed income investment unrealized losses, their associated fair values, and the duration of unrealized losses are shown in the following tables:
| June 30, 2020 |  |  |  |  |  |  |  |  |  |
| In Loss Position Less Than 12 Months |  |  |  | In Loss Position Greater Than 12 Months |  |  |  | Total |  |
| Fair Market Value |  | Unrealized Losses |  | Fair Market Value |  | Unrealized Losses |  | Fair Market Value |  | Unrealized Losses
|  |  |  |  | (In thousands) |  |  |  |  |  |
U.S. Treasury | $ | 1,201 |  |  | $ | (3) |  |  | $ | 1,243 |  |  | $ | (246) |  |  | $ | 2,444 |  |  | $ | (249) |
Canadian government | — |  |  | — |  |  | 11,973 |  |  | (727) |  |  | 11,973 |  |  | (727) |
Corporate | 54 |  |  | (2) |  |  | 2,235 |  |  | (79) |  |  | 2,289 |  |  | (81) |
Asset-backed | — |  |  | — |  |  | 25 |  |  | (5) |  |  | 25 |  |  | (5) |
Total fixed income securities with an unrealized loss | $ | 1,255 |  |  | $ | (5) |  |  | $ | 15,476 |  |  | $ | (1,057) |  |  | $ | 16,731 |  |  | $ | (1,062) |
| December 31, 2019 |  |  |  |  |  |  |  |  |  |
| In Loss Position Less Than 12 Months |  |  |  | In Loss Position Greater Than 12 Months |  |  |  | Total |  |
| Fair Market Value |  | Unrealized Losses |  | Fair Market Value |  | Unrealized Losses |  | Fair Market Value |  | Unrealized Losses
|  |  |  |  | (In thousands) |  |  |  |  |  |
U.S. Treasury | $ | 3,023 |  |  | $ | (36) |  |  | $ | 1,947 |  |  | $ | (94) |  |  | $ | 4,970 |  |  | $ | (130) |
Canadian government | — |  |  | — |  |  | 13,804 |  |  | (850) |  |  | 13,804 |  |  | (850) |
Corporate | 30 |  |  | — |  |  | 4,826 |  |  | (172) |  |  | 4,856 |  |  | (172) |
Residential mortgage-backed | — |  |  | — |  |  | 51 |  |  | (1) |  |  | 51 |  |  | (1) |
Asset-backed | — |  |  | — |  |  | 28 |  |  | (4) |  |  | 28 |  |  | (4) |
Total fixed income securities with an unrealized loss | $ | 3,053 |  |  | $ | (36) |  |  | $ | 20,656 |  |  | $ | (1,121) |  |  | $ | 23,709 |  |  | $ | (1,157) |
Deferred revenue, net Deferred revenue, net represents future revenue, including distributed trust investment earnings associated with unperformed trust-funded preneed contracts that are not held in trust accounts. Future revenue and net trust investment earnings that are held in trust accounts are included in Deferred receipts held in trust. The components of Deferred revenue, net in our unaudited Condensed Consolidated Balance Sheet were as follows:
| June 30, 2020 |  | December 31, 2019 |  |
| (In thousands) |  |  |  |
Deferred revenue | $ | 2,090,129 |  |  | $ | 2,046,000 |  |  |
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts | (596,023) |  |  | (578,897) |  |  |
Deferred revenue, net | $ | 1,494,106 |  |  | $ | 1,467,103 |  |  |
The following table summarizes the activity for our contract liabilities, which are reflected in Deferred revenue, net and Deferred receipts held in trust:
| Six Months Ended June 30, |  |
| 2020 |  | 2019
| (In thousands) |  |
Beginning balance — Deferred revenue, net and Deferred receipts held in trust | $ | 5,306,479 |  |  | $ | 4,790,552 |
Net preneed contract sales | 496,467 |  |  | 496,842 |
Acquisitions (dispositions) of businesses, net | 12,777 |  |  | (29,665) |
Net investment (losses) gains(1) | (189,474) |  |  | 327,819 |
Recognized revenue from backlog(2) | (226,663) |  |  | (212,912) |
Recognized revenue from current period sales | (237,296) |  |  | (241,589) |
Change in amounts due on unfulfilled performance obligations | (18,151) |  |  | (3,770) |
Change in cancellation reserve | 1,070 |  |  | (206) |
Effect of foreign currency and other | (6,891) |  |  | 10,848 |
Ending balance — Deferred revenue, net and Deferred receipts held in trust | $ | 5,138,318 |  |  | $ | 5,137,919 |
(1)Includes both realized and unrealized investment (losses) gains. (2)Includes current year trust fund income through the date of performance.

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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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