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Preneed Activities (Notes)
 9 Months Ended
Sep. 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 September 30, 2018 and December 31, 2017 are as follows:
 
September 30, 2018
 
December 31, 2017
 
(In thousands)
Preneed funeral receivables(1)
$
117,730

 
$
336,925

Preneed cemetery receivables(1)
856,637

 
1,118,146

Preneed receivables from customers(1)
974,367

 
1,455,071

Unearned finance charge
(46,273
)
 
(45,515
)
Allowance for cancellation (1)
(48,667
)
 
(107,749
)
Preneed receivables, net
$
879,427

 
$
1,301,807

 
 
 
 
Trust investments, at market
$
5,023,407

 
$
4,749,548

Insurance-backed fixed income securities and other
262,178

 
259,654

Trust investments
5,285,585

 
5,009,202

Less: Cemetery perpetual care trust investments
(1,596,542
)
 
(1,532,167
)
Preneed trust investments
$
3,689,043

 
$
3,477,035

 
 
 
 
Preneed receivables, net and trust investments
$
4,568,470

 
$
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
 
Nine Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
 
(In thousands)
Deposits
$
96,539

 
$
86,028

 
$
296,651

 
$
277,286

Withdrawals
$
97,525

 
$
99,872

 
$
318,818

 
$
297,595

Purchases of securities
$
265,125

 
$
886,732

 
$
1,273,683

 
$
1,792,190

Sales of securities
$
295,983

 
$
509,675

 
$
1,331,981

 
$
1,742,860

Realized gains (1)
$
70,095

 
$
79,971

 
$
216,241

 
$
185,897

Realized losses (1)
$
(20,358
)
 
$
(17,707
)
 
$
(50,210
)
 
$
(62,657
)

(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 September 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.
 
September 30, 2018
 
Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Value
 
 
 
 
 
(In thousands)
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
U.S. Treasury
2
 
$
49,924

 
$
14

 
$
(621
)
 
$
49,317

Canadian government
2
 
59,507

 
36

 
(1,738
)
 
57,805

Corporate
2
 
24,962

 
67

 
(336
)
 
24,693

Residential mortgage-backed
2
 
3,809

 
10

 
(91
)
 
3,728

Asset-backed
2
 
142

 
2

 
(10
)
 
134

Equity securities:
 
 
 
 
 
 
 
 
 
Preferred stock
2
 
10,080

 
891

 
(186
)
 
10,785

Common stock:
 
 
 
 
 
 
 
 
 
United States
1
 
1,208,054

 
295,891

 
(42,913
)
 
1,461,032

Canada
1
 
36,162

 
11,804

 
(1,425
)
 
46,541

Other international
1
 
75,039

 
10,707

 
(4,613
)
 
81,133

Mutual funds:
 
 
 
 
 
 
 
 
 
Equity
1
 
728,307

 
45,012

 
(12,089
)
 
761,230

Fixed income
1
 
1,231,818

 
3,492

 
(46,257
)
 
1,189,053

Other
3
 
14,726

 
4,228

 
—

 
18,954

Trust investments, at fair value
 
 
3,442,530

 
372,154

 
(110,279
)
 
3,704,405

Commingled funds
 
 
 
 
 
 
 
 
 
Fixed income
 
 
427,226

 
2,462

 
(17,359
)
 
412,329

Equity
 
 
206,040

 
40,558

 
(2
)
 
246,596

Money market funds
 
 
380,743

 
—

 
—

 
380,743

Private equity
 
 
212,462

 
68,388

 
(1,516
)
 
279,334

Trust investments, at net asset value
 
 
1,226,471

 
111,408

 
(18,877
)
 
1,319,002

Trust investments, at market
 
 
$
4,669,001

 
$
483,562

 
$
(129,156
)
 
$
5,023,407

 
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 September 30, 2018, our unfunded commitment for our private equity and other investments was $96.3 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
 
Nine Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
 
(In thousands)
Fair value, beginning balance
$
20,194

 
$
7,924

 
$
9,067

 
$
7,163

Net unrealized gains (losses) included in Other income (expense), net(1)
1,020

 
(116
)
 
750

 
694

Purchases
36

 
1,881

 
43

 
1,909

Sales
(9
)
 
(854
)
 
(9
)
 
(931
)
Acquisitions
(2,287
)
 
—

 
9,103

 
—

Fair value, ending balance
$
18,954

 
$
8,835

 
$
18,954

 
$
8,835


(1)
All net unrealized gains (losses) 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 September 30, 2018 are estimated as follows:
 
Fair Value
 
(In thousands)
Due in one year or less
$
64,152

Due in one to five years
59,940

Due in five to ten years
10,290

Thereafter
1,295

 
$
135,677

Recognized trust fund income (realized and unrealized) related to these trust investments was $50.2 million and $39.1 million for the three months ended September 30, 2018 and 2017, respectively. Recognized trust fund income (realized and unrealized) related to these trust investments was $147.3 million and $122.6 million for the nine months ended September 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 September 30, 2018 and December 31, 2017, respectively, are shown in the following tables:
 
September 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
$
25,192

 
$
(576
)
 
$
3,119

 
$
(45
)
 
$
28,311

 
$
(621
)
Canadian government
—

 
—

 
26,469

 
(1,738
)
 
26,469

 
(1,738
)
Corporate
9,332

 
(65
)
 
6,089

 
(271
)
 
15,421

 
(336
)
Residential mortgage-backed
3,378

 
(89
)
 
100

 
(2
)
 
3,478

 
(91
)
 Asset-backed
—

 
—

 
99

 
(10
)
 
99

 
(10
)
Total temporarily fixed income impaired securities
$
37,902

 
$
(730
)
 
$
35,876

 
$
(2,066
)
 
$
73,778

 
$
(2,796
)
 
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
)