Note E – Marketable Debt Securities

The Company holds marketable debt securities in its wholly-owned insurance captive subsidiary. These 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:

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The contractual maturities of the Company’s available for sale marketable debt securities are as follows:

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The Company held 65 securities that were in an unrealized loss position of approximately $0.9 million at May 10, 2025, and 45 securities in an unrealized loss position of approximately $0.7 million at August 31, 2024. 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 10, 2025, and the comparable prior year period.

Included above in total available-for-sale marketable debt securities are $114.5 million and $111.5 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 10, 2025, and August 31, 2024, respectively.