Marketable Securities

9 Months Ended

Sep. 28, 2024

Marketable Securities.

Marketable Securities

(3) Marketable Securities

The Company’s marketable securities are all classified as available-for-sale within “Current Assets” in the Company’s Condensed Consolidated Balance Sheets. The 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. Unrealized gains and losses on debt securities are recognized in “Accumulated other comprehensive income (loss)” on the Company’s Condensed Consolidated Balance Sheets. 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 Condensed Consolidated Statements of Income. The Company recognized an investment gain of $6.2 million in the thirteen weeks ended September 28, 2024, which included an unrealized gain in equity securities of $653 thousand. In the thirteen weeks ended September 30, 2023, the Company recognized investment income of $2.2 million, which included an unrealized loss in equity securities of $437 thousand. In the thirty-nine weeks ended September 28, 2024, the Company recognized investment income of $14.1 million, which included an unrealized gain in equity securities of $1.0 million. In the thirty-nine weeks ended September 30, 2023, the Company recognized investment income of $6.3 million, which included an unrealized loss in equity securities of $815 thousand.

Marketable securities, as of September 28, 2024 and December 30, 2023, consisted of:

			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
September 28, 2024	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	5,948
Level 2
Corporate and municipal bonds	$	180,308	$	4,214	$	(5,627)		178,895
Commercial Paper		46,035		557		—		46,592
Total	$	226,343	$	4,771	$	(5,627)	$	231,435

			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
December 30, 2023	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	4,910
Level 2
Corporate and municipal bonds	$	177,972	$	3,853	$	(6,553)		175,272
Commercial paper		44,732		1,076		—		45,808
Total	$	222,704	$	4,929	$	(6,553)	$	225,991

Maturities of marketable securities classified as available-for-sale at September 28, 2024, were as follows:

	Amortized		Fair
(amounts in thousands)	Cost		Value
Available-for-sale:
Due within one year	$	110,075	$	111,033
Due after one year through five years		58,115		56,527
Due after five years through ten years		13,650		12,953
Due after ten years		44,503		44,974
Total	$	226,343	$	225,487

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 Condensed 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 Condensed Consolidated Statements of Income. The Company recognized investment income of $1.6 million and investment loss of $774 thousand in the thirteen weeks ended September 28, 2024 and September 30, 2023, respectively. The Company recognized investment income of $3.4 million and $1.4 million in the thirty-nine weeks ended September 28, 2024 and September 30, 2023, respectively. The changes in the underlying liability to the associates are recorded in “Other income (expense).”