Cash, Cash Equivalents, and Investments

3 Months Ended

Mar. 29, 2020

Cash and Cash Equivalents [Abstract]

Cash, cash equivalents, and investments consisted of the following (in thousands):



	March 29, 2020		December 31, 2019
Cash	$	225,207	$	155,498
Money market instruments	13,990		15,933
Cash and cash equivalents	239,197		171,431
Asset-backed securities	69,956		66,680
Corporate bonds	54,937		65,624
Treasury bills	19,763		92,914
Municipal bonds	6,980		4,630
Certificate of deposit	4,121		4,328
Sovereign bonds	3,487		6,294
Current investments	159,244		240,470
Treasury bills	190,693		216,334
Corporate bonds	177,869		146,474
Asset-backed securities	51,395		46,403
Sovereign bonds	21,083		16,005
Agency bonds	5,915		5,914
Municipal bonds	—		2,322
Non-current investments	446,955		433,452
	$	845,396	$	845,353

Asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; corporate bonds consist of debt securities issued by both domestic and foreign companies; treasury bills consist of debt securities issued by the U.S. government; municipal bonds consist of debt securities issued by state and local government entities; certificates of deposit are time deposits held by financial institutions with a fixed interest rate; sovereign bonds consist of direct debt issued by foreign governments; and agency bonds consist of domestic or foreign obligations of government agencies and government-sponsored enterprises that have government backing. All securities are denominated in U.S. Dollars and the certificate of deposit is denominated in Korean Won.

On January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, “Measurement of Credit Losses on Financial Instruments,” using the modified-retrospective approach, which requires the Company to apply the standard on a prospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the period in which the guidance is effective. The Company did not record an adjustment to retained earnings, as there were no debt securities with credit losses as of the adoption date.

The following table summarizes the Company’s available-for-sale investments as of March 29, 2020 (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Current:
Asset-backed securities	$	70,510	$	25	$	(579	)	$	69,956
Corporate bonds	55,404		20		(487		)	54,937
Treasury bills	19,328		435		—			19,763
Municipal bonds	6,944		36		—			6,980
Sovereign bonds	3,485		2		—			3,487
Non-current:
Treasury bills	187,794		2,899		—			190,693
Corporate bonds	183,646		117		(5,894		)	177,869
Asset-backed securities	52,405		55		(1,065		)	51,395
Sovereign bonds	20,944		147		(8		)	21,083
Agency bonds	5,930		—		(15		)	5,915
	$	606,390	$	3,736	$	(8,048	)	$	602,078

The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of March 29, 2020 (in thousands):



	Unrealized Loss Position For:
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	195,755	$	(6,337	)	$	1,146	$	(44	)	$	196,901	$	(6,381	)
Asset-backed securities	108,932		(1,640		)	674		(4		)	109,606		(1,644		)
Sovereign bonds	13,662		(8		)	—		—			13,662		(8		)
Agency bonds	3,123		(6		)	2,792		(9		)	5,915		(15		)
	$	321,472	$	(7,991	)	$	4,612	$	(57	)	$	326,084	$	(8,048	)

The Company recorded credit losses on debt securities totaling $160,000 during the three-month period ended March 29, 2020. No credit losses on debt securities were recorded during the three-month period ended March 31, 2019. Credit losses are included in "Other income (expense)" on the Consolidated Statement of Operations.

Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $2,268,000 and $2,874,000 as of March 29, 2020 and December 31, 2019, respectively.

In its evaluation to determine expected credit losses, management considered all available historical and current information, expectations of future economic conditions, the type of security, the credit rating of the security, and the size of the loss position, as well as other relevant information. The Company does not intend to sell, and is unlikely to be required to sell, any of these available-for-sale investments before their effective maturity or market price recovery.

The following table summarizes the allowance for credit losses activity for the three-month period ended March 29, 2020 (in thousands):



Balance as of December 31, 2019	$	—
Increases to the allowance for credit losses	160
Write-offs	—
Balance as of March 29, 2020	$	160

The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $1,865,000 and $15,000, respectively, during the three-month period ended March 29, 2020 and $64,000 and $24,000, respectively, during the three-month period ended March 31, 2019. These gains and losses are included in "Investment income" on the Consolidated Statements of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, are recorded in shareholders’ equity as accumulated other comprehensive loss.

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of March 29, 2020 (in thousands):



	<1 year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		Total
Corporate bonds	$	54,937	$	87,940	$	80,663	$	9,266	$	—	$	232,806
Treasury bills	19,763		101,648		89,045		—		—		210,456
Asset-backed securities	69,956		10,436		33,206		3,393		4,360		121,351
Sovereign bonds	3,487		21,083		—		—		—		24,570
Municipal bonds	6,980		—		—		—		—		6,980
Agency bonds	—		—		5,915		—		—		5,915
	$	155,123	$	221,107	$	208,829	$	12,659	$	4,360	$	602,078