CEMETERY PERPETUAL CARE TRUST INVESTMENTS

Care trusts’ corpus on our Consolidated Balance Sheet represents the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus as of December 31, 2018 and September 30, 2019 are as follows (in thousands):



	December 31, 2018			September 30, 2019
Trust assets, at market value	$	44,071		$	48,397
Obligations due from trust	(577		)	(626		)
Care trusts’ corpus	$	43,494		$	47,771

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 Other revenue. Trust management fees charged by CSV RIA are included in revenue in the period in which they are earned. At September 30, 2019, none of our cemetery perpetual care trust investments were underfunded.

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 fixed income securities, including 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, 2019. There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 10 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, 2019 (in thousands, except percentages):



	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses			Fair Market Value
Cash and money market accounts	1	$	4,182	$	—	$	—		$	4,182
Fixed income securities:
Foreign debt	2	4,683		98		(336		)	4,445
Corporate debt	2	11,935		654		(500		)	12,089
Preferred stock	2	10,191		708		(94		)	10,805
Mortgage-backed securities	2	355		—		(132		)	223
Common stock	1	16,101		687		(2,577		)	14,211
Mutual funds:
Fixed Income	2	1,901		63		(77		)	1,887
Trust securities		$	49,348	$	2,210	$	(3,716	)	$	47,842
Accrued investment income		$	555						$	555
Cemetery perpetual care investments									$	48,397
Market value as a percentage of cost									96.9		%

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	1,710
Due in five to ten years	8,600
Thereafter	17,252
Total	$	27,562

The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at December 31, 2018 (in thousands, except percentages):



	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses			Fair Market Value
Cash and money market accounts	1	$	11,144	$	—	$	—		$	11,144
Fixed income securities:
Foreign debt	2	2,872		27		(385		)	2,514
Corporate debt	2	9,956		227		(730		)	9,453
Preferred stock	2	8,141		37		(820		)	7,358
Mortgage-backed securities	2	417		101		(9		)	509
Common stock	1	15,562		542		(3,395		)	12,709
Trust securities		$	48,092	$	934	$	(5,339	)	$	43,687
Accrued investment income		$	384						$	384
Cemetery perpetual care investments									$	44,071
Market value as a percentage of cost									90.8		%

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 and nine months ended September 30, 2018 and 2019, we did not record any impairments 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, 2019, 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, 2019 are shown in the following table (in thousands):



	September 30, 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
Fixed income securities:
Foreign debt	$	1,368	$	(88	)	$	734	$	(248	)	$	2,102	$	(336	)
Corporate debt	1,971		(342		)	3,425		(158		)	5,396		(500		)
Preferred stock	2,542		(25		)	1,549		(69		)	4,091		(94		)
Mortgage-backed securities	—		—			223		(132		)	223		(132		)
Common stock	7,753		(1,703		)	1,885		(874		)	9,638		(2,577		)
Mutual Funds:
Fixed Income	601		(77		)	—		—			601		(77		)
Total temporary impaired securities	$	14,235	$	(2,235	)	$	7,816	$	(1,481	)	$	22,051	$	(3,716	)

Our perpetual care trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses for the periods ended December 31, 2018 are shown in the following table (in thousands):



	December 31, 2018
	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	$	1,619	$	(189	)	$	639	$	(196	)	$	2,258	$	(385	)
Corporate debt	7,006		(587		)	301		(143		)	7,307		(730		)
Preferred stock	3,586		(279		)	2,787		(541		)	6,373		(820		)
Mortgage-backed securities	—		—			32		(9		)	32		(9		)
Common stock	9,010		(2,557		)	733		(838		)	9,743		(3,395		)
Total temporary impaired securities	$	21,221	$	(3,612	)	$	4,492	$	(1,727	)	$	25,713	$	(5,339	)

Perpetual care trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2019 are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2019			2018			2019
Realized gains	$	435		$	291		$	739		$	1,315
Realized losses	(363		)	(414		)	(889		)	(855		)
Net change in care trusts’ corpus	(72		)	123			150			(460		)
Total	$	—		$	—		$	—		$	—

Perpetual care trust investment security transactions recorded in Other revenue for the three and nine months ended September 30, 2018 and 2019 are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2019			2018			2019
Investment income	$	1,158		$	1,220		$	3,749		$	3,414
Realized loss, net	(241		)	(232		)	(955		)	(512		)
Total	$	917		$	988		$	2,794		$	2,902

Purchases and sales of investments in the perpetual care trusts for the three and nine months ended September 30, 2018 and 2019 are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2019			2018			2019
Purchases	$	(5,185	)	$	(7,680	)	$	(11,856	)	$	(21,954	)
Sales	6,149			6,599			15,545			14,578