What is the purpose of The Standardx holding marketable securities?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
We hold marketable securities with readily determinable fair values to fund certain operating programs and for investment purposes. We periodically transfer available cash and cash equivalents to purchase marketable securities for investment purposes.
Marketable Securities Held to Fund Operating Programs—Marketable securities held to fund operating programs, which are recorded at fair value on our condensed consolidated balance sheets, were as follows:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Loyalty program (Note 8) | $ 669 | $ 642 |
| Deferred compensation plans held in rabbi trusts (Note 8 and Note 10) | 523 | 548 |
| Captive insurance company (Note 8) | 162 | 86 |
| Total marketable securities held to fund operating programs | $ 1,354 | $ 1,276 |
| Less: current portion of marketable securities held to fund operating programs included in | (147) | (55) |
| cash and cash equivalents and short-term investments | ||
| Marketable securities held to fund operating programs included in other assets | $ 1,207 | $ 1,221 |
At March 31, 2025 and December 31, 2024, marketable securities held to fund operating programs included:
- $555 million and $473 million, respectively, of available-for-sale ("AFS") debt securities with contractual maturity dates ranging from 2025 through 2069. The amortized cost of our AFS debt securities approximates fair value;
- $25 million, in both periods, of time deposits classified as held-to-maturity ("HTM") debt securities with a contractual maturity date in 2025. The amortized cost of our time deposits approximates fair value;
- $17 million, in both periods, of equity securities with a readily determinable fair value.
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the company holds marketable securities for two primary purposes: to fund certain operating programs and for investment purposes. The FDD states that The Standardx periodically transfers available cash and cash equivalents to purchase marketable securities for investment purposes. These securities are recorded at fair value on the company's consolidated balance sheets.
The marketable securities held to fund operating programs included $473 million and $330 million, respectively, of AFS debt securities with contractual maturity dates ranging from 2025 through 2069 as of December 31, 2024, and December 31, 2023. Additionally, there were $25 million in both periods of time deposits classified as HTM debt securities with a contractual maturity date in 2025, and $17 million and $15 million, respectively, of equity securities with a readily determinable fair value.
For investment purposes, The Standardx held $1,133 million in total marketable securities as of December 31, 2024, compared to $400 million as of December 31, 2023. These securities include interest-bearing money market funds, common shares in Playa N.V., and time deposits. The amounts exclude the current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments, which were ($975) million and ($294) million, respectively. The remaining marketable securities held for investment purposes are included in other assets, totaling $158 million and $106 million for the same periods.