Cash, Cash Equivalents, and Investments

6 Months Ended

Jun. 28, 2020

Cash and Cash Equivalents [Abstract]

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


	June 28, 2020		December 31, 2019
Cash	$	235,799	$	155,498

Money market instruments	50,222		15,933
Cash and cash equivalents	286,021		171,431
Asset-backed securities	50,311		66,680
Corporate bonds	42,248		65,624

Treasury bills	34,018		92,914
Sovereign bonds	14,869		6,294
Municipal bonds	1,638		4,630
Certificate of deposit	—		4,328


Current investments	143,084		240,470
Treasury bills	196,674		216,334
Corporate bonds	194,412		146,474
Asset-backed securities	41,299		46,403
Agency bonds	22,054		5,914
Sovereign bonds	12,648		16,005
Municipal bonds	—		2,322


Non-current investments	467,087		433,452
	$	896,192	$	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; sovereign bonds consist of direct debt issued by foreign governments; 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; 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, with the exception of the certificate of deposit held as of December 31, 2019 that was denominated in Korean Won.

Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $1,958,000 and $2,874,000 as of June 28, 2020 and December 31, 2019, respectively.

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 June 28, 2020 (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Current:
Asset-backed securities	$	49,899	$	412	$	—	$	50,311
Corporate bonds	42,065		221		(38)		42,248



Treasury bills	33,480		538		—		34,018
Sovereign bonds	14,787		82		—		14,869
Municipal bonds	1,643		—		(5)		1,638

Non-current:
Treasury bills	194,330		2,345		(1)		196,674
Corporate bonds	192,233		2,513		(334)		194,412
Asset-backed securities	40,817		484		(2)		41,299
Agency bonds	22,035		37		(18)		22,054
Sovereign bonds	12,533		115		—		12,648

	$	603,822	$	6,747	$	(398)	$	610,171

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 June 28, 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	$	49,525	$	(363)	$	1,181	$	(9)	$	50,706	$	(372)
Treasury bills	12,962		(1)		—		—		12,962		(1)
Asset-backed securities	5,749		(1)		260		(1)		6,009		(2)

Agency bonds	3,128		(2)		2,784		(16)		5,912		(18)
Municipal bonds	1,293		(5)		—		—		1,293		(5)


	$	72,657	$	(372)	$	4,225	$	(26)	$	76,882	$	(398)

The Company recorded gross credit losses and gross credit recoveries on debt securities totaling $0 and $85,000, respectively, for the three-month period ended June 28, 2020, and $160,000 and $85,000, respectively, for the six-month period ended June 28, 2020. No credit losses or recoveries on debt securities were recorded for the three-month or six-month periods ended June 30, 2019. Credit losses and recoveries are included in "Other income (expense)" on the Consolidated Statements of Operations.

The following table summarizes the allowance for credit losses activity for the six-month period ended June 28, 2020 (in thousands):


Balance as of December 31, 2019	$	—
Increases to the allowance for credit losses	160
Decreases to the allowance for credit losses	(85)
Write-offs	—

Balance as of June 28, 2020	$	75

The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $962,000 and $7,000, respectively, for the three-month period ended June 28, 2020, and $394,000 and $12,000, respectively, for the three-month period ended June 30, 2019. The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $2,826,000 and $21,000, respectively, for the six-month period ended June 28, 2020, and $458,000 and $36,000, respectively, for the six-month period ended June 30, 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 June 28, 2020 (in thousands):


	<1 year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		Total
Corporate bonds	$	42,248	$	81,987	$	102,034	$	10,391	$	—	$	236,660
Treasury bills	34,018		138,612		58,062		—		—		230,692
Asset-backed securities	50,311		13,750		23,308		—		4,241		91,610


Sovereign bonds	14,869		9,218		3,430		—		—		27,517
Agency bonds	—		—		22,054		—		—		22,054
Municipal bonds	1,638		—		—		—		—		1,638


	$	143,084	$	243,567	$	208,888	$	10,391	$	4,241	$	610,171