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Investments | 3 Months Ended
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Mar. 28, 2020
Investments |
(8) | Investments
Investments include primarily investment-grade corporate bonds and U.S. Treasury obligations having maturities of up to five years (the “bond portfolio”) and money market investments. Investments in the bond portfolio are reported as available-for-sale and are carried at fair value. Investments maturing less than one year from the balance sheet date are included in short-term investments and investments maturing more than one year from the balance sheet date are included in other assets in the consolidated balance sheets. Management performs an analysis of the nature of the unrealized losses on available-for-sale investments to determine whether an allowance for credit loss is necessary. Unrealized losses, representing the excess of the purchase price of an investment over its fair value as of the end of a period, considered to be a result of credit-related factors, are to be included as a charge in the statement of income, while unrealized losses considered to be a result of noncredit-related factors are to be included as a component of shareholders’ equity. Investments whose values are based on quoted market prices in active markets are classified within Level 1. Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, are classified within Level 2. As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Any transfers between levels are recognized as of the beginning of any reporting period. Fair value of the bond portfolio was determined using Level 1 inputs related to U.S. Treasury obligations and money market investments and Level 2 inputs related to investment-grade corporate bonds, asset-backed securities and direct obligations of government agencies. Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $584,000 at March 28, 2020, while unrealized gains, net of unrealized losses, on the investments in the bond portfolio were $1,427,000 at December 28, 2019, respectively. The amortized cost and fair values of available-for-sale investments are as follows at March 28, 2020 and December 28, 2019 (in thousands):
|  |  |  |  | Gross |  |  | Gross |  |  |  |
Amortized Cost |  |  | Unrealized Gains |  |  | Unrealized Losses |  |  | Fair Value |
March 28, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market investments |  | $ | 15,815 |  |  | $ | — |  |  | $ | — |  |  | $ | 15,815 |
Asset-backed securities |  |  | 571 |  |  |  | — |  |  |  | 48 |  |  |  | 523 |
Corporate bonds and direct obligations of government agencies |  |  | 98,287 |  |  |  | 1,038 |  |  |  | 1,710 |  |  |  | 97,615 |
U.S. Treasury obligations |  |  | 2,336 |  |  |  | 136 |  |  |  | — |  |  |  | 2,472 |
Total |  | $ | 117,009 |  |  | $ | 1,174 |  |  | $ | 1,758 |  |  | $ | 116,425 |
December 28, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market investments |  | $ | 15,691 |  |  | $ | — |  |  | $ | — |  |  | $ | 15,691 |
Asset-backed securities |  |  | 572 |  |  |  | — |  |  |  | 1 |  |  |  | 571 |
Corporate bonds and direct obligations of government agencies |  |  | 97,583 |  |  |  | 1,465 |  |  |  | 44 |  |  |  | 99,004 |
U.S. Treasury obligations |  |  | 2,335 |  |  |  | 12 |  |  |  | 5 |  |  |  | 2,342 |
Total |  | $ | 116,181 |  |  | $ | 1,477 |  |  | $ | 50 |  |  | $ | 117,608 |
For those available-for-sale investments with unrealized losses at March 28, 2020 and December 28, 2019, the following table summarizes the duration of the unrealized loss (in thousands):
|  | Less than 12 months |  |  | 12 months or longer |  |  | Total |
|  | Fair Value |  |  | Unrealized Loss |  |  | Fair Value |  |  | Unrealized Loss |  |  | Fair Value |  |  | Unrealized Loss |
March 28, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities |  | $ | 523 |  |  | $ | 48 |  |  | $ | — |  |  | $ | — |  |  | $ | 523 |  |  | $ | 48 |
Corporate bonds and direct obligations of government agencies |  |  | 49,348 |  |  |  | 1,710 |  |  |  | — |  |  |  | — |  |  |  | 49,348 |  |  |  | 1,710 |
Total |  | $ | 49,871 |  |  | $ | 1,758 |  |  | $ | — |  |  | $ | — |  |  | $ | 49,871 |  |  | $ | 1,758 |
December 28, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities |  | $ | 571 |  |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 571 |  |  | $ | 1 |
Corporate bonds and direct obligations of government agencies |  |  | 8,728 |  |  |  | 41 |  |  |  | 4,260 |  |  |  | 3 |  |  |  | 12,988 |  |  |  | 44 |
U.S. Treasury obligations |  |  | 1,226 |  |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 1,226 |  |  |  | 5 |
Total |  | $ | 10,525 |  |  | $ | 47 |  |  | $ | 4,260 |  |  | $ | 3 |  |  | $ | 14,785 |  |  | $ | 50 |
The Company believes that unrealized losses on investments were primarily due to the widening of credit spreads in the fixed income market related to the coronavirus (“COVID-19”) worldwide pandemic. The Company expects to recover, through collection of all of the contractual cash flows of each security, the amortized cost basis of these securities as it does not intend to sell, and does not anticipate being required to sell, these securities before recovery of the cost basis. For these reasons, no losses have been recognized in the Company’s consolidated statements of income.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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