CEMETERY PERPETUAL CARE TRUST INVESTMENTS

Care trusts’ corpus on our Consolidated Balance Sheets represent the corpus of those trusts plus undistributed income. The components of Care trusts’ corpus as of December 31, 2014 and June 30, 2015 were as follows (in thousands):



	December 31, 2014			June 30, 2015
Trust assets, at fair value	$	48,670		$	48,620
Obligations due from trust	(528		)	(466		)
Care trusts’ corpus	$	48,142		$	48,154

We are required by various state laws to pay a portion of the proceeds from the sale of cemetery property interment rights into perpetual care trust funds. The income earned from these perpetual care trusts offsets maintenance expenses for cemetery property and memorials. This trust fund income is recognized, as earned, in Cemetery revenues. Trust management fees charged by our wholly-owned registered investment advisor, CSV RIA, are included in revenue in the period in which they are earned.

Where quoted prices are available in an active market, investments held by the trusts are classified as Level 1 investments pursuant to the three-level valuation hierarchy. Our Level 1 investments include cash and common stock. Where quoted market prices are not available for the specific security, then fair values are estimated by using quoted prices of similar securities in active markets or other inputs other than quoted prices that can corroborate observable market data. These investments are municipal bonds, foreign debt, corporate debt and preferred stocks, all of which are classified within Level 2 of the valuation hierarchy. We review and update our fair value hierarchy classifications quarterly. There were no transfers between Levels 1 and 2 in the three and six months ended June 30, 2015. There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 8 for further information of the fair value measurement and the three-level valuation hierarchy.

The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at June 30, 2015 (in thousands):



	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses			Fair Market Value
Cash and money market accounts	1	$	4,285	$	—	$	—		$	4,285
Fixed income securities:
Municipal bonds	2	334		—		(66		)	268
Foreign debt	2	3,756		12		(189		)	3,579
Corporate debt	2	19,184		134		(1,301		)	18,017
Preferred stock	2	11,597		34		(397		)	11,234
Common stock	1	10,465		1,288		(941		)	10,812
Trust securities		$	49,621	$	1,468	$	(2,894	)	$	48,195
Accrued investment income		$	425						$	425
Cemetery perpetual care trust investments									$	48,620
Market value as a percentage of cost									97.1		%

The estimated maturities of the fixed income securities included above are as follows (in thousands):



Due in one year or less	$	87
Due in one to five years	4,670
Due in five to ten years	4,065
Thereafter	24,276
	$	33,098

The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at December 31, 2014 (in thousands):



	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses			Fair Market Value
Cash and money market accounts	1	$	3,206	$	—	$	—		$	3,206
Fixed income securities:
Municipal bonds	2	229		5		—			234
Foreign debt	2	3,871		—		(156		)	3,715
Corporate debt	2	19,911		248		(1,428		)	18,731
Preferred stock	2	12,694		137		(214		)	12,617
Common stock	1	8,747		1,568		(653		)	9,662
Trust securities		$	48,658	$	1,958	$	(2,451	)	$	48,165
Accrued investment income		$	505						$	505
Cemetery perpetual care investments									$	48,670
Fair market value as a percentage of cost									99.0		%

We determine whether or not the assets in the cemetery perpetual care trusts have an other-than-temporary impairment on a security-by-security basis. This assessment is made based upon a number of criteria including the length of time a security has been in a loss position, changes in market conditions and concerns related to the specific issuer. If a loss is considered to be other-than-temporary, the cost basis of the security is adjusted downward to its fair market value. Any reduction in the cost basis due to an other-than-temporary impairment is also recorded as a reduction to Care trusts’ corpus. We recorded a $0.1 million impairment in the three and six months ended June 30, 2014 for other-than-temporary declines in the fair value related to unrealized losses on certain investments. We recorded a $0.5 million impairment in the three and six months ended June 30, 2015 for other-than-temporary declines in the fair value related to unrealized losses on certain investments. At June 30, 2015, we had certain investments within our perpetual care trust investments that had tax lots in loss positions for more than one year. Based on our analyses of these securities, the companies’ businesses and current market conditions, we determined that these investment losses were temporary in nature.

Our perpetual care trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses for the periods ended June 30, 2015 and December 31, 2014 are shown in the following tables (in thousands):



	June 30, 2015
	In Loss Position Less than 12 months					In Loss Position Greater than 12 months					Total
	Fair Market Value		Unrealized Losses			Fair Market Value		Unrealized Losses			Fair Market Value		Unrealized Losses
Fixed income securities:
Municipal bonds	$	268	$	(66	)	$	—	$	—		$	268	$	(66	)
Foreign debt	2,246		(189		)	—		—			2,246		(189		)
Corporate debt	12,721		(822		)	2,967		(479		)	15,688		(1,301		)
Preferred stock	7,948		(288		)	2,589		(109		)	10,537		(397		)
Common stock	3,795		(789		)	481		(152		)	4,276		(941		)
Total temporary impaired securities	$	26,978	$	(2,154	)	$	6,037	$	(740	)	$	33,015	$	(2,894	)



	December 31, 2014
	In Loss Position Less than 12 months					In Loss Position Greater than 12 months					Total
	Fair Market Value		Unrealized Losses			Fair Market Value		Unrealized Losses			Fair Market Value		Unrealized Losses
Fixed income securities:
Foreign debt	$	3,716	$	(156	)	$	—	$	—		$	3,716	$	(156	)
Corporate debt	11,893		(513		)	1,328		(915		)	13,221		(1,428		)
Preferred stock	6,821		(191		)	2,133		(23		)	8,954		(214		)
Common stock	4,663		(616		)	44		(37		)	4,707		(653		)
Total temporary impaired securities	$	27,093	$	(1,476	)	$	3,505	$	(975	)	$	30,598	$	(2,451	)

Perpetual care trust investment security transactions recorded in Interest expense on our Consolidated Statements of Operations for the three and six months ended June 30, 2014 and 2015 were as follows (in thousands):



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2015			2014			2015
Realized gains	$	897		$	785		$	1,314		$	975
Realized losses	(543		)	(60		)	(692		)	(485		)
Increase in care trusts’ corpus	(354		)	(725		)	(622		)	(490		)
Total	$	—		$	—		$	—		$	—

Perpetual care trust investment security transactions recorded in Cemetery revenue for the three and six months ended June 30, 2014 and 2015 were as follows (in thousands):



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2015		2014		2015
Investment income	$	1,300	$	1,200	$	2,580	$	2,368
Realized gain, net	391		375		150		284
Total	$	1,691	$	1,575	$	2,730	$	2,652

Purchases and sales of investments in the perpetual care trusts were as follows (in thousands):



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2015			2014			2015
Purchases	$	(9,200	)	$	(3,471	)	$	(14,135	)	$	(8,105	)
Sales	$	9,842		$	4,531		$	15,022		$	6,353