8. Marketable Securities

The FASB ASC topic entitled Fair Value Measurements and Disclosures defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The accounting guidance classifies the inputs used to measure fair value into the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liability

Level 2	Observable inputs for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3	Unobservable inputs for the asset or liability

The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The valuation methods used by the Company for each significant class of investments are summarized below.

Mortgage-backed securities, corporate bonds and obligations of states and political subdivisions – Valued based on prices obtained from an independent pricing vendor using both market and income approaches. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, and credit spreads.

Common stocks – Valued at the closing price reported on the active market on which the individual securities are traded.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Available for sale securities measured at estimated fair value on a recurring basis are summarized below:

	Fair Value Measurements as of September 28, 2013
Description	Total		Level 1		Level 2		Level 3

Mortgage-backed securities	$	518,840	$	-	$	518,840	$	-
Obligations of states and political subdivisions		690,615		-		690,615		-
Corporate bonds		420,345		-		420,345		-
Common stocks		27,435		27,435		-		-
Other		71,162		-		71,162		-
Total	$	1,728,397	$	27,435	$	1,700,962	$	-

	Fair Value Measurements as
	of December 29, 2012
Description	Total		Level 1		Level 2		Level 3

Mortgage-backed securities	$	650,895	$	-	$	650,895	$	-
Obligations of states and political subdivisions		499,857		-		499,857		-
Corporate bonds		399,941		-		399,941		-
Common stocks		22,982		22,982		-		-
Other		67,720		-		67,720		-
Total	$	1,641,395	$	22,982	$	1,618,413	$	-

The following is a summary of the Company’s marketable securities classified as available-for-sale securities at September 28, 2013:

									Estimated Fair
					Gross		Other Than		Value (Net
			Gross Unrealized		Unrealized		Temporary		Carrying
	Amortized Cost		Gains		Losses		Impairment		Amount)
Mortgage-backed securities	$	534,722	$	4,386	$	(20,268)	$	-	$	518,840
Obligations of states and political subdivisions		711,989		1,649		(23,023)		-		690,615
U.S. corporate bonds		424,439		1,658		(4,478)		(1,274)		420,345
Common stocks		23,795		3,975		(335)		-		27,435
Other		67,914		3,335		(87)		-		71,162
Total	$	1,762,859	$	15,003	$	(48,191)	$	(1,274)	$	1,728,397

In the first three quarters of 2013, Garmin experienced unrealized, non-cash losses on its investment portfolio resulting in a balance of $48,191 of gross unrealized losses on marketable securities at September 28, 2013. The amortized cost and estimated fair value of the securities at an unrealized loss position at September 28, 2013 were $1,165,053 and $1,116,862, respectively. This decrease in estimated fair value is primarily due to market valuations on mortgage-backed securities and obligations of states and political subdivisions declining. The decline was due to increases in the 10 Year Treasury Bond Yield during the second and third quarters, which caused market valuations of certain securities in our investment portfolios to decline. Approximately 47% of the securities in our portfolio were at an unrealized loss position at September 28, 2013. We have the ability to hold these securities until maturity or their value is recovered. We do not consider these unrealized losses to be other than temporary and no impairment has been recorded in the accompanying condensed consolidated statement of income.

The following is a summary of the Company’s marketable securities classified as available-for-sale securities at December 29, 2012:

									Estimated Fair
					Gross		Other Than		Value (Net
			Gross Unrealized		Unrealized		Temporary		Carrying
	Amortized Cost		Gains		Losses		Impairment		Amount)
Mortgage-backed securities	$	644,388	$	8,894	$	(2,387)	$	-	$	650,895
Obligations of states and political subdivisions		499,241		2,345		(1,729)		-		499,857
U.S. corporate bonds		400,310		3,138		(2,233)		(1,274)		399,941
Common stocks		21,113		2,392		(523)		-		22,982
Other		67,181		551		(12)		-		67,720
Total	$	1,632,233	$	17,320	$	(6,884)	$	(1,274)	$	1,641,395

The cost of securities sold is based on the specific identification method.

The amortized cost and estimated fair value of marketable securities at September 28, 2013, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

	Cost		Estimated Fair Value
Due in one year or less	$	136,835	$	134,253
Due after one year through five years		688,846		686,299
Due after five years through ten years		257,244		249,112
Due after ten years		621,050		592,932
Other (No contractual maturity dates)		58,884		65,801
	$	1,762,859	$	1,728,397