CEMETERY PERPETUAL CARE TRUST INVESTMENTS

Care trusts’ corpus on our Consolidated Balance Sheets represent the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus as of December 31, 2013 and 2014 were as follows (in thousands):



	December 31, 2013			December 31, 2014
Trust assets, at market value	$	42,342		$	48,670
Obligations due from trust	(449		)	(528		)
Care trusts’ corpus	$	41,893		$	48,142

We are required by various state laws to pay a portion of the proceeds from the sale of cemetery property interment rights into perpetual care trust funds. The income earned from these perpetual care trusts offsets maintenance expenses for cemetery property and memorials. This trust fund income is recognized, as earned, in Cemetery revenues. Trust management fees charged by our wholly-owned registered investment advisor, CSV RIA, are included in revenue in the period in which they are earned.

Where quoted prices are available in an active market, investments held by the trusts are classified as Level 1 investments pursuant to the three-level valuation hierarchy. Our Level 1 investments include cash and common stock. Where quoted market prices are not available for the specific security, then fair values are estimated by using quoted prices of similar securities in active markets or other inputs other than quoted prices that can corroborate observable market data. These investments are municipal bonds, foreign debt, corporate debt and preferred stock, all of which are classified within Level 2 of the valuation hierarchy. There were no transfers between Levels 1 and 2 for the year ended December 31, 2014. There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 11 for further information of fair value measurement and the three-level valuation hierarchy.

The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at December 31, 2014 (in thousands):



	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses			Fair Market Value
Cash and money market accounts	1	$	3,206	$	—	$	—		$	3,206
Fixed income securities:
Municipal bonds	2	229		5		—			234
Foreign debt	2	3,871		—		(156		)	3,715
Corporate debt	2	19,911		248		(1,428		)	18,731
Preferred stock	2	12,694		137		(214		)	12,617
Common stock	1	8,747		1,568		(653		)	9,662
Trust securities		$	48,658	$	1,958	$	(2,451	)	$	48,165
Accrued investment income		$	505						$	505
Cemetery perpetual care investments									$	48,670
Market value as a percentage of cost									99.0		%

The estimated maturities of the fixed income securities included above are as follows (in thousands):



Due in one year or less	$	—
Due in one to five years	3,801
Due in five to ten years	4,980
Thereafter	26,516
Total fixed income securities	$	35,297

The cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2013 are detailed below (in thousands):



	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses			Fair Market Value
Cash and money market accounts	1	$	973	$	—	$	—		$	973
Fixed income securities:
Foreign debt	2	2,062		87		(2		)	2,147
Corporate debt	2	19,773		236		(691		)	19,318
Preferred stock	2	10,668		110		(165		)	10,613
Common stock	1	7,539		1,417		(178		)	8,778
Trust securities		$	41,015	$	1,850	$	(1,036	)	$	41,829
Accrued investment income		$	513						$	513
Cemetery perpetual care investments									$	42,342
Market value as a percentage of cost									102.0		%

We determine whether or not the assets in the cemetery perpetual care trusts have an other-than-temporary impairment on a security-by-security basis. This assessment is made based upon a number of criteria including the length of time a security has been in a loss position, changes in market conditions and concerns related to the specific issuer. If a loss is considered to be other-than-temporary, the cost basis of the security is adjusted downward to its fair market value. Any reduction in the cost basis due to an other-than-temporary impairment is also recorded as a reduction to Care trusts’ corpus. In the second quarter of 2014, we recorded a $0.1 million impairment charge for other-than-temporary declines in fair value related to unrealized losses on certain investments. We did not record any other impairments in 2014. No impairments were recorded in the year ended December 31, 2013. At December 31, 2014, we had certain investments within our perpetual care trust investments that had tax lots in loss positions for more than one year. Based on our analyses of these securities, the companies’ businesses and current market conditions, we determined that these investments losses are temporary in nature.

Our perpetual care trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses for the years ended December 31, 2014 and 2013, are shown in the following tables (in thousands):



	December 31, 2014
	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
Fixed income securities:
Foreign debt	$	3,716	$	(156	)	$	—	$	—		$	3,716	$	(156	)
Corporate debt	11,893		(513		)	1,328		(915		)	13,221		(1,428		)
Preferred stock	6,821		(191		)	2,133		(23		)	8,954		(214		)
Common stock	4,663		(616		)	44		(37		)	4,707		(653		)
Total temporary impaired securities	$	27,093	$	(1,476	)	$	3,505	$	(975	)	$	30,598	$	(2,451	)



	December 31, 2013
	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
Fixed income securities:
Foreign debt	$	478	$	(2	)	$	—	$	—		$	478	$	(2	)
Corporate debt	6,948		(332		)	462		(359		)	7,410		(691		)
Preferred stock	5,811		(165		)	—		—			5,811		(165		)
Common stock	716		(114		)	470		(64		)	1,186		(178		)
Total temporary impaired securities	$	13,953	$	(613	)	$	932	$	(423	)	$	14,885	$	(1,036	)

Perpetual care trust investment security transactions recorded in Interest expense on our Consolidated Statements of Operations for the years ended December 31, 2012, 2013 and 2014 were as follows (in thousands):



	Year ended December 31,
	2012			2013			2014
Realized gains	$	5,664		$	2,172		$	3,468
Realized losses	(1,707		)	(542		)	(1,748		)
Increase in Care trusts’ corpus	(3,957		)	(1,630		)	(1,720		)
Total	$	—		$	—		$	—

Perpetual care trust investment security transactions recorded in Cemetery revenue for the years ended December 31, 2012, 2013 and 2014 were as follows (in thousands):



	Year ended December 31,
	2012		2013		2014
Investment income	$	5,612	$	4,063	$	4,713
Realized gains, net	1,200		1,511		1,112
Total	$	6,812	$	5,574	$	5,825

Purchases and sales of investments in the perpetual care trusts were as follows (in thousands):



	Year ended December 31,
	2012			2013			2014
Purchases	$	(82,793	)	$	(27,719	)	$	(38,413	)
Sales	83,060			28,261			35,402