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Cemetery Perpetual Care Trust Investments | 9 Months Ended
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Sep. 30, 2016
Cemetery Perpetual Care Trust Investments [Abstract] |
CEMETERY PERPETUAL CARE TRUST INVESTMENTS | 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, 2015 and September 30, 2016 were as follows (in thousands):
| December 31, 2015 |  | September 30, 2016
Trust assets, at market value | $ | 43,127 |  |  | $ | 45,048 |
Obligations due from trust | (711 | ) |  | (703 | )
Care trusts’ corpus | $ | 42,416 |  |  | $ | 44,345 |
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 Revenues: Cemetery. Trust management fees charged by CSV RIA are included in revenue in the period in which they are earned. At September 30, 2016, none of our cemetery perpetual care trust investments were under-funded. 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, preferred stock, mortgage backed securities and fixed income mutual funds, all of which are classified within Level 2 of the valuation hierarchy. We review and update our fair value hierarchy classifications quarterly. There were no transfers between Levels 1 and 2 in the three and nine months ended September 30, 2016. There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 9 to the Consolidated Financial Statements included herein for further information of the 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 September 30, 2016 (in thousands):
| Fair Value Hierarchy Level |  | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Market Value
Cash and money market accounts | 1 |  | $ | 4,656 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,656 |
Fixed income securities: |  |  |  |  |  |  |  |  |
Municipal bonds | 2 |  | 368 |  |  | — |  |  | — |  |  | 368 |
Foreign debt | 2 |  | 5,772 |  |  | 175 |  |  | (497 | ) |  | 5,450 |
Corporate debt | 2 |  | 15,927 |  |  | 1,099 |  |  | (1,059 | ) |  | 15,967 |
Preferred stock | 2 |  | 11,465 |  |  | 18 |  |  | (493 | ) |  | 10,990 |
Mortgage backed securities | 2 |  | 149 |  |  | — |  |  | (10 | ) |  | 139 |
Common stock | 1 |  | 7,507 |  |  | 344 |  |  | (1,950 | ) |  | 5,901 |
Mutual funds: |  |  |  |  |  |  |  |  |
Fixed Income | 2 |  | 867 |  |  | 90 |  |  | — |  |  | 957 |
Trust securities |  |  | $ | 46,711 |  |  | $ | 1,726 |  |  | $ | (4,009 | ) |  | $ | 44,428 |
Accrued investment income |  |  | $ | 620 |  |  |  |  |  |  | $ | 620 |
Cemetery perpetual care investments |  |  |  |  |  |  |  |  | $ | 45,048 |
Market value as a percentage of cost |  |  |  |  |  |  |  |  | 95.1 | %
The estimated maturities of the fixed income securities included above are as follows (in thousands):
Due in one year or less | $ | 183 |
Due in one to five years | 5,053 |
Due in five to ten years | 4,145 |
Thereafter | 23,533 |
| $ | 32,914 |
The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at December 31, 2015 (in thousands):
| Fair Value Hierarchy Level |  | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Market Value
Cash and money market accounts | 1 |  | $ | 5,472 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,472 |
Fixed income securities: |  |  |  |  |  |  |  |  |
Municipal bonds | 2 |  | 325 |  |  | — |  |  | (45 | ) |  | 280 |
Foreign debt | 2 |  | 3,232 |  |  | — |  |  | (480 | ) |  | 2,752 |
Corporate debt | 2 |  | 16,216 |  |  | 57 |  |  | (3,094 | ) |  | 13,179 |
Preferred stock | 2 |  | 11,263 |  |  | 20 |  |  | (611 | ) |  | 10,672 |
Common stock | 1 |  | 11,945 |  |  | 393 |  |  | (1,939 | ) |  | 10,399 |
Trust securities |  |  | $ | 48,453 |  |  | $ | 470 |  |  | $ | (6,169 | ) |  | $ | 42,754 |
Accrued investment income |  |  | $ | 373 |  |  |  |  |  |  | $ | 373 |
Cemetery perpetual care investments |  |  |  |  |  |  |  |  | $ | 43,127 |
Market value as a percentage of cost |  |  |  |  |  |  |  |  | 88.2 | %
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 three months ended September 30, 2016, we recorded a $0.1 million impairment for other-than-temporary declines in the fair value related to unrealized losses on certain investments. We did no t record any impairments in the three months ended September 30, 2015. In the nine months ended September 30, 2015 and 2016, we recorded a $0.5 million impairment for other-than-temporary declines in the fair value related to unrealized losses on certain investments. There is no impact on earnings until such time that the loss is realized in the trusts, allocated to preneed contracts and the services are performed or the merchandise is delivered causing the contract to be withdrawn from the trust in accordance with state regulations. At September 30, 2016, 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 investment losses were temporary in nature. Our perpetual care trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses for the periods ended September 30, 2016 and December 31, 2015 are shown in the following tables (in thousands):
| September 30, 2016
| 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 | 1,632 |  |  | (91 | ) |  | 1,990 |  |  | (406 | ) |  | 3,622 |  |  | (497 | )
Corporate debt | 4,948 |  |  | (148 | ) |  | 3,529 |  |  | (911 | ) |  | 8,477 |  |  | (1,059 | )
Preferred stock | 1,126 |  |  | (8 | ) |  | 8,537 |  |  | (485 | ) |  | 9,663 |  |  | (493 | )
Mortgage backed securities | 140 |  |  | (10 | ) |  | — |  |  | — |  |  | 140 |  |  | (10 | )
Common stock | 2,932 |  |  | (872 | ) |  | 1,561 |  |  | (1,078 | ) |  | 4,493 |  |  | (1,950 | )
Total temporary impaired securities | $ | 10,778 |  |  | $ | (1,129 | ) |  | $ | 15,617 |  |  | $ | (2,880 | ) |  | $ | 26,395 |  |  | $ | (4,009 | )
| December 31, 2015
| 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: |  |  |  |  |  |  |  |  |  |  |
Municipal bonds | $ | 280 |  |  | $ | (45 | ) |  | $ | — |  |  | $ | — |  |  | $ | 280 |  |  | $ | (45 | )
Foreign debt | 2,541 |  |  | (265 | ) |  | 281 |  |  | (215 | ) |  | 2,822 |  |  | (480 | )
Corporate debt | 10,463 |  |  | (2,164 | ) |  | 2,210 |  |  | (931 | ) |  | 12,673 |  |  | (3,095 | )
Preferred stock | 7,100 |  |  | (301 | ) |  | 3,568 |  |  | (309 | ) |  | 10,668 |  |  | (610 | )
Common stock | 7,379 |  |  | (1,220 | ) |  | 2,186 |  |  | (719 | ) |  | 9,565 |  |  | (1,939 | )
Total temporary impaired securities | $ | 27,763 |  |  | $ | (3,995 | ) |  | $ | 8,245 |  |  | $ | (2,174 | ) |  | $ | 36,008 |  |  | $ | (6,169 | )
Perpetual care trust investment security transactions recorded in Interest expense on our Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2016 were as follows (in thousands):
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2015 |  | 2016 |  | 2015 |  | 2016
Realized gains | $ | 731 |  |  | $ | 44 |  |  | $ | 1,706 |  |  | $ | 156 |
Realized losses | (207 | ) |  | (261 | ) |  | (692 | ) |  | (1,943 | )
Decrease (increase) in care trusts’ corpus | (524 | ) |  | 217 |  |  | (1,014 | ) |  | 1,787 |
Total | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Perpetual care trust investment security transactions recorded in Revenues: Cemetery for the three and nine months ended September 30, 2015 and 2016 were as follows (in thousands):
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2015 |  | 2016 |  | 2015 |  | 2016
Investment income | $ | 1,371 |  |  | $ | 1,523 |  |  | $ | 3,739 |  |  | $ | 4,503 |
Realized gain, net | 213 |  |  | 14 |  |  | 497 |  |  | (444 | )
Total | $ | 1,584 |  |  | $ | 1,537 |  |  | $ | 4,236 |  |  | $ | 4,059 |
Purchases and sales of investments in the perpetual care trusts were as follows (in thousands):
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2015 |  | 2016 |  | 2015 |  | 2016
Purchases | $ | (7,247 | ) |  | $ | (936 | ) |  | $ | (15,352 | ) |  | $ | (12,888 | )
Sales | $ | 2,532 |  |  | $ | 3,832 |  |  | $ | 8,885 |  |  | $ | 11,702 |

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- Definition CEMETERY PERPETUAL CARE TRUST INVESTMENTS + References No definition available. + Details
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- Definition This note represents disclosures relating to cemetery perpetual care 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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