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Cemetery Perpetual Care Trust Investments
12 Months Ended
Dec. 31, 2019
Cemetery Perpetual Care Trust Investments [Abstract]  
CEMETERY PERPETUAL CARE TRUST INVESTMENTS
CEMETERY PERPETUAL CARE TRUST INVESTMENTS
Care trusts’ corpus on our Consolidated Balance Sheet represent the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus as of December 31, 2018 and 2019 are as follows (in thousands): 
 
December 31, 2018

 
December 31, 2019

Cemetery perpetual care trust investments, at market value
$
44,071

 
$
64,047

Obligations due from trust
(577
)
 
(631
)
Care trusts’ corpus
$
43,494

 
$
63,416


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 December 31, 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, common stock and equity mutual funds. 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. There were no transfers between Levels 1 and 2 for the year ended December 31, 2019. There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 12 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, 2019 (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market Value
Cash and money market accounts
1
 
$
4,624

 
$

 
$

 
$
4,624

Fixed income securities:
 
 
 
 
 
 
 
 
 
Foreign debt
2
 
4,200

 
238

 
(175
)
 
4,263

Corporate debt
2
 
11,658

 
802

 
(534
)
 
11,926

Preferred stock
2
 
10,782

 
666

 
(106
)
 
11,342

Mortgage-backed securities
2
 
324

 

 
(71
)
 
253

Common stock
1
 
21,594

 
3,399

 
(1,911
)
 
23,082

Mutual funds:
 
 
 
 
 
 
 
 
 
Equity
1
 
233

 
146

 
(1
)
 
378

Fixed income
2
 
7,156

 
618

 
(107
)
 
7,667

Trust securities
 
 
$
60,571

 
$
5,869

 
$
(2,905
)
 
$
63,535

Accrued investment income
 
 
$
512

 
 
 
 
 
$
512

Cemetery perpetual care investments
 
 
 
 
 
 
 
 
$
64,047

Market value as a percentage of cost
 
 
 
 
 
 
 
 
104.9
%

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
3,130

Due in five to ten years
6,786

Thereafter
17,868

Total fixed income securities
$
27,784


The following table reflects the cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2018 (in thousands): 
 
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. We did not record any impairments in the years ended December 31, 2018 and 2019.
At December 31, 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 investments 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 year ended December 31, 2019 are shown in the following tables (in thousands):
 
December 31, 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
$
168

 
$
(26
)
 
$
549

 
$
(149
)
 
$
717

 
$
(175
)
Corporate debt
1,057

 
(196
)
 
3,253

 
(338
)
 
4,310

 
(534
)
Preferred stock
2,989

 
(106
)
 

 

 
2,989

 
(106
)
Mortgage-backed securities

 

 
252

 
(71
)
 
252

 
(71
)
Common stock
3,299

 
(463
)
 
2,657

 
(1,448
)
 
5,956

 
(1,911
)
Mutual funds:
 
 
 
 
 
 
 
 
 
 
 
Equity and Other
2

 

 
18

 
(1
)
 
20

 
(1
)
Fixed income
732

 
(94
)
 
360

 
(13
)
 
1,092

 
(107
)
Total temporary impaired securities
$
8,247

 
$
(885
)
 
$
7,089

 
$
(2,020
)
 
$
15,336

 
$
(2,905
)
Our perpetual care trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses for the year ended December 31, 2018 are shown in the following tables (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 years ended December 31, 2017, 2018 and 2019 are as follows (in thousands):
 
Years ended December 31,
 
2017
 
2018
 
2019
Realized gains
$
926

 
$
1,364

 
$
1,663

Realized losses
(1,195
)
 
(1,896
)
 
(1,258
)
Net change in Care trusts’ corpus
269

 
532

 
(405
)
Total
$

 
$

 
$


Perpetual care trust investment security transactions recorded in Other revenue for the years ended December 31, 2017, 2018 and 2019 are as follows (in thousands):
 
Years ended December 31,
 
2017
 
2018
 
2019
Investment income
$
5,949

 
$
5,934

 
$
4,500

Realized losses, net
(838
)
 
(1,355
)
 
(377
)
Total
$
5,111

 
$
4,579

 
$
4,123


Purchases and sales of investments in the perpetual care trusts for the years ended December 31, 2017, 2018 and 2019 are as follows (in thousands):
 
Years ended December 31,
 
2017
 
2018
 
2019
Purchases
$
(13,923
)
 
$
(17,313
)
 
$
(26,573
)
Sales
8,899

 
25,786

 
17,588