Marketable Debt Securities

8 Months Ended

May 04, 2024

Marketable Debt Securities

Marketable Debt Securities

Note E – Marketable Debt Securities

Marketable debt securities are carried at fair value, with unrealized gains and losses, net of income taxes, recorded in Accumulated other comprehensive loss until realized, and any credit risk related losses are recognized in net income in the period incurred. The Company’s basis for determining the cost of a security sold is the Specific Identification Model.

The Company’s available-for-sale marketable debt securities consisted of the following:

	May 4, 2024
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	28,377	$	13	$	(270)	$	28,120
Government bonds		56,502		376		(1,048)		55,830
Mortgage-backed securities		2,771		—		(118)		2,653
Asset-backed securities and other		32,540		—		(83)		32,457
	$	120,190	$	389	$	(1,519)	$	119,060

	August 26, 2023
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	31,683	$	17	$	(504)	$	31,196
Government bonds		63,747		—		(1,440)		62,307
Mortgage-backed securities		3,215		—		(213)		3,002
Asset-backed securities and other		25,242		—		(234)		25,008
	$	123,887	$	17	$	(2,391)	$	121,513

The marketable debt securities held at May 4, 2024 had effective maturities ranging from less than one year to approximately eleven years. In evaluating whether a credit loss exists for the securities, the Company considers factors such as the severity of the loss position, the credit worthiness of the investee, the term to maturity and the intent and ability to hold the investments until maturity or until recovery of fair value. An allowance for credit losses was deemed unnecessary given consideration of the factors above. The Company did not realize any material gains or losses on its marketable debt securities during the thirty-six week period ended May 4, 2024 and the comparable prior year period.

Included above in total available-for-sale marketable debt securities are $108.7 million and $105.0 million of marketable debt securities transferred by the Company’s insurance captive to a trust account to secure its obligations to an insurance company related to future workers’ compensation and casualty losses as of May 4, 2024 and August 26, 2023, respectively.