Credit Risk and Fair Value of Financial Instruments

Fair Value Estimates

The fair value estimates of the following financial instruments have been determined using available market information and appropriate valuation methodologies. The carrying values of cash and cash equivalents, trade receivables, and trade payables approximate the fair values of those instruments due to the short-term nature of the instruments. The fair values of receivables on preneed funeral and cemetery contracts are impracticable to estimate because of the lack of a trading market and the diverse number of individual contracts with varying terms.

The fair value of our debt instruments at September 30, 2012 and December 31, 2011 was as follows:



	September 30, 2012		December 31, 2011
	(In thousands)
7.875% Debentures due February 2013	$	4,757	$	4,971
7.375% Senior Notes due October 2014	199,439		196,954
6.75% Senior Notes due April 2015	150,112		150,083
6.75% Senior Notes due April 2016	220,569		216,375
7.0% Senior Notes due June 2017	340,725		323,025
7.625% Senior Notes due October 2018	296,875		276,875
7.0% Senior Notes due May 2019	275,625		262,500
8.0% Senior Notes due November 2021	184,875		167,550
7.5% Senior Notes due April 2027	216,200		195,750
Bank credit facility due March 2016	77,000		65,000
Mortgage notes and other debt, maturities through 2047	5,850		36,340
Total fair value of debt instruments	$	1,972,027	$	1,895,423

The fair values of our long-term, fixed rate loans were estimated using market prices for those loans, and therefore they are classified within Level 1 of the Fair Value Measurements hierarchy as required by the FVM&D Topic of the ASC. The bank credit agreement and the mortgage and other debt are classified within Level 3 of the Fair Value Measurements hierarchy. The fair values of these instruments have been estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. A significant increase (decrease) in the inputs results in a directionally opposite change in the fair value of the instruments.