8. PERPETUAL CARE TRUSTS

At June 30, 2016 and December 31, 2015, the Partnership’s perpetual care trusts consisted of investments in debt and equity marketable securities and cash equivalents, both directly as well as through mutual and investment funds. Certain assets acquired in connection with the Partnership’s 2015 acquisitions (see Note 3) are based upon preliminary estimated values assigned to the assets by the Partnership at the date of acquisition, and will be adjusted when additional information is received.

All of these investments are classified as Available for Sale and accordingly, all of the assets are carried at fair value. All of the investments subject to the fair value hierarchy (see Note 1) are considered either Level 1 or Level 2 assets pursuant to the three-level hierarchy described in Note 15. There were no Level 3 assets. The perpetual care trusts are VIEs for which the Partnership is the primary beneficiary.

A reconciliation of the Partnership’s perpetual care trust activities for the six months ended June 30, 2016 and 2015 is presented below (in thousands):


	Six months ended June 30,
	2016			2015
Balance, beginning of period	$	307,804		$	345,105
Contributions		5,146			5,766
Distributions		(7,818	)		(6,253	)
Interest and dividends		8,127			8,144
Capital gain distributions		85			35
Realized gains and losses		(470	)		15,296
Taxes		(757	)		(605	)
Fees		(622	)		(1,073	)
Unrealized change in fair value		10,205			(34,305	)

Balance, end of period	$	321,700		$	332,110

During the six months ended June 30, 2016, purchases of available for sale securities were $161.3 million, while sales, maturities and paydowns of available for sale securities were $156.1 million.

The cost and market value associated with the assets held in the perpetual care trusts as of June 30, 2016 and December 31, 2015 were as follows (in thousands):


					Gross		Gross
	Fair Value				Unrealized		Unrealized			Fair
June 30, 2016	Hierarchy Level		Cost		Gains		Losses			Value
Short-term investments		1	$	35,904	$	—	$	—		$	35,904
Fixed maturities:
U.S. governmental securities		2		187		17		—			204
Corporate debt securities		2		14,116		262		(570	)		13,808

Total fixed maturities				14,303		279		(570	)		14,012

Mutual funds - debt securities		1		161,372		1,322		(2,312	)		160,382
Mutual funds - equity securities		1		36,838		2,888		(552	)		39,174
Other investment funds (1)				69,073		431		—			69,504
Equity securities		1		1,476		614		(7	)		2,083
Other invested assets		2		79		3		(2	)		80

Total managed investments			$	319,045	$	5,537	$	(3,443	)	$	321,139

Assets acquired via acquisition				561		—		—			561

Total			$	319,606	$	5,537	$	(3,443	)	$	321,700

(1)

Other investment funds are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the balance sheet. This asset class is composed of fixed income funds and equity funds, which have a redemption period ranging from 30 to 90 days, and private credit funds, which have lockup periods ranging from six to ten years with three potential one year extensions at the discretion of the funds’ general partners. As of June 30, 2016 there are $50.1 million in unfunded commitments to the private credit funds, which are callable at any time.


					Gross		Gross
	Fair Value				Unrealized		Unrealized			Fair
December 31, 2015	Hierarchy Level		Cost		Gains		Losses			Value
Short-term investments		1	$	36,618	$	—	$	—		$	36,618
Fixed maturities:
U.S. governmental securities		2		126		14		—			140
Corporate debt securities		2		22,837		57		(845	)		22,049
Other debt securities		2		36		—		(1	)		35

Total fixed maturities				22,999		71		(846	)		22,224

Mutual funds - debt securities		1		184,866		35		(7,180	)		177,721
Mutual funds - equity securities		1		68,079		1,054		(1,713	)		67,420
Equity securities		1		2,319		636		(7	)		2,948
Other invested assets		2		473		1		(162	)		312

Total managed investments			$	315,354	$	1,797	$	(9,908	)	$	307,243

Assets acquired via acquisition				561		—		—			561

Total			$	315,915	$	1,797	$	(9,908	)	$	307,804

The contractual maturities of debt securities as of June 30, 2016 were as follows below:


	Less than		1 year through		6 years through		More than
	1 year		5 years		10 years		10 years
U.S. governmental securities	$	111	$	—	$	39	$	54
Corporate debt securities		123		11,915		1,770		—

Total fixed maturities	$	234	$	11,915	$	1,809	$	54

Temporary Declines in Fair Value

The Partnership evaluates declines in fair value below cost of each individual asset held in the perpetual care trusts on a quarterly basis.

An aging of unrealized losses on the Partnership’s investments in debt and equity securities within the perpetual care trusts as of June 30, 2016 and December 31, 2015 is presented below (in thousands):


	Less than 12 months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2016	Value		Losses		Value		Losses		Value		Losses
Fixed maturities:
Corporate debt securities	$	6,115	$	371	$	2,096	$	199	$	8,211	$	570

Total fixed maturities		6,115		371		2,096		199		8,211		570

Mutual funds - debt securities		21,362		665		39,903		1,647		61,265		2,312
Mutual funds - equity securities		1,496		115		4,181		437		5,677		552
Equity securities		290		7		—		—		290		7
Other invested assets		—		—		67		2		67		2

Total	$	29,263	$	1,158	$	46,247	$	2,285	$	75,510	$	3,443


	Less than 12 months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2015	Value		Losses		Value		Losses		Value		Losses
Fixed maturities:
U.S. governmental securities	$	—	$	—	$	112	$	—	$	112	$	—
Corporate debt securities		12,482		535		4,505		310		16,987		845
Other debt securities		35		1		—		—		35		1

Total fixed maturities		12,517		536		4,617		310		17,134		846

Mutual funds - debt securities		81,215		4,263		50,774		2,917		131,989		7,180
Mutual funds - equity securities		16,514		1,363		4,308		350		20,822		1,713
Equity securities		488		6		1,137		1		1,625		7
Other invested assets		—		—		315		162		315		162

Total	$	110,734	$	6,168	$	61,151	$	3,740	$	171,885	$	9,908

For all securities in an unrealized loss position, the Partnership evaluated the severity of the impairment and length of time that a security has been in a loss position and concluded the decline in fair value below the asset’s cost was temporary in nature. In addition, the Partnership is not aware of any circumstances that would prevent the future market value recovery for these securities.

Other-Than-Temporary Impairment of Trust Assets

The Partnership assesses its perpetual care trust assets for other-than-temporary declines in fair value on a quarterly basis. During the three and six months ended June 30, 2016 and 2015, the Partnership determined that there were no other than temporary impairments to the investment portfolio in the perpetual care trusts.