View Filing Data

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2011	Mar. 02, 2012	Jun. 30, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	CARRIAGE SERVICES INC
Entity Central Index Key	0001016281
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 86.8
Entity Common Stock, Shares Outstanding		18,144,630

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 1,137	$ 1,279
Accounts receivable, net of allowance for bad debts of $979 in 2010 and $928 in 2011	16,605	15,587
Inventories and other current assets	13,530	10,828
Total current assets	31,272	27,694
Preneed cemetery trust investments	66,419	79,691
Preneed funeral trust investments	75,812	81,143
Preneed receivables, net of allowance for bad debts of $1,236 in 2010 and $1,728 in 2011	22,800	24,099
Receivables from preneed funeral trusts	22,487	21,866
Property, plant and equipment, net of accumulated depreciation of $71,700 in 2010 and $78,100 in 2011	136,469	128,472
Cemetery property	71,620	71,128
Goodwill	193,962	183,324
Deferred charges and other non-current assets	10,451	7,860
Cemetery perpetual care trust investments	41,485	45,735
Total assets	672,777	671,012
Current liabilities:
Current portion of senior long-term debt and capital lease obligations	628	563
Accounts payable and other liabilities	13,874	9,700
Accrued liabilities	17,867	14,896
Total current liabilities	32,369	25,159
Senior long-term debt, net of current portion	135,000	132,416
Convertible junior subordinated debenture due in 2029 to an affiliate	89,770	92,858
Obligations under capital leases, net of current portion	4,155	4,289
Deferred preneed cemetery revenue	59,934	50,125
Deferred preneed funeral revenue	40,961	39,517
Deferred preneed cemetery receipts held in trust	66,419	79,691
Deferred preneed funeral receipts held in trust	75,812	81,143
Care trusts' corpus	41,379	45,941
Total liabilities	545,799	551,139
Commitments and contingencies
Redeemable Preferred Stock	200	200
Stockholders' equity:
Common Stock, $.01 par value; 80,000,000 shares authorized; 21,311,000 and 21,663,000 issued as of December 31, 2010 and 2011, respectively	217	213
Additional paid-in capital	201,284	200,987
Accumulated deficit	(63,987)	(70,951)
Treasury stock, at cost; 3,153,000 and 3,236,000 shares at December 31, 2010 and 2011, respectively	(10,736)	(10,576)
Total stockholders' equity	126,778	119,673
Total liabilities and stockholders' equity	$ 672,777	$ 671,012

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for bad debts	$ 928	$ 979
Preneed receivables, allowance for bad debts	1,728	1,236
Accumulated depreciation of property, plant and equipment	$ 78,100	$ 71,700
Common stock, par value	$ .01	$ .01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	21,663,000	21,311,000
Treasury stock, shares	3,236,000	3,153,000

- Definition

The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement.

+ References + Details

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenues:
Funeral	$ 145,222	$ 138,125	$ 131,051
Cemetery	45,414	46,822	46,576
Total revenues	190,636	184,947	177,627
Field costs and expenses:
Funeral	91,274	89,974	83,069
Cemetery	29,434	31,403	32,984
Depreciation and amortization	8,600	8,621	8,748
Regional and unallocated funeral and cemetery costs	9,024	7,502	6,708
Total field costs and expenses	138,332	137,500	131,509
Gross profit	52,304	47,447	46,118
Corporate costs and expenses:
General, administrative and other	21,745	15,451	14,412
Home office depreciation and amortization	1,013	1,355	1,591
Total corporate costs and expenses	22,758	16,806	16,003
Operating income	29,546	30,641	30,115
Interest expense	(18,305)	(18,262)	(18,498)
Gain on repurchase of junior subordinated debentures	846	317
Interest income and other, net	51	751	228
Total interest and other, net	(17,408)	(17,194)	(18,270)
Income before income taxes	12,138	13,447	11,845
Provision for income taxes	(5,160)	(5,368)	(4,797)
Net income	6,978	8,079	7,048
Preferred stock dividend	(14)	(14)	(14)
Net income available to common stockholders	$ 6,964	$ 8,065	$ 7,034
Basic earnings per common share:	$ 0.38	$ 0.46	$ 0.40
Diluted earnings per common share:	0.38	$ 0.45	$ 0.40
Dividends declared per share:	$ 0.075
Weighted average number of common and common equivalent shares outstanding:
Basic	18,359	17,635	17,573
Diluted	18,397	17,938	17,749

Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Shares Outstanding	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Beginning balance, shares at Dec. 31, 2008		17,835
Beginning balance at Dec. 31, 2008	$ 103,510	$ 196	$ 195,104	$ (86,050)	$ (5,740)
Net income	7,048			7,034
Issuance of common stock, shares		426
Issuance of common stock	766	$ 4	762
Exercise of stock options, shares		76
Exercise of stock options	154	$ 1	153
Issuance of restricted common stock, shares		374
Issuance of restricted common stock		$ 4	(4)
Cancellation and retirement of restricted common stock, shares		(31)
Cancellation and retirement of restricted common stock	(121)		(121)
Amortization of restricted common stock	1,005		1,005
Stock-based compensation expense	134		134
Treasury stock acquired, shares		(1,378)
Treasury stock acquired	(4,260)				(4,260)
Ending balance, shares at Dec. 31, 2009		17,302
Ending balance at Dec. 31, 2009	108,222	$ 205	197,033	(79,016)	(10,000)
Net income	8,079			8,065
Issuance of common stock, shares		202
Issuance of common stock	1,115	$ 2	1,113
Exercise of stock options, shares		516
Exercise of stock options	1,417	$ 5	1,412
Issuance of restricted common stock, shares		250
Issuance of restricted common stock		$ 2	(2)
Cancellation and retirement of restricted common stock, shares		(68)
Cancellation and retirement of restricted common stock	(218)	$ (1)	(217)
Amortization of restricted common stock	1,394		1,394
Stock-based compensation expense	254		254
Acquisition of convertible junior subordinated debentures converted into treasury stock, shares		(44)
Acquisition of convertible junior subordinated debentures converted into treasury stock	(576)				(576)
Ending balance, shares at Dec. 31, 2010		18,158
Ending balance at Dec. 31, 2010	119,673	$ 213	200,987	(70,951)	(10,576)
Net income	6,978			6,964
Issuance of common stock, shares		125
Issuance of common stock	522	$ 1	521
Exercise of stock options, shares		173
Exercise of stock options	291	$ 1	290
Issuance of restricted common stock, shares		280
Issuance of restricted common stock		$ 3	(3)
Cancellation and retirement of restricted common stock, shares		(183)
Cancellation and retirement of restricted common stock	(427)	$ (1)	(426)
Amortization of restricted common stock	1,530		1,530
Stock-based compensation expense	337		337
Treasury stock acquired, shares		(126)
Treasury stock acquired	(736)		(576)		(160)
Dividends on common stock	(1,376)		(1,376)
Ending balance, shares at Dec. 31, 2011		18,427
Ending balance at Dec. 31, 2011	$ 126,778	$ 217	$ 201,284	$ (63,987)	$ (10,736)

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities:
Net income	$ 6,978	$ 8,079	$ 7,048
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,613	9,976	10,339
Amortization of deferred financing costs	653	728	767
Gain on repurchase of convertible junior subordinated debentures	(846)	(317)
Provision for losses on accounts receivable	2,788	4,031	3,937
Stock-based compensation expense	1,867	1,759	1,588
Deferred income taxes	(3,462)	1,521	4,797
Loss on early extinguishment of debt	201
Other	38	(153)	(37)
Changes in operating assets and liabilities that provided (required) cash:
Accounts and preneed receivables	(1,921)	(4,761)	(7,241)
Inventories and other current assets	(1,513)	1,830	220
Deferred charges and other	(38)		(108)
Preneed funeral and cemetery trust investments	10,956	(1,369)	(3,737)
Accounts payable and accrued liabilities	7,006	2,975	(2,072)
Litigation settlement			(3,300)
Deferred preneed funeral and cemetery revenue	10,316	168	(784)
Deferred preneed funeral and cemetery receipts held in trust	(11,481)	1,212	4,678
Net cash provided by operating activities	31,155	25,679	16,095
Cash flows from investing activities:
Acquisitions	(18,574)	(19,007)	(3,102)
Net proceeds from sales of assets		400	67
Capital expenditures	(10,644)	(10,661)	(9,370)
Net cash used in investing activities	(29,218)	(29,268)	(12,405)
Cash flows from financing activities:
Borrowings under the bank credit facility	2,500	600
Payments on senior long-term debt and obligations under capital leases	(625)	(474)	(778)
Proceeds from the exercise of stock options and employee stock purchase plan	719	1,188	476
Dividends on common stock	(1,376)
Dividends on redeemable preferred stock	(14)	(14)	(14)
Tax benefit from stock-based compensation	25	571
Repurchase of convertible junior subordinated debentures	(2,241)	(576)
Payment of debt amendment and loan origination costs	(333)		(505)
Purchase of treasury stock	(736)		(4,260)
Other financing costs	2	(43)
Net cash provided by (used) in financing activities	(2,079)	1,252	(5,081)
Net decrease in cash and cash equivalents	(142)	(2,337)	(1,391)
Cash and cash equivalents at beginning of year	1,279	3,616	5,007
Cash and cash equivalents at end of year	$ 1,137	$ 1,279	$ 3,616

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 death care services and merchandise in the United States. As of December 31, 2011, the Company owned and operated 159 funeral homes in 25 states and 33 cemeteries in 12 states.

Principles of Consolidation

The accompanying Consolidated Financial Statements include the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

Funeral and Cemetery Operations

Carriage records 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. Revenues to be recognized from the delivery of merchandise and performance of services related to contracts that were acquired in acquisitions are typically lower than those originated by the Company.

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 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 $9.3 million and $8.6 million of funeral receivables at December 31, 2010 and 2011, respectively, and $7.3 million and $8.8 million of cemetery receivables at December 31, 2010 and 2011, respectively. Non-current preneed receivables at December 31, 2010 and 2011, represent the payments expected to be received beyond one year from the balance sheet date. Non-current preneed receivables consisted of approximately $8.8 million and $8.5 million of funeral receivables and $17.2 million and $16.0 million of cemetery receivables at December 31, 2010 and 2011, respectively. For 2010 and 2011, accounts receivable also include minor amounts of other receivables.

Preneed Contracts

Carriage sells interment rights, merchandise and services prior to the time of need, which is referred to as preneed. In many instances the customer pays for the preneed contract over a period of time. Cash proceeds from preneed sales less amounts that the Company may retain under state regulations are deposited to a trust or used to purchase a third-party insurance policy. The principal and accumulated earnings of the trusts are generally withdrawn at maturity (death) or cancellation. The cumulative trust income earned and the increases in insurance benefits on the insurance products are deferred until the service is performed. The customer receivables and amounts deposited in trusts that Carriage controls are primarily included in the non-current asset section of the balance sheet. The preneed funeral contracts secured by third party insurance policies are not recorded as assets or liabilities of the Company.

In the opinion of management, the proceeds from the trust funds and the insurance policies at the times the preneed contracts mature will exceed the estimated future costs to perform services and provide products under such arrangements. The types of securities in which the trusts may invest are regulated by state agencies.

Preneed Funeral and Cemetery Trust Funds

The Company’s preneed and perpetual care trust funds are reported in accordance with the principles of consolidating Variable Interest Entities (“VIE’s”). In the case of preneed trusts, the customers are the legal beneficiaries. In the case of perpetual care trusts, the Company does not have a right to access the corpus in the perpetual care trusts. For these reasons, the Company has recognized financial interests of third parties in the trust funds in our financial statements as Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus. The investments of such trust funds are classified as available-for-sale and are reported at market value; therefore, the unrealized gains and losses, as well as accumulated and undistributed income and realized gains and losses, are recorded to Deferred preneed receipts held in trust and Care trusts’ corpus in the Company’s Consolidated Balance Sheets. The Company’s future obligations to deliver merchandise and services are reported at estimated settlement amounts. Preneed funeral and cemetery trust investments are reduced by the trust investment earnings that we have been allowed to withdraw in certain states prior to maturity. These earnings, along with preneed contract collections not required to be placed in trust, are recorded in Deferred preneed funeral revenue and Deferred preneed cemetery revenue until the service is performed or the merchandise is delivered.

In accordance with respective state laws, the Company is required to deposit a specified amount into perpetual and memorial care trust funds for each interment/entombment right and certain memorials sold. Income from the trust funds is distributed to Carriage and used to provide for the care and maintenance of the cemeteries and mausoleums. Such trust fund income is recognized as revenue when realized by the trust and distributable to the Company. The Company is restricted from withdrawing any of the principal balances of these funds.

An enterprise is required to perform an analysis to determine whether the enterprise’s variable interest(s) give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company’s analysis continues to support its position as the primary beneficiary in the majority of our funeral and cemetery trust funds.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Inventory

Inventory consists primarily of caskets, outer burial containers and cemetery monuments and markers and is recorded at the lower of its cost basis (determined by the specific identification method) or net realizable value.

Property, Plant and Equipment

Property, plant and equipment 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 is computed based on the straight-line method over the following estimated useful lives of the assets:


	Years
Buildings and improvements		15 to 40
Furniture and fixtures		7 to 10
Machinery and equipment		5 to 10
Automobiles		5 to 7

Property, plant and equipment was comprised of the following at December 31, 2010 and 2011:


	December 31, 2010			December 31, 2011
	(in thousands)
Land	$	37,424		$	39,673
Buildings and improvements		109,348			118,343
Furniture, equipment and automobiles		53,400			56,553

		200,172			214,569
Less: accumulated depreciation		(71,700	)		(78,100	)

	$	128,472		$	136,469

During 2009, 2010 and 2011, the Company recorded $7,517,000, $7,365,000 and $7,466,000 respectively, for depreciation expense against operating income.

Long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. The long-lived assets to be held and used are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value less estimated cost to sell.

Income Taxes

The Company and its subsidiaries file a consolidated U.S. Federal income tax return and separate state income tax returns in the states in which we operate. We record deferred taxes for temporary differences between the tax basis and financial reporting basis of assets and liabilities. The Company records a valuation allowance to reflect the estimated amount of deferred tax assets for which realization is uncertain. Management reviews the valuation allowance at the end of each quarter and makes adjustments if it is determined that it is more likely than not that the tax benefits will be realized.

The Company analyzes tax benefits for uncertain tax positions and how they are to be recognized, measured, and derecognized in financial statements; provides certain disclosures of uncertain tax matters; and specifies how reserves for uncertain tax positions should be classified on the Consolidated Balance Sheets. The Company has reviewed its income tax positions and identified certain tax deductions, primarily related to business acquisitions that are not certain. Our policy with respect to potential penalties and interest is to record them as “Other” expense and “Interest” expense, respectively. The entire balance of unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate. The Company does not anticipate a significant increase or decrease in its unrecognized tax benefits during the next twelve months.

Stock Plans and Stock-Based Compensation

The Company has stock-based employee and director compensation plans in the form of restricted stock, performance units, stock options and an employee stock purchase plan. The Company recognizes compensation expense in an amount equal to the fair value of the share-based awards over the period of vesting. Fair value is determined for restricted stock, stock options and the employee stock purchase plan on the date of the grant. The fair value of options or awards containing options is determined using the Black-Scholes valuation model.

See Note 16 to the Consolidated Financial Statements included herein for additional information on the Company’s stock-based compensation plans.

Computation of Earnings Per Common Share

Basic earnings per share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares consist of stock options.

Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are recognized as participating securities and included in the computation of both basic and diluted earnings per share. Our grants of restricted stock awards to our employees and directors are considered participating securities and we have prepared our earnings per share calculations to include outstanding unvested restricted stock awards in both the basic and diluted weighted average shares outstanding calculation. For the three years ended December 31, 2009, 2010 and 2011, the calculations for basic and diluted earnings per share are presented in Note 20 to the Consolidated Financial Statements of this Annual Report on Form 10-K for the year ended December 31, 2011.

Fair Value Measurements

We define fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). We disclose the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. The fair value disclosure transfers in and out of Levels 1 and 2 and the gross presentation of purchases, sales, issuances and settlements in the Level 3 reconciliation of the three-tier fair value hierarchy are also presented herein in Note 10 to the Consolidated Financial Statements. The Company currently does not have any assets that have fair values determined by Level 3 inputs and no liabilities measured at fair value. We have not elected to measure any additional financial instruments and certain other items at fair value that are not currently required to be measured at fair value.

To determine the fair value of assets and liabilities in an environment where the volume and level of activity for the asset or liability have significantly decreased, the exit price is used as the fair value measurement. For the year ended December 31, 2011, we did not incur significant decreases in the volume or level of activity of any asset or liability. The Company considers an impairment of debt and equity securities other-than-temporary unless (a) the Company has the intent to hold the investment and (b) evidence indicate the cost of the investment is recoverable before the Company is more likely than not required to sell the investment. If impairment is indicated, then an adjustment will be made to reduce the carrying amount to fair value. As of December 31, 2011, no impairment was identified.

In the ordinary course of business, we are typically exposed to a variety of market risks. Currently, these are primarily related to changes in fair market values related to outstanding debts and changes in the values of securities associated with the preneed and perpetual care trusts. Management is actively involved in monitoring exposure to market risk and developing and utilizing appropriate risk management techniques when appropriate and when available for a reasonable price. Our Senior Notes were issued to the public at par in January 2005 and are carried at a cost of $130 million. At December 31, 2011, these securities were typically trading at a price of approximately $98, indicating a fair market value of approximately $127.4 million. Our convertible junior subordinated debentures, payable to Carriage Services Capital Trust (the “Trust”) pay interest at the fixed rate of 7% and are carried on our Consolidated Balance Sheet at a cost of approximately $89.8 million. The fair value of these securities is estimated to be approximately $78.7 million at December 31, 2011 based on available broker quotes of the corresponding preferred securities issued by the Trust.

For more information regarding fair market valuations, see Note 10 to the Consolidated Financial Statements herein.

Business Combinations

Tangible and intangible assets acquired and liabilities assumed are recorded at fair value and goodwill is recognized for any differences between the price of the acquisition and fair value. We customarily estimate related transaction costs known at closing. To the extent that information not available to us at the closing date subsequently becomes available during the allocation period, we may adjust goodwill, assets, or liabilities associated with the acquisition. Acquisition related costs are recognized separately from the acquisition and are expensed as incurred.

During 2011, the Company acquired six funeral home businesses. See Note 3 to the Consolidated Financial Statements herein for further information on the 2011 acquisitions.

Goodwill

The excess of the purchase price over the fair value of net identifiable assets of funeral homes and certain cemeteries acquired, as determined by management in transactions accounted for as purchases, is recorded as goodwill. Goodwill is primarily associated with or recorded in connection with the acquisitions of funeral businesses. Many of the acquired funeral homes have provided high quality service to families for generations. The resulting loyalty often represents a substantial portion of the value of a funeral business. We review the carrying value of goodwill at least annually on reporting units (aggregated geographically) to determine if facts and circumstances exist which would suggest that this intangible asset might be carried in excess of fair value. For 2009 and 2010 fair value was determined by discounting the estimated future cash flows of the businesses in each reporting unit at the Company’s weighted average cost of capital less debt allocable to the reporting unit and by reference to recent sales transactions of similar businesses. The calculation of fair value can vary dramatically with changes in estimates of the number of future services performed, inflation in costs, and the Company’s cost of capital, which is impacted by long-term interest rates. No impairment was indicated.

We performed our 2011 annual impairment test of goodwill by conducting a qualitative assessment of each of our reporting units, East, Central and West regional divisions in the United States, using information as of August 31, 2011. See Part II, Item 8, Financial Statements and Supplementary Data, Note 2, discussing new guidance on the methodology used for the annual goodwill impairment test. Based on our 2011 impairment test, we concluded that there was no impairment of goodwill.

In addition to our annual review, we assess the impairment of goodwill whenever events or changes in circumstances indicate that the carrying value may be greater than fair value. Factors that could trigger an interim impairment review include, but are not limited to, significant adverse changes in the business climate which may be indicated by a decline in the Company’s market capitalization or decline in operating results. The market capitalization of the Company consists of the common stock, Senior Notes and convertible trust preferred securities. No such events or changes occurred between the testing date and year end to trigger a subsequent impairment review.

Use of Estimates

The preparation of the Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going 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. 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 the margins, operating income and net earnings as a percentage of revenues will be consistent from year to year.

Subsequent Events

Management of the Company evaluated events and transactions during the period beginning subsequent to December 31, 2011 through the date the financial statements were issued, for potential recognition or disclosure in the accompanying financial statements covered by this report. See Note 25 to the Consolidated Financial Statements included herein for additional information on subsequent events.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
-Publisher AICPA
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Name FASB Interpretation (FIN)
-Publisher FASB
-Number 46R
-Paragraph 4, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6359553&loc=d3e288-107754

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2197480

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6921930&loc=d3e5614-111684

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 915
-SubTopic 235
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6472506&loc=d3e38932-110933

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2209116

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 272
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6970148&loc=SL6228881-111685

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2122150

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 720
-SubTopic 15
-URI http://asc.fasb.org/subtopic&trid=2122524

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 275
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2134480

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS140-4/FIN46(R)-8
-Paragraph 8, C1, C7
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Recently Issued Accounting Standards

12 Months Ended

Dec. 31, 2011

Recently Issued Accounting Standards [Abstract]

RECENTLY ISSUED ACCOUNTING STANDARDS

2. RECENTLY ISSUED ACCOUNTING STANDARDS

Allowance for Credit Losses of Financing Receivables

In July 2010, new guidance was issued which increased the disclosure requirements about the credit quality of financing receivables and the allowance for credit losses. The intent of the disclosure is to provide additional information about the nature of credit risks inherent in our financing receivables, how credit risk is analyzed and assessed when determining the allowance for credit losses, and the reasons for the change in the allowance for credit losses. The disclosures related to period-end information were required for annual reporting periods ending after December 15, 2010 and thus effective for the Company at December 31, 2010. The disclosure of activity that occurs during the reporting period are required for interim periods beginning after December 15, 2010 and thus was effective for the Company for the period beginning January 1, 2011. The additional required disclosures are provided in Note 6 to the Consolidated Financial Statements.

Goodwill Impairment Testing

In September 2011, new guidance was issued to modify the method used to perform the first step of the two step process for the annual goodwill impairment test. The guidance permits an entity to first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company adopted this update early for its annual impairment testing as of August 31, 2011.

Pro Forma Information for Business Combinations

In December 2010, new guidance was issued for disclosing supplementary pro forma information for business combinations that are material on an individual or aggregate basis. The guidance specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The guidance also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, and thus was effective for the Company for the period beginning January 1, 2011. The adoption of this accounting standard update will apply to material business combinations and did not have a material impact on our disclosures to the Consolidated Financial Statements in 2011 and the comparable prior periods.

Fair Value Measurements

In May 2011, additional guidance was issued regarding how fair value measurements and disclosures should be applied where it is already required or permitted under International Financial Reporting Standards or United States Generally Accepted Accounting Principles. This new guidance clarifies and aligns the existing application of fair value measurement guidance and revises certain language. This guidance is effective for the first interim or annual period beginning after December 15, 2011, thus effective for the Company for the period beginning January 1, 2012. The adoption of this accounting standard update is not expected to have a material impact on our Consolidated Financial Statements.

Comprehensive Income

In June 2011, new guidance was issued regarding the reporting of comprehensive income in the financial statements. Entities will have the option to present the components of net income and comprehensive income in either a single continuous statement or two separate but consecutive statements. This new guidance eliminates the option to report other comprehensive income and its components in the statement of changes in stockholder’s equity. This guidance requires retrospective application and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, thus effective for the Company for the period beginning January 1, 2012. The Company is currently evaluating the impact, if any, the adoption will have on its Consolidated Financial Statements.

Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisitions [Abstract]

ACQUISITIONS

3. ACQUISITIONS

Our growth strategy includes the execution of our Strategic Acquisition Model. The goal of that model is to build concentrated groups of businesses in ten to fifteen strategic markets. We assess acquisition candidates using six strategic ranking criteria and to differentiate the price we are willing to pay. Those criteria are:

•

Size of business;

•

Size of market;

•

Competitive standing;

•

Demographics;

•

Strength of brand; and

•

Barriers to entry.

Carriage completed six acquisitions of funeral home businesses in 2011. The consideration paid for these businesses was $18.6 million and the assumption of $0.6 million of liabilities. During the fourth quarter of 2011, the Company completed two of the six acquisitions of funeral home businesses, one in Kentucky and the other in New York, for a total of $8.3 million. During 2010, the Company completed six acquisitions, one cemetery business and five funeral home businesses for a total of $19.0 million in cash and the assumption of $0.6 million of liabilities and debt. The assets and liabilities for all acquisitions were recorded at fair value and included goodwill of $10.7 million and $16.4 million for 2011 and 2010, respectively. For all acquisitions, the Company acquired substantially all the assets and assumed certain operating liabilities including obligations associated with existing preneed contracts. The proforma impact of the acquisitions on the prior periods are not presented as the impact is not material to reported results. The results of the acquired businesses are included in the Company’s results from the date of acquisition.

Selected information on the 2011 acquisitions follows (in millions):


Acquisition Date	Type of Business	Market	Assets Acquired (Excluding Goodwill)	Goodwill Recorded	Liabilities and Debt Assumed
April 2011	Three Funeral Homes	Amarillo, TX	$1.5	$2.4	$0.6
April 2011	One Funeral Home	Miami, FL	$0.6	$1.2	_
August 2011	One Funeral Home	Duncan, OK	$1.6	$2.4	_
September 2011	Three Funeral Homes	Modesto, CA	$0.1	$1.1	_
October 2011	Three Funeral Homes	South Shore, KY	$1.2	$1.3	_
December 2011	One Funeral Home	Long Island, NY	$3.5	$2.3	_

The effect of the 2011 acquisitions on the Consolidated Balance Sheet at December 31, 2011 was as follows (in thousands):


Net current assets	$	175
Property, plant & equipment		7,361
Goodwill		10,638
Other assets		1,040
Preneed funeral trust investments		1,463
Receivables from preneed funeral trusts		388
Note payable		(640	)
Deferred preneed funeral revenue		(388	)
Deferred preneed funeral receipts held in trust		(1,463	)

Cash paid	$	18,574

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6927-128479

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1490-128463

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7008-128479

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1500-128463

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6996-128479

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1524-128463

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1392-128463

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7000-128479

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1497-128463

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1486-128463

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1383-128463

+ Details

Goodwill

12 Months Ended

Dec. 31, 2011

Goodwill [Abstract]

GOODWILL

4. GOODWILL

Many of the former owners and staff of acquired funeral homes and certain cemeteries have provided high quality service to families for generations. The resulting loyalty often represents a substantial portion of the value of a business. The excess of the purchase price over the fair value of net identifiable assets acquired and liabilities assumed, as determined by management in business acquisition transactions accounted for as purchases, is recorded as goodwill.

The following table presents changes in goodwill in the accompanying Consolidated Balance Sheets for the year ended December 31, 2010 and 2011 (in thousands):


	December 31, 2010		December 31, 2011
Goodwill at beginning of year	$	166,930	$	183,324
Acquisitions and changes in previous estimates		16,394		10,638

Goodwill at end of year	$	183,324	$	193,962

Changes in previous estimates are related to minor adjustments to inventory.

Preneed Trust Investments

12 Months Ended

Dec. 31, 2011

Preneed Trust Investments [Abstract]

PRENEED TRUST INVESTMENTS

5. PRENEED TRUST INVESTMENTS

Preneed Cemetery Trust Investments

Preneed cemetery trust investments represent trust fund assets that the Company will generally withdraw when the merchandise or services are provided. Preneed cemetery trust investments are reduced by the trust earnings the Company has been allowed to withdraw prior to performance by the Company pursuant to state laws. The components of preneed cemetery trust investments in our Consolidated Balance Sheets at December 31, 2010 and 2011 are as follows (in thousands):


	December 31, 2010			December 31, 2011
Preneed cemetery trust investments	$	81,771		$	68,557
Less: allowance for contract cancellation		(2,080	)		(2,138	)

	$	79,691		$	66,419

Upon cancellation of a preneed cemetery 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, the Company is 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, the Company assesses whether it is responsible for replenishing the corpus of the trust, in which case a loss provision would be recorded.

The cost and fair market values associated with preneed cemetery trust investments at December 31, 2011 are detailed below (in thousands). The Company determines whether or not the assets in the preneed cemetery 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 of the investment due to an other-than-temporary impairment is likewise recorded as a reduction in deferred preneed cemetery receipts held in trust. There will be no impact on earnings unless and until such time as the investment is withdrawn from the trust in accordance with state regulations at an amount that is less than its original basis.


	Cost		Unrealized Gains		Unrealized Losses			Market
Cash and money market accounts	$	1,234	$	—	$	—		$	1,234
Fixed income securities:
Corporate debt		53,227		1,085		(1,548	)		52,764
Mortgage backed securities		1		—		—			1
Common stock		13,002		102		(3,646	)		9,458
Mutual funds:
Equity		3,808		250		(30	)		4,028

Trust securities	$	71,272	$	1,437	$	(5,224	)	$	67,485

Accrued investment income	$	1,072						$	1,072

Preneed cemetery trust investments								$	68,557

Market value as a percentage of cost									94.7	%

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


Due in one year or less	$	—
Due in one to five years		3,472
Due in five to ten years		19,836
Thereafter		29,457

	$	52,765

The cost and market values associated with preneed cemetery trust assets at December 31, 2010 are detailed below (in thousands):


	Cost		Unrealized Gains		Unrealized Losses			Market
Cash and money market accounts	$	2,114	$	—	$	—		$	2,114
Fixed income securities:
Corporate debt		30,405		5,804		(219	)		35,990
Mortgage backed securities		3		—		—			3
Common stock		33,265		5,982		(217	)		39,030
Mutual funds:
Equity		3,557		293		—			3,850

Trust securities	$	69,344	$	12,079	$	(436	)	$	80,987

Accrued investment income	$	784						$	784

Preneed cemetery trust investments								$	81,771

Market value as a percentage of cost									116.8	%

Preneed cemetery trust investment security transactions recorded in Interest income and other, net in the Consolidated Statements of Operations for the years ended December 31, 2009, 2010 and 2011 were as follows (in thousands):


	Year ended December 31,
	2009			2010			2011
Investment income	$	3,109		$	3,434		$	3,471
Realized gains		2,165			12,563			14,041
Realized losses		(4,211	)		(821	)		(4,453	)
Expenses and taxes		(381	)		(586	)		(1,239	)
Increase in deferred preneed cemetery receipts held in trust		(682	)		(14,590	)		(11,820	)

	$	—		$	—		$	—

Purchases and sales of investments in the preneed cemetery trusts were as follows (in thousands):


	Year ended December 31,
	2009			2010			2011
Purchases	$	(44,661	)	$	(56,431	)	$	(111,550	)
Sales		39,825			54,055			121,217

Preneed Funeral Trust Investments

Preneed funeral trust investments represent trust fund assets that the Company expects to withdraw when the services and merchandise are provided. Preneed funeral contracts are secured by funds paid by the customer to the Company. Preneed funeral trust investments are reduced by the trust earnings the Company has been allowed to withdraw prior to performance by the Company 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 in our Consolidated Balance Sheets at December 31, 2010 and 2011 were as follows (in thousands):


	December 31, 2010			December 31, 2011
Preneed funeral trust investments	$	83,324		$	78,227
Less: allowance for contract cancellation		(2,181	)		(2,415	)

	$	81,143		$	75,812

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, the Company is 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, the Company assesses whether it is responsible for replenishing the corpus of the trust, in which case a loss provision would be recorded.

The cost and fair market values associated with preneed funeral trust investments at December 31, 2011 are detailed below (in thousands). The Company determines whether or not the assets in the preneed funeral trusts 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. There will be no impact on earnings unless and until such time as the investment is withdrawn from the trust in accordance with state regulations at an amount that is less than its original basis.


	Cost		Unrealized Gains		Unrealized Losses			Market
Cash and money market accounts	$	12,318	$	—	$	—		$	12,318
Fixed income securities:
U.S. Treasury debt		5,421		125		(24	)		5,522
Mortgage backed securities		439		12		(1	)		450
Corporate debt		36,430		992		(869	)		36,553
Common stock		10,007		74		(2,557	)		7,524
Mutual funds:
Equity		9,291		42		(967	)		8,366
Fixed income		4,361		172		(31	)		4,502
Other Investments		2,221		—		(16	)		2,205

Trust Securities	$	80,488	$	1,417	$	(4,465	)	$	77,440

Accrued investment income	$	787						$	787

Preneed funeral trust investments								$	78,227

Market value as a percentage of cost									96.2	%

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


Due in one year or less	$	1,068
Due in one to five years		5,239
Due in five to ten years		14,087
Thereafter		22,131

	$	42,525

The cost and market values associated with preneed funeral trust assets at December 31, 2010 are detailed below (in thousands):


	Cost		Unrealized Gains		Unrealized Losses			Market
Cash and money market accounts	$	10,735	$	—	$	—		$	10,735
Fixed income securities:
U.S. Treasury debt		5,461		126		(39	)		5,548
Mortgage backed securities		694		32		—			726
Corporate debt		21,791		5,408		(62	)		27,137
Common stock		21,305		3,995		(115	)		25,185
Mutual funds:
Equity		6,209		561		(211	)		6,559
Fixed income		6,513		357		(76	)		6,794

Trust Securities	$	72,708	$	10,479	$	(503	)	$	82,684

Accrued investment income	$	640						$	640

Preneed funeral trust investments								$	83,324

Market value as a percentage of cost									113.7	%

Preneed funeral trust investment security transactions recorded in Interest income and other, net in the Consolidated Statements of Operations for the years ended December 31, 2009, 2010 and 2011 were as follows (in thousands):


	Year ended December 31,
	2009			2010			2011
Investment income	$	3,063		$	3,410		$	2,934
Realized gains		3,198			11,023			10,772
Realized losses		(6,588	)		(532	)		(3,223	)
Expenses and taxes		(722	)		(873	)		(1,224	)
(Increase) decrease in deferred preneed funeral receipts held in trust		1,049			(13,028	)		(9,259	)

	$	—		$	—		$	—

Purchases and sales of investments in the preneed funeral trusts were as follows (in thousands):


	Year ended December 31,
	2009			2010			2011
Purchases	$	(40,596	)	$	(11,800	)	$	(89,969	)
Sales		34,596			8,321			86,846

Preneed Cemetery Receivables

12 Months Ended

Dec. 31, 2011

Preneed Cemetery Receivables [Abstract]

PRENEED CEMETERY RECEIVABLES

6. PRENEED CEMETERY RECEIVABLES

Preneed sales of cemetery interment rights, merchandise and services are usually financed through interest-bearing installment sales contracts, generally with terms of up to five years with such interest earnings included in cemetery revenues. In substantially all cases, we receive an initial down payment at the time the contract is signed. The interest rates generally range between 9.5% and 12%. Occasionally, we have offered zero percent interest financing to promote sales for limited-time offers. At December 31, 2011, the balance of preneed receivables for cemetery interment rights and for merchandise and services was $18.5 million and $9.1 million, respectively.

The Company determines an allowance for customer cancellations and refunds on contracts in which revenue has been recognized on sales of cemetery interment rights. We reserve 100% of the receivables on contracts in which the revenue has been recognized and payments are 120 days past due or more, which was approximately 2.3% of the total receivables on recognized sales at December 31, 2011. 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 years ending December 31, 2010 and 2011, the changes to the allowance for contract cancellations were as follows (in thousands):


	As of December 31,
	2010			2011
Beginning balance	$	1,448		$	1,488
Write-offs and cancellations		(1,886	)		(1,551	)
Recoveries		—			—
Provision		1,926			1,415

Ending balance	$	1,488		$	1,352

The Company has a collections policy whereby past due notification is sent to the customers beginning at 15 days past due and thereafter periodically until 90 days past due. Any items on contracts that are past due 120 days are sent to a third-party collector.

The aging of past due financing receivables as of December 31, 2011 is 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	$	832	$	437	$	242	$	455	$	1,966	$	17,587	$	19,553
Deferred revenue		349		177		100		187		813		7,212		8,025

Total contracts	$	1,181	$	614	$	342	$	642	$	2,779	$	24,799	$	27,578

The aging of past due financing receivables as of December 31, 2010 is 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	$	661	$	420	$	249	$	263	$	1,593	$	16,912	$	18,505
Deferred revenue		276		184		95		122		677		8,432		9,109

Total contracts	$	937	$	604	$	344	$	385	$	2,270	$	25,344	$	27,614

Receivables From Preneed Funeral Trusts

12 Months Ended

Dec. 31, 2011

Receivables From Preneed Funeral Trusts [Abstract]

RECEIVABLES FROM PRENEED FUNERAL TRUSTS

7. RECEIVABLES FROM PRENEED FUNERAL TRUSTS

The receivables from preneed funeral trusts represent assets in trusts which are controlled and operated by third parties in which the Company does not have a controlling financial interest (less than 50%) in the trust assets. The Company accounts for these investments at cost. As of December 31, 2010 and 2011, receivables from preneed funeral trusts were as follows (in thousands):


	December 31, 2010			December 31, 2011
	(in thousands)
Preneed funeral trust funds	$	22,542		$	23,182
Less: allowance for contract cancellation		(676	)		(695	)

	$	21,866		$	22,487

The following summary reflects the composition of the assets held in trust and controlled by third parties to satisfy Carriage’s future obligations under preneed funeral arrangements related to the preceding contracts at December 31, 2011 and 2010. The cost basis includes reinvested interest and dividends that have been earned on the trust assets. Fair value includes unrealized gains and losses on trust assets.


	Historical Cost Basis		Fair Value
	(in thousands)
As of December 31, 2011:
Cash and cash equivalents	$	3,450	$	3,450
Fixed income investments		15,106		15,231
Mutual funds and common stocks		39		39
Annuities		4,588		4,842

Total	$	23,183	$	23,562


	Historical Cost Basis		Fair Value
	(in thousands)
As of December 31, 2010:
Cash and cash equivalents	$	3,554	$	3,554
Fixed income investments		13,990		14,009
Mutual funds and common stocks		76		76
Annuities		4,922		5,407

Total	$	22,542	$	23,046

Contracts Secured by Insurance

12 Months Ended

Dec. 31, 2011

Contracts Secured by Insurance [Abstract]

CONTRACTS SECURED BY INSURANCE

8. CONTRACTS SECURED BY INSURANCE

Certain preneed funeral contracts are secured by life insurance contracts. Generally, the proceeds of the life insurance policies have been assigned to the Company and will be paid upon the death of the insured. The proceeds will be used to satisfy the beneficiary’s obligations under the preneed contract for services and merchandise. Preneed funeral contracts secured by insurance totaled $205.0 million and $216.0 million at December 31, 2010 and 2011, respectively, and are not included in the Company’s Consolidated Balance Sheets.

Cemetery Perpetual Care Trust Investments

12 Months Ended

Dec. 31, 2011

Cemetery Perpetual Care Trust Investments [Abstract]

CEMETERY PERPETUAL CARE TRUST INVESTMENTS

9. CEMETERY PERPETUAL CARE TRUST INVESTMENTS

Cemetery Care trusts’ corpus on the Consolidated Balance Sheets represents the corpus of those trusts plus undistributed income. The components of Cemetery Care trusts’ corpus as of December 31, 2010 and December 31, 2011 were as follows (in thousands):


	December 31, 2010		December 31, 2011
Trust assets, at market value	$	45,735	$	41,485
Obligations due from (to) trust		206		(106	)

Care trusts’ corpus	$	45,941	$	41,379

The Company is 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 following table reflects the cost and fair market values associated with the trust investments held in perpetual care trust funds at December 31, 2011 (in thousands). The Company determines 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.


	Cost		Unrealized Gains		Unrealized Losses			Market
Cash and money market accounts	$	210	$	—	$	—		$	210
Fixed income securities:
Corporate debt		34,900		709		(1,083	)		34,526
Other		1		—		—			1
Common stock		8,333		63		(2,350	)		6,046

Trust Securities	$	43,444	$	772	$	(3,433	)	$	40,783

Accrued investment income	$	702						$	702

Cemetery perpetual care investments								$	41,485

Market value as a percentage of cost									93.9	%

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


Due in one year or less	$	—
Due in one to five years		2,098
Due in five to ten years		13,515
Thereafter		18,914

	$	34,527

The cost and market values associated with the trust investments held in perpetual care trust funds at December 31, 2010 are detailed below (in thousands):


	Cost		Unrealized Gains		Unrealized Losses			Market
Cash and money market accounts	$	784	$	—	$	—		$	784
Fixed income securities:
Corporate debt		23,458		4,120		(129	)		27,449
Common stock		14,704		2,299		(143	)		16,860
Mutual funds:
Equity		64		—		(17	)		47
Fixed income		15		—		(3	)		12

Trust Securities	$	39,025	$	6,419	$	(292	)	$	45,152

Accrued investment income	$	583						$	583

Cemetery perpetual care investments								$	45,735

Market value as a percentage of cost									115.7	%

Perpetual care trust investment security transactions recorded in Interest income and other, net in the Consolidated Statements of Operations for the years ended December 31, 2009, 2010 and 2011 were as follows (in thousands):


	Year ended December 31,
	2009			2010			2011
Undistributable realized gains	$	2,118		$	5,774		$	7,111
Undistributable realized losses		(3,567	)		(780	)		(2,347	)
Decrease (increase) in Care trusts’ corpus		1,449			(4,994	)		(4,764	)

	$	—		$	—		$	—

Perpetual care trust investment security transactions recorded in Cemetery revenue for the years ended December 31, 2009, 2010 and 2011 were as follows (in thousands):


	Year ended December 31,
	2009			2010			2011
Interest and dividend income	$	2,375		$	2,145		$	2,563
Realized gains, net		154			2,132			1,085
Expenses		(178	)		(21	)		—

Total	$	2,351		$	4,256		$	3,648

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


	Year ended December 31,
	2009			2010			2011
Purchases	$	(38,833	)	$	(38,736	)	$	(40,030	)
Sales		39,299			39,819			53,823

Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

10. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date applicable for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. We disclose the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date.

The Company evaluated its financial assets and liabilities for those financial assets and liabilities that met the criteria of the disclosure requirements and fair value framework. The Company identified investments in fixed income securities, common stock and mutual funds presented within the preneed and perpetual care trust investments categories on the Consolidated Balance Sheets as having met such criteria.

The following three-level valuation hierarchy based upon the transparency of inputs is utilized in the measurement and valuation of financial assets or liabilities as of the measurement date:

•

Level 1—Fair value of securities based on unadjusted quoted prices for identical assets or liabilities in active markets. Our investments classified as Level 1 securities include common stock, certain fixed income securities, and equity mutual funds;

•

Level 2—Fair value of securities estimated based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation. These inputs include interest rates, yield curves, credit risk, prepayment speeds, rating and tax-exempt status. Our investments classified as Level 2 securities include certain fixed income securities and fixed income mutual funds; and

•

Level 3—Unobservable inputs based upon the reporting entity’s internally developed assumptions, which market participants would use in pricing the asset or liability. As of December 31, 2011, the Company did not have any assets that had fair values determined by Level 3 inputs and no liabilities measured at fair value.

The Company accounts for its investments as available-for-sale and measures them at fair value under standards of financial accounting and reporting for investments in equity instruments that have readily determinable fair values and for all investments in debt securities.

The following table summarizes the fair value on a recurring basis and summarizes the fair value hierarchy of the valuation techniques utilized by us to determine the fair values as of December 31, 2011 (in thousands). Certain fixed income and other securities are reported at fair value using Level 2 inputs. For these securities, the Company uses pricing services and dealer quotes. As of December 31, 2011, the Company did not have any liabilities measured at fair value.


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2011
Assets:
Fixed income securities:
U.S. Treasury debt	$	5,522	$	—	$	—	$	5,522
Mortgage-backed securities		451		2		—		453
Corporate debt		—		123,843		—		123,843
Common stock		23,028		—		—		23,028
Mutual funds:
Equity		12,378		—		—		12,378
Fixed income		—		6,722		—		6,722

Total Assets	$	41,379	$	130,567	$	—	$	171,946

There were no significant transfers between Levels 1 and 2 for the year ended December 31, 2011.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Deferred Charges and Other Non-Current Assets

12 Months Ended

Dec. 31, 2011

Deferred Charges and Other Non-Current Assets [Abstract]

DEFERRED CHARGES AND OTHER NON-CURRENT ASSETS

11. DEFERRED CHARGES AND OTHER NON-CURRENT ASSETS

Deferred charges and other non-current assets at December 31, 2010 and 2011 were as follows (in thousands):


	December 31, 2010		December 31, 2011
Prepaid agreements not to compete, net of accumulated amortization of $602 and $706, respectively	$	529	$	425
Deferred loan costs, net of accumulated amortization of $2,775 and $3,161, respectively		2,086		1,700
Deferred income tax asset		1,211		3,955
Convertible junior subordinated debenture origination costs, net of accumulated amortization of $1,563 and $1,698, respectively		2,480		2,345
Other		1,554		2,026

	$	7,860	$	10,451

Agreements not to compete are amortized over the term of the respective agreements, ranging from four to ten years. Deferred loan costs are being amortized over the term of the related debt.

Senior Long-Term Debt

12 Months Ended

Dec. 31, 2011

Convertible Junior Subordinated Debenture Payable to Affiliate and Company Obligated Mandatory Redeemable Convertible Preferred Securities of Carriage Services Capital Trust and Senior Long-Term Debt [Abstract]

SENIOR LONG-TERM DEBT

12. SENIOR LONG-TERM DEBT

The Company’s senior long-term debt consisted of the following at December 31, 2010 and 2011 (in thousands):


	December 31, 2010			December 31, 2011
Revolving credit facility, secured, floating rate	$	600		$	3,100
7⁷/ 8% Senior Notes due 2015		130,000			130,000
Acquisition debt		208			140
Other		2,042			2,257
Less: current portion		(434	)		(497	)

	$	132,416		$	135,000

The Company has outstanding a principal amount of $130 million of the Senior Notes, due in 2015, with interest payable semi-annually. The Company had a $40.0 million senior secured revolving credit facility with a $20.0 million accordion feature that was to mature in November 2012 and was collateralized by all personal property and funeral home real property in certain states. Effective August 11, 2011, the Company entered into a new secured revolving credit facility with Wells Fargo Bank, N.A. which contains commitments for an aggregate of $60.0 million with an accordion provision for up to an additional $15.0 million. The credit facility matures in October 2014 and, under certain conditions, may be extended to October 2016. The credit facility is collateralized by the accounts receivable and all personal property of the Company. Borrowings under the credit facility bear interest at either the prime rate or LIBOR options.

At December 31, 2011, the prime rate option was equivalent to 4.125% and the LIBOR margin was 1.875%. The fees related to the current credit facility were approximately $333,000 and are being amortized over the life of the facility. No letters of credit were issued and outstanding under the credit facility at December 31, 2011. Interest is payable quarterly.

Carriage, the parent entity, has no material assets or operations independent of its subsidiaries. All assets and operations are held and conducted by subsidiaries, each of which (except for Carriage Services Capital Trust, which is a single purpose entity that holds our 7% debentures issued in connection with the issuance of the Trust’s term income deferrable equity securities (TIDES) 7% convertible preferred securities) have fully and unconditionally guaranteed the Company’s obligations under the Senior Notes. Additionally, the Company does not currently have any significant restrictions on its ability to receive dividends or loans from any subsidiary guarantor under the Senior Notes.

The Company was in compliance with the covenants contained in the credit facility and the Senior Notes as of and for the years ended December 31, 2010 and 2011.

Acquisition debt consists of deferred purchase price notes payable to sellers. The deferred purchase price notes bear interest at 0%, discounted at imputed interest rates ranging from 6% to 8%, with original maturities from three to fifteen years.

The aggregate maturities of long-term debt for the next five years as of December 31, 2011 are approximately $500,000, $452,000, $3,540,000, $130,277,000 and $211,000, respectively and $500,000 thereafter.

Convertible Junior Subordinated Debenture Payable to Affiliate and Company Obligated Mandatory Redeemable Convertible Preferred Securities of Carriage Services Capital Trust

12 Months Ended

Dec. 31, 2011

CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE PAYABLE TO AFFILIATE AND COMPANY OBLIGATED MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SECURITIES OF CARRIAGE SERVICES CAPITAL TRUST

13.

CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES PAYABLE TO AFFILIATE AND COMPANY OBLIGATED MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SECURITIES OF CARRIAGE SERVICES CAPITAL TRUST

Carriage’s wholly-owned subsidiary, Carriage Services Capital Trust, issued 1,875,000 units of 7% convertible preferred securities (TIDES) during June 1999, resulting in approximately $90.0 million in net proceeds, and the Company issued a 7% convertible junior subordinated debenture to the Trust in the amount of $93.75 million. The convertible preferred securities have a liquidation amount of $50 per unit, and are convertible into Carriage’s common stock at the equivalent conversion price of $20.4375 per share of common stock. The subordinated debentures and the TIDES mature in 2029, and the TIDES are guaranteed on a subordinated basis by the Company. Both the subordinated debentures and the TIDES contain a provision for the deferral of distributions for up to 20 consecutive quarters. During the period in which distribution payments are deferred, distributions will continue to accumulate at the 7% annual rate. Also, the deferred distributions will themselves accumulate distributions at the annual rate of 7%. During the period in which distributions are deferred, Carriage is prohibited from paying dividends on its common stock or repurchasing its common stock, with limited exceptions. There are no deferred distributions at December 31, 2011.

For the year ended December 31, 2010, the Company repurchased 17,850 shares of these TIDES for approximately $0.6 million and recorded a gain of $0.3 million. In September 2010, the Company converted these preferred shares at the current conversion rate of 2.4465 into shares of common stock equal to 43,670 shares. During the year ended December 31, 2011, the Company repurchased 61,742 shares of these TIDES for approximately $2,241,000 and recorded gains of $846,000. The Company converted these preferred shares at the conversion rate of 2.4465 into shares of common stock equal to 151,052 shares. Immediately upon the exchange, these common shares were cancelled. At December 31, 2011, amounts outstanding under the convertible junior subordinated debentures totaled $89.8 million.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

14. COMMITMENTS AND CONTINGENCIES

Leases

Carriage leases certain office facilities, vehicles and equipment under operating leases for terms ranging from one to fifteen years. Certain of these leases provide for an annual adjustment and contain options for renewal. Rent expense totaled $3,850,000, $4,807,000 and $5,593,000 for 2009, 2010 and 2011, respectively. Assets acquired under capital leases are included in property, plant and equipment in the accompanying Consolidated Balance Sheets in the amount of $1,128,000 in 2010 and $1,059,000 in 2011, net of accumulated depreciation. Capital lease obligations are included in current and long-term debt as indicated below.

At December 31, 2011, future minimum lease payments under non-cancellable lease agreements were as follows:


	Future Minimum Lease Payments
	Operating Leases		Capital Leases
	(in thousands)
Years ending December 31,
2012	$	3,819	$	433
2013		3,507		437
2014		2,630		462
2015		1,778		504
2016		696		505
Thereafter		288		5,194

Total future minimum lease payments	$	12,718	$	7,535

Less: amount representing interest (rates ranging from 7% to 11.5%)				(3,249	)
Less: current portion of obligations under capital leases				(131	)

Long-term obligations under capital leases			$	4,155

Agreements and Employee Benefits

Carriage has obtained various agreements not to compete from former owners and employees. These agreements are generally for one to ten years and provide for periodic payments over the term of the agreements. The aggregate payments due under these agreements for the next five years total $2,009,000, $1,611,000, $1,370,000, $1,169,000, and $683,000 respectively and $1,012,000 thereafter.

The Company has entered into various consulting agreements with former owners of businesses. Payments for such agreements are generally not made in advance. These agreements are generally for one to ten years and provide for future payments monthly or bi-weekly. The aggregate payments for the next five years total $733,000, $499,000, $419,000, $236,000 and $87,000, respectively and $17,000 thereafter.

The Company has entered into employment agreements with its executive officers and certain management personnel. These agreements are generally for three years and provide for participation in various incentive compensation arrangements. These agreements automatically renew on an annual basis after their initial term has expired. The minimum payments due under these agreements is approximately $1,855,000 for the next two years and $283,000 for the third year.

Carriage sponsors a defined contribution plan (401K) for the benefit of its employees. The Company’s matching contributions and plan administrative expenses totaled $1,220,000, $1,243,000, and $1,357,000 for 2009, 2010 and 2011, respectively. The Company does not offer any post-retirement or post-employment benefits.

Other Commitments

The Company has an agreement to outsource the processing of transactions for the cemetery business and certain accounting activities. The Company and the contractor may terminate the contract for various reasons upon written notification. Payments vary based on the level of resources provided. The Company paid $2.1 million, $1.9 million and $2.0 million to the contractor for services in 2009, 2010 and 2011, respectively.

Litigation

We are a party to various litigation matters and proceedings. For each of our outstanding legal matters, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies, and the likelihood of an unfavorable outcome. We intend to defend ourselves in the lawsuits described herein. If we determine that an unfavorable outcome is probable and can be reasonably estimated, we establish the necessary accruals. We hold certain insurance policies that may reduce cash outflows with respect to an adverse outcome of certain of these litigation matters.

Leathermon, et al. v. Grandview Memorial Gardens, Inc., et al., United States District Court, Southern District of Indiana, Case No. 4:07-cv-137. On August 17, 2007, five plaintiffs filed a putative class action against the current and past owners of Grandview Cemetery in Madison, Indiana, including the Carriage subsidiaries that owned the cemetery from January 1997 until February 2001, on behalf of all individuals who purchased cemetery and burial goods and services at Grandview Cemetery. Plaintiffs claim that the cemetery owners performed burials negligently, breached Plaintiffs’ contracts, and made misrepresentations regarding the cemetery. The Plaintiffs also allege that the claims occurred prior, during and after the Company owned the cemetery. On October 15, 2007, the case was removed from

Jefferson County Circuit Court, Indiana to the Southern District of Indiana. On April 24, 2009, shortly before Defendants had been scheduled to file their briefs, in opposition to Plaintiffs’ motion for class certification, Plaintiffs moved to amend their complaint to add new class representatives and claims, while also seeking to abandon other claims. The Company, as well as several other Defendants, opposed Plaintiffs’ motion to amend their complaint and add parties. In April 2009, two Defendants moved to disqualify Plaintiffs’ counsel from further representing Plaintiffs in this action. On March 31, 2010, the Court granted the Defendants’ motion to disqualify Plaintiffs’ counsel. In that order, the Court gave Plaintiffs 60 days within which to retain new counsel. On May 6, 2010, Plaintiffs filed a petition for writ of mandamus with the Seventh Circuit Court of Appeals seeking relief from the trial court’s order of disqualification of counsel. On May 19, 2010, the Defendants responded to the petition of mandamus. On July 8, 2010, the Seventh Circuit denied Plaintiffs’ petition for writ of mandamus. Thus, pursuant to the trial court’s order, Plaintiffs were given 60 days from July 8, 2010 in which to retain new counsel to prosecute this action on their behalf. Plaintiffs retained new counsel and the trial court granted the newly retained Plaintiffs’ counsel 90 days to review the case and advise the Court whether or not Plaintiffs would seek leave to amend their complaint to add and/or change the allegations as are currently stated therein and whether or not they would seek leave to amend the proposed class representatives for class certification. Plaintiffs moved for leave to amend both the class representatives and the allegations stated within the complaint. Defendants filed oppositions to such amendments. The Court issued an order permitting the Plaintiffs to proceed with amending the class representatives and a portion of their claims; however, certain of Plaintiffs’ claims have been dismissed. Discovery in this matter will now proceed. Carriage intends to defend this action vigorously. Because the lawsuit is in its preliminary stages, we are unable to evaluate the likelihood of an unfavorable outcome to the Company or to estimate the amount or range of any potential loss, if any, at this time.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

INCOME TAXES

15. INCOME TAXES

The provision for income taxes from continuing operations for the years ended December 31, 2009, 2010 and 2011 consisted of (in thousands):


	Year Ended December 31,
	2009		2010		2011
Current:
U. S. Federal	$	80	$	1,489	$	7,590
State		284		960		1,032

Total current provision		364		2,449		8,622
Deferred:
U. S. Federal		3,597		2,667		(3,414	)
State		836		252		(48	)

Total deferred provision		4,433		2,919		(3,462	)

Total income tax provision	$	4,797	$	5,368	$	5,160

A reconciliation of taxes from continuing operations calculated at the U.S. federal statutory rate to those reflected in the Consolidated Statements of Operations for the years ended December 31, 2009, 2010 and 2011 is as follows (in thousands):


	Year Ended December 31,
	2009						2010						2011
	Amount			Percent			Amount			Percent			Amount			Percent
Federal statutory rate	$	4,027			34.0	%	$	4,572			34.0	%	$	4,127			34.0	%
Effect of state income taxes, net of federal benefit		667			5.6			858			6.4			710			5.9
Effect of non-deductible expenses and other, net		322			2.7			136			1.1			533			4.3
Change in valuation allowance		(219	)		(1.8	)		(198	)		(1.5	)		(210	)		(1.7	)

	$	4,797			40.5	%	$	5,368			40.0	%	$	5,160			42.5	%

The tax effects of temporary differences from total operations that give rise to significant deferred tax assets and liabilities at December 31, 2010 and 2011 were as follows (in thousands):


	Year Ended December 31,
	2010			2011
Deferred income tax assets:
Net operating loss carryforwards	$	3,597		$	2,474
State tax credit carryforwards		92			91
State bonus depreciation		259			267
Accrued liabilities and other		2,355			3,075
Amortization of non-compete agreements		539			336
Preneed liabilities, net		27,234			33,301

Total deferred income tax assets		34,076			39,544
Less valuation allowance		(1,545	)		(1,335	)

Total deferred income tax assets	$	32,531		$	38,209

Deferred income tax liabilities:
Amortization and depreciation	$	(28,107	)	$	(30,753	)
Other		(856	)		(426	)

Total deferred income tax liabilities		(28,963	)		(31,179	)

Total net deferred tax assets	$	3,568		$	7,030

Current deferred tax asset	$	2,357		$	3,075
Non-current deferred tax asset		1,211			3,955

Total net deferred tax assets	$	3,568		$	7,030

The current deferred tax asset is included in Inventories and other current assets at December 31, 2010 and 2011. The non-current deferred tax asset is included in Deferred charges and other non-current assets at December 31, 2010 and 2011.

Carriage records a valuation allowance to reflect the estimated amount of deferred tax assets for which realization is uncertain. Management reviews the valuation allowance at the end of each quarter and makes adjustments if it is determined that it is more likely than not that the tax benefits will be realized. The Company recognized a $0.2 million decrease in its valuation allowance during 2011.

For federal income tax reporting purposes, Carriage utilized the remainder of its net operating loss carryforward during the current year. For state reporting purposes, Carriage has approximately $45.7 million of net operating loss carryforwards that will expire between 2013 and 2030, if not utilized. Based on management’s assessment of the various state net operating losses, it was determined that it is more likely than not that the Company will not be able to realize tax benefits on a substantial amount of the state losses. The valuation allowance at December 31, 2011 is attributable to the deferred tax asset related to the state operating losses.

The Company has unrecognized tax benefits for federal and state income tax purposes totaling $7.9 million as of December 31, 2011, resulting from deductions totaling $20.9 million on federal returns and $20.2 million on various state returns. The Company has state net operating loss carryforwards exceeding these deductions, and has accounted for these unrecognized tax benefits by reducing the deferred income tax asset related to the net operating loss carryforwards by the amount of these unrecognized deductions. For federal and certain states without net operating loss carryforwards, the Company has increased its taxes payable by deductions that are not considered more likely than not. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):


	Year Ended December 31,
	2009			2010			2011
Unrecognized tax benefit at beginning of year	$	6,327		$	6,863		$	7,396
Additions based on tax positions related to the current year		560			562			512
Reductions as a result of a lapse of the applicable statute of limitations		(24	)		(29	)		(32	)

Unrecognized tax benefit at end of year	$	6,863		$	7,396		$	7,876

The entire balance of unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate. The effects of recognizing the tax benefits of uncertain tax positions for the year ended December 31, 2011 were not material to the Company’s operations. The Company does not anticipate a significant increase or decrease in its unrecognized tax benefits during the next twelve months. The amount of penalty and interest recognized in the balance sheet and statement of operations was not material for the year ended December 31, 2011.

The Company’s Federal income tax returns for 2001 through 2010 are open tax years that may be examined by the Internal Revenue Service. The Company’s unrecognized state tax benefits are related to state returns open from 2001 through 2010.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity, Share Repurchase program and Preferred Stock [Abstract]

STOCKHOLDERS' EQUITY

16. STOCKHOLDERS’ EQUITY

Stock Based Compensation Plans

During the three year period ended December 31, 2011, Carriage had four stock benefit plans in effect under which stock option grants or restricted stock have been issued or remain outstanding: the 1995 Stock Incentive Plan (the “1995 Plan”), the 1996 Stock Option Plan (the “1996 Plan”), the 1996 Directors’ Stock Option Plan (the “Directors’ Plan”) and the Amended and Restated 2006 Long Term Incentive Plan (the “Amended and Restated 2006 Plan”). All of the options granted under the plans have ten-year terms. The 1995 Plan expired in 2005 and the 1996 Plan and the Director’s Plan were terminated during 2006. The 2006 Amended and Restated Plan expires on May 24, 2016. The expiration and termination of these plans does not affect the options previously issued and outstanding.

All stock-based plans are administered by the Compensation Committee appointed by the Board of Directors. The 2006 Amended and Restated Plan provides for grants of options as non-qualified options or incentive stock options, restricted stock, stock appreciation rights and performance awards. Option grants are required by the 2006 Amended and Restated Plan to be issued with an exercise price equal to or greater than the fair market value of Carriage’s common stock as determined by the closing price on the date of the option grant. The options have ten year terms.

The status of each of the plans at December 31, 2011 is as follows (in thousands):


	Shares Reserved		Shares Available to Issue		Options Outstanding
1995 Plan		—		—		16
1996 Plan		—		—		8
Directors’ Plan		—		—		—
2006 Amended and Restated Plan		2,850		938		297

Total		2,850		938		321

Employee Stock Options

On February 28, 2011, a total of 207,549 stock options were awarded to officers and certain employees. These options will vest in 33¹/3% increments over a three year period and will expire on February 28, 2021. The value of these stock options is approximately $0.5 million. The fair value of the option grants is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rates of 1.25%; expected dividend yield of 0% for each year; expected termination period of 3.37 years; expected lives of three years; and expected volatility of 60.09%. During the third quarter of 2011, 3,000 stock options were awarded to an employee. The value of these options was approximately $6,400. The stock options vest in 33¹/3% increments over a three year period and will expire August 10, 2021. The fair value of the option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rates of 0.625%, expected dividend yield of 1.9% for each year; expected termination period of 3.46 years, expected lives of three years; and expected volatility of 58.74%.

A summary of the stock options at December 31, 2009, 2010 and 2011 and changes during the three years ended December 31, 2011 is presented in the table and narrative below (shares in thousands):


	Year Ended December 31,
	2009					2010					2011
				Wtd. Avg.					Wtd. Avg.					Wtd. Avg.
	Shares			Ex. Price		Shares			Ex. Price		Shares			Ex. Price
Outstanding at beginning of period		907		$	2.97		787		$	2.71		445		$	4.74
Granted		—			—		211		$	4.78		212		$	5.69
Exercised		(76	)	$	2.01		(516	)	$	1.56		(173	)	$	5.56
Canceled or expired		(44	)	$	9.25		(37	)	$	4.79		(162	)	$	5.24

Outstanding at end of year		787		$	2.71		445		$	4.74		321		$	5.17

Exercisable at end of year		787		$	2.71		253		$	4.71		106		$	4.75

The aggregate intrinsic value of the outstanding and exercisable stock options at December 31, 2011 was $245,000.

The total intrinsic value of options exercised during 2009, 2010 and 2011 totaled $151,000, $1,628,000, and $203,800 respectively. As of December 31, 2011, there was $276,400 of unrecognized compensation cost, net of estimated forfeitures, related to nonvested stock options. The Company recorded compensation expense related to vesting stock options totaling less than $1,000 in 2009, $81,000 in 2010, and $237,000 in 2011.

The following table further describes the Company’s outstanding stock options at December 31, 2011 (shares in thousands):


	Options Outstanding						Options Exercisable
Actual Ranges of Exercise Prices 150% increment	Number Outstanding at 12/31/11		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number Exercisable at 12/31/11		Weighted-Average Exercise Price
$3.12-4.78		24		1.41	$	4.45		24	$	4.45
$4.78-4.78		153		8.39	$	4.78		77	$	4.78
$4.79-5.70		3		9.62	$	5.21		—		—
$5.70-5.70		141		9.17	$	5.70		5	$	5.70

$3.12-5.70		321		8.22	$	5.16		106	$	4.75

Employee Stock Purchase Plan

Carriage provides all employees the opportunity to purchase common stock through payroll deductions. Purchases are made quarterly; the price being 85% of the lower of the price on the grant date or the purchase date. In 2009, employees purchased a total of 219,262 shares at a weighted average price of $2.52 per share. In 2010, employees purchased a total of 106,880 shares at a weighted average price of $3.38 per share. In 2011, employees purchased a total of 86,287 shares at a weighted average price of $4.15 per share. Compensation cost for the Plan totaling approximately $159,000, $173,000, and $100,000 was expensed in 2009, 2010 and 2011, respectively.

The fair values of the grants at the beginning of each of the years pursuant to the Company’s employee stock purchase plan (“ESPP”) were estimated using the following assumptions:


	2009		2010		2011
Dividend yield		0%		0%		0%
Expected volatility		76%		70%		29%
Risk-free interest rate		0.09%, 0.27%, 0.31%, 0.35%		0.08%, 0.18%, 0.31%, 0.45%		0.15%, 0.19%, 0.24%, 0.29%
Expected life (years)		.25, .50, .75, 1		.25, .50, .75, 1		.25, .50, .75, 1

Expected volatilities are based on the historical volatility during the previous twelve months of the underlying common stock. The risk-free rate for the quarterly purchase periods is based on the U.S. Treasury yields in effect at the time of grant (January 1). The expected life of the ESPP grants represents the calendar quarters from the grant date (January 1) to the purchase date (end of each quarter).

Restricted Stock Grants

The Company, from time to time, issues shares of restricted common stock to certain officers, directors, and key employees of the Company from its stock benefit plans. The restricted stock issued to officers and key employees vest in either 25% or 33¹/3% increments over four or three year terms, respectively. A summary of the status of unvested restricted stock awards as of December 31, 2011, and changes during 2011, is presented below (shares in thousands):


Unvested stock awards	Shares			Weighted Average Grant Date Fair Value
Unvested at January 1, 2011		660		$	4.29
Awards		280			5.68
Vestings		(344	)		4.33
Cancellations		(105	)		4.84

Unvested at December 31, 2011		491		$	5.38

Related to the vesting of restricted stock awards previously awarded to our officers, employees and directors, the Company recorded compensation expense, included in general, administrative and other expenses, totaling $1.0 million for the year ended December 31, 2009, $1.3 million for the year ended December 31, 2010, and $1.9 million for the year ended December 31, 2011.

As of December 31, 2011, the Company had $1.5 million of total unrecognized compensation costs related to unvested restricted stock awards, which are expected to be recognized over a weighted average period of approximately 1.6 years.

Director Compensation Plans

The Company’s Director Compensation Plan entitles the directors to be compensated in the form of quarterly retainers for service as a director, annual retainers for committee chair positions and fees for attending meetings. Effective March 22, 2010, and subsequently revised on July 14, 2010, the Board of Directors approved a new Director Compensation Policy in which the directors no longer have an option to elect to receive all or a portion of their fees in stock. Consequently, all retainers and meeting fees after March 22, 2010 have been paid in cash. Also, in accordance with this new policy, each independent director is entitled to a fully vested annual equity retainer equal to $40,000 of the Company’s common stock. On May 18, 2011, the Company issued 6,802 shares of common stock to each of the three independent directors for such retainer. One new director joined the Board of Directors during the second quarter of 2011, at which time he was granted 17,006 shares valued at $100,000. A second new director joined the Board of Directors during the third quarter of 2011, at which time he was granted 19,193 shares valued at $100,000. For both new directors, one-half of those shares vested immediately; the remainder vest over two years. On March 5, 2012, the Board of Directors approved a new Director Compensation Policy which increased certain fees and retainers.

Cash Dividends

On May 17, 2011, our Board of Directors approved the initiation of a quarterly cash dividend policy for our common stock. The Board declared three quarterly dividends of $0.025 per share, totaling approximately $1.4 million which were paid on June 1, 2011, September 1, 2011 and December 1, 2011 respectively, to record holders of our common stock as of May 17, 2011, August 12, 2011 and November 14, 2011 respectively. The Company has a dividend reinvestment program so that stockholders may elect to reinvest their dividends into additional shares of the Company’s common stock.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph d

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

+ Details

Share Repurchase Program

12 Months Ended

Dec. 31, 2011

Stockholders' Equity, Share Repurchase program and Preferred Stock [Abstract]

SHARE REPURCHASE PROGRAM

17. SHARE REPURCHASE PROGRAM

During November 2011, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $5 million of the Company’s common stock. The repurchases are executed in the open market and through privately negotiated transactions subject to market conditions, normal trading restrictions and other relevant factors. During 2011, the Company repurchased 126,952 shares of common stock at an aggregate cost of $736,456 and an average cost per share of $5.82. The repurchased shares are held as treasury stock.

Preferred Stock

12 Months Ended

Dec. 31, 2011

Stockholders' Equity, Share Repurchase program and Preferred Stock [Abstract]

PREFERRED STOCK

18. PREFERRED STOCK

The Company has 40,000,000 authorized shares of preferred stock. The Company has issued 20,000 shares of mandatorily redeemable convertible preferred stock to a key employee in exchange for certain intellectual property rights. The preferred stock has a liquidation value of $10 per share and is convertible at any time prior to February 22, 2013 into the Company’s common stock on a one-for-one basis. If not converted into the Company’s common stock, the preferred stock is subject to mandatory redemption on February 22, 2013. Dividends accrue on a cumulative basis at the rate of 7% per year, payable quarterly.

Related Party Transactions

12 Months Ended

Dec. 31, 2011

RELATED PARTY TRANSACTIONS

19. RELATED PARTY TRANSACTIONS

A member of the Company’s Board of Directors is a key member of management and Chief Investment Officer of an otherwise unrelated company that holds $7.3 million of the Company’s Senior Notes for investment purposes.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

+ Details

Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

EARNINGS PER SHARE

20. EARNINGS PER SHARE

Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and included in the computation of both basic and diluted earnings per share. Our grants of restricted stock awards to our employees and directors are considered participating securities and we have prepared our earnings per share calculations to include outstanding unvested restricted stock awards in the basic and diluted weighted average shares outstanding calculation.

The following table sets forth the computation of the basic and diluted earnings per share for the years ended December 31, 2009, 2010 and 2011:


	Year Ended December 31,
	2009			2010			2011
	(in thousands, except per share data)
Net income	$	6,780		$	7,777		$	6,665
Net income allocated to non-vested share awards		268			302			313
Preferred stock dividend		(14	)		(14	)		(14	)

Undistributed earnings available to common stockholders	$	7,034		$	8,065		$	6,964

Weighted average number of common shares outstanding for basic EPS computation		17,573			17,635			18,359
Effect of dilutive securities:
Stock options		176			303			38

Weighted average number of common and common equivalent shares outstanding for diluted EPS computation		17,749			17,938			18,397

Basic earnings per common share:
Undistributed earnings	$	0.39		$	0.44		$	0.36
Allocation of earnings to non-vested share awards		0.01			0.02			0.02

Total	$	0.40		$	0.46		$	0.38

Diluted earnings per common share:
Undistributed earnings	$	0.39		$	0.43		$	0.36
Allocation of earnings to non-vested share awards		0.01			0.02			0.02

Total	$	0.40		$	0.45		$	0.38

Options to purchase 0.2 million shares were not included in the computation of diluted earnings per share for the year ended December 31, 2009, because the effect would be antidilutive as the exercise prices exceeded the average market price of the common shares.

Options to purchase 0.7 million shares were not included in the computation of diluted earnings per share for the year ended December 31, 2010, because the effect would be antidilutive as the exercise prices exceeded the average market price of the common shares.

Options to purchase 0.5 million shares were not included in the computation of diluted earnings per share for the year ended December 31, 2011, because the effect would be antidilutive as the exercise prices exceeded the average market price of the common shares.

Major Segments of Business

12 Months Ended

Dec. 31, 2011

Major Segments of Business [Abstract]

MAJOR SEGMENTS OF BUSINESS

21. MAJOR SEGMENTS OF BUSINESS

Carriage conducts funeral and cemetery operations only in the United States. The following table presents external revenues from continuing operations, net income (loss) from continuing operations, total assets, depreciation and amortization, capital expenditures, number of operating locations, interest expense, and income tax expense (benefit) from continuing operations by segment:


	Funeral		Cemetery		Corporate			Consolidated
	(in thousands, except number of operating locations)
External revenues from continuing operations:
2011	$	145,222	$	45,414	$	—		$	190,636
2010		138,125		46,822		—			184,947
2009		131,051		46,576		—			177,627
Income (loss) from continuing operations before income taxes:
2011	$	42,134	$	10,170	$	(40,166	)	$	12,138
2010		37,940		9,506		(33,999	)		13,447
2009		38,040		7,575		(33,770	)		11,845
Total assets:
2011	$	423,714	$	226,177	$	22,886		$	672,777
2010		409,329		242,461		19,222			671,012
2009		370,058		223,743		25,497			619,298
Long-lived assets:
2011	$	305,540	$	91,430	$	7,185		$	404,155
2010		286,868		90,611		7,183			384,662
2009		267,233		90,304		7,797			365,334
Depreciation and amortization:
2011	$	5,746	$	2,853	$	1,014		$	9,613
2010		5,362		3,259		1,355			9,976
2009		5,531		3,217		1,591			10,339
Capital expenditures:
2011	$	5,958	$	3,673	$	1,013		$	10,644
2010		6,467		3,448		746			10,661
2009		3,422		4,875		1,073			9,370
Number of operating locations at year end:
2011		159		33		—			192
2010		147		33		—			180
2009		138		32		—			170
Interest expense
2011	$	343	$	66	$	17,896		$	18,305
2010		312		76		17,874			18,262
2009		410		92		17,996			18,498
Income tax expense (benefit) from continuing operations:
2011	$	16,227	$	3,710	$	(14,777	)	$	5,160
2010		14,345		3,449		(12,426	)		5,368
2009		26,374		4,731		(26,308	)		4,797

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

+ Details

Supplemental Disclosure of Statement of Operations Information

12 Months Ended

Dec. 31, 2011

Supplemental Disclosure of Statement of Operations Information [Abstract]

SUPPLEMENTAL DISCLOSURE OF STATEMENT OF OPERATIONS INFORMATION

22. SUPPLEMENTAL DISCLOSURE OF STATEMENT OF OPERATIONS INFORMATION


	Year Ended December 31,
	2009		2010		2011
	(in thousands)
Revenues
Goods
Funeral	$	54,171	$	55,386	$	57,467
Cemetery		32,950		30,909		29,063

Total goods	$	87,121	$	86,295	$	86,530

Services
Funeral	$	70,945	$	74,357	$	79,519
Cemetery		9,347		9,541		9,918

Total services	$	80,292	$	83,898	$	89,437

Financial revenue
Preneed funeral commission income	$	2,024	$	2,265	$	1,811
Preneed funeral trust earnings		3,911		6,117		6,425
Cemetery trust earnings		2,747		4,815		5,073
Cemetery finance charges		1,532		1,557		1,360

Total financial revenue	$	10,214	$	14,754	$	14,669

Total revenues	$	177,627	$	184,947	$	190,636

Cost of revenues
Goods
Funeral	$	45,207	$	47,700	$	47,799
Cemetery		26,523		24,729		22,650

Total goods	$	71,730	$	72,429	$	70,449
Services
Funeral	$	36,125	$	40,885	$	42,098
Cemetery		6,461		6,674		6,784

Total services	$	42,586	$	47,559	$	48,882
Financial expenses
Preneed funeral commissions	$	1,737	$	1,389	$	1,377

Total financial expenses	$	1,737	$	1,389	$	1,377

Total cost of revenues	$	116,053	$	121,377	$	120,708

The costs of revenues, for purposes of this supplemental disclosure, include only field costs and expenses that are directly allocable between the goods, services and financial categories in the funeral and cemetery segments. Depreciation and amortization and regional and unallocated funeral and cemetery costs are not included in this disclosure.

Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Data (Unaudited) [Abstract]

QUARTERLY FINANCIAL DATA (UNAUDITED)

23. QUARTERLY FINANCIAL DATA (UNAUDITED)

The tables below set forth consolidated operating results by fiscal quarter for the years ended December 31, 2010 and 2011, in thousands, except earnings per share.


	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
2011
Revenues	$	50,858		$	47,907		$	44,078		$	47,793
Gross profit		15,050			13,546			10,645			13,063

Net income	$	3,286		$	2,601		$	793		$	298
Preferred stock dividend		(4	)		(3	)		(5	)		(2	)

Net income available to common shareholders	$	3,282		$	2,598		$	788		$	296

Basic earnings per common share:	$	0.18		$	0.14		$	0.04		$	0.02
Diluted earnings per common share:	$	0.18		$	0.14		$	0.04		$	0.02

2010
Revenues	$	46,847		$	44,517		$	45,485		$	48,098
Gross profit		13,517			12,032			10,059			11,838

Net income	$	2,774		$	2,299		$	859		$	2,147
Preferred stock dividend		(3	)		(4	)		(3	)		(4	)

Net income available to common shareholders	$	2,771		$	2,295		$	856		$	2,143

Basic earnings per common share:	$	0.16		$	0.13		$	0.05		$	0.12
Diluted earnings per common share^(a):	$	0.16		$	0.13		$	0.05		$	0.12

(a)	Earnings per share are computed independently for each of the quarters presented. Therefore, the sum of the quarterly per share amounts does not equal the total computed for the year 2010 due to rounding and stock transactions which occurred during the period.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

Supplemental Disclosure of Cash Flow Information

12 Months Ended

Dec. 31, 2011

Supplemental Disclosure of Cash Flow Information [Abstract]

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

The following information is supplemental disclosure for the Consolidated Statements of Cash Flows (in thousands):


	Year Ended December 31,
	2009			2010			2011
Cash paid for interest and financing costs	$	17,887		$	17,818		$	17,690
Cash paid for taxes		126			393			743
Fair value of stock issued to directors, officers, and certain other employees		1,123			1,129			1,591
Restricted common stock withheld for payroll taxes		128			131			415
Net (deposits) withdrawals in preneed funeral trusts		(222	)		148			(1,383	)
Net (deposits) withdrawals in preneed cemetery trusts		(2,879	)		(1,848	)		11,031
Net (deposits) withdrawals in perpetual care trusts		(1,552	)		674			1,521
Net (increase) decrease in preneed funeral receivables		(340	)		376			317
Net (increase) decrease in preneed cemetery receivables		(2,423	)		(696	)		1,548
Net withdrawals (deposits) of receivables from preneed funeral trusts		916			(343	)		(251	)
Net change in preneed funeral receivables increasing (decreasing)deferred revenue		(304	)		(872	)		1,034
Net change in preneed cemetery receivables increasing (decreasing) deferred revenue		(480	)		1,040			9,282
Net deposits (withdrawals) into (from) preneed funeral trust accounts increasing (decreasing) deferred preneed funeral receipts		222			(148	)		1,383
Net deposits (withdrawals) into (from) preneed cemetery trust accounts increasing (decreasing) deferred cemetery receipts		2,879			1,848			(11,031	)
Net deposits (withdrawals) into (from) perpetual care trust accounts increasing (decreasing) care trusts’ corpus		1,577			(488	)		(1,833	)

Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

25. SUBSEQUENT EVENTS

On February 21, 2012, the Company acquired a funeral home business in Pennsylvania for $4.7 million. In the acquisition, the Company acquired substantially all the assets and assumed certain operating liabilities, including obligations associated with existing preneed contracts.

Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2011

Valuation and Qualifying Accounts [Abstract]

VALUATION AND QUALIFYING ACCOUNTS

CARRIAGE SERVICES, INC.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

(in thousands)


Description	Balance at beginning of year		Charged to costs and expenses		Deduction		Balance at end of year
Year ended December 31, 2009:
Allowance for bad debts, current portion	$	833	$	3,617	$	3,699	$	751
Allowance for preneed bad debts, contract cancellations and receivables from preneed funeral trusts, noncurrent portion	$	847	$	2,744	$	2,433	$	1,160
Employee severance accruals	$	137	$	37	$	174	$	—
Litigation reserves	$	4,973	$	—	$	3,914	$	1,059

Year ended December 31, 2010:
Allowance for bad debts, current portion	$	751	$	3,942	$	3,714	$	979
Allowance for preneed bad debts, contract cancellations and receivables from preneed funeral trusts, noncurrent portion	$	1,160	$	2,648	$	2,570	$	1,236
Employee severance accruals	$	—	$	237	$	—	$	237
Litigation reserves	$	1,059	$	—	$	6	$	1,053

Year ended December 31, 2011:
Allowance for bad debts, current portion	$	979	$	1,226	$	1,277	$	928
Allowance for receivables from preneed funeral and cemetery trusts and contract cancellations, noncurrent portion	$	1,236	$	2,335	$	1,843	$	1,728
Employee severance accruals	$	237	$	1,935	$	2,015	$	157
Litigation reserves	$	1,053	$	—	$	27	$	1,026