Marketable Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

4. Marketable Securities

ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The accounting guidance classifies the inputs used to measure fair value into the following hierarchy:


Level 1	Unadjusted quoted prices in active markets for the identical asset or liability


Level 2	Observable inputs for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3	Unobservable inputs for the asset or liability

The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Valuation is based on prices obtained from an independent pricing vendor using both market and income approaches. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, and credit spreads.

The method described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Marketable securities classified as available-for-sale securities are summarized below:


		Available-For-Sale Securities as of December 31, 2022
	Fair Value Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Agency securities	Level 2	$	7,000	$	—	$	(786	)	$	6,214
Mortgage-backed securities	Level 2		45,373		—		(4,525	)		40,848
Corporate debt securities	Level 2		1,106,688		188		(77,802	)		1,029,074
Municipal securities	Level 2		326,058		3		(28,861	)		297,200
Other	Level 2		10,466		—		(2,154	)		8,312
Total		$	1,495,585	$	191	$	(114,128	)	$	1,381,648


		Available-For-Sale Securities as of December 25, 2021
	Fair Value Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Agency securities	Level 2	$	7,000	$	—	$	(110	)	$	6,890
Mortgage-backed securities	Level 2		149,692		257		(880	)		149,069
Corporate debt securities	Level 2		1,079,390		9,830		(11,827	)		1,077,393
Municipal securities	Level 2		356,037		1,870		(4,864	)		353,043
Other	Level 2		31,134		22		(873	)		30,283
Total		$	1,623,253	$	11,979	$	(18,554	)	$	1,616,678

The primary objectives of the Company’s investment policy are to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of low credit risk. The fair value of securities varies from period to period due to changes in interest rates, the performance of the underlying collateral, and the credit performance of the underlying issuer, among other factors.

Accrued interest receivable, which totaled $11,086 as of December 31, 2022, is excluded from both the fair value and amortized cost basis of available-for-sale securities and is included within prepaid expenses and other current assets on the Company’s consolidated balance sheets. The Company writes off impaired accrued interest on a timely basis, generally within 30 days of the due date, by reversing interest income. No accrued interest was written off during the 53-week period ended December 31, 2022.

The Company recognizes impairments relating to credit losses of available-for-sale securities through an allowance for credit losses and other income (expense) on the Company’s consolidated statements of income. Impairment not relating to credit losses is recorded in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. The cost of securities sold is based on the specific identification method. Approximately 98% of securities in our portfolio were at an unrealized loss position at December 31, 2022.

The following tables display additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of December 31, 2022 and December 25, 2021.


	As of December 31, 2022
	Less than 12 Consecutive Months					12 Consecutive Months or Longer					Total
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
Agency securities	$	—		$	—	$	(786	)	$	6,214	$	(786	)	$	6,214
Mortgage-backed securities		(1,900	)		23,229		(2,625	)		17,619		(4,525	)		40,848
Corporate debt securities		(26,680	)		508,956		(51,122	)		498,834		(77,802	)		1,007,790
Municipal securities		(2,136	)		69,017		(26,725	)		225,679		(28,861	)		294,696
Other		—			—		(2,154	)		8,067		(2,154	)		8,067
Total	$	(30,716	)	$	601,202	$	(83,412	)	$	756,413	$	(114,128	)	$	1,357,615


	As of December 25, 2021
	Less than 12 Consecutive Months					12 Consecutive Months or Longer					Total
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
Agency securities	$	(110	)	$	6,890	$	—		$	—	$	(110	)	$	6,890
Mortgage-backed securities		(148	)		18,909		(732	)		7,598		(880	)		26,507
Corporate debt securities		(9,466	)		499,084		(2,361	)		85,033		(11,827	)		584,117
Municipal securities		(4,247	)		226,009		(617	)		29,405		(4,864	)		255,414
Other		(467	)		17,845		(406	)		7,205		(873	)		25,050
Total	$	(14,438	)	$	768,737	$	(4,116	)	$	129,241	$	(18,554	)	$	897,978

As of December 31, 2022 and December 25, 2021, the Company had not recognized an allowance for credit losses on any securities in an unrealized loss position.

The Company has not recorded an allowance for credit losses and charge to other income for the unrealized losses on agency, mortgage-backed, corporate debt, municipal, and other securities presented above because we do not consider the declines in fair value to have resulted from credit losses. We have not observed a significant deterioration in credit quality of these securities, which are highly rated with moderate to low credit risk. Declines in value are largely attributable to current global economic conditions. The securities continue to make timely principal and interest payments, and the fair values are expected to recover as they approach maturity. The Company does not intend to sell the securities, and it is not more likely than not that the Company will be required to sell the securities, before the respective recoveries of their amortized cost bases, which may be maturity.

The amortized cost and fair value of marketable securities at December 31, 2022, by maturity, are shown below.


	Amortized Cost		Fair Value
Due in one year or less	$	175,644	$	173,288
Due after one year through five years		1,303,653		1,194,280
Due after five years through ten years		14,041		12,382
Due after ten years		2,247		1,698
Total	$	1,495,585	$	1,381,648