Carriage Services, Inc.
CARRIAGE SERVICES INC (Form: 10-Q, Received: 04/26/2016 06:10:00)
Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2016
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 1-11961
CARRIAGE SERVICES, INC.
(Exact name of registrant as specified in its charter)
 
DELAWARE
76-0423828
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
3040 Post Oak Boulevard, Suite 300
Houston, Texas, 77056
(Address of principal executive offices)
(713) 332-8400
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   x     No   o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filer
o
Accelerated filer
x
Non-accelerated filer
o   (Do not check if a smaller reporting company)
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   o     No   x
The number of shares of the registrant’s Common Stock, $.01 par value per share, outstanding as of April 22, 2016 was 16,630,583 .
 


Table of Contents

CARRIAGE SERVICES, INC.
INDEX
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

- 2 -

Table of Contents

PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements
CARRIAGE SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
 
 
 
(unaudited)
 
December 31, 2015
 
March 31, 2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
535

 
$
871

Accounts receivable, net of allowance for bad debts of $1,054 in 2015 and $943 in 2016
18,181

 
17,911

Inventories
5,654

 
5,782

Prepaid expenses
4,684

 
4,770

Other current assets
4,707

 
3,853

Total current assets
33,761

 
33,187

Preneed cemetery trust investments
63,291

 
60,432

Preneed funeral trust investments
85,553

 
83,132

Preneed receivables, net of allowance for bad debts of $2,042 in 2015 and $2,046 in 2016
27,998

 
28,224

Receivables from preneed trusts
13,544

 
13,050

Property, plant and equipment, net of accumulated depreciation of $103,306 in 2015 and $105,016 in 2016
214,874

 
216,864

Cemetery property, net of accumulated amortization of $30,289 in 2015 and $31,282 in 2016
75,597

 
75,784

Goodwill
264,416

 
264,416

Deferred charges and other non-current assets
10,978

 
10,748

Cemetery perpetual care trust investments
43,127

 
41,341

Total assets
$
833,139

 
$
827,178

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Current portion of long-term debt and capital lease obligations
$
12,236

 
$
12,533

Accounts payable
7,917

 
6,162

Other liabilities
524

 
2,535

Accrued liabilities
16,541

 
14,623

Total current liabilities
37,218

 
35,853

Long-term debt, net of current portion
103,495

 
139,413

Revolving credit facility
91,514

 
52,633

Convertible subordinated notes due 2021
115,227

 
116,278

Obligations under capital leases, net of current portion
2,875

 
2,816

Deferred preneed cemetery revenue
56,721

 
56,692

Deferred preneed funeral revenue
31,748

 
31,209

Deferred tax liability
39,956

 
38,968

Other long-term liabilities
5,531

 
5,782

Deferred preneed cemetery receipts held in trust
63,291

 
60,432

Deferred preneed funeral receipts held in trust
85,553

 
83,132

Care trusts’ corpus
42,416

 
41,292

Total liabilities
675,545

 
664,500

Commitments and contingencies:

 

Stockholders’ equity:
 
 
 
Common stock, $.01 par value; 80,000,000 shares authorized; 22,497,873 and 22,481,301 issued as of December 31, 2015 and March 31, 2016, respectively


225

 
225

Additional paid-in capital
214,250

 
214,763

Retained earnings
3,385

 
7,956

Treasury stock, at cost; 5,849,316 shares at December 31, 2015 and March 31, 2016

(60,266
)
 
(60,266
)
Total stockholders’ equity
157,594

 
162,678

Total liabilities and stockholders’ equity
$
833,139

 
$
827,178

The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

- 3 -


CARRIAGE SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share data)
 
For the Three Months Ended March 31,
 
2015
 
2016
Revenues:
 
 
 
Funeral
$
50,137

 
$
49,302

Cemetery
13,116

 
14,029

 
63,253

 
63,331

Field costs and expenses:
 
 
 
Funeral
28,415

 
27,781

Cemetery
7,302

 
7,862

Depreciation and amortization
2,802

 
3,336

Regional and unallocated funeral and cemetery costs
2,525

 
3,049

 
41,044

 
42,028

Gross profit
22,209

 
21,303

Corporate costs and expenses:
 
 
 
General and administrative costs and expenses
7,170

 
9,247

Home office depreciation and amortization
520

 
398

 
7,690

 
9,645

Operating income
14,519

 
11,658

Interest expense
(2,550
)
 
(2,851
)
Accretion of discount on convertible subordinated notes
(827
)
 
(927
)
Loss on early extinguishment of debt

 
(567
)
Other income (loss)
(119
)
 
305

Income before income taxes
11,023

 
7,618

Provision for income taxes
(4,605
)
 
(3,047
)
Net income
$
6,418

 
$
4,571

 
 
 
 
Basic earnings per common share:
$
0.35

 
$
0.27

Diluted earnings per common share:
$
0.34

 
$
0.27

 
 
 
 
Dividends declared per common share
$
0.025

 
$
0.025

 
 
 
 
Weighted average number of common and common equivalent shares outstanding:
 
 
 
Basic
18,208

 
16,459

Diluted
18,804

 
16,650

The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

- 4 -


CARRIAGE SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
 
For the Three Months Ended March 31,
 
2015
 
2016
Cash flows from operating activities:
 
 
 
Net income
$
6,418

 
$
4,571

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Net gain on sale and disposal of assets

 
(187
)
Loss on early extinguishment of debt

 
567

Depreciation and amortization
3,322

 
3,734

Amortization of deferred financing costs
226

 
221

Accretion of discount on convertible subordinated notes
827

 
927

Provision for losses on accounts receivable
424

 
523

Stock-based compensation expense
1,089

 
1,297

Deferred income tax expense
1,559

 
379

Changes in operating assets and liabilities that provided (required) cash:
 
 
 
Accounts and preneed receivables
56

 
(479
)
Inventories and other current assets
3,224

 
(727
)
Deferred charges and other
111

 
230

Preneed funeral and cemetery trust investments
(760
)
 
7,560

Accounts payable
(9
)
 
(1,755
)
Accrued and other liabilities
(5,020
)
 
(147
)
Deferred preneed funeral and cemetery revenue
(82
)
 
(568
)
Deferred preneed funeral and cemetery receipts held in trust
1,237

 
(6,404
)
Net cash provided by operating activities
12,622

 
9,742

 
 
 
 
Cash flows from investing activities:
 
 
 
Acquisitions and land for new construction
(4,250
)
 
(2,685
)
Purchase of land and buildings previously leased
(600
)
 

Net proceeds from the sale of assets

 
555

Capital expenditures
(5,798
)
 
(3,595
)
Net cash used in investing activities
(10,648
)
 
(5,725
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Borrowings on the revolving credit facility
10,600

 
11,500

Payments against the revolving credit facility
(10,100
)
 
(50,100
)
Borrowings on the term loan

 
39,063

Payments against the term loan
(2,344
)
 
(2,813
)
Payments on other long-term debt and obligations under capital leases
(370
)
 
(321
)
Proceeds from the exercise of stock options and employee stock purchase plan contributions
212

 
228

Dividends on common stock
(463
)
 
(415
)
Payment of loan origination costs related to the credit facility
(13
)
 
(717
)
Excess tax benefit (deficiency) of equity compensation
408

 
(106
)
Net cash used in financing activities
(2,070
)
 
(3,681
)
 
 
 
 
Net increase (decrease) in cash and cash equivalents
(96
)
 
336

Cash and cash equivalents at beginning of period
413

 
535

Cash and cash equivalents at end of period
$
317

 
$
871

 
 
 
 
The accompanying condensed notes are an integral part of these Consolidated Financial Statements.

- 5 -


CARRIAGE SERVICES, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
Carriage Services, Inc. (“Carriage”, the “Company”, “we”, “us” or “our”) is a leading provider of deathcare services and merchandise in the United States. As of March 31, 2016 , we operated 167 funeral homes in 27 states and 32 cemeteries in 11 states.
Our operations are reported in two business segments: Funeral Home Operations and Cemetery Operations. Funeral homes are principally service businesses that provide funeral services (traditional burial and cremation) and sell related merchandise, such as caskets and urns. Cemeteries are primarily sales businesses that provide interment rights (grave sites and mausoleums) and related merchandise, such as markers and memorials.
Principles of Consolidation and Interim Condensed Disclosures
Our unaudited consolidated financial statements include the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated. Our interim consolidated financial statements are unaudited but include all adjustments, which consist of normal, recurring accruals, that are necessary for a fair presentation of our financial position and results of operations as of and for the interim periods presented. Our unaudited consolidated financial statements have been prepared in a manner consistent with the accounting principles described in our Annual Report on Form 10-K for the year ended December 31, 2015 unless otherwise disclosed herein, and should be read in conjunction therewith.
Reclassifications
Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation with no effect on our previously reported results of operations, consolidated financial position, or cash flows.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Use of Estimates
The preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, realization of accounts receivable, goodwill, intangible assets, property and equipment and deferred tax assets and liabilities. We base our estimates on historical experience, third-party data and assumptions that we believe to be reasonable under the circumstances. The results of these considerations form the basis for making judgments about the amount and timing of revenues and expenses, the carrying value of assets and the recorded amounts of liabilities. Actual results may differ from these estimates and such estimates may change if the underlying conditions or assumptions change. Historical performance should not be viewed as indicative of future performance, as there can be no assurance that our results of operations will be consistent from year to year.
Funeral and Cemetery Operations
We record the revenue from sales of funeral and cemetery merchandise and services when the merchandise is delivered or the service is performed. Sales of cemetery interment rights are recorded as revenue in accordance with the retail land sales provisions for accounting for sales of real estate. This method provides for the recognition of revenue in the period in which the customer’s cumulative payments exceed 10% of the contract price related to the interment right. Costs related to the sales of interment rights, which include real property and other costs related to cemetery development activities, are charged to operations using the specific identification method in the period in which the sale of the interment right is recognized as revenue. We recorded amortization expense for cemetery property of approximately $0.8 million and $1.0 million for the three months ended March 31, 2015 and 2016 , respectively. Sales taxes collected are recognized on a net basis in our Consolidated Financial Statements.
Allowances for bad debts and customer cancellations are provided at the date that the sale is recognized as revenue and are based on our historical experience and the current economic environment. We also monitor changes in delinquency rates and provide additional bad debt and cancellation reserves when warranted. When preneed sales of funeral services and merchandise are funded through third-party insurance policies, we earn a commission on the sale of the policies. Insurance commissions are

- 6 -


recognized as revenues at the point at which the commission is no longer subject to refund, which is typically one year after the policy is issued.
Accounts receivable included approximately $8.2 million and $7.4 million of funeral receivables at December 31, 2015 and March 31, 2016 , respectively, and $9.7 million and $10.2 million of cemetery receivables at December 31, 2015 and March 31, 2016 , respectively. For 2015 and 2016, accounts receivable also included minor amounts of other receivables. Non-current preneed receivables represented the payments expected to be received beyond one year from the balance sheet date. Non-current preneed receivables consisted of approximately $7.3 million of funeral receivables at December 31, 2015 and March 31, 2016 and $20.7 million and $20.9 million of cemetery receivables at December 31, 2015 and March 31, 2016 , respectively. Bad debt expense totaled approximately $0.4 million and $0.5 million for the three months ended March 31, 2015 and 2016 .
Property, Plant and Equipment
Property, plant and equipment (including equipment under capital leases) are stated at cost. The costs of ordinary maintenance and repairs are charged to operations as incurred, while renewals and betterments are capitalized. Depreciation of property, plant and equipment (including equipment under capital leases) is computed based on the straight-line method.
Property, plant and equipment was comprised of the following at December 31, 2015 and March 31, 2016 :
 
December 31, 2015
 
March 31, 2016
 
(in thousands)
Land
$
65,433

 
$
67,868

Buildings and improvements
180,804

 
180,711

Furniture, equipment and automobiles
71,943

 
73,301

Property, plant and equipment, at cost
318,180

 
321,880

Less: accumulated depreciation
(103,306
)
 
(105,016
)
Property, plant and equipment, net
$
214,874

 
$
216,864

We recorded depreciation expense of approximately $2.6 million and $2.7 million for the three months ended March 31, 2015 and 2016 , respectively. During the first quarter of 2016, we acquired real estate for $2.7 million for funeral home expansion projects. 
Stock Plans and Stock-Based Compensation
We have stock-based employee and director compensation plans under which we may grant restricted stock, stock options, performance awards and our employee stock purchase plan under which stock may be purchased. We recognize compensation expense in an amount equal to the fair value of the share-based awards expected to vest over the requisite service period. Fair value is determined on the date of the grant. The fair value of options or awards containing options is determined using the Black-Scholes valuation model. The fair value of the performance awards is determined using a Monte-Carlo simulation pricing model.
See Note 11 to the Consolidated Financial Statements included herein for additional information on our stock-based compensation plans.
Presentation of Debt Issuance Costs
Effective January 1, 2016, we adopted the Financial Accounting Standards Board's (“FASB”) new guidance on simplifying the presentation of debt issuance costs. In April 2015, the FASB issued Accounting Standards Update (“ASU”), Imputation of Interest (Subtopic 835-30) , which requires that entities that have historically presented debt issuance costs as an asset, related to a recognized debt liability, will be required to present those costs as a direct deduction from the carrying value of the related debt liability. This presentation will result in debt issuance costs being presented in the same way debt discounts have historically been addressed. Debt issuances costs of $4.2 million and $4.1 million have been presented as a deduction from the carrying value of the related liabilities in our Consolidated Balance Sheets as of December 31, 2015 and March 31, 2016 , respectively.
Business Combinations
Effective January 1, 2016, we adopted the FASB new guidance on simplifying the accounting for measurement-period adjustments for Business Combinations. In September 2015, the FASB issued ASU, Business Combinations (Topic 805) , which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. These include the effect on earnings of changes in depreciation, amortization, or other income effects as if the accounting had been completed at the acquisition date. The entity is required to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in the current

- 7 -


period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Our adoption of this ASU did not have a material effect on our financial statements.
Extraordinary and Unusual Items
Effective January 1, 2016, we adopted the FASB new guidance on extraordinary and unusual items. In January 2015, the FASB issued ASU, Extraordinary and Unusual Items (Subtopic 225-20) . This ASU eliminates the concept of reporting extraordinary items. Preparers will not have to assess whether a particular event or transaction is extraordinary and likewise, auditors and regulators no longer need to evaluate whether a preparer treated an unusual and/or infrequent item appropriately. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include such items. Our adoption of this ASU did not have a material effect on our financial statements.
Subsequent Events
Management evaluated events and transactions during the period subsequent to March 31, 2016 through the date the financial statements were issued for potential recognition or disclosure in the accompanying financial statements covered by this report. See Note 14 to the Consolidated Financial Statements included herein for additional information regarding subsequent events.
2. RECENTLY ISSUED ACCOUNTING STANDARDS
Simplifying Share-Based Payment Accounting
In March 2016, the FASB issued ASU, Compensation—Stock Compensation (Topic 718). This ASU applies to all entities that issue share-based payment awards to their employees. The amendments in this ASU involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with earlier application permitted for all entities. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We plan to adopt the provisions of this ASU for our fiscal year beginning January 1, 2017 and are currently evaluating the impact the adoption of this new accounting standard will have on our Consolidated Financial Statements.
Leases
In February 2016, the FASB issued ASU, Leases (Topic 842). This ASU addresses certain aspects of recognition, presentation, and disclosure of leases and apply to all entities that that enter into a lease, with some specified scope exemptions. The amendments in this ASU aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with earlier application permitted for all entities. Both lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We plan to adopt the provisions of this ASU for our fiscal year beginning January 1, 2019 and are currently evaluating the impact the adoption of this new accounting standard will have on our Consolidated Financial Statements.
3.    PRENEED TRUST INVESTMENTS
Preneed Cemetery Trust Investments
Preneed cemetery trust investments represent trust fund assets that we are generally permitted to withdraw when the merchandise or services are provided. The components of Preneed cemetery trust investments on our Consolidated Balance Sheets at December 31, 2015 and March 31, 2016 were as follows (in thousands):
 
December 31, 2015
 
March 31, 2016
Preneed cemetery trust investments, at market value

$
65,486

 
$
62,551

Less: allowance for contract cancellation
(2,195
)
 
(2,119
)
Preneed cemetery trust investments, net
$
63,291

 
$
60,432

Upon cancellation of a preneed cemetery contract, a customer is generally entitled to receive a refund of the corpus, and in some cases, some or all of the earnings held in trust. In certain jurisdictions, we are obligated to fund any shortfall if the amounts

- 8 -


deposited by the customer exceed the funds in trust, including some or all investment income. As a result, when realized or unrealized losses of a trust result in the trust being under-funded, we assess whether we are responsible for replenishing the corpus of the trust, in which case a loss provision is recorded. At March 31, 2016 , our preneed cemetery trust investments were not under-funded.
Earnings from our preneed cemetery trust investments are recognized in revenue when a service is performed or merchandise is delivered. Trust management fees charged by our wholly-owned registered investment advisor (“CSV RIA”) are included as 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, 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 fixed income securities including municipal bonds, foreign debt, corporate debt, preferred stocks and mortgage backed securities, 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 months ended March 31, 2016 . There are no Level 3 investments in the preneed cemetery trust investment portfolio. See Note 7 for further information of the fair value measurement and the three-level hierarchy.
The cost and fair market values associated with preneed cemetery trust investments at March 31, 2016 are detailed below (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market
Value
Cash and money market accounts
1
 
$
4,611

 
$

 
$

 
$
4,611

Fixed income securities:
 
 
 
 
 
 
 
 
 
Municipal bonds
2
 
457

 

 
(83
)
 
374

Foreign debt
2
 
7,437

 
110

 
(937
)
 
6,610

Corporate debt
2
 
25,871

 
699

 
(3,238
)
 
23,332

Preferred stock
2
 
16,184

 
5

 
(1,406
)
 
14,783

Common stock
1
 
15,006

 
162

 
(4,403
)
 
10,765

Mutual Funds:
 
 
 
 
 
 
 
 
 
       Fixed Income
2
 
$
1,078

 
$
49

 
$

 
$
1,127

Trust securities
 
 
$
70,644

 
$
1,025

 
$
(10,067
)
 
$
61,602

Accrued investment income
 
 
$
949

 
 
 
 
 
$
949

Preneed cemetery trust investments
 
 
 
 
 
 
 
 
$
62,551

Market value as a percentage of cost
 
 
 
 
 
 
 
 
87.2
%
The estimated maturities of the fixed income securities included above are as follows (in thousands):
Due in one year or less
$
127

Due in one to five years
8,546

Due in five to ten years
4,591

Thereafter
31,835

Total fixed income securities
$
45,099


- 9 -


The cost and fair market values associated with preneed cemetery trust investments at December 31, 2015 are detailed below (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market
Value
Cash and money market accounts
1
 
$
8,296

 
$

 
$

 
$
8,296

Fixed income securities:
 
 
 
 
 
 
 
 
 
Municipal bonds
2
 
458

 

 
(63
)
 
395

Foreign debt
2
 
4,803

 

 
(695
)
 
4,108

Corporate debt
2
 
22,968

 
85

 
(4,279
)
 
18,774

Preferred stock
2
 
16,236

 
29

 
(885
)
 
15,380

Mortgage backed securities
2
 

 

 

 

Common stock
1
 
20,387

 
682

 
(3,161
)
 
17,908

Trust securities
 
 
$
73,148

 
$
796

 
$
(9,083
)
 
$
64,861

Accrued investment income
 
 
$
625

 
 
 
 
 
$
625

Preneed cemetery trust investments
 
 
 
 
 
 
 
 
$
65,486

Market value as a percentage of cost
 
 
 
 
 
 
 
 
88.7
%
We determine whether or not the assets in the preneed cemetery trust investments 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 of the investment due to an other-than-temporary impairment is likewise recorded as a reduction in Deferred preneed cemetery receipts held in trust on our Consolidated Balance Sheets. We recorded a $0.7 million impairment in the first quarter of 2015 and 2016 for other-than-temporary declines in the fair value related to unrealized losses on certain investments. There is no impact on earnings until such time that the loss is realized in the trusts, allocated to the preneed contracts and the services are performed or the merchandise is delivered causing the contract to be withdrawn from the trust in accordance with state regulations.
At March 31, 2016 , we had certain investments within our preneed cemetery 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 cemetery merchandise and service trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses as of March 31, 2016 and December 31, 2015 , are shown in the following tables (in thousands):
 
March 31, 2016
 
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
$
142

 
$
(28
)
 
$
232

 
$
(55
)
 
$
374

 
$
(83
)
Foreign debt
2,671

 
(395
)
 
1,984

 
(542
)
 
4,655

 
(937
)
Corporate debt
5,449

 
(853
)
 
8,034

 
(2,385
)
 
13,483

 
(3,238
)
Preferred stock
6,613

 
(566
)
 
7,730

 
(840
)
 
14,343

 
(1,406
)
Common stock
6,088

 
(2,602
)
 
3,278

 
(1,801
)
 
9,366

 
(4,403
)
Total temporary impaired securities
$
20,963

 
$
(4,444
)
 
$
21,258

 
$
(5,623
)
 
$
42,221

 
$
(10,067
)

- 10 -


 
December 31, 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
$
395

 
$
(63
)
 
$

 
$

 
$
395

 
$
(63
)
Foreign debt
$
3,680

 
$
(384
)
 
$
406

 
$
(312
)
 
$
4,086

 
$
(696
)
Corporate debt
14,468

 
(2,992
)
 
3,056

 
(1,287
)
 
17,524

 
(4,279
)
Preferred stock
10,285

 
(436
)
 
5,168

 
(448
)
 
15,453

 
(884
)
Common stock
12,029

 
(1,989
)
 
3,564

 
(1,172
)
 
15,593

 
(3,161
)
Total temporary impaired securities
$
40,857

 
$
(5,864
)
 
$
12,194

 
$
(3,219
)
 
$
53,051

 
$
(9,083
)
Preneed cemetery trust investment security transactions recorded in Interest expense on our Consolidated Statements of Operations for the three months ended March 31, 2015 and 2016 were as follows (in thousands):
 
For the Three Months Ended March 31,
 
2015
 
2016
Investment income
$
517

 
$
291

Realized gains
358

 
108

Realized losses
(798
)
 
(2,480
)
Expenses and taxes
(319
)
 
(343
)
Decrease in deferred preneed cemetery receipts held in trust
242

 
2,424

 
$

 
$

Purchases and sales of investments in the preneed cemetery trusts were as follows (in thousands):
 
For the Three Months Ended March 31,

 
2015
 
2016
Purchases
$
(7,008
)
 
$
(10,892
)
Sales
$
2,752

 
$
7,354

Preneed Funeral Trust Investments
Preneed funeral trust investments represent trust fund assets that we are permitted to withdraw as services and merchandise are provided to customers. Preneed funeral contracts are secured by funds paid by the customer to us. Preneed funeral trust investments are reduced by the trust earnings we have been allowed to withdraw prior to our performance and amounts received from customers that are not required to be deposited into trust, pursuant to various state laws. The components of Preneed funeral trust investments on our Consolidated Balance Sheets at December 31, 2015 and March 31, 2016 were as follows (in thousands):
 
December 31, 2015
 
March 31, 2016
Preneed funeral trust investments, at market value
$
88,444

 
$
85,958

Less: allowance for contract cancellation
(2,891
)
 
(2,826
)
Preneed funeral trust investments, net
$
85,553

 
$
83,132

Upon cancellation of a preneed funeral contract, a customer is generally entitled to receive a refund of the corpus and some or all of the earnings held in trust. In certain jurisdictions, we are obligated to fund any shortfall if the amounts deposited by the customer exceed the funds in trust, including some or all investment income. As a result, when realized or unrealized losses of a trust result in the trust being under-funded, we assess whether we are responsible for replenishing the corpus of the trust, in which case a loss provision is recorded. At March 31, 2016 , our preneed funeral trust investments were not under-funded.
Earnings from our preneed funeral trust investments are recognized in revenue when a service is performed or merchandise is delivered. Trust management fees charged by our wholly-owned registered investment advisor are included in revenue in the period in which they are earned.

- 11 -


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, U.S. treasury debt, common stock and equity mutual funds. 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 fixed income securities including municipal bonds, foreign debt, corporate debt, preferred stocks, mortgage backed securities and fixed income mutual funds and other investments, 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 other transfers between Levels 1 and 2 for the three months ended March 31, 2016 . There are no Level 3 investments in the preneed funeral trust investment portfolio. See Note 7 for further information of the fair value measurement and the three-level hierarchy.
The cost and fair market values associated with preneed funeral trust investments at March 31, 2016 are detailed below (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market
Value
Cash and money market accounts
1
 
$
17,828

 
$

 
$

 
$
17,828

Fixed income securities:
 
 
 
 
 
 
 
 
 
U.S. treasury debt
1
 
1,491

 
48

 

 
1,539

Municipal bonds
2
 
478

 

 
(87
)
 
391

Foreign debt
2
 
7,823

 
120

 
(971
)
 
6,972

Corporate debt
2
 
27,648

 
793

 
(3,412
)
 
25,029

Preferred stock
2
 
17,464

 
131

 
(1,455
)
 
16,140

Mortgage backed securities
2
 
267

 
5

 
(4
)
 
268

Common stock
1
 
15,528

 
160

 
(4,597
)
 
11,091

Mutual funds:
 
 
 
 
 
 
 
 
 
Fixed income
2
 
2,118

 
54

 
(51
)
 
2,121

Other investments
2
 
3,562

 

 
(24
)
 
3,538

Trust securities
 
 
$
94,207

 
$
1,311

 
$
(10,601
)
 
$
84,917

Accrued investment income
 
 
$
1,041

 
 
 
 
 
$
1,041

Preneed funeral trust investments
 
 
 
 
 
 
 
 
$
85,958

Market value as a percentage of cost
 
 
 
 
 
 
 
 
90.1
%

The estimated maturities of the fixed income securities included above are as follows (in thousands):
Due in one year or less
$
137

Due in one to five years
9,641

Due in five to ten years
5,682

Thereafter
34,879

Total
$
50,339



- 12 -


The cost and fair market values associated with preneed funeral trust investments at December 31, 2015 are detailed below (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market
Value
Cash and money market accounts
1
 
$
21,458

 
$

 
$

 
$
21,458

Fixed income securities:
 
 
 
 
 
 
 
 
 
U.S. treasury debt
1
 
1,492

 
24

 
(12
)
 
1,504

Municipal bonds
2
 
478

 

 
(66
)
 
412

Foreign debt
2
 
4,938

 

 
(711
)
 
4,227

Corporate debt
2
 
24,787

 
133

 
(4,711
)
 
20,209

Preferred stock
2
 
17,496

 
158

 
(914
)
 
16,740

Mortgage backed securities
1
 
273

 
4

 
(4
)
 
273

Common stock
 
 
20,864

 
738

 
(3,114
)
 
18,488

Mutual funds:
 
 
 
 
 
 
 
 
 
Equity
1
 

 

 

 

Fixed income
2
 
$
959

 
$

 
$
(82
)
 
$
877

Other investments
2
 
$
3,598

 
$

 
$
(30
)
 
$
3,568

Trust securities
 
 
$
96,343

 
$
1,057

 
$
(9,644
)
 
$
87,756

Accrued investment income
 
 
688

 
 
 
 
 
$
688

Preneed funeral trust investments
 
 
 
 
 
 
 
 
$
88,444

Market value as a percentage of cost
 
 
 
 
 
 
 
 
91.1
%
We determine whether or not the assets in the preneed funeral trust investments have other-than-temporary impairments 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 of the investment due to an other-than-temporary impairment is likewise recorded as a reduction to Deferred preneed funeral receipts held in trust on our Consolidated Balance Sheets. We recorded a $0.8 million impairment in the first quarter of 2016 for other-than-temporary declines in the fair value related to unrealized losses on certain investments. We recorded a $0.6 million impairment in the first quarter of 2015 for other-than-temporary declines in the fair value related to unrealized losses on certain investments. There is no impact on earnings until such time that the loss is realized in the trusts, allocated to preneed contracts and the services are performed or the merchandise is delivered causing the contract to be withdrawn from the trust in accordance with state regulations.
At March 31, 2016 , we had certain investments within our preneed funeral 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 preneed funeral trust investment unrealized losses, their associated fair market values, and the duration of unrealized losses as of March 31, 2016 and December 31, 2015 are shown in the following tables (in thousands):

- 13 -


 
March 31, 2016
 
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
$
139

 
$
(27
)
 
$
252

 
$
(60
)
 
$
391

 
$
(87
)
Foreign debt
2,692

 
(378
)
 
2,158

 
(593
)
 
4,850

 
(971
)
Corporate debt
5,470

 
(825
)
 
8,783

 
(2,587
)
 
14,253

 
(3,412
)
Preferred stock
6,384

 
(537
)
 
8,449

 
(918
)
 
14,833

 
(1,455
)
Mortgage backed securities
102

 
(3
)
 
15

 
(1
)
 
117

 
(4
)
Mutual funds:
 
 
 
 
 
 
 
 
 
 
 
Equity
6,087

 
(2,620
)
 
3,594

 
(1,977
)
 
9,681

 
(4,597
)
Fixed income
46

 
(1
)
 
818

 
(50
)
 
864

 
(51
)
Other investments

 

 
11

 
(24
)
 
11

 
(24
)
Total temporary impaired securities
$
20,920

 
$
(4,391
)
 
$
24,080

 
$
(6,210
)
 
$
45,000

 
$
(10,601
)
 
December 31, 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:
 
 
 
 
 
 
 
 
 
 
 
U.S. debt
$

 
$

 
$
1,504

 
$
(12
)
 
$
1,504

 
$
(12
)
Municipal bonds
413

 
(66
)
 

 

 
413

 
(66
)
Foreign debt
3,763

 
(392
)
 
416

 
(319
)
 
4,179

 
(711
)
Corporate debt
15,929

 
(3,294
)
 
3,364

 
(1,417
)
 
19,293

 
(4,711
)
Preferred stock
10,623

 
(451
)
 
5,338

 
(463
)
 
15,961

 
(914
)
Mortgage backed securities

 

 
272

 
(4
)
 
272

 
(4
)
Mutual funds:
 
 
 
 
 
 
 
 
 
 
 
Equity
11,848

 
(1,959
)
 
3,510

 
(1,154
)
 
15,358

 
(3,113
)
Equity and other

 

 

 

 

 

Fixed income
1

 

 
876

 
(82
)
 
877

 
(82
)
Other investments

 

 
42

 
(31
)
 
42

 
(31
)
Total temporary impaired securities
42,577

 
(6,162
)
 
15,322

 
(3,482
)
 
57,899

 
(9,644
)

- 14 -


Preneed funeral trust investment security transactions recorded in Interest expense on the Consolidated Statements of Operations for the three months ended March 31, 2015 and 2016 were as follows (in thousands):
 
For the Three Months Ended March 31,
 
2015
 
2016
Investment income
$
556

 
$
340

Realized gains
294

 
144

Realized losses
(625
)
 
(2,396
)
Expenses and taxes
(260
)
 
(247
)
Decrease in deferred preneed funeral receipts held in trust
35

 
2,159

 
$

 
$

Purchases and sales of investments in the preneed funeral trusts were as follows (in thousands):
 
For the Three Months Ended March 31,

 
2015
 
2016
Purchases
$
(5,489
)
 
$
(11,407
)
Sales
$
2,302

 
$
7,458

4.    PRENEED CEMETERY RECEIVABLES
Preneed sales of cemetery interment rights and related products and services are usually financed through interest-bearing installment sales contracts, generally with terms of up to five years with such interest income reflected as Preneed cemetery finance charges . In substantially all cases, we receive an initial down payment at the time the contract is signed. At March 31, 2016 , our total financed preneed receivables was $36.8 million , of which $27.0 million and $9.8 million were for cemetery interment rights and for merchandise and services respectively. These amounts are presented on our consolidated balance sheet as $11.2 million within Accounts receivable and $25.6 million within Preneed receivables . The unearned finance charges associated with these receivables were $5.2 million and $5.3 million at December 31, 2015 and March 31, 2016 , respectively.
We determine an allowance for customer cancellations and refunds on contracts in which revenue has been recognized on sales of cemetery interment rights. We have a collections policy where past due notifications are sent to the customer beginning at 15 days past due and periodically thereafter until the contract is cancelled or payment is received. We reserve 100% of the receivables on contracts in which the revenue has been recognized and payments are 90 days past due or more, which was approximately 4.9% of the total receivables on recognized sales at March 31, 2016 . An allowance is recorded at the date that the contract is executed and periodically adjusted thereafter based upon actual collection experience at the business level. For the three months ended March 31, 2016 , the change in the allowance for contract cancellations was as follows (in thousands):
 
March 31, 2016
Beginning balance
$
1,765

Write-offs and cancellations
(385
)
Provision
399

Ending balance
$
1,779

The aging of past due financing receivables as of March 31, 2016 was as follows (in thousands):
 
31-60
Past Due
 
61-90
Past Due
 
91-120
Past Due
 
>120
Past Due
 
Total Past
Due
 
Current
 
Total Financing
Receivables
Recognized revenue
$
569

 
$
351

 
$
185

 
$
1,096

 
$
2,201

 
$
23,970

 
$
26,171

Deferred revenue
206

 
119

 
84

 
351

 
760

 
9,906

 
10,666

Total contracts
$
775

 
$
470

 
$
269

 
$
1,447

 
$
2,961

 
$
33,876

 
$
36,837


- 15 -


5.    RECEIVABLES FROM PRENEED TRUSTS
The receivables from preneed trusts represent assets in trusts which are controlled and operated by third parties in which we do not have a controlling financial interest ( less than 50% ) in the trust assets. We account for these investments at cost. As of December 31, 2015 and March 31, 2016 , receivables from preneed trusts were as follows (in thousands):
 
December 31, 2015
 
March 31, 2016
Preneed trust funds, at cost
$
13,963

 
$
13,454

Less: allowance for contract cancellation
(419
)
 
(404
)
Receivables from preneed trusts, net
$
13,544

 
$
13,050

The following summary reflects the composition of the assets held in trust and controlled by third parties to satisfy our future obligations under preneed arrangements related to the preceding contracts at December 31, 2015 and March 31, 2016 . The cost basis includes reinvested interest and dividends that have been earned on the trust assets. Fair value includes the unrealized gains and losses on trust assets.
 
Historical
Cost Basis
 
Fair Value
 
(in thousands)
As of December 31, 2015
 
 
 
Cash and cash equivalents
$
2,898

 
$
2,898

Fixed income investments
8,423

 
8,426

Mutual funds and common stocks
2,626

 
2,625

Annuities
16

 
16

Total
$
13,963

 
$
13,965


 
Historical
Cost Basis
 
Fair Value
 
(in thousands)
As of March 31, 2016
 
 
 
Cash and cash equivalents
$
2,989

 
$
2,989

Fixed income investments
7,941

 
7,941

Mutual funds and common stocks
2,508

 
2,555

Annuities
16

 
16

Total
$
13,454

 
$
13,501

6. 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, 2015 and March 31, 2016 were as follows (in thousands):
 
December 31, 2015
 
March 31, 2016
Trust assets, at market value
$
43,127

 
$
41,341

Obligations due from trust
(711
)
 
(49
)
Care trusts’ corpus
$
42,416

 
$
41,292

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 Revenues from cemetery operations . Trust management fees charged by CSV RIA are included in revenue in the period in which they are earned. At March 31, 2016 , our cemetery perpetual care trust investments were not under-funded
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, preferred stock and fixed income mutual funds, all of which are classified within Level 2 of

- 16 -


the valuation hierarchy. There were no transfers between Levels 1 and 2 in the three months ended March 31, 2016 . There are no Level 3 investments in the cemetery perpetual care trust investment portfolio. See Note 7 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 March 31, 2016 (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market
Value
Cash and money market accounts
1
 
$
3,085

 
$

 
$

 
$
3,085

Fixed income securities:
 
 
 
 
 
 
 
 
 
Municipal bonds
2
 
327

 

 
(60
)
 
267

Foreign debt
2
 
4,810

 
66

 
(633
)
 
4,243

Corporate debt
2
 
17,495

 
422

 
(2,354
)
 
15,563

Preferred stock
2
 
11,341

 
4

 
(988
)
 
10,357

Common stock
1
 
9,151

 
96

 
(2,722
)
 
6,525

Mutual Funds:
 
 
 
 
 
 
 
 
 
Fixed Income
2
 
$
695

 
$
34

 
$

 
$
729

Trust securities
 
 
$
46,904

 
$
622

 
$
(6,757
)
 
$
40,769

Accrued investment income
 
 
$
572

 
 
 
 
 
$
572

Cemetery perpetual care investments
 
 
 
 
 
 
 
 
$
41,341

Market value as a percentage of cost
 
 
 
 
 
 
 
 
86.9
%
The estimated maturities of the fixed income securities included above are as follows (in thousands):
Due in one year or less
$
77

Due in one to five years
5,405

Due in five to ten years
3,209

Thereafter
21,739

Total fixed income securities
$
30,430

The following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at December 31, 2015 (in thousands):
 
Fair Value Hierarchy Level
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Market
Value
Cash and money market accounts
1
 
$
5,472

 
$

 
$

 
$
5,472

Fixed income securities:
 
 
 
 
 
 
 
 
 
Municipal bonds
2
 
325

 

 
(45
)
 
280

Foreign debt
2
 
3,232

 

 
(480
)
 
2,752

Corporate debt
2
 
16,216

 
57

 
(3,094
)
 
13,179

Preferred stock
2
 
11,263

 
20

 
(611
)
 
10,672

Common stock
1
 
11,945

 
393

 
(1,939
)
 
10,399

Trust securities
 
 
$
48,453

 
$
470

 
$
(6,169
)
 
$
42,754

Accrued investment income
 
 
$
373

 
 
 
 
 
$
373

Cemetery perpetual care investments
 
 
 
 
 
 
 
 
$
43,127

Market value as a percentage of cost
 
 
 
 
 
 
 
 
88.2
%
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 $0.4 million impairment in the first quarter of 2016 for other-than-temporary declines in the fair value related to unrealized losses on certain investments.

- 17 -


We recorded a $0.5 million impairment in the first quarter of 2015 for other-than-temporary declines in the fair value related to unrealized losses on certain investments.
At March 31, 2016 , 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 March 31, 2016 and December 31, 2015 are shown in the following tables (in thousands):
 
March 31, 2016
 
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
$
128

 
$
(26
)
 
$
139

 
$
(33
)
 
$
267

 
$
(60
)
Foreign debt
1,878

 
(306
)
 
1,192

 
(327
)
 
3,070

 
(633
)
Corporate debt
4,569

 
(917
)
 
4,840

 
(1,437
)
 
9,409

 
(2,354
)
Preferred stock
5,420

 
(481
)
 
4,660

 
(507
)
 
10,080

 
(988
)
Common stock
3,666

 
(1,631
)
 
1,986

 
(1,091
)
 
5,652

 
(2,722
)
Total temporary impaired securities
$
15,661

 
$
(3,361
)
 
$
12,817

 
$
(3,395
)
 
$
28,478

 
$
(6,757
)
 
December 31, 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
$
280

 
$
(45
)
 
$

 
$

 
$
280

 
$
(45
)
Foreign debt
$
2,541

 
$
(265
)
 
$
281

 
$
(215
)
 
$
2,822

 
$
(480
)
Corporate debt
10,463

 
(2,164
)
 
2,210

 
(931
)
 
12,673

 
(3,095
)
Preferred stock
7,100

 
(301
)
 
3,568

 
(309
)
 
10,668

 
(610
)
Common stock
7,379

 
(1,220
)
 
2,186

 
(719
)
 
9,565

 
(1,939
)
Total temporary impaired securities
$
27,763

 
$
(3,995
)
 
$
8,245

 
$
(2,174
)
 
$
36,008

 
$
(6,169
)
Perpetual care trust investment security transactions recorded in Interest expense on our Consolidated Statements of Operations for the three months ended March 31, 2015 and 2016 were as follows (in thousands):
 
For the Three Months Ended March 31,
 
2015
 
2016
Realized gains
$
190

 
$
47

Realized losses
(425
)
 
(1,249
)
Decrease in care trusts’ corpus
235

 
1,202

Total
$

 
$

Perpetual care trust investment security transactions recorded in Cemetery revenue for the three months ended March 31, 2015 and 2016 were as follows (in thousands):
 
For the Three Months Ended March 31,
 
2015
 
2016
Investment income
$
1,168