XML 25 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Preneed Activities (Notes)
 6 Months Ended
Jun. 30, 2018
Preneed Activities [Abstract]  
Preneed Activities
3. Preneed Activities
Preneed receivables, net and trust investments
The components of Preneed receivables, net and trust investments in our unaudited Condensed Consolidated Balance Sheet at June 30, 2018 and December 31, 2017 are as follows:
 
June 30, 2018
 
December 31, 2017
 
(In thousands)
Preneed funeral receivables(1)
$
115,406

 
$
336,925

Preneed cemetery receivables(1)
839,960

 
1,118,146

Preneed receivables from customers(1)
955,366

 
1,455,071

Unearned finance charge
(48,608
)
 
(45,515
)
Allowance for cancellation (1)
(47,902
)
 
(107,749
)
Preneed receivables, net
$
858,856

 
$
1,301,807

 
 
 
 
Trust investments, at market
$
4,896,475

 
$
4,749,548

Insurance-backed fixed income securities and other
261,674

 
259,654

Trust investments
5,158,149

 
5,009,202

Less: Cemetery perpetual care trust investments
(1,562,659
)
 
(1,532,167
)
Preneed trust investments
$
3,595,490

 
$
3,477,035

 
 
 
 
Preneed receivables, net and trust investments
$
4,454,346

 
$
4,778,842


(1)
Upon adoption of "Revenue from Contracts with Customers" on January 1, 2018, we reclassified amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts as a reduction in Deferred revenue, net. As a result of this reclassification, we eliminated the allowance for cancellation on these performance obligations.

The table below sets forth certain investment-related activities associated with our trusts:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In thousands)
Deposits
$
106,843

 
$
106,771

 
$
200,112

 
$
191,258

Withdrawals
$
114,524

 
$
104,641

 
$
221,293

 
$
197,723

Purchases of securities
$
407,859

 
$
387,415

 
$
1,007,748

 
$
904,571

Sales of securities
$
419,357

 
$
738,302

 
$
1,035,357

 
$
1,227,167

Realized gains (1)
$
87,840

 
$
53,493

 
$
146,146

 
$
105,926

Realized losses (1)
$
(17,552
)
 
$
(18,137
)
 
$
(29,852
)
 
$
(44,950
)

(1)
All realized gains and losses are recognized in Other income (expense), net for our trust investments and are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.
 



The costs and values associated with trust investments recorded at fair value at June 30, 2018 and December 31, 2017 are detailed below. Cost reflects the investment (net of redemptions) of control holders in the trusts. Fair value represents the value of the underlying securities held by the trusts.
 
June 30, 2018
 
Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Value
 
 
 
 
 
(In thousands)
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
U.S. Treasury
2
 
$
53,781

 
$
20

 
$
(569
)
 
$
53,232

Canadian government
2
 
59,109

 
46

 
(1,531
)
 
57,624

Corporate
2
 
31,206

 
255

 
(329
)
 
31,132

Residential mortgage-backed
2
 
5,213

 
10

 
(80
)
 
5,143

Asset-backed
2
 
142

 
2

 
(11
)
 
133

Equity securities:
 
 
 
 
 
 
 
 
 
Preferred stock
2
 
11,519

 
620

 
(163
)
 
11,976

Common stock:
 
 
 
 
 
 
 
 
 
United States
1
 
1,273,864

 
236,873

 
(46,573
)
 
1,464,164

Canada
1
 
31,679

 
10,887

 
(973
)
 
41,593

Other international
1
 
83,763

 
13,044

 
(3,270
)
 
93,537

Mutual funds:
 
 
 
 
 
 
 
 
 
Equity
1
 
709,776

 
40,605

 
(12,764
)
 
737,617

Fixed income
1
 
1,175,308

 
3,647

 
(45,546
)
 
1,133,409

Other
3
 
16,995

 
3,200

 
(1
)
 
20,194

Trust investments, at fair value
 
 
3,452,355

 
309,209

 
(111,810
)
 
3,649,754

Commingled funds
 
 
 
 
 
 
 
 
 
Fixed income
 
 
417,179

 
23

 
(16,390
)
 
400,812

Equity
 
 
225,264

 
15,694

 
(238
)
 
240,720

Money market funds
 
 
331,228

 
—

 
—

 
331,228

Private equity
 
 
210,305

 
65,420

 
(1,764
)
 
273,961

Trust investments, at net asset value
 
 
1,183,976

 
81,137

 
(18,392
)
 
1,246,721

Trust investments, at market
 
 
$
4,636,331

 
$
390,346

 
$
(130,202
)
 
$
4,896,475

 
December 31, 2017
 
Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Value
 
 
 
 
 
(In thousands)
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
U.S. Treasury
2
 
$
48,805

 
$
14

 
$
(117
)
 
$
48,702

Canadian government
2
 
81,500

 
160

 
(1,089
)
 
80,571

Corporate
2
 
13,540

 
327

 
(170
)
 
13,697

Residential mortgage-backed
2
 
3,279

 
16

 
(14
)
 
3,281

Asset-backed
2
 
320

 
15

 
(10
)
 
325

Equity securities:
 
 
 
 
 
 
 
 
 
Preferred stock
2
 
7,834

 
385

 
(139
)
 
8,080

Common stock:
 
 
 
 
 
 
 
 
 
United States
1
 
1,161,015

 
266,822

 
(24,739
)
 
1,403,098

Canada
1
 
30,762

 
12,545

 
(522
)
 
42,785

Other international
1
 
63,510

 
13,174

 
(2,834
)
 
73,850

Mutual funds:
 
 
 
 
 
 
 
 
 
Equity
1
 
613,934

 
59,100

 
(4,312
)
 
668,722

Fixed income
1
 
1,230,196

 
11,897

 
(23,943
)
 
1,218,150

Other
3
 
5,953

 
3,114

 
—

 
9,067

Trust investments, at fair value
 
 
3,260,648

 
367,569

 
(57,889
)
 
3,570,328

Commingled funds
 
 
 
 
 
 
 
 
 
Fixed income
 
 
454,242

 
235

 
(5,860
)
 
448,617

Equity
 
 
214,000

 
12,826

 
—

 
226,826

Money market funds
 
 
287,435

 
—

 
—

 
287,435

Private equity
 
 
166,860

 
51,631

 
(2,149
)
 
216,342

Trust investments, at net asset value
 
 
1,122,537

 
64,692

 
(8,009
)
 
1,179,220

Trust investments, at market
 
 
$
4,383,185

 
$
432,261

 
$
(65,898
)
 
$
4,749,548


As of June 30, 2018, our unfunded commitment for our private equity and other investments was $112 million which, if called, would be funded by the assets of the trusts.
The change in our market-based trust investments with significant unobservable inputs (Level 3) is as follows:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In thousands)
Fair value, beginning balance
$
8,533

 
$
7,313

 
$
9,067

 
$
7,163

Net unrealized gain included in Other income (expense), net(1)
264

 
660

 
(270
)
 
810

Purchases
7

 
28

 
7

 
28

Sales
—

 
(77
)
 
—

 
(77
)
Acquisitions
11,390

 
—

 
11,390

 
—

Fair value, ending balance
$
20,194

 
$
7,924

 
$
20,194

 
$
7,924


(1)
All net unrealized (losses) gains recognized in Other income (expense), net for our trust investments are offset by a corresponding reclassification in Other income (expense), net to Deferred receipts held in trust and Care trusts' corpus.
Maturity dates of our fixed income securities range from 2018 to 2077. Maturities of fixed income securities (excluding mutual funds) at June 30, 2018 are estimated as follows:
 
Fair Value
 
(In thousands)
Due in one year or less
$
65,392

Due in one to five years
64,107

Due in five to ten years
15,209

Thereafter
2,556

 
$
147,264

Recognized trust fund income (realized and unrealized) related to these trust investments was $52.2 million and $45.2 million for the three months ended June 30, 2018 and 2017, respectively. Recognized trust fund income (realized and unrealized) related to these trust investments was $97.1 million and $83.3 million for the six months ended June 30, 2018 and 2017, respectively.
We have determined that the unrealized losses in our fixed income investments are considered temporary in nature, as the unrealized losses were due to temporary fluctuations in interest rates. We believe that none of the securities are other-than-temporarily impaired based on our analysis of the investments. Our analysis included a review of the portfolio holdings and discussions with the individual money managers as to the credit ratings and the severity and duration of the unrealized losses. Our fixed income investment unrealized losses, their associated values, and the duration of unrealized losses as of June 30, 2018 and December 31, 2017, respectively, are shown in the following tables:
 
June 30, 2018
 
In Loss Position
Less Than 12 Months
 
In Loss Position
Greater Than 12 Months
 
Total
 
Value
 
Unrealized
Losses
 
Value
 
Unrealized
Losses
 
Value
 
Unrealized
Losses
 
 
 
 
 
(In thousands)
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
25,245

 
$
(530
)
 
$
2,382

 
$
(39
)
 
$
27,627

 
$
(569
)
Canadian government
9,693

 
(481
)
 
16,233

 
(1,050
)
 
25,926

 
(1,531
)
Corporate
4,541

 
(60
)
 
5,944

 
(269
)
 
10,485

 
(329
)
Residential mortgage-backed
2,868

 
(78
)
 
99

 
(2
)
 
2,967

 
(80
)
 Asset-backed
—

 
—

 
78

 
(11
)
 
78

 
(11
)
Total temporarily fixed income impaired securities
$
42,347

 
$
(1,149
)
 
$
24,736

 
$
(1,371
)
 
$
67,083

 
$
(2,520
)
 
December 31, 2017
 
In Loss Position
Less Than 12 Months
 
In Loss Position
Greater Than 12 Months
 
Total
 
Value
 
Unrealized
Losses
 
Value
 
Unrealized
Losses
 
Value
 
Unrealized
Losses
 
 
 
 
 
(In thousands)
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
29,014

 
$
(115
)
 
$
106

 
$
(2
)
 
$
29,120

 
$
(117
)
Canadian government
20,947

 
(639
)
 
6,370

 
(450
)
 
27,317

 
(1,089
)
Corporate
2,423

 
(31
)
 
4,453

 
(139
)
 
6,876

 
(170
)
Residential mortgage-backed
2,880

 
(12
)
 
151

 
(2
)
 
3,031

 
(14
)
 Asset-backed
—

 
—

 
74

 
(10
)
 
74

 
(10
)
Total temporarily impaired fixed income securities
$
55,264

 
$
(797
)
 
$
11,154

 
$
(603
)
 
$
66,418

 
$
(1,400
)