Marketable Securities

6 Months Ended

Jun. 25, 2022

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

(3) Marketable Securities

The Company’s marketable securities are all classified as available-for-sale within “Current Assets” in the Company’s Consolidated Balance Sheets. FASB has established three levels of inputs that may be used to measure fair value:

Level 1Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and

Level 3Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company’s marketable securities valued using Level 1 inputs include highly liquid equity securities, for which quoted market prices are available. The Company’s bond and commercial paper portfolio is valued using a combination of pricing for similar securities, recently executed transactions, cash flow models with yield curves and other pricing models utilizing observable inputs, which are considered Level 2 inputs.

For Level 2 investment valuation, the Company utilizes standard pricing procedures of its investment advisory firm which includes various third-party pricing services. These procedures also require specific price monitoring practices as well as pricing review reports, valuation oversight and pricing challenge procedures to maintain the most accurate representation of investment fair market value.

The Company accrues interest on its bond and commercial paper portfolio throughout the life of each bond and commercial paper held. Dividends from the equity securities are recognized as received. Interest, dividends and unrealized gains and losses on equity securities are recognized in “Investment income (loss) and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment income of $1.1 million in the thirteen weeks ended June 25, 2022, which included an unrealized gain in equity securities of $70 thousand. In the thirteen weeks ended June 26, 2021, the Company recognized investment income of $318 thousand, which included an unrealized loss in equity securities of $320 thousand. In the twenty-six weeks ended June 25, 2022, the Company recognized investment income of $1.7 million, which included an unrealized loss in equity securities of $145 thousand. In the twenty-six weeks ended June 26, 2021, the Company recognized investment losses of $1.2 million, which included unrealized losses in equity securities of $82 thousand.

Marketable securities, as of June 25, 2022 and December 25, 2021, consisted of:

			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
June 25, 2022	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	6,365
Level 2
Corporate and municipal bonds	$	148,793	$	1,562	$	(9,093)		141,262
Commercial Paper		81,821		12		(68)		81,765
	$	230,614	$	1,574	$	(9,161)	$	229,392

			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
December 25, 2021	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	6,509
Level 2
Corporate and municipal bonds	$	151,947	$	4,753	$	(2,384)		154,315
Commercial Paper		44,931		2		(13)		44,920
	$	196,878	$	4,755	$	(2,397)	$	205,744

Maturities of marketable securities classified as available-for-sale at June 25, 2022, were as follows:

	Amortized		Fair
(amounts in thousands)	Cost		Value
Available-for-sale:
Due within one year	$	103,326	$	102,778
Due after one year through five years		79,661		76,970
Due after five years through ten years		47,627		43,279
	$	230,614	$	223,027

SERP Investments

The Company also maintains a non-qualified supplemental executive retirement plan for certain of its associates which allows them to defer income to future periods. Participants in the plans earn a return on their deferrals based on mutual fund investments. The Company chooses to invest in the underlying mutual fund investments to offset the liability associated with the non-qualified deferred compensation plans. Such investments are reported on the Company’s Consolidated Balance Sheets as “SERP investment,” are classified as trading securities and are measured at fair value using Level 1 inputs with gains and losses included in “Investment income (loss) and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment loss of $2.1 million in the thirteen weeks ended June 25, 2022, and investment income of $1.8 million in the same period in 2021. The Company recognized investment loss of $3.6 million and investment income of $2.6 million in the twenty-six weeks ended June 25, 2022, and June 26, 2021, respectively. The changes in the underlying liability to the associates are recorded in “Other income (expense).”