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Trust Investments

9 Months Ended

Sep. 30, 2023

Preneed Trust Investments [Abstract]

Trust Investments

TRUST INVESTMENTSPreneed trust investments represent trust fund assets that we are generally permitted to withdraw as the services and merchandise are provided to customers. Preneed funeral and cemetery contracts are secured by payments from customers, less amounts not required by law to be deposited into trust. These earnings are recognized in Other revenue on our Consolidated Statements of Operations, when a service is performed or merchandise is delivered. Trust management fees charged by our wholly-owned registered investment advisory firm (“CSV RIA”) are included as revenue in the period in which they are earned. Our investments are diversified across multiple industry segments using a balanced allocation strategy to minimize long-term risk. We do not intend to sell and it is likely that we will not be required to sell the securities prior to their anticipated recovery.

Cemetery perpetual care trust investments represent a portion of the proceeds from the sale of cemetery property interment rights that we are required by various state laws to deposit 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 in Other revenue.

Changes in the fair value of our trust fund assets (Preneed funeral, cemetery and perpetual care trust investments) are offset by changes in the fair value of our trust fund liabilities (Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus) and reflected in Other, net. There is no impact on earnings until such time the services are performed or the merchandise is delivered, causing the contract to be withdrawn from the trust in accordance with state regulations and the gain or loss is allocated to the contract.

We rely on our trust investments to provide funding for the various contractual obligations that arise upon maturity of the underlying preneed contracts. Because of the long-term relationship between the establishment of trust investments and the required performance of the underlying contractual obligations, the impact of current market conditions that may exist at any given time is not necessarily indicative of our ability to generate profit on our future performance obligations.

Preneed Cemetery Trust Investments

The components of Preneed cemetery trust investments on our Consolidated Balance Sheet are as follows (in thousands):

			December 31, 2022						September 30, 2023
Preneed cemetery trust investments, at market value			$	98,269					$	95,632
Less: allowance for contract cancellation			(3,204)						(3,049)
Preneed cemetery trust investments			$	95,065					$	92,583

The cost and market values associated with preneed cemetery trust investments at September 30, 2023 are detailed below (in thousands):

			Fair Value Hierarchy Level						Cost						Unrealized Gains						Unrealized Losses						Fair Market Value
Cash and money market accounts			1						$	9,177					$	—					$	—					$	9,177
Fixed income securities:
U.S. agency obligations			2						803						—						(75)						728
Foreign debt			2						9,246						959						(351)						9,854
Corporate debt			2						15,058						109						(4,872)						10,295
Preferred stock			2						11,524						528						(1,466)						10,586
Certificates of deposit			2						79						—						(9)						70
Common stock			1						40,264						8,897						(7,508)						41,653
Limited partnership fund									3,572						108						—						3,680
Mutual funds:
Equity			1						553						—						(65)						488
Fixed income			2						11,361						2						(3,153)						8,210
Trust securities									$	101,637					$	10,603					$	(17,499)					$	94,741
Accrued investment income									$	891																	$	891
Preneed cemetery trust investments																											$	95,632
Market value as a percentage of cost																											93.2%

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

Due in one year or less			$	138
Due in one to five years			8,981
Due in five to ten years			3,956
Thereafter			18,458
Total fixed income securities			$	31,533

The cost and market values associated with preneed cemetery trust investments at December 31, 2022 are detailed below (in thousands):

			Fair Value Hierarchy Level						Cost						Unrealized Gains						Unrealized Losses						Fair Market Value
Cash and money market accounts			1						$	10,434					$	—					$	—					$	10,434
Fixed income securities:
U.S. agency obligations			2						803						—						(72)						731
Foreign debt			2						12,241						910						(644)						12,507
Corporate debt			2						15,066						104						(4,139)						11,031
Preferred stock			2						12,560						436						(1,789)						11,207
Certificate of deposit			2						79						—						(8)						71
Common stock			1						42,929						5,102						(6,228)						41,803
Mutual funds:
Equity			1						362						—						(33)						329
Fixed income			2						12,324						10						(3,310)						9,024
Trust Securities									$	106,798					$	6,562					$	(16,223)					$	97,137
Accrued investment income									$	1,132																	$	1,132
Preneed cemetery trust investments																											$	98,269
Market value as a percentage of cost																											91.0%

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at September 30, 2023, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

			September 30, 2023
			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:
U.S. agency obligations			$	—					$	—					$	728					$	(75)					$	728					$	(75)
Foreign debt			2,885						(100)						1,711						(251)						4,596						(351)
Corporate debt			3,106						(276)						4,374						(4,596)						7,480						(4,872)
Preferred stock			305						(21)						7,993						(1,445)						8,298						(1,466)
Certificates of deposit			—						—						71						(9)						71						(9)
Total fixed income securities with an unrealized loss			$	6,296					$	(397)					$	14,877					$	(6,376)					$	21,173					$	(6,773)

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed cemetery trust investments in an unrealized loss position at December 31, 2022, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

			December 31, 2022
			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:
U.S. agency obligations			$	732					$	(72)					$	—					$	—					$	732					$	(72)
Foreign debt			5,394						(308)						744						(336)						6,138						(644)
Corporate debt			8,037						(3,922)						563						(217)						8,600						(4,139)
Preferred stock			7,146						(1,271)						2,517						(518)						9,663						(1,789)
Certificates of deposit			71						(8)						—						—						71						(8)
Total fixed income securities with an unrealized loss			$	21,380					$	(5,581)					$	3,824					$	(1,071)					$	25,204					$	(6,652)

Preneed cemetery trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):

			Three months ended September 30,												Nine months ended September 30,
			2022						2023						2022						2023
Investment income			$	556					$	610					$	1,618					$	1,889
Realized gains			392						246						9,285						2,247
Realized losses			(105)						(190)						(2,488)						(1,336)
Unrealized gains (losses), net			(5,037)						1,818						(14,137)						(6,896)
Expenses and taxes			(482)						(454)						(1,353)						(1,076)
Net change in deferred preneed cemetery receipts held in trust			4,676						(2,030)						7,075						5,172
			$	—					$	—					$	—					$	—

Purchases and sales of investments in the preneed cemetery trusts are as follows (in thousands):

			Three months ended September 30,												Nine months ended September 30,
			2022						2023						2022						2023
Purchases			$	(459)					$	(5,481)					$	(2,083)					$	(14,619)
Sales			—						5,368						661						11,230

Preneed Funeral Trust Investments

Preneed funeral trust investments represent trust fund assets that we are permitted to withdraw as services and merchandise are provided to customers. Preneed funeral contracts are secured by payments from customers, less retained amounts not required to be deposited into trust.

The components of Preneed funeral trust investments on our Consolidated Balance Sheet are as follows (in thousands):

			December 31, 2022						September 30, 2023
Preneed funeral trust investments, at market value			$	107,995					$	109,863
Less: allowance for contract cancellation			(3,442)						(3,430)
Preneed funeral trust investments			$	104,553					$	106,433

The cost and market values associated with preneed funeral trust investments at September 30, 2023 are detailed below (in thousands):

			Fair Value Hierarchy Level						Cost						Unrealized Gains						Unrealized Losses						Fair Market Value
Cash and money market accounts			1						$	27,984					$	—					$	—					$	27,984
Fixed income securities:
U.S treasury debt			1						485						—						(48)						437
Foreign debt			2						8,680						917						(320)						9,277
Corporate debt			2						13,540						98						(4,287)						9,351
Preferred stock			2						10,413						495						(1,380)						9,528
Common stock			1						36,309						8,456						(6,561)						38,204
Limited partnership fund									3,413						103						—						3,516
Mutual funds:
Equity			1						405						—						(57)						348
Fixed income			2						9,599						2						(2,712)						6,889
Other investments			2						3,511						—						—						3,511
Trust securities									$	114,339					$	10,071					$	(15,365)					$	109,045
Accrued investment income									$	818																	$	818
Preneed funeral trust investments																											$	109,863
Market value as a percentage of cost																											95.4%

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

Due in one year or less			$	80
Due in one to five years			7,980
Due in five to ten years			3,636
Thereafter			16,897
Total fixed income securities			$	28,593

The cost and market values associated with preneed funeral trust investments at December 31, 2022 are detailed below (in thousands):

			Fair Value Hierarchy Level						Cost						Unrealized Gains						Unrealized Losses						Fair Market Value
Cash and money market accounts			1						$	29,641					$	—					$	—					$	29,641
Fixed income securities:
U.S. treasury debt			1						484						—						(45)						439
Foreign debt			2						10,851						818						(555)						11,114
Corporate debt			2						12,735						89						(3,443)						9,381
Preferred stock			2						10,730						391						(1,564)						9,557
Common stock			1						36,478						4,485						(5,187)						35,776
Mutual funds:
Equity			1						326						—						(30)						296
Fixed income			2						9,907						9						(2,691)						7,225
Other investments			2						3,592						—						—						3,592
Trust securities									$	114,744					$	5,792					$	(13,515)					$	107,021
Accrued investment income									$	974																	$	974
Preneed funeral trust investments																											$	107,995
Market value as a percentage of cost																											93.3%

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at September 30, 2023, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

			September 30, 2023
			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:
U.S. treasury debt			$	—					$	—					$	437					$	(48)					$	437					$	(48)
Foreign debt			2,709						(94)						1,542						(226)						4,251						(320)
Corporate debt			2,969						(264)						3,749						(4,023)						6,718						(4,287)
Preferred stock			291						(20)						7,269						(1,360)						7,560						(1,380)
Total fixed income securities with an unrealized loss			$	5,969					$	(378)					$	12,997					$	(5,657)					$	18,966					$	(6,035)

The following table summarizes our fixed income securities (excluding mutual funds) within our preneed funeral trust investment in an unrealized loss position at December 31, 2022, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

			December 31, 2022
			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:
U.S. treasury debt			$	439					$	(45)					$	—					$	—					$	439					$	(45)
Foreign debt			4,766						(274)						626						(281)						5,392						(555)
Corporate debt			6,742						(3,248)						506						(195)						7,248						(3,443)
Preferred stock			5,908						(1,099)						2,261						(465)						8,169						(1,564)
Total fixed income securities with an unrealized loss			$	17,855					$	(4,666)					$	3,393					$	(941)					$	21,248					$	(5,607)

Preneed funeral trust investment security transactions recorded in Other, net on the Consolidated Statements of Operations are as follows (in thousands):

			Three months ended September 30,												Nine months ended September 30,
			2022						2023						2022						2023
Investment income			$	398					$	479					$	1,245					$	1,542
Realized gains			357						235						8,247						2,178
Realized losses			(96)						(181)						(2,242)						(1,278)
Unrealized gains (losses), net			(4,394)						1,911						(11,794)						(5,294)
Expenses and taxes			(214)						(182)						(751)						(576)
Net change in deferred preneed funeral receipts held in trust			3,949						(2,262)						5,295						3,428
			$	—					$	—					$	—					$	—

Purchases and sales of investments in the preneed funeral trusts are as follows (in thousands):

			Three months ended September 30,												Nine months ended September 30,
			2022						2023						2022						2023
Purchases			$	—					$	(5,237)					$	(590)					$	(13,987)
Sales			8						5,135						538						10,820

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 are as follows (in thousands):

			December 31, 2022						September 30, 2023
Cemetery perpetual care trust investments, at market value			$	66,307					$	82,042
Obligations due from trust			(812)						(743)
Care trusts’ corpus			$	65,495					$	81,299

The following table reflects the cost and market values associated with the trust investments held in cemetery perpetual care trust funds at September 30, 2023 (in thousands):

			Fair Value Hierarchy Level						Cost						Unrealized Gains						Unrealized Losses						Fair Market Value
Cash and money market accounts			1						$	6,913					$	—					$	—					$	6,913
Fixed income securities:
Foreign debt			2						8,447						810						(338)						8,919
Corporate debt			2						13,152						137						(4,292)						8,997
Preferred stock			2						11,121						469						(1,334)						10,256
Common stock			1						33,764						7,586						(6,219)						35,131
Limited partnership fund									3,014						91						—						3,105
Mutual funds:
Equity			1						464						—						(57)						407
Fixed income			2						10,248						1						(2,737)						7,512
Trust securities									$	87,123					$	9,094					$	(14,977)					$	81,240
Accrued investment income									$	802																	$	802
Cemetery perpetual care investments																											$	82,042
Market value as a percentage of cost																											93.2%

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

Due in one year or less			$	—
Due in one to five years			7,107
Due in five to ten years			3,505
Thereafter			17,560
Total fixed income securities			$	28,172

The following table reflects the cost and market values associated with the trust investments held in cemetery perpetual care trust funds at December 31, 2022 (in thousands):

			Fair Value Hierarchy Level						Cost						Unrealized Gains						Unrealized Losses						Fair Market Value
Cash and money market accounts			1						$	5,326					$	—					$	—					$	5,326
Fixed income securities:
Foreign debt			2						8,746						600						(470)						8,876
Corporate debt			2						10,540						118						(2,961)						7,697
Preferred stock			2						9,831						287						(1,374)						8,744
Common stock			1						28,625						3,443						(4,297)						27,771
Mutual funds:
Equity			1						345						2						(22)						325
Fixed income			2						9,046						26						(2,310)						6,762
Trust securities									$	72,459					$	4,476					$	(11,434)					$	65,501
Accrued investment income									$	806																	$	806
Cemetery perpetual care investments																											$	66,307
Market value as a percentage of cost																											90.4%

The following table summarizes our fixed income securities (excluding mutual funds) within our cemetery perpetual care trust investment in an unrealized loss position at September 30, 2023, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

			September 30, 2023
			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			$	2,906					$	(107)					$	1,576					$	(231)					$	4,482					$	(338)
Corporate debt			2,621						(233)						3,704						(4,059)						6,325						(4,292)
Preferred stock			257						(18)						7,356						(1,316)						7,613						(1,334)
Total fixed income securities with an unrealized loss			$	5,784					$	(358)					$	12,636					$	(5,606)					$	18,420					$	(5,964)

The following table summarizes our fixed income securities (excluding mutual funds) within our perpetual care trust investment in an unrealized loss position at December 31, 2022, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

			December 31, 2022
			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			$	4,123					$	(218)					$	554					$	(252)					$	4,677					$	(470)
Corporate debt			5,413						(2,818)						371						(143)						5,784						(2,961)
Preferred stock			6,066						(1,032)						1,659						(342)						7,725						(1,374)
Total fixed income securities with an unrealized loss			$	15,602					$	(4,068)					$	2,584					$	(737)					$	18,186					$	(4,805)

Cemetery perpetual care trust investment security transactions recorded in Other, net on our Consolidated Statements of Operations are as follows (in thousands):

			Three months ended September 30,												Nine months ended September 30,
			2022						2023						2022						2023
Realized gains			$	48					$	31					$	1,292					$	862
Realized losses			(13)						(24)						(302)						(494)
Unrealized gains (losses), net			(3,730)						1,444						(9,846)						(5,883)
Net change in care trusts’ corpus			3,695						(1,451)						8,856						5,515
Total			$	—					$	—					$	—					$	—

Cemetery perpetual care trust investment security transactions recorded in Other revenue are as follows (in thousands):

			Three months ended September 30,												Nine months ended September 30,
			2022						2023						2022						2023
Investment income			$	3,075					$	2,663					$	8,613					$	8,741
Realized losses, net			(739)						(322)						(1,343)						(796)
Total			$	2,336					$	2,341					$	7,270					$	7,945

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

			Three months ended September 30,												Nine months ended September 30,
			2022						2023						2022						2023
Purchases			$	(233)					$	(4,625)					$	(644)					$	(11,336)
Sales			—						4,529						441						15,433

X

- Definition

PRENEED TRUST INVESTMENTS

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X

- Definition

This note represents disclosures relating to preneed funeral and cemetery 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.

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