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Note 6 - Marketable Securities
6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

6. Marketable Securities

 

The amortized cost and unrealized gains/(losses), net of marketable securities as of June 30, 2020 and December 31, 2019, are as follows (in thousands):

 

  

As of June 30, 2020

  

As of December 31, 2019

 

Marketable securities:

        

Amortized cost (1)

 $114,587  $12,064 

Unrealized gains/(losses), net (1)

  518,964   (2,711)

Total fair value

 $633,551  $9,353 

 

 

(1)

See Albertsons Companies, Inc. discussion below.

 

During the three months ended June 30, 2020 and 2019, the net unrealized gains on marketable securities were $526.2 million and $0.1 million, respectively. In addition, during the six months ended June 30, 2020 and 2019, the net unrealized gains on marketable securities were $521.6 million and $1.6 million, respectively. These net unrealized gains are included in Gain on marketable securities, net on the Company’s Condensed Consolidated Statements of Income. See Footnote 11 to the Notes to the Company’s Condensed Consolidated Financial Statements for fair value disclosure.

 

Albertsons Companies, Inc. (“ACI”) –

 

The Company owned 9.29% of the common stock of ACI, one of the largest food and drug retailers in the United States, and accounted for this $140.2 million investment on the cost method, which was included in Other assets on the Company’s Condensed Consolidated Balance Sheets. During the six months ended June 30, 2020, ACI issued $1.75 billion of convertible preferred stock and used the net proceeds of $1.68 billion to repurchase approximately 17.5% of ACI’s common stock owned by its current shareholders. As a result of this transaction, the Company received net proceeds of $156.1 million, recognized a gain of $131.6 million, which is included in Gain on sale of cost method investment on the Company’s Condensed Consolidated Statements of Income and held a 7.5% ownership interest in ACI.

 

On June 25, 2020, ACI announced its initial public offering of 50.0 million shares of its common stock had been priced at $16.00 per share. In connection with this transaction, the Company received net proceeds of $71.4 million, net of fees, from the sale of 4.7 million common shares in ACI and recognized a gain of $59.2 million, which is included in Gain on sale of cost method investment on the Company’s Condensed Consolidated Statements of Income. The shares are now traded on the New York Stock Exchange (NYSE) under the symbol "ACI", which began trading as of June 26, 2020. As of June 30, 2020, the Company holds 39.8 million common shares in ACI which are accounted for as available-for-sale marketable securities and are included in Marketable securities on the Company’s Condensed Consolidated Balance Sheets. As of June 30, 2020, the Company’s investment in ACI was $628.2 million, including a mark-to-market gain of $524.7 million.