Investments

9 Months Ended

Sep. 27, 2025

(8)	Investments

Investments include primarily investment-grade corporate bonds, asset-backed securities, commercial paper 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

non-credit-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, commercial paper and direct obligations of government agencies. Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $

922,000

and $

3,573,000

at September 27, 2025 and December 28, 2024, respectively.

The amortized cost and fair values of

available-for-sale

investments are as follows at September 27, 2025 and December 28, 2024 (in thousands):


			Gross		Gross
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
September 27, 2025
Money market investments	$	5,998	$	—	$	—	$	5,998
Asset-backed securities		21,686		57		1,240		20,503
Corporate bonds, commercial paper and direct obligations of government agencies		103,735		993		739		103,989
U.S. Treasury obligations		14,869		7		—		14,876

Total	$	146,288	$	1,057	$	1,979	$	145,366

December 28, 2024
Money market investments	$	13,473	$	—	$	—	$	13,473
Asset-backed securities		26,785		25		1,770		25,040
Corporate bonds, commercial paper and direct obligations of government agencies		107,180		198		2,026		105,352

Total	$	147,438	$	223	$	3,796	$	143,865

For those

available-for-sale

investments with unrealized losses at September 27, 2025 and December 28, 2024, 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
September 27, 2025
Asset-backed securities	$	4,537	$	411	$	9,400	$	829	$	13,937	$	1,240
Corporate bonds, commercial paper, and direct obligations of government agencies		16,299		130		17,003		609		33,302		739

Total	$	20,836	$	541	$	26,403	$	1,438	$	47,239	$	1,979

December 28, 2024
Asset-backed securities	$	9,663	$	37	$	12,596	$	1,733	$	22,259	$	1,770
Corporate bonds, commercial paper, and direct obligations of government agencies		18,409		169		59,609		1,857		78,018		2,026

Total	$	28,072	$	206	$	72,205	$	3,590	$	100,277	$	3,796

The Company believes unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality. The Company expects to recover, through collection

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.

LANDSTAR SYSTEM INC 10-Q