Cemetery Perpetual Care Trust Investments
 3 Months Ended
Mar. 31, 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 March 31, 2016 were as follows (in thousands):
 
December 31, 2015
 
March 31, 2016
Trust assets, at market value
$
43,127

 
$
41,341

Obligations due from trust
(711
)
 
(49
)
Care trusts’ corpus
$
42,416

 
$
41,292


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 from cemetery operations. Trust management fees charged by CSV RIA are included in revenue in the period in which they are earned. At March 31, 2016, our cemetery perpetual care trust investments were not 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 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 in the three months ended March 31, 2016. There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 7 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 March 31, 2016 (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market
Value
Cash and money market accounts
1
 
$
3,085

 
$
—

 
$
—

 
$
3,085

Fixed income securities:
 
 
 
 
 
 
 
 
 
Municipal bonds
2
 
327

 
—

 
(60
)
 
267

Foreign debt
2
 
4,810

 
66

 
(633
)
 
4,243

Corporate debt
2
 
17,495

 
422

 
(2,354
)
 
15,563

Preferred stock
2
 
11,341

 
4

 
(988
)
 
10,357

Common stock
1
 
9,151

 
96

 
(2,722
)
 
6,525

Mutual Funds:
 
 
 
 
 
 
 
 
 
Fixed Income
2
 
$
695

 
$
34

 
$
—

 
$
729

Trust securities
 
 
$
46,904

 
$
622

 
$
(6,757
)
 
$
40,769

Accrued investment income
 
 
$
572

 
 
 
 
 
$
572

Cemetery perpetual care investments
 
 
 
 
 
 
 
 
$
41,341

Market value as a percentage of cost
 
 
 
 
 
 
 
 
86.9
%

The estimated maturities of the fixed income securities included above are as follows (in thousands):
Due in one year or less
$
77

Due in one to five years
5,405

Due in five to ten years
3,209

Thereafter
21,739

Total fixed income securities
$
30,430


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. We recorded a $0.4 million impairment in the first quarter of 2016 for other-than-temporary declines in the fair value related to unrealized losses on certain investments. We recorded a $0.5 million impairment in the first quarter of 2015 for other-than-temporary declines in the fair value related to unrealized losses on certain investments.
At March 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 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 March 31, 2016 and December 31, 2015 are shown in the following tables (in thousands):
 
March 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
$
128

 
$
(26
)
 
$
139

 
$
(33
)
 
$
267

 
$
(60
)
Foreign debt
1,878

 
(306
)
 
1,192

 
(327
)
 
3,070

 
(633
)
Corporate debt
4,569

 
(917
)
 
4,840

 
(1,437
)
 
9,409

 
(2,354
)
Preferred stock
5,420

 
(481
)
 
4,660

 
(507
)
 
10,080

 
(988
)
Common stock
3,666

 
(1,631
)
 
1,986

 
(1,091
)
 
5,652

 
(2,722
)
Total temporary impaired securities
$
15,661

 
$
(3,361
)
 
$
12,817

 
$
(3,395
)
 
$
28,478

 
$
(6,757
)
 
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 months ended March 31, 2015 and 2016 were as follows (in thousands):
 
For the Three Months Ended March 31,
 
2015
 
2016
Realized gains
$
190

 
$
47

Realized losses
(425
)
 
(1,249
)
Decrease in care trusts’ corpus
235

 
1,202

Total
$
—

 
$
—


Perpetual care trust investment security transactions recorded in Cemetery revenue for the three months ended March 31, 2015 and 2016 were as follows (in thousands):
 
For the Three Months Ended March 31,
 
2015
 
2016
Investment income
$
1,168

 
$
1,476

Realized gain, net
(91
)
 
(262
)
Total
$
1,077

 
$
1,214


Purchases and sales of investments in the perpetual care trusts were as follows (in thousands):
 
For the Three Months Ended March 31,
 
2015
 
2016
Purchases
$
(4,634
)
 
$
(6,758
)
Sales
$
1,822

 
$
4,748