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, 2013 and December 31, 2012 was as follows:



	September 30, 2013		December 31, 2012
	(In thousands)
7.875% Debentures due February 2013	$	—	$	4,786
6.75% Senior Notes due April 2015	145,676		150,112
6.75% Senior Notes due April 2016	216,621		222,049
7.0% Senior Notes due June 2017	327,450		341,094
7.625% Senior Notes due October 2018	284,560		298,750
7.0% Senior Notes due May 2019	266,875		276,250
4.5% Senior Notes due November 2020	190,500		204,500
8.0% Senior Notes due November 2021	170,250		186,000
5.375% Senior Notes due January 2022	407,469		—
7.5% Senior Notes due April 2027	207,500		215,500
Bank credit facility	—		86,600
Mortgage notes and other debt, maturities through 2047	4,711		5,698
Total fair value of debt instruments	$	2,221,612	$	1,991,339

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.