
(3)	Investments


(a)	Debt Securities

Following is a summary of debt securities as of June 29, 2019 and December 29, 2018:



	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Amounts are in thousands)
June 29, 2019
Tax exempt bonds	$	1,019,864		1,746		1,359	1,020,251
Taxable bonds	3,809,977			89,836		6,654	3,893,159
Restricted investments	169,681			8,885		—	178,566
	$	4,999,522		100,467		8,013	5,091,976
December 29, 2018
Tax exempt bonds	$	1,256,673		184		12,759	1,244,098
Taxable bonds	2,527,468			1,737		55,085	2,474,120
Restricted investment	160,318			520		346	160,492
	$	3,944,459		2,441		68,190	3,878,710

The Company maintains restricted investments primarily for the benefit of the Company’s insurance carrier related to self-insurance reserves. These investments are held as collateral and not used for claim payments.

The cost and fair value of debt securities by expected maturity as of June 29, 2019 and December 29, 2018 are as follows:



	June 29, 2019			December 29, 2018
	Cost		Fair Value	Cost	Fair Value
	(Amounts are in thousands)
Due in one year or less	$	444,036	443,636	563,272	560,992
Due after one year through five years	3,334,452		3,372,629	2,831,916	2,768,971
Due after five years through ten years	1,214,955		1,269,396	542,488	541,852
Due after ten years	6,079		6,315	6,783	6,895
	$	4,999,522	5,091,976	3,944,459	3,878,710

Following is a summary of temporarily impaired debt securities by the time period impaired as of June 29, 2019 and December 29, 2018:



	Less Than 12 Months				12 Months or Longer			Total
	Fair Value		Unrealized Losses		Fair Value	Unrealized Losses		Fair Value	Unrealized Losses
	(Amounts are in thousands)
June 29, 2019
Tax exempt bonds	$	—		—	702,766		1,359	702,766		1,359
Taxable bonds	31,196			136	997,595		6,518	1,028,791		6,654
	$	31,196		136	1,700,361		7,877	1,731,557		8,013
December 29, 2018
Tax exempt bonds	$	25,150		95	1,182,783		12,664	1,207,933		12,759
Taxable bonds	645,379			5,821	1,464,208		49,264	2,109,587		55,085
Restricted investment	28,687			346	—		—	28,687		346
	$	699,216		6,262	2,646,991		61,928	3,346,207		68,190

There are 208 debt securities contributing to the total unrealized losses of $8,013,000 as of June 29, 2019. Unrealized losses related to debt securities are primarily due to increases in interest rates impacting the market value of certain bonds. The Company continues to receive scheduled principal and interest payments on these debt securities.


(b)	Equity Securities

In 2018, the Company adopted the Accounting Standards Update (ASU) requiring equity securities be measured at fair value with net unrealized gains and losses from changes in the fair value recognized in earnings (fair value adjustment). The fair value of equity securities was $2,566,113,000 and $2,698,720,000 as of June 29, 2019 and December 29, 2018, respectively.

Prior to adoption of the ASU, equity securities were classified as available-for-sale and measured at fair value. Changes in fair value determined to be temporary were reported in other comprehensive earnings net of income taxes. Upon adoption of the ASU, the Company reclassified the cumulative effect of the net unrealized gain on equity securities net of income taxes as of December 31, 2017 of $198,310,000 from accumulated other comprehensive earnings to retained earnings. The fair value adjustment includes the cumulative effect of the ASU reclassified to retained earnings as of December 31, 2017.


(c)	Investment Income

In the following table, net realized gain on the sale of investments represents the difference between the cost and the proceeds from the sale of debt and equity securities. The net realized gain on the sale of investments excludes the net gain on the sale of equity securities previously recognized through the fair value adjustment, which is presented separately.

Following is a summary of investment income for the three and six months ended June 29, 2019 and June 30, 2018:



		Three Months Ended						Six Months Ended
	June 29, 2019			June 30, 2018			June 29, 2019		June 30, 2018
	(Amounts are in thousands)
Interest and dividend income		$	46,714		31,061			88,730		60,153
Net realized gain on sale of investments		66,233			16,642			70,444		23,667
		112,947			47,703			159,174		83,820
Fair value adjustment, due to net unrealized gain, on equity securities held at end of period		4,969			76,829			319,317		51,047
Net loss (gain) on sale of equity securities previously recognized through fair value adjustment		27,226			(16,217	)		33,838		(22,414	)
		$	145,142		108,315			512,329		112,453