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 2016 were as follows (in thousands):



	December 31, 2015			December 31, 2016
Trust assets, at market value	$	43,127		$	46,889
Obligations due from trust	(711		)	(599		)
Care trusts’ corpus	$	42,416		$	46,290

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 December 31, 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. There were no transfers between Levels 1 and 2 for the year ended December 31, 2016. There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 11 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 December 31, 2016 (in thousands):



	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses			Fair Market Value
Cash and money market accounts	1	$	6,522	$	—	$	—		$	6,522
Fixed income securities:
Municipal bonds	2	365		13		(3		)	375
Foreign debt	2	5,100		99		(435		)	4,764
Corporate debt	2	13,715		966		(821		)	13,860
Preferred stock	2	11,323		5		(664		)	10,664
Mortgage-backed securities	2	569		223		(3		)	789
Common stock	1	8,259		1,382		(1,146		)	8,495
Mutual funds:
Fixed income	2	855		76		—			931
Trust securities		$	46,708	$	2,764	$	(3,072	)	$	46,400
Accrued investment income		$	489						$	489
Cemetery perpetual care investments									$	46,889
Market value as a percentage of cost									99.3		%

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



Due in one year or less	$	119
Due in one to five years	4,073
Due in five to ten years	4,083
Thereafter	22,177
Total fixed income securities	$	30,452

The following table reflects the cost and 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. For both years ended December 31, 2015 and 2016, we recorded a $0.4 million impairment charge for other-than-temporary declines in fair value related to unrealized losses on certain investments.

At December 31, 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 investments losses are temporary in nature.

Our perpetual care trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses as of December 31, 2016 are shown in the following tables (in thousands):



	December 31, 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:
Municipal bonds	$	137	$	(3	)	$	—	$	—		$	137	$	(3	)
Foreign debt	1,619		(120		)	1,961		(315		)	3,580		(435		)
Corporate debt	4,679		(152		)	1,439		(669		)	6,118		(821		)
Preferred stock	2,038		(77		)	8,329		(587		)	10,367		(664		)
Mortgage-backed securities	31		(3		)	—		—			31		(3		)
Common stock	1,563		(121		)	2,004		(1,025		)	3,567		(1,146		)
Total temporary impaired securities	$	10,067	$	(476	)	$	13,733	$	(2,596	)	$	23,800	$	(3,072	)

Our perpetual care trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses as of December 31, 2015 are shown in the following tables (in thousands):



	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 years ended December 31, 2014, 2015 and 2016 were as follows (in thousands):



	Year ended December 31,
	2014			2015			2016
Realized gains	$	3,468		$	1,773		$	872
Realized losses	(1,748		)	(2,431		)	(3,069		)
Decrease (increase) in Care trusts’ corpus	(1,720		)	658			2,197
Total	$	—		$	—		$	—

Perpetual care trust investment security transactions recorded in Revenues: Cemetery for the years ended December 31, 2014, 2015 and 2016 were as follows (in thousands):



	Year ended December 31,
	2014		2015		2016
Investment income	$	4,713	$	5,315	$	6,451
Realized gains (losses), net	1,112		436		(434		)
Total	$	5,825	$	5,751	$	6,017

Purchases and sales of investments in the perpetual care trusts for the years ended December 31, 2014, 2015 and 2016 were as follows (in thousands):



	Year ended December 31,
	2014			2015			2016
Purchases	$	(38,413	)	$	(16,694	)	$	(16,546	)
Sales	35,402			14,710			16,534