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Preneed Activities (Notes)
 6 Months Ended
Jun. 30, 2017
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, 2017 and December 31, 2016 are as follows:
 
June 30, 2017
 
December 31, 2016
 
(In thousands)
Preneed funeral receivables
$
327,138

 
$
312,556

Preneed cemetery receivables
1,091,264

 
1,038,592

Preneed receivables from customers
1,418,402

 
1,351,148

Unearned finance charge
(46,488
)
 
(45,989
)
Allowance for cancellation
(108,411
)
 
(104,740
)
Preneed receivables, net
$
1,263,503

 
$
1,200,419

 
 
 
 
Trust investments, at market
$
3,857,858

 
$
3,936,908

Cash held in trust (1)

648,003

 
304,055

Insurance-backed fixed income securities and other
268,721

 
271,248

Trust investments
4,774,582

 
4,512,211

Less: Cemetery perpetual care trust investments
(1,465,563
)
 
(1,407,465
)
Preneed trust investments
$
3,309,019

 
$
3,104,746

 
 
 
 
Preneed receivables, net and trust investments
$
4,572,522

 
$
4,305,165


(1)
The higher cash balance at June 30, 2017 reflects the liquidation of certain trust assets for realignment within our trust structures that were reinvested subsequent to quarter end.

The table below sets forth certain investment-related activities associated with our trusts:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
 
(In thousands)
 
(In thousands)
Deposits
$
106,771

 
$
87,152

 
$
191,258

 
$
161,671

Withdrawals
$
104,641

 
$
86,168

 
$
197,723

 
$
170,043

Purchases of available-for-sale securities
$
387,415

 
$
349,789

 
$
904,571

 
$
641,471

Sales of available-for-sale securities (1)
$
738,302

 
$
336,491

 
$
1,227,167

 
$
601,070


(1)
The higher activity in the second quarter reflects the liquidation of certain trust assets for realignment within our trust structures that were reinvested subsequent to quarter end.

The costs and values associated with trust investments recorded at fair value at June 30, 2017 and December 31, 2016 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, 2017
 
Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Value
 
 
 
 
 
(In thousands)
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
U.S. Treasury
2
 
$
39,324

 
$
26

 
$
(10
)
 
$
39,340

Canadian government
2
 
81,661

 
327

 
(364
)
 
81,624

Corporate
2
 
17,859

 
326

 
(3
)
 
18,182

Residential mortgage-backed
2
 
426

 
17

 
(1
)
 
442

Asset-backed
2
 
318

 
19

 
(7
)
 
330

Equity securities:
 
 
 
 
 
 
 
 
 
Preferred stock
2
 
6,716

 
186

 
(155
)
 
6,747

Common stock:
 
 
 
 
 
 
 
 
 
United States
1
 
1,059,056

 
178,940

 
(24,327
)
 
1,213,669

Canada
1
 
29,392

 
11,524

 
(451
)
 
40,465

Other international
1
 
58,284

 
8,454

 
(4,338
)
 
62,400

Mutual funds:
 
 
 
 
 
 
 
 
 
Equity
1
 
683,976

 
59,066

 
(15,324
)
 
727,718

Fixed income
1
 
957,617

 
11,705

 
(29,715
)
 
939,607

Other
3
 
4,921

 
3,004

 
(1
)
 
7,924

Trust investments, at fair value
 
 
2,939,550

 
273,594

 
(74,696
)
 
3,138,448

Fixed income commingled funds
 
 
529,020

 
12,607

 
(5,507
)
 
536,120

Private equity
 
 
185,549

 
13,243

 
(15,502
)
 
183,290

Trust investments, at net asset value
 
 
714,569

 
25,850

 
(21,009
)
 
719,410

Trust investments, at market
 
 
$
3,654,119

 
$
299,444

 
$
(95,705
)
 
$
3,857,858

 
December 31, 2016
 
Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Value
 
 
 
 
 
(In thousands)
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
U.S. Treasury
2
 
$
145,315

 
$
884

 
$
(838
)
 
$
145,361

Canadian government
2
 
79,141

 
409

 
(222
)
 
79,328

Corporate
2
 
18,934

 
295

 
(227
)
 
19,002

Residential mortgage-backed
2
 
333

 
1

 
(1
)
 
333

Asset-backed
2
 
448

 
16

 
(31
)
 
433

Equity securities:
 
 
 
 
 
 
 
 
 
Preferred stock
2
 
2,907

 
83

 
(156
)
 
2,834

Common stock:
 
 
 
 
 
 
 
 
 
United States
1
 
1,107,942

 
151,146

 
(35,542
)
 
1,223,546

Canada
1
 
25,708

 
10,030

 
(455
)
 
35,283

Other international
1
 
83,238

 
4,995

 
(10,632
)
 
77,601

Mutual funds:
 
 
 
 
 
 
 
 
 
Equity
1
 
688,120

 
19,962

 
(56,857
)
 
651,225

Fixed income
1
 
875,615

 
6,203

 
(46,219
)
 
835,599

Other
3
 
4,712

 
2,468

 
(17
)
 
7,163

Trust investments, at fair value
 
 
3,032,413

 
196,492

 
(151,197
)
 
3,077,708

Fixed income commingled funds
 
 
692,434

 
8,524

 
(12,234
)
 
688,724

Private equity
 
 
175,881

 
9,812

 
(15,217
)
 
170,476

Trust investments, at net asset value
 
 
868,315

 
18,336

 
(27,451
)
 
859,200

Trust investments, at market
 
 
$
3,900,728

 
$
214,828

 
$
(178,648
)
 
$
3,936,908


As of June 30, 2017, our unfunded commitment for our private equity and other investments was $124.3 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
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
 
(In thousands)
 
(In thousands)
Fair value, beginning balance
$
7,313

 
$
7,991

 
$
7,163

 
$
8,162

Net unrealized gains included in Accumulated other comprehensive income(1)
660

 
555

 
810

 
384

Purchases
28

 
25

 
28

 
25

Sales
(77
)
 
(18
)
 
(77
)
 
(18
)
Fair value, ending balance
$
7,924

 
$
8,553

 
$
7,924

 
$
8,553



(1)
All net unrealized gains recognized in Accumulated other comprehensive income for our trust investments are offset by a corresponding reclassification in Accumulated other comprehensive income to Deferred preneed receipts held in trust and Care trusts' corpus.
Maturity dates of our fixed income securities range from 2017 to 2040. Maturities of fixed income securities (excluding mutual funds) at June 30, 2017 are estimated as follows:
 
Fair Value
 
(In thousands)
Due in one year or less
$
84,885

Due in one to five years
50,412

Due in five to ten years
4,211

Thereafter
410

 
$
139,918


Recognized trust fund income (realized and unrealized) related to these trust investments was $45.2 million and $40.3 million for the three months ended June 30, 2017 and 2016, respectively. Recognized trust fund income (realized and unrealized) related to these trust investments was $83.3 million and $80.5 million for the six months ended June 30, 2017 and 2016, respectively.
We have determined that the remaining unrealized losses in our trust investments are considered temporary in nature, as the unrealized losses were due to temporary fluctuations in interest rates and equity prices. The investments are diversified across multiple industry segments using a balanced allocation strategy to minimize long-term risk. 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 sector exposures, credit ratings, and the severity and duration of the unrealized losses. Our trust investment unrealized losses, their associated values, and the duration of unrealized losses as of June 30, 2017 and December 31, 2016, respectively, are shown in the following tables:
 
June 30, 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
$
4,879

 
$
(10
)
 
$
—

 
$
—

 
$
4,879

 
$
(10
)
Canadian government
13,702

 
(116
)
 
3,576

 
(248
)
 
17,278

 
(364
)
Corporate
3,774

 
(3
)
 
—

 
—

 
3,774

 
(3
)
Residential mortgage-backed
152


(1
)

—


—


152


(1
)
 Asset-backed
76

 
(7
)
 
—

 
—

 
76

 
(7
)
Equity securities:
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
1,817

 
(58
)
 
523

 
(97
)
 
2,340

 
(155
)
Common stock:
 
 
 
 
 
 
 
 
 
 
 
United States
237,944

 
(21,780
)
 
19,785

 
(2,547
)
 
257,729

 
(24,327
)
Canada
2,175

 
(359
)
 
924

 
(92
)
 
3,099

 
(451
)
Other international
6,198

 
(856
)
 
9,868

 
(3,482
)
 
16,066

 
(4,338
)
Mutual funds:
 
 
 
 
 
 
 
 
 
 
 
Equity
267,609

 
(8,139
)
 
31,384

 
(7,185
)
 
298,993

 
(15,324
)
Fixed income
102,861

 
(1,578
)
 
299,472

 
(28,137
)
 
402,333

 
(29,715
)
Other
—

 
—

 
16

 
(1
)
 
16

 
(1
)
Trust investments, at fair value
641,187

 
(32,907
)
 
365,548

 
(41,789
)
 
1,006,735

 
(74,696
)
Fixed income commingled funds
248,507

 
(5,114
)
 
17,589

 
(393
)
 
266,096

 
(5,507
)
Private equity
4,509

 
(777
)
 
72,022

 
(14,725
)
 
76,531

 
(15,502
)
Trust investments, at net asset value
253,016

 
(5,891
)
 
89,611

 
(15,118
)
 
342,627

 
(21,009
)
Total temporarily impaired securities
$
894,203

 
$
(38,798
)
 
$
455,159

 
$
(56,907
)
 
$
1,349,362

 
$
(95,705
)
 
December 31, 2016
 
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
$
41,409

 
$
(838
)
 
$
—

 
$
—

 
$
41,409

 
$
(838
)
Canadian government
2,913

 
(31
)
 
3,344

 
(191
)
 
6,257

 
(222
)
Corporate
2,107

 
(22
)
 
6,162

 
(205
)
 
8,269

 
(227
)
Residential mortgage-backed
303

 
(1
)
 
—

 
—

 
303

 
(1
)
 Asset-backed
28

 
(22
)
 
156

 
(9
)
 
184

 
(31
)
Equity securities:
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
971

 
(53
)
 
515

 
(103
)
 
1,486

 
(156
)
Common stock:
 
 
 
 
 
 
 
 
 
 
 
United States
271,433

 
(23,168
)
 
50,923

 
(12,374
)
 
322,356

 
(35,542
)
Canada
3,318

 
(383
)
 
1,078

 
(72
)
 
4,396

 
(455
)
Other international
19,274

 
(4,139
)
 
24,525

 
(6,493
)
 
43,799

 
(10,632
)
Mutual funds:
 
 
 
 
 
 
 
 
 
 
 
Equity
234,714

 
(9,825
)
 
276,504

 
(47,032
)
 
511,218

 
(56,857
)
Fixed income
323,917

 
(5,941
)
 
425,614

 
(40,278
)
 
749,531

 
(46,219
)
Other
26

 
(2
)
 
1,160

 
(15
)
 
1,186

 
(17
)
Trust investments, at fair value
900,413

 
(44,425
)
 
789,981

 
(106,772
)
 
1,690,394

 
(151,197
)
Fixed income commingled funds
473,550

 
(11,714
)
 
20,587

 
(520
)
 
494,137

 
(12,234
)
Private equity
22,677

 
(750
)
 
73,100

 
(14,467
)
 
95,777

 
(15,217
)
Trust investments, at net asset value
496,227

 
(12,464
)
 
93,687

 
(14,987
)
 
589,914

 
(27,451
)
Total temporarily impaired securities
$
1,396,640

 
$
(56,889
)
 
$
883,668

 
$
(121,759
)
 
$
2,280,308

 
$
(178,648
)