Preneed Activities Level 1 (Notes)

12 Months Ended

Dec. 31, 2023

Preneed Activities [Abstract]

Preneed Activities Text Block

3. Preneed Activities

Preneed Receivables, Net and Trust Investments

The components of Preneed receivables, net and trust investments in our Consolidated Balance Sheet were as follows:

	Years Ended December 31,
	2023		2022
	(In thousands)
Preneed receivables, net	$	1,513,933	$	1,402,209
Trust investments, at fair value	6,394,796		5,663,163
Insurance-backed fixed income securities and other	222,424		214,440
Trust investments	6,617,220		5,877,603
Less: Cemetery perpetual care trust investments	(1,939,241)		(1,702,313)
Preneed trust investments	4,677,979		4,175,290
Preneed receivables, net and trust investments	$	6,191,912	$	5,577,499

Preneed receivables, net comprised the following:

	December 31, 2023
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	190,514	$	1,371,804	$	1,562,318
Unearned finance charges	(10,100)		(5,810)		(15,910)
Preneed receivables, at amortized cost	$	180,414	$	1,365,994	$	1,546,408
Reserve for credit losses	(17,026)		(15,449)		(32,475)
Preneed receivables, net	$	163,388	$	1,350,545	$	1,513,933

	December 31, 2022
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	180,108	$	1,267,304	$	1,447,412
Unearned finance charges	(11,129)		(6,760)		(17,889)
Preneed receivables, at amortized cost	$	168,979	$	1,260,544	$	1,429,523
Reserve for credit losses	(14,438)		(12,876)		(27,314)
Preneed receivables, net	$	154,541	$	1,247,668	$	1,402,209

At December 31, 2023, the amortized cost basis of our preneed receivables by year of origination was as follows:

	2023		2022		2021		2020		2019		Prior		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	76,517	$	47,537	$	24,827	$	11,242	$	6,683	$	13,608	$	180,414
Cemetery	546,601		395,895		236,830		120,496		42,613		23,559		1,365,994
Total preneed receivables, at amortized cost	$	623,118	$	443,432	$	261,657	$	131,738	$	49,296	$	37,167	$	1,546,408

At December 31, 2023, the payment status of our preneed receivables was as follows:

	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	6,086	$	5,147	$	2,513	$	26,685	$	40,431	$	139,983	$	180,414
Cemetery	60,313		49,773		14,557		3,461		128,104		1,237,890		1,365,994
Total preneed receivables, at amortized cost	$	66,399	$	54,920	$	17,070	$	30,146	$	168,535	$	1,377,873	$	1,546,408

The following table summarizes the activity for the reserve for credit losses on preneed receivables for the twelve months ended December 31, 2023.

	December 31, 2022		Provision for Expected Credit Losses		(Acquisitions) Divestitures, Net		Write Offs		Effect of Foreign Currency		December 31, 2023
	(In thousands)
Funeral	$	(14,438)	$	(4,761)	$	—	$	2,175	$	(2)	$	(17,026)
Cemetery	(12,876)		(3,230)		15		648		(6)		(15,449)
Total reserve for credit losses on preneed receivables	$	(27,314)	$	(7,991)	$	15	$	2,823	$	(8)	$	(32,475)

The table below sets forth certain investment-related activities associated with our trusts:

	Years Ended December 31,
	2023		2022		2021
	(In thousands)
Deposits	$	590,257	$	534,586	$	519,023
Withdrawals	$	591,591	$	507,872	$	477,443
Purchases of securities	$	2,070,313	$	1,647,032	$	1,823,267
Sales of securities	$	2,038,517	$	1,518,779	$	1,744,618
Realized gains from sales of securities(1)	$	281,168	$	332,738	$	584,863
Realized losses from sales of securities(1)	$	(227,075)	$	(201,173)	$	(91,715)

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

The activity in Preneed receivables, net and trust investments was as follows:

	Years Ended December 31,
	2023		2022		2021
	(In thousands)
Beginning balance - Preneed receivables, net and trust investments	$	5,577,499	$	6,015,323	$	5,345,720
Net preneed contract sales	1,973,012		1,978,266		1,870,972
Cash receipts from customers, net of refunds	(1,699,683)		(1,639,291)		(1,550,735)
Deposits to trust	515,866		468,482		452,554
Acquisitions of businesses, net	3,394		15,860		4,912
Net undistributed investment earnings (losses) (1)	527,264		(611,057)		448,469
Maturities and distributed earnings	(591,834)		(500,216)		(464,247)
Change in cancellation allowance	(5,160)		(6,609)		(1,523)
Change in amounts due on unfulfilled performance obligations	(93,473)		(123,385)		(87,207)
Effect of foreign currency and other	(14,973)		(19,874)		(3,592)
Ending balance - Preneed receivables, net and trust investments	$	6,191,912	$	5,577,499	$	6,015,323

(1)    Includes both realized and unrealized investment earnings.

The cost and fair values associated with trust investments recorded at fair value at December 31, 2023 and 2022 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.

		December 31, 2023
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	45,645	$	145	$	(1,376)	$	44,414
Canadian government	2	31,896		—		—		31,896
Corporate	2	10,642		138		(17)		10,763
Residential mortgage-backed	2	5,452		29		(104)		5,377
Asset-backed	2	291		—		(51)		240
Equity securities:
Preferred stock	2	417		—		(97)		320
Common stock:
United States	1	1,744,919		478,226		(78,630)		2,144,515
Canada	1	42,721		20,251		(676)		62,296
Other international	1	108,106		19,580		(11,088)		116,598
Mutual funds:
Equity	1	876,620		118,476		(9,540)		985,556
Fixed income	1	998,767		5,727		(109,231)		895,263
Trust investments, at fair value		3,865,476		642,572		(210,810)		4,297,238
Commingled funds
Fixed income		827,600		2,432		(63,021)		767,011
Equity		337,500		71,819		(642)		408,677
Money market funds		346,672		—		—		346,672
Alternative investments		412,482		169,825		(7,109)		575,198
Trust investments, at net asset value		1,924,254		244,076		(70,772)		2,097,558
Trust investments, at market		$	5,789,730	$	886,648	$	(281,582)	$	6,394,796

As of December 31, 2023, our unfunded commitment for our private equity investments was $322.6 million which, if called, would be funded by the assets of the trusts.

		December 31, 2022
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	45,084	$	22	$	(2,033)	$	43,073
Canadian government	2	30,200		—		—		30,200
Corporate	2	175		—		(18)		157
Residential mortgage-backed	2	1,420		—		(101)		1,319
Asset-backed	2	294		—		(52)		242
Equity securities:
Preferred stock	2	4,144		—		(2,340)		1,804
Common stock:
United States	1	1,707,240		283,423		(208,523)		1,782,140
Canada	1	47,821		11,765		(11,117)		48,469
Other international	1	123,440		10,561		(19,009)		114,992
Mutual funds:
Equity	1	917,686		64,895		(112,374)		870,207
Fixed income	1	1,135,815		1,231		(166,286)		970,760
Trust investments, at fair value		4,013,319		371,897		(521,853)		3,863,363
Commingled funds
Fixed income		730,940		2		(89,246)		641,696
Equity		309,893		40,820		(3,846)		346,867
Money market funds		325,562		—		—		325,562
Alternative investments		307,275		179,491		(1,091)		485,675
Trust investments, at net asset value		1,673,670		220,313		(94,183)		1,799,800
Trust investments, at market		$	5,686,989	$	592,210	$	(616,036)	$	5,663,163

Our alternative investments include funds invested in limited partnerships with interests in private equity, private market real estate, energy and natural resources, infrastructure, transportation, and private debt including both distressed debt and mezzanine financing. These investments can never be redeemed by the funds. Instead, due to the nature of the investments in this category, distributions are received through the liquidation of the underlying assets of the funds. The funds' managers have not communicated the timing of any liquidations.

Maturity dates of our fixed income securities range from 2024 to 2040. Maturities of fixed income securities (excluding mutual funds) at December 31, 2023 are estimated as follows:

	Fair Value
	(In thousands)
Due in one year or less	$	55,207
Due in one to five years	30,265
Due in five to ten years	7,132
Thereafter	86
Total estimated maturities of fixed income securities	$	92,690

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $158.2 million, $143.8 million, and $179.7 million for the years ended December 31, 2023, 2022, and 2021, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $86.6 million, $85.1 million, and $96.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Deferred Revenue, Net

Deferred revenue, net represents future revenue, including distributed trust investment earnings associated with unperformed trust-funded preneed contracts that are not held in trust accounts. Future revenue and net trust investment earnings that are held in trust accounts are included in Deferred receipts held in trust.

The components of Deferred revenue, net in our Consolidated Balance Sheet were as follows:

	Years Ended December 31,
	2023		2022
	(In thousands)
Deferred revenue	$	2,649,397	$	2,472,693
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	(945,888)		(848,665)
Deferred revenue, net	$	1,703,509	$	1,624,028

The following table summarizes the activity for our contract liabilities, which are reflected in Deferred revenue, net and Deferred receipts held in trust:

	Years Ended December 31,
	2023		2022		2021
	(In thousands)
Beginning balance — Deferred revenue, net and Deferred receipts held in trust	$	5,787,548	$	6,299,241	$	5,761,291
Net preneed contract sales	1,451,833		1,448,371		1,314,001
Acquisitions (dispositions) of businesses, net	5,961		10,824		4,707
Net investment gains (losses) (1)	527,894		(618,760)		443,088
Recognized revenue from backlog(2)	(554,839)		(498,242)		(471,160)
Recognized revenue from current period sales	(730,436)		(726,584)		(669,025)
Change in amounts due on unfulfilled performance obligations	(93,473)		(123,337)		(87,207)
Change in cancellation reserve	87		8,351		(459)
Effect of foreign currency and other	(20,182)		(12,316)		4,005
Ending balance — Deferred revenue, net and Deferred receipts held in trust	$	6,374,393	$	5,787,548	$	6,299,241

(1)Includes both realized and unrealized investment gains (losses).

(2)Includes current year trust fund income through the date of performance.