XML 24 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Investments (Notes)
 9 Months Ended
Sep. 26, 2020
Investments, Debt and Equity Securities [Abstract]  
Investments [Tex Block] Investments
(a)Debt Securities
In 2020, the Company adopted the Accounting Standards Update (ASU) requiring companies to recognize credit losses on debt securities in earnings as an allowance that is reevaluated each reporting period. The Company adopted the ASU on a prospective basis as of December 29, 2019. Prior to the adoption of the ASU, credit losses in which the Company did not expect to recover the cost of the debt security were recognized in earnings as an other-than-temporary impairment. The adoption of the ASU did not have an effect on the Company’s financial position, results of operations or cash flows.
Debt securities are classified as available-for-sale and measured at fair value. The Company evaluates debt securities on an individual security basis to determine if an unrealized loss is due to a credit loss or other factors, including interest rate fluctuations. The collectability of debt securities is evaluated based on criteria that include the extent to which the cost (cost of the debt security adjusted for amortization of premium or accretion of discount) exceeds fair value, the credit rating of the issuer or security, the failure of the issuer to make scheduled principal or interest payments and the financial health and prospects of the issuer or security.
Credit losses on debt securities the Company does not intend to sell and will not be required to sell prior to any anticipated recovery are recognized in earnings through an allowance. The allowance is measured as the difference between the present value of expected cash flows and the cost of the debt security, limited to the difference between the cost and the fair value of the debt security. Expected cash flows are discounted using the debt security’s effective interest rate. Subsequent changes to the allowance are recognized in earnings in the period of the change. Credit losses on debt securities the Company intends to sell or will be required to sell prior to any anticipated recovery are recognized in earnings and measured as the difference between the cost and the fair value of the debt security.
Other unrealized losses on debt securities the Company does not intend to sell and will not be required to sell prior to any anticipated recovery are reported in other comprehensive earnings net of income taxes and included as a component of stockholders’ equity. Other unrealized losses on debt securities the Company intends to sell or will be required to sell prior to any anticipated recovery are recognized in earnings and measured as the difference between the cost and the fair value of the debt security.
Following is a summary of debt securities as of September 26, 2020 and December 28, 2019:
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
 (Amounts are in thousands)
September 26, 2020
Tax exempt bonds
$596,669 9,110 136 605,643 
Taxable bonds
7,478,037 276,735 7,898 7,746,874 
Restricted investments
167,603 15,659 — 183,262 
$8,242,309 301,504 8,034 8,535,779 
December 28, 2019
Tax exempt bonds
$767,931 3,429 130 771,230 
Taxable bonds
5,002,036 120,132 1,443 5,120,725 
Restricted investments
169,983 10,101 — 180,084 
$5,939,950 133,662 1,573 6,072,039 
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 September 26, 2020 and December 28, 2019 are as follows:
 September 26, 2020December 28, 2019
 Cost
Fair
Value
Cost
Fair
Value
 (Amounts are in thousands)
Due in one year or less$645,524 650,446 437,236 438,105 
Due after one year through five years5,089,321 5,277,428 3,836,333 3,900,904 
Due after five years through ten years2,503,518 2,603,665 1,661,143 1,727,594 
Due after ten years3,946 4,240 5,238 5,436 
$8,242,309 8,535,779 5,939,950 6,072,039 
The Company had no debt securities with credit losses as of September 26, 2020.
Following is a summary of debt securities with other unrealized losses by the time period impaired as of September 26, 2020 and December 28, 2019:
 
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)
September 26, 2020
Tax exempt bonds
$29,415 136 — — 29,415 136 
Taxable bonds
1,420,268 7,898 — — 1,420,268 7,898 
$1,449,683 8,034 — — 1,449,683 8,034 
December 28, 2019
Tax exempt bonds
$48,462 11 99,976 119 148,438 130 
Taxable bonds
573,315 888 197,641 555 770,956 1,443 
$621,777 899 297,617 674 919,394 1,573 
There are 73 debt securities contributing to the total unrealized losses of $8,034,000 as of September 26, 2020. Unrealized losses related to debt securities are primarily due to increases in interest rates that occurred since the debt securities were purchased. The Company continues to receive scheduled principal and interest payments on these debt securities.
(b)Equity Securities
Equity securities are 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 $2,280,448,000 and $2,354,346,000 as of September 26, 2020 and December 28, 2019, respectively.
(c)Investment Income
Net realized gain on investments represents the difference between the cost and the proceeds from the sale of debt and equity securities. The net realized gain on investments excludes the net gain or loss on the sale of equity securities previously recognized through the fair value adjustment, which is presented separately in the following table.
Following is a summary of investment income for the three and nine months ended September 26, 2020 and September 28, 2019:
 Three Months EndedNine Months Ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
 (Amounts are in thousands)
Interest and dividend income$47,061 46,796 148,239 135,526 
Net realized gain on investments109,132 33,798 217,596 104,242 
156,193 80,594 365,835 239,768 
Fair value adjustment, due to net unrealized gain (loss), on equity securities held at end of period130,637 (26,936)340,618 292,381 
Net (gain) loss on sale of equity securities previously recognized through fair value adjustment(21,535)16,391 (97,540)50,229 
$265,295 70,049 608,913 582,378